§ 11-89A-10 — Security for Payment of Bonds; Contracts and Agreements to Secure

(a) Any bonds issued by the authority shall be revenue bonds and shall be payable solely out of such revenues of the authority as may be designated in the proceedings of the board under which they shall be authorized to be issued. Any such proceedings may provide that the bonds therein authorized shall be payable solely out of the revenues derived from the operation of any facility or facilities owned by the authority, regardless of the fact that those bonds may have been issued with respect to or for the benefit of a certain facility or facilities of the authority.
(b) As security for payment of the principal and interest on any bonds issued or assumed by it, any authority may enter into a contract or contracts, and adopt resolutions or other proceedings containing provisions constituting a part of the contract or contracts with the holders of such bonds, pertaining to, among other things, the following:
(1) Pledging all or any part of the revenues of such authority to secure the payment of such bonds;
(2) Pledging, assigning or mortgaging all or any part of the assets of such authority to secure the payment of such bonds;
(3) The creation of reserve, sinking or other funds and the regulation and disposition thereof;
(4) The issuance of additional bonds;
(5) Binding the authority to impose and collect reasonable rates for and the imposition of reasonable regulations respecting any service rendered from or with respect to any facility or facilities;
(6) The procedure, if any, by which the terms of any contract with the holders of such bonds may be amended or abrogated, the amount of bonds the holders of which must consent thereto and the manner in which such consent may be given;
(7) Limitations on the amount of moneys to be expended by such authority for its operating expenses;
(8) Vesting in a trustee or trustees such property, rights, powers and duties as such authority may determine;
(9) Defining the acts or omissions to act that shall constitute a default in the performance of the obligations and duties of such authority to the holders of such bonds and providing for the rights and remedies of such holders in the event of such default; provided, however, that such rights and remedies shall not be inconsistent with the general laws of the state and the other provisions of this chapter; and
(10) Any other matters, of like or different character, which in any way affect the security or protection of the holders of such bonds.
(c) Any mortgage of property granted by any authority, any security interest in property created by it, or any assignment or pledge of revenues or contract rights made by it, in each case to secure the payment of its bonds, shall be valid and binding from the time when such mortgage is granted, such security interest created, or such assignment or pledge is made, as the case may be, and the property so mortgaged, the property with respect to which such security interest is so created, and the revenues and contract rights so assigned or pledged shall immediately (or as soon thereafter as such authority obtains any right thereto or interest therein) be subject to such mortgage, security interest, assignment or pledge, as the case may be, without physical delivery of any property, revenues or contract documents covered thereby or any further act, and the lien of any such mortgage, security interest, assignment or pledge shall be valid and binding as against all persons having claims of any kind in tort, contract or otherwise against such authority, irrespective of whether such persons have actual notice thereof, from the time notice of such mortgage, security interest, assignment or pledge is filed for record (1) in the office of the judge of probate in which the certificate of incorporation of such authority was filed for record and (2) in the case of any mortgage or security interest covering any tangible property, whether real, personal or mixed, in the office of the judge of probate of the county in which such property is or is to be located pursuant to any agreement made by such authority with any person respecting the location and use of such property. Such notice shall contain a statement of the existence of any such mortgage, security interest, assignment or pledge, as the case may be, a description of the property, revenues or contract rights subject thereto and a description of the bonds secured thereby, all in terms sufficient to give notice to a reasonably prudent person of the existence and effect of any such mortgage, security interest, assignment or pledge. If the requirements of the preceding sentence are met, such notice may consist of (i) a summary statement prepared specially for the purpose of serving as such notice, (ii) an executed counterpart of any mortgage, security agreement, assignment, trust indenture or other instrument granting such mortgage, creating such security interest or making such assignment or pledge, as the case may be, or (iii) a certified copy of the resolution adopted by the board of such authority authorizing such mortgage, security interest, assignment or pledge, as the case may be.

Legislative History

(Acts 1980, No. 80-278, p. 368, §11.)