Article 6. Indebtedness And Financing of California Public Utilities Code >> Division 7. >> Chapter 4. >> Article 6.
A district may borrow money and incur or assume
indebtedness, and issue bonds or other evidences of indebtedness.
A district may refund or retire any of its existing or
No district shall incur any funded indebtedness which in the
aggregate exceeds 20 percent of the assessed valuation of all real
and personal property situated within the district.
The board of directors or other officers of the district may
not incur any debt or liability, either by issuing bonds or
otherwise, in excess of the express provisions of this division. Any
debt or liability incurred in excess of those express provisions is
absolutely void, excepting that the debt limitations may be exceeded
where the district finances waterworks or sewage disposal facilities
by means of a revenue bond issue, or by means of a general obligation
bond issue, or by means provided by Section 16580 and makes
provision to pledge, as additional security for the general
obligation or indebtedness, all or any part of revenues received from
the facilities over a period not to exceed 40 years, in which event
the limitation of indebtedness set forth in Section 16573 of this
code may not be applicable to the bonds or indebtedness so secured or
so additionally secured by the revenue.
A district may issue bonds for the purpose of acquiring or
constructing any waterworks necessary or proper for carrying out the
objects and purposes of the district, in like manner as other bonds
are authorized to be issued under this division, and may pledge the
revenue, income, receipts, and profits from the operation of the
waterworks to the payment of the principal of and interest on the
bonds. A district may, if it so elects, declare the payment thereof
shall be made solely from the revenue, income, receipts, and profits.
Notwithstanding any provision of this division limiting the
amount of indebtedness which may be incurred by it, in order to
repair and replace structures and equipment impaired or destroyed or
both by flood, fire, earthquake, or other catastrophe, upon the
unanimous vote of its board, a district may do any or all of the
(a) Borrow money at a rate of interest not exceeding 8 percent a
year, including borrowing from the United States or any of its
agencies, in a principal amount not to exceed 6 percent of the
assessed value of all real and personal property situated in the
(b) Issue evidences of indebtedness to represent the sum borrowed.
(c) Arrange terms for the repayment of the sum borrowed.
A district may refinance any indebtedness incurred pursuant
to Section 16576 by borrowing from the United States or any of its
agencies and issuing in connection therewith evidences of
indebtedness in the form and upon the terms required by the United
States or its agency. The sum so borrowed shall not exceed the amount
of the obligation being refinanced, and interest shall not exceed 8
percent per year. The money so borrowed for refinancing shall be used
only to repay the obligation for the retirement of which the money
A district may accept, without limitation by any other
provisions of this division requiring approval of indebtedness,
contributions or loans from the United States, or any department,
instrumentality, or agency thereof, for the purpose of financing the
construction, maintenance, and operation of any enterprise in which
the district is authorized to engage, and may enter into contracts
and co-operate with, and accept co-operation from, the United States,
or any department, instrumentality, or agency thereof, in the
construction, maintenance, and operation, and in financing the
construction, maintenance, and operation, of any such enterprise in
accordance with any legislation which Congress may have heretofore
adopted or may hereafter adopt, under which aid, assistance, and
co-operation may be furnished by the United States in the
construction, maintenance, and operation or in financing the
construction, maintenance, and operation of any such enterprise. A
district may do any and all things necessary in order to avail itself
of such aid, assistance, and co-operation under any federal
legislation now or hereafter enacted. Any evidence of indebtedness
issued under this section shall constitute a negotiable instrument.
A district may contract with any state agency to finance any
district improvement authorized by Section 16461 that is related to
the provision of water for human consumption. The terms of the
contract shall be consistent with this chapter. Notwithstanding any
other provision in this chapter, the term of the contract may extend
up to 30 years.