BILL NUMBER: SB 633	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JANUARY 13, 2012
	AMENDED IN SENATE  JANUARY 5, 2012
	AMENDED IN SENATE  JANUARY 4, 2012

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

                        FEBRUARY 18, 2011

   An act to add Section 16728 to the Government Code, relating to
bonds.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 633, as amended, Huff. Bonds: fine for unauthorized use.
   The State General Obligation Bond Law provides 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   provision that provides
 that if the Department of Finance determines that  bond
revenues   funds  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. The bill would prohibit a fine from being paid with
proceeds from the bond fund that was misappropriated.  
and the entity responsible for the funds does not take the corrective
action prescribed by the department within a time to be determined
by the department, then the Department of Finance may prohibit the
entity that was responsible for the unauthorized use from allocating
any additional funds from the bond act. 
   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.  The Department of Finance may order any state board,
department, or agency authorized by a bond act that incorporates this
chapter by reference, in whole or in part, to allocate funds from
the sale of bonds to cease and desist from doing so, provided that
the following conditions are met:
   (a) The Department of Finance has audited the board, department,
or agency and made a finding that funds have been used in a manner
not authorized by the bond act.
   (b) The Department of Finance prescribed corrective action, or any
other measure it deemed necessary, to remedy the unauthorized use of
funds, and provided a date by which the board, department, or agency
must implement or comply with the prescribed corrective action.
   (c) The Department of Finance determined that the board,
department, or agency did not implement or comply with the corrective
action by the date specified in subdivision (b).  
  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.