Special assessment bonds are backed by which of the following?

Special assessment bonds are backed by which of the following?

• A. General taxation
• B. Donations
• C. Charges against benefited properties
• D. Investments in government securities

Answer: (C)

Special assessment bonds are typically backed by charges assessed against properties that benefit from a specific improvement or service funded by the bond. These bonds are used to finance projects that enhance property values, such as the construction of roads, sidewalks, or sewer systems. The property owners who benefit from these improvements are required to pay special assessments, which are levied to repay the bondholders. This creates a direct connection between the bond's repayment and the properties that derive direct benefit from the funded improvement. In contrast, general taxation does not specifically tie bond repayment to individual properties, and donations do not guarantee a financial return required for bond obligations. Investments in government securities do not relate to how special assessment bonds are secured, as they have their own investment structures and purposes. Therefore, the mechanism of financing through charging benefited properties clearly supports the role of special assessment bonds, making it the correct choice in this context.

Special assessment bonds are typically backed by charges assessed against properties that benefit from a specific improvement or service funded by the bond. These bonds are used to finance projects that enhance property values, such as the construction of roads, sidewalks, or sewer systems. The property owners who benefit from these improvements are required to pay special assessments, which are levied to repay the bondholders. This creates a direct connection between the bond's repayment and the properties that derive direct benefit from the funded improvement.

In contrast, general taxation does not specifically tie bond repayment to individual properties, and donations do not guarantee a financial return required for bond obligations. Investments in government securities do not relate to how special assessment bonds are secured, as they have their own investment structures and purposes. Therefore, the mechanism of financing through charging benefited properties clearly supports the role of special assessment bonds, making it the correct choice in this context.