§ 35-A:30 — Waiver of Defenses; Rights of Holders

Upon the sale and issuance of any municipal bonds to the bank by any governmental unit, such governmental unit shall be held and be deemed to have agreed that in the event of the failure of such governmental unit to pay the interest on or the principal of any of such municipal bonds owned or held by the bank as and when due and payable, such governmental unit shall have waived all and any defenses to such nonpayment, and upon such nonpayment and demand upon such governmental unit for payment, if funds are not available in its treasury to pay the same, the governing body of such governmental unit shall forthwith assess a tax upon the assessment roll of the governmental unit, sufficient to pay the same with 12 percent interest thereon, and cause the same to be collected within 60 days, and further, notwithstanding the provisions of any other law, including particularly any law pursuant to which such municipal bonds were issued by such governmental unit, the bank upon such nonpayment shall thereupon constitute a holder or owner of such municipal bonds as being in default, and that notwithstanding the provisions of any other law as to time or duration of default or percentage of holders or owners of bonds entitled to exercise rights of such holders or owners of bonds in default, or to invoke any remedies or powers thereof or of any trustee in connection therewith or of any board, body, agency or commission of the state having jurisdiction in such matter or circumstance, the bank may then and thereupon avail itself of all other remedies, rights and provisions of law applicable in such circumstance, and that the failure to exercise or exert any such rights or remedies within any time or period provided by law shall not be raised as a defense by such governmental unit, and that all of the bonds of the issue of bonds of such governmental unit as to which there has been such nonpayment, shall for all of the purposes of this section be held and be deemed to have become due and payable and to be unpaid. The bank is hereby authorized and empowered to carry out the provisions of this section and to exercise all of the rights and remedies and provisions of law herein provided or referred to.

Legislative History

1977, 491:1, eff. July 1, 1977.