§ 50724 Bond Revenue Protection Clauses

• •This law lets a contract (called an 'indenture') have rules about what the board can or can't do with stuff built using bond money.
• •The rules can stop the board from selling, leasing, or messing with the stuff built with bond money.
• •The rules can also stop the board from making deals that hurt the money (revenues) needed to pay back the bonds.
• •The goal is to protect the people who own the bonds (bond holders) and make sure they get paid.

A city builds a toll bridge using money from bonds. The contract for the bonds says the city can't lease the bridge to a private company.

This law lets the bond contract have that rule to make sure the city keeps control of the bridge and the toll money to pay back the bonds. If the city tried to lease the bridge, it would break the rule and could get in trouble.