§ 39:993 — Mortgage and pledge; rights of bond holders

Any bonds issued under the authority of this Part shall be payable from and secured by a pledge of the revenues herein above described and may be secured by a mortgage covering all or any part of the project or facility from which the revenues so pledged may be derived. The governing authority may, by resolution, empower the presiding officer and secretary or clerk to issue, execute, sign, seal, negotiate, and deliver the bonds and to make and execute in the name and under the seal of the municipality an act of mortgage and pledge to secure the payment of the bonds in principal and interest, and when the act of mortgage and pledge has been executed, the property to the extent mortgaged thereby and not released according to the terms of the mortgage and the income and revenues therefrom thus pledged, shall remain mortgaged and pledged for the security of the bonds, in principal and interest, until they have been fully paid and discharged: or in the alternative, the governing authority of the municipality or district may deposit with the trustee, as provided in the act of mortgage, cash or United States government bonds in a sufficient amount to fully pay the then outstanding bonds and interest thereon, and, upon such deposit being made, the trustee may cancel the mortgage. Any holder of the bonds or of any of the coupons thereto attached may by appropriate legal action compel performance of all duties required of the governing body and officials of the municipality by the provisions of this Part. In case default is made in payment of bonds, or any of them, in whole or in part, or of any installment of interest thereon, when the same becomes due, the holder of the bonds may proceed against the governing authority of the municipality to enforce the pledge of income and revenues and foreclose the mortgage by seizure and sale of the property mortgaged, as if proceeding against a private person. But, bonds issued under the provisions of this Part and the liability arising therefrom shall not be a charge upon the other income and revenues of the municipality issuing the bonds, and shall not be included in computing the indebtedness of the municipality for the purpose of determining any constitutional or statutory limitation.

Legislative History

Acts 1964, No. 520, §3. Amended by Acts 1972, No. 433, §1; Acts 1974, No. 620, §1.