§ 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 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 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 that the utility district may be required by law to pay; and
(14) Any other matters of like or different character 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 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.