2023 Code of Alabama › Title 9 - Conservation and Natural Resources. › Chapter 10 - Water Conservation and Irrigation. › Article 2 - Water Conservation and Irrigation Corporations. › Section 9-10-38 - Security for Bonds.

Section 9-10-38
Security for bonds.
(a) At the discretion of the corporation, any bonds issued under the provisions of this article may be secured by a trust agreement by and between the corporation and a corporate trustee, which may be any trust company or bank having the powers of a trust company within or without the state. The trust agreement or the resolution providing for the issuance of such bonds, subject to the provisions of Section 9-10-35, may pledge or assign tolls, rentals, sales receipts or other revenues to which the corporation's right then exists or which may thereafter come into existence and the moneys derived therefrom and the proceeds of such bonds; provided, however, that the trust agreement or resolution shall not convey or mortgage any project or any part thereof.
(b) Such trust agreement or resolution providing for the issuance of 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 corporation in relation to the acquisition of property and the construction, improvement, maintenance, repair, operation and insurance of the project or projects, the rates of tolls, rentals, sales receipts and other revenues to be charged, the payment, security or redemption of bonds and the custody, safeguarding and application of all moneys and provisions for the employment of consulting engineers in connection with the construction or operation of such project or projects. It shall be lawful for any bank or trust company incorporated under the laws of this 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 corporation. Any trust agreement or resolution may set forth the rights and remedies of the bondholders and of the trustee and may restrict the individual rights of action by bondholders. In addition to the foregoing, any trust agreement or resolution may contain such other provisions as the corporation may deem reasonable and proper for the security of the bondholders. All expenses incurred in carrying out the provisions of any trust agreement may be treated as a part of the cost of the operation of the project or projects.
(c) Any pledge of tolls, rentals, sales receipts, other revenues or moneys made by the corporation shall be valid and binding from the time the pledge is made. The tolls, rentals, sales receipts, other revenues or moneys so pledged and thereafter received by the corporation, except that part of the tolls, rentals, sales receipts, other revenues or moneys which are necessary to maintain the project or projects in good operating condition or to pay the reasonable operating expenses of the corporation or any judgment rendered against it, 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 shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the corporation, irrespective of whether such parties have notice thereof.
(d) Neither the resolution nor any trust agreement by which a pledge is created need be filed or recorded except in the records of the corporation. If such trust agreement should be offered for record it shall be filed and recorded without the payment of the mortgage tax required by Chapter 22, Title 40.
(e) The corporation may, at its discretion, enter into any supplement to such trust agreement, which supplement shall be governed, so far as may be, by the same provisions of this article as are applicable to the trust agreement.
(Acts 1955, No. 539, p. 1186, §10.)