CHAPTER 4. Bonds [43600. - 43904.]

Chapter 4 added by Stats. 1949, Ch. 79.

§§ 43600–43904 · 136 sections

1. ARTICLE 1. General §§ 43600–43638 · 42 sections

   • § 43600 As used in this article, “an issue of bonds” means the aggregate principal amount of all bonds authorized by a proposal approved by the city electors pursuant…
   • § 43601 As used in this article, “municipal improvement” includes bridges, waterworks, water rights, sewers, light and power works or plants, buildings for municipal…
   • § 43602 Pursuant to this article, a city may incur indebtedness for any municipal improvement requiring an expenditure greater than the amount allowed for it by the…
   • § 43602.5 (a) A city or a city and county may also incur indebtedness pursuant to this chapter for seismic strengthening of unreinforced buildings and other buildings.…
   • § 43603 When a city planning commission and the legislative body approve a group of municipal improvements as constituting a city plan, the legislative body may submit…
   • § 43604 Such a city plan may include land for public use, public buildings including auditoriums and stadiums, parks, streets, transportation facilities and other…
   • § 43605 A city shall not incur an indebtedness for public improvements which exceeds in the aggregate 15 percent of the assessed value of all real and personal…
   • § 43606 An indebtedness is incurred within the meaning of this article to the extent of the principal amount of bonds sold and delivered.
   • § 43607 Proceedings are initiated when the city legislative body passes a resolution by a two-thirds vote of all its members determining that the public interest or…
   • § 43608 At any subsequent meeting, by a two-thirds vote of all its members, the legislative body may pass an ordinance ordering the submission of the proposition of…
   • § 43609 Propositions for more than one object or purpose may be submitted at the same election.
   • § 43610 The ordinance shall recite: (a) The object and purpose of incurring the indebtedness. (b) The estimated cost of the public improvements. (c) The amount of the…
   • § 43610.1 The ordinance may provide that the estimated cost stated therein of the public improvements includes any or all of the following: (a) Legal or other fees…
   • § 43611 The ordinance shall be published once a day for at least seven days in a newspaper published at least six days a week in the city, or once a week for two weeks…
   • § 43612 If an election called pursuant to this article is consolidated with any other election, the ordinance calling the bond election need not set forth the election…
   • § 43613 Except as otherwise provided in the ordinance, the election shall be conducted as other city elections.
   • § 43614 If two-thirds of the electors voting on the proposition vote for it, the bonds may be issued.
   • § 43615 When two or more propositions for incurring indebtedness are submitted at the same election, the votes cast for and against each proposition shall be counted…
   • § 43616 If any proposition is defeated by the electors, the legislative body shall not call another election on a substantially similar proposition to be held within…
   • § 43617 The legislative body shall prescribe the form of the bonds and interest coupons, and fix the date of the bonds.
   • § 43618 The legislative body may divide the principal amount of any issue into two or more series and fix different dates for the bonds of each series. The bonds of…
   • § 43619 The legislative body shall fix, and designate in the bonds, a time and place for payment of the bonds. Except as provided in Section 43620 of the code, not…
   • § 43620 The legislative body may fix a date, not more than two years from the date of issuance, for the earliest maturity of each issue or series of bonds and in the…
   • § 43620.1 An action to determine the validity of bonds may be brought pursuant to Chapter 9 (commencing with Section 860) of Title 10 of Part 2 of the Code of Civil…
   • § 43621 The legislative body may provide for redemption of bonds before maturity at prices determined by it. A bond shall not be subject to call or redemption prior to…
   • § 43622 The bonds shall be issued in such denomination or denominations as the legislative body may prescribe.
   • § 43623 The bonds shall be signed by the mayor, or such other officer as the legislative body authorizes by resolution adopted by a two-thirds vote of all its members,…
   • § 43624 The bond coupons shall be numbered consecutively and signed by the treasurer.
   • § 43625 All signatures and countersignatures except that of the clerk or the clerk’s deputy may be printed, lithographed, or engraved.
   • § 43626 If any officer whose signature or countersignature appears on bonds or coupons ceases to be an officer before delivery of the bonds, that officer’s signature…
   • § 43627 The bonds may be issued and sold as the legislative body determines, but for not less than par. Before selling the bonds, or any part thereof, the legislative…
   • § 43628 All premiums and accrued interest received shall be placed in the fund to be used for the payment of principal of and interest on the bonds, and the remainder…
   • § 43629 The legislative body may provide for delivery of any bonds at places outside the city or State, and for receipt and transmittal of the purchase price in cash…
   • § 43630 After three years after a bond election the legislative body may determine, by ordinance adopted by a two-thirds vote of all of its members, that no part of…
   • § 43631 When the legislative body determines by resolution that the expenditure of money raised by the sale of bonds for the purpose for which the bonds were voted is…
   • § 43632 At the time of making the general tax levy after incurring the bonded indebtedness, and annually thereafter until the bonds are paid or until there is a sum in…
   • § 43633 If the earliest maturity of the bonds is more than one year after the date of issuance, the legislative body shall levy and collect annually a tax sufficient…
   • § 43634 These taxes shall be levied and collected as other city taxes, and in addition to all other taxes. They shall be used only for payment of the bonds and…
   • § 43635 A city may undertake to perform the work directly on any municipal improvement for which bonds are issued pursuant to this article, purchasing the materials…
   • § 43636 When the city and the United States jointly perform work on such municipal improvements, the city may turn over its portion of the cost to the United States…
   • § 43637 By resolution, the legislative body may require the treasurer to give additional bonds for the safe custody and care of the public funds.
   • § 43638 When municipal improvements are being made pursuant to this article, the legislative body shall make all necessary regulations for carrying out and maintaining…
2. ARTICLE 3. Refunding Indebtedness §§ 43720–43747 · 28 sections

   • § 43720 The legislative body of any city, except a city and county, may provide for the funding or refunding of outstanding indebtedness pursuant to this article, if…
   • § 43721 By a two-thirds vote of its number, the legislative body may fund or refund the indebtedness at, after, or before maturity and issue bonds of the city for the…
   • § 43722 The bonds shall be issued in denominations of not less than one hundred dollars ($100) nor more than one thousand dollars ($1,000) each, have not more than 40…
   • § 43723 The rate of interest during the entire term of the bonds need not be the same but different rates may be fixed for one or more interest payments.
   • § 43724 The bonds shall be serial bonds, and not less than one-fortieth of the principal and interest on all sums unpaid shall be paid each year.
   • § 43725 The legislative body may fix a date for the earliest maturity of the principal of the bonds, not more than three years from the date of the issue.
   • § 43726 The bonds shall be payable in such money and at such places as the legislative body designates in the bonds.
   • § 43727 The bonds may be sold in the manner provided by the legislative body, to the highest bidder, at such price that the interest rate paid by the city, computed on…
   • § 43728 The proceeds of any sale for cash shall be placed in the city treasury to the credit of the funding fund, and applied only to refunding the indebtedness for…
   • § 43729 Any proceeds of the refunding bonds remaining after the indebtedness has been paid shall be deposited in the fund established for the payment of principal and…
   • § 43730 At the time of making the general tax levy after incurring the bonded indebtedness and annually thereafter until the bonds are paid or until there is a sum in…
   • § 43731 If the earliest maturity of the refunding bonds is more than one year after the date of issuance, the legislative body shall levy and collect annually a tax…
   • § 43732 The taxes shall be levied and collected as other city taxes, and are in addition to all other taxes. They shall be used only for the payment of the bonds and…
   • § 43732.5 (a) Prior to the issuance by a city of bonds pursuant to this chapter, the legislative body may elect, by resolution, to guarantee payment on outstanding bonds…
   • § 43733 Bonds to fund or refund the indebtedness shall not be issued unless authorized by the electors of the city voting at an election to be called and held for that…
   • § 43734 The election shall be called and held pursuant to Article 1 of this chapter.
   • § 43735 The ordinance calling the election shall recite the object and purposes for which the bonded indebtedness is to be incurred.
   • § 43736 When it is proposed to refund any outstanding bonded indebtedness of a city upon terms which permit any number of the refunding bonds to mature more than forty…
   • § 43737 The proceeds from the sale of the bonds shall be applied by the treasurer to the satisfaction of the judgment or the refunding of the indebtedness for which…
   • § 43738 If the refunding bonds are issued in whole or in part to refund before maturity an indebtedness evidenced by bonds, notes, or other evidences of indebtedness,…
   • § 43740 When sufficient money is in the funding fund to redeem one or more outstanding past due bonds, warrants, judgments, notes, or other evidences of indebtedness…
   • § 43741 At the same time the treasurer shall deposit in the post office a copy of the notice, enclosed in a sealed envelope, postage prepaid, addressed to the…
   • § 43742 If any bonds are authorized for funding or refunding before maturity any obligations which by their terms are subject to call and payment before maturity, and…
   • § 43743 When any outstanding bonds, warrants, judgments, notes, or other evidences of indebtedness are surrendered and paid, the treasurer shall cancel them by…
   • § 43744 The treasurer shall keep a record of bonds, warrants, judgments, notes, or other evidences of indebtedness redeemed, and report the redemptions to the city…
   • § 43745 If the obligations were issued by, on account of, or against, any department, board, or special fund of the city, he shall make the report to such department,…
   • § 43746 The report shall be made at least once a month, and shall be accompanied by the bonds, warrants, judgments, or other evidences of indebtedness which have been…
   • § 43747 Any money remaining in the funding fund, after all outstanding bonds, warrants, judgments, notes, or other evidences of indebtedness proposed to be refunded…
3. ARTICLE 4. Investment Bond Act of 1909 §§ 43760–43797 · 38 sections

   • § 43760 This article may be cited as the Investment Bond Act of 1909.
   • § 43761 Whenever the public interest or necessity requires, any city may incur a bonded indebtedness to acquire bonds: (a) Issued by the city. (b) Issued by or for any…
   • § 43762 It is the intent of the Legislature in adopting this article that the acquisition of such bonds or investments of the general improvement fund shall be for any…
   • § 43763 Bonds issued pursuant to this article shall be issued substantially in the manner prescribed by Article 1 of this chapter.
   • § 43764 The ordinance calling the election need not contain any statement as to the estimated cost of the proposed public improvement.
   • § 43765 If the bonds are to be issued to acquire outstanding bonds, the ordinance shall state generally: (a) What bonds are to be purchased or acquired. (b) The total…
   • § 43766 The interest rate on the bonds need not be the same during the entire term and different rates may be fixed for one or more interest payments.
   • § 43767 The bonds shall not be sold at less than their par value. They may be exchanged at their par value for the outstanding bonds if the outstanding bonds are taken…
   • § 43768 In the exchange of bonds, interest upon the bonds to be acquired accruing to the date of exchange may be offset against the interest accruing upon the bonds…
   • § 43769 Bonds issued pursuant to this article shall be redeemed and paid pursuant to Article 1 of this chapter.
   • § 43770 Taxes for the payment of the bonds shall be levied pursuant to Article 1 except where any issue of bonds pursuant to this article is to mature at one time.
   • § 43771 The legislative body of any city shall keep the funds arising from the sale of bonds pursuant to this article separate and distinct from all other municipal…
   • § 43772 If the bonds are issued to acquire or to provide funds for the purchase of certain outstanding bonds, they may be used only for that purpose. All of the funds…
   • § 43773 At such times as the legislative body determines, it may sell any of the bonds purchased by it. The bonds shall not be sold at a price less than that paid for…
   • § 43774 The purchase price of any bonds sold and the accrued interest on them shall be placed in the general improvement fund and may be reinvested in bonds, or, if…
   • § 43775 During the time the city owns any district bonds payable from taxes or assessments levied wholly or partially in accordance with the assessed value of the land…
   • § 43776 When bonds are acquired at less than their par value, the legislative body may reduce the total principal amount of any issue acquired and held by it to a…
   • § 43777 The ordinance is subject to referendum as other ordinances and shall designate: (a) The issue of bonds to be reduced. (b) The total principal amount of the…
   • § 43778 At the time and place fixed, the bonds shall be publicly canceled, and the city clerk shall enter on the minutes of the legislative body a record of the bonds…
   • § 43779 If the bonds canceled are issued under the Improvement Bond Act of 1915, the legislative body shall reduce the principal amount of the assessments securing the…
   • § 43780 The reduction of assessments shall be carried out by canceling such proportion of the assessments as is necessary, and the legislative body may provide…
   • § 43781 When the legislative body of any city has acquired any district bonds pursuant to this article, it may, as an alternative to the procedure prescribed in…
   • § 43782 Before ordering the cancellation, by ordinance the legislative body shall: (a) Determine that the public interest and welfare will be best served by the…
   • § 43783 At the time and place fixed in the ordinance, the bonds shall be publicly canceled, and the legislative body shall cause a record of the cancellation to be…
   • § 43784 The legislative body may sell any district bonds acquired from money in the general improvement fund to any property owner at such price as it determines, to…
   • § 43785 All district bonds sold for the purpose of effecting such redemption shall be canceled and discharged upon the redemption of the property. The treasurer shall…
   • § 43786 The legislative body may determine that any issue of bonds pursuant to this article shall mature at one time, not to exceed twenty years from the date of issue.
   • § 43787 If the bonds are made to mature at one time, the annual tax levy shall be sufficient to pay the interest on the bonds as it comes due and create a sinking fund…
   • § 43788 The sum to be raised each year and placed in the sinking fund for the payment of the principal shall not be less than an amount obtained by dividing the total…
   • § 43789 If the entire issue of bonds is to mature at one time, the bonds may be called for redemption in numerical order at par and accrued interest on any interest…
   • § 43790 Any bond issued pursuant to this article shall not be callable or redeemable prior to its fixed maturity date unless it contains a statement that the bond is…
   • § 43791 At least once each year, within sixty days prior to an interest payment date, if the sinking fund contains sufficient available money to call one or more of…
   • § 43792 The notice shall state the amount available for the redemption of bonds and specify the time and place the proposals will be opened. At such time and place,…
   • § 43793 A proposal shall not be accepted unless the sale price is less than par and accrued interest. If no proposals are received, or if those received are rejected…
   • § 43794 Notice of the call for redemption shall be published once a week for two weeks in a newspaper of general circulation in the city. The first publication shall…
   • § 43795 If any bonds called are not presented for redemption on the date fixed, on the day following a sum sufficient for the payment of the principal of such bonds…
   • § 43796 This article provides an alternative system for the issuance of bonds. When proceedings are commenced under this article, its provisions govern all procedures…
   • § 43797 This article shall be liberally construed to the end that its purposes may be made effective.
4. ARTICLE 5. Prepayment §§ 43820–43824 · 5 sections

   • § 43820 In its ordinance or resolution authorizing the issuance of bonds, a city legislative body may provide that a certain portion of such bonds, as determined and…
   • § 43821 In the ordinance or resolution, the legislative body shall prescribe the method for determining the particular bonds to be paid, and the manner in which they…
   • § 43822 If provision is made for the payment of bonds in advance of maturity, the legislative body shall levy and collect a tax which, with any other funds in the…
   • § 43823 Such taxes are in addition to all other taxes levied and collected for municipal purposes and for meeting payments on the principal and interest of the bonded…
   • § 43824 The amount fixed by the legislative body to be paid in lieu of interest accrued but not due shall be paid by the city out of the fund in its treasury for…
5. ARTICLE 6. Compromise §§ 43850–43860 · 11 sections

   • § 43850 Whenever a city has an outstanding indebtedness evidenced by bonds the legislative body may submit to the electors of the city, at any election held for that…
   • § 43851 The election shall be called and held in the same manner as other elections in the city.
   • § 43852 The notice of election shall state: (a) The bonded indebtedness which it is proposed to declare at once due and payable. (b) The terms of the proposed…
   • § 43853 The question shall be voted upon as an entirety. If two-thirds of the electors vote in favor of it, by ordinance the legislative body shall declare the bonds…
   • § 43854 The legislative body shall carry the compromise into effect and consent to the judgment specified in the notice of election and the proposed method of paying…
   • § 43855 It shall provide for the collection of an annual tax sufficient to pay the interest on the judgment as it falls due and such portion of the principal as is…
   • § 43856 The rights of any nonconsenting holder of bonds specified in the notice are not affected by the proceedings.
   • § 43857 In any action brought upon any of the bonds described in the notice, the judgment of a court of competent jurisdiction is conclusive as to the regularity of…
   • § 43858 In any action brought upon any of the bonds described in the notice of election, the plaintiff shall deposit in court the bonds upon which he sues.
   • § 43859 When the judgment, rendered in accordance with the terms of the proposed compromise described in the notice, becomes final, the bonds sued upon shall be…
   • § 43860 If for any reason the judgment is reversed or set aside, or if any orders or writs under it are disobeyed by the defendant or its officers, the treasurer shall…
6. ARTICLE 7. Registration §§ 43880–43886 · 7 sections

   • § 43880 Upon presentation by the owner to the city treasurer of any coupon bond or bond payable to bearer issued by any city, with a request for the conversion of the…
   • § 43881 The bond may thereafter be transferred by the registered owner in person or by attorney duly authorized on presentation to the treasurer, and again registered,…
   • § 43882 The statement stamped, printed, or written upon the bond may be in substantially the following form: (Date, giving month, year, and day.) This bond is…
   • § 43883 After any bond has been registered, the principal and interest shall be payable to the registered owner.
   • § 43884 The city treasurer shall keep in his office a book showing at all times what bonds are registered and in whose names.
   • § 43885 Notwithstanding any provision of law to the contrary, bonds, issued pursuant to statute or city charter, may be in the form of coupon bonds or registered…
   • § 43886 This article applies to all coupon bonds and all other bonds payable to bearer.
7. ARTICLE 8. Destruction of Unsold Bonds §§ 43900–43904 · 5 sections

   • § 43900 The legislative body of any city may destroy any bonds remaining in the possession of the city if: (a) The bonds were voted to be issued for municipal…
   • § 43901 The legislative body shall give notice of its intention to destroy the bonds by publication of a notice for four successive weeks in the official newspaper of…
   • § 43902 The notice shall state: (a) The time and place of the destruction. (b) The reason for the destruction. (c) A general description of the character and amount of…
   • § 43903 At the time and place stated in the notice, the legislative body shall publicly destroy the bonds unless at least three days before the designated time,…
   • § 43904 No other issue of bonds in place of those destroyed shall be made by the city, unless again authorized by a vote of the people.