Gov. Code, § 17302

Notes shall be issued pursuant to this part only to raise funds in an amount sufficient to satisfy the Controller’s registered demand or demands. Proceeds of notes may also be used for the payments described in Section 17311 to the extent that those payments are not included within the appropriations comprising the demand or demands. The principal amount of the issuance of notes shall equal the amount of the demand or the portion of the demand that is satisfied by the issuance. The issuance of any notes pursuant to this part shall be authorized by a resolution adopted by the Treasurer with the approval of the Controller and the Director of Finance.

(a) Any note (1) may be negotiable, (2) may be payable to order or to bearer, (3) may be in any denomination, (4) shall be payable not later than 120 days after the end of the fiscal year in which the note has been issued and shall not be renewable beyond that date, (5) may bear fixed or variable interest at a rate or rates to be determined as provided by the resolution and payable as provided therein, (6) may be payable on a fixed date or upon demand of the holder of the note, (7) may be made subject to prepayment or redemption at the option of the state or at the option of the holder, and (8) may have a term not exceeding 12 months.

(b) In lieu of issuing notes pursuant to subdivision (a), the resolution may provide for the issuance of notes in the form of commercial paper. This commercial paper may be issued and renewed from time to time, in amounts, subject to the requirements of this subdivision, as the Treasurer shall determine, from the date of initial issuance until the final maturity date, which shall not be more than 12 months, and shall occur not more than 120 days after the end of the fiscal year in which the commercial paper was first issued, and shall not be renewed beyond that date. The maximum principal amount of commercial paper outstanding at any one time shall be stated in the resolution, and shall not be greater than the amount of the Controller’s demand. The resolution may also provide that the commercial paper (1) may be negotiable, (2) may be payable to order or to bearer, (3) may be in any denomination, (4) may bear fixed or variable interest at a rate or rates to be determined as provided in the resolution and payable as provided therein, (5) may be payable on a fixed date or upon demand of the holder of the commercial paper, (6) may be made subject to prepayment or redemption at the option of the state or of the holder, and (7) may contain any other provision necessary or appropriate to carry out the program of commercial paper.