SECTIONS 5750-5755 - California Statutes

GOVERNMENT CODE

SECTION 5750-5755

5750. The Legislature finds and declares all of the following:
(a) There is a growing need for the state to finance capital
projects to renew and expand the state's infrastructure through the
use of various types of revenue obligations that are paid from the
General Fund.
(b) The need for these capital expenditures could also offer a
simple way for California families to save for the costs of higher
education and other significant expenditures that must be planned for
over an extended period of time.
(c) Families need convenient and simple methods to make secure
investments for major expenses, such as funding higher education
expenses.
(d) The California Savings Bond Program will benefit the state by
providing sources of revenue for capital redevelopment projects and
will benefit individuals and families by providing a simple and safe
method of saving funds for expenses, such as higher education
expenses.
(e) Families who use this program for college savings should not
be penalized by the financial aid system.

5751. As used in this chapter, the following terms have the
following meanings:
(a) "Bonds" means general obligation bonds, revenue bonds, or any
derivative evidence of indebtedness which includes, but is not
limited to, interests in pools, money market mutual funds, and unit
investment trusts, issued by or on behalf of any state agency.
(b) "Governing body" means the board, authority, trustees,
director, commission, committee, secretary, or other policy making
body that exercises authority over a state agency.
(c) "State agency" has the same meaning as defined by Section
11000.

5752. The Treasurer may sell California savings bonds in accordance
with the requirements of this chapter. Notwithstanding any provision
of law, when the Treasurer determines that bonds are to be sold, the
Treasurer may request the governing body to authorize bonds with the
following terms and the governing body shall authorize these terms:
(a) The bonds may be issued in a denomination or denominations of
any amount or amounts requested by the Treasurer and all bonds of the
same issue or same series need not be of the same denomination.
(b) The bonds may bear no interest or may bear interest payable
only at maturity or at the times and in the manner established in the
resolution, indenture, agreement, or other instrument providing for
the issuance of the bonds.
(c) For purposes of determining the principal amount of bonds
outstanding, in the case of any bonds that do not provide for payment
of interest on the bond prior to maturity, the principal amount of
these bonds shall be the cash price paid by the initial purchasers of
the bonds to the state plus the amount of any costs of issuance of
the bonds. Within 30 days of the delivery of any bonds, the Treasurer
shall submit to the governing body a certificate stating the
principal amount of bonds, calculated as stated in this subdivision,
which have been sold, and this certification shall be conclusive for
all purposes.
(d) The bonds may be issued in any form requested by the Treasurer
in order to satisfy the requirements of a book entry system of
depository trust companies or other similar financial institutions.
(e) In addition to the standard designation, the bonds may be
designated "California savings bonds" entitled to the benefits of
this chapter.

5753. In arranging the sale of bonds, the Treasurer may impose the
following requirements on any financial institution that sells the
bonds to the public:
(a) California residents planning to use the tax-exempt income for
college expenses shall have first priority for purchase of the bonds
and all other California residents shall be given second priority
for purchase of the bonds.
(b) The broker or institution marketing the bonds may not
establish a minimum order size.
(c) As long as the demand by individual investors is greater than
the supply of bonds, the bonds shall not be sold to institutional
investors.

5754. (a) A person who redeems California savings bonds and who has
owned the bonds for at least five years, or a person designated by
the owner, may exclude the amount redeemed to a maximum of
twenty-five thousand dollars ($25,000), per year per student,
adjusted for inflation after January 1, 1993, according to the
California Consumer Price Index, from any required calculations of
income and net worth for the purpose of making state financial aid
determinations for any public or private postsecondary educational
institution in this state. This exclusion shall only be available for
bonds redeemed or to be redeemed in the 12-month period preceding
the date of award for financial aid. Notwithstanding Section 69506 of
the Education Code, the modification made by this section to the
methodology set forth in federal law or regulation for determining
the expected family contribution of students seeking any state-funded
financial assistance is determined by the Legislature to be in the
best interest of the state.
(b) This chapter does not apply to college savings bonds issued by
the Treasurer prior to January 1, 1993, except that a person who
redeems college savings bonds issued prior to January 1, 1993, and
who has owned the bonds for at least five years, or a person
designated by the owner, may exclude the amount redeemed to a maximum
of twenty-five thousand dollars ($25,000), per year per student,
adjusted for inflation after January 1, 1993, according to the
California Consumer Price Index, from any required calculations of
income and net worth for the purpose of making state financial aid
determinations for any public or private postsecondary educational
institution in this state. This exclusion shall only be available for
bonds redeemed or to be redeemed in the 12-month period preceding
the date of award for financial aid.

5755. The general authority of the Treasurer to sell bonds, as
provided in this chapter, is intended to be in addition to, and not
limited by, specific provisions authorizing the issuance of bonds and
is a separate and complete authority for the actions authorized by
this chapter.