Article 11. Proceeds of California Public Utilities Code >> Division 6. >> Chapter 6.5. >> Article 11.

All sums received as accrued interest on the sale of any issue of bonds issued pursuant to this chapter shall be applied to the payment of interest on or principal of bonds of that issue.

All sums received as principal and premiums on the sale of any issue of bonds shall be applied to the purposes for which such bonds were issued. The board may provide in the resolution authorizing the issue of any bonds under this chapter that any portion of the proceeds of sale of the bonds may be applied to payment of interest during construction for a period of not to exceed three years from and after the date of such bonds.

The board may from time to time establish and maintain a separate fund or funds in the district treasury for the purpose of insuring the application of such proceeds received as principal on the sale of any issue of bonds to the purposes for which the same were issued.

Money set aside and placed in any such separate fund shall remain therein until from time to time expended for the purposes for which such bonds were issued, including the reimbursement of other funds of the district for expenditures therefrom for purposes for which such bonds were issued, made after the adoption by the board of the preliminary resolution of intention provided for in Section 13101, and shall not be used for any other purpose whatsoever, except for temporary investment thereof as provided in this division; provided, however, that money may be paid or transferred from any such separate fund, in furtherance of the purpose of its establishment, to any other such separate fund established for a like purpose in connection with the same issue of bonds.

Money in any such separate fund shall be drawn therefrom only upon demands authenticated by the signature of the accountant of the district.

If the board shall determine by resolution that the expenditure of the whole or any portion of the said principal sum of any issue of bonds for the purpose for which such bonds were issued is impracticable or unwise, the board may--
  (1) Apply such money or any part thereof to the purchase of bonds of that issue, or to the payment of any such bonds, at maturity or on redemption, or to the payment of interest thereon or of premiums due on the redemption thereof; or
  (2) Apply such money or any part thereof to any new purpose which is within the purposes for which bonds might be issued under the terms of this chapter; provided, however, that before applying any of such money to such new purpose the board shall adopt a resolution specifying such new purpose, the amount of such money to be applied thereto, and authorizing such application, which resolution shall be subject to the same procedures, and take final effect only in the same manner, as if it were a resolution adopted pursuant to Section 13091, authorizing the issuance of bonds for such new purpose, and such resolution authorizing such application to such new purpose, when it shall have taken final effect under such procedures, shall be sufficient authority for the application of such money to such new purpose.

If any excess of the principal sum of the proceeds of any issue of bonds shall remain unexpended after the full accomplishment of the purpose for which such bonds were issued the board, by resolution, may direct that the same shall be applied to the purchase of bonds of that issue, or to the payment of any such bonds, at maturity or on redemption, or to the payment of interest thereon or of premiums due on the redemption thereof, or that it shall be transferred to the revenues pertaining to the electric system in connection with which such bonds were issued.