Article 4. Refunding Bonds of California Public Utilities Code >> Division 10. >> Part 2. >> Chapter 8. >> Article 4.
The district may provide for the funding or refunding of
outstanding general obligation indebtedness pursuant to this article,
if any of the following conditions exist:
(a) The district has indebtedness evidenced by bonds, notes, or
other evidences of indebtedness, which according to their terms are
subject to call or payment before maturity.
(b) The district has filed a petition under any bankruptcy law of
the United States and refunding of its indebtedness is authorized in
the bankruptcy proceedings.
(c) The holder or holders of outstanding indebtedness has
consented to exchange such outstanding bonds for refunding bonds
bearing a lower rate of interest than such outstanding bonds.
The district by a two-thirds vote of the board may fund or
refund its general obligation indebtedness at, after, or before
maturity and issue refunding bonds of the district to refund the
indebtedness evidenced by such outstanding securities.
Refunding general obligations may be issued and may be sold
in accordance with Articles 2 (commencing with Section 29169) and 3
(commencing with Section 29200), except that no election need be
called or held for the purpose of authorizing the issuance of
refunding bonds and the refunding bonds may be sold and the proceeds
thereof applied to the redemption of bonds of indebtedness or may be
exchanged at not less than their par value for the evidences of
indebtedness to be refunded.
Refunding bonds issued pursuant to this article will have
the same weight and force and may be used in the same manner as the
bonds to be refunded.
The proceeds of any sale of refunding bonds for cash shall
be deposited with the treasurer or depositary, as determined by the
district, to the credit of the Funding Fund, and applied only to
refunding the indebtedness for which the bonds are issued.
Any proceeds of the refunding bonds remaining after the
indebtedness has been paid shall be deposited in the fund established
for the payment of principal and interest on the refunding bonds and
used only for the purpose of paying such principal or interest as it
At the time of making the general tax levy after incurring
the bonded indebtedness and annually thereafter until the refunding
bonds are paid or until there is a sum in the treasury set apart for
that purpose sufficient to meet all payments of principal and
interest on the bonds as they become due, the district shall levy and
collect a tax sufficient to pay the interest on the bonds and such
part of the principal as will become due before the proceeds of the
next general tax levy will be available.
If the earliest maturity of the refunding bonds is more than
one year after the date of issuance, the board shall levy and
collect annually a tax sufficient to pay the interest as it falls due
and to constitute a sinking fund for payment of the principal on or
The taxes shall be levied and collected as other district
taxes, and are in addition to all other taxes. They shall be used
only for the payment of the bonds and interest thereon.
Refunding bonds may be issued in a principal amount
sufficient to provide funds for (a) the payment of the principal of
and interest on the bonds, notes or other evidences of indebtedness
to be refunded; (b) all expenses incidental to the calling,
retirement or payment of the outstanding bonds, notes or other
evidences of indebtedness and the issuance of refunding bonds
including the difference in amount between the par value of the
refunding bonds and any amount less than par; (c) any amount
necessary to be made available for the payment of interest upon the
refunding bonds from the date of their delivery to the date of
maturity or payment of the bonds, notes or other evidences of
indebtedness to be refunded out of the proceeds of sale or the date
upon which the bonds, notes or evidences of indebtedness to be
refunded will be paid pursuant to call and redemption thereof or
pursuant to any agreement with the holders thereof for the refunding
or exchanging of such bonds, notes or other evidences of
indebtedness; and (d) the premium if any necessary to be paid in
order to call and retire the outstanding bonds, notes or other
evidences of indebtedness to be refunded. Refunding bonds may be
exchanged at not less than their par value and accrued interest for
outstanding bonds, notes or other evidences of indebtedness to be
When sufficient money is in the Funding Fund to redeem one
or more outstanding past due bonds, notes or other evidences of
indebtedness, or to redeem one or more of the outstanding bonds,
notes or other evidences of indebtedness, which are subject to call
or payment before maturity, and which are proposed to be funded or
refunded, the treasurer shall publish a notice that he is prepared to
pay the bond, note or other evidence of indebtedness (giving its
number, if any). The notice shall be published once a week for two
weeks in a newspaper of general circulation in the district, if there
is one. Copies of such advertisement may be published in any
newspaper or financial publication in the United States. If the bond,
note or other evidence of indebtedness to be called for redemption
or refunded is not presented for redemption on or before the date
specified for redemption, as set forth on the face of such
outstanding bond, note or other evidence of indebtedness, interest
thereon shall cease.
At the same time, the treasurer shall deposit in the post
office a copy of the notice, enclosed in a sealed envelope, postage
prepaid, addressed to the registered owner of any such bond, note, or
other evidence of indebtedness, registered pursuant to this part,
whose address appears upon the record in the treasurer's office. If
the bond, note, or other evidence of indebtedness is not presented
within the time specified in the notice, the interest upon it ceases
and the amount due shall be set aside for the payment when presented.
When any outstanding bonds, notes or other evidence of
indebtedness are surrendered and paid, the treasurer shall cancel
them by endorsing on their faces the amount for which they are
received, "Canceled," and the date of cancellation.
The treasurer shall keep a record of bonds, notes, or other
evidences of indebtedness redeemed, and report the redemption to the
board. At the end of each month in which there has been a redemption,
a report thereof shall be made accompanied by the bonds, notes, or
other evidence of indebtedness which have been taken up and canceled
or by a certificate of their destruction by any bank or trust company
appointed by the board as fiscal agent or paying agent for such
bonds, notes, or other evidences of indebtedness and authorized to
destroy bonds, notes, or coupons, or other evidence of indebtedness
upon payment thereof.
Any money remaining in the Funding Fund, after all
outstanding bonds, warrants, judgments, notes, or other evidences of
indebtedness proposed to be refunded have been taken up and canceled,
shall be deposited in the fund established for the payment of
principal and interest on the refunding bonds and used only for
paying such principal or interest as they mature.
Refunding of revenue bonds of the district may be
accomplished in the manner provided by the Revenue Bond Law of 1941,
all of the provisions of which are hereby made applicable to the