Article 8. Retirement Of Bonds of California Water Code >> Division 6. >> Part 3. >> Chapter 8. >> Article 8.

Any surplus which exists in the construction fund shall be applied to the retirement of bonds issued for construction of the project by purchase or call.

In the event the bonds cannot be purchased at a price satisfactory to the department and are not by their terms callable prior to maturity such surplus shall be paid into the fund applicable to the payment of principal and interest of the bonds and shall be used for that purpose.

The proceedings authorizing the issuance of bonds may provide limitations and conditions upon the time and manner of applying such surplus to the purchase and call of outstanding bonds.

The terms upon which the bonds shall be purchased or called and such limitations and conditions as are mentioned in the preceding section shall be followed and observed in the application and use of such surplus.

All bonds retired by purchase or call shall be immediately canceled.