§ 46-15.1-11. Pledge of revenues and other funds.
(a)(1) In the discretion of the board, any bonds or notes issued by it may be secured by
a trust agreement between the board and a corporate trustee, which may be any trust
company or bank whose principal office is within or without the state. The trust agreement
or the resolution providing for the issue of the bonds or notes may pledge or assign,
in whole or in part, the revenues and other moneys held or to be received by the board
under this chapter or chapter 15.3 of this title, and may convey, mortgage, or grant
or assign a security interest in any water supply facilities pledge agreement or lease
thereof in connection with which those bonds shall have been authorized.
(2) The trust agreement or resolution may contain such provisions for protecting and enforcing
the rights and remedies of the bondholders or noteholders as may be reasonable and
proper and not in violation of law, including provisions defining defaults and providing
for remedies in the event thereof (which may include the acceleration of maturities),
and covenants setting forth the duties of, and limitations on, the board in acting
under this chapter in relation to the purchase or leasing of property, construction,
improvement, enlargement, alteration, equipping, furnishing, maintenance, operation,
repair, insurance, and disposition of property, the custody, safeguarding, investment,
and application of monies, the issue of additional bonds or notes, the fixing, revision,
and collection of rates and rents, the use of any surplus bond or note proceeds, the
establishment of reserves, and the making and amending of leases, pledge agreements
and contracts.
(3) The board is authorized to fix, revise, and collect rates and rents for water furnished
by it or facilities leased by it to others. The rates and rents shall not be subject
to supervision or regulation by any other commission, board, bureau, or agency of
the state or of any municipality or other political subdivision of the state, but
the rates and rents shall be subject to the terms of any applicable contracts and
leases.
(b)(1) It shall be lawful for any bank or trust company to act as a depository or trustee
of the proceeds of bonds or notes or of revenues or other moneys under any such trust
agreement or resolution, and to furnish such indemnifying bonds or to pledge such
securities as may be required by the board. The trust agreement or resolution may
set forth the rights and remedies of the bondholders or noteholders and of the trustee,
and may restrict the individual right of action by bondholders or noteholders. In
addition to the foregoing, the trust agreement or resolution may contain such other
provisions as the board may deem reasonable and proper for the security of the bondholders
or noteholders.
(2) All expenses incurred in carrying out the provisions of the trust agreement or resolution
may be treated as part of the board's cost of operation and maintenance under this
chapter.
(3) The pledge or mortgage or grant of a security interest by the trust agreement or resolution
shall be valid and binding from the time when the pledge or mortgage or grant of a
security interest is made; the revenues or other moneys so pledged and then held or
thereafter received by the board shall immediately be subject to the lien of the pledge
without any physical delivery thereof or further act; and the lien of any such pledge
or mortgage or grant of a security interest shall be valid and binding as against
all parties having claims of any kind in tort, contract, or otherwise against the
board, irrespective of whether the parties have notice thereof.
(4) Neither the resolution nor any trust agreement by which a pledge or mortgage or grant
of a security interest is created need be filed or recorded except in the records
of the board, and no filing need be made under the Uniform Commercial Code.