BILL NUMBER: SB 633	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Huff
   (Coauthor: Senator Harman)
   (Coauthor: Assembly Member Jeffries)

                        FEBRUARY 18, 2011

   An act to add Sections 16728 and 53508.10 to the Government Code,
relating to bonds.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 633, as introduced, Huff. Bonds: fine for unauthorized use.
   The existing State General Obligation Bond Law contains procedures
for use in authorizing the issuance and sale and providing for the
repayment of state general obligation bonds.
   This bill would incorporate into the State General Obligation Bond
Law a requirement that if bond revenues from a bond act are expended
for a purpose not authorized by the bond act, then the party
responsible for the unauthorized use shall repay all funds expended
improperly to the bond fund, and pay a fine of a specified amount to
the bond fund.
   Existing law authorizes cities, counties, school districts,
community college districts, and special districts to issue and
refund general obligation bonds and prescribes the procedures for
this purpose.
   This bill would incorporate into the law authorizing cities,
counties, school districts, community college districts, and special
districts to issue bonds a requirement that if bond revenues from a
bond resolution are expended for a purpose not authorized by the bond
resolution, then the party responsible for the unauthorized use
shall repay all funds expended improperly to the bond fund, and pay a
fine of a specified amount to the bond fund.
   Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 16728 is added to the Government Code, to read:

   16728.  With respect to a bond act that incorporates this chapter
by reference, in whole or in part, if bond revenues from that act are
expended for a purpose not authorized by the bond act, then the
board, committee, or entity otherwise responsible for the
unauthorized use shall do the following:
   (a) Promptly repay all funds that were expended improperly to the
bond fund.
   (b) Pay a fine to the bond fund equal to 5 percent of the total
amount of bond revenues that were expended improperly.
  SEC. 2.  Section 53508.10 is added to the Government Code, to read:

   53508.10.  With respect to a bond act that incorporates this
article by reference, if bond revenues from that resolution are
expended for a purpose not authorized by the resolution authorizing
the issuance of the bonds, then the issuer, legislative body, or
party otherwise responsible for the unauthorized use shall do the
following:
   (a) Promptly repay all funds that were expended improperly to the
bond fund.
   (b) Pay a fine to the bond fund equal to 5 percent of the total
amount of bond revenues that were expended improperly.