§ 15 — Security agreements for local governmental obligations

Section 15. (a) Notwithstanding any general or special law to the contrary, when authorized by a two-thirds vote as defined in section one of chapter forty-four or by such other vote as is authorized by the applicable bond act, any local governmental obligations may be secured by one or more security agreements between the local governmental unit and a corporate trustee, which may be a trust company or bank having the powers of a trust company within or without the commonwealth, or directly between the trust and the local governmental unit. Any such security agreement shall be in such form and shall be executed as provided in the applicable loan agreement or as otherwise agreed to between the board and the local governmental unit.(b) Any security agreement directly or indirectly securing local governmental obligations, other than local governmental obligations issued in accordance with section fourteen, may pledge or assign, and create security interests in, all or any part of the general revenues of the local governmental unit. Any trust agreement securing local governmental obligations issued in accordance with said section fourteen may pledge or assign, and create security interests in, all or any part of the local system revenues of the local governmental unit, but shall not otherwise pledge or assign any other general revenues of the local governmental unit unless otherwise authorized by the applicable bond act. Any security agreement may contain such provisions for protecting and enforcing the rights, security and remedies of the trust, or other holders of the local governmental obligations, as may be determined by the board and the local governmental unit, including without limitation provisions defining defaults and providing for remedies, including without limitation, the acceleration of maturities and, in the case of local governmental obligations issued under said section fourteen, the appointment of a receiver of the project financed thereby and the system of which it is a part, the covenants setting forth the duties of, and limitations on, the local governmental unit in relation to the custody, safeguarding, investment and application of monies, including general revenues and local system revenues, the issue of additional and refunding local governmental obligations and other bonds, notes or obligations on a parity or superior thereto, the establishment of reserves, the establishment of sinking funds for the payment of local governmental obligations, and the use of surplus proceeds. A security agreement securing local governmental obligations issued in accordance with said section fourteen may also include covenants and provisions not in violation of law regarding the acquisition, construction, operation and carrying out of the water pollution abatement project financed by such obligations, the system of which it is a part and any other revenue producing facilities from which the local governmental unit derives local system revenues, the fixing and collection of local system revenues and the making and amending of contracts relating thereto. Any local governmental obligations may also be secured by insurance or by letters or lines of credit or other credit facilities and a local governmental unit may pledge or assign any of its general revenues or local system revenues, as appropriate, as security for payments made thereon.(c) Any pledge of general revenues or local system revenues made by a local governmental unit shall be valid and binding and shall be deemed continuously perfected for the purpose of chapter one hundred and six and any other law from the time made. The general revenues, local system revenues, monies, rights and proceeds so pledged and then held or thereafter acquired or received by the local governmental unit shall immediately be subject to the lien of such pledge without any physical delivery or segregation thereof or further act, and the lien of such pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise, regardless of whether such parties have notice thereof. Neither the security agreement or any other agreement by which a pledge is created need be filed or recorded except in the records of the local governmental unit and no filing need be made under the provisions of said chapter one hundred and six.(d) A pledge of general revenues or local system revenues in accordance with this chapter shall constitute a sufficient appropriation thereof for the purposes of any provision for appropriation for so long as such pledge shall be in effect and, notwithstanding any general or special law to the contrary, such revenues shall be applied as required by the pledge and the security agreement evidencing the same without further appropriation.