§ 45-48.1-12. Payment of bonds and notes. (a) The principal of premium, if any, and interest on all bonds and notes issued under the provisions of this chapter, unless otherwise provided herein, shall be general obligations of the district or shall be payable solely from the funds provided therefor from revenues as herein provided.

(b) In the discretion of the board, any bonds and notes issued hereunder may be secured by a resolution of the board or by a trust agreement between the district and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state, and the trust agreement shall be in a form and executed in a manner as may be determined by the district. The trust agreement or resolution may pledge or assign, in whole or in part, the revenues and other moneys held or to be received by the district, including the revenues from any facilities already existing when the pledge or assignment is made, and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the district, and the proceeds thereof. The trust agreement or resolution may contain provisions for protecting and enforcing the rights, security and remedies of the bondholders or noteholders as may, in the discretion of the district, be reasonable and proper and not in violation of law, including, without limiting the generality of the foregoing, 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 district in relation to the acquisition, construction, improvement, enlargement, alteration, equipping, furnishing, maintenance, use, operation, repair, insurance, and disposition of the water works system, or other property of the district, the custody, safeguarding, investment and application of moneys, the issue of additional or refunding bonds and notes, the fixing, revision and collection of fees, rates, rents, assessments, or other charges, the use of any surplus bond and note proceeds, the establishment of reserves, and the making and amending of contracts.

(c) In the discretion of the board, any bonds or notes issued under authority of this chapter, may be issued by the district in the form of lines of credit, loans, or other banking arrangements and under such terms and conditions, not inconsistent with this chapter, and under such agreements with the purchasers or makers thereof, as the board may determine to be in the best interest of the district. In addition to other security provided herein or otherwise by law, bonds or notes issued by the district under any provision of this chapter may be secured, in whole or in part, by insurance or letters or lines of credit or other credit facilities, and the district may pledge or assign any of its revenues as security for the reimbursement by the district to the issuers of such insurance, letters or lines of credit or other credit facilities of any payments made under the insurance or letters or lines of credit or other credit facilities.

(d) It shall be lawful for any bank or trust company to act as a depository or trustee of the proceeds of bonds, notes, revenues, or other moneys under any trust agreement or resolution and to furnish indemnification or to pledge securities and issue letters of credit as may be required by the district. Any pledge of revenues or other property made by the district under this chapter shall be valid and binding and shall be deemed continuously perfected from the time when the pledge is made; the revenues, moneys, rights and proceeds so pledged and then held or thereafter acquired or received by the district shall immediately be subject to the lien of the pledge without any physical delivery or segregation thereof or further act; and the lien of any pledge shall be valid and binding against all parties having claims of any kind in tort, contract or otherwise against the district, irrespective of whether the parties have notice thereof. Neither the resolution, any trust agreement nor any other agreement by which a pledge is created need be filed or recorded except in the records of the district.

(e) Any holder of a bond or note issued by the district under the provisions of this chapter or of any of the coupons appertaining thereto and any trustee under a trust agreement or resolution securing the same, except to the extent the rights herein given may be restricted by the trust agreement or resolution securing the same, may bring suit upon the bonds or notes or coupons and may, either at law or in equity, by suit, action, mandamus or other proceedings for legal or equitable relief, including proceeding for the appointment of a receiver to take possession and control of the business and properties of the district, too operate and maintain the same, to make any necessary repairs, renewals and replacements in respect thereof and to fix, revise and collect fees and charges, protect and enforce any and all rights under the trust agreement, resolution or other agreement, and may enforce and compel the performance of all duties required by this act or by the trust agreement or resolution to be performed by the district or by any officer thereof.

History of Section. (P.L. 2003, ch. 270, § 1; P.L. 2003, ch. 364, § 1.)