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HomePublic Utilities CodeDiv. 10Pt. 3Ch. 7Art. 6§ 30981 Bondholder Contract Enforcement

§ 30981 Bondholder Contract Enforcement

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

§ 30981 Bondholder Contract Enforcement

Key Takeaways

  • •If a district (like a local government area) borrows money by selling bonds, it must pay that money back, no matter what.
  • •Even if the district breaks up or loses some land, the people who live there still have to help pay back the money.
  • •The money made from things the district owns (like toll roads or parks) must be used to pay back the bonds first.
  • •The state has to make sure the money gets paid back, even if the district can’t do it anymore.

Example

A small town borrows money to build a new park by selling bonds. Later, the town decides to split into two smaller towns.

Even after splitting, both new towns still have to pay back the money for the park. The money made from park fees must go toward paying back the bonds first.

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

Official Source
View on CA.gov

§ 30981 Bondholder Contract Enforcement

Notwithstanding any other provisions of this part or any other law, the provisions of all ordinances, resolutions and other proceedings in the issuance by the district 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 shall constitute a contract between the district and the holders of such bonds, equipment trust certificates, notes or evidences of indebtedness or liability and the provisions thereof shall be enforceable against the district, any or all of its successors or assigns, the state, any department of the state, or any officer thereof, by mandamus or any other appropriate suit, action or proceeding in law or in equity in any court of competent jurisdiction. Nothing contained in this part or in any other law shall be held to relieve the district or the territory included within it from any bonded or other debt or liability contracted by the district. Upon dissolution of the district or upon withdrawal of territory therefrom, the property formerly included within the district or withdrawn therefrom shall continue to be liable for the payment of all bonded and other indebtedness or liabilities outstanding at the time of such dissolution or withdrawal the same as if the district had not been so dissolved or the territory withdrawn therefrom, and it shall be the duty of the state or other successors or assigns to provide for the payment of such 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 district shall be pledged, charged, assigned and have a lien thereon for the payment of such bonds as long as the same are outstanding, regardless of any change in ownership, operation or control of such revenue-producing improvements, works, facilities or property and it shall, in such later event or events, be the duty of the state or other successors or assigns to continue to maintain and operate such revenue-producing improvements, works, facilities or property as long as bonds are outstanding. (Amended by Stats. 1967, Ch. 1215.)

Last verified: January 23, 2026

Key Terms

liabilitydissolutionresolutiondutycontractlienordinanceproperty

Related Statutes

  • § 100492 Vta Bondholder Contract Enforcement
  • § 103602 Bondholder Contract Enforcement
  • § 120702 Bondholder Contract Enforcement
  • § 40226 Bonded Indebtedness For Transit
  • § 50226 Bonded Indebtedness For Transit

References

  • Official text at leginfo.legislature.ca.gov
  • California Legislature. Public Utilities Code. Section 30981.
View Official Source