§ 369-B:7 — Security Interests in RRB Property

I. To the extent the provisions of this section conflict with Article 9 of RSA 382-A, this section shall apply.
II. A security interest in RRB property is valid, is enforceable against the pledgor and third parties, subject to the rights of any third parties holding security interests in the RRB property perfected in the manner described in this section, and attaches when all of the following have taken place:
(a) A finance order authorizing the RRB charge included in the RRB property has become effective in accordance with this chapter.
(b) Value has been given by the pledgees of the RRB property.
(c) The pledgor has signed a security agreement covering the RRB property.
III. A valid and enforceable security interest in RRB property is perfected when it has attached and when financing statements have been filed in accordance with Article 9 of RSA 382-A naming the pledgor of the RRB property as "debtor" and identifying the RRB property. Any description of the RRB property shall be sufficient if it refers to the finance order creating the RRB property. A copy of the financing statement shall be filed with the commission by the pledgor or transferor of the RRB property, and the commission may require the pledgor or transferor to make other filings with respect to the security interest in accordance with procedures it may establish, but the filing with the commission and such other filings shall not affect the perfection of the security interest. A financing statement filed pursuant to this section is effective until a termination statement is filed.
IV. A perfected security interest in RRB property is a continuously perfected security interest in all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting security interests shall rank according to priority in time of perfection. RRB property shall constitute property for all purposes, including for contracts securing rate reduction bonds, whether or not the revenues and proceeds arising with respect thereto have accrued.
V. Subject to the terms of the security agreement covering the RRB property and the rights of any third parties holding security interests in the RRB property perfected in the manner described in this section, the validity and relative priority of a security interest created under this section are not defeated or adversely affected by the commingling of revenues and proceeds arising with respect to the RRB property with other funds of the electric utility that is the pledgor or transferor of the RRB property, or by any security interest in a deposit account of that electric utility into which the revenues and proceeds are deposited or in such revenues and proceeds themselves perfected under Article 9 of RSA 382-A or otherwise. Subject to the terms of the security agreement, the pledgees of the RRB property shall have a perfected security interest in all cash and deposit accounts of the electric utility in which revenues and proceeds arising with respect to the RRB property have been commingled with other funds, but the perfected security interest shall be limited to an amount not greater than the amount of the revenues and proceeds with respect to the RRB property received by the electric utility within 12 months before (1) any default under the security agreement or (2) the institution of insolvency proceedings by or against the electric utility, less payments from the revenues and proceeds to the pledgees during that 12-month period. Nothing in this paragraph shall exempt the debtor from the tracing requirements of federal bankruptcy law.
VI. If an event of default occurs under the security agreement covering the RRB property, the pledgees of the RRB property, subject to the terms of the security agreement, shall have all rights and remedies of a secured party upon default under Article 9 of RSA 382-A, and shall be entitled to conduct a secured party sale of the RRB property or otherwise enforce their security interest in the RRB property, subject to the rights of any third parties holding prior security interests in the RRB property perfected in the manner provided in this section. In addition, the commission may require, in the finance order creating the RRB property, that, in the event of default by the electric utility in payment of revenues and proceeds arising with respect to the RRB property, the commission, upon the application by the pledgees or transferees, including transferees under this section, of the RRB property, and without limiting any other remedies available to the pledgees or transferees by reason of the default, shall order the sequestration and payment to the pledgees or transferees of revenues and proceeds arising with respect to the RRB property. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the RRB property. Any surplus in revenues and proceeds in excess of amounts necessary to pay principal, premium, if any, interest, costs, and arrearages on the rate reduction bonds, and other costs arising under the security agreement, shall be remitted to the debtor or to the pledgor or transferor.
VII. RSA 382-A:9-204 and RSA 382-A:9-205 shall apply to a pledge of RRB property by an electric utility, an affiliate of an electric utility, or a financing entity.
VIII. This paragraph sets forth the terms by which a consensual security interest can be created and perfected in the RRB property. Unless otherwise ordered by the commission with respect to any series of rate reduction bonds on or prior to the issuance of the series, there shall exist a statutory lien as provided in this paragraph. Upon the effective date of the finance order, there shall exist a first priority lien on all RRB property then existing or thereafter arising pursuant to the terms of the finance order. This lien shall arise by operation of this paragraph automatically without any action on the part of the electric utility, any affiliate thereof, the financing entity, or any other person. This lien shall secure all obligations, then existing or subsequently arising, under the rate reduction bonds issued pursuant to the finance order to the holders of such rate reduction bonds, the trustee or representative for such holders, and any other entity specified in the finance order. The persons for whose benefit this lien is established shall, upon the occurrence of any defaults specified in the finance order, have all rights and remedies of a secured party upon default under Article 9 of RSA 382-A, and shall be entitled to conduct a secured party sale of the RRB property or otherwise enforce this statutory lien in the RRB property. This lien shall attach to the RRB property regardless of who shall own, or shall subsequently be determined to own, the RRB property including any electric utility, company, any affiliate thereof, the financing entity, or any other person. This lien shall be valid, perfected, and enforceable against the owner of the RRB property and all third parties upon the effective date of the finance order without any further public notice; provided, however, that any person may, but shall not be required to, file a financing statement in accordance with paragraph III of this section. Financing statements so filed may be "protective filings" and shall not be evidence of the ownership of the RRB property. A perfected statutory lien in RRB property is a continuously perfected lien in all revenues and proceeds arising with respect thereto, whether or not the revenues or proceeds have accrued. Conflicting liens shall rank according to priority in time of perfection. In addition, the commission may require, in the finance order creating the RRB property, that, in the event of default by the electric utility in payment of revenues and proceeds arising with respect to the RRB property, the commission, upon the application by the beneficiaries of the statutory lien, and without limiting any other remedies available to the beneficiaries by reason of the default, shall order the sequestration and payment to the beneficiaries of revenues and proceeds arising with respect to the RRB property. Any order shall remain in full force and effect notwithstanding any bankruptcy, reorganization, or other insolvency proceedings with respect to the debtor, pledgor, or transferor of the RRB property. Any surplus in revenues and proceeds in excess of amounts necessary to pay principal, premium, if any, interest, costs, and arrearages on the rate reduction bonds, and other costs arising in connection with the documents governing the rate reduction bonds, shall be remitted to the debtor or to the pledgor or transferor.

Legislative History

2000, 249:2, eff. June 12, 2000.