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HomePublic Utilities CodeDiv. 11Ch. 6Art. 5§ 120702 Bondholder Contract Enforcement

§ 120702 Bondholder Contract Enforcement

Public Utilities Code·California
AI Summary·Official Text·Key Terms·Related Statutes·References
AI SummaryVerified

§ 120702 Bondholder Contract Enforcement

Key Takeaways

  • •If the board issues bonds or borrows money, they must follow the rules they set in the contract with the lenders.
  • •Even if the board breaks up or changes, the area that was part of the board still has to pay back the money they borrowed.
  • •Money made from things the board owns (like buildings or facilities) must be used to pay back the bonds until they are fully paid off.

Example

A city board borrows money to build a new park. They promise to use the money from park fees to pay back the loan.

Even if the board changes or the city decides to stop managing the park, the money from park fees must still be used to pay back the loan. The city can't just walk away from the debt.

AI-generated — May contain errors. Not legal advice. Always verify source.

Official Source
View on CA.gov

§ 120702 Bondholder Contract Enforcement

Notwithstanding any other provisions of this division or any other law, the provisions of all ordinances, resolutions, and other proceedings in the issuance by the board of any bonds, bonds with a pledge of revenues, bonds for improvement districts, revenue bonds, equipment trust certificates, notes, or any and all evidences of indebtedness or liability constitute a contract between the board and the holders of the bonds, equipment trust certificates, notes, or evidences of indebtedness or liability, and the provisions thereof are enforceable against the board or any or all of its successors or assigns, by mandamus or any other appropriate suit, action, or proceeding in law or in equity in any court of competent jurisdiction. Nothing in this division or in any other law shall be held to relieve the board or the territory included within it from any bonded or other debt or liability contracted by the board. Upon dissolution of the board or upon withdrawal of territory therefrom, that territory formerly included within the board, or withdrawn therefrom, shall continue to be liable for the payment of all bonded and other indebtedness or liabilities outstanding at the time of the dissolution or withdrawal as if the board had not been so dissolved or the territory withdrawn therefrom, and it shall be the duty of the successors or assigns to provide for the payment of the bonded and other indebtedness and liabilities. Except as may be otherwise provided in the proceedings for the authorization, issuance, and sale of any revenue bonds, bonds secured by a pledge of revenues, or bonds for improvement districts secured by a pledge of revenues, revenues of any kind or nature derived from any revenue-producing improvements, works, facilities, or property owned, operated, or controlled by the board shall be pledged, charged, assigned, and have a lien thereon for the payment of the bonds as long as they are outstanding, regardless of any change in ownership, operation, or control of the revenue-producing improvements, works, facilities, or property and it shall, in any later event or events, be the duty of the successors or assigns to continue to maintain and operate the revenue-producing improvements, works, facilities, or property as long as bonds are outstanding. (Added by Stats. 1983, Ch. 599, Sec. 2.)

Last verified: January 23, 2026

Key Terms

dissolutionliabilityownershippropertyresolutionliencontractduty

Related Statutes

  • § 100492 Vta Bondholder Contract Enforcement
  • § 103602 Bondholder Contract Enforcement
  • § 30981 Bondholder Contract Enforcement
  • § 12811.1 Property Owner Lien Responsibility
  • § 12751.3 District Supply Cost Savings

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Public Utilities Code. Section 120702.
View Official Source