Article 2. Modification Of Bonds And Warrants of California Water Code >> Division 11. >> Part 8. >> Chapter 5. >> Article 2.

If a district desires to extend the time or times of maturity of any or all of its bonds or warrants payable at stated times or to reduce the rate of interest thereon or to effect any combination of these, it may either:
  (a) Enter into an agreement in writing with the holders of the bonds or warrants affected, specifying the changes in dates of maturity, rate or rates of interest, or both.
  (b) Propose a plan of composition of its outstanding indebtedness which involves changes in dates of maturity, rate or rates of interest, or both.

The rate of interest specified in the agreement or plan shall not exceed 8 percent per year.

All interest coupons shall be payable on the first day of January or the first day of July.

The board may call an election to submit to the voters the question whether or not the bonds or warrants shall be modified as provided in the agreement or plan. Notice of the election shall be given and it shall be held and its result declared as nearly as practicable as in the case of bond elections.

If a majority of the votes cast for and against the proposal is in favor of modifying the bonds or warrants, the proposal is approved.

An agreement or plan may not be carried out pursuant to this article until a proposal therefor is approved by the voters, and a plan may not be carried out until it is either:
  (a) Agreed to in writing by all of the holders of bonds and warrants affected.
  (b) Confirmed in accordance with federal bankruptcy law.

Upon the presentation to the secretary of any of the bonds or warrants covered by the agreement or plan, he shall indorse on them the date to which their maturity is extended and shall attach to them coupons with his signature or a facsimile of it to evidence the semiannual interest from the time or times of the original maturity of the bonds or warrants to the new maturity date or dates.

If the agreement or plan provides for a reduction in the rate of interest on the bonds or warrants before the original time or times of their maturity, new coupons shall be attached to the bonds or warrants to evidence the reduced interest. Any old coupons evidencing the interest originally provided shall be detached by the secretary from the bonds or warrants and canceled.

Each bond or warrant presented and indorsed shall continue as an obligation of the district and shall not become due until the date specified in the agreement or plan.

This article does not amend, modify, or limit any other provision of law for changing the date or dates of maturity of outstanding obligations of a district, but provides an alternative method of extending any obligations whose date or dates of maturity may be changed under any other provision of law.