CA Health & Safety Code Section 4623.1

(a)

When the purposes and objects specified in any measure incurring bonded indebtedness submitted at any special election called for that purpose have been accomplished and any proceeds of sale of bonds authorized at the special election remain unexpended, or any bonds authorized at the special election remain unissued and unsold (the unexpended proceeds and the proceeds of sale of the then unissued bonds being hereinafter in this section together referred to as “unexpended bond proceeds”), the unexpended bond proceeds may be applied to payment of the costs (including any or all of the items specified in Section 4625) of any improvements, additions, betterments or extensions (hereinafter in this section collectively referred to as “improvements”) to the sewer work or improvement described in the resolution or ordinance calling the special election if the governing body shall first find and determine that:

(1)

The improvements are reasonably related to the purposes and objects included within the terms of the bond measure approved at the special election or are necessary to carry out the purposes and objects.

(2)

The improvements will be acquired or constructed entirely within the area of and will benefit the district as it existed on the date on which the special election was called to authorize the bonds sold, or to be sold, to provide the unexpended bond proceeds.

(3)

The resolution providing for the issuance of the bonds authorized at the special election and already outstanding does not prohibit, or can be and is amended to permit, the application of the unexpended bond proceeds to payment of the costs of the improvements; and if a hearing is duly called, noticed and held and resolutions are adopted by the governing body as provided in paragraph (b) of this section.

(b)

Before so applying the unexpended bond proceeds the governing body shall adopt a resolution stating the following:

(1)

The name and number of the district and a reference by date of adoption to the resolution or resolutions in which the boundaries of the district are set forth.

(2)

The date of the special election at which the bonds (which provided, or which when sold will provide, the unexpended bond proceeds) were authorized, the aggregate principal amount of bonds outstanding, the amount (if any) of unexpended bond proceeds provided by bonds theretofore sold and the principal amount of authorized, but unissued bonds (if any), proposed to be sold to provide unexpended bond proceeds.

(3)

A general description of the improvements proposed to be acquired or constructed, the estimated costs thereof and the amount of unexpended bond proceeds to be applied to payment of the costs.

(4)

A time and place for the hearing of objections to the proposed improvements or to the proposed expenditure of the unexpended bond proceeds by any person who is on the date of the hearing an owner of land or a registered voter within the boundaries of the district as it existed on the date of the special election at which the bonds were authorized. The resolution shall be published, posted and mailed as provided in Sections 4610 and 4610.5 for a resolution relating to formation of a district. On the day fixed for the hearing, or on any date to which the hearing is continued, the governing body shall hear and consider all written and oral objections presented to the proposed improvements or to the proposed expenditure of the unexpended bond proceeds. At the hearing, the governing body may make any changes in the proposed improvements or proposed expenditures as appear necessary in the public interest; and the governing body may not exclude any land from the district and shall abandon the proceedings if it finds that any land within the boundaries of the district as it existed on the date the special election was called will not be benefited by the proposed improvements. At the conclusion of the hearing, if the proceedings are not abandoned and if the governing body overrules all protests and objections and finds that the provisions of this section are complied with, the governing body may by a resolution which is passed by a vote of two-thirds of all its members approve the proposed improvements and proposed expenditure of the unexpended bond proceeds and, if bonds are to be issued and sold, may also, by the resolution provide for the issue and sale of the bonds.