All sums received as accrued interest on the sale of any issue of bonds issued pursuant to this chapter shall be applied to the payment of interest on or principal of bonds of that issue.
Electric System ImprovementsProceeds
Section § 13171
When bonds are sold and generate interest, that interest must be used to pay off either the interest or the principal amount of those same bonds.
accrued interest bond sale bond interest payment
Section § 13172
This law states that money made from selling bonds, both the principal and any premiums, must be used for the projects the bonds were issued for. The board can decide that some of this money can also cover the interest costs during the project's construction phase, but only for up to three years after the bonds are issued.
All sums received as principal and premiums on the sale of any issue of bonds shall be applied to the purposes for which such bonds were issued. The board may provide in the resolution authorizing the issue of any bonds under this chapter that any portion of the proceeds of sale of the bonds may be applied to payment of interest during construction for a period of not to exceed three years from and after the date of such bonds.
bond proceeds bond issuance sale premiums
Section § 13173
This law section allows the board to create separate funds within the district's treasury. These funds ensure that money gained from selling bonds is used only for the specific reasons the bonds were issued.
The board may from time to time establish and maintain a separate fund or funds in the district treasury for the purpose of insuring the application of such proceeds received as principal on the sale of any issue of bonds to the purposes for which the same were issued.
district treasury separate fund bond proceeds
Section § 13174
This law states that money placed in a special fund created for specific bond purposes must stay there until it is used for those purposes. The expenditures must align with why the bonds were issued, including paying back district funds used for the same reasons after initial decisions were made. This money can't be used for anything else unless it's a temporary investment or shifted between similar funds for the same bond issue.
Money set aside and placed in any such separate fund shall remain therein until from time to time expended for the purposes for which such bonds were issued, including the reimbursement of other funds of the district for expenditures therefrom for purposes for which such bonds were issued, made after the adoption by the board of the preliminary resolution of intention provided for in Section 13101, and shall not be used for any other purpose whatsoever, except for temporary investment thereof as provided in this division; provided, however, that money may be paid or transferred from any such separate fund, in furtherance of the purpose of its establishment, to any other
such separate fund established for a like purpose in connection with the same issue of bonds.
bond funds special fund temporary investment
Section § 13175
The law states that money from a specific, separate fund can only be accessed if the district's accountant signs and authorizes the demand for it.
Money in any such separate fund shall be drawn therefrom only upon demands authenticated by the signature of the accountant of the district.
separate fund money access signature requirement
Section § 13176
This law allows a board to decide if using funds from bond issues for their original purpose is unwise or impractical. If so, the board can redirect these funds. They might buy back the bonds, pay them off, cover interest, or pay redemption premiums. Alternatively, they can allocate the funds to a new purpose—as long as it's within reasons allowed for bond issuance. Before redirecting funds to a new purpose, the board must pass a resolution following the same process as issuing new bonds, specifying the new purpose and amount.
If the board shall determine by resolution that the expenditure of the whole or any portion of the said principal sum of any issue of bonds for the purpose for which such bonds were issued is impracticable or unwise, the board may—
(1)CA Public Utilities Code § 13176(1) Apply such money or any part thereof to the purchase of bonds of that issue, or to the payment of any such bonds, at maturity or on redemption, or to the payment of interest thereon or of premiums due on the redemption thereof; or
(2)CA Public Utilities Code § 13176(2) Apply such money or any part thereof to any new purpose which is within the
purposes for which bonds might be issued under the terms of this chapter; provided, however, that before applying any of such money to such new purpose the board shall adopt a resolution specifying such new purpose, the amount of such money to be applied thereto, and authorizing such application, which resolution shall be subject to the same procedures, and take final effect only in the same manner, as if it were a resolution adopted pursuant to Section 13091, authorizing the issuance of bonds for such new purpose, and such resolution authorizing such application to such new purpose, when it shall have taken final effect under such procedures, shall be sufficient authority for the application of such money to such new purpose.
bond issuance bond redemption bond purchase
Section § 13177
If there's leftover money from a bond issue after the project it was meant for is completed, the board can decide how to use it. They can buy back some of the issued bonds, pay off bonds that are due, pay interest or any premiums for early redemption, or add it to the income of the related electric system.
If any excess of the principal sum of the proceeds of any issue of bonds shall remain unexpended after the full accomplishment of the purpose for which such bonds were issued the board, by resolution, may direct that the same shall be applied to the purchase of bonds of that issue, or to the payment of any such bonds, at maturity or on redemption, or to the payment of interest thereon or of premiums due on the redemption thereof, or that it shall be transferred to the revenues pertaining to the electric system in connection with which such bonds were issued.
bond issue proceeds unexpended funds board resolution
