2012 -- S 2870

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LC02328

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS

     Introduced By: Senator Louis P. DiPalma

     Date Introduced: April 12, 2012

     Referred To: Senate Environment & Agriculture

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 39 of the General Laws entitled "PUBLIC UTILITIES AND

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CARRIERS" is hereby amended by adding thereto the following chapter:

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     CHAPTER 29

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EAST BAY ENERGY CONSORTIUM ACT

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     39-29-1. Short title. – This chapter shall be known and may be cited as the “East Bay

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Energy Consortium Act”.

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     39-29-2. Legislative findings. – Recognizing the importance of protecting, maintaining

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and utilizing all sources of energy for the generation of electricity and recognizing the importance

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of developing facilities in the east bay for the generation of electrical energy from sources not

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primarily dependent on fossil fuels, there is a need for municipal participation in the development

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of such facilities. Accordingly, the general assembly hereby finds and declares that:

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     (1) The overuse of fossil fuels for the production of electricity is detrimental to the

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environment of Rhode Island.

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     (2) Development of alternative sources of energy for the production of electricity will

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reduce the state’s vulnerability to supply and price disruptions originating outside the state.

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     (3) The communities of the East Bay have presented a proposal whereby they would

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develop facilities for the generation of electricity using alternative energy sources.

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     (4) The state and its citizens would be better served and its environment enhanced by the

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development of facilities for the generation of electricity through alternative energy sources.

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     (5) The need for alternative means of producing electrical energy in East Bay requires

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prompt action on the part of the state, its agencies, boards and commissions.

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     39-29-3. Definitions. – (a) “Alternative Energy Sources” means any renewable energy

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resource including, without limitation, geothermal and tidal energy, and any other fuel or energy

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source but otherwise excluding fossil fuels, nuclear energy, and hydroelectric energy.

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     (b) “Board” means the board of delegates of the east bay energy consortium board

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created by section 39-29-5.

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     (c) “Bonds” means bonds, notes, or other obligations issued by the consortium.

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     (d) “Consortium” means the east bay energy consortium.

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     (e) “Eligible net metering resource” shall have the meaning ascribed thereto by section

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39-26.4-2.

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     (f) “Participating Community” means those eligible towns and cities which, by ordinance

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adopted by the applicable city or town council, choose to join the consortium. The eligible towns

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are Barrington, Bristol, Little Compton, Middletown, Portsmouth, Tiverton, Warren, and the

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eligible cities are East Providence and Newport.

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     (g) “Property” means any or all of the properties of any electric generation and

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interconnection system or part thereof, including plants, works, and instrumentalities, and all

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properties used or useful in connection therewith, and all parts thereof and all appurtenances

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thereto, including lands, easements, rights in land and water rights, rights-of-way, contract rights,

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franchises, approaches, connections, dams, reservoirs, water mains and pipelines, pumping

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stations and equipment, or any other property incidental to and included in the system or part

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thereof situated within or without the district.

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     (h) “Treasurer” means the treasurer of the consortium.

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     39-29-4. Adopting ordinances. – An eligible community may by ordinance join the

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consortium. The ordinance shall specify the method of electing or appointing a delegate to

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represent the eligible community on the board and shall indicate whether the delegate shall serve

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for a specified term and what that term shall be or whether the delegate shall serve at the pleasure

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of the appointing authority.

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     39-29-5. Board created. – A board to be known as the east bay energy consortium board

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is hereby created.

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     39-29-6. Composition of board. – (a) The board shall consist of one delegate elected or

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appointed by each participating community.

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     (b) A majority of the members of the board then in office shall constitute a quorum, and

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the vote of a majority of a quorum shall be necessary for any action taken by the consortium,

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except to the extent otherwise provided by the bylaws. No vacancy in the membership of the

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board shall impair the right of a quorum to exercise all the rights and perform all the duties of the

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consortium.

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     (c) In the event of a vacancy occurring in the board by reason of the death, resignation, or

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removal for willful misconduct of a member, the governing body of the town or city which

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appointed the member shall appoint a new member for any unexpired term.

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     (d) In the month of January, the board shall make an annual report to the town or city

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council of each participating community of the consortium’s activities for the preceding fiscal

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year. Each report shall set forth a complete operating and financial statement covering its

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operations during the year. The consortium shall cause an annual audit of the books, records, and

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accounts of the consortium to be made.

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     39-29-7. Officers and employees of board. – The chairperson of the board shall be

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selected by the majority vote of the members of the board. The board shall appoint a secretary

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and a treasurer who need not be a member of the board and such other employees as may be

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necessary in its judgment, and fix their compensation. The board may provide, in the fixing of

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compensation, for a retirement program, commonly known as a pension plan, funded by

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individual or group insurance or annuity contracts or otherwise, for health and accident insurance,

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for life insurance, for hospital service, and for physicians’ service for any one or more or all of its

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employees; and the board is hereby authorized to expend the moneys of the consortium for such

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purposes and programs as it may deem advisable. These programs and purposes may be financed

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in full or in part by the moneys of the consortium.

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     39-29-8. Compensation of members and agents. – Delegates shall serve without

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compensation from the consortium but may receive compensation from the appointing town or

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city. Each delegate shall be entitled to reimbursement from the consortium of his or her actual

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and necessary expenses incurred in the performance of his or her official duties. The salaries,

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compensation, and expenses of all officers, employees, and agents (other than salaries and

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compensation of delegates, if any) shall be paid solely out of the funds of the consortium. No part

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of the earnings of the consortium shall inure to the benefit of any private person.

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     39-29-9. Business prohibited to delegates. – No delegate to the consortium shall

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directly or indirectly engage in any contract or agreement for labor or for the supply of materials

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for construction or reconstruction of the physical assets of the consortium or replacements or

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additions thereto.

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     39-29-10. Powers of consortium. – The consortium shall have power:

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     (1) To make and alter bylaws, not inconsistent with this chapter or with the laws of this

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state, for the administration and regulation of its business and affairs;

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     (2) To adopt and alter a corporate seal;

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     (3) To sue, be sued, complain and defend in its name in all courts;

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     (4) To be a promoter, partner, member, associate, or manager of any partnership,

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enterprise, or venture; provided, however, that the consortium shall not have any power to create,

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empower or otherwise establish any corporation, subsidiary corporation, corporate body, any

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form of partnership, or any other separate entity without the express approval and authorization of

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the general assembly;

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     (5) To transact its business, carry on its operations and have and exercise the powers

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granted by this chapter;

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     (6) To contract and incur liabilities in its own name for any lawful purpose which would

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effectuate the provisions of this chapter; to execute all instruments necessary to carry out the

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purposes of this chapter; and to do all things necessary or convenient to carry out the powers

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expressly granted by this chapter; provided, however, that the full faith, credit, and taxing power

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of the state shall never be pledged, nor shall any bond, note, or other evidence of indebtedness of

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the consortium constitute an obligation of the state;

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     (7) To indemnify and advance expenses to any delegate, officer, agent or employee, past

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or present, to the same extent as a corporation formed under chapter 1.2 of title 7 may indemnify

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any of its delegates, officers or agents and subject to the standards and restrictions, if any, set

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forth in its bylaws and to purchase and maintain insurance on behalf of any delegate, manager,

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agent or employee against any liability asserted against him or her and incurred by the delegate,

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manager, agent or employee in that capacity or arising out of the delegate’s, manager’s, agent’s or

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employee’s status, whether or not the consortium would have the power to indemnify under the

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provisions of this section, the articles of organization or operating agreement;

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     (8) To pay pensions and establish pension plans, pension trusts, profit sharing plans and

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other incentive and benefit plans for any or all of its agents and employees;

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     (9) To provide insurance for its benefit on the life of any of its agents or employees;

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     (10) To elect or appoint agents and define their duties and fix their compensation;

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     (11) To engage the services of consultants on a contractual basis for rendering

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professional and technical assistance and advice, and to employ architects, engineers, attorneys,

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accountants, construction, and financial experts and any other advisors, consultants, and agents as

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may be necessary in his or her judgment, and to fix their compensation;

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     (12) To invest any funds of the consortium, including funds held in reserve or sinking

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funds, or any moneys not required for immediate use or disbursement at the discretion of the

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consortium, in:

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     (i) Obligations of the state or the United States;

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     (ii) Obligations of the principal and interest of which are guaranteed by the state or the

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United States;

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     (iii) Obligations of agencies and instrumentalities of the state or the United States;

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     (iv) Certificates of deposits of banks and trust companies or shares of building loan

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associations organized under the laws of the state or doing business in the state; or

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     (v) Any obligations, securities, and other investments as shall be specified in resolutions

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of the consortium, and to take and hold real and personal property as security for the payment of

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amounts lent or invested;

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     (13) To purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use, and

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otherwise deal in and with, real or personal property, or any interest in real or personal property,

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wherever situated, to obtain options for the acquisition thereof and to mortgage or pledge the

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same. If the consortium deems it advisable, to acquire any property through the purchase of stock

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and obligations of a corporation owning the property and the dissolution of the corporation. The

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owner or owners of any property which the consortium is herein authorized to acquire are hereby

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authorized to sell or otherwise transfer the same to the consortium, and in the case of a sale or

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other transfer of property pursuant to this provision it shall be lawful to dissolve the corporation,

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notwithstanding any provision of the general or public laws to the contrary.

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     (14) To make and execute agreements of lease, conditional sales contracts, installment

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sales contracts, loan agreements, mortgages, construction contracts, operation contracts, and other

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contracts and instruments necessary or convenient in the exercise of the powers and functions of

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the corporation granted by this chapter.

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     (15) To own and operate, maintain, repair, improve, enlarge, and extend, in accordance

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with the provisions of this chapter, any property acquired and conduct its activities within or

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without the state all of which, together with the acquisition of the property, are hereby declared to

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be public purposes.

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     (16) To sell, transfer and dispose of any property, real, personal, or mixed, or interest

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therein when no longer needed for its purposes, to grant options for the purchase of such;

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provided, however, that in the case of any sale or proposed sale of any real property hereunder,

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the consortium shall first grant to the city or town in which the real property, or any part thereof,

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is situated (if such town or city is located in Rhode Island) the right to purchase the real property,

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or portion thereof situated within its boundaries, upon the same terms and conditions as the

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consortium offers or proposes to offer to any other prospective purchaser.

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     (17) To produce electricity within or without the territorial limit of the participating cities

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and towns; provided, however, that the primary fuels or other energy sources for the production

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of electricity shall be alternative energy sources.

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     (18) To distribute and sell electricity within the territorial limit of the participating towns

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and cities.

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     (19) To fix, charge and collect rents, fees, rates, and charges for the use of any project or

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the electricity generated or delivered thereby and to make assessments and impose reasonable and

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just user charges, so as to provide revenues sufficient at all times to pay, as the same shall become

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due, the principal and interest on any bonds issued by the consortium, together with the

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maintenance of proper reserves therefor, in addition to paying, as the same shall become due, the

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expenses of operating and maintaining the property of the consortium, together with proper

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reserves for depreciation, maintenance, and contingencies and all other obligations and

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indebtedness of the consortium and to pay for those expenses that may be required by law or as

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may be determined by the consortium to be necessary for the maintenance and operation of its

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projects. Except with respect to electricity delivered to a participating town or city pursuant to a

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net metering arrangement, the consortium shall charge any town or city for the use of any facility

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of or service rendered by or any commodities furnished to it by the consortium at rates applicable

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to other users taking similar service.

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     (20) To enter into any net metering arrangement. If the consortium enters into a net

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metering arrangement on its own behalf, all municipal accounts of all participating communities

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shall be treated as accounts eligible for net metering within an eligible net metering system site, if

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the consortium enters into a net metering arrangement on behalf of one or more but less than all

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participating communities:

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     (i) The consortium shall designate the specific eligible net metering resources to which

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the arrangement applies electric distribution;

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     (ii) Only municipal accounts of the towns and cities on whose behalf the arrangement is

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made shall be treated as accounts eligible for net metering with respect to the designated

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resources; and

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     (iii) The net metering arrangement may contain provisions designed to prevent netting of

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excess consumption by one participating community against excess production of another

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participating community or production by the towns and cities on behalf of which the

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arrangement is not made, under such conditions and circumstances as may be specified in the

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arrangement, and such provisions shall be applicable to the participating communities on behalf

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of which the arrangement was not made as well as the towns and cities on behalf of which the

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arrangement was made; provided, that on request of any participating town or city or the electric

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distributing company the commission shall have the authority to make the determination whether

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specific provisions are appropriate and fair.

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     (21) To borrow money through the Rhode Island economic development corporation for

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any of its corporate purposes, including the creation and maintenance of working capital, and to

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issue negotiable bonds, notes, or other obligations and to fund or refund the same.

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     (22) Subject to the provisions of any contract with note holders or bond holders, to

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consent to the modification, with respect to rate of interest, time of payments of any installment

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of principal or interest, security or any other term of any mortgage, mortgage loan, mortgage loan

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commitment, contract, or agreement of any kind to which the corporation is a party.

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     (23) As security for the payment of principal and interest on any bonds or notes or any

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agreements made in connection therewith, to mortgage and pledge any or all of its projects and

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property, whether then owned or thereafter acquired, and to pledge the revenues and receipts from

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all or part thereof, and to assign or pledge the leases, sales contracts or loan agreements or other

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agreements on any portion or all of its projects and property and to assign or pledge the income

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received by virtue of the lease, sales contracts, loan agreements or other agreements.

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     (24) To contract for and to accept any gifts or grants or loans or funds or property or

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financial or other assistance in any form from the United States or any agency or instrumentality

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of the United States or from the state or any agency or instrumentality of the state or from any

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other source and to comply, subject to the provisions of this chapter, with the terms and

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conditions of this contract.

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     (25) To enter into agreements with any municipality or political subdivision, providing

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that the consortium shall pay annual sums as the consortium shall negotiate in lieu of taxes to the

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municipality or political subdivision of the state in respect to any real or personal property which

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is owned by the consortium and is located in the municipality or political subdivision.

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     (26) To enter into cooperative agreements with cities, towns, or companies within or

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without the district for the interconnection of facilities or for any other lawful corporate purposes

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necessary or desirable to effect the purposes of this chapter.

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     (27) To have and exercise all powers necessary to effect its purposes.

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     39-29-11. Application of public utility law – Rate determination. – Chapters 1 through

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5 of this title shall not apply to the consortium created by this chapter.

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     39-29-12. Power to issue bonds – Pledge of revenues. – The consortium shall have the

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power and is hereby authorized from time to time to issue its negotiable bonds for any of its

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purposes and to secure the payment of the bonds as may be provided in the resolution or

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resolutions authorizing the bonds. Projects undertaken by the consortium to develop, maintain, or

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utilize eligible net metering resources shall not be considered to be essential public facilities for

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purposes of chapter 35-18.

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     39-29-13. Security for bonds or notes. – (a) The principal of and interest on any bonds

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or notes issued by the consortium may be secured by a pledge of any or all revenues and receipts

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of the consortium and may be secured by a mortgage or other instrument covering all or any part

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of one or more projects, including all or part of any additions, improvements, extensions to, or

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enlargements of projects thereafter made.

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     (b) Bonds or notes issued for the acquisition, construction, reconstruction, rehabilitation,

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development, or improvement of one or more projects may also be secured by an assignment of

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leases of, or mortgages on, or contracts of sale or loan agreements with regard to the project or

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projects and by an assignment of the revenues, receipts, payments, or repayments derived by the

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consortium from those leases, mortgages, sales agreements, or loan agreements.

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     (c) The resolution under which the bonds or notes are authorized to be issued and any

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mortgage, lease, sales agreement, or loan agreement, or other instrument may contain agreements

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and provisions respecting the maintenance of the projects covered thereby, the fixing and

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collection of rents, payments or repayments or other revenues, including moneys received in

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repayment of loans, and interest on the loans, the creation and maintenance of special funds from

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rents or other revenues and the rights and remedies available in the event of default, all as the

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consortium shall deem advisable.

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     (d) Each pledge, agreement, mortgage, or other instrument made for the benefit or

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security of any of the bonds or notes of the consortium shall be valid and binding from the time

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the pledge is made and shall continue in effect until the principal of and interest on the bonds or

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notes for the benefit of which the pledge was made has been fully paid, or until provision has

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been made for the payment in the manner provided in the resolutions under which those bonds or

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notes were authorized. The revenues, moneys, or property pledged by the consortium shall

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immediately be subject to the lien of that pledge without any physical delivery thereof or further

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act, and the lien of the pledge shall be valid and binding as against all parties having claims of

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any kind in tort, contract, or otherwise against the consortium, irrespective of whether the parties

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have notice thereof. Neither the resolution nor any other instrument by which a pledge is created

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need be recorded.

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     (e) The consortium may provide in any proceedings under which bonds or notes may be

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authorized that any project or part of a project may be constructed, reconstructed, rehabilitated, or

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improved by the consortium, or any lessee, vendee, obligor, or any designee of the consortium

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and may also provide in those proceedings for the time and manner of and requisitions for

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disbursements to be made for the cost of the construction, and for any certificates and approvals

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of construction and disbursements that the corporation shall deem necessary and provide for in

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those proceedings.

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     (f) Any resolution under which bonds or notes of the consortium are authorized to be

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issued (and any trust indenture established thereby) may contain provisions for vesting in a

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trustee or trustees those properties, rights, powers, and duties in trust that the consortium may

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determine.

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     (g) Any participating community may, in the manner provided in chapter 45-12 or

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another general or special act as though such guarantee were a bond of the participating

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community, guarantee all or a part of repayment of principal of or payment of interest on any

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bond of the consortium.

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     39-29-14. Terms and sale of bonds -- Refunding. – (a) The consortium is hereby

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authorized to provide by resolution for the issuance, at one time or from time to time, of revenue

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bonds of the authority for the purpose of paying all or part of the cost to acquire, construct,

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reconstruct, rehabilitate, improve, or maintain any property necessary or desirable for the

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purposes of the authority. The bonds shall be authorized by resolution of the board, and shall bear

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such date or dates, mature at such time or times not exceeding forty (40) years from their date,

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bear interest at such rate or rates payable at such time or times, be in such denominations, be in

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such form, either coupon or registered, carry such registration privileges and such privileges of

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reconversion from registered to coupon form, be executed in such manner, be payable in such

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medium of payment, at such place or places and be subject to redemption at such premium, if

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required, and on such terms, as the resolution may provide. The consortium may purchase or

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otherwise acquire or require bond insurance, letters of credit, lines of credit or such other

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instruments or securities to insure the timely payment of principal, interest, and/or redemption

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premium on the bonds.

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     (b) Pending the preparation of the bonds in definitive form, the consortium shall have the

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power to issue temporary bonds or interim receipts in such form as the board may elect. The

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definitive bonds shall be signed by the chairperson of the board or a facsimile thereof shall be

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impressed or imprinted thereon and attested by the manual or facsimile signature of the secretary

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of the consortium. In case any officer whose signature or facsimile of whose signature shall

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appear on any bonds or coupons shall cease to be an officer before the delivery of the bonds, the

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signature or the facsimile shall nevertheless be valid and sufficient for all purposes the same as if

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he or she had remained in office until delivery.

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     (c) Any bonds, authorized by and issued pursuant to this chapter, may be sold at public or

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private sale for such price or prices as the consortium shall determine.

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     (d) The consortium is hereby authorized to provide for the issuance of refunding bonds of

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the consortium for the purpose of refunding any bonds then outstanding which shall have been

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issued under the provisions of this chapter, including the payment of any redemption premium

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thereon or interest accrued or to accrue to the earliest or subsequent date of redemption purchase

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or maturity of the bonds and, if deemed advisable by the consortium, for the additional purpose of

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paying all or part of the cost of acquiring, constructing, reconstructing, rehabilitating, or

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improving any property of the consortium. The proceeds of bonds or notes issued for the purpose

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of refunding outstanding bonds or notes may be applied, in the discretion of the board, to the

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purchase, retirement at maturity, or redemption of the outstanding bonds or notes either on their

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earliest or a subsequent redemption date, and may, pending that application, be placed in escrow.

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Any escrowed proceeds may be invested and reinvested in obligations of or guaranteed by the

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state or the United States, or in certificates of deposit, time deposits, or repurchase agreements

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fully secured or guaranteed by the state or the United States, or an instrumentality of either,

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maturing at such time or times as shall be appropriate to assure the prompt payment, as to

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principal, interest, and redemption premium, if any, of the outstanding bonds or notes to be so

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refunded. After the terms of the escrow have been fully satisfied and carried out, any balance of

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the proceeds and interest, income, and profits, if any, earned or realized on the investments

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thereof may be returned to the authority for use by it in furtherance of its purposes. The portion of

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the proceeds of bonds or notes issued for the additional purpose of paying all or part of the cost of

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acquiring, constructing, reconstructing, rehabilitating, developing, or improving any property of

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the consortium may be invested and reinvested in such obligations, securities, and other

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investments consistent with this section as shall be specified in the resolutions under which the

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bonds are authorized and which shall mature not later than the times when the proceeds will be

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needed for these purposes. The interest, income, and profits, if any, earned or realized on the

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investments may be applied to the payment of all parts of the costs, or may be used by the

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consortium otherwise in furtherance of its purposes. The issuance of the bonds, the maturities,

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and other details thereof, the rights of the holders thereof, and the rights, duties, and obligations

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of the authority in respect to the bonds shall be governed by the provisions of this chapter insofar

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as the provisions may be applicable.

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     39-29-15. Covenants permissible in bond resolution. – Any resolution or resolutions

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authorizing any bonds or any issue of bonds may contain provisions which shall be a part of the

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contract with the holders of the bonds thereby authorized, as to:

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     (1) Pledging all or any part of the money, earnings, income, and revenues derived from

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all or any part of the property of the consortium to secure the payment of any bonds or of any

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issue of bonds subject to such agreements with bondholders as may then exist;

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     (2) The rates to be fixed and the charges to be collected and the amounts to be raised in

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each year, and the use and disposition of the earnings and other revenues;

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     (3) The setting aside of reserves and the creation of sinking funds and the regulation and

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disposition thereof;

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     (4) Limitations on the right of the consortium to restrict and regulate the use of the

11-76

properties in connection with which the bonds are issued;

11-77

     (5) Limitations on the purposes to which the proceeds of sale of any issue of bonds may

11-78

be applied;

11-79

     (6) Limitations on the issuance of additional bonds, including refunding bonds and the

11-80

terms upon which additional bonds may be issued and secured;

11-81

     (7) The procedure, if any, by which the terms of any contract with bondholders may be

11-82

amended or abrogated, the amount of bonds the holders of which must consent thereto, and the

11-83

manner in which consent may be given;

11-84

     (8) The creation of special funds into which any earnings or revenues of the consortium

11-85

may be deposited, and the investment of the funds;

11-86

     (9) The appointment of a fiscal agent and the determination of its powers and duties;

11-87

     (10) Limitations on the power of the consortium to sell or otherwise dispose of its

11-88

properties;

11-89

     (11) The preparation of annual budgets by the consortium and the employment of

11-90

consulting engineers and auditors;

11-91

     (12) The rights and remedies of bondholders in the event of failure on the part of the

11-92

consortium to perform any agreement;

11-93

     (13) Covenanting that as long as any bonds are outstanding the consortium shall use its

11-94

best efforts to establish and maintain its rates and charges adequate at all times to pay and provide

11-95

for all operating expenses of the consortium, all payments of principal, redemption premium, if

11-96

any, and interest on bonds, notes or other evidences of indebtedness of or assumed by the

11-97

consortium, all renewals, repairs, or replacements to the property of the consortium deemed

11-98

necessary, and all other amounts which the authority may by law, resolution or contract be

11-99

obligated to pay. On or before the last day of the consortium’s fiscal year, the consortium shall

11-100

review the adequacy of its rates and charges to satisfy the above requirements for the next

11-101

succeeding fiscal year. If the review indicates that the rates and charges are, or are likely to be,

11-102

insufficient to meet the requirements of this chapter, the consortium shall promptly take such

12-1

steps as are permitted by law and as are necessary to cure or avoid the deficiency.

12-2

     (14) Any other matters, of like or different character which in any way affect the security

12-3

or protection of the bonds.

12-4

     39-29-16. Short-term notes. – Money borrowed by the consortium for the purpose of

12-5

providing temporary financing of a project or projects or combination of projects pending the

12-6

issuance of bonds or other notes, shall be evidenced by notes or other obligations. The principal

12-7

and interest of all notes or other obligations of the consortium issued under the provisions of this

12-8

section shall be payable no later than the fourth anniversary of the date of their issue, and shall be

12-9

payable from the following:

12-10

     (1) From the proceeds of bonds subsequently issued; or

12-11

     (2) From the proceeds of subsequent borrowings which comply with the provisions

12-12

hereof; or

12-13

     (3) From revenues of the consortium which may be equal and proportionate with, but not

12-14

superior to, that securing bonds then outstanding or subsequently issued. Notwithstanding any

12-15

other provisions of this chapter, the notes shall be deemed to be negotiable instruments under the

12-16

laws of the state of Rhode Island subject only to the provisions for registration contained in those

12-17

laws. The notes or other obligations or any issue of these shall be in a form and contain any other

12-18

provisions as the corporation may determine and the notes or resolutions or proceedings

12-19

authorizing the notes or other obligations or any issue of these may contain, in addition to any

12-20

provisions, conditions, covenants, or limitations authorized by this chapter, any provisions,

12-21

conditions, covenants, or limitations which the corporation is authorized to include in any

12-22

resolution or resolutions authorizing bonds or notes or in any trust indenture relating to bonds or

12-23

notes. The consortium may issue the notes or other obligations in any manner either publicly or

12-24

privately on any terms as it may determine to be in its best interests. These notes or other

12-25

obligations may be issued under the provisions of this chapter without obtaining the consent of

12-26

any department, division, commission, board, body, or agency of the state, without any other

12-27

proceedings or the happening of any conditions or things other than those proceedings,

12-28

conditions, or things which are specifically required by this chapter and by the provisions and

12-29

resolutions authorizing the issuance of the notes or obligations.

12-30

     39-29-17. Tax exemption. – It is hereby declared that the consortium and the carrying

12-31

out of its purposes is in all respects for the benefit of the people of the state and for the

12-32

improvement of their health, welfare, and prosperity, and the consortium will be performing an

12-33

essential governmental function in the exercise of the powers conferred by this chapter, and the

12-34

state covenants with the holders of the bonds that the consortium shall be required to pay no taxes

13-1

or assessments or sums in lieu of taxes, except as provided in section 39-29-18, to the state or any

13-2

political subdivision thereof upon any of the property acquired by it or under its jurisdiction,

13-3

control, possession, or supervision or upon its activities in the operation and maintenance of the

13-4

property or upon any earnings, revenues, moneys, or other income derived by the consortium, and

13-5

that the bonds of the consortium and the income therefrom shall at all times be exempt from

13-6

taxation.

13-7

     39-29-18. State and municipalities not liable -- Exceptions. – Except for any guarantee

13-8

by a participating community entered into pursuant to the provisions of subsection 39-29-13(g),

13-9

neither the state nor any municipality is liable for the payment of the principal of or interest on

13-10

any bonds or notes of the consortium, or for the performance of any pledge, mortgage, obligation,

13-11

or agreement of any kind whatsoever which may be undertaken by the consortium, and none of

13-12

the bonds or notes of the consortium nor any of its agreements or obligations, except to the extent

13-13

so guaranteed, shall be construed to constitute an indebtedness of the state or any municipality

13-14

within the meaning of any constitutional or statutory provision whatsoever, nor shall the issuance

13-15

of bonds or notes under the provisions of this chapter, directly, indirectly, or contingently, except

13-16

to the extent so guaranteed, obligate the state or any municipality or political subdivision thereof

13-17

to levy or to pledge any form of taxation whatever therefor or to make any appropriation for their

13-18

payment.

13-19

     39-29-19. Payments in lieu of taxes. – (a) The consortium shall pay annually, having

13-20

first made provision for the payment of operations and maintenance of the system and for the

13-21

payment of principal and interest on any bonds and any other charges payable from revenues due

13-22

as may be provided in any bond or trust indenture, in lieu of any property tax, as a charge upon its

13-23

earnings or revenues, to each town, city, or district such amount as shall have been agreed

13-24

between the town, city, or district and the consortium. If no agreement as to the amount to be paid

13-25

shall have been reached, then, if the town, city or district is a participating community or located

13-26

in a participating community, the consortium shall determine the amount to be paid or, if the

13-27

town, city, or district is not a participating community or located within a participating

13-28

community, the amount to be paid shall be a sum equal in amount to the property tax, if any,

13-29

levied on the acquired property by the town, city, or district during the year next preceding the

13-30

acquisition of such property by the consortium. As used in this section the term “participating

13-31

community” includes any town or city that has ever been a participating community.

13-32

     (b) The consortium shall have no power to levy or collect ad valorem property taxes.

13-33

     39-29-20. Relations with municipalities. – (a) The consortium shall plan, construct,

13-34

reconstruct, rehabilitate, alter, improve, develop, maintain, and operate projects in conformity

14-1

with the applicable zoning or other land use ordinances, codes, plans, or regulations of any

14-2

municipality or political subdivision of the state in which those projects are situated.

14-3

     (b) The consortium shall, in planning, constructing, reconstructing, rehabilitating,

14-4

altering, or improving any project, comply with all requirements of state and federal laws, codes,

14-5

or regulations applicable to that planning, construction, reconstruction, rehabilitation, alteration,

14-6

or improvement. The consortium shall adopt a comprehensive building code (which may, but

14-7

need not be, the Building Officials Code Administrators International) with which all projects

14-8

shall comply. That adoption shall not preclude the consortium’s later adoption of a different

14-9

comprehensive building code or of its alteration, amendment, or supplementation of any

14-10

comprehensive building code so adopted. Except as otherwise specifically provided to the

14-11

contrary, no municipality or other political subdivision of the state shall have the power to modify

14-12

or change in whole or in part the drawings, plans, or specifications for any project of the

14-13

consortium; nor to require that any person, firm, or corporation employed with respect to that

14-14

project perform work in any other or different manner than that provided by those drawings,

14-15

plans, and specifications; nor to require that any such person, firm, or corporation obtain any

14-16

approval, permit, or certificate from the municipality or political subdivision in relation to the

14-17

project; and the doing of that work by any person, firm, or corporation in accordance with the

14-18

terms of those drawings, plans, specifications, or contracts shall not subject the person, firm, or

14-19

corporation to any liability or penalty, civil or criminal, other than as may be stated in the

14-20

contracts or may be incidental to the proper enforcement thereof nor shall any municipality or

14-21

political subdivision have the power to require the consortium, or any lessee or successor in

14-22

interest, to obtain any approval, permit, or certificate from the municipality or political

14-23

subdivision as a condition of owning, using, maintaining, operating, or occupying any project

14-24

acquired, constructed, reconstructed, rehabilitated, altered, or improved by the consortium or

14-25

pursuant to drawings, plans, and specifications made or approved by the consortium; provided,

14-26

however, that nothing contained in this subsection shall be deemed to relieve any person, firm, or

14-27

corporation from the necessity of obtaining from any municipality or other political subdivision

14-28

of the state any license which, but for the provisions of this chapter, would be required in

14-29

connection with the rendering of personal services or sale at retail of tangible personal property

14-30

other than electricity.

14-31

     (c) Except to the extent that the consortium shall expressly otherwise agree, a

14-32

municipality or political subdivision, including, but not limited to, a town, city, or district in

14-33

which a project of the consortium is located, shall provide for the project, whether then owned by

14-34

the consortium or any successor in interest, police, fire, sanitation, health protection, and other

15-1

municipal services of the same character and to the same extent as those provided for other

15-2

residents of that municipality or political subdivision, but nothing contained in this section shall

15-3

be deemed to require any municipality or political subdivision to make capital expenditures for

15-4

the sole purpose of providing any of these services for that project.

15-5

     (d) In carrying out a project, the consortium shall be empowered to enter into contractual

15-6

agreements with municipalities and public corporations and those municipalities and public

15-7

corporations are authorized and empowered, notwithstanding any other law, to enter into any

15-8

contractual agreements with the consortium and to do all things necessary to carry out their

15-9

obligations under the agreements.

15-10

     (e) Notwithstanding the provisions of any general, special, or local law or charter,

15-11

municipalities and public corporations are empowered to purchase, or to lease for a term not

15-12

exceeding ninety-nine (99) years, projects of the consortium, upon any terms and conditions as

15-13

may be agreed upon by the municipality or public corporation and the consortium.

15-14

     39-29-21. Power of eminent domain. – (a) If, for any of the purposes of this chapter, the

15-15

consortium shall find it necessary to acquire any real property lying within any participating

15-16

community, whether for immediate or future use, the consortium may find and determine that the

15-17

property, whether a fee simple absolute or a lesser interest, is required for the acquisition,

15-18

construction, or operation of a project, and upon that determination, the property shall be deemed

15-19

to be required for public use until otherwise determined by the consortium; and with the

15-20

exceptions hereinafter specifically noted, the determination shall not be affected by the fact that

15-21

the property has been taken for, or is then devoted to, a public use; but the public use in the hands

15-22

or under the control of the consortium shall be deemed superior to the public use in the hands of

15-23

any other person, association, or corporation; provided further, however, that no real property or

15-24

interest, estate, or right in real property belonging to the state shall be acquired without consent of

15-25

the state; and no real property or interest, estate, or right in real property belonging to any

15-26

municipality shall be acquired without the consent of the municipality; and no real property, or

15-27

interest or estate in real property belonging to a public utility corporation may be acquired

15-28

without the approval of the public utility commission or another regulatory body having

15-29

regulatory power over the public utility corporation.

15-30

     (b) The consortium may proceed to acquire and is authorized to and may proceed to

15-31

acquire property, whether a fee simple absolute or a lesser interest, by the exercise of the right of

15-32

eminent domain in the manner prescribed in this chapter.

15-33

     (c) Nothing contained in this section shall be construed to prohibit the consortium from

15-34

bringing any proceedings to remove a cloud on title or any other proceedings that it may, in its

16-1

discretion, deem proper and necessary, or from acquiring property by negotiation or purchase.

16-2

     (d) The necessity for the acquisition of property under this chapter shall be conclusively

16-3

presumed upon the adoption as hereinafter described by the board of a vote determining that the

16-4

acquisition of the property or any interest in property described in that vote is necessary for the

16-5

acquisition, construction, or operation of a project. Within six (6) months after its passage, the

16-6

consortium shall cause to be filed in the appropriate land evidence records a copy of its vote

16-7

together with a statement signed by the chairperson or vice-chairperson of the consortium that the

16-8

property is taken pursuant to this chapter, and also a description of the real property indicating the

16-9

nature and extent of the estate or interest in the estate taken and a plat of the real property, which

16-10

copy of the vote and statement of the chairperson or vice-chairperson shall be certified by the

16-11

secretary of the consortium and the description and plat shall be certified by the city or town clerk

16-12

for the city or town within which the real property lies.

16-13

     (e) The vote described in subsection (d) shall be adopted only by a majority of the

16-14

members of the board who are duly qualified and serving as such (whether or not present at the

16-15

meeting), which majority shall include the delegate representing the participating community in

16-16

which the property to be taken lies; provided that, if no delegate (whether or not present at the

16-17

meeting) represents that participating community, the vote may be adopted without the

16-18

affirmative vote of a delegate from that participating community if, not less than forty-five (45)

16-19

days nor more than one hundred eighty (180) days before the adoption of the vote, the board shall

16-20

have given notice to the town or city council of that participating community that the board will

16-21

be considering the acquisition of real property lying in the participating community. In those

16-22

cases when notice to a participating community is required, the notice need not provide any

16-23

details relating to any property under consideration other than that it is located in the participating

16-24

community.

16-25

     (f) Forthwith, thereafter, the consortium shall cause to be filed in the superior court in and

16-26

for the county within which the real property lies a statement of the sum of money estimated to be

16-27

just compensation for the property taken, and shall deposit in the superior court for the use of the

16-28

persons entitled to the money the sum set forth in the statement. The consortium shall satisfy the

16-29

court that the amount deposited with the court is sufficient to satisfy the just claims of all persons

16-30

having an estate or interest in the real property. Whenever the consortium satisfies the court that

16-31

the claims of all persons interested in the real property taken have been satisfied, the unexpended

16-32

balance shall be ordered repaid forthwith to the consortium.

16-33

     (g) Upon the filing of the copy of the vote, statement, description, and plat in the land

16-34

evidence records and upon the making of the deposit in accordance with the order of the superior

17-1

court, title to the real property in fee simple absolute or any lesser estate or interest specified in

17-2

the resolution shall vest in the consortium, and that real property shall be deemed to be

17-3

condemned and taken for the use of the consortium and the right to just compensation for the

17-4

condemned property shall vest in the persons entitled to compensation, and the consortium

17-5

thereupon may take possession of the real property. No sum paid unto the court shall be charged

17-6

with clerks’ fees of any nature.

17-7

     (h) After the filing of the copy of the vote, statement, description, and plat, notice of the

17-8

taking of that land or other real property shall be served upon the owners of, or persons having

17-9

any estate or interest in, the real property by the sheriff or his or her deputies of the county in

17-10

which the real estate is situated by leaving a true and attested copy of the vote, statement,

17-11

description, and plat with each of those persons personally, or at the last and usual place of abode

17-12

in this state with some person living there, and in case any of those persons are absent from this

17-13

state and have no last and usual place of abode therein occupied by any person, the copy shall be

17-14

left with the person or persons, if any, in charge of, or having possession of the real property

17-15

taken of the absent persons, and another copy shall be mailed to the address of the person, if the

17-16

address is known to the officer serving the notice.

17-17

     (i) After the filing of the vote, description, and plat, the consortium shall cause a copy to

17-18

be published in some newspaper having general circulation in the city or town in which the real

17-19

property lies at least once a week for three (3) successive weeks.

17-20

     (j) If any party shall agree with the consortium upon the price to be paid for the value of

17-21

the real property so taken and of appurtenant damage to any remainder or for the value of his or

17-22

her estate, right, or interest therein, the court, upon application of the parties in interest, may order

17-23

that the sum agreed upon be paid forthwith from the money deposited, as the just compensation to

17-24

be awarded in the proceedings; provided, however, that no payment shall be made to any official

17-25

or employee of the consortium for any property or interest in the property acquired from the

17-26

official or employee unless the amount of the payment is determined by the court to constitute

17-27

just compensation to be awarded in the proceedings.

17-28

     (k) Any owner of, or person entitled to any estate or right in, or interested in any part of,

17-29

the real property taken, who cannot agree with the consortium upon the price to be paid for his or

17-30

her estate, right or interest in the real property taken and the appurtenant damage to the

17-31

remainder, may, within three (3) months after personal notice of the taking, or if he or she has no

17-32

personal notice, may within one year from the time the sum of money estimated to be just

17-33

compensation is deposited in the superior court for the use of the persons entitled to the

17-34

compensation, apply by petition to the superior court for the county in which the real property is

18-1

situated, setting forth the taking of his or her land or his or her estate or interest in these and

18-2

praying for an assessment of damages by the court or by a jury. Upon the filing of the petition,

18-3

the court shall cause twenty (20) days’ notice of the pendency of a trial to be given to the

18-4

consortium by serving the chairperson or vice chairperson of the board with a certified copy of

18-5

the notice.

18-6

     (l) After the service of notice, the court may proceed to the trial thereof. The trial shall be

18-7

conducted as other civil actions at law are tried. The trial shall determine all questions of fact

18-8

relating to the value of the real property, and any estate or interest, and the amount of this value

18-9

and the appurtenant damage to any remainder and the amount of this damage, and the trial and

18-10

decision or verdict of the court or jury shall be subject to all rights to except to rulings, to move

18-11

for new trial, and to appeal, as are provided by law. Upon the entry of judgment in those

18-12

proceedings, execution shall be issued against the money deposited in court and in default against

18-13

any other funds of the consortium not held in trust for the benefit of bondholders.

18-14

     (m) In case two (2) or more petitioners make claim to the same real property, or to any

18-15

estate or interest, or to different estate or interests in the same real property, the court shall, upon

18-16

motion, consolidate their several petitions for trial at the same time, and may frame all necessary

18-17

issues for the trial.

18-18

     (n) If any real property or any estate or interest in which any minor or other person not

18-19

capable in law to act in his or her own behalf is interested be taken under the provisions of this

18-20

chapter, the superior court, upon the filing of a petition by or on behalf of the minor or person or

18-21

by the consortium, may appoint a guardian ad litem for the minor or other person. Guardians

18-22

may, with the advice and consent of the superior court, and upon any terms as the superior court

18-23

may prescribe, release to the consortium all claims for damages for the land of the minor or other

18-24

person or for any estate or interest. Any lawfully appointed, qualified, and acting guardian or

18-25

other fiduciary of the estate of any minor or other person, with the approval of the court of

18-26

probate within this state having jurisdiction to authorize the sale of lands and properties within

18-27

this state of the minor or other person, may before the filing of any petition, agree with the minor

18-28

or other person for any taking of his or her real property or of his or her interest or estate, and

18-29

may, upon receiving the amount, release to the consortium all claims for damages for the minor

18-30

or other person for the taking.

18-31

     (o) In case any owner of or any person having an estate or interest in the real property

18-32

fails to file his or her petition, the superior court for the county in which the real property is

18-33

situated, in its discretion, may permit the filing of the petition within one year subsequent to the

18-34

year following the time of the deposit in the superior court of the sum of money estimated to be

19-1

just compensation for the property taken; provided, the person shall have had no actual

19-2

knowledge of the taking of the land in season to file the petition; and provided, no other person or

19-3

persons claiming to own the real property or estate or interest shall have been paid the value; and

19-4

provided, no judgment has been rendered against the corporation for the payment of the value to

19-5

any other person or persons claiming to own the real estate.

19-6

     (p) If any real property or any estate or interest is unclaimed or held by a person or

19-7

persons whose whereabouts are unknown, after making inquiry satisfactory to the superior court

19-8

for the county in which the real property lies, the consortium, after the expiration of two (2) years

19-9

from the first publication of the copy of the vote, statement, description, and plat, may petition the

19-10

court that the value of the estate or interest of the unknown person or persons be determined.

19-11

After the notice by publication to any person or persons that the court in its discretion may order,

19-12

and after a hearing on the petition, the court shall fix the value of the estate or interest and shall

19-13

order the sum to be deposited in the registry of the court in a special account to accumulate for

19-14

the benefit of the person or persons, if any, entitled to it. The receipt of the clerk of the superior

19-15

court shall constitute a discharge of the corporation from all liability in connection with the

19-16

taking. When the person entitled to the money deposited shall have satisfied the superior court of

19-17

his or her right to receive that money, the court shall cause it to be paid over to him or her, with

19-18

all accumulations thereon.

19-19

     (q) The superior court shall have power to make any orders with respect to

19-20

encumbrances, liens, taxes, and other charges on the land, if any, as shall be just and equitable.

19-21

     (r) Whenever, in the opinion of the consortium, a substantial saving in the cost of

19-22

acquiring title can be effected by conveying other real property, title to which is in the

19-23

consortium, to the person or persons from whom the estate or interest in real property is being

19-24

purchased or taken, or by the construction or improvement by the consortium of any work or

19-25

facility upon the remaining real property of the person or persons from whom the estate or

19-26

interest in real property is being purchased or taken, the consortium shall be and hereby is

19-27

authorized to convey that other real property to the person or persons from whom the estate or

19-28

interest in real property is being purchased or taken and to construct or improve any work or

19-29

facility upon the remaining land of the person or persons.

19-30

     (s) At any time during the pendency of any proceedings for the assessment of damages

19-31

for property or interests taken or to be taken by eminent domain by the consortium, the

19-32

consortium or any owner may apply to the court for an order directing an owner or the

19-33

consortium, as the case may be, to show cause why further proceedings should not be expedited,

19-34

and the court may upon that application make an order requiring that the hearings proceed and

20-1

that any other steps be taken with all possible expedition.

20-2

     39-29-22. Pledge not to alter rights of consortium. – The state does hereby pledge to

20-3

and agree with the holders of the bonds, notes, and other evidences of indebtedness issued for the

20-4

benefit of the consortium that the state will not limit or alter rights hereby vested in the

20-5

consortium until the bonds, notes, or other evidences of indebtedness, together with interest

20-6

thereon, with interest on any unpaid installment of interest and all costs and expenses in

20-7

connection with any actions or proceedings by or on behalf of the bondholders, are fully met and

20-8

discharged.

20-9

     39-29-23. Money of consortium. – All money of the consortium, from whatever source

20-10

derived, shall be paid to the treasurer of the consortium. The money on receipt shall be deposited

20-11

forthwith in a separate bank account or accounts. The money in the accounts shall be paid out on

20-12

check of the treasurer, on requisition by the consortium, or of such other person or persons as the

20-13

consortium may authorize to make the requisitions. All deposits of money shall be secured by

20-14

obligations of the United States, or of the state, of a market value equal at all times to the amount

20-15

of deposits, and all banks and trust companies are authorized to give security for the deposits. The

20-16

consortium shall have power, notwithstanding the provisions of this section, to contract in any

20-17

loan or other financing agreement as to the custody, collection, security, investment, and payment

20-18

of any money of the consortium, or any money held in trust or otherwise for the payment of

20-19

bonds or in any way to secure a loan or other financing agreement, and to carry out any loan or

20-20

other financing agreement notwithstanding that the agreement may be inconsistent with the

20-21

previous provisions of this section. Money held in trust or otherwise for the payment of bonds or

20-22

in any way to secure the consortium’s obligations and any loan or other financing agreement and

20-23

deposits of money may be secured in the same manner as money of the consortium, and all banks

20-24

and trust companies are authorized to give security for the deposits.

20-25

     39-29-24. Distribution of surpluses. – (a) The board may determine that certain funds of

20-26

the consortium in excess of any reserves required to be maintained under any agreement with

20-27

bondholders or with the provider of any grant or by resolution of the board are surplus to the

20-28

needs of the consortium. The board may further resolve by a two-thirds (2/3) vote that some or all

20-29

of such surplus shall be distributed to the participating communities in such allocation as the

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board shall determine to be fair and equitable.

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     39-29-25. Beneficial ownership of eligible net metering resources. – The consortium

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shall be trustee of the eligible net metering resources to which it holds title for the benefit of the

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participating towns and cities or, if some eligible net metering resources have been designated to

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particular participating towns or cities, and other net metering resources have not been so

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designated, the designated resources shall be held for the benefit of the designated towns or cities

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and the undesignated resources shall be held for the benefit of the remaining participating towns

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and cities.

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     39-29-26. Withdrawal. – The bylaws may permit any participating community to

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withdraw from participation in the consortium, provided that the withdrawing town or city has

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paid or made adequate arrangements to pay its share of all liabilities of the consortium. The

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bylaws may provide that, upon such withdrawal and payment and satisfaction of such other

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conditions as may be set forth therein, the consortium shall transfer to the withdrawing town or

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city legal title to the eligible net metering resources (or interests therein) which the consortium

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theretofore held for the benefit of the withdrawing town or city.

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     39-29-27. Transfer on dissolution. – If the consortium shall be dissolved, all funds of

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the consortium, not required for the payment of bonds or other debts of the consortium, the

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disposition of which is not otherwise governed by contracts to which the consortium may be

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party, shall be paid to the participating towns and cities in accordance with their beneficial

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interests therein.

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     39-29-28. Right to alter, amend, or repeal chapter. – The right to alter, amend, or

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repeal this chapter is hereby expressly reserved, but no such alteration, amendment, or repeal

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shall operate to impair the obligation of any contract made by the consortium under any power

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conferred by this chapter.

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     39-29-29. Severability. – If any section, clause, provision, or term of this chapter shall be

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declared unconstitutional and ineffective in whole or in part, then to the extent that it is not

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unconstitutional and ineffective it shall be valid and effective and no other section, clause,

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provision, or term shall on account thereof be deemed invalid or ineffective.

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     SECTION 2. This act shall take effect upon passage.

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LC02328

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS

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     This act would create the East Bay Energy Consortium whereby the communities of the

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East Bay region of the state would be authorized to develop facilities for electrical generation

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using alternative energy sources.

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     This act would take effect upon passage.

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LC02328

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