California Code, Health and Safety Code - HSC § 33782

Any agency may provide for the issuance of the revenue bonds of the agency for the purpose of refunding any revenue bonds of the agency then outstanding, or for the purpose of refunding any revenue bonds of another political subdivision of the state then outstanding pursuant to Section 33761, including the payment of any redemption premiums thereof and any interest accrued or to accrue to the earliest or subsequent date of redemption, purchase, or maturity of the bonds, and, if both (a) deemed advisable by the agency, and (b) projects financed with the bonds fall within the jurisdiction of the agency, for the additional purpose of paying all or any part of the cost of additional residential construction.

The proceeds of revenue bonds issued pursuant to this section may, in the discretion of the agency, be applied to the purchase or retirement at maturity or redemption of outstanding revenue bonds, either at their earliest or any subsequent redemption date or upon the purchase or retirement at the maturity thereof and, pending that application, the portion of the proceeds allocated for that purpose may be placed in escrow, to be applied to the purchase or retirement at maturity or redemption on that date, as may be determined by the agency. Pending use for purchase, retirement at maturity, or redemption of outstanding revenue bonds, any proceeds held in such an escrow may be invested and reinvested as provided in the resolution authorizing the issuance of the refunding bonds. Any interest or other increment earned or realized on any such investment may also be applied to the payment of the outstanding revenue bonds to be refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of the proceeds and any interest or increment earned or realized from the investment thereof may be returned to the agency to be used by it for any lawful purpose under this chapter. That portion of the proceeds of any revenue bonds issued pursuant to this section which is designated for the purpose of paying all or any part of the cost of additional residential construction may be invested and reinvested in obligations of, or guaranteed by, the United States of America or in certificates of deposit or time deposits secured by obligation of, or guaranteed by, the United States of America, maturing not later than the time or times when the proceeds will be needed for the purpose of paying all or any part of the cost.

All revenue bonds issued pursuant to this section shall be subject to this chapter in the same manner and to the same extent as other bonds issued pursuant to this chapter.