Section § 43600

Explanation

This law defines "an issue of bonds" as the total amount of bonds that city voters have approved through a proposal.

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 to this article.

Section § 43601

Explanation

This law defines what is considered a "municipal improvement" within a city. It includes things like bridges, water facilities, sewers, electricity and lighting plants, municipal buildings, and other structures needed for city functions. The term also covers acquiring land for public use, like civic centers, whether or not there are current plans or funds for developing that land.

As used in this article, “municipal improvement” includes bridges, waterworks, water rights, sewers, light and power works or plants, buildings for municipal uses, wharves, breakwaters, jetties, seawalls, schoolhouses, fire apparatus, street work, and other works, property, or structures necessary or convenient to carry out the objects, purposes, and powers of the city. “Municipal improvement” also includes the acquisition of real property for a civic center site or for any public use or uses, whether or not the improvement of said real property is part of the purposes for which the bonds are to be issued and whether or not funds for the improvement of said real property are presently available from other sources.

Section § 43602

Explanation

This law allows a city to borrow money if it needs more funds for a municipal project than what is provided by the yearly taxes.

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 annual tax levy.

Section § 43602.5

Explanation

This law allows cities or city/counties to borrow money to fund the seismic strengthening of buildings, including giving loans to both public agencies and private building owners. These loans must keep rental units affordable and require a certified plan for improving seismic safety without demolishing or constructing new buildings. Any money repaid from these loans is to either pay off the borrowed money or fund more loans. These loans create a lien on the property and can be customized by the city in terms of interest rates and duration. Cities must have checked unreinforced buildings and set up rules before using this funding option. Such efforts are not considered a misuse of public money but seen as serving a public benefit, especially for historic buildings which must follow more specific guidelines.

(a)CA Government Code § 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. Proceeds of bonds authorized pursuant to this section may be used to make loans to public entities or owners of private buildings. Loans shall satisfy all of the following:
(1)CA Government Code § 43602.5(a)(1) Any loan used to finance seismic strengthening of a residential structure containing units rented by households specified in Section 50079.5 of the Health and Safety Code before strengthening shall be subject to a regulatory agreement which will ensure that the number of those units in the structure will not be reduced and will remain available at affordable rents pursuant to Section 50053 of the Health and Safety Code as long as any portion of the loan is unpaid.
(2)CA Government Code § 43602.5(a)(2) All seismic strengthening financed with any loan funded pursuant to this section shall be in accordance with a plan developed for the structure by a registered civil engineer or a licensed architect, or approved by a city or city and county building official, one of whom shall certify that the work funded is necessary for seismic safety reasons, or is otherwise legally required for completion of the work or occupancy of the building. In no event shall any loan funded pursuant to this section finance the destruction of any existing building or the construction of any new building.
(3)CA Government Code § 43602.5(a)(3) Any amount received in payment of interest on or to repay principal on any loan made pursuant to this section shall be used to pay debt service on bonds authorized pursuant to this section, or shall be used to fund additional loans for seismic strengthening, except that the provisions of this paragraph shall not apply after the bonds, including any bonds issued to refund the bonds, are fully repaid.
(4)CA Government Code § 43602.5(a)(4) Loans made pursuant to this section shall constitute liens in favor of the city or city and county when recorded by the county recorder of the county in which the real property is located. The lien shall contain the legal description of the real property, the assessor’s parcel number, and the name of the owner of record as shown on the latest equalized assessment roll.
(5)CA Government Code § 43602.5(a)(5) The legislative body of the city or city and county may specify the interest rate, term, and other provisions of any loan made pursuant to this section.
(6)CA Government Code § 43602.5(a)(6) A city or city and county may issue bonds and make loans pursuant to this section only if the city or city and county has completed an inventory of unreinforced masonry structures within its jurisdiction and has adopted a mitigation ordinance pursuant to Section 8875.2 or Section 19163 of the Health and Safety Code. The city or city and county shall establish criteria, terms, and conditions to identify eligible buildings.
(b)CA Government Code § 43602.5(b) The legislative body of the city or city and county is authorized to expend the proceeds of bonds authorized by this section to make loans pursuant to this section. The legislative body of a city or city and county shall declare in the bond proposition that loans made from bond proceeds pursuant to this section to owners of private buildings for seismic strengthening of unreinforced buildings or other buildings constitute a public purpose resulting in a public benefit. Loans made pursuant to this section shall not be construed to be gifts of public funds in violation of Section 6 of Article XVI of the California Constitution.
(c)CA Government Code § 43602.5(c) Work on qualified historical buildings or structures shall be done in accordance with the State Historical Building Code (Part 2.7 (commencing with Section 18950) of Division 13 of the Health and Safety Code).
(d)CA Government Code § 43602.5(d) The Legislature hereby declares that loans made from bond proceeds pursuant to this section to owners of private buildings for seismic strengthening of unreinforced buildings or other buildings constitute a public purpose resulting in a public benefit.

Section § 43603

Explanation

This law allows a city's planning commission and legislative body to approve a group of municipal improvements as a city plan. Once approved, the legislative body can propose a single bond to fund the entire plan, bypassing the usual rules in Title 7 for creating and approving a city plan.

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 a single bond proposition covering the entire group of improvements. The provisions of Title 7 of this code shall not apply to the formulation and approval of a city plan under this section.

Section § 43604

Explanation

This section allows a city plan to include areas designated for public purposes, such as spaces for public buildings like auditoriums and stadiums, as well as parks, streets, transportation facilities, and other improvements that benefit the community.

Such a city plan may include land for public use, public buildings including auditoriums and stadiums, parks, streets, transportation facilities and other municipal improvements.

Section § 43605

Explanation

This law limits the amount of debt a city can take on for public projects to no more than 15 percent of the total value of all property in the city. The term 'indebtedness' here specifically refers to debt from bonds that are to be repaid through taxes on city properties.

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 property of the city. Within the meaning of this section “indebtedness” means bonded indebtedness of the city payable from the proceeds of taxes levied upon taxable property in the city.

Section § 43606

Explanation

This law states that a debt is considered to be taken on when bonds are sold and delivered, based on the main amount of those bonds.

An indebtedness is incurred within the meaning of this article to the extent of the principal amount of bonds sold and delivered.

Section § 43607

Explanation

This law section explains that a city can start projects for public improvements if at least two-thirds of its governing members agree it is necessary or beneficial for the public.

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 necessity demands the acquisition, construction, or completion of any municipal improvement.

Section § 43608

Explanation

This law allows the legislative body of a city to propose borrowing money through bonds to finance a specific purpose. To do this, they must pass an ordinance by a two-thirds majority vote. The decision to incur this debt is then submitted to the city's qualified voters for approval during a specific election.

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 incurring a bonded debt for the purpose set forth in said resolution to the qualified voters of the city at an election held for that purpose.

Section § 43609

Explanation

This law says that during an election, voters can be presented with proposals that address multiple issues or goals at the same time.

Propositions for more than one object or purpose may be submitted at the same election.

Section § 43610

Explanation

This law section explains what must be included in an ordinance about taking on debt for public improvements. It must state why the debt is needed, the expected cost of the projects, and the total amount of debt. It should also mention the interest rate, which can't be more than 8%, and specify the election date, how the election will be conducted, and how people can vote on the debt issue.

The ordinance shall recite:
(a)CA Government Code § 43610(a) The object and purpose of incurring the indebtedness.
(b)CA Government Code § 43610(b) The estimated cost of the public improvements.
(c)CA Government Code § 43610(c) The amount of the principal of the indebtedness.
(d)CA Government Code § 43610(d) The rate or maximum rate of interest on the indebtedness, which shall not exceed 8 percent, and need not be recited if it does not exceed 41/2 percent. Said interest shall be payable semiannually except that interest for the first year after the date of the bonds may be made payable at the end of said year.
(e)CA Government Code § 43610(e) The date of the election.
(f)CA Government Code § 43610(f) The manner of holding the election and the procedure for voting for or against the proposition.

Section § 43610.1

Explanation

This law allows a city's ordinance to include various costs in the estimated price of public improvements. These costs may cover legal fees, bond printing, and costs related to the authorization, issuance, and sale of bonds. If these improvements generate revenue, the ordinance can also cover bond interest during construction and up to 12 months after. Importantly, the bond proceeds can only be used for expenses outlined in the ordinance and can't be spent on anything the city wouldn't normally fund through its regular budget.

The ordinance may provide that the estimated cost stated therein of the public improvements includes any or all of the following:
(a)CA Government Code § 43610.1(a) Legal or other fees incidental to or connected with the authorization, issuance and sale of the bonds.
(b)CA Government Code § 43610.1(b) The costs of printing the bonds and other costs and expenses incidental to or connected with the authorization, issuance and sale of the bonds.
(c)CA Government Code § 43610.1(c) If the public improvements are revenue-producing public works, bond interest estimated to accrue during the construction period and for a period of not to exceed 12 months after completion of construction.
If such statement is made, the proceeds of the sale of the bonds may be used to pay such of the foregoing as are stated in the ordinance.
This section shall not be construed to authorize a city to use the proceeds of the sale of bonds for a purpose for which it could not use its general fund.

Section § 43611

Explanation

This law explains how a city ordinance should be made public. If there's a local newspaper that publishes at least six days a week, the ordinance needs to be published once a day for at least a week. If the newspaper publishes less often, then the ordinance should appear once a week for two consecutive weeks. When no such newspaper exists, the ordinance must be posted in three public places around the city for two weeks. No other form of notice is required.

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 in a newspaper published less than six days a week in the city.
If there are no such newspapers, it shall be posted in three public places in the city for two succeeding weeks.
No other notice need be given.

Section § 43612

Explanation

If a bond election is combined with another election, the details like precincts and polling places don't have to be listed separately. Instead, the election can use the same locations and officers as the other election it's combined with. You just need to reference the official notice of that other election—like its ordinance, resolution, or publication details—to show where those details can be found.

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 precincts, polling places and officers of election but may provide that the precincts, polling places and officers of election shall be the same as those set forth in the ordinance, order, resolution or notice calling or providing for or listing or designating the precincts, polling places and election officers for the election with which the election called pursuant to this article is consolidated, and shall refer to such ordinance, order, resolution or notice by number and title or date of adoption, or by date or proposed date of publication and the name of the newspaper in which publication has been or will be made, or by any other definite description.

Section § 43613

Explanation

This law section means that unless the ordinance specifies something different, city elections will be run like any other city election.

Except as otherwise provided in the ordinance, the election shall be conducted as other city elections.

Section § 43614

Explanation

This law explains that if a proposition for issuing bonds is put to a vote, at least two-thirds of the voters need to approve it for the bonds to be issued.

If two-thirds of the electors voting on the proposition vote for it, the bonds may be issued.

Section § 43615

Explanation

If more than one proposal to take on debt is presented during the same election, the votes for each proposal must be counted individually and not lumped together.

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 separately.

Section § 43616

Explanation

If voters reject a proposal in an election, the government cannot hold a new vote on a similar proposal for six months. However, if enough voters, specifically 15% of the city population based on the last governor's election, sign a petition, an election can be called before the six-month period ends.

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 six months after the prior election. If a petition requesting submission of such a proposition, signed by 15 percent of the city electors as shown by the votes cast for all candidates for Governor at the last election, is filed with the legislative body, it may hold an election before the expiration of six months.

Section § 43617

Explanation

This law requires the legislative body to decide how bonds and their interest coupons should look and also determine when the bonds will be dated.

The legislative body shall prescribe the form of the bonds and interest coupons, and fix the date of the bonds.

Section § 43618

Explanation

This law section allows the legislative body to split the total amount of a bond issue into multiple groups, each with its own set of issuance dates and payment schedules. However, the maturity dates for each group must still meet the regulations set out in this article.

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 one series may be made payable at different times from those of any other series. The maturity of each series shall comply with this article.

Section § 43619

Explanation

This law says that the government must decide when and where bond payments are due. Every year, at least one-fortieth of the bond's principal amount, plus interest on any unpaid amounts, must be paid off.

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 less than one-fortieth of the principal amount of each issue or series of bonds with interest on all sums unpaid shall be paid every year.

Section § 43620

Explanation

This section explains how a legislative body can set up the repayment schedule for bonds they issue. If the bonds are for revenue-generating projects, they can start paying them off up to 10 years after issuing them; for other projects, the repayment must start within 2 years. Each year, at least 1/40th of the total debt should be paid off. Alternatively, payments can be set up as roughly equal yearly amounts of principal and interest, but they can't fluctuate more than 5% from one year to the next. Finally, all bonds must be fully paid off within 40 years.

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 case of bonds issued for the acquisition, construction, or completion of revenue-producing public works may fix a date not more than 10 years from the date of issuance for the earliest maturity of each issue or series of bonds. Beginning with the date of the earliest maturity of each issue or series, not less than one-fortieth of the indebtedness of such issue or series shall be paid every year; provided, however, the bonds of any issue or series irrespective of the purpose for which the same are to be issued may be made to mature and become payable in approximately equal total annual installments of interest and principal, during the term of the bonds computed from the first year in which any part of the principal shall mature to the date of final maturity which annual installments may vary one from the other in amounts not exceeding in any year more than 5 percent of the total principal amount of the bonds of such issue or of the series thereof then proposed to be issued. The final maturity date shall not exceed 40 years from the time of incurring the indebtedness evidenced by each issue or series.

Section § 43620.1

Explanation

If you want to check if bonds are legally valid, you can take legal action using the process outlined in Chapter 9, starting with Section 860, in the Code of Civil Procedure.

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 Procedure.

Section § 43621

Explanation

This law says that the group in charge of issuing bonds can decide to pay them off early, but only if the bond specifically says it can be redeemed before the date it is due to be paid back, known as maturity.

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 maturity unless it contains a recital to that effect.

Section § 43622

Explanation
This section allows the legislative body to decide the amount or amounts for which the bonds will be issued.
The bonds shall be issued in such denomination or denominations as the legislative body may prescribe.

Section § 43623

Explanation

This law states that bonds must be signed by the mayor or another officer who is authorized by a two-thirds vote from the legislative body. Additionally, the city treasurer must also sign it. Finally, the clerk or a deputy clerk must countersign these bonds.

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, and the city treasurer. They shall be countersigned by the clerk or a deputy clerk.

Section § 43624

Explanation

This law section states that the bond coupons must be numbered in order and signed by the treasurer.

The bond coupons shall be numbered consecutively and signed by the treasurer.

Section § 43625

Explanation

This law section states that any signatures, other than the ones made by the clerk or the clerk’s deputy, can be created using printing, lithographing, or engraving methods instead of being hand-written.

All signatures and countersignatures except that of the clerk or the clerk’s deputy may be printed, lithographed, or engraved.

Section § 43626

Explanation

If an officer's signature or countersignature is on bonds or coupons, and they leave their position before the bonds are delivered, their signature remains valid as if they were still in office.

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 is as effective as if the officer had remained in office.

Section § 43627

Explanation

This law explains how bonds can be issued and sold by a government body. Bonds can't be sold for less than their face value. The government must invite bids before selling these bonds and award them to the highest responsible bidder if the bids are satisfactory. If no satisfactory bids are received, the government can either try again with new advertisements or sell the bonds privately.

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 body shall give notice inviting sealed bids in such manner as the legislative body may prescribe. If satisfactory bids are received, the bonds offered for sale shall be awarded to the highest responsible bidder. If no bids are received, or if the legislative body determines that the bids received are not satisfactory as to price or responsibility of the bidders, the legislative body may reject all bids received, if any, and either readvertise or sell the bonds at private sale.

Section § 43628

Explanation

This law states that any money from bond premiums and interest must be used to pay off the bond's principal and interest first. The remaining bond money goes into a special fund for specific improvement projects defined in an ordinance. Once the project is complete, any leftover money in that fund should help pay off the bonds. If all bond payments are complete and there's still money left, it should go into the general fund.

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 of the proceeds of the bonds shall be placed in the treasury to the credit of the proper improvement fund and applied exclusively to the purpose and object recited in the ordinance; provided, however, that when said purpose and object has been accomplished any moneys remaining in such improvement fund shall be transferred to the fund to be used for the payment of principal of and interest on the bonds. Further, when such purpose and object have been accomplished and all principal and interest on the bonds have been paid, any balance of money then remaining shall be transferred to the general fund.

Section § 43629

Explanation

This law allows the local government to deliver bonds at locations outside of their city or state. It also allows them to receive payment for these bonds either in cash or as verified bank funds through the Federal Reserve.

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 or bank credits in the form of certified Federal Reserve bank funds.

Section § 43630

Explanation

Three years after a bond election, a governing body can decide by a two-thirds majority vote that any unsold bonds will not be issued or sold. Once they pass the ordinance, those unsold bonds are no longer valid.

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 the bond issue remaining unsold shall be issued or sold. When the ordinance takes effect, the bonds remaining unsold and described in the ordinance become void.

Section § 43631

Explanation

If the local government decides it's not practical or smart to spend money from bonds on their original purpose, they can hold a special election. This election is to ask voters if the money can be used for a different city-related project.

The election process will be the same as when voters initially approved the bond use.

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 impracticable or unwise, it may call a special election to obtain the consent of the electors to use the money for some other specified municipal purpose.
The procedure shall be the same as when the bond proposition was originally submitted.

Section § 43632

Explanation

This law requires the government to collect enough taxes each year to pay off the interest and principal of a bonded debt they owe. They must continue collecting these taxes until the bonds are fully paid or there is enough money set aside to cover future payments.

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 the treasury set apart for that purpose sufficient to meet all payments of principal and interest on the bonds as they become due, the legislative body shall levy and collect a tax sufficient to pay the interest on the bonds and such part of the principal as will become due before the proceeds of a tax levied at the next general tax levy will be available.

Section § 43633

Explanation

If the bonds have more than a year until they mature, the legislative body must collect taxes each year. These taxes cover the interest payments and help set aside funds to repay the bond's principal when it matures.

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 to pay the interest as it falls due and to constitute a sinking fund for payment of the principal on or before maturity.

Section § 43634

Explanation

This law says that certain taxes, collected just like other city taxes, will be added on top of existing taxes. The money from these taxes can only be used to pay off bonds and their interest.

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 interest.

Section § 43635

Explanation

This law permits a city to directly handle construction work on municipal improvements funded by bonds. This means the city can buy materials and hire workers without going through the usual contract bidding process.

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 and hiring the labor without following the ordinary procedure in awarding contracts.

Section § 43636

Explanation

If a city teams up with the United States to work on local municipal improvements, the city can give its share of the costs directly to the United States, who will then handle those expenses.

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 for expenditure by it.

Section § 43637

Explanation

This law allows a government body to require the treasurer to provide additional financial guarantees, known as bonds, to ensure they responsibly manage and protect public funds.

By resolution, the legislative body may require the treasurer to give additional bonds for the safe custody and care of the public funds.

Section § 43638

Explanation

This law explains that when a city is making improvements, the city council must set up rules to manage and maintain these projects. They also need to appoint people to handle the construction and operation of the improvements.

In cities with a specific board of public works, that board will take care of these responsibilities.

The city council can hire a qualified person or company to manage the financial aspects related to the bonds for these projects. This financial manager can also act on behalf of city officials in dealing with bonds.

When municipal improvements are being made pursuant to this article, the legislative body shall make all necessary regulations for carrying out and maintaining the improvements and appoint all necessary agents to look after the construction and operation of improvements.
The board of public works shall perform these duties in cities having freeholders’ charters providing for such a board.
The legislative body may contract with a specially qualified person, firm or corporation to act as fiscal agent. Such contracts may authorize the fiscal agent to act as agent for any city officer or employee in the performance of any duty required to be performed, or in taking any action authorized to be taken in connection with bonds issued pursuant to this chapter.