85-1-307. Provisions to secure payment of bonds.
85-1-307. Provisions to secure payment of bonds. In connection with the issuance of the bonds for the purpose of paying in whole (or as supplemented by a grant from the United States or any instrumentality or agency of the United States) the cost of the works or project or in order to secure the payment of the bonds, the department may:
(1) pledge all or any part of the income, profit, and revenue of the works or project and all money received from the sale or disposal of water, use of water, water storage, or other service and from the operation, lease, sale, or other disposition of all or any part of the works or project and covenant to pay the income, profit, and revenue into the appropriate water fund and debt service fund;
(2) covenant against pledging all or any part of the income, profit, and revenue of the works or project and all money received from the sale or disposal of water, use of water, water storage, or other service and from the operation, lease, sale, or other disposition of all or any part of the works or project;
(3) covenant against mortgaging all or any part of the works or project or against permitting or suffering any lien on the works or project;
(4) covenant to fix and establish prices, rates, and charges for water and other services made available in connection with the works or project to provide at all times funds that will be sufficient to:
(a) pay all costs of operation and maintenance of the works or project, together with necessary repairs to the works or project;
(b) meet and pay the principal and interest of all the bonds as they severally become due and payable; and
(c) create reserves for the principal and interest of all the bonds and for the meeting of contingencies in the operation and maintenance of the works or project as the department determines;
(5) make further covenants as to the prices, rates, and charges as the department determines;
(6) create special funds, in addition to those required by this chapter, for money reserved for principal and interest on bonds or for the meeting of contingencies in the operation and maintenance of the works or project and determine the manner in which and the depositary or depositaries in which those funds must be deposited and the manner in which they must be secured. It is lawful for any bank or trust company incorporated under the laws of the state to act as that depositary and to furnish indemnifying bonds or to pledge securities as required by the department;
(7) provide for the replacement of lost, destroyed, or mutilated bonds;
(8) covenant against extending the time for the payment of the principal or interest on any of the bonds, directly or indirectly, by any means or in any manner;
(9) prescribe and covenant as to the events of default and terms and conditions upon which any or all of the bonds become or may be declared due before maturity and as to the terms and conditions upon which the declaration and its consequences may be waived;
(10) covenant as to the rights, liabilities, powers, and duties arising upon the breach by it of any covenant, condition, or obligation;
(11) vest in a trustee or trustees the right to enforce any covenant made to secure or to pay the bonds or to foreclose any trust indenture in relation to the bonds, provide for the powers and duties of the trustee or trustees, limit the liabilities of trustees, and provide the terms and conditions upon which the trustee or trustees or the holders of bonds or any proportion of them may enforce the covenant or exercise the right of foreclosure;
(12) make covenants and do any and all acts and things as may be necessary or convenient or desirable in order to secure the bonds or, in the absolute discretion of the department, to make the bonds more marketable, notwithstanding that the covenants, acts, or things may not be enumerated or expressly authorized in this chapter;
(13) do all things in the issuance of the bonds and provide for their security not inconsistent with the constitution of Montana.
History: En. Sec. 8, Ch. 35, Ex. L. 1933; amd. Sec. 3, Ch. 95, L. 1935; re-en. Sec. 349.8, R.C.M. 1935; amd. Sec. 126, Ch. 253, L. 1974; R.C.M. 1947, 89-111(3); amd. Sec. 31, Ch. 298, L. 1983; amd. Sec. 427, Ch. 418, L. 1995.