Section 11-50-172

Provision by transferor for payment of outstanding bonds, mortgages, indentures, etc.

If there are outstanding any bonds, mortgages, indentures, resolutions, or other obligations, including revenue bonds or other securities, payable from or secured by a pledge of the revenues or earnings of or constituting a lien upon the water system or systems proposed to be transferred and conveyed under the provisions of this article, the public corporation proposing to make such transfer and conveyance:

(1) Shall make provision for the assumption by the transferee public corporation of the due and prompt payment of the principal of and interest on such bonds or other obligations and the due and prompt performance of all other agreements and conditions in the manner authorized by such outstanding bonds, mortgages, indentures, resolutions, or other obligations, or

(2) In the absence of any such authorization or, at the election of the transferor and transferee public corporations, shall make provision for the payment thereof satisfactory to any one or more banks or trust companies named as trustee or serving as such trustee under such mortgage, indenture, or resolution or, if there is no such trustee, to the bank or trust company serving as paying agent of such bonds or other securities, by establishing with such bank or trust company, as trustee, an irrevocable trust fund consisting of cash or interest-bearing general obligations of the United States of America or both to provide for the payment and retirement of all such bonds and other securities and the interest thereon.

(Acts 1969, No. 773, p. 1379, §2.)