§ 45-39.2-11. Bonds.
(a) The electric and water 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 electric and water 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 electric and water 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 electric and water 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 electric and water district's facilities and service and to
provide utility service and receive the revenues from the electric and water district's
facilities and service for such period, not exceeding forty (40) years, as may be
necessary to recover all payments due on the bonds.
(c) The bonds of the electric and water 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 electric and water district
shall determine.
(d) Pending the issuance of bonds in definitive form, the electric and water district
may issue bond anticipation notes or interim receipts in such form as the board of
utility commissioners may elect.
(e) The electric and water district is hereby authorized to provide for the issuance of
refunding bonds of the electric and water district for the purpose of refunding any
bonds then outstanding which 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 electric and water 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 electric and water 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 electric and water 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 electric and water district and the carrying out of
its corporate, district, and political subdivision 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 electric and water 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 electric and water district's bonds
that the electric and water 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 electric and water district or under its jurisdiction, control,
or supervision, or upon any of the electric and water district's activities in the
operation or maintenance of the property or upon any earnings, revenues, monies, or
other income derived by the electric and water district, and that the bonds of the
electric and water 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.
(g) The state does hereby pledge to and agree with the holders of the bonds, notes, or
other evidence of an indebtedness of the electric and water district that the state
will not limit or alter the rights vested in the electric and water district until
the bonds, notes, or other evidence of indebtedness, together with the interest on
the debt, are fully met and discharged.
(h) Any resolution or resolutions authorizing any bond, or any issue of bonds, may contain
provisions which 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 electric and water 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 electric and water 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 electric
and water 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 electric and water 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
electric and water district to perform any covenant or agreement relating to a bond
indenture;
(13) Covenanting that as long as any bonds are outstanding the electric and water 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 electric
and water district, all payments of principal, redemption premium (if any), and interest
on bonds, notes, or other evidences of indebtedness incurred or assumed by the electric
and water district, all renewals, repairs, and replacements to the property and facilities
of the electric and water district, and all other amounts which the electric and water
district may be required by law to pay; and
(14) Any other matters of like or different character which in any way affect the security
or protection of the bonds.
(i) The bonds of the electric and water 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 thereafter be authorized to invest in bonds or other obligation 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 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.