Chapter 293 |
2017 -- S 0729 SUBSTITUTE A Enacted 07/26/2017 |
A N A C T |
RELATING TO TOWNS AND CITIES -- BLOCK ISLAND UTILITY DISTRICT ACT OF 2017 |
Introduced By: Senator V. Susan Sosnowski |
Date Introduced: April 12, 2017 |
It is enacted by the General Assembly as follows: |
SECTION 1. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby |
amended by adding thereto the following chapter: |
CHAPTER 67 |
BLOCK ISLAND UTILITY DISTRICT ACT OF 2017 |
45-67-1. Short title. |
This act shall be known and may be cited as the "Block Island Utility District Act of |
2017". |
45-67-2. Definitions. |
Terms used in this chapter shall be construed as follows, unless another meaning is |
expressed or is clearly apparent from the language or context: |
(1) "BIPCOo" means the Block Island pPower cCompany. |
(2) "BIPCOo assets" means that real property, personal property, rights in any real and |
personal property, facilities, equipment, contract rights, statutory rights and privileges, franchises |
and other tangible or intangible property of any kind owned by BIPCOo. |
(3) "BIPCOo contractual obligations" means the obligations represented by and inherent |
in any contract entered into between BIPCOo and another utility or other party, which obligations |
remain outstanding in any part as of the date when BIPCOo ceases to be an electric utility |
pursuant to §45-67-8(1). |
(4) "BIPCOo debt obligations" means the obligations represented by and inherent in any |
debt incurred by BIPCOo for the purpose of financing any aspect of its electric system or |
operations, which obligations remain outstanding in any part as of the date when BIPCOo ceases |
to be an electric utility pursuant to §45-67-8(1). |
(5) "Qualified elector" means any person whose name appears on an active account with |
the utility district and who is designated by the account holder to be the qualified elector. No |
active account shall have more than one qualified elector and no qualified elector shall have more |
than one vote. |
(6) "Utility district" means the Block Island utility district, a quasi-municipal corporation, |
having a distinct legal existence from the state, established and empowered by this chapter to: |
(i) Fulfill electric utility functions, powers, rights, and obligations; |
(ii) Exercise certain powers as an electric distribution company and power producer; and |
(iii) Provide additional utility services not inconsistent with the duties, powers and |
obligations of the utility district as defined in this section. |
(7)"Utility service area" means that geographic area comprising New Shoreham, Rhode |
Island. |
45-67-3. Statement of purpose. |
This chapter is intended to establish the Block Island utility district and to authorize and |
enable the utility district to provide utility products and services as may be authorized, from time |
to time, by the utility district's board of utility commissioners. |
45-67-4. Block Island utility district established. |
(a) There is hereby created a quasi-municipal corporation, having a distinct legal |
existence from the state, to be known as the Block Island utility district, the boundaries of which |
shall be coterminous with the boundaries of New Shoreham, Rhode Island. The utility district |
shall have and be entitled to exercise the powers, rights, and functions set forth in this chapter. |
Notwithstanding any other provision of these general laws or of any regulation, ordinance, rules |
or requirements promulgated thereunder to the contrary, upon the creation of the utility district, |
all rights, obligations, and duties under contracts and agreements to which BIPCOo is a party that |
are assumed by or transferred to the utility district shall not be affected, modified, limited, or |
altered as a result of such assumption or transfer and shall be assumed, performed, and be fully |
enforceable by and against the utility district. |
(b) In the event that BIPCOo and the utility district are unable to agree on the price, terms |
and conditions of such sale of personal property and assumption of such obligations, then |
BIPCOo shall continue as the electric utility servicing the utility service area, and the Block |
Island utility district shall not function as an electric utility. |
45-67-5. Board of utility commissioners of the Block Island utility district |
established. |
There is hereby created a board to be known as the board of utility commissioners of the |
Block Island utility district. The powers of the utility district as set forth in this chapter, shall be |
vested in and exercised by a majority of the members of the board of utility commissioners then |
in office; provided, however, that the board of utility commissioners in its discretion may |
delegate executive functions to managers, by resolution, rule, or otherwise. |
45-67-6. Membership of board of utility commissioners. |
(a) The board of utility commissioners shall consist of five (5) members, no less than |
three (3) of whom shall be residents of the town of New Shoreham as defined by the Revised |
Ordinances of the town of New Shoreham, Chapter 2, Article I, Section 2-2. A majority of the |
board shall constitute a quorum and a majority of the members shall be necessary for all actions |
taken by the board. No vacancy in the membership of the board shall impair the right of a quorum |
to exercise all the rights and perform all the duties of the board. The initial elected members of |
the board of utility commissioners shall be elected with staggered terms of two (2) years and four |
(4) years. The three (3) candidates receiving the most votes will serve four-(4) year (4) terms; the |
two (2) candidates receiving the next highest number of votes will serve two-(2) year (2) terms. |
Thereafter, the members of the board of utility commissioners of the utility district shall be |
elected for a term of four (4) years by ballot of qualified electors. |
(b) The election of the initial board of utility commissioners shall be administered by the |
town of New Shoreham using the list of qualified electors provided by BIPCOo. |
(c) Each member of the board of utility commissioners shall be a qualified elector. A |
qualified elector shall be eligible to be a candidate for election to the board; provided, however, |
that they shall first have filed a declaration of candidacy with the secretary of the board of utility |
commissioners not later than thirty (30) calendar days prior to the scheduled date of the election |
through which such person seeks to be elected. In the event of a vacancy occurring on the board |
of utility commissioners by reason of death, resignation, or other cause, the board itself may |
select an eligible candidate to fill the vacancy until the next annual election. In the event that an |
active account is in the name of a corporation or other entity, the designated qualified elector of |
such an entity shall also be eligible to be a candidate for election to the board. |
(d) The board of utility commissioners shall elect each year from among its members: |
(1) A chairperson; |
(2) A vice chairperson; |
(3) A secretary; and |
(4) A treasurer. |
(e) The board of utility commissioners shall establish and adopt bylaws for the |
management and conduct of the utility district's affairs and other aspects of the governance of the |
utility district not otherwise controlled by this chapter. |
45-67-7. Compensation of the board – Employees of the utility district. |
(a) Members of the board of utility commissioners shall not be entitled to receive |
compensation for attendance at scheduled and special meetings of the board of utility |
commissioners. The salaries, compensation, and expenses of employees and agents of the utility |
district, shall be paid solely out of funds of the utility district. No part of the earnings of the utility |
district shall inure to the benefit of any private person. |
(b) The board may enter into employment contracts with its executive employees. The |
board shall have the authority to approve employee benefit plans, including fringe benefits such |
as, but not limited to, pension, health, disability, and other insurances. |
(c) No member of the board of utility commissioners shall directly or indirectly engage or |
participate in the proceeds of any contract or agreement to supply anything of value or receive |
anything of value from the utility district. The prohibition set forth in this subsection may be |
waived by a vote of four (4) of the board of utility commissioners, if, and only if, the board of |
utility commissioners shall have first obtained an opinion of the attorney general and/or the |
Rhode Island ethics commission based on full disclosure of all relevant facts that the waiver does |
not contravene state law and is otherwise in the best interests of the consumers served by the |
utility district. |
45-67-8. Powers of the utility district. |
The utility district shall have the power: |
(1) To acquire the BIPCOo assets and to assume the BIPCOo debt obligations. The sale |
by voluntary purchase of such property and the assumption of such obligations shall be negotiated |
between BIPCOo and the utility district; provided, however, that upon acquiring BIPCOo assets, |
the utility district shall assume and fulfill all of BIPCOo's related contractual obligations in full; |
(2) To acquire such other real or personal property by voluntary purchase from the owner |
or owners of the property, and to the extent that the board of utility commissioners deems it |
advisable, to acquire property held by a corporation through acquisition of the stock of the |
corporation and dissolution of the corporation; |
(3) To acquire real property, fixtures, and rights and interests in real property within its |
utility service area by eminent domain, except for real property owned in whole or in part by the |
town of New Shoreham or BIPCOo, or real property owned by other utilities, subject to the |
supervision of the public utilities commission in the manner prescribed in §39-1-31; |
(4) To own, operate, maintain, repair, improve, enlarge, and extend, in accordance with |
the provisions of this chapter, any property acquired under this section all of which, together with |
the acquisition of the property, are hereby declared to be public purposes; |
(5) To produce, purchase, acquire, distribute, and sell electricity at wholesale or retail |
within its utility service area, subject to franchise rights of other utilities; to lay down, construct, |
own, operate, maintain, repair, and improve mains, pipes, towers, and other equipment and |
facilities necessary, appropriate or useful for those purposes within its utility service area, subject |
to franchise rights of other utilities; and to contract with others for any or all of the foregoing |
purposes; |
(6) To produce, buy, sell, and trade electric capability, power, or energy products or |
services at wholesale or retail within its utility service area, subject to franchise rights of other |
utilities; to purchase for its own use or for resale electric transmission service and ancillary |
services within its utility service area, subject to franchise rights of other utilities; and to engage |
in any other transaction with respect to electricity or electricity products within its utility service |
area, subject to franchise rights of other utilities that was heretofore authorized for investor- |
owned electric companies operating as domestic electric utilities within the state (including |
participation in generating facilities as authorized by chapter 20 of title 39); provided, that the |
utility district shall operate and be subject to regulation of its retail rates for electricity under title |
39 when operating within its utility service area; |
(7) To acquire, own, lease, operate, maintain, repair, and expand facilities and equipment |
within its utility service area subject to franchise rights of other utilities necessary, appropriate, or |
useful to the operation of an electric utility; |
(8) To acquire, own, lease, operate, maintain, repair, and expand facilities and equipment |
within its utility service area, subject to franchise rights of other utilities necessary, appropriate, |
or useful to the operation of other utilities, including, but not limited to,: communications |
services such as Iinternet service, high-speed data transfer, local and long-distance telephone |
service, community antenna television service, and to engage in the operation of such utilities |
within its utility service area subject to franchise rights of other utilities; |
(9) To sue and be sued; |
(10) To adopt and alter a corporate seal; |
(11) To acquire, hold, use, lease, sell, transfer, assign, or otherwise dispose of any |
property, real, personal, or mixed, or any interest therein, for its corporate purposes, and to |
mortgage, pledge, or lease any such property; |
(12) To make and adopt bylaws for the management and regulation of its affairs; |
(13) To borrow money for any of the purposes or powers granted to it under, or by |
operation of this chapter, including the creation and maintenance of working capital, and to issue |
negotiable bonds, notes, or other obligations, to fund or refund the same, and to secure the |
obligation of such bonds, notes, or other obligations in any case by pledge of, or security interest |
in, the revenues and property of the utility district; |
(14) To fix rates (subject to the requirements of title 39 in the case of retail electric rates |
within its utility service area) and collect charges for the use of the facilities or services rendered |
by or any commodities furnished by the utility district; and |
(15) To contract in its own name for any lawful purpose that would effectuate the |
purposes and provisions of this chapter; to execute all instruments necessary to carry out the |
purposes of this chapter; and to do all things necessary or convenient to carry into effect and |
operation the powers granted by this chapter. |
45-67-9. Limitation of powers. |
All services provided by the utility district that constitute public utility services within the |
meaning of §39-1-2 shall be subject to the applicable jurisdictions of the public utilities |
commission and the division of public utilities and carriers. |
45-67-10. Exemptions. |
(a) The exemption waiver provided by the public utilities commission to BIPCOo from |
the terms of §39-1-27 shall also apply to the utility district and the public utilities commission |
shall have the authority to provide such other waivers from this section as may be in the public |
interest. |
(b) The utility district shall, from time to time, submit plans to the public utilities |
commission on retail choice as defined in §39-1-27.3. The public utilities commission shall have |
the authority to approve those plans as may be in the interests of all ratepayers of the utility |
district, including the option of not offering retail choice. Any waiver on retail choice granted by |
the public utilities commission to BIPCOo shall also apply to the utility district. |
(c) The exemptions provided for the Pascoag utility district and BIPCOo under §§39-1- |
27.3.1, 39-1-27.12, 39-2-1.2(b), 39-2-25, 39-26.1-1 through and including 39-26.1-6, and |
chapters 1.1, 26, 26.2, 26.4, and 26.6 of title 39 shall also apply to the Block Island utility district. |
The utility district shall be exempt from the provisions of chapter 18 of title 35. |
(d) As long as the utility district has a waiver from the restructuring provisions of §39-1- |
27, then the utility district shall also be granted a waiver from the provisions of §39-1-27.6 such |
that the employees of the utility district may be allowed to provide both electrical generation and |
distribution services. |
45-67-11. Bonds. |
(a) The utility district shall have the power, and is hereby authorized, from time to time, |
to issue its negotiable bonds for any of its corporate or district purposes and to secure the |
payment of the bonds in such manner and by such means as may be provided in the resolution or |
resolutions of the utility district authorizing the bonds, subject to the regulatory jurisdiction of the |
division of public utilities and carriers in the manner prescribed in §39-3-15, where applicable. |
(b) The utility district is specifically authorized to secure bonds that it may issue from |
time to time by a pledge of, or creation of other security interest in, the revenues of the utility |
district, which pledge or security interest may be enforceable by the grant of a conditional |
franchise, in the event of default in the payment of the bonds, entitling the secured party or trustee |
to enter upon and take control of the utility district's facilities and service and to provide utility |
service and receive the revenues from the utility district's facilities and service for such period, |
not exceeding twenty (20) years, as may be necessary to recover all payments due on the bonds. |
(c) The bonds of the utility district shall be authorized by resolution of the board of utility |
commissioners. The bonds shall bear such date or dates, mature at such time or times not |
exceeding forty (40) years from their issuance, bear interest at such rate or rates payable at such |
time or times, be in such denominations and in such form, carry such registration privileges, be |
executed in such manner, be payable in such medium of payment, at such place or places and |
such time or times and be subject to redemption at such premium, if required, and on such terms, |
as the resolution may provide. The bonds so authorized and issued pursuant to this chapter may |
be sold at public or private sale for any price or prices that the utility district shall determine. |
(d) Pending the issuance of bonds in definitive form, the utility district may issue bond |
anticipation notes or interim receipts in such form as the board of utility commissioners may |
elect. |
(e) The utility district is hereby authorized to provide for the issuance of refunding bonds |
of the utility district for the purpose of refunding any bonds or notes then outstanding which that |
shall have been issued under the provisions of this chapter, including the payment of any |
redemption premium on the bonds or interest accrued or to accrue to the earliest or subsequent |
date of redemption, purchase, or maturity of the bonds and, if deemed advisable by the utility |
district, for the additional purpose of paying all or a part of the cost of acquiring, constructing, |
reconstructing, rehabilitating, or improving any property, facilities, or systems, or parts of |
property, facilities or systems, of the utility district. The proceeds of bond or notes issued for the |
purpose of refunding outstanding bonds or notes may be applied, in the discretion of the utility |
district, to the purchase, retirement at maturity or redemption of outstanding bonds or notes either |
on their earliest or a subsequent redemption date and may, pending that application, be placed in |
escrow in the same manner and through the same means as are generally available to and |
incumbent upon political subdivisions of the state. |
(f) It is hereby declared that the utility district and the carrying out of its corporate |
purposes is, in all respects, for the benefit of the people of the state and for the improvement of |
their health, welfare, and prosperity, and the utility district will be performing an essential |
governmental function in the exercise of the powers conferred by this chapter. The state therefore |
covenants with the holders of the utility district's bonds that the utility district shall not be |
required to pay taxes or payments in lieu of taxes to the state or any other political subdivision of |
the state upon any property of the utility district or under its jurisdiction, control, or supervision, |
or upon any of the utility district's activities in the operation or maintenance of the property, or |
upon any earnings, revenues, monies or other income derived by the utility district, and that the |
bonds of the utility district and the income from the bonds shall at all times be exempt from |
taxation by the state and its political subdivisions. Notwithstanding the foregoing, nothing in this |
section shall be deemed to prohibit the division of public utilities and carriers, the public utilities |
commission, and the department of attorney general from assessing the utility in accordance with |
the provisions of §§39-1-23, 39-1-26, 39-19-9 and 39-19-14, if applicable. |
(g) Any resolution or resolutions authorizing any bond, or any issue of bonds, may |
contain provisions which that shall be a part of the contract with the bondholders of the bonds |
thereby authorized, as to: |
(1) Pledging all or any part of the money, earnings, income, and revenues derived from |
all or any part of the property of the utility district to secure the payment of any bonds or of any |
issue of bonds subject to such agreements with bondholders as may then exist; |
(2) The rates to be fixed and the charges to be collected and the amounts to be raised in |
each year and the use and disposition of the earnings and other revenue; |
(3) The setting aside of reserves and the creation of sinking funds and the regulation and |
disposition thereof; |
(4) Limitations on the right of the utility district to restrict and regulate the use of the |
properties in connection with which the bonds are issued; |
(5) Limitations on the purposes to which the proceeds of sale of any issue of bonds may |
be put; |
(6) Limitations on the issuance of additional bonds, including refunding bonds and the |
terms upon which additional bonds may be issued and secured; |
(7) The procedure, if any, by which the terms of any contract with bondholders may be |
amended or abrogated, the percentage of bondholders whose consent shall be required for such |
amendment or abrogation, and the manner in which consent may be given; |
(8) The creation of special funds into which any earnings or revenues of the utility district |
may be deposited, and the investment of the funds; |
(9) The appointment of a fiscal agent and the determination of its powers and duties; |
(10) Limitations on the power of the utility district to sell or otherwise dispose of its |
properties; |
(11) The preparation of annual budgets by the authority and the employment of |
consultants and auditors; |
(12) The rights and remedies of bondholders in the event of failure on the part of the |
utility district to perform any covenant or agreement relating to a bond indenture; |
(13) Covenanting that, as long as any bonds are outstanding, the utility district shall use |
its best efforts to establish and maintain its rates and charges at levels adequate at all times to pay |
and provide for all operating expenses of the utility district, all payments of principal, redemption |
premium (if any), and interest on bonds, notes, or other evidences of indebtedness incurred or |
assumed by the utility district, all renewals, repairs and replacements to the property and facilities |
of the utility district, and all other amounts which that the utility district may be required by law |
to pay; and |
(14) Any other matters of like or different character which that in any way affect the |
security or protection of the bonds. |
(h) The bonds of the utility district are hereby made securities in which all public officers |
and bodies of this state and all municipalities and municipal subdivisions, all insurance |
companies and associations and other persons carrying on an insurance business, all banks, |
bankers, trust companies, savings banks, and savings associations (including savings and loan |
associations), building and loan associations, investment companies, and other persons carrying |
on a banking business, all administrators, guardians, executors, trustees and other fiduciaries, and |
all other persons whomsoever, who are now or may hereafter be authorized to invest in bonds or |
other obligations of the state may properly and legally invest funds including capital in their |
control or belonging to them. The bonds are also hereby made securities which that may be |
deposited with, and shall be received by, all public officers and bodies of this state, and all |
municipalities and municipal subdivisions, for any purpose for which the deposit of bonds or |
other obligations of this state is now or may thereafter be required. |
45-67-12. State not liable. |
Neither the state nor the town of New Shoreham is liable for the payment of the principal |
of or interest on any bonds or notes of the utility district, or for the performance of any pledge, |
mortgage, obligation, or agreement of any kind whatsoever which that may be undertaken by the |
utility district, and none of the bonds or notes of the utility district, nor any of its agreements or |
obligations, are construed to constitute an indebtedness of the state or the town of New Shoreham |
within the meaning of any constitutional or statutory provision whatsoever, nor shall the issuance |
of bonds or notes, under the provisions of this chapter, directly or indirectly or contingently, |
obligate the state or any municipality of the state to levy or to pledge any form of taxation for |
them or to make any appropriation for their payment. All of the revenue bonds or notes shall |
contain on their face a statement to the effect that neither the state nor the town of New Shoreham |
are obligated to pay the revenue bonds or notes, or their interest, except from revenues of the |
project or projects for which they are issued, and that neither the faith and credit, nor the taxing |
power of the state or of any municipality of the state, is pledged to the payment of the principal of |
or the interest on those bonds or notes. |
45-67-13. Money of the utility district. |
(a) All money of the utility district, from whatever source derived, shall be paid to the |
treasurer of the utility district. The money on receipt shall be deposited forthwith in a separate |
bank account or accounts. The money in the accounts shall be paid out with a check of the |
treasurer, on requisition by the utility district, or of any other person or persons that the utility |
district may authorize to make the requisitions. All deposits of money shall be secured by |
obligations of the United States or of the state, of a market value at all times not less than the |
amount of deposits, and all banks and trust companies are authorized to give security for the |
deposits. The utility district shall have the power, notwithstanding the provisions of this section, |
to contract with the holders of any of its bonds as to the custody, collection, security, investment, |
and payment of any money of the authority, or any money held in trust or otherwise for the |
payment of bonds or in any way to secure the bonds, and to carry out any contract. Money held in |
trust or otherwise for the payment of bonds or in any way to secure bonds and deposits of money |
may be secured in the same manner as the money of the authority, and all banks and trust |
companies are authorized to give security for the deposits. |
(b) Notwithstanding subsection (a) of this section, or any other provision of this chapter, |
the board of utility commissioners shall have the power to authorize, by resolution, a loan or |
advance from one utility fund of the utility district to another. Any such interfund advance or loan |
shall be for a term specified in the authorizing resolution of the board of utility commissioners |
and shall bear interest at a rate reasonably determined by the board of utility commissioners to be |
consistent with the public interest implicated in all funds involved in the interfund loan or |
advance; provided, however, that an interest rate set at the rate applicable to the utility district's |
most recent borrowing from a bank or other financial institution shall be presumptively |
reasonable as the rate of interest for an interfund loan or advance. |
45-67-14. Alteration, amendment, repeal or severability. |
The right to alter, amend, or repeal this chapter is reserved to the state, but no such |
alteration, amendment, or repeal shall operate to retroactively impair the obligation of any |
contract made or assumed by the utility district under any power conferred by this chapter. If any |
section, clause, provision, or term of this chapter shall be declared unconstitutional, void, ultra |
vires, or otherwise ineffective in whole or in part, such determination of invalidity shall not |
otherwise affect the validity or enforceability of any other provision of this chapter. |
45-67-15. Reversion upon dissolution or termination. |
Upon dissolution or termination of the utility district, the assets of the utility district that |
remain after payment, or making provision for payment, of all bonds, notes, and other obligations |
of the utility district shall be distributed to the town of New Shoreham or as ordered by a court of |
proper jurisdiction. |
SECTION 2. This act shall take effect upon passage. |
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LC002436/SUB A |
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