(a) The authority may provide for the issuance of bonds of the authority for the purpose of refunding, directly or indirectly, any bonds, notes, or other evidences of indebtedness of the authority or a public agency then outstanding, including the payment of any redemption premium thereon and any interest accrued or to accrue to the earliest or subsequent date of redemption, purchase, or maturity of these bonds, and, if deemed advisable by the authority, for the additional purpose of paying all or any part of the cost of constructing and acquiring additions, improvements, extensions, or enlargements of a project or any portion thereof.

(b) The proceeds of any bonds issued for the purpose of refunding outstanding bonds, notes, or other securities may, in the discretion of the authority, be applied to the purchase or retirement at maturity or redemption of outstanding bonds either on their earliest or any subsequent redemption date or upon the purchase or retirement at the maturity thereof and may, pending application, be placed in escrow to be applied to purchase or retirement at maturity or redemption on a date as may be determined by the authority.

(c) Pending this use, any of these escrowed proceeds may be invested and reinvested by the Treasurer or any trustee in instruments as may be specified in the resolution or indenture governing the bonds to be refunded, maturing at the time or times as shall be appropriate to ensure the prompt payment, as to principal, interest and redemption premium, if any, of the outstanding bonds to be so refunded. The interest, income, and profits, if any, earned or realized on this type of investment may also be applied to the payment of the outstanding bonds to be so refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of these proceeds and interest, income, and profits, if any, earned or realized on the investments thereof may be returned to the authority for use by it in any lawful manner.

(d) All of these bonds shall be subject to the provisions of this division in the same manner and to the same extent as other bonds issued pursuant to this division. If the authority refunds bonds or evidences of indebtedness not originally issued by the authority, the authority shall make findings that the project being refinanced qualifies as a project under this division.

(Amended by Stats. 2009, Ch. 643, Sec. 22. (SB 832) Effective November 2, 2009.)