Cal. HNC § 6077.1

Whenever the improvement and development work for which any issue of bonds has been voted has been constructed and the proceeds of the bonds sold have not been entirely expended, the board may by resolution order that the unexpended proceeds be placed in the fund provided for the purpose of paying principal and interest of said bonds or said board may by resolution direct that all or a part of said unexpended proceeds be used for the purpose of purchasing outstanding bonds of said district. Said bonds may be purchased only after the publication at least twice in a newspaper of general circulation in the district of a notice inviting sealed proposals for the sale of bonds to the district. The notice shall state the time and place when the proposals will be opened and the amount of money available for the purchase of the bonds. The legislative body may reject any or all proposals and if it rejects all thereof, may within a period of thirty days thereafter purchase for cash any outstanding bonds of the district but in that event the purchase price shall not be more than the lowest purchase price at which bonds were tendered to the district in the public bidding.

Any bonds purchased under the authority of this section shall be canceled immediately.