BILL NUMBER: SB 633	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  JUNE 11, 2012
	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, Runner, and Wolk)
   (Coauthors: Assembly Members  Fletcher,   Garrick,
  Gorell,   Hagman,  Harkey, Jeffries,
Logue,   Miller,   Nestande,  
Portantino,  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 provision that provides that if the Department of Finance
determines that funds from a bond act are expended for a purpose not
authorized by the bond act, and the entity  responsible for
the funds   that is authorized to allocate funds from
the sale of bonds  does not take the corrective action  or
  measure  prescribed by the department within 
a time to be determined by   60 days of receiving
notice of the corrective action or measure from  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   sale of those bonds.
The bill would provide that its provisions   apply 
 only to the allocation of funds that are   authorized
under a bond act that is adopted on or after January 1, 2013 .
   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.   (a)    The Department of Finance may
order any state board, department, or agency  that is 
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 
 allocating any additional funds from the sale of those bonds
 , provided that the following conditions are met: 
   (a) 
    (1)    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) 
    (2)    The Department of Finance  has 
prescribed corrective action, or any other measure it 
deemed   deems  necessary, to remedy the
unauthorized use of funds, and  provided a date by which
  has notified  the board, department, or agency
 that it  must implement or comply with the prescribed
corrective action  or measure within 60 days of receiving notice
of the corrective action or measure  . 
   (c) 
    (3)    The Department of Finance  has 
determined that the board, department, or agency  did
  has  not  implement  
implemented  or  comply   complied 
with the corrective action  by the date specified in
subdivision (b)   or measure within the 60-day period
prescribed in paragraph (2)  . 
   (b) Notwithstanding subdivision (a) or any other law, the
Department of Finance may not order a corrective action or measure
that results in the nonpayment of contractual obligations entered
into in good faith, or which have been performed under the contract
in good faith, for the rendition of services to the board,
department, or agency that is the subject of the audit under this
section.  
   (c) Any cease and desist order issued by the Department of Finance
pursuant to this section shall be reasonably designed to ensure
compliance with the prescribed corrective action or measure and to
avoid unnecessary disruption of the underlying bond-funded project or
program.  
   (d) This section shall apply only to the allocation of funds that
are authorized by a bond act that is adopted on or after January 1,
2013, and that incorporates this chapter by reference, in whole or in
part.