§ 116D-27. Trust agreement; money received deemed trust funds; insurance; remedies.
§ 116D‑27. Trustagreement; money received deemed trust funds; insurance; remedies.
(a) Trust Agreement Securing Bonds. In the discretion of theBoard of Governors and subject to the approval of the Director of the Budget,any special obligation bonds issued under this Article may be secured by atrust agreement by and between the Board of Governors and a corporate trustee,which may be any trust company or bank having the powers of a trust companywithin or without the State. The trust agreement or the resolution providingfor the issuance of special obligation bonds may pledge or assign the obligatedresources designated as security for the special obligation bonds, but shallnot convey or mortgage any property of the institution. The trust agreement orresolution providing for the issuance of special obligation bonds may containprovisions for protecting and enforcing the rights and remedies of the holdersof the special obligation bonds that are reasonable and proper and not inviolation of law, including covenants setting forth the duties of the Board ofGovernors in relation to the acquisition, construction, or provision of any ofthe charging and collecting of any rates, fees, or charges that have beendesignated as obligated resources, the maintenance, repair, operation, andinsurance of any property of the institution, and the custody, safeguarding,and application of all moneys. It shall be lawful for any bank or trust companyincorporated under the laws of the State which may act as depositary of theproceeds of special obligation bonds or funds securing special obligation bondsto furnish any indemnifying bonds or to pledge any securities as may berequired by the Board of Governors. A trust agreement or resolution may setforth the rights and remedies of the holders of the special obligation bondsand the rights, remedies, and immunities of the trustee or trustees, if any,and may restrict the individual right of action by the holders. In addition tothe foregoing, a trust agreement or resolution may contain other provisions theBoard of Governors considers reasonable and proper for the security of theholders. All expenses incurred in carrying out the provisions of the trustagreement or resolution may be treated as a part of the cost of the specialobligation bond projects for which the special obligation bonds are issued oras an expense of operation of the special obligation bond project.
(b) Trust Funds. All moneys received pursuant to the authorityof this Article, whether as proceeds from the sale of bonds, or as obligatedresources, are trust funds to be held and applied solely as provided in thisArticle. The Board of Governors may provide for the payment of all or part ofthe proceeds of the sale of the special obligation bonds and the obligatedresources to any officer, board, or depositary that it may designate for theircustody, and may provide for their method of disbursement, with any safeguardsand restrictions it may determine. Any officer with whom, or any bank or trustcompany with which, moneys are deposited shall act as trustee of the moneys andshall hold and apply them for the purposes of this Article, subject to anyrequirements provided in this Article and in the resolution or trust agreement,authorizing or securing the special obligation bonds.
(c) Insurance. Notwithstanding the provisions of any otherlaw, the Board of Governors may carry insurance on any special obligation bondprojects and any existing facilities in any amounts and covering any risks itconsiders advisable.
(d) Remedies. Any holder of special obligation bonds issuedunder this Article and the trustees under a trust agreement, except to theextent the rights given in this section may be restricted by the trustagreement or the resolution authorizing the issuance of the special obligationbonds, may, either at law or in equity, by suit, action, mandamus, or otherproceedings, protect and enforce any and all rights under the laws of the Stateor granted under this Article or under the trust agreement or resolution, andmay enforce and compel the performance of all duties required by this Articleor by the trust agreement or resolution to be performed by the Board ofGovernors or by any of its officers, including the fixing, charging, andcollecting of obligated resources. (2000‑3, s. 1.2.)