§ 46-12.2-13. Trust agreements pertaining to local governmental obligations.
(a) Notwithstanding any general or special law to the contrary, local governmental obligations
issued in accordance with this chapter may be secured by one or more trust agreements,
including, or in addition to the applicable loan agreement, 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 state, or directly between the agency and
the local governmental unit. Any trust agreement shall be in such form and shall be
executed as provided in the applicable loan agreement or as otherwise agreed to between
the agency and the local governmental unit.
(b) Any trust agreement directly or indirectly securing local governmental obligations
may, in addition to other security provided by law, pledge or assign, and create security
interests in, all or any part of the general revenues of the local governmental unit.
Any trust agreement may contain such provisions for protecting and enforcing the rights,
security, and remedies of the agency, or other holders of the local governmental obligations,
as may be determined by the agency including, without limitation, provisions defining
defaults and providing for remedies in the event thereof, which may include the acceleration
of maturities to the extent permitted by law, and covenants setting forth the duties
of, and limitations on, the local governmental unit in relation to the custody, safeguarding,
investment, and application of moneys, including general revenues and wastewater 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 of local governmental obligations. A
trust agreement securing local governmental obligations issued in accordance with
§ 46-12.2-12 may also include covenants and provisions not in violation of law regarding the acquisition,
construction, operation, and carrying out of the approved project financed by the
local governmental obligations, the wastewater system of which it is a part, and any
other revenue producing facilities from which the local governmental unit may derive
wastewater system revenues or other general revenues, the fixing and collection of
wastewater system revenues or other general revenues, and the making and amending
of contracts relating thereto.
(c) In addition to other security provided herein or otherwise by law, any local governmental
obligations issued under authority of this chapter may be secured, in whole or in
part, by insurance or by letters or lines of credit or other credit facilities issued
by any insurance company, bank, trust company, or other financial institution, within
or without the state, and a local governmental unit may pledge subject to applicable
voter approval requirements, assign, or appropriate any of its general revenues or
wastewater system revenues, as appropriate, as security for the reimbursement to the
issuers of insurance, letters, or lines of credit or other credit facilities of any
payments made thereunder.
(d) Any trust agreement may set forth the rights and remedies of the agency or other holders
of the local governmental obligations secured thereby and of any trustee or other
fiduciary thereunder.
(e) In addition to any other remedies provided under the applicable loan agreement or
otherwise by law, the agency and any other holder of local governmental obligations
issued under the provisions of this chapter, and any trustee under any trust agreement
securing the obligations may bring suit in the superior court upon the local governmental
obligations, and may, either at law or in equity, by suit, action, mandamus, or other
proceeding for legal or equitable relief, including, in the case of local governmental
obligations issued in accordance with § 46-12.2-12, proceedings for the appointment of a receiver to take possession and control of
the approved project financed thereby, the wastewater system of which it is a part,
or any other revenue producing facilities from which the local governmental unit may
derive wastewater system revenues or other general revenues, to operate and maintain
the system or facility in compliance with law, to make any necessary repairs, renewals,
and replacements and to fix, revise, and collect wastewater system revenues, protect,
and enforce any and all rights under the laws of the state or granted in this chapter
or under any trust agreement, and may enforce and compel the performance of all duties
required by this chapter, the loan agreement, the applicable bond act, or the trust
agreement to be performed by the local governmental unit or any officer thereof.
(f) A pledge of general revenues or wastewater 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 the pledge shall be in effect, and, notwithstanding
any general or special law or municipal charter to the contrary, the revenues shall
be applied as required by the pledge and the trust agreement evidencing the revenues
without further appropriation.
(g) A pledge or assignment of general revenues, other than wastewater system revenues,
may be made only to secure general obligations of a local governmental unit.