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 specified in the ordinance or resolution, will be paid by the city each year prior to maturity, at the option of the holders, pursuant to this article. Such advance payment of bonds shall be in addition to the payment of bonds of the same issue at maturity.
BondsPrepayment
Section § 43820
This law allows a city government to include a provision in its bond issuance plan that lets bondholders choose to have some of their bonds paid off early, before they reach full term. This early payment option is in addition to the regular plan to pay the bonds at their maturity date.
bond issuance city legislative body advance payment
Section § 43821
This law requires a legislative body to decide how certain bonds will be chosen and paid off. They must also specify how much the city will pay instead of the interest on these bonds, but this amount can't be more than the interest that's already accumulated but not yet due.
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 are payable. It shall also fix the amount to be paid by the city in lieu of interest on the bonds accrued but not due at the time of the payment. This amount shall not exceed the amount of accrued interest.
bond payment method legislative body decision bonds selection criteria
Section § 43822
This law requires that if bonds are to be paid off before they are due, the legislative body must set and collect an annual tax to cover the bonds that need to be paid. This tax, along with other designated funds, must be enough to pay what's owed on the bonds before the next tax levy is set. The tax remains in place each year until the bonds are completely paid off or the city has enough money set aside for future payments.
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 treasury set apart for the purpose, is sufficient to pay the portion of such bonds becoming payable before maturity and prior to the time for fixing the next general tax levy. The tax shall be levied and collected annually until all such bonds are paid, or there is a sufficient sum in the city treasury set apart for that purpose to meet all sums due or to become due on the principal of the bonds.
advance bond payment legislative tax levy annual tax collection
Section § 43823
This law section explains that certain taxes are required on top of any other taxes collected for city needs and debt payments. They need to be collected just like other city taxes, with the specific purpose of paying off bonds before they are due.
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 indebtedness as they fall due. They shall be levied and collected at the time and in the manner of other municipal taxes, and be used only for the purpose of paying bonds prior to maturity.
additional taxes municipal taxes debt payments
Section § 43824
This law states that when a city needs to pay bondholders interest that has been earned but not yet come due, this payment will come from a specific fund meant for interest payments. When the bonds are eventually paid off, the city will pay this accrued interest along with any remaining unpaid interest to those who turn in their interest coupons.
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 meeting sums coming due for interest on such bonds. At the time of payment of the bonds, this amount, and all due and unpaid interest shall be paid upon surrender of all outstanding interest coupons on the bonds.
bondholders interest payments accrued interest interest coupons
