§ 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.

History of Section. (P.L. 1970, ch. 304, § 1; P.L. 1986, ch. 56, § 3; P.L. 1987, ch. 417, § 3; P.L. 1992, ch. 468, § 1; P.L. 2007, ch. 340, § 49.)