ACTS FOR ISSUANCE OF BONDS

SEC. 605. After the expiration of the twenty-day limitation period provided for in section 604 of this part, the District Council may by act establish an issue of bonds as authorized pursuant to the provisions of sections 601 to 604, inclusive, hereof. An issue of bonds is hereby defined to be all or any part of an aggregate principal amount of bonds authorized pursuant to said sections, but no indebtedness shall be deemed to have been incurred within the meaning of this Act until the bonds shall have been sold, delivered, and paid for, and then only to the extent of the principal amount of bonds so sold and delivered. The bonds of any authorized issue may be issued all at one time, or from time to time in series and in such amounts as the District Council shall deem advisable. The act authorizing the issuance of any series of bonds shall fix the date of the bonds of such series, and the bonds of each such series shall be payable in annual installments beginning not more than three years after the date of the bonds and ending not more than thirty years from such date. The amount of said series to be payable in each year to be so fixed that when the annual interest is added to the principal amount payable in each year the total amount payable in each year in which part of the principal is payable shall be substantially equal. It shall be an immaterial variance if the difference between the largest and smallest amounts of principal and interest payable annually during the term of the bonds does not exceed 3 per centum of the total authorized amount of such series. Such Act shall also prescribe the form of the bonds to be issued thereunder, and of the interest coupons appertaining thereto, and the manner in which said bonds and coupons shall be executed. The bonds and coupons may be executed by the facsimile signatures of the officer or officers designated by the Act authorizing the bonds, to sign the bonds, with the exception that at least one signature shall be manual. Such bonds may be issued in coupon form in the denomination of $1,000, registerable as to principal only or as to both principal and interest, and if registered as to both principal and interest may be issuable in denominations of multiples of $1,000. Such bonds and the interest thereon may be payable at such place or places within or without the District as the District Council may determine.

PUBLIC SALE

SEC. 606. (a) All bonds issued under this part shall be sold at public sale upon sealed proposals at such price or prices as shall be approved by the District Council after publication of a notice of such sale at least once not less than ten days prior to the date fixed for sale in a daily newspaper carrying municipal bond notices and devoted primarily to financial news or to the subject of State and municipal bonds published in the city of New York, New York, and in a newspaper of general circulation published in the District. Such notice shall state among other things that no proposal shall be considered unless there is deposited with the District as a downpayment a certified check or cashier's check for an amount equal to at least 2 per centum of the par amount of bonds bid for, and the District Council shall reserve the right to reject any and all bids.

(b) The Treasurer of the United States, and any administrative officer or agency of the United States Government may purchase bonds issued under this part with funds under the control of such officer or agency to the same extent as the Treasurer, officer, or agency is permitted by law to invest such moneys in obligations of the United States Government, and such sale may be negotiated without the necessity of complying with the provisions of this section, relative to a public sale of the bonds.

PART 2 SHORT-TERM BORROWINGS

BORROWING TO MEET SUPPLEMENTAL APPROPRIATIONS

SEC. 621. In the absence of unappropriated available revenues to meet supplemental appropriations made pursuant to section 505, the District Council may by act authorize the issuance of negotiable notes, in a total amount not to exceed 5 per centum of the total appropriations for the current fiscal year, each of which shall be designated "supplemental" and may be renewed from time to time, but all such notes and renewals thereof shall be paid not later than the close of the fiscal year following that in which such act becomes effective.

BORROWING IN ANTICIPATION OF REVENUES

SEC. 622. For any fiscal year, in anticipation of the collection or receipt of revenues of that fiscal year, the District Council may by act authorize the borrowing of money by the execution of negotiable notes of the District, not to exceed 20 per centum of the total anticipated revenue, each of which shall be designated "Revenue Note for the Budget Year 19 ". Such notes may be renewed from time to time, but all such notes, together with the renewals, shall mature and be paid not later than the end of the fiscal year for which the original notes have been issued.

NOTES REDEEMABLE PRIOR TO MATURITY

SEC. 623. No notes issued pursuant to this part shall be made payable on demand, but any note may be made subject to redemption prior to maturity on such notice and at such time as may be stated in the note.

SALE OF NOTES

SEC. 624. All notes issued pursuant to this part may be sold at not less than par and accrued interest at private sale without previous advertising.

PART 3-PAYMENT OF BONDS AND NOTES

SEC. 631. (a) The Act of the District Council authorizing the issuance of bonds pursuant to this title shall, where necessary, provide for the levy annually of a special tax without limitation as to rate or amount upon all the taxable real and personal tangible property within the District in amounts which, together with other revenues of the District available and applicable for said purposes, will be sufficient to pay the principal of and interest on said bonds and the premium, if any, upon the redemption thereof, as the same respectively become due and payable, which tax shall be levied and collected at the same time and in the same manner as other District taxes are levied and collected, and when collected shall be set aside for the purpose of paying such principal, interest, and premium. (b) The full faith and credit of the District shall be and is hereby pledged for the payment of the principal of and the interest on all bonds and notes of the District hereafter issued pursuant to this title whether or not such pledge be stated in the bonds or notes or in the Act authorizing the issuance thereof.

PART 4-TAX EXEMPTION-LEGAL INVESTMENT

TAX EXEMPTION

SEC. 641. Bonds and notes issued by the District Council pursuant to this title and the interest thereon shall be exempt from all Federal and District taxation except estate, inheritance, and gift taxes.

LEGAL INVESTMENT

SEC. 642. Notwithstanding any restrictions on the investment of funds by fiduciaries contained in any other laws, all domestic insurance companies, domestic insurance associations, executors, administrators, guardians, trustees, and other fiduciaries within the District of Columbia may legally invest any sinking funds, moneys, trust funds, or other funds belonging to them or under or within their control in any bonds issued pursuant to this title, it being the purpose of this section to authorize the investment in such bonds or notes of all sinking, insurance, retirement, compensation, pension and trust funds. National banking associations are authorized to deal in, underwrite, purchase and sell, for their own accounts or for the accounts of customers, bonds and notes issued by the District Council to the same extent as national banking associations are authorized by paragraph seven of section 5136 of the Revised Statutes (title 12, U.S.C., sec. 24), to deal in, underwrite, purchase and sell obligations of the United States, States, or political subdivisions thereof. All Federal building and loan associations and Federal savings and loan associations; and banks, trust companies, building and loan associations, and savings and loan associations, domiciled in the District of Columbia, may purchase, sell, underwrite, and deal in, for their own account or for the account of others, all bonds or notes issued pursuant to this title: Provided, That nothing contained in this section shall be construed as relieving any person,

firm, association or corporation from any duty of exercising due and reasonable care in selecting securities for purchase or investment.

TITLE VII-FINANCIAL AFFAIRS OF THE DISTRICT

PART 1-FINANCIAL ADMINISTRATION

SURETY BONDS

SEC. 701. Each officer and employee of the District required to do so by the District Council shall provide a bond with such surety and in such amount as the District Council may require. The premiums for all such bonds shall be paid out of appropriations for the District.

FINANCIAL DUTIES OF THE MAYOR

SEC. 702. The Mayor, through his duly designated subordinates, shall have charge of the administration of the financial affairs of the District and to that end he shall

(1) prepare and submit in the form and manner prescribed by the District Council under section 502 the annual budget estimates and budget message;

(2) supervise and be responsible for all financial transactions to insure adequate control of revenues and resources and to insure that appropriations are not exceeded;

(3) maintain systems of accounting and internal control designed to provide

(A) full disclosure of the financial results of the District government's activities,

(B) adequate financial information needed by the District government for management purposes,

(C) effective control over and accountability for all funds, property, and other assets: Provided, That as soon as practicable after the date of enactment of this Act, the mayor shall cause the accounts of the District to be maintained on a basis that will facilitate the preparation of costs-based budgets;

(4) submit to the District Council a monthly financial statement, by appropriation and department, and in any further detail the District Council may specify;

(5) prepare, as of the end of each fiscal year, a complete financial statement and report;

(6) supervise and be responsible for the assessment of all property subject to assessment within the corporate limits of the District for taxation, make all special assessments for the District government, prepare tax maps, and give such notice of taxes and special assessments as may be required by law;

(7) supervise and be responsible for the assessment and collection of all taxes, special assessments, license fees, and other revenues of the District for the collection of which the District is responsible and receive all money receivable by the District from the Federal Government, or from any courts, or from any agency of the District;

(8) have custody of all public funds belonging to or under the control of the District, or any agency of the District government, and deposit all funds coming into his hands, in such depositories as may be designated and under such terms and conditions as may be prescribed by act of the District Council;

(9) have custody of all investments and invested funds of the District government, or in possession of such government in a fiduciary capacity, and have the safekeeping of all bonds and notes of the District and the receipt and delivery of District bonds and notes for transfer, registration, or exchange.

CONTROL OF APPROPRIATIONS

SEC. 703. The District Council may provide (1) the transfer during the budget year of any appropriation balance then available for one item of appropriation to another item of appropriation, and (2) the allocation to new items of funds appropriated for contingent expenditure.

ACCOUNTING SUPERVISION AND CONTROL

SEC. 704. The Mayor, through his duly authorized subordinates, shall(1) prescribe the forms of receipts, vouchers, bills, and claims to be used by all the agencies of the District government;

(2) examine and approve all contracts, orders, and other documents by which the District government incurs financial obligations, having previously ascertained that moneys have been appropriated and allotted and will be available when the obligations shall become due and payable;

(3) audit and approve before payment all bills, invoices, payrolls, and other evidences of claims, demands, or charges against the District government and with the advice of the legal officials of the District determine the regularity, legality, and correctness of such claims, demands, or charges; and (4) perform internal audits of central accounting and department and agency records of the District government, including the examination of any accounts or records of financial transactions, and giving due consideration to the effectiveness of accounting systems, internal control, and related administrative practices of the respective agencies.

WHEN CONTRACTS AND EXPENDITURES PROHIBITED

SEC. 705. No officer or agency of the District shall, during any budget year, expend or contract to expend any money or incur any liability, or enter into any contract which by its terms involves the expenditure of money, for any purpose, in excess of the amounts appropriated for any item of expenditure. Any contract, verbal or written, made in violation of this Act shall be null and void. Any officer or employee of the District who shall violate this section, upon conviction thereof, may be summarily removed from office. Nothing in this section, however, shall prevent the making of contracts or of expenditures for capital improvements to be financed in whole or in part by the issuance of bonds, nor the making of contracts of lease or for services for a period exceeding the budget year in which such contract is made when such contract is permitted by law.

GENERAL FUND

SEC. 706. The general fund of the District shall be composed of the revenues of the District other than the revenues applied by law to special funds. All moneys received by any agency, officer, or employee of the District in its or his official capacity shall belong to the District government and shall be paid promptly to the Mayor, or his duly authorized subordinates, for deposit in the appropriate funds.

CONTRACTS EXTENDING BEYOND ONE YEAR

SEC. 707. No contract involving expenditure out of the appropriations of more than one year shall be made for a period of more than five years; nor shall any such contract be valid unless made or approved by act of the District Council. PART 2-ANNUAL POST AUDIT BY GENERAL ACCOUNTING OFFICE

INDEPENDENT ANNUAL POST AUDIT

SEC. 721. (a) The General Accounting Office shall audit the financial transactions of the District for the fiscal year ending June 30, 1961, and for each fiscal year thereafter, under such rules and regulations as may be prescribed by the Comptroller General of the United States. The audit shall be conducted at the place or places where the accounts are normally kept. The representatives of the General Accounting Office shall have access to all books, accounts, financial records, reports, files, and all other papers, things, or property belonging to or in use by the District and necessary to facilitate the audit, and they shall be afforded full facilities for verifying transactions with the balances or securities held by depositories, fiscal agents, and custodians.

(b) (1) A report of each such audit for each fiscal year shall be made by the Comptroller General to the Mayor and to the District Council not later than January 15 following the close of the fiscal year for which such audit is made. The report shall set forth the scope of the audit and shall include such comments and information as may be deemed necessary to keep the Mayor and the District Council informed of the operations and financial condition of the District,

together with such recommendations with respect thereto as the Comptroller General may deem advisable. The report shall also show specifically every program, expenditure, or other financial transaction or undertaking, which, in the opinion of the Comptroller General, has been carried on or made without authority of law.

(2) After the Mayor and his duly authorized subordinates have had an opportunity to be heard, the District Council by resolution shall provide for the publication of such report together with such other material as it deems pertinent thereto.

(3) The Mayor, within ninety days after the report has been made to him and the District Council, shall state in writing to the District Council what has been done to comply with the recommendations made by the Comptroller General in the report.

AMENDMENT OF BUDGET AND ACCOUNTING ACT

SEC. 722. Section 2 of the Budget and Accounting Act, 1921 (U.S.C., 1952 edition, title 31, sec. 2), is hereby amended by striking out "and the municipal government of the District of Columbia".

PART 3-ADJUSTMENT OF FEDERAL AND DISTRICT EXPENSES

ADJUSTMENT OF FEDERAL AND DISTRICT EXPENSES

SEC. 731. Subject to section 1001 and other provisions of law, the Mayor, with the advice and consent of the District Council, and the Director of the Bureau of the Budget, are authorized and empowered to enter into an agreement or agreements concerning the manner and method by which amounts owed by the District to the United States, or by the United States to the District, shall be ascertained and paid.

TITLE VIII-BOARD OF EDUCATION

CREATION AND MEMBERSHIP

SEC. 801. There is hereby created a Board of Education, consisting of nine members elected as provided in title IX.

TRANSFER OF FUNCTIONS

SEC. 802. The Board of Education provided for in section 2 of the Act entitled "An Act to fix and regulate the salaries of teachers, school officers, and other employees of the board of education of the District of Columbia", approved June 20, 1906, is hereby abolished and its functions are hereby transferred to the Board of Education created by section 801.

FUNCTIONS AND LIMITATIONS

SEC. 803. (a) Subject to the provisions of section 321, the Board of Education shall

(1) determine appropriate policies for the District with respect to the maintenance and operation of public schools;

(2) appoint the Superintendent of Schools;

(3) prescribe such regulations, not inconsistent with the provisions of this title, as may be necessary or appropriate for the purposes of the operation of this title; and

(4) appoint such standing and special committees, and allocate to them such duties, as may be necessary or appropriate for the purposes of the operation of this title.

(b) In contracting with any person to serve as Superintendent of Schools of the District, the Board of Education shall not obligate the District for a period longer than the three-year period commencing on the date of contracting. Each contract shall reserve to the Board the right to remove the incumbent for cause. (c) Final action by the Board of Education shall not be taken on any proposed regulation until the thirteenth day following the day on which it was submitted; but the Board of Education may take earlier final action at a regular meeting, or at a special meeting for which reasonable notice has been given, upon vote of two-thirds of the members present.