BILL NUMBER: SB 633	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JANUARY 4, 2012

INTRODUCED BY   Senator Huff
   (  Coauthor:   Senator  
Harman   Coauthors:   Senators  
Harman   and Runner  )
   (  Coauthor:   Assembly Member 
 Jeffries   Coauthors:   Assembly
Members   Harkey,   Jeffries,   and Wagner
 )

                        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 amended, 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  the Department of Finance determines
that  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.
 This bill would require that the fine shall not be paid with
proceeds from the bond fund that was misappropriated. 
   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.  This bill would
require that the fine shall not be paid with proceeds from the bond
fund that was misappropriated. 
   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  the Department of Finance
determines in an audit that  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  .
  ,   provided   that the fine shall
not be paid with proceeds from the bond fund that was
misappropriated. 
  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  .
  ,   provided   that the fine shall
not be paid with proceeds from the bond fund that was
misappropriated.