California Code, Water Code - WAT § 11755

The department may borrow money in anticipation of the sale of bonds duly authorized to be issued, but which have not yet been sold and delivered, and for that purpose may issue negotiable bond anticipation bonds and may renew such bond anticipation bonds from time to time, but the maximum maturity of any such bond anticipation bonds, including the renewals thereof, shall not exceed five years from the date of the original bond anticipation bonds.  Such bond anticipation bonds may be issued at public or private sale.  The department may provide, by resolution, for issuance at such maturities, interest rates, in such form, and under such other terms and conditions as the department, in its discretion, may determine.

The proceeds from the sale of such bond anticipation bonds shall be used only for the purposes for which may be used the proceeds of the sale of bonds in anticipation whereof they were issued.  Such bond anticipation bonds shall not be issued in an amount in excess of the aggregate amount of bonds authorized to be issued, less the amount of any of such authorized bonds previously sold, and also less the amount of other bond anticipation bonds issued in anticipation thereof and then outstanding.

The principal of such bond anticipation bonds may be paid from any moneys available therefor and not otherwise pledged.  If such bond anticipation bonds, or any portion thereof, have not been previously paid, they shall be paid from the proceeds of the next sale of bonds in anticipation whereof they were issued.

Interest on such bond anticipation bonds shall be payable from the same funds from which the interest on the bonds in anticipation whereof they were issued is payable.  Interest on the bond anticipation bonds may be paid out of proceeds thereof.