§ 46-12.8-10. 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, 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 drinking water system revenues, the issue of additional and refunding local governmental obligations and other bonds, notes, or other 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 § 46-12.8-9 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 obligations, the drinking water system of which it is a part, and any other revenue producing facilities from which the local governmental unit may derive drinking water system revenues, the fixing and collection of drinking water system 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 or assign any of its general revenues or drinking water 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 § 46-12.8-9, proceedings for the appointment of a receiver to take possession and control of the approved project financed thereby, the drinking water system of which it is a part, or any other revenue producing facilities from which the local governmental unit may derive drinking water system 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 drinking water 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 drinking water 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 drinking water system revenues, may be made only to secure general obligations of a local governmental unit.

History of Section. (P.L. 1993, ch. 313, § 1; P.L. 1993, ch. 396, § 1.)