Gov. Code, § 16737

(a) When the committee deems it in the best interests of the state, it may authorize the Treasurer, upon those terms and conditions that may be fixed by the committee or determined by the Treasurer, to issue notes, on a negotiated or a competitive-bid basis, maturing within a period not to exceed five years, in anticipation of the sale of bonds duly authorized at the time the notes are issued. The proceeds from the sale of those notes shall be deposited in the related fund and used only for the purposes for which may be used the proceeds of the sale of bonds in anticipation whereof the notes were issued or as additionally authorized by this section.

(b) The notes authorized by this section may be sold at a price at, above, or below the principal amount thereof, at the discretion of the Treasurer.

(c) Any premium received from the sale of notes authorized by this section may be applied to pay costs of issuance of the notes or interest accruing on the notes.

(d) The notes authorized by this section may bear a fixed or variable rate or rates of interest.

(e) In connection with the sale of notes pursuant to this section, the Treasurer may engage the services of legal and financial advisers, credit enhancers, trustees or paying agents, and other professionals that the Treasurer deems necessary, and may enter into contracts for these services, to be paid from proceeds of the notes or any duly enacted appropriation.

(f) When the committee deems it in the best interests of the state, it may authorize the Treasurer to deliver the notes in payment for work or material furnished to the state for a public improvement, pursuant to a contract awarded in the manner prescribed by law. The notes shall be so delivered only for the purposes for which may be used the proceeds of the sale of bonds in anticipation whereof the notes were issued.

(g) All notes issued pursuant to this section and any renewals thereof shall be payable at a fixed time, solely from the proceeds of the sale of the bonds and not otherwise, except if the sale of the bonds did not occur prior to the maturity of the notes issued in anticipation of the sale, the Treasurer shall, in order to meet the notes or the renewals thereof then maturing, issue renewal notes for this purpose. No renewal of a note or a renewal note shall be issued after the sale of bonds in anticipation of which the original note was issued.

(h) Every note issued pursuant to this section and any renewal thereof shall, unless paid from a renewal note, be payable from the proceeds of the sale of bonds and not otherwise. The total amount of the notes or renewals thereof issued and outstanding shall not exceed the total amount of the unsold bonds.

(i) Interest on the notes issued pursuant to this section shall be payable from any appropriation made for that purpose or from proceeds of the sale of the notes.