2009 California Penal Code - Section 7400-7414 :: Chapter 15. New Prison Construction Bond Act Of 1988

PENAL CODE
SECTION 7400-7414

7400.  This chapter shall be known and may be cited as the New
Prison Construction Bond Act of 1988.

7401.  The State General Obligation Bond Law is adopted for the
purpose of the issuance, sale and repayment of, and otherwise
providing with respect to, the bonds authorized to be issued by this
chapter, and the provisions of that law are included in this chapter
as though set out in full in this chapter except that,
notwithstanding anything in the State General Obligation Bond Law,
the maximum maturity of the bonds shall not exceed 20 years from the
date of each respective series. The maturity of each respective
series shall be calculated from the date of that series.

7402.  There is in the State Treasury the 1988 Prison Construction
Fund, which fund is hereby created. The proceeds of the sale of bonds
authorized by this act shall be deposited in the fund, and may be
transferred upon request of the Department of Corrections and upon
approval of the Director of Finance, to the New Prison Construction
Fund established by Section 7102, the 1984 Prison Construction Fund
established by Section 7202, or the 1986 Prison Construction Fund
established by Section 7302, or any combination thereof. If the
moneys are so transferred, "fund" means the New Prison Construction
Fund, 1984 Prison Construction Fund, or 1986 Prison Construction
Fund, or any combination thereof, as is appropriate. At least 30 days
prior to requesting a transfer as authorized by this section, the
Department of Corrections shall notify the chairpersons of the fiscal
committees in each house of the Legislature, and the Chairperson and
the Vice Chairperson of the Joint Legislative Budget Committee.

7403.  The 1988 Prison Construction Committee is hereby created. The
committee shall consist of the Controller, the Treasurer, and the
Director of Finance. That committee shall be the "committee," as that
term is used in the State General Obligation Bond Law.
   The Department of Corrections is the "board" for the purpose of
the State General Obligation Bond Law and this chapter.

7404.  The committee is hereby authorized and empowered to create a
debt or debts, liability or liabilities, of the State of California,
in the aggregate principal amount of eight hundred seventeen million
dollars ($817,000,000), exclusive of refunding bonds, in the manner
provided in this chapter. That debt or debts, liability or
liabilities, shall be created for the purpose of providing the fund
to be used for the object and work specified in Section 7406.

7405.  The committee may determine whether or not it is necessary or
desirable to issue any bonds authorized under this chapter, and if
so, the amount of bonds then to be issued and sold. The committee may
authorize the Treasurer to sell all or any part of the bonds herein
authorized at such time or times as may be fixed by the Treasurer.

7406.  (a) Except as provided in subdivision (b), the moneys in the
fund shall be used for the acquisition, construction, renovation,
remodeling, and deferred maintenance of state youth and adult
correctional facilities.
   (b) Of the moneys in the fund, forty million dollars ($40,000,000)
is hereby appropriated to the Board of Corrections to fund those
projects entitled to be funded under subdivision (c) of Section 3 of
Chapter 444 of the Statutes of 1984, as amended, to the extent that
those projects have not received full funding and for any costs
associated with the sale of bonds and any administrative costs
incurred by the Board of Corrections in the administration of the
County Jail Capital Expenditure Bond Acts of 1981 and 1984 and the
County Correctional Facility Capital Expenditure Bond Act of 1986.
   (c) Notwithstanding subdivision (b) of Section 11 of Chapter 1519
of the Statutes of 1986 or any other provision of law to the
contrary, and subject to the annual Budget Act appropriations by the
Legislature, administrative costs shall not exceed 1 1/2 percent of
the amount allocated for any costs incurred by the Board of
Corrections in the administration of the County Jail Capital
Expenditure Bond Acts of 1981 and 1984 and the County Correctional
Facility Capital Expenditure Bond Act of 1986.

7407.  (a) All bonds herein authorized, which shall have been duly
sold and delivered as herein provided, shall constitute valid and
legally binding general obligations of the State of California, and
the full faith and credit of the State of California is hereby
pledged for the punctual payment of both the principal thereof and
interest thereon.
   (b) There shall be collected annually in the same manner and at
the same time as other state revenue is collected such a sum, in
addition to the ordinary revenues of the state, as shall be required
to pay the principal of and interest on those bonds, and it is hereby
made the duty of all officers charged by law with any duty in regard
to the collection of that revenue to do and perform each and every
act which shall be necessary to collect that additional sum.
   (c) All money deposited in the fund which has been derived from
premiums or accrued interest on bonds sold shall be available for
transfer to the General Fund as a credit to expenditures for bond
interest.
   (d) All money deposited in the fund pursuant to any provision of
law requiring repayments to the state which are financed by the
proceeds of the bonds authorized by this chapter shall be available
for transfer to the General Fund. When transferred to the General
Fund that money shall be applied as a reimbursement to the General
Fund on account of the principal of and interest on the bonds which
has been paid from the General Fund.

7408.  Notwithstanding Section 13340 of the Government Code, there
is hereby appropriated from the General Fund in the State Treasury
for the purpose of this chapter such an amount as will equal the
following:
   (a) That sum annually as will be necessary to pay the principal of
and the interest on the bonds issued and sold pursuant to this
chapter.
   (b) That sum as is necessary to carry out the provisions of
Section 7409, which sum is appropriated without regard to fiscal
years.

7409.  For the purpose of carrying out this chapter, the Director of
Finance may by executive order authorize the withdrawal from the
General Fund of an amount or amounts not to exceed the amount of the
unsold bonds which the committee has by resolution authorized to be
sold for the purpose of carrying out this chapter. Any amounts
withdrawn shall be deposited in the fund and shall be disbursed by
the committee in accordance with this chapter. Any money made
available under this section to the board shall be returned by the
board to the General Fund from moneys received from the sale of bonds
sold for the purpose of carrying out this chapter. Those withdrawals
from the General Fund shall be returned to the General Fund with
interest at the rate which would otherwise have been earned by those
sums in the Pooled Money Investment Account.

7409.5.  Notwithstanding any other provision of this bond act, or of
the State General Obligation Bond Law (Chapter 4 (commencing with
Section 16720) of Part 3 of Division 4 of Title 2 of the Government
Code), if the Treasurer sells bonds pursuant to this bond act that
include a bond counsel opinion to the effect that the interest on the
bonds is excluded from gross income for federal tax purposes under
designated conditions, the Treasurer may maintain separate accounts
for the bond proceeds invested and the investment earnings on those
proceeds, and may use or direct the use of those proceeds or earnings
to pay any rebate, penalty, or other payment required under federal
law, or take any other action with respect to the investment and use
of those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.

7410.  The board may request the Pooled Money Investment Board to
make a loan from the Pooled Money Investment Account, in accordance
with Section 16312 of the Government Code, for the purposes of
carrying out the provisions of this chapter. The amount of the
request shall not exceed the amount of the unsold bonds which the
committee has by resolution authorized to be sold for the purpose of
carrying out this chapter. The board shall execute any documents
required by the Pooled Money Investment Board to obtain and repay the
loan. Any amounts loaned shall be deposited in the fund to be
allocated by the board in accordance with this chapter.

7411.  Any bonds issued and sold pursuant to this chapter may be
refunded by the issuance of refunding bonds in accordance with
Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of
Division 2 of Title 2 of the Government Code. Approval by the
electors of the state for the issuance of bonds shall include the
approval of the issuance of any bonds issued to refund any bonds
originally issued or any previously issued refunding bonds.

7412.  All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, shall be available for the
purpose provided in Section 7406 but shall not be available for
transfer to the General Fund to pay the principal of and interest on
bonds. The money in the fund may be expended only as herein provided.

7413.  Money in the fund may only be expended pursuant to
appropriations by the Legislature.

7414.  The Legislature hereby finds and declares that, inasmuch as
the proceeds from the sale of bonds authorized by this chapter are
not "proceeds of taxes" as that term is used in Article XIII B of the
California Constitution, the disbursement of these proceeds is not
subject to the limitations imposed by that article.


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