Bond Funds - - CA Public Resources

Section § 37030

This law explains that the demand for acquiring property for environmental purposes is much higher than the state funds available through approved bonds. To address this, the Natural Heritage Preservation Tax Credit Act of 2000 allows property owners to donate land and receive a tax credit worth 55% of the land's value. This approach almost halves the state's property acquisition costs. By allowing bond funds to be used with these tax credits, the state can expand its capacity to purchase environmentally important properties.

The Legislature finds and declares all of the following:

(a) Current justifiable needs for the acquisition of property for environmental purposes substantially exceed state-approved bond funds available for these purposes.

(b) The Natural Heritage Preservation Tax Credit Act of 2000 authorizes the acquisition of qualified property through donations eligible for a credit against the personal income or bank and corporation tax in an amount equal to 55 percent of the fair market value of any qualified contribution.

(d) Authorizing the expenditure of bond funds to acquire property using these tax credits will significantly expand the acquisition power of existing bond funds.

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(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)

Section § 37031

This section explains the definition of 'purpose' and 'property' in the context of bond provisions and funds. For bonds described in parts 1 to 3 of Section 37032, 'purpose' refers to the scheme and design of the bond. For bonds in parts 4 to 11 of the same section, 'purpose' means the scope and effect. If bond funds are used following a bond act passed by initiative (part 12 of Section 37032), 'purpose' follows the scope and effect definition. If not, it follows the scheme and design definition.

'Property' refers to any property acquired with bond funds under these rules, as defined in another section (37002).

(a) For bond provisions listed in paragraphs (1) to (3), inclusive, of subdivision (c) of Section 37032, “purpose” means scheme and design.

(b) For bond provisions listed in paragraphs (4) to (11), inclusive, of subdivision (c) of Section 37032, “purpose” means scope and effect.

(c) For bond funds eligible to be used under this chapter, pursuant to paragraph (12) of subdivision (c) of Section 37032, if the bond act is passed by initiative, “purpose” shall be defined pursuant to subdivision (b), but if the bond act is not passed by initiative, “purpose” shall be defined pursuant to subdivision (a).

(d) For purposes of this chapter, “property” means property as defined in subdivision (j) of Section 37002 that is acquired pursuant to this division using bond funds in accordance with this chapter.

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(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)

Section § 37032

This law allows state departments or local governments in California to use certain bond funds to acquire property, provided that the acquisition meets specific guidelines and purposes related to the bond provision. These funds can't be used if they're given out through a competitive grant process.

This rule outlines specific bond sections from where funds can be sourced, focusing mainly on environmental and water projects. The law ensures that acquisitions align with the purpose of the designated bond provisions and it includes a tax credit benefit for such transactions.

(a) If a department or local government identifies property that may be acquired pursuant to this division and determines that the acquisition would comply with the purpose of a bond provision listed in subdivision (c) and any applicable guidelines developed for that bond provision by the administering agency, and all of the requirements of this division are met and the department or local government acquires the property pursuant to this division, the department or local government may expend funds from the bond provision that have been appropriated, allocated, or awarded to it, to acquire the property using the tax credit provided by this division.

(b) The applicable bond provisions from which a department or local government may use bond funds to acquire property using the tax credit provided by this division do not include grants of bond funds distributed through a competitive process.

(c) The applicable bond provisions from which a department or local government may expend bond funds pursuant to subdivision (a) are the following:

(1) Section 5096.615.

(2) Subdivision (a) or (b), or paragraph (1) of subdivision (c), of Section 5096.650.

(3) Funds under paragraph (2) of subdivision (c) of Section 5096.650 that are to be expended pursuant to paragraph (6) of subdivision (b) of Section 31220.

(4) Section 79541 of the Water Code.

(5) Section 79542 of the Water Code.

(6) Section 79544 of the Water Code.

(7) Subdivision (e) or (f) of Section 79550 of the Water Code.

(8) Section 79565 of the Water Code.

(9) Section 79568 of the Water Code.

(10) Section 79570 of the Water Code.

(11) Section 79572 of the Water Code.

(12) Other bond funds, if the bond act specifies that its funds may be used for the purposes of this division.

property acquisition bond funds tax credit non-competitive grants state departments local governments environmental projects Water Code guidelines compliance bond provision purpose land purchase fund appropriation section 5096.615 section 79541 competitive process exclusion

(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)

Section § 37034

This law section explains the process for acquiring property through donation when bond funds are involved. A department or local government can request a property donation if it meets specific bond requirements. When the donor agrees, they must submit an application, including a signed authorization for tax purposes. If approved, the acquiring body uses bond funds to reimburse the General Fund for any tax credits the donor claims. This process requires precise coordination, including information exchanges between the Franchise Tax Board, the board, the department, and other governmental bodies to ensure funds are appropriately transferred and credited. The law ensures that any related financial transactions, like encumbering bond funds, align with fiscal policies without being restricted by fiscal year constraints.

(a)

(1) If a department determines that property is available for acquisition by donation, and that the acquisition of the property would comply with the requirements of an applicable bond provision specified in subdivision (c) of Section 37032 and any applicable guidelines developed for that bond provision by the administering agency, and the department believes the acquisition of the property would comply with the requirements of this division, the department may request the prospective donor of the property to submit an application pursuant to Section 37010. If the prospective donor agrees to submit that application, the department may apply for approval of the donation pursuant to the requirements of this division.

(2) If a local government determines that property is available for acquisition by donation, and that the acquisition of the property would comply with the requirements of an applicable bond provision specified in subdivision (c) of Section 37032 and any applicable guidelines developed for that bond provision by the administering agency, and the local government believes that the acquisition of the property would comply with the requirements of this division, the local government may request the department that allocated to it the relevant bond funds to determine whether it agrees with the local government’s determinations and beliefs made pursuant to this paragraph. If the department agrees with the local government and gives its approval for the acquisition with bond funds that it has allocated to the local government, the local government may request the prospective donor of the property to submit an application pursuant to Section 37010. If the prospective donor agrees to submit the application, the local government may apply for approval of the donation pursuant to the requirements of this division.

(3) In addition to the requirements of Section 37011, the application shall include, and shall not be accepted if it does not include, a signed authorization by the donor, in a form and manner mutually agreeable to the board and the Franchise Tax Board, for the disclosure of the information necessary to make the payment as required by subdivision (b). For purposes of subdivision (b) of Section 1798.24 of the Civil Code, the signed authorization shall be the donor’s voluntary consent to the disclosure of the information.

(b)

(1) If the board gives approval, the department or local government may acquire the property pursuant to this division. Through the process outlined in this section, the department shall reimburse the General Fund for the tax credit claimed pursuant to this chapter under Section 17053.30 or 23630 of the Revenue and Taxation Code by transferring bond funds identified under subdivision (c) of Section 37032 to the Natural Heritage Preservation Tax Credit Reimbursement Account, on the basis of information provided to the department under Section 37040 regarding credit claimed for a qualified contribution under Section 17053.30 or 23630 of the Revenue and Taxation Code in that tax year.

(2) If a local government applies directly to the board for acceptance of a qualified donation, the board may provide conditional approval for the local government to acquire the property pursuant to this division. Through the process outlined in this section, the local government shall reimburse the General Fund for the tax credit claimed pursuant to this chapter under Section 17053.30 or 23630 of the Revenue and Taxation Code by transferring funds in the full amount of the approved tax credit to the board for deposit into the Natural Heritage Preservation Tax Credit Reimbursement Account.

(3)

(A) Upon approval by the board, and prior to the time the department, local government, or designated nonprofit organization receives the property, the department shall encumber bond funds identified under subdivision (c) of Section 37032 in an amount necessary to pay for the tax credit as provided in Section 17053.30 or 23630, as applicable, of the Revenue and Taxation Code.

(B) If a local government applies directly to the board for acceptance of a qualified donation, and the board provides conditional approval of the qualified donation, the local government shall have 60 days to transfer to the board the full amount of funds necessary to reimburse the General Fund. Upon receipt of the funds necessary to reimburse the General Fund, the board shall provide the donor and the local government with a notice of final approval of the tax credit. A tax credit is not approved until such time as the donor and local government receive a final notification from the board that sufficient funds have been received to reimburse the General Fund for the loss of revenue associated with the tax credit.

(C) The acquisition agreement or any other document that clearly delineates the commitment pursuant to this division shall be the only documentation required for the department to encumber the bond funds as required by this paragraph.

(D) Except as prohibited by the relevant bond act, notwithstanding Section 13340 of the Government Code or any other provision of law, the encumbrance shall be available without regard to fiscal years to allow payments to the Natural Heritage Preservation Tax Credit Reimbursement Account for the tax credit due the donor of the property under Section 17053.30 or 23630, as applicable, of the Revenue and Taxation Code.

(4) The Franchise Tax Board shall provide the board information pursuant to subdivision (a) of Section 19560 of the Revenue and Taxation Code on tax credits claimed. The information shall include the tax year for which the credit was claimed. The board shall provide the information required by Section 37040 to the relevant department. Upon notification that a qualified tax credit has been claimed, the department, pursuant to paragraph (1), shall transfer bond funds in the amount of the tax credit for that tax year to the Natural Heritage Preservation Tax Credit Reimbursement Account within 60 days of receipt of the notification. The department shall notify the board of this transfer.

(5) The board shall forward the information it receives pursuant to paragraph (4) to the Controller and the Department of Finance, which shall use the information for the purpose of attributing the budgetary impact of the credit and bond fund transfer to the appropriate tax and fiscal year.

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(Amended by Stats. 2009, Ch. 220, Sec. 4. (AB 94) Effective January 1, 2010.)

Section § 37035

This law section talks about situations where a nonprofit organization can take on the responsibility of accepting a property that a government department or local government plans to acquire. If the nonprofit's acceptance of the property aligns with certain bond provisions, the department or local government can apply to get the property for the nonprofit. This transfer requires agreement from the donor and the nonprofit, as well as adherence to specific procedural requirements. The goal is to ensure the property is handled appropriately without the government directly owning it. Any funds transferred must comply with regulations to reimburse the General Fund when applicable.

(a)

(1) If a department determines that a designated nonprofit organization, in lieu of the department, should accept property that the department applies to acquire pursuant to paragraph (1) of subdivision (a) of Section 37034, and determines that the acceptance by the designated nonprofit organization would comply with the purpose of the applicable bond provision specified in subdivision (c) of Section 37032, the department may, upon that determination and upon making the determinations and having the belief required by paragraph (1) of subdivision (a) of Section 37034, apply to acquire the property for that designated nonprofit organization pursuant to this division. The department shall not make that application until the prospective donor agrees to submit an application pursuant to Section 37010 and paragraph (3) of subdivision (a) of Section 37034 and the designated nonprofit organization agrees to accept the property if it is acquired pursuant to this division.

(2) If a local government determines that a designated nonprofit organization, in lieu of the local government, should accept property that the local government applies to acquire pursuant to paragraph (2) of subdivision (a) of Section 37034, and determines that the acceptance by the designated nonprofit organization would comply with the purpose of the applicable bond provision specified in subdivision (c) of Section 37032, the local government may, upon that determination and making the determinations and having the belief required by paragraph (2) of subdivision (a) of Section 37034, request the department that allocated to it the relevant bond funds to determine whether it agrees with the local government’s determinations made pursuant to this paragraph. If the department agrees with the local government, gives its approval for the designated nonprofit organization’s acceptance of the property, and gives its approval pursuant to paragraph (2) of subdivision (a) of Section 37034, the local government may apply to acquire the property for that designated nonprofit organization pursuant to this division. The local government shall not make that application until the prospective donor agrees to submit an application pursuant to Section 37010 and paragraph (3) of subdivision (a) of Section 37034 and the designated nonprofit organization agrees to accept the property if it is acquired pursuant to this division.

(b) If a department or local government applies for a designated nonprofit organization to acquire property, pursuant to subdivision (a), the department and donor, and the local government, if applicable, shall comply with all requirements of this division that apply to the department and donor, and to the local government, if applicable, when the department or local government otherwise applies to acquire property pursuant to this division.

(c) If a local government applies for a designated nonprofit organization to acquire and accept donated property, the local government shall comply with all requirements of this division that apply to the local government transferring funds to the board necessary to reimburse the General Fund.

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(Amended by Stats. 2009, Ch. 220, Sec. 5. (AB 94) Effective January 1, 2010.)

Section § 37036

This law establishes the Natural Heritage Preservation Tax Credit Reimbursement Account within California's General Fund. The account receives certain payments and is solely for reimbursing the General Fund according to specific rules. Once the money is in the account and the Legislature is informed, the Controller must transfer the funds to the General Fund within 60 days. Also, the funds in this account cannot be loaned to others or earn interest.

(a) The Natural Heritage Preservation Tax Credit Reimbursement Account is established in the General Fund to receive moneys paid pursuant to this chapter.

(b) Moneys in the Natural Heritage Preservation Tax Credit Reimbursement Account shall be used only to reimburse the General Fund as determined by the departments pursuant to paragraph (1) of subdivision (b) of Section 37034.

(c) Upon receipt of funds in the Natural Heritage Preservation Tax Credit Reimbursement Account and notification to the Legislature, the Controller shall transfer, within 60 days of the notification, the balance of the Natural Heritage Preservation Tax Credit Reimbursement Account to the General Fund.

(d) The moneys in the Natural Heritage Preservation Tax Credit Reimbursement Account may not be loaned to another fund and may not accrue interest.

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(Amended by Stats. 2008, Ch. 760, Sec. 19. Effective September 30, 2008.)

Section § 37038

This law states that if a board within a department receives money from certain bonds and wants to use it to buy property, they must make sure the purchase aligns with both the bond's purpose and any guidelines set by the agency managing the bond. They also need to ensure the purchase follows the division's rules.

If the board is the department that receives moneys pursuant to any of the bond provisions listed in subdivision (c) of Section 37032 and the board wishes to use those bond funds to acquire property pursuant to this division using those bond funds, the board shall make separate determinations regarding whether the acquisition of that property would comply with the purpose of the applicable bond provision and any applicable guidelines developed for that bond provision by the administering agency, and whether the acquisition would comply with the requirements of this division.

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(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)

Section § 37040

This section outlines the responsibilities of a board when it learns of someone claiming a tax credit related to certain bond acts. Once notified by the Franchise Tax Board, the board must inform the Controller, the Treasurer, and the relevant department about specific details such as which bond fund the credit is coming from, the project name and local government, the department transferring funds, and the credit amount for the year.

(a) The board shall notify the Controller, the Treasurer, and the relevant department of the information listed in subdivision (b) after the board receives notification from the Franchise Tax Board pursuant to Section 19560 of the Revenue and Taxation Code that a person is claiming a tax credit under this chapter.

(b) The board shall provide all of the following information:

(1) The bond fund and specific provision of the bond act under which the credit is being claimed.

(2) The project name, appropriation under which the credit was encumbered, and, if applicable, the related local government.

(3) The department that will transfer the appropriate bond funds to the Natural Heritage Preservation Tax Credit Reimbursement Account.

(4) The amount of the tax credit for that tax year.

tax credit notification bond fund Franchise Tax Board project appropriation Natural Heritage Preservation Tax Credit credit amount details fund transfer department local government involvement tax year credit Reimbursement Account relevant department notification

(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)

Section § 37042

This law clarifies that using bond funds as outlined in this chapter is not considered using borrowed money to cover a state's budget shortfall at the end of the year, which is something the California Constitution prohibits.

The Legislature finds and declares that the expenditure of bond funds pursuant to this chapter does not constitute the use of bond proceeds or other indebtedness to pay a year-end state budget deficit, as prohibited by subdivision (c) of Section 1.3 of Article XVI of the California Constitution.

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(Added by Stats. 2004, Ch. 715, Sec. 2. Effective January 1, 2005.)