Section 11-50-346
Execution of trust agreement as security for payment of revenue bonds authorized; provisions in trust agreements or resolutions for issuance of bonds generally.
In the discretion of the board, any revenue bonds issued under the provisions of this article may be secured by a trust agreement by and between the board and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state.
Such trust agreement or resolution providing for the issuance of such bonds may pledge or assign the revenues to be received, but shall not convey or mortgage any water system or sewer system or any part thereof. Such trust agreement or resolution providing for the issuance of such bonds may contain such provisions for protecting and enforcing the rights and remedies of the bondholders as may be reasonable and proper and not in violation of law, including covenants setting forth the duties of the board in relation to the acquisition, construction, improvement, maintenance, repair, operation, and insurance of the system or systems in connection with which such bonds shall have been authorized, the fixing and revising of rates, fees, and charges, the custody, safeguarding, and application of all moneys and the employment of consulting engineers in connection with such construction, reconstruction, or operation. It shall be lawful for any bank or trust company incorporated under the laws of the state which may act as depository of the proceeds of bonds or of revenues to furnish such indemnifying bonds or to pledge such securities as may be required by the board. Any such trust agreement or resolution may set forth the rights and remedies of the bondholders and of the trustee, if any, and may restrict the individual right of action by bondholders. In addition to the foregoing, any such trust agreement or resolution may contain such other provisions as the board may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as a part of the cost of operation.
Any such pledge of revenues shall be valid and binding from the time when the pledge is made, and the revenues or other moneys so pledged and thereafter received by the board shall immediately be subject to the lien of such pledge without any physical delivery thereof or further act. The lien of any such pledge 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 such parties have notice thereof, from the time a statement thereof is filed in the office of the judge of probate of the county or counties where the system is located. Such notice need only state the date of the resolution, the principal amount of the bonds, and whether the system is a water system or sewer system or a combined water and sewer system and that the proceeds of such system have been pledged to the payment of the bonds.
(Acts 1951, No. 775, p. 1359, §8.)