The provisions of this article are applicable only to refunding plans which both:
(a)CA Water Code § 25110(a) Were adopted prior to January 31, 1939.
(b)CA Water Code § 25110(b) Then contained no provisions for modification.
Refunding BondsUnauthorized Refunding Modification
Section § 25110
This law applies only to specific financial plans, known as refunding plans, that meet two criteria: they must have been put into place before January 31, 1939, and they must not have included any terms allowing for changes or modifications at that time.
refunding plans adopted before 1939 no modification provisions
Section § 25111
This law section states that the terms of a refunding plan and its associated bonds can be changed if everyone involved agrees. Specifically, the district and all holders of the bonds must approve any modifications to the terms.
The terms of any refunding plan and of the refunding bonds outstanding thereunder may be modified from time to time if the modification is approved in the manner provided in this article by all of the following:
(a)CA Water Code § 25111(a) The district.
(b)CA Water Code § 25111(b) The holders of all of the outstanding refunding bonds affected.
refunding plan modification refunding bonds bond holders approval
Section § 25112
This law states that any changes proposed within a district must be approved in two ways: first, through a formal resolution by the board overseeing the district, and second, through a vote by the district's residents during a specially called election.
The approval of the modification by the district shall be given by a resolution of its board and by its voters at an election called by the board.
district modification approval board resolution voter election
Section § 25113
This law states that when there's an election regarding a modification, the process for notifying and holding the election should follow the same procedures as a bond election. However, the key difference is that only a simple majority vote is needed for the modification to be approved.
Notice of the election shall be given and it shall be held in substantially the same manner as a bond election, except that a majority vote only is required for approval of the modification.
bond election election notice majority vote
Section § 25115
This law section explains how modifications to outstanding refunding bonds can be approved. Approval can happen in one of two ways: either all bondholders give their written consent, or a federal bankruptcy court issues an order that legally binds all bondholders.
The approval of the holders of outstanding refunding bonds affected by the modification shall be evidenced by either of the following:
(a)CA Water Code § 25115(a) The written consent of all of the owners and holders of the bonds.
(b)CA Water Code § 25115(b) An order under federal bankruptcy law that is binding upon the holders and owners of all of the outstanding refunding bonds affected.
refunding bonds bondholder consent modification approval
Section § 25116
This law allows a district to change the terms of existing refunding bonds without needing to issue new ones. Instead, the district can update the existing bonds by endorsing the new terms directly on them, or by referencing a separate modification document. This process must follow the method outlined in the relevant article.
If the modification is approved in the manner provided in this article, the district need not issue new refunding bonds and coupons in exchange for outstanding bonds and coupons the terms of which have been modified, but in lieu thereof the district may provide for the indorsement on the outstanding refunding bonds and coupons affected of the terms of the modification or a reference to its terms if contained in an instrument of modification or modified refunding plan, all as provided in the modification.
modification of bonds refunding bonds bond terms update
Section § 25117
This law allows a district to change the maturity date of refunding bonds by marking the new date on the bond itself. Instead of issuing entirely new bonds, they can just note the new maturity date and add new interest coupons for future payments.
If the modification or modified refunding plan provides for the extension of the time of maturity of all or any of the refunding bonds, the district in lieu of issuing new refunding bonds may indorse upon the face of the refunding bonds extended the new date of their maturity and attach to them new interest coupons to evidence interest payments to become due to the extended date of maturity of the refunding bonds.
refunding bonds maturity extension interest coupons
Section § 25118
This law states that when refunding bonds have their terms changed, they remain legally valid and are still considered active bonds of the district. They continue to be negotiable instruments, which means they can be bought and sold. The bonds must be paid according to their original terms and any agreed-upon modifications, even if the payment time is extended.
All refunding bonds the terms of which have been modified shall continue to be binding outstanding bonds of the district and negotiable instruments irrespective of any indorsement of the terms of the modification or of the extension of the time of payment and shall be payable in accordance with their terms and the provisions of the modification.
refunding bonds bond terms modification binding bonds
Section § 25119
This law allows for changes to a previously approved plan for refunding bonds, provided the changes are agreed upon by a specified percentage of bondholders. The method for agreeing on these changes should be outlined in the plan itself.
Any modification of any refunding plan adopted pursuant to the provisions of this article may provide for its subsequent modification with the consent of the holders of any specified percentage of the refunding bonds affected by the modification in the manner provided in it.
refunding plan modification bondholder consent refunding bonds
