Harbor Development Bond Law

California’s Harbors and Navigation Code, in Division 6, Part 4, contains the Harbor Development Bond Law of 1958. Chapter 1 contains general provisions. Section 3900 titles this part of the “Harbor Development Bond Law of 1958.”

Section 3901 provides definitions for the following terms: “committee,” “authority,” “commission,” and “San Francisco Harbor Improvement Fund.” Section 3902 created four specified funds in the State Treasury.

Section 3903 created in the State Government the Harbor Improvement Bond Committee. The committee consists of the State Controller, the State Treasurer, and the Director of Finance, who serves as the chair. Section 3904 prohibits the committee members from receiving compensation for their services.

Section 3905 provides that the Harbor Improvement Bond Committee is authorized and empowered to create a debt or debts, liability or liabilities, of the State of California, in the manner and to the extent provided.

Section 3906 requires the State Treasurer to arrange for the preparation of the requisite number of suitable bonds in accordance with the specifications contained in such resolution. The aggregate par value of all bonds issued under this part cannot exceed $60 million.

Section 3907 provides that, when when the commission determines by resolution that a bond issue under this part is necessary or desirable in order to make any of the expenditures authorized by this part, then the committee is required to approve or disapprove the resolution. The committee has to adopt a resolution directing the State Treasurer to arrange for the preparation of the requisite number of suitable bonds. The resolution must contain nine specified items.

Section 3908 prohibits the aggregate par value of all bonds issued under this part from exceeding $50 million and the aggregate par value of all bonds issued under this part cannot exceed $10 million.

Section 3909 provides all bonds issued must bear the facsimile signature of the Governor and the facsimile countersignature of the Controller and be endorsed by the State Treasurer by facsimile signature and the bonds be signed, countersigned and endorsed by the officers who are in office on the date of the adoption of the resolution of the committee.

Section 3910 states that all bonds authorized, which have been duly sold and delivered as provided, constitute valid and legally binding general obligations of the State of California, and the full faith and credit of the State of California is pledged for the punctual payment of both principal and interest thereof.

Also, there is appropriated from any available moneys in the account established in the Harbor Bond Sinking Fund, or if such moneys are insufficient, then from the General Fund of the State of California, an annual sum necessary to pay the principal of and interest on the bonds issued and sold.

Section 3911 provides that, in determining the dates of maturity of the bonds, and the amount to mature at each date of maturity, the committee must be guided by the amounts of the revenue estimated to accrue to the Harbor Bond Sinking Fund. The committee fixes and determines the dates and amounts of maturities in a manner that will coincide, as nearly as it may deem to be practicable, with the dates and amounts of the estimated revenue.

Section 3912 specifies that the rate of interest to be borne by the bonds need not be uniform for all bonds of the same issue, series or division.

Section 3913 requires both the principal of and interest on the bonds to be payable in lawful money of the United States, at the Office of the State Treasurer, or at the office of any duly authorized fiscal agent of the State.

Section 3914 requires each bond to contain a reference to this part and, if subject to call or redemption prior to maturity, a recital to that effect.

Section 3915 requires the bonds authorized to be issued under this part to be sold by the State Treasurer to the highest bidder for cash, either at public auction or upon sealed bids as the committee may by resolution determine.

Section 3916 requires due notice of the time and place of sale of all bonds to be given by the State Treasurer by publication in one newspaper published in the City and County of San Francisco and also by publication in one newspaper published in the City of Sacramento and by publication in one newspaper published in the City of Los Angeles once a week during two weeks prior to such sale.

All money secured from the sale of bonds issued at the instance of the authority, other than such amount as may have been paid as premium or accrued interest, is to be placed in the State Treasury to the credit of the Fifth San Francisco Seawall Fund, as well as the Small Craft Harbor Bond Fund.

Section 3916.5 appropriates $75,000 out of the General Fund to be used as a revolving fund to pay the expenses incurred by the State Treasurer in having the bonds prepared and in advertising their sale or their prior redemption, for expenses incurred by the committee, and for legal services.

Section 3917 allows the committee to provide for the issuance, sale or exchange of refunding bonds out of the bonds issued under this part for the purpose of redeeming or retiring any bond issued by the committee if, under the terms of that issue, the bonds issued may be redeemed or retired.

Section 3918 requires, for the payment of the principal and interest of the bonds, the Harbor Bond Sinking Fund to consist of six specified items.

Section 3918.5 requires a separate account to be established in the Harbor Bond Sinking Fund, in which is to be deposited all money paid into the fund from the San Francisco Harbor Improvement Fund. The money deposited to this account can be expended for specified purposes.

Section 3919 requires the State Treasurer to on Controller’s warrants duly drawn for that purpose, invest the moneys in the Harbor Bond Sinking Fund in the purchase of the bonds of the United States, or of the State of California, including any bonds authorized, issued and sold under authority of this part.

Section 3919.3 authorizes the authority, with the approval of the Department of Finance, to invest any surplus moneys in the Fifth San Francisco Seawall Fund in bonds or other obligations of the United States, or of the several counties, municipalities, school districts, or other public agencies of the State of California, and to sell the bonds or obligations. Interest accruing upon the deposit of money of the fund are to be paid into and credited to the San Francisco Harbor Improvement Fund.

Section 3920 provides that, whenever the committee deems that it will increase the salability or the price of the bonds to obtain, prior to or after sale, a legal opinion, other than that of the Attorney General, as to the validity of the bonds, the committee may authorize the State Treasurer or the Department of Finance to obtain such a legal opinion.

Section 3921 requires the State Treasurer directly or through a state fiscal agent to pay on the maturity of the bonds.

Section 3922 provides that, upon the payment of any bond or coupon, the State Treasurer must perforate the same with a suitable device in a manner to indicate the payment and a record of the payment is to be made.

Section 3923 allows the State Treasurer, or any state fiscal agent, with the approval of the State Treasurer, to destroy or cremate any or all bonds and any or all coupons which have been previously paid or canceled as provided.

Section 3924 states it is the duty of the State Treasurer to pay the interest of said bonds, when the same falls due, out of the moneys provided for in this part, on Controller’s warrants duly drawn for that purpose.

Section 3925 specifies that all bonds issued under this part and sold are be deemed to have been called in at their respective dates of maturity and the State Treasurer must, on the respective dates of maturity of the bonds, or as soon thereafter as the matured bonds are surrendered to him, pay the amount upon Controller’s warrants duly drawn for that purpose.

Section 3926 states that, whenever the committee determines any bonds then outstanding, and which by their terms are subject to redemption prior to maturity, should be redeemed, and that money sufficient for such redemption will be available at the time proposed for such redemption, it may, by resolution, direct the State Treasurer to call and redeem the bonds.

Section 3927 requires the State Controller and State Treasurer to keep full and particular account and record of all their proceedings under this part, and they must transmit to the Governor an abstract of all their proceedings.

Section 3928 provides that all money remaining in the account of the Harbor Bond Sinking Fund after the principal of and interest upon all bonds issued under this part at the instance of the authority have been paid in full are to be paid into the San Francisco Harbor Improvement Fund to be expended in accordance with law.