SECTIONS 16720-16727

16720.  This chapter shall be known and may be cited as the StateGeneral Obligation Bond Law.16721.  The purpose of this chapter is to provide a procedure whichmay be adopted by other acts for use with whatever modifications arenecessary in authorizing the issuance and sale of state generalobligation bonds and providing for the repayment of such bonds. Thischapter does not itself authorize the issuance or sale of any bonds.16722.  As used in this chapter, the following terms shall have thefollowing meaning unless the context otherwise requires: (a) "Board" means the state board, department, or agencyauthorized by that act to request the committee to cause bonds to beissued for the purpose of creating a fund that is to be expended bythe board for the purposes specified in that act. (b) "Bond" means a state general obligation bond issued pursuantto an act adopting the provisions of this chapter. (c) "Bond act" means the act authorizing the issuance of stategeneral obligation bonds and adopting this chapter by reference. (d) "Committee" means the finance committee or other body createdby that act and authorized to cause bonds to be issued by theadoption of a resolution or resolutions. (e) "Fund" means the fund created by that act, and into which theproceeds from the sale of the bonds are paid. (f) "Tender" means a term of a bond that gives the holder theright to have the bond purchased from the holder at a predeterminedprice prior to maturity.16723.  Any bond act may adopt the provisions of this chapter byreference to its short title, and such reference shall serve toincorporate the provisions of this chapter in said act as though setout in full therein. Notwithstanding such adoption by reference, thebond act may contain provisions applicable to the bonds issuedthereunder, and, in case of conflict, the provisions in the bond actshall prevail.16724.  The bond act shall contain all of the following provisions: (a) A statement of the total amount of bonds authorized to beissued and the purpose for which the proceeds from the sale of thebonds may be used. (b) The creation of a committee and fund, and the naming of theboard as these items are defined in Section 16722. (c) A statement that the bonds are valid obligations of the stateand a pledge of the full faith and credit of the state for thepunctual payment of both principal and interest thereof. (d) An appropriation from the General Fund in the State Treasuryof the sum annually as shall be necessary to pay the principal andinterest on the bonds as they become due and payable. (e) A requirement that there be collected annually in the samemanner and at the same time as other state revenue is collected thesum, in addition to the ordinary revenues of the state, as isrequired to pay the principal and interest on the bonds; and aprovision making it the duty of all officers charged by law with anyduty in regard to the collections of the revenue to do and performeach and every act which is necessary to collect that additional sum. (f) If the bond act provides that the fund shall have any receiptsother than the proceeds of the sale of bonds, the proceeds ofinterim financing, or the investment earnings on the proceeds of bondsales or interim financing, then the bond act shall also specifywhether those receipts shall be transferred to the General Fund as areimbursement for debt service payments or be used for the samepurpose for which the proceeds of the sale of the bonds may be used. (g) A provision incorporating the provisions of this chapter, anda declaration that the provisions hereof are included in the act asthough set out in full therein. (h) A statement that the bonds may be refunded in accordance withArticle 6 (commencing with Section 16780), and that approval of theauthorization of the bonds by the electors includes approval of anybonds issued to refund the bonds originally issued. (i) A statement that notwithstanding any other provision of thebond act, or of the State General Obligation Bond Law (Chapter 4(commencing with Section 16720) of Part 3 of Division 4 of Title 2 ofthe Government Code), if the Treasurer sells bonds pursuant to thisbond act that include a bond counsel opinion to the effect that theinterest on the bonds is excluded from gross income for federal taxpurposes under designated conditions, the Treasurer may maintainseparate accounts for the bond proceeds invested and the investmentearnings on those proceeds, and may use or direct the use of thoseproceeds or earnings to pay any rebate, penalty, or other paymentrequired under federal law, or take any other action with respect tothe investment and use of those bond proceeds, as may be required ordesirable under federal law in order to maintain the tax-exemptstatus of those bonds and to obtain any other advantage under federallaw on behalf of the funds of this state. (j) A statement that the board may request the Pooled MoneyInvestment Board to make a loan from the Pooled Money InvestmentAccount, in accordance with Section 16312, for the purposes ofcarrying out the bond act. The amount of the request shall not exceedthe amount of the unsold bonds that the committee has by resolutionauthorized to be sold for the purpose of carrying out the bond act.The board shall execute any documents required by the Pooled MoneyInvestment Board to obtain and repay the loan. Any amounts loanedshall be deposited in the fund to be allocated by the board inaccordance with the bond act.16724.4.  Any state bond measure approved by the voters on or afterJanuary 1, 2004, shall be subject to an annual reporting process, asfollows: (a) The head of the lead state agency administering the bondproceeds shall report to the Legislature and the Department ofFinance no later than January 1, 2005, or the January 1 of the secondyear following the enactment of the bond measure, whichever islater, and at least once a year thereafter. The annual report shallcontain all of the following: (1) A list of all projects and their geographical location thathave been funded or are required or authorized to receive funds. (2) The amount of funds allocated on each project. (3) The status of any project required or authorized to be funded. (b) Costs of the report may be included in the cost ofadministering the bond measure unless the measure specificallyprohibits those expenses.16724.5.  (a) For purposes of this section, "revolving fund" meansthe General Obligation Bond Expense Revolving Fund created pursuantto this section. (b) There is in the State Treasury the General Obligation BondExpense Revolving Fund, which shall consist of all moneysappropriated by the Legislature into that fund or payable into thatfund in accordance with this section. (c) All moneys in the revolving fund are hereby appropriated andshall be available without regard to fiscal years for all of thefollowing: (1) The payment of the expenses incurred by the Treasurer inhaving the bonds prepared and in advertising their sale or theirprior redemption, and of the other costs described in subdivision (e)of Section 16727. (2) For expenses incurred by the committee pursuant to Section16758. (3) For payment for legal services pursuant to Section 16760. (d) Whenever bonds are sold, out of the first moneys realized fromtheir sale, there shall be redeposited in the revolving fund thesums that have been expended for the purposes specified insubdivision (c), which may be used for the same purposes and repaidin the same manner whenever additional sales are made.16724.6.  There is hereby transferred from any bond fund created forthe proceeds of sales of state general obligation bonds, the amountsnecessary to reimburse the Treasurer, the Controller, and theDepartment of Finance for actual expenses incurred in: (1)administering or reviewing loans from the Pooled Money InvestmentAccount to the bond fund including review by the Public Works Boardstaff, (2) assuring bond program compliance with federal laws andregulations related to tax-exempt government obligations by trackingarbitrage and expenditures, calculating and remitting federal rebatesand penalties, investing bond sale proceeds, establishing andmaintaining special accounting systems, and providing other servicesthe Treasurer determines are necessary to maintain the tax-exemptstatus of the bonds.16724.7.  Costs incurred by the state in connection with stategeneral obligation bonds bearing variable interest rates that aredifferent from costs determined by the Treasurer to be customarycosts for state general obligation bonds bearing interest at fixedrates (including, but not limited to, fees and charges ofunderwriters, remarketing or auction agents, tender and payingagents, rating agencies, financial advisors, counsel, and staff costsdirectly associated with the foregoing), shall be paid from annualappropriations from the General Fund if the bonds are issued under abond act approved by the voters prior to January 1, 2002. If thebonds are issued under a bond act approved by the voters afterJanuary 1, 2002, these costs are authorized to be paid, and may bepaid, from the General Obligation Bond Expense Revolving Fund createdby Section 16724.5 or from proceeds from the sale of any bondsissued pursuant to this chapter.16725.  The Controller, the State Treasurer and the committee shallkeep full and particular account and record of all their proceedingsunder the bond act and this chapter and they shall transmit to theGovernor an abstract of all such proceedings thereunder, with anannual report, to be transmitted by the Governor to the Legislatureannually. All books and papers pertaining to the matters provided forin the bond act and this chapter shall at all times be open to theinspection of the Governor, the Attorney General, any committee ofeither branch of the Legislature, or any joint committee of both, anycitizen of the State, or any interested party.16726.  Upon request of the board stating that the purposes forwhich the bonds were issued and sold has been effected, the committeeshall certify this fact to the State Controller, and thereupon theunencumbered balance of cash remaining from the proceeds of the saleof the bonds in the fund shall, on order of the State Controller, betransferred therefrom to the General Fund.16727.  Proceeds from the sale of any bonds issued pursuant to thischapter shall be used only for the following purposes: (a) The costs of construction or acquisition of capital assets."Capital assets" mean tangible physical property with an expecteduseful life of 15 years or more. "Capital assets" also means tangiblephysical property with an expected useful life of 10 to 15 years,but these costs may not exceed 10 percent of the bond proceeds net ofall issuance costs. "Capital assets" include major maintenance,reconstruction, demolition for purposes of reconstruction offacilities, and retrofitting work that is ordinarily done no moreoften than once every 5 to 15 years or expenditures that continue orenhance the useful life of the capital asset. "Capital assets" alsoinclude equipment with an expected useful life of two years or more.Costs allowable under this section include costs incidentally butdirectly related to construction or acquisition, including, but notlimited to, planning, engineering, construction management,architectural, and other design work, environmental impact reportsand assessments, required mitigation expenses, appraisals, legalexpenses, site acquisitions, and necessary easements. (b) To make grants or loans, if the proceeds of the grants orloans are used for the costs of construction or acquisition ofcapital assets. Bond proceeds may also be used to pay the costs of astate agency for administering the grant or loan program. (c) To repay funds borrowed in anticipation of the sale of thebonds, including interest, or to pay interest on the bondsthemselves. (d) To pay the costs of a state agency with responsibility foradministering the bond program. These costs include those incurred bythe Treasurer, the Controller, the Department of Finance, and thePublic Works Board for staff, operating expenses and equipment, andconsultants' costs. (e) The costs of the Treasurer's office directly associated withthe sale and payment of the bonds, including, but not limited to,underwriting discounts, costs of printing, bond counsel,registration, and fees of trustees. Nothing in this section is intended to prohibit the investment ofbond proceeds or the use of proceeds of those investments in anymanner authorized by law.