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 matures.

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 before maturity.

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 refunded thereby.

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 district.