§ 46-12.8-10 - Trust agreements pertaining to local governmental obligations.
SECTION 46-12.8-10
§ 46-12.8-10 Trust agreements pertainingto local governmental obligations. – (a) Notwithstanding any general or special law to the contrary, localgovernmental obligations issued in accordance with this chapter may be securedby one or more trust agreements, including, or in addition to the applicableloan agreement, between the local governmental unit and a corporate trustee,which may be a trust company or bank having the powers of a trust companywithin or without the state, or directly between the agency and the localgovernmental unit. Any trust agreement shall be in such form and shall beexecuted as provided in the applicable loan agreement or as otherwise agreed tobetween the agency and the local governmental unit.
(b) Any trust agreement directly or indirectly securing localgovernmental obligations may, in addition to other security provided by law,pledge or assign, and create security interests in, all or any part of thegeneral revenues of the local governmental unit. Any trust agreement maycontain such provisions for protecting and enforcing the rights, security, andremedies of the agency, or other holders of the local governmental obligations,as may be determined by the agency including, without limitation, provisionsdefining defaults and providing for remedies in the event thereof, which mayinclude the acceleration of maturities, and covenants setting forth the dutiesof, and limitations on, the local governmental unit in relation to the custody,safeguarding, investment, and application of moneys, including general revenuesand drinking water system revenues, the issue of additional and refunding localgovernmental obligations and other bonds, notes, or other obligations on aparity or superior thereto, the establishment of reserves, the establishment ofsinking funds for the payment of local governmental obligations, and the use ofsurplus proceeds of local governmental obligations. A trust agreement securinglocal governmental obligations issued in accordance with § 46-12.8-9 mayalso include covenants and provisions not in violation of law regarding theacquisition, construction, operation, and carrying out of the approved projectfinanced by the obligations, the drinking water system of which it is a part,and any other revenue producing facilities from which the local governmentalunit may derive drinking water system revenues, the fixing and collection ofdrinking water system revenues, and the making and amending of contractsrelating thereto.
(c) In addition to other security provided herein orotherwise by law, any local governmental obligations issued under authority ofthis chapter may be secured, in whole or in part, by insurance or by letters orlines of credit or other credit facilities issued by any insurance company,bank, trust company, or other financial institution, within or without thestate, and a local governmental unit may pledge or assign any of its generalrevenues or drinking water system revenues, as appropriate, as security for thereimbursement to the issuers of insurance, letters or lines of credit or othercredit facilities of any payments made thereunder.
(d) Any trust agreement may set forth the rights and remediesof the agency or other holders of the local governmental obligations securedthereby and of any trustee or other fiduciary thereunder.
(e) In addition to any other remedies provided under theapplicable loan agreement or otherwise by law, the agency and any other holderof local governmental obligations issued under the provisions of this chapter,and any trustee under any trust agreement securing the obligations may bringsuit in the superior court upon the local governmental obligations, and may,either at law or in equity, by suit, action, mandamus, or other proceeding forlegal or equitable relief, including, in the case of local governmentalobligations issued in accordance with § 46-12.8-9, proceedings for theappointment of a receiver to take possession and control of the approvedproject financed thereby, the drinking water system of which it is a part, orany other revenue producing facilities from which the local governmental unitmay derive drinking water system revenues, to operate and maintain the systemor facility in compliance with law, to make any necessary repairs, renewals,and replacements and to fix, revise, and collect drinking water systemrevenues, protect, and enforce any and all rights under the laws of the stateor granted in this chapter or under any trust agreement, and may enforce andcompel the performance of all duties required by this chapter, the loanagreement, the applicable bond act, or the trust agreement to be performed bythe local governmental unit or any officer thereof.
(f) A pledge of general revenues or drinking water systemrevenues in accordance with this chapter shall constitute a sufficientappropriation thereof for the purposes of any provision for appropriation forso long as the pledge shall be in effect, and, notwithstanding any general orspecial law or municipal charter to the contrary, the revenues shall be appliedas required by the pledge and the trust agreement evidencing the revenueswithout further appropriation.
(g) A pledge or assignment of general revenues, other thandrinking water system revenues, may be made only to secure general obligationsof a local governmental unit.