BILL NUMBER: AB 326	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Leonard

                        FEBRUARY 11, 1999

   An act to add Chapter 17 (commencing with Section 7440) to Title 7
of Part 3 of the Penal Code, relating to financing the construction
of prison facilities by providing the funds necessary therefor
through the issuance and sale of bonds of the State of California and
by providing for the handling and disposition of those funds.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 326, as introduced, Leonard.  Prison construction.
   (1) Existing law authorizes the construction of correctional
facilities, as specified.
   This bill, in addition, would authorize the Department of
Corrections to construct and establish 6 medium, maximum, or
combination thereof, security prisons throughout the State of
California.
   (2) Existing law contains various bond acts to finance the
construction of state correctional facilities, including the New
Prison Construction Bond Act of 1990, under which the proceeds of the
sale of bonds in the amount of $450,000,000 is available for the
acquisition, construction, renovation, remodeling, and deferred
maintenance of state youth and adult correctional facilities.
   This bill would enact the New Prison Construction Bond Act of
1999, which, if adopted, would authorize the issuance, pursuant to
the State General Obligation Bond Law, of bonds in an unspecified
amount to provide for the construction of the 6 state prisons
described in (1) above, and for the purpose of refinancing interim
debt incurred for these purposes.
   The bill would provide for submission of the bond act to the
voters at the March 7, 2000, statewide primary election in accordance
with specified law.
   Vote:  2/3.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  no.


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


  SECTION 1.  (a) The Department of Corrections is hereby authorized
to construct and establish six medium, maximum, or combination
thereof, security prisons throughout the State of California.
   (b) The location of the prisons established pursuant to this act
shall be consistent with the department's Five-Year Facilities Master
Plan for the fiscal years 1999-2000 to 2003-2004, inclusive.
   (c) The department shall provide space in the prisons established
pursuant to this act to accommodate the need of inmates needing drug
and alcohol rehabilitation.
   (d) The number of rehabilitation spaces shall be consistent with
the needs identified in the department's Five-Year Facilities Master
Plan for the fiscal years 1999-2000 to 2003-2004, inclusive.
  SEC. 2.  Chapter 17 (commencing with Section 7440) is added to
Title 7 of Part 3 of the Penal Code, to read:

      CHAPTER 17.  NEW PRISON CONSTRUCTION BOND ACT OF 1999

   7440.  This chapter shall be known and may be cited as the New
Prison Construction Bond Act of 1999.
   7441.  The State General Obligation Bond Law is adopted for the
purpose of the issuance, sale and repayment of, and otherwise
providing with respect to, the bonds authorized to be issued by this
chapter, and the provisions of that law are included in this chapter
as though set out in full in this chapter except that,
notwithstanding anything in the State General Obligation Bond Law,
the maximum maturity of the bonds shall not exceed 20 years from the
date of each respective series.  The maturity of each respective
series shall be calculated from the date of that series.
   7442.  There is in the State Treasury the 1999 Prison Construction
Fund, which fund is hereby created.  The proceeds of the sale of
bonds authorized by this chapter shall be deposited in the fund.
Upon request of the Department of Corrections and upon approval of
the Director of Finance, appropriations or augmentations to
appropriations made from the 1984 Prison Construction Fund
established by Section 7202, the 1986 Prison Construction Fund
established by Section 7302, the 1988 Prison Construction Fund
established by Section 7402, or the 1990 Prison Construction Fund
established by Section 7422, or any combination thereof, may be
funded from the 1999 Prison Construction Fund.  If the moneys are so
funded, "fund" means the 1984 Prison Construction Fund, the 1986
Prison Construction Fund, the 1988 Prison Construction Fund, the 1990
Prison Construction Fund, or the 1999 Prison Construction Fund
created by this section, or any combination thereof, as is
appropriate.  At least 30 days prior to requesting funding for
appropriations or augmentations to appropriations for other bond acts
as authorized by this section, the Department of Corrections shall
notify the chairpersons of the fiscal committees in each house of the
Legislature, and the chairperson and the vice chairperson of the
Joint Legislative Budget Committee.
   7443.  The 1999 Prison Construction Committee is hereby created.
The committee shall consist of the Controller, the Treasurer, and the
Director of Finance, or their designated representatives.  A
majority may act for the committee.  The Treasurer shall chair the
committee.  That committee shall be the "committee," as that term is
used in the State General Obligation Bond Law.
   When funds are appropriated to the Department of Corrections, the
Department of Corrections is the "board" for the purpose of the State
General Obligation Bond Law and this chapter.
   7444.  The committee is hereby authorized and empowered to create
a debt or debts, liability or liabilities, of the State of
California, in the aggregate principal amount of ____ dollars
($_____), exclusive of refunding bonds, in the manner provided in
this chapter.  That debt or debts, liability or liabilities, shall be
created for the purpose of providing the fund to be used for the
object and work specified in Section 7446 and to be used to reimburse
the General Obligation Bond Expense Revolving Fund pursuant to
Section 16724.5 of the Government Code.
   7445.  The committee may determine whether or not it is necessary
or desirable to issue any bonds authorized under this chapter, and if
so, the amount of bonds then to be issued and sold.  The committee
may authorize the Treasurer to sell all or any part of the bonds
herein authorized at such time or times as may be fixed by the
Treasurer.
   7446.  The moneys in the fund shall be used for the construction
of the six state correctional facilities authorized pursuant to the
act that enacted this chapter.  In addition, moneys in the fund may
be used to help mitigate capital costs of school districts and local
governments impacted by those facilities, provided the cost of the
mitigation does not exceed two million dollars ($2,000,000) per
school district or local government.  Moneys deposited in the fund
may also be used for the refinancing of interim debt incurred for any
of the purposes specified in this section.
   7447.  (a) All bonds herein authorized, which shall have been duly
sold and delivered as herein provided, shall constitute valid and
legally binding general obligations of the State of California, and
the full faith and credit of the State of California is hereby
pledged for the punctual payment of both the principal thereof and
interest thereon.
   (b) There shall be collected annually in the same manner and at
the same time as other state revenue is collected, that sum, in
addition to the ordinary revenues of the state, that is required to
pay the principal of, and interest on those bonds, and it is hereby
made the duty of all officers charged by law with any duty in regard
to the collection of that revenue to do and perform each and every
act which shall be necessary to collect that additional sum.
   (c) All money deposited in the fund that has been derived from
premiums or accrued interest on bonds sold shall be available for
transfer to the General Fund as a credit to expenditures for bond
interest.
   (d) All money deposited in the fund pursuant to any provision of
law requiring repayments to the state that is financed by the
proceeds of the bonds authorized by this chapter shall be available
for transfer to the General Fund.  When transferred to the General
Fund that money shall be applied as a reimbursement to the General
Fund on account of the principal of and interest on the bonds which
have been paid from the General Fund.
   7448.  Notwithstanding Section 13340 of the Government Code, there
is hereby appropriated from the General Fund in the State Treasury
for the purpose of this chapter such an amount as will equal the
following:
   (a) That sum annually as will be necessary to pay the principal of
and the interest on the bonds issued and sold pursuant to this
chapter.
   (b) That sum as is necessary to carry out the provisions of
Section 7449, which sum is appropriated without regard to fiscal
years.
   7449.  For the purpose of carrying out this chapter, the Director
of Finance may authorize, by executive order, the withdrawal from the
General Fund of an amount or amounts not to exceed the amount of the
unsold bonds which the committee has authorized, by resolution, to
be sold for the purpose of carrying out this chapter.  Any amounts
withdrawn shall be deposited in the fund and shall be disbursed by
the committee in accordance with this chapter. Any money made
available under this section to the board shall be returned by the
board to the General Fund from moneys received from the sale of bonds
sold for the purpose of carrying out this chapter.  Those
withdrawals from the General Fund shall be returned to the General
Fund with interest at the rate which would otherwise have been earned
by those sums in the Pooled Money Investment Account.
   7450.  The board may request the Pooled Money Investment Board to
make a loan from the Pooled Money Investment Account, in accordance
with Section 16312 of the Government Code, for the purposes of
carrying out the provisions of this chapter.  The amount of the
request shall not exceed the amount of the unsold bonds which the
committee has authorized, by resolution, to be sold for the purpose
of carrying out this chapter.  The board shall execute any documents
required by the Pooled Money Investment Board to obtain and repay the
loan.  Any amounts loaned shall be deposited in the fund to be
allocated by the board in accordance with this chapter.
   7451.  Any bonds issued and sold pursuant to this chapter may be
refunded by the issuance of refunding bonds in accordance with
Article 6 (commencing with Section 16780) of Chapter 4 of Part 3 of
Division 4 of Title 2 of the Government Code.  Approval by the
electors of the state for the issuance of bonds shall include the
approval of the issuance of any bonds issued to refund any bonds
originally issued or any previously issued refunding bonds.
   7452.  All proceeds from the sale of bonds, except those derived
from premiums and accrued interest, shall be available for the
purposes provided in Section 7446, but shall not be available for
transfer to the General Fund to pay the principal of, and interest
on, bonds.  The money in the fund may be expended only as herein
provided.
   Notwithstanding any provision of this chapter or the State General
Obligation Bond Law set forth in Chapter 4 (commencing with Section
16720) of Part 3 of Division 4 of Title 2 of the Government Code, if
the Treasurer sells bonds pursuant to this chapter that include a
bond counsel opinion to the effect that the interest on the bonds is
excluded from gross income for federal tax purposes under designated
conditions, the Treasurer may maintain separate accounts for the bond
proceeds invested and the investment earnings on those proceeds, and
may use or direct the use of those proceeds or earnings to pay any
rebate, penalty, or other payment required under federal law, or to
take any other action with respect to the investment and the use of
those bond proceeds, as may be required or desirable under federal
law in order to maintain the tax-exempt status of those bonds and to
obtain any other advantage under federal law on behalf of the funds
of this state.
   7453.  Money in the fund may be expended only pursuant to
appropriations by the Legislature.  The Department of Corrections,
annually on or before January 10, shall submit its five-year facility
master plan to the Legislature.  The plan shall include a program of
proposed expenditures from the 1999 Prison Construction Fund.
   7454.  The Legislature hereby finds and declares that, inasmuch as
the proceeds from the sale of bonds authorized by this chapter are
not "proceeds of taxes" as that term is used in Article XIIIB of the
California Constitution, the disbursement of these proceeds is not
subject to the limitations imposed by that article.
  SEC. 3.  The amount of the General Obligation Bond authorized
pursuant to Section 2 of this act, although unspecified, shall be
consistent with the amounts necessary to construct the six prisons
authorized pursuant to Section 1 of this act.
  SEC. 4.  Section 2 of this act shall become effective upon the
approval by the voters, at the March 7, 2000, statewide primary
election, of the New Prison Construction Bond Act of 1999, as set
forth in Section 2 of this act.
  SEC. 5.  Section 2 of this act shall be submitted to the voters at
the March 7, 2000, statewide primary election in accordance with
provisions of the Government Code and the Elections Code governing
submission of statewide measures to the voters.
  SEC. 6.  (a) Notwithstanding any other provision of law, all
ballots of the March 7, 2000, statewide primary election shall have
printed thereon and in a square thereof, exclusively the words:  "New
Prison Construction Bond Act of 1999," and in the same square under
those words, the following in 8-point type:  "This act provides for a
bond issue of ____ dollars ($____) to provide funds to relieve
overcrowding in the state's prisons through new construction."
Opposite the square, there shall be left spaces in which voters may
place a cross in the manner required by law to indicate whether they
vote for or against the act.
   (b) Where voting in the election is done by means of voting
machines used pursuant to law in a manner that carries out the intent
of this section, the use of the voting machines and the expression
of the voters' choice by means thereof are in compliance with this
section.