16730. Upon request of the board, supported as required in the bond
act, the committee shall determine the necessity or desirability of
obtaining interim financing pursuant to Section 16312 or 16313 and of
issuing any bonds authorized to be issued and the amount of interim
financing or bonds then to be obtained or issued and sold. Successive
issues of bonds may be authorized and sold and shall be designated
by an appropriate number or other designation. It is not necessary
that all of the bonds authorized to be issued be sold at any one
time.
16731. Whenever the committee determines that the sale of all or
any part of the bonds authorized to be issued is necessary or
desirable, it shall adopt a resolution to that effect. The resolution
shall specify all of the following as to the bonds then to be sold:
(a) The aggregate number, aggregate par value, denominations, and
the date of the bonds to be then sold. The denominations shall be in
the sum of one thousand dollars ($1,000) or multiples of that sum.
The date appearing on the bonds shall be deemed to be the date of
issuance for all purposes of this chapter, irrespective of the actual
date of delivery of the bonds and the payment of the purchase price
of the bonds.
(b) The dates of maturity and the amount of the bonds maturing at
each date of maturity, which amounts need not be equal. The last
dates of maturity shall be not more than 45 years after the date of
the bonds.
(c) Whether or not the bonds are to be subject to redemption or
tender prior to maturity, and, if so, the provisions for the
redemption or tender, the manner of the call or notice thereof, and
the price or prices at which the bonds shall be subject to redemption
or tender.
(d) (1) (A) The annual rate, or rates, of interest that the bonds
to be issued shall bear, which shall be in the increments determined
by the Treasurer, but not in excess of 11 percent. The rate or rates
may be determined at the time of the sale of the bonds.
(B) As an alternative to subparagraph (A), the resolution may
specify that the bonds may pay a variable interest rate or rates, as
prescribed in the resolution, but not in excess of 11 percent per
annum, and in accordance with the requirements of this subparagraph.
(i) At the time and as the result of the issuance of any bonds
bearing a variable interest rate, the aggregate principal amount of
all state general obligation bonds bearing variable interest rates
may not exceed 20 percent of the aggregate principal amount of all
state general obligation bonds then outstanding.
(ii) For purposes of the calculation made pursuant to clause (i),
variable rate bonds shall not include commercial paper notes issued
pursuant to Section 16731.6 or bonds that have an effective fixed
interest rate through a hedging contract, as specified in
subparagraph (C), but shall include bonds that have an effective
variable interest rate through a hedging contract.
(iii) Notwithstanding any other provision of this chapter, if the
committee decides to issue state general obligation bonds bearing
variable interest rates, the committee is not required to comply with
Section 16732.
(iv) Notwithstanding any other provision of law, if bonds are
issued bearing a variable interest rate under a bond act approved by
the voters on or after January 1, 2002, and if the variable interest
rate bonds provide a right of tender, then any amount payable by the
state as a result of the tender with respect to principal of and
interest on the bonds prior to the regularly scheduled principal or
interest payment dates, or payable by the state pursuant to
redemption or call initiated as a means to repay the obligation of
the state resulting from the tender, is backed by the full faith and
credit of the state and shall be payable under the bond act.
(v) A contractual obligation of the state to repay advances and
pay interest thereon under a credit enhancement or liquidity
agreement entered into in connection with variable interest rate
bonds providing a right of tender and issued under a bond act
approved by the voters on or after January 1, 2002, shall be backed
by the full faith and credit of the state and shall be payable under
the bond act, except to the extent bond interest paid with an advance
and interest on the advance would exceed the maximum interest rate
specified in this subdivision.
(C) For the purposes of clause (ii) of subparagraph (B), bonds
that have an "effective fixed interest rate through a hedging
contract" means bonds for which the Treasurer determines the hedging
contract meets either of the following conditions:
(i) Significantly reduces variable rate risk by providing changes
in fair values or cashflows that substantially offset the changes in
fair value or cashflows of the bonds.
(ii) Qualifies for integration with the bonds in calculating the
yield on the bonds under the rules prescribed in Section 148 of the
United States Internal Revenue Code (26 U.S.C. Sec. 148).
(D) The Treasurer's determination specified in subparagraph (C)
shall be made at the time the hedging contract is entered into and
shall apply through the maturity of the bonds, unless the hedging
contract is terminated prior to maturity.
(2) (A) (i) Notwithstanding any other provision of law, for bonds
approved by the voters after January 1, 2006, payment of any amounts
owed by the state to a counterparty, after any offset for payments
owed to the state on any hedging contract described in Section 5922
in connection with those bonds, shall be deemed to be included within
the appropriation for interest on the bonds contained in the
applicable bond act.
(ii) The total payments of stated interest on the bonds together
with payments owed by the state after any offset for payments owed to
the state on a hedging contract shall not exceed the maximum
interest rate set forth in this subdivision.
(iii) To the extent payments of interest on a bond, together with
payments on a hedging contract, would, in any fiscal year, exceed the
maximum interest rate specified in this subdivision, the excess
amounts may be paid in subsequent fiscal years, if the aggregate
amount of interest and that excess amount paid in any year does not
exceed the maximum interest rate specified in this subdivision.
(B) The Treasurer may not enter into any hedging contract
described by subparagraph (A) unless the committee has approved
policies developed by the Treasurer relating to the entering into and
managing of those hedging contracts that shall include both of the
following:
(i) A requirement that any hedging contract or program of
contracts is designed to reduce the amount or duration of payment,
currency, rate, spread, or similar risk or result in a lower cost of
borrowing when used in combination with the issuance or carrying of
bonds.
(ii) A description of the criteria to be used to evaluate the
potential risks and benefits to the state of entering into a
particular hedging contract or program of contracts and to evaluate
the performance of outstanding hedging contracts in comparison to the
objectives for which the hedging contract was executed.
(C) The policies approved pursuant to subparagraph (B) are exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3.
(e) The interest payment dates.
(f) The technical form and language of the bonds.
(g) Whether or not the right is reserved to make delivery in the
form of temporary or interim bonds, certificates, or receipts,
exchangeable for definitive bonds when executed and available for
delivery. If the right is reserved, the denominations and form of the
temporary securities shall be stated.
(h) Provisions for the registration and exchange of bonds and for
the use of a depository to hold book-entry bonds after issuance.
(i) All other terms and conditions of the bonds and of the
execution, issuance, and sale of the bonds, which shall be consistent
with all of this chapter.
16731.5. (a) Notwithstanding any other provision of this chapter,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as zero coupon or capital appreciation
bonds. The committee shall adopt a resolution finding that issuance
of these bonds is necessary and desirable, directing the Treasurer to
arrange for preparation of the requisite number of suitable bonds,
and specifying other provisions relating to the bonds including the
following:
(1) The date, number, denominations, and aggregate par value of
the bonds payable at maturity. The aggregate par value may be
represented by bond certificates in denominations as the committee
deems appropriate, but not less than one thousand dollars ($1,000).
(2) The dates of maturity and the aggregate amounts of the bonds
maturing on each of these dates. Determination of maturity dates and
amounts by the committee shall be made upon recommendation of the
Treasurer to provide the maximum benefit to potential purchasers and
to respond to the expected demand for the bonds. Whenever the
committee determines to issue bonds from any authorized bond act as
zero coupon or capital appreciation bonds, and to issue bonds from
the same authorization at the same time pursuant to Section 16731,
the committee may comply with the requirements of subdivision (b) of
Section 16731 by taking into account all the bonds of the same
authorization being issued at the same time.
(3) The interest rate or rates, and interest payment dates
applicable to the bonds. Zero coupon bonds may bear a zero rate of
interest, and capital appreciation bonds may bear a stated rate of
interest payable only at maturity, compounded at the same rate, which
rate or rates may be determined at the time of sale of the bonds.
The rate of interest borne by these bonds, or the nominal interest
rate taking into account the original issue discount of these bonds,
when bearing a zero interest rate, shall not exceed 11 percent per
annum.
(4) Any provisions for the redemption of the bonds prior to their
stated maturity.
(5) The technical form and language of the bonds.
(6) All other terms and conditions of the bonds and of their
execution, issuance, and sale, deemed necessary and appropriate by
the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue bonds as zero coupon or capital
appreciation bonds, all of the following shall apply:
(1) The bonds may be sold at negotiated sale at a price below the
par value in a manner consistent with paragraph (3) of subdivision
(a). If the committee determines to issue other bonds authorized by
the same bond act at the same time as zero coupon or capital
appreciation bonds are issued, the other bonds may also be sold at
negotiated sale with a discount of not more than 3 percent of the par
amount thereof.
(2) For purposes of determining the principal amount of bonds of
any voted authorization outstanding, in the case of any bonds which
are zero coupon or capital appreciation bonds and do not provide for
payment of interest on the bond prior to maturity, the principal
amount of the bonds shall be the cash price paid by the initial
purchasers of the bonds to the state, and deposited in the fund, plus
the amount of any costs of issuance of the bonds. Within 30 days of
the delivery of any zero coupon or capital appreciation bonds, the
Treasurer shall submit to the committee a certificate stating the
principal amount of bonds of each issue, calculated as stated in this
subdivision, which have been sold, and the certification shall be
conclusive for all purposes under this chapter and the constitution.
(3) The committee may arrange to utilize the services of
investment banks, commercial banks, savings and loans or other
financial institutions, or other advisers as it may deem appropriate
to publicize and assist in the marketing and sale of zero coupon or
capital appreciation bonds.
(c) When zero coupon or capital appreciation bonds are issued
pursuant to this section, the debt service payments on the bonds
should continue to be managed in a manner consistent with the state's
policy of retiring general obligation bonds in an orderly efficient
manner. It is the expectation of the Legislature that the authority
provided by this section will not be used to defer debt service
payments as a means of preserving General Fund moneys for short-term
purposes. The committee shall provide in the resolution authorizing
the issuance of zero coupon or capital appreciation bonds that the
state shall set aside, in a separate trust fund within the State
Treasury, an amount in each year representing the amount of interest
accrued during that year to be payable at the maturity of the bonds,
with these payments to be deemed a payment of debt service on the
bonds.
16731.6. (a) Notwithstanding any other provision of this chapter,
and as an alternative to the procedures set forth in Section 16731,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as commercial paper notes. The
committee shall adopt a resolution finding that issuance of the bonds
in the form of commercial paper notes is necessary and desirable,
directing the Treasurer to arrange for preparation of the requisite
number of suitable notes, and specifying other provisions relating to
the commercial paper notes, including all of the following:
(1) For each program of commercial paper notes authorized, the
resolution shall contain the final date of maturity and the total
aggregate principal amount of the commercial paper notes authorized
to be outstanding at any one time up to the maturity date, in
accordance with all of the following:
(A) The resolution may provide that the commercial paper notes may
be issued and renewed from time to time until the final maturity
date, and that the amount issued from time to time may be set by the
Treasurer up to the maximum amount authorized to be outstanding at
any one time.
(B) The resolution shall include methods of setting the dates,
numbers, and denominations of the commercial paper notes.
(C) The determination of the final maturity date and total amount
by the committee shall be made upon recommendation of the Treasurer
to meet the needs of the state for funds, to provide the maximum
benefit to potential purchasers, and to respond to the expected
demand for the commercial paper notes.
(D) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16732.
(2) The method of setting the interest rates and interest payment
dates applicable to the commercial paper notes, in accordance with
the following:
(A) Commercial paper notes may bear a stated rate of interest
payable only at maturity, which rate or rates may be determined at
the time of sale of each unit of commercial paper notes.
(B) The rate of interest borne by the commercial paper notes shall
not exceed 11 percent per annum.
(C) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16733.
(3) Any provisions for the redemption of the commercial paper
notes prior to stated maturity.
(4) The technical form and language of the commercial paper notes.
(5) All other terms and conditions of the commercial paper notes
and of their execution, issuance, and sale, deemed necessary and
appropriate by the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue commercial paper notes, all of the
following shall apply:
(1) The commercial paper notes may be sold at negotiated sale at a
price below the par value in a manner consistent with paragraph (2)
of subdivision (a).
(2) During the term of any program of commercial paper notes, the
renewal and reissuance from time to time of the commercial paper
notes in an amount up to the maximum amount authorized by the
resolution shall be deemed to be a refunding of the previously
maturing amount, permitted by and consistent with Article 6
(commencing with Section 16780).
(3) Consistent with the intent for the General Fund to realize a
savings in debt service costs when commercial paper notes are issued
in place of bonds without shifting or adding financing and debt
service costs to the bond funds, the state administrative costs of
commercial paper and interest payable and other costs associated with
commercial paper notes shall be paid for as follows:
(A) The proceeds of commercial paper notes are, notwithstanding
Section 13340, continuously appropriated to pay the state
administrative costs of commercial paper including, but not limited
to, costs of the Treasurer's office, the Controller's office, and the
Department of Finance.
(B) The interest payable on maturing commercial paper notes and
other costs associated with commercial paper notes not specified in
subparagraph (A), including, but not limited to, remarketing fees,
issuing and paying agent fees, the letter or line of credit provider
fees, the rating agency fees, and bond counsel fees, shall be paid
from the General Fund which, notwithstanding Section 13340, is
continuously appropriated to pay the interests and costs.
16732. In determining the dates of maturity of the bonds, and the
amount thereof to mature at each date of maturity, the committee
shall be guided, so far as it may deem to be practicable, by the
amounts and dates of maturity of the revenue estimated to accrue to
the fund pursuant to the bond act. The committee shall fix and
determine the dates and amounts of such maturities in such manner
that, together with the dates and amounts of interest payments on the
bonds, they shall coincide, as nearly as it may deem to be
practicable, with the dates and amounts of such estimated revenues.
16733. The rate of interest to be borne by the bonds need not be
uniform for all bonds of the same issue, and shall be the rate or
rates specified in the bid or proposal for negotiated sale accepted
by the Treasurer, unless a variable interest rate is prescribed for
the bonds in the resolution pursuant to subdivision (d) of Section
16731. The first interest payment date may be any date within one
year after the date of the bonds.
16734. Both principal of and interest on the bonds shall be payable
in lawful money of the United States, at the Office of the State
Treasurer, or at the office of any state fiscal agent, or at the
office of any duly authorized agent of the State Treasurer.
16735. Each bond shall contain a reference to the bond act, and if
subject to call, tender, or redemption prior to maturity, a recital
to that effect.
16737. (a) When the committee deems it in the best interests of the
state, it may authorize the Treasurer, upon those terms and
conditions that may be fixed by the committee or determined by the
Treasurer, to issue notes, on a negotiated or a competitive-bid
basis, maturing within a period not to exceed five years, in
anticipation of the sale of bonds duly authorized at the time the
notes are issued. The proceeds from the sale of those notes shall be
deposited in the related fund and used only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued or as additionally authorized by this
section.
(b) The notes authorized by this section may be sold at a price
at, above, or below the principal amount thereof, at the discretion
of the Treasurer.
(c) Any premium received from the sale of notes authorized by this
section may be applied to pay costs of issuance of the notes or
interest accruing on the notes.
(d) The notes authorized by this section may bear a fixed or
variable rate or rates of interest.
(e) In connection with the sale of notes pursuant to this section,
the Treasurer may engage the services of legal and financial
advisers, credit enhancers, trustees or paying agents, and other
professionals that the Treasurer deems necessary, and may enter into
contracts for these services, to be paid from proceeds of the notes
or any duly enacted appropriation.
(f) When the committee deems it in the best interests of the
state, it may authorize the Treasurer to deliver the notes in payment
for work or material furnished to the state for a public
improvement, pursuant to a contract awarded in the manner prescribed
by law. The notes shall be so delivered only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued.
(g) All notes issued pursuant to this section and any renewals
thereof shall be payable at a fixed time, solely from the proceeds of
the sale of the bonds and not otherwise, except if the sale of the
bonds did not occur prior to the maturity of the notes issued in
anticipation of the sale, the Treasurer shall, in order to meet the
notes or the renewals thereof then maturing, issue renewal notes for
this purpose. No renewal of a note or a renewal note shall be issued
after the sale of bonds in anticipation of which the original note
was issued.
(h) Every note issued pursuant to this section and any renewal
thereof shall, unless paid from a renewal note, be payable from the
proceeds of the sale of bonds and not otherwise. The total amount of
the notes or renewals thereof issued and outstanding shall not exceed
the total amount of the unsold bonds.
(i) Interest on the notes issued pursuant to this section shall be
payable from any appropriation made for that purpose or from
proceeds of the sale of the notes.
16730. Upon request of the board, supported as required in the bond
act, the committee shall determine the necessity or desirability of
obtaining interim financing pursuant to Section 16312 or 16313 and of
issuing any bonds authorized to be issued and the amount of interim
financing or bonds then to be obtained or issued and sold. Successive
issues of bonds may be authorized and sold and shall be designated
by an appropriate number or other designation. It is not necessary
that all of the bonds authorized to be issued be sold at any one
time.
16731. Whenever the committee determines that the sale of all or
any part of the bonds authorized to be issued is necessary or
desirable, it shall adopt a resolution to that effect. The resolution
shall specify all of the following as to the bonds then to be sold:
(a) The aggregate number, aggregate par value, denominations, and
the date of the bonds to be then sold. The denominations shall be in
the sum of one thousand dollars ($1,000) or multiples of that sum.
The date appearing on the bonds shall be deemed to be the date of
issuance for all purposes of this chapter, irrespective of the actual
date of delivery of the bonds and the payment of the purchase price
of the bonds.
(b) The dates of maturity and the amount of the bonds maturing at
each date of maturity, which amounts need not be equal. The last
dates of maturity shall be not more than 45 years after the date of
the bonds.
(c) Whether or not the bonds are to be subject to redemption or
tender prior to maturity, and, if so, the provisions for the
redemption or tender, the manner of the call or notice thereof, and
the price or prices at which the bonds shall be subject to redemption
or tender.
(d) (1) (A) The annual rate, or rates, of interest that the bonds
to be issued shall bear, which shall be in the increments determined
by the Treasurer, but not in excess of 11 percent. The rate or rates
may be determined at the time of the sale of the bonds.
(B) As an alternative to subparagraph (A), the resolution may
specify that the bonds may pay a variable interest rate or rates, as
prescribed in the resolution, but not in excess of 11 percent per
annum, and in accordance with the requirements of this subparagraph.
(i) At the time and as the result of the issuance of any bonds
bearing a variable interest rate, the aggregate principal amount of
all state general obligation bonds bearing variable interest rates
may not exceed 20 percent of the aggregate principal amount of all
state general obligation bonds then outstanding.
(ii) For purposes of the calculation made pursuant to clause (i),
variable rate bonds shall not include commercial paper notes issued
pursuant to Section 16731.6 or bonds that have an effective fixed
interest rate through a hedging contract, as specified in
subparagraph (C), but shall include bonds that have an effective
variable interest rate through a hedging contract.
(iii) Notwithstanding any other provision of this chapter, if the
committee decides to issue state general obligation bonds bearing
variable interest rates, the committee is not required to comply with
Section 16732.
(iv) Notwithstanding any other provision of law, if bonds are
issued bearing a variable interest rate under a bond act approved by
the voters on or after January 1, 2002, and if the variable interest
rate bonds provide a right of tender, then any amount payable by the
state as a result of the tender with respect to principal of and
interest on the bonds prior to the regularly scheduled principal or
interest payment dates, or payable by the state pursuant to
redemption or call initiated as a means to repay the obligation of
the state resulting from the tender, is backed by the full faith and
credit of the state and shall be payable under the bond act.
(v) A contractual obligation of the state to repay advances and
pay interest thereon under a credit enhancement or liquidity
agreement entered into in connection with variable interest rate
bonds providing a right of tender and issued under a bond act
approved by the voters on or after January 1, 2002, shall be backed
by the full faith and credit of the state and shall be payable under
the bond act, except to the extent bond interest paid with an advance
and interest on the advance would exceed the maximum interest rate
specified in this subdivision.
(C) For the purposes of clause (ii) of subparagraph (B), bonds
that have an "effective fixed interest rate through a hedging
contract" means bonds for which the Treasurer determines the hedging
contract meets either of the following conditions:
(i) Significantly reduces variable rate risk by providing changes
in fair values or cashflows that substantially offset the changes in
fair value or cashflows of the bonds.
(ii) Qualifies for integration with the bonds in calculating the
yield on the bonds under the rules prescribed in Section 148 of the
United States Internal Revenue Code (26 U.S.C. Sec. 148).
(D) The Treasurer's determination specified in subparagraph (C)
shall be made at the time the hedging contract is entered into and
shall apply through the maturity of the bonds, unless the hedging
contract is terminated prior to maturity.
(2) (A) (i) Notwithstanding any other provision of law, for bonds
approved by the voters after January 1, 2006, payment of any amounts
owed by the state to a counterparty, after any offset for payments
owed to the state on any hedging contract described in Section 5922
in connection with those bonds, shall be deemed to be included within
the appropriation for interest on the bonds contained in the
applicable bond act.
(ii) The total payments of stated interest on the bonds together
with payments owed by the state after any offset for payments owed to
the state on a hedging contract shall not exceed the maximum
interest rate set forth in this subdivision.
(iii) To the extent payments of interest on a bond, together with
payments on a hedging contract, would, in any fiscal year, exceed the
maximum interest rate specified in this subdivision, the excess
amounts may be paid in subsequent fiscal years, if the aggregate
amount of interest and that excess amount paid in any year does not
exceed the maximum interest rate specified in this subdivision.
(B) The Treasurer may not enter into any hedging contract
described by subparagraph (A) unless the committee has approved
policies developed by the Treasurer relating to the entering into and
managing of those hedging contracts that shall include both of the
following:
(i) A requirement that any hedging contract or program of
contracts is designed to reduce the amount or duration of payment,
currency, rate, spread, or similar risk or result in a lower cost of
borrowing when used in combination with the issuance or carrying of
bonds.
(ii) A description of the criteria to be used to evaluate the
potential risks and benefits to the state of entering into a
particular hedging contract or program of contracts and to evaluate
the performance of outstanding hedging contracts in comparison to the
objectives for which the hedging contract was executed.
(C) The policies approved pursuant to subparagraph (B) are exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3.
(e) The interest payment dates.
(f) The technical form and language of the bonds.
(g) Whether or not the right is reserved to make delivery in the
form of temporary or interim bonds, certificates, or receipts,
exchangeable for definitive bonds when executed and available for
delivery. If the right is reserved, the denominations and form of the
temporary securities shall be stated.
(h) Provisions for the registration and exchange of bonds and for
the use of a depository to hold book-entry bonds after issuance.
(i) All other terms and conditions of the bonds and of the
execution, issuance, and sale of the bonds, which shall be consistent
with all of this chapter.
16731.5. (a) Notwithstanding any other provision of this chapter,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as zero coupon or capital appreciation
bonds. The committee shall adopt a resolution finding that issuance
of these bonds is necessary and desirable, directing the Treasurer to
arrange for preparation of the requisite number of suitable bonds,
and specifying other provisions relating to the bonds including the
following:
(1) The date, number, denominations, and aggregate par value of
the bonds payable at maturity. The aggregate par value may be
represented by bond certificates in denominations as the committee
deems appropriate, but not less than one thousand dollars ($1,000).
(2) The dates of maturity and the aggregate amounts of the bonds
maturing on each of these dates. Determination of maturity dates and
amounts by the committee shall be made upon recommendation of the
Treasurer to provide the maximum benefit to potential purchasers and
to respond to the expected demand for the bonds. Whenever the
committee determines to issue bonds from any authorized bond act as
zero coupon or capital appreciation bonds, and to issue bonds from
the same authorization at the same time pursuant to Section 16731,
the committee may comply with the requirements of subdivision (b) of
Section 16731 by taking into account all the bonds of the same
authorization being issued at the same time.
(3) The interest rate or rates, and interest payment dates
applicable to the bonds. Zero coupon bonds may bear a zero rate of
interest, and capital appreciation bonds may bear a stated rate of
interest payable only at maturity, compounded at the same rate, which
rate or rates may be determined at the time of sale of the bonds.
The rate of interest borne by these bonds, or the nominal interest
rate taking into account the original issue discount of these bonds,
when bearing a zero interest rate, shall not exceed 11 percent per
annum.
(4) Any provisions for the redemption of the bonds prior to their
stated maturity.
(5) The technical form and language of the bonds.
(6) All other terms and conditions of the bonds and of their
execution, issuance, and sale, deemed necessary and appropriate by
the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue bonds as zero coupon or capital
appreciation bonds, all of the following shall apply:
(1) The bonds may be sold at negotiated sale at a price below the
par value in a manner consistent with paragraph (3) of subdivision
(a). If the committee determines to issue other bonds authorized by
the same bond act at the same time as zero coupon or capital
appreciation bonds are issued, the other bonds may also be sold at
negotiated sale with a discount of not more than 3 percent of the par
amount thereof.
(2) For purposes of determining the principal amount of bonds of
any voted authorization outstanding, in the case of any bonds which
are zero coupon or capital appreciation bonds and do not provide for
payment of interest on the bond prior to maturity, the principal
amount of the bonds shall be the cash price paid by the initial
purchasers of the bonds to the state, and deposited in the fund, plus
the amount of any costs of issuance of the bonds. Within 30 days of
the delivery of any zero coupon or capital appreciation bonds, the
Treasurer shall submit to the committee a certificate stating the
principal amount of bonds of each issue, calculated as stated in this
subdivision, which have been sold, and the certification shall be
conclusive for all purposes under this chapter and the constitution.
(3) The committee may arrange to utilize the services of
investment banks, commercial banks, savings and loans or other
financial institutions, or other advisers as it may deem appropriate
to publicize and assist in the marketing and sale of zero coupon or
capital appreciation bonds.
(c) When zero coupon or capital appreciation bonds are issued
pursuant to this section, the debt service payments on the bonds
should continue to be managed in a manner consistent with the state's
policy of retiring general obligation bonds in an orderly efficient
manner. It is the expectation of the Legislature that the authority
provided by this section will not be used to defer debt service
payments as a means of preserving General Fund moneys for short-term
purposes. The committee shall provide in the resolution authorizing
the issuance of zero coupon or capital appreciation bonds that the
state shall set aside, in a separate trust fund within the State
Treasury, an amount in each year representing the amount of interest
accrued during that year to be payable at the maturity of the bonds,
with these payments to be deemed a payment of debt service on the
bonds.
16731.6. (a) Notwithstanding any other provision of this chapter,
and as an alternative to the procedures set forth in Section 16731,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as commercial paper notes. The
committee shall adopt a resolution finding that issuance of the bonds
in the form of commercial paper notes is necessary and desirable,
directing the Treasurer to arrange for preparation of the requisite
number of suitable notes, and specifying other provisions relating to
the commercial paper notes, including all of the following:
(1) For each program of commercial paper notes authorized, the
resolution shall contain the final date of maturity and the total
aggregate principal amount of the commercial paper notes authorized
to be outstanding at any one time up to the maturity date, in
accordance with all of the following:
(A) The resolution may provide that the commercial paper notes may
be issued and renewed from time to time until the final maturity
date, and that the amount issued from time to time may be set by the
Treasurer up to the maximum amount authorized to be outstanding at
any one time.
(B) The resolution shall include methods of setting the dates,
numbers, and denominations of the commercial paper notes.
(C) The determination of the final maturity date and total amount
by the committee shall be made upon recommendation of the Treasurer
to meet the needs of the state for funds, to provide the maximum
benefit to potential purchasers, and to respond to the expected
demand for the commercial paper notes.
(D) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16732.
(2) The method of setting the interest rates and interest payment
dates applicable to the commercial paper notes, in accordance with
the following:
(A) Commercial paper notes may bear a stated rate of interest
payable only at maturity, which rate or rates may be determined at
the time of sale of each unit of commercial paper notes.
(B) The rate of interest borne by the commercial paper notes shall
not exceed 11 percent per annum.
(C) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16733.
(3) Any provisions for the redemption of the commercial paper
notes prior to stated maturity.
(4) The technical form and language of the commercial paper notes.
(5) All other terms and conditions of the commercial paper notes
and of their execution, issuance, and sale, deemed necessary and
appropriate by the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue commercial paper notes, all of the
following shall apply:
(1) The commercial paper notes may be sold at negotiated sale at a
price below the par value in a manner consistent with paragraph (2)
of subdivision (a).
(2) During the term of any program of commercial paper notes, the
renewal and reissuance from time to time of the commercial paper
notes in an amount up to the maximum amount authorized by the
resolution shall be deemed to be a refunding of the previously
maturing amount, permitted by and consistent with Article 6
(commencing with Section 16780).
(3) Consistent with the intent for the General Fund to realize a
savings in debt service costs when commercial paper notes are issued
in place of bonds without shifting or adding financing and debt
service costs to the bond funds, the state administrative costs of
commercial paper and interest payable and other costs associated with
commercial paper notes shall be paid for as follows:
(A) The proceeds of commercial paper notes are, notwithstanding
Section 13340, continuously appropriated to pay the state
administrative costs of commercial paper including, but not limited
to, costs of the Treasurer's office, the Controller's office, and the
Department of Finance.
(B) The interest payable on maturing commercial paper notes and
other costs associated with commercial paper notes not specified in
subparagraph (A), including, but not limited to, remarketing fees,
issuing and paying agent fees, the letter or line of credit provider
fees, the rating agency fees, and bond counsel fees, shall be paid
from the General Fund which, notwithstanding Section 13340, is
continuously appropriated to pay the interests and costs.
16732. In determining the dates of maturity of the bonds, and the
amount thereof to mature at each date of maturity, the committee
shall be guided, so far as it may deem to be practicable, by the
amounts and dates of maturity of the revenue estimated to accrue to
the fund pursuant to the bond act. The committee shall fix and
determine the dates and amounts of such maturities in such manner
that, together with the dates and amounts of interest payments on the
bonds, they shall coincide, as nearly as it may deem to be
practicable, with the dates and amounts of such estimated revenues.
16733. The rate of interest to be borne by the bonds need not be
uniform for all bonds of the same issue, and shall be the rate or
rates specified in the bid or proposal for negotiated sale accepted
by the Treasurer, unless a variable interest rate is prescribed for
the bonds in the resolution pursuant to subdivision (d) of Section
16731. The first interest payment date may be any date within one
year after the date of the bonds.
16734. Both principal of and interest on the bonds shall be payable
in lawful money of the United States, at the Office of the State
Treasurer, or at the office of any state fiscal agent, or at the
office of any duly authorized agent of the State Treasurer.
16735. Each bond shall contain a reference to the bond act, and if
subject to call, tender, or redemption prior to maturity, a recital
to that effect.
16737. (a) When the committee deems it in the best interests of the
state, it may authorize the Treasurer, upon those terms and
conditions that may be fixed by the committee or determined by the
Treasurer, to issue notes, on a negotiated or a competitive-bid
basis, maturing within a period not to exceed five years, in
anticipation of the sale of bonds duly authorized at the time the
notes are issued. The proceeds from the sale of those notes shall be
deposited in the related fund and used only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued or as additionally authorized by this
section.
(b) The notes authorized by this section may be sold at a price
at, above, or below the principal amount thereof, at the discretion
of the Treasurer.
(c) Any premium received from the sale of notes authorized by this
section may be applied to pay costs of issuance of the notes or
interest accruing on the notes.
(d) The notes authorized by this section may bear a fixed or
variable rate or rates of interest.
(e) In connection with the sale of notes pursuant to this section,
the Treasurer may engage the services of legal and financial
advisers, credit enhancers, trustees or paying agents, and other
professionals that the Treasurer deems necessary, and may enter into
contracts for these services, to be paid from proceeds of the notes
or any duly enacted appropriation.
(f) When the committee deems it in the best interests of the
state, it may authorize the Treasurer to deliver the notes in payment
for work or material furnished to the state for a public
improvement, pursuant to a contract awarded in the manner prescribed
by law. The notes shall be so delivered only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued.
(g) All notes issued pursuant to this section and any renewals
thereof shall be payable at a fixed time, solely from the proceeds of
the sale of the bonds and not otherwise, except if the sale of the
bonds did not occur prior to the maturity of the notes issued in
anticipation of the sale, the Treasurer shall, in order to meet the
notes or the renewals thereof then maturing, issue renewal notes for
this purpose. No renewal of a note or a renewal note shall be issued
after the sale of bonds in anticipation of which the original note
was issued.
(h) Every note issued pursuant to this section and any renewal
thereof shall, unless paid from a renewal note, be payable from the
proceeds of the sale of bonds and not otherwise. The total amount of
the notes or renewals thereof issued and outstanding shall not exceed
the total amount of the unsold bonds.
(i) Interest on the notes issued pursuant to this section shall be
payable from any appropriation made for that purpose or from
proceeds of the sale of the notes.
16730. Upon request of the board, supported as required in the bond
act, the committee shall determine the necessity or desirability of
obtaining interim financing pursuant to Section 16312 or 16313 and of
issuing any bonds authorized to be issued and the amount of interim
financing or bonds then to be obtained or issued and sold. Successive
issues of bonds may be authorized and sold and shall be designated
by an appropriate number or other designation. It is not necessary
that all of the bonds authorized to be issued be sold at any one
time.
16731. Whenever the committee determines that the sale of all or
any part of the bonds authorized to be issued is necessary or
desirable, it shall adopt a resolution to that effect. The resolution
shall specify all of the following as to the bonds then to be sold:
(a) The aggregate number, aggregate par value, denominations, and
the date of the bonds to be then sold. The denominations shall be in
the sum of one thousand dollars ($1,000) or multiples of that sum.
The date appearing on the bonds shall be deemed to be the date of
issuance for all purposes of this chapter, irrespective of the actual
date of delivery of the bonds and the payment of the purchase price
of the bonds.
(b) The dates of maturity and the amount of the bonds maturing at
each date of maturity, which amounts need not be equal. The last
dates of maturity shall be not more than 45 years after the date of
the bonds.
(c) Whether or not the bonds are to be subject to redemption or
tender prior to maturity, and, if so, the provisions for the
redemption or tender, the manner of the call or notice thereof, and
the price or prices at which the bonds shall be subject to redemption
or tender.
(d) (1) (A) The annual rate, or rates, of interest that the bonds
to be issued shall bear, which shall be in the increments determined
by the Treasurer, but not in excess of 11 percent. The rate or rates
may be determined at the time of the sale of the bonds.
(B) As an alternative to subparagraph (A), the resolution may
specify that the bonds may pay a variable interest rate or rates, as
prescribed in the resolution, but not in excess of 11 percent per
annum, and in accordance with the requirements of this subparagraph.
(i) At the time and as the result of the issuance of any bonds
bearing a variable interest rate, the aggregate principal amount of
all state general obligation bonds bearing variable interest rates
may not exceed 20 percent of the aggregate principal amount of all
state general obligation bonds then outstanding.
(ii) For purposes of the calculation made pursuant to clause (i),
variable rate bonds shall not include commercial paper notes issued
pursuant to Section 16731.6 or bonds that have an effective fixed
interest rate through a hedging contract, as specified in
subparagraph (C), but shall include bonds that have an effective
variable interest rate through a hedging contract.
(iii) Notwithstanding any other provision of this chapter, if the
committee decides to issue state general obligation bonds bearing
variable interest rates, the committee is not required to comply with
Section 16732.
(iv) Notwithstanding any other provision of law, if bonds are
issued bearing a variable interest rate under a bond act approved by
the voters on or after January 1, 2002, and if the variable interest
rate bonds provide a right of tender, then any amount payable by the
state as a result of the tender with respect to principal of and
interest on the bonds prior to the regularly scheduled principal or
interest payment dates, or payable by the state pursuant to
redemption or call initiated as a means to repay the obligation of
the state resulting from the tender, is backed by the full faith and
credit of the state and shall be payable under the bond act.
(v) A contractual obligation of the state to repay advances and
pay interest thereon under a credit enhancement or liquidity
agreement entered into in connection with variable interest rate
bonds providing a right of tender and issued under a bond act
approved by the voters on or after January 1, 2002, shall be backed
by the full faith and credit of the state and shall be payable under
the bond act, except to the extent bond interest paid with an advance
and interest on the advance would exceed the maximum interest rate
specified in this subdivision.
(C) For the purposes of clause (ii) of subparagraph (B), bonds
that have an "effective fixed interest rate through a hedging
contract" means bonds for which the Treasurer determines the hedging
contract meets either of the following conditions:
(i) Significantly reduces variable rate risk by providing changes
in fair values or cashflows that substantially offset the changes in
fair value or cashflows of the bonds.
(ii) Qualifies for integration with the bonds in calculating the
yield on the bonds under the rules prescribed in Section 148 of the
United States Internal Revenue Code (26 U.S.C. Sec. 148).
(D) The Treasurer's determination specified in subparagraph (C)
shall be made at the time the hedging contract is entered into and
shall apply through the maturity of the bonds, unless the hedging
contract is terminated prior to maturity.
(2) (A) (i) Notwithstanding any other provision of law, for bonds
approved by the voters after January 1, 2006, payment of any amounts
owed by the state to a counterparty, after any offset for payments
owed to the state on any hedging contract described in Section 5922
in connection with those bonds, shall be deemed to be included within
the appropriation for interest on the bonds contained in the
applicable bond act.
(ii) The total payments of stated interest on the bonds together
with payments owed by the state after any offset for payments owed to
the state on a hedging contract shall not exceed the maximum
interest rate set forth in this subdivision.
(iii) To the extent payments of interest on a bond, together with
payments on a hedging contract, would, in any fiscal year, exceed the
maximum interest rate specified in this subdivision, the excess
amounts may be paid in subsequent fiscal years, if the aggregate
amount of interest and that excess amount paid in any year does not
exceed the maximum interest rate specified in this subdivision.
(B) The Treasurer may not enter into any hedging contract
described by subparagraph (A) unless the committee has approved
policies developed by the Treasurer relating to the entering into and
managing of those hedging contracts that shall include both of the
following:
(i) A requirement that any hedging contract or program of
contracts is designed to reduce the amount or duration of payment,
currency, rate, spread, or similar risk or result in a lower cost of
borrowing when used in combination with the issuance or carrying of
bonds.
(ii) A description of the criteria to be used to evaluate the
potential risks and benefits to the state of entering into a
particular hedging contract or program of contracts and to evaluate
the performance of outstanding hedging contracts in comparison to the
objectives for which the hedging contract was executed.
(C) The policies approved pursuant to subparagraph (B) are exempt
from the requirements of Chapter 3.5 (commencing with Section 11340)
of Part 1 of Division 3.
(e) The interest payment dates.
(f) The technical form and language of the bonds.
(g) Whether or not the right is reserved to make delivery in the
form of temporary or interim bonds, certificates, or receipts,
exchangeable for definitive bonds when executed and available for
delivery. If the right is reserved, the denominations and form of the
temporary securities shall be stated.
(h) Provisions for the registration and exchange of bonds and for
the use of a depository to hold book-entry bonds after issuance.
(i) All other terms and conditions of the bonds and of the
execution, issuance, and sale of the bonds, which shall be consistent
with all of this chapter.
16731.5. (a) Notwithstanding any other provision of this chapter,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as zero coupon or capital appreciation
bonds. The committee shall adopt a resolution finding that issuance
of these bonds is necessary and desirable, directing the Treasurer to
arrange for preparation of the requisite number of suitable bonds,
and specifying other provisions relating to the bonds including the
following:
(1) The date, number, denominations, and aggregate par value of
the bonds payable at maturity. The aggregate par value may be
represented by bond certificates in denominations as the committee
deems appropriate, but not less than one thousand dollars ($1,000).
(2) The dates of maturity and the aggregate amounts of the bonds
maturing on each of these dates. Determination of maturity dates and
amounts by the committee shall be made upon recommendation of the
Treasurer to provide the maximum benefit to potential purchasers and
to respond to the expected demand for the bonds. Whenever the
committee determines to issue bonds from any authorized bond act as
zero coupon or capital appreciation bonds, and to issue bonds from
the same authorization at the same time pursuant to Section 16731,
the committee may comply with the requirements of subdivision (b) of
Section 16731 by taking into account all the bonds of the same
authorization being issued at the same time.
(3) The interest rate or rates, and interest payment dates
applicable to the bonds. Zero coupon bonds may bear a zero rate of
interest, and capital appreciation bonds may bear a stated rate of
interest payable only at maturity, compounded at the same rate, which
rate or rates may be determined at the time of sale of the bonds.
The rate of interest borne by these bonds, or the nominal interest
rate taking into account the original issue discount of these bonds,
when bearing a zero interest rate, shall not exceed 11 percent per
annum.
(4) Any provisions for the redemption of the bonds prior to their
stated maturity.
(5) The technical form and language of the bonds.
(6) All other terms and conditions of the bonds and of their
execution, issuance, and sale, deemed necessary and appropriate by
the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue bonds as zero coupon or capital
appreciation bonds, all of the following shall apply:
(1) The bonds may be sold at negotiated sale at a price below the
par value in a manner consistent with paragraph (3) of subdivision
(a). If the committee determines to issue other bonds authorized by
the same bond act at the same time as zero coupon or capital
appreciation bonds are issued, the other bonds may also be sold at
negotiated sale with a discount of not more than 3 percent of the par
amount thereof.
(2) For purposes of determining the principal amount of bonds of
any voted authorization outstanding, in the case of any bonds which
are zero coupon or capital appreciation bonds and do not provide for
payment of interest on the bond prior to maturity, the principal
amount of the bonds shall be the cash price paid by the initial
purchasers of the bonds to the state, and deposited in the fund, plus
the amount of any costs of issuance of the bonds. Within 30 days of
the delivery of any zero coupon or capital appreciation bonds, the
Treasurer shall submit to the committee a certificate stating the
principal amount of bonds of each issue, calculated as stated in this
subdivision, which have been sold, and the certification shall be
conclusive for all purposes under this chapter and the constitution.
(3) The committee may arrange to utilize the services of
investment banks, commercial banks, savings and loans or other
financial institutions, or other advisers as it may deem appropriate
to publicize and assist in the marketing and sale of zero coupon or
capital appreciation bonds.
(c) When zero coupon or capital appreciation bonds are issued
pursuant to this section, the debt service payments on the bonds
should continue to be managed in a manner consistent with the state's
policy of retiring general obligation bonds in an orderly efficient
manner. It is the expectation of the Legislature that the authority
provided by this section will not be used to defer debt service
payments as a means of preserving General Fund moneys for short-term
purposes. The committee shall provide in the resolution authorizing
the issuance of zero coupon or capital appreciation bonds that the
state shall set aside, in a separate trust fund within the State
Treasury, an amount in each year representing the amount of interest
accrued during that year to be payable at the maturity of the bonds,
with these payments to be deemed a payment of debt service on the
bonds.
16731.6. (a) Notwithstanding any other provision of this chapter,
and as an alternative to the procedures set forth in Section 16731,
the committee may provide for the issuance of all or part of the
bonds authorized to be issued as commercial paper notes. The
committee shall adopt a resolution finding that issuance of the bonds
in the form of commercial paper notes is necessary and desirable,
directing the Treasurer to arrange for preparation of the requisite
number of suitable notes, and specifying other provisions relating to
the commercial paper notes, including all of the following:
(1) For each program of commercial paper notes authorized, the
resolution shall contain the final date of maturity and the total
aggregate principal amount of the commercial paper notes authorized
to be outstanding at any one time up to the maturity date, in
accordance with all of the following:
(A) The resolution may provide that the commercial paper notes may
be issued and renewed from time to time until the final maturity
date, and that the amount issued from time to time may be set by the
Treasurer up to the maximum amount authorized to be outstanding at
any one time.
(B) The resolution shall include methods of setting the dates,
numbers, and denominations of the commercial paper notes.
(C) The determination of the final maturity date and total amount
by the committee shall be made upon recommendation of the Treasurer
to meet the needs of the state for funds, to provide the maximum
benefit to potential purchasers, and to respond to the expected
demand for the commercial paper notes.
(D) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16732.
(2) The method of setting the interest rates and interest payment
dates applicable to the commercial paper notes, in accordance with
the following:
(A) Commercial paper notes may bear a stated rate of interest
payable only at maturity, which rate or rates may be determined at
the time of sale of each unit of commercial paper notes.
(B) The rate of interest borne by the commercial paper notes shall
not exceed 11 percent per annum.
(C) Notwithstanding any other provision of this chapter, whenever
the committee determines to issue commercial paper notes, the
committee is not required to comply with the requirements of Section
16733.
(3) Any provisions for the redemption of the commercial paper
notes prior to stated maturity.
(4) The technical form and language of the commercial paper notes.
(5) All other terms and conditions of the commercial paper notes
and of their execution, issuance, and sale, deemed necessary and
appropriate by the committee.
(b) Notwithstanding any other provision of this chapter, when the
committee determines to issue commercial paper notes, all of the
following shall apply:
(1) The commercial paper notes may be sold at negotiated sale at a
price below the par value in a manner consistent with paragraph (2)
of subdivision (a).
(2) During the term of any program of commercial paper notes, the
renewal and reissuance from time to time of the commercial paper
notes in an amount up to the maximum amount authorized by the
resolution shall be deemed to be a refunding of the previously
maturing amount, permitted by and consistent with Article 6
(commencing with Section 16780).
(3) Consistent with the intent for the General Fund to realize a
savings in debt service costs when commercial paper notes are issued
in place of bonds without shifting or adding financing and debt
service costs to the bond funds, the state administrative costs of
commercial paper and interest payable and other costs associated with
commercial paper notes shall be paid for as follows:
(A) The proceeds of commercial paper notes are, notwithstanding
Section 13340, continuously appropriated to pay the state
administrative costs of commercial paper including, but not limited
to, costs of the Treasurer's office, the Controller's office, and the
Department of Finance.
(B) The interest payable on maturing commercial paper notes and
other costs associated with commercial paper notes not specified in
subparagraph (A), including, but not limited to, remarketing fees,
issuing and paying agent fees, the letter or line of credit provider
fees, the rating agency fees, and bond counsel fees, shall be paid
from the General Fund which, notwithstanding Section 13340, is
continuously appropriated to pay the interests and costs.
16732. In determining the dates of maturity of the bonds, and the
amount thereof to mature at each date of maturity, the committee
shall be guided, so far as it may deem to be practicable, by the
amounts and dates of maturity of the revenue estimated to accrue to
the fund pursuant to the bond act. The committee shall fix and
determine the dates and amounts of such maturities in such manner
that, together with the dates and amounts of interest payments on the
bonds, they shall coincide, as nearly as it may deem to be
practicable, with the dates and amounts of such estimated revenues.
16733. The rate of interest to be borne by the bonds need not be
uniform for all bonds of the same issue, and shall be the rate or
rates specified in the bid or proposal for negotiated sale accepted
by the Treasurer, unless a variable interest rate is prescribed for
the bonds in the resolution pursuant to subdivision (d) of Section
16731. The first interest payment date may be any date within one
year after the date of the bonds.
16734. Both principal of and interest on the bonds shall be payable
in lawful money of the United States, at the Office of the State
Treasurer, or at the office of any state fiscal agent, or at the
office of any duly authorized agent of the State Treasurer.
16735. Each bond shall contain a reference to the bond act, and if
subject to call, tender, or redemption prior to maturity, a recital
to that effect.
16737. (a) When the committee deems it in the best interests of the
state, it may authorize the Treasurer, upon those terms and
conditions that may be fixed by the committee or determined by the
Treasurer, to issue notes, on a negotiated or a competitive-bid
basis, maturing within a period not to exceed five years, in
anticipation of the sale of bonds duly authorized at the time the
notes are issued. The proceeds from the sale of those notes shall be
deposited in the related fund and used only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued or as additionally authorized by this
section.
(b) The notes authorized by this section may be sold at a price
at, above, or below the principal amount thereof, at the discretion
of the Treasurer.
(c) Any premium received from the sale of notes authorized by this
section may be applied to pay costs of issuance of the notes or
interest accruing on the notes.
(d) The notes authorized by this section may bear a fixed or
variable rate or rates of interest.
(e) In connection with the sale of notes pursuant to this section,
the Treasurer may engage the services of legal and financial
advisers, credit enhancers, trustees or paying agents, and other
professionals that the Treasurer deems necessary, and may enter into
contracts for these services, to be paid from proceeds of the notes
or any duly enacted appropriation.
(f) When the committee deems it in the best interests of the
state, it may authorize the Treasurer to deliver the notes in payment
for work or material furnished to the state for a public
improvement, pursuant to a contract awarded in the manner prescribed
by law. The notes shall be so delivered only for the purposes for
which may be used the proceeds of the sale of bonds in anticipation
whereof the notes were issued.
(g) All notes issued pursuant to this section and any renewals
thereof shall be payable at a fixed time, solely from the proceeds of
the sale of the bonds and not otherwise, except if the sale of the
bonds did not occur prior to the maturity of the notes issued in
anticipation of the sale, the Treasurer shall, in order to meet the
notes or the renewals thereof then maturing, issue renewal notes for
this purpose. No renewal of a note or a renewal note shall be issued
after the sale of bonds in anticipation of which the original note
was issued.
(h) Every note issued pursuant to this section and any renewal
thereof shall, unless paid from a renewal note, be payable from the
proceeds of the sale of bonds and not otherwise. The total amount of
the notes or renewals thereof issued and outstanding shall not exceed
the total amount of the unsold bonds.
(i) Interest on the notes issued pursuant to this section shall be
payable from any appropriation made for that purpose or from
proceeds of the sale of the notes.
