Article 6. Funds And Warrants of California Water Code >> Division 5. >> Part 5. >> Chapter 6. >> Article 6.

The money derived from the sale of any of the bonds shall be received by the State Treasurer and placed to the credit of the following funds in the following manner:
  (a) An amount equal to the accrued interest on the bonds so sold to the date of sale shall be placed by the State Treasurer to the credit of the bond fund of the assessment upon which the bonds are based.
  (b) All other money derived from the sale of any of the bonds shall be placed to the credit of the drainage district in a fund designated as the "Construction fund of (giving the name and number of the assessment upon which the bonds are based)," and may be drawn and expended upon warrants drawn by the Controller at the request of the board upon and payable out of the construction fund in the same manner as provided in Part 4 of this division, with reference to the expenditure of moneys collected upon assessments.

Whenever the drainage district has any money in the bond fund of any assessment which money is not immediately required for the purpose of paying principal or interest on bonds of the assessment, all or any part of it may be invested in bonds of the drainage district based upon and secured by the assessment.

The investment may be made by the board by direct purchase of the bonds from time to time and in such manner as it determines and at such price or prices as it deems advisable but not to exceed par, plus the accrued interest thereon.

Any bonds purchased pursuant to the provisions of this article, and held in the bond fund may from time to time be sold and the proceeds temporarily reinvested in bonds as provided in this article.

Sales of any bonds purchased and held in the bond fund shall from time to time be made so that the proceeds may be applied to the purpose for which the bond fund was created.

Any bonds purchased pursuant to the provisions of this article, may be delivered to the State Treasurer for cancellation and the bonds shall thereupon be canceled by the State Treasurer and after cancellation shall cease to be an indebtedness or obligation of the drainage district and the assessment, or either, for any purpose whatsoever.

The bond fund of each assessment shall be held by the State Treasurer and shall be applied by him toward the payment of the bonds and coupons thereon based upon the assessment, as the bonds and coupons fall due.

If any balance remains in the bond fund of the assessment after payment in full of the principal and interest of all outstanding bonds issued upon the assessment, the balance shall be held for the benefit of the lands upon which the assessment was made and in proportion to the amounts assessed thereon.

The balance may be distributed by the board to the owners or other persons interested in the lands.

The board shall from time to time when necessary, present its written request to the Controller for the issuance of warrants for the purpose of paying the cost and expenses of the works or project, for which the assessment was levied, and the expenses of making, bonding and collecting the assessment.

The board's request shall specify the amount of the warrant and the name of the payee thereof and upon receipt of the request the Controller shall draw his warrants upon the State Treasurer payable out of the Construction Fund of the assessment upon which the bonds are issued.

The State Treasurer shall pay the warrants or make delivery of the bonds as provided in this part.

Warrants issued by the Controller and payable out of the assessment as provided by Part 4 of this division shall be paid by the State Treasurer out of and only out of the Construction Fund of the assessment, and in their proper order of registration.

No warrant issued pursuant to any of the provisions of this part or of Part 4 of this division shall be accepted or received by the county treasurer in payment of all or any part of any assessment upon which bonds have been authorized.