Section 78701 Of Chapter 10. Fiscal Provisions From California Water Code >> Division 24. >> Chapter 10.
78701
. Notwithstanding any provision of this division or the State
General Obligation Bond Law, if the Treasurer sells bonds pursuant to
this division that include a bond counsel opinion to the effect that
the interest on the bonds is excluded from gross income for federal
tax purposes, subject to designated conditions, the Treasurer may
maintain separate accounts for the investment of bond proceeds and
the investment earnings on those proceeds. The Treasurer may use or
direct the use of those proceeds or earnings to pay any rebate,
penalty, or other payment required under federal law or to take any
other action with respect to the investment and use of bond proceeds
required or desirable under federal law to maintain the tax-exempt
status of those bonds and to obtain any other advantage under federal
law on behalf of the funds of this state.