Security for Bonds or Notes; Insurance, Letters or Lines of Credit, Trust Agreements

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Section 22C. Bonds or notes issued by a town or district may be secured in whole or in part by insurance or by letters or lines of credit or other credit facilities upon a two-thirds vote of the board of selectmen of the town or a two-thirds vote of the prudential committee, if any, otherwise the board or commissioners of the district. Any such insurance, letter or line of credit or credit facility may provide for reimbursement to be made over such period of time, not to exceed two years beyond the maturity date of the bonds or notes so secured, as the officers authorized to issue the bonds or notes shall deem proper and may provide for interest on such reimbursement to be paid at such rate or rates of interest as the officers authorized to issue the bonds or notes shall deem proper, including rates variable from time to time as determined by such index, banker's loan rate or other method as may be specified therein. For the purpose of securing its bonds or notes, a town or district, acting by its treasurer, upon a two-thirds vote of the board of selectmen of the town, or a two-thirds vote of the prudential committee, if any, otherwise the board or commissioners of the district may enter into a trust agreement between the town or district and a corporate trustee which shall be a bank or trust company doing business in the commonwealth. Any such trust agreement, and any other agreements necessary or incidental to the issuance of such bonds or notes, shall be in such form as may be deemed proper by the officers authorized to issue the bonds or notes, and shall be executed by such officers. It shall be lawful for any bank or trust company doing business in the commonwealth to act as a depository or trustee under any such trust agreement and to furnish such indemnification and pledge such securities as may be required by the town or district. Any trustee under a trust agreement established pursuant to this section may bring suit upon the bonds or notes and may, either at law or equity, by suit, action, mandamus or other proceedings for legal or equitable relief, enforce all rights under the laws of the commonwealth or granted hereunder or under such trust agreement, and may enforce and compel the performance of all duties required under such trust agreement to be performed by the town or district or by any officer thereof. All expenses incurred in carrying out the provisions of this section may be treated by the town or district as a cost of preparing, issuing and marketing its bonds or notes.


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