The legislative body may, by resolution, borrow money in anticipation of the sale of bonds which have been authorized pursuant to this division, but which have not been sold and delivered, issue negotiable bond anticipation notes therefor, and renew the notes from time to time. The maximum maturity of any bond anticipation notes, including the renewals thereof, shall not exceed three years from the date of delivery of the original notes.
Part 10.7BOND ANTICIPATION NOTES
Section § 8745
This section allows a government body to temporarily borrow money while waiting to sell bonds that have been approved but not yet issued. They can do this by issuing notes, called bond anticipation notes, which can be renewed as needed. However, these notes can't last longer than three years from when they were first issued.
anticipation of bond sales borrow money bond anticipation notes renewable notes temporary financing three-year maturity limit government borrowing authorized bonds unsold bonds short-term debt instrument
Section § 8745.2
This law section states that you can pay off bond anticipation notes using any available funds. When the principal or interest is due, they must be paid from the proceeds of the next bond sale related to those notes.
The principal and interest on the bond anticipation notes may be paid from any money available for their payment. Any portion of the principal or interest which is due and payable shall be paid from the proceeds of the next sale of bonds in anticipation of which the notes were issued.
bond anticipation notes principal payment interest payment available funds sale of bonds proceeds next bond sale due payments payment method financial obligations debt management bond proceeds notes issuance payment source California infrastructure funding
Section § 8745.4
Money from bond anticipation notes can be used for the same purposes as the bonds they are linked to. This means you can use the money in the same way you would use the money from the actual bonds.
The proceeds of bond anticipation notes issued pursuant to this part may be used for any purpose for which the bonds in anticipation of which the notes were issued may be used.
bond anticipation notes bond proceeds use of proceeds financial purpose eligible uses bond-linked uses municipal bonds note proceeds anticipatory funding bond issuance government finance public projects interim financing debt instruments
Section § 8745.6
This law section states that bond anticipation notes can't be issued for more money than the total amount of bonds that the legislative body is allowed to issue. Before issuing new notes, you must subtract any bonds already sold and any other bond anticipation notes that are still unpaid.
The bond anticipation notes shall not be issued in any amount in excess of the aggregate amount of bonds which the legislative body has been authorized to issue, less the amount of any bonds of the authorized issue which have been previously sold and less the amount of other bond anticipation notes previously issued and still outstanding.
bond anticipation notes excess issuance aggregate bond amount legislative body authorization authorized bond issue previously sold bonds outstanding bond notes financial limitations debt issuance municipal finance short-term financing instruments bond sales debt management issuing bonds
Section § 8745.8
This section explains that when a legislative body decides to issue bond anticipation notes, they can set rules for calling and redeeming these notes before they are due. They can redeem the notes at a set price, as long as the premium doesn't exceed 6% of the note's face value. The resolution will also specify how note holders will be notified about this redemption and at what price. If the notes can be redeemed early, they must clearly state this on their face, or else they cannot be called before their maturity date.
The legislative body may provide, in its resolution authorizing the issuance of bond anticipation notes, that the note shall be subject to call and redemption prior to maturity, at the option of the legislative body, at the price or prices which are fixed in the resolution, but not to exceed a premium of 6 percent of the par value of the note subject to redemption. The resolution shall fix the method of giving notice of redemption to the holders of the notes to be redeemed and the price or prices at which the note shall be subject to redemption. Any notes that are subject to call and redemption prior to maturity shall contain a recital to that effect on their face, and no note shall be subject to call or redemption prior to its fixed maturity date unless it contains that recital.
bond anticipation notes call and redemption premium limit par value early redemption notice of redemption maturity date fixed price legislative body option resolution requirements
Section § 8746
This law section allows for bond anticipation notes to be issued and sold just like regular bonds. This means they can be handled in similar ways during the issuance and sale processes.
The bond anticipation notes may be issued and sold in the same manner as the bonds.
bond anticipation notes bond issuance bond sales financial instruments public financing municipal bonds debt financing short-term debt finance management investment strategy
Section § 8746.2
This law section says that bond anticipation notes, which are temporary financial instruments issued before actual bonds, can include the same terms, conditions, or restrictions that are allowed in the resolutions for regular bonds approved by a legislative body. It essentially allows for flexibility and uniformity in the terms used for both types of financial instruments.
The bond anticipation notes and the resolution authorizing them may contain any provisions, conditions, or limitations which a resolution of the legislative body authorizing the issuance of bonds may contain.
bond anticipation notes temporary financial instruments legislative body resolution bond issuance financial provisions conditions limitations flexibility in terms uniformity in financial instruments temporary bonds bond terms and conditions financial resolutions authorizing issuance bond resolutions legislative approval
Section § 8746.4
If the expected bonds can't be sold as planned or there is a default on bond anticipation notes, the government must provide a solution in their resolution. This solution should limit property owners' financial responsibilities to the amount they've been assessed, unless there is a specific agreement where some property owners offer their property as extra security for the notes.
The legislative body shall provide a remedy in its resolution authorizing the issuance of bond anticipation notes if the anticipated bonds cannot be sold at the time or in the amount specified in the resolution or if any default occurs with respect to the notes. Any remedy which is so provided shall limit the obligations of property owners within the area subject to assessment to the amount of the assessment authorized and levied, except that the legislative body may enter into an agreement with any of the property owners within the district pledging some or all of the property of those property owners who are a party to the agreement as additional security for the notes.
bond anticipation notes remedy resolution property owner obligations default assessment limitation additional security government resolution anticipated bonds property pledge district agreement financial responsibility issuance of bonds assessment amount security agreement
