Whenever the board by resolution passed by a vote of two-thirds of all its members determines that the refunding of the whole or any portion of the bonded indebtedness will be of advantage to the district the board may refund the bonded indebtedness or any portion thereof and issue refunding bonds of the district therefor.
BondsRefunding
Section § 50250
If two-thirds of the board members agree, the district can pay off its current bond debt and replace it with new bonds. This process is called refunding and can involve all or part of the existing debt if it benefits the district.
board resolution two-thirds vote bonded indebtedness
Section § 50251
This law states that issuing refunding bonds does not count as new or increased debt according to this act, so there's no need for voter approval to issue them. The board has the authority to set up a process for calling and redeeming these bonds before their maturity date, as specified in the ordinance that authorizes the refunding bonds.
The issuance of refunding bonds shall not be construed as the incurring or increase of an indebtedness within the meaning of this act, and the approval of the voters is not required for the issuance of refunding bonds. The board may provide for the call and redemption of any or all of the bonds on any interest payment date prior to their fixed maturity in the ordinance authorizing the issuance of the refunding bonds.
refunding bonds incurring debt increase debt
Section § 50252
This section states that the rules in this chapter mainly control everything related to the handling of refunding bonds. This includes how they are created, sold, and repaid, as well as using bond money to pay interest. The law also covers the bonds' eligibility as investments.
Except as otherwise provided, the provisions of this chapter shall substantially govern as to all matters pertaining to the issuance of refunding bonds, including and without limiting the generality of the foregoing, the form, execution, issuance, maturity, redemption, refunding, validation, the payment of interest from bond funds, and the status of the bonds as investments.
refunding bonds bond issuance bond maturity
Section § 50253
This section explains that when bonds are refunded, the new bonds, known as refunding bonds, cannot have an interest rate higher than the original bonds that are being replaced. The repayment of these refunding bonds must start within one year of issuance and be fully paid off within 40 years.
Refunding bonds shall bear interest at a rate not exceeding the interest rate on the refunded bonds, but payment of the refunding bonds shall begin not later than one year from the date thereof and be completed in not more than 40 years from that date.
refunding bonds interest rate limit payment commencement
Section § 50254
This section states that the money made from selling refunding bonds must be used solely to buy or pay off existing bonds, for which the refunding bonds were originally issued. The bonds can be bought back for no more than their face value and any interest that has accumulated, or for the call price, whichever is applicable.
The proceeds of the sale of refunding bonds shall be applied only to the purchase, or retirement at not more than par and accrued interest, or the call price, of the bonded indebtedness for which the refunding bonds were issued.
refunding bonds bond proceeds bond retirement
Section § 50255
Instead of selling new bonds to raise money to pay off old bonds, the board is allowed to directly exchange new refunding bonds for old ones. The exchange must be at a minimum value of the bond's face value plus any interest that has accrued.
In lieu of selling refunding bonds and using the proceeds to purchase or retire the bonds to be refunded, the board may exchange refunding bonds at not less than par and accrued interest for the bonds so refunded.
refunding bonds bond exchange exchange at par
Section § 50256
When a district's bonds are refunded, they're given to the district's treasurer. The treasurer marks them as canceled, noting whether they were exchanged or bought and at what price. The word 'canceled' and the cancellation date are also punched into both the bond and any attached coupons.
Whenever outstanding bonds are refunded they shall be surrendered to the treasurer of the district, who shall cancel them by endorsing on their face the manner in which the refunding was effected (whether by exchange or purchase, and the amount for which so purchased, if any) and by perforating through each bond and each coupon attached thereto the word “canceled” together with the date of cancellation.
outstanding bonds refund surrender
