Bonds may be issued by a district for the purpose of acquiring, maintaining, constructing, or altering work, or for the purpose of funding the district’s portion of the funding of a coinsurance plan between a hospital and the member of its attending medical staff, when, in either case, in the opinion of the directors, a special assessment would be inadvisable, and the expenses of such operations will be in excess of an amount which can reasonably be raised by the regular annual assessment for the running expenses of the district.
Chapter 4Bonds
Section § 32300
This law allows a district to issue bonds to pay for big projects like building or improving facilities, or to cover costs in a shared insurance plan with hospitals if regular funds or special assessments aren't enough. The decision to use bonds is made by district directors when they believe regular funds won't cover it and a special assessment doesn't make sense.
district bonds acquiring facilities maintaining facilities constructing facilities altering work coinsurance plan special assessment hospital funding attending medical staff running expenses district directors opinion excess expenses funding challenges hospital insurance plan funding
Section § 32300.1
This law section explains how a legislative body in California can decide the total amount of bonds to issue for a project. They can include all costs related to acquiring, building, improving, or financing the project.
They can also factor in expenses like engineering, legal fees, inspection, costs related to having a bond election, and any interest on the bonds during and up to 12 months after construction is finished.
In determining the amount of bonds to be issued, the legislative body may include:
(a)CA Health and Safety Code § 32300.1(a)
All costs and estimated costs incidental to or connected with the acquisition, construction, improving or financing of the project.
(b)CA Health and Safety Code § 32300.1(b)
All engineering, inspection, legal and fiscal agent’s fees, costs of the bond election and of the issuance of such bonds, and bond interest estimated to accrue during the construction period and for a period of not to exceed 12 months after completion of construction.
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Section § 32300.2
This law allows a district to issue new bonds to pay off or refinance its existing debts or bonds.
Bonds may be issued by a district for the purpose of refunding any or all of the outstanding bonds or other indebtedness of the district.
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Section § 32301
This law explains the process for holding an election to approve the issuance of bonds by a district. The district's board of directors can decide to hold this election on their own, or they must do so if a petition is submitted. This petition must be signed by at least 15% of the district's eligible voters and must clearly state what the bond money will be used for.
An election shall be held to authorize the issuance of any bonds of a district. The board of directors of a district may call such election at its discretion, and it shall call such election upon presentation to it of a petition requesting the issuance of bonds, specifying the purpose to which the proceeds are to be applied, and signed by electors of the district entitled to cast votes equal in number to at least 15 per cent of the total number of votes of all the electors of the district.
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Section § 32302
This rule states that when a board of directors decides to hold an election for issuing bonds, their announcement must include details like the bond amount, interest rate, and the latest date the bonds will mature. If at least two-thirds of voters support it, the board must issue the bonds.
The resolution of the board of directors calling a bond election, in addition to all of the matters required by this division for a resolution calling an election, shall state the amount of the proposed bond issue, the rate of interest thereon, and the maximum date of maturity of bonds. If two-thirds of the votes cast at the bond election are in favor of the issuance of the bonds, the board of directors shall cause bonds to be issued.
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Section § 32303
This law section states that a board of directors must decide and record details about bonds, including their form, when the bonds and their interest are due, and their value. The maturity date can't be more than 30 years after they are issued. Bonds can be paid at the district's office, the county treasurer's office, or another designated place of the holder's choice.
The board of directors by resolution entered on its minutes shall prescribe the form of the bonds and of the interest coupons attached thereto, shall fix the time when the whole or any part of the principal of said bonds shall be payable, which shall not be more than 30 years after their date of issuance, the denomination or denominations of the bonds, the date or dates of issuance of such bonds, the number or numbers of the bonds maturing at each date of maturity and the place or places of payment of such bonds. Said bonds may be payable at the office of the district or at the office of the county treasurer of the organizing county, or at any place or places designated therein at holder’s option.
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Section § 32304
When bonds are issued, the first set must be paid off within five years, and the last set must be paid off within 30 years from when they were issued.
Bonds first to mature in each issue shall mature not later than five years from the date of issuance thereof; and those last to mature of each issue shall mature not later than 30 years from the date of issuance thereof.
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Section § 32305
This law states that the board of directors is responsible for setting the interest rate on bonds issued under this chapter. The interest rate cannot be more than 8% per year, and can be paid either once a year or twice a year.
The rate of interest to be borne by bonds issued under the authority of this chapter shall be fixed by the board of directors. The rate shall not exceed 8 percent per annum, payable annually or semiannually.
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Section § 32306
This law section states that the board of directors has the authority to determine the size and value of bonds that are issued under this chapter.
Bonds issued under the authority of this chapter shall be of such denomination or denominations as the board of directors may prescribe.
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Section § 32307
This law says that bonds issued by a district must be signed by the leader and confirmed by the district's secretary. These bonds remain valid for future sales, even if the signing officer is no longer in that position when the bonds are sold.
All bonds issued pursuant to this chapter shall be signed by the presiding officer and attested by the secretary of the board of directors of the district, and shall be valid as to future sale thereafter, regardless of whether at the time of sale the officer so signing is still the incumbent of such office.
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Section § 32308
This law states that hospital districts in California cannot take on debt through bonds that exceed 10% of the assessed value of all taxable property in their area. It also mentions that bonds issued by local hospital districts are considered valid investments for trust funds, insurance companies, banks, and trust companies. These bonds can be legally used in situations where city, county, or school district bonds are typically accepted, such as investments or as security for financial obligations.
No hospital district shall incur a bonded indebtedness exceeding 10 percent of the assessed value of all the taxable property in the district as shown by the last equalized county assessment roll or rolls of the county or counties in which the district lies. Any bonds of local hospital districts which shall be issued under the provisions of this chapter shall be legal investments for all trust funds and for the funds of insurance companies, banks, both commercial and savings, and trust companies, and whenever any moneys or funds may by any law now or hereafter enacted be invested in bonds of cities, cities and counties, counties or school districts within the State of California, such moneys or funds may be invested in said bonds of local hospital districts issued under this chapter, and whenever bonds of cities, cities and counties, counties or school districts within the State may by any law now or hereafter enacted be used as security for the performance of any act or the deposit of any public moneys, said bonds of local hospital districts issued under this chapter and in pursuance of its provisions may be so used.
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Section § 32309
This law allows the board of directors to sell bonds whenever it's needed to get the best financial outcome for the purposes the bonds were originally issued for.
The board of directors may, from time to time, sell bonds in such quantities as may be necessary and most advantageous to raise money for the purposes for which they were issued.
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Section § 32310
This law states that bonds must be sold for at least their face value (par value). Before any sale, the district's board of directors needs to pass a resolution to sell a specific amount of bonds, declaring the exact date, time, and location for receiving bids.
The district must publish a notice about the bond sale in a widely-read local newspaper at least 10 days before the sale, announcing that they will accept sealed bids at the specified place and time.
Bonds shall be sold for at least par value. Before making any sales, the board of directors of the district shall, by resolution entered on its minutes, declare its intention to sell a specified amount of bonds, and the day, hour, and place at which bids will be received for such bonds. Notice of the sale shall be given by publication, once, not less than 10 days prior to the date of sale, in a newspaper of general circulation in the district and shall state that sealed proposals for the purchase of bonds will be received at the place designated for the receipt of bids until the day and hour named in the resolution.
bond sale par value resolution by board district board of directors bids for bonds sealed proposals publication notice newspaper of general circulation date of sale hour of sale location for bids notification requirements
Section § 32311
When it's time to sell bonds, the board of directors will look at all the offers from bidders. They can sell the bonds to the highest responsible buyer or reject all the bids if they choose. No bid is valid unless it's backed by a certified or cashier's check for a percentage set by the board. If the bidder backs out after their proposal is accepted, they lose their check. If the board doesn't sell the bonds, they can try again by advertising them for sale.
At the time appointed, the board of directors shall open the proposals, and may sell the bonds or any portion thereof to the highest responsible bidder or bidders. Any and all bids may be rejected and no proposal shall be accepted unless accompanied by a certified or cashier’s check for such reasonable percentage of the amount of the bid as shall be determined by the board of directors, to apply to the purchase price of the bonds. The amount of such check shall be forfeited if, after the acceptance of the proposal the bidder refuses to accept the bonds and to complete his purchase thereof on conditions stated in his bid. In case no award is made the board of directors thereafter may again advertise the bonds or any part thereof for sale.
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Section § 32312
This law requires the county board to levy a tax each year to pay off bonds issued by a district. This tax is separate from other district taxes and must cover the bond interest and create a fund to repay the principal when due. All collected taxes for this purpose must be used only to pay off the bonds and their interest until full repayment.
The board or boards of supervisors of the county or counties in which the district lies shall, at the time of fixing the general tax levy, sometimes called the annual assessment or regular annual assessment, for such district, and in the manner for such general tax levy provided, levy and collect annually each year until said bonds are paid or until there shall be a sum in the treasury set apart for that purpose sufficient to meet all sums coming due for the principal and interest on such bonds, a tax sufficient to pay the interest on such bonds as the same becomes due and also, to constitute a sinking fund for the payment of the principal thereof at maturity. The sum for the sinking fund shall in any event be sufficient to provide for the payment of the principal of all of the bonds as such bonds become due. Said tax shall be in addition to all other taxes levied for district purposes and shall be placed in the bond interest and sinking fund of the district and, until all of the principal and interest of the bonds of said district is paid, the moneys in said fund shall be used for no other purpose than the payment of said bonds and accruing interest thereon.
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Section § 32314
This law section allows the board to decide if a bond issued by the district can be paid off early, before it is due (also known as calling a bond). They can set the terms for this, including when and at what price the early retirement can happen. If a bond can be paid off early, this information must be included in the bond's details.
The board may provide that any bond issued by the district may be subject to call and retirement prior to maturity at such times and prices and upon such other terms as the board may specify. If a bond is subject to call and retirement prior to maturity that fact shall be stated in the bond.
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