7-7-4623. Security for refunding revenue bonds. (1) The refunding bonds shall be special obligations of the municipality and shall be payable from and secured by a lien upon the revenues of the enterprise, as shall be more fully described in the resolution of the governing body authorizing the issuance of the refunding bonds. Subject to the constitution of the state of Montana and to the prior or superior rights of any person, any municipality shall have power, by resolution of its governing body, to pledge and assign for the security of the refunding bonds all or any part of the gross or the net revenues of such enterprise.
(2) (a) As additional security for any issue of refunding bonds hereunder or any part thereof, any municipality shall have power and is hereby authorized, by resolution of its governing body, to confer upon the holders of the refunding bonds all rights, powers, and remedies which said holders would be entitled to if they were the owners and had possession of the notes, bonds, or other obligations for the refinancing of which such refunding bonds shall have been issued, including but not limited to the preservation of the lien of such notes, bonds, or other obligations without extinguishment, impairment, or diminution thereof.
(b) In the event any municipality exercises the power conferred by this subsection:
(i) each refunding bond shall contain a recital to the effect that the holder thereof has been granted the additional security provided by this subsection; and
(ii) each note, bond, certificate, or other obligation of the municipality to be refinanced by any such refunding bonds shall be kept intact and shall not be canceled or destroyed until the refunding bonds and interest thereon have been finally paid and discharged but shall be stamped with a legend to the effect that such note, bond, certificate, or other obligation has been refunded pursuant to the Revenue Bond Refinancing Act of 1937.
(3) All refunding bonds of the same issue shall be equally and ratably secured, without priority by reason of number or date of bond, of sale, of execution, or of delivery, by a lien upon the revenues of the enterprise in accordance with the provisions of this section and the resolution authorizing the issuance of such refunding bonds.
History: En. Sec. 8, Ch. 121, L. 1937; R.C.M. 1947, 79-1908(1) thru (3).
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