2017 -- S 0652

========

LC001744

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

____________

A N   A C T

RELATING TO EDUCATION

     Introduced By: Senators Pearson, DiPalma, DaPonte, Gallo, and Conley

     Date Introduced: March 29, 2017

     Referred To: Senate Housing & Municipal Government

     (RIIB)

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 16-7-41, 16-7-41.1 and 16-7-44 of the General Laws in Chapter

16-7 entitled "Foundation Level School Support [See Title 16 Chapter 97 - The Rhode Island

Board Of Education Act]" are hereby amended to read as follows:

     16-7-41. Computation of school housing aid.

     (a) In each fiscal year the state shall pay to each community a grant to be applied to the

cost of school housing equal to the following:

     The cost of each new school housing project certified to the commissioner of elementary

and secondary education not later than July 15 of the fiscal year shall be divided by the actual

number of years of the bond issued by the local community, or the Rhode Island Health and

Educational Building Corporation, or the Rhode Island Infrastructure Bank in support of the

specific project, times the school housing aid ratio; and provided, further, with respect to costs of

new school projects financed with proceeds of bonds issued by the local , or the Rhode Island

Health and Educational Building Corporation, or the Rhode Island Infrastructure Bank in support

of the specific project, the amount of the school housing aid payable in each fiscal year shall not

exceed the amount arrived at by multiplying the principal and interest of the bonds payable in

each fiscal year by the school housing aid ratio and which principal and interest amount over the

life of the bonds, shall, in no event, exceed the costs of each new school housing project certified

to the commissioner of elementary and secondary education. If a community fails to specify or

identify the appropriate reimbursement schedule, the commissioner of elementary and secondary

education may at his or her discretion set up to a five (5) year reimbursement cycle for projects

under five hundred thousand dollars ($500,000); up to ten (10) years for projects up to three

million dollars ($3,000,000); and up to twenty (20) years for projects over three million dollars

($3,000,000).

     (b) Aid shall be provided for the same period as the life of the bonds issued in support of

the project and at the school housing aid ratio applicable to the local community at the time of the

bonds issued in support of the project as set forth in § 16-7-39.

     (c) Aid shall be paid either to the community or in the case of projects financed through

the Rhode Island Health and Educational Building Corporation or the Rhode Island Infrastructure

Bank, to the Rhode Island Health and Educational Building Corporation or the Rhode Island

Infrastructure Bank or its designee including, but not limited to, a trustee under a bond indenture

or loan and trust agreement, in support of bonds issued for specific projects of the local

community in accordance with this section, § 16-7-40 and § 16-7-44. Notwithstanding the

preceding, in case of failure of any city, town or district to pay the amount due in support of

bonds issued on behalf of a city, town, school or district project financed by the Rhode Island

Health and Educational Building Corporation or the Rhode Island Infrastructure Bank, upon

notification by the Rhode Island Health and Educational Building Corporation or the Rhode

Island Infrastructure Bank, the general treasurer shall deduct the amount from aid provided under

this section, § 16-7-40, § 16-7-44 and § 16-7-15 through § 16-7-34.3 due the city, town or district

and direct said funding to the Rhode Island Health and Educational Building Corporation or the

Rhode Island Infrastructure Bank or its designee.

     (d) Notwithstanding any provisions of law to the contrary, in connection with the

issuance of refunding bonds benefiting any local community, any net interest savings resulting

from the refunding bonds issued by such community or a municipal public buildings authority for

the benefit of the community or by the Rhode Island health and educational building corporation

or the Rhode Island Infrastructure Bank for the benefit of the community, in each case in support

of school housing projects for the community, shall be allocated between the community and the

state of Rhode Island, by applying the applicable school housing aid ratio at the time of issuance

of the refunding bonds, calculated pursuant to § 16-7-39, that would otherwise apply in

connection with school housing projects of the community; provided however, that for any

refundings that occur between July 1, 2013 and December 31, 2015, the community shall receive

eighty percent (80%) of the total savings and the state shall receive twenty percent (20%). In

connection with any such refunding of bonds, the finance director or the chief financial officer of

the community shall certify such net interest savings to the commissioner of elementary and

LC001744 - Page 2 of 26

secondary education. Notwithstanding § 16-7-44 or any other provision of law to the contrary,

school housing projects costs in connection with any such refunding bond issue shall include

bond issuance costs incurred by the community, the municipal public buildings authority or the

Rhode Island health and educational building corporation or the Rhode Island Infrastructure

Bank, as the case may be, in connection therewith. In connection with any refunding bond issue,

school housing project costs shall include the cost of interest payments on such refunding bonds,

if the cost of interest payments was included as a school housing cost for the bonds being

refunded. A local community or municipal public buildings authority shall not be entitled to the

benefits of this subsection (d) unless the net present value savings resulting from the refunding is

at least three percent (3%) of the refunded bond issue.

     (e) Any provision of law to the contrary notwithstanding, the commissioner of

elementary and secondary education shall cause to be monitored the potential for refunding

outstanding bonds of local communities or municipal public building authorities or of the Rhode

Island Health and Educational Building Corporation or the Rhode Island Infrastructure Bank

issued for the benefit of local communities or municipal public building authorities and benefiting

from any aid referenced in this section. In the event it is determined by said monitoring that the

net present value savings which could be achieved by refunding such bonds of the type

referenced in the prior sentence including any direct costs normally associated with such

refundings is equal to (i) at least one hundred thousand dollars ($100,000) and (ii) for the state

and the communities or public building authorities at least three percent (3%) of the bond issue to

be refunded including associated costs then, in such event, the commissioner (or his or her

designee) may direct the local community or municipal public building authority for the benefit

of which the bonds were issued, to refund such bonds. Failure of the local community or

municipal public buildings authority to timely refund such bonds, except due to causes beyond

the reasonable control of such local community or municipal public building authority, shall

result in the reduction by the state of the aid referenced in this § 16-7-4.1 associated with the

bonds directed to be refunded in an amount equal to ninety percent (90%) of the net present value

savings reasonably estimated by the commissioner of elementary and secondary education (or his

or her designee) which would have been achieved had the bonds directed to be refunded been

refunded by the ninetieth (90th) day (or if such day is not a business day in the state of Rhode

Island, the next succeeding business day) following the date of issuance of the directive of the

commissioner (or his or her designee) to refund such bonds. Such reduction in the aid shall begin

in the fiscal year following the fiscal year in which the commissioner issued such directive for the

remaining term of the bond.

LC001744 - Page 3 of 26

     (f) Payments shall be made in accordance with § 16-7-40 and this section.

     (g) For purposes of financing or refinancing school facilities in the city of Central Falls

through the issuance bonds through the Rhode Island Health and Educational Building

Corporation or the Rhode Island Infrastructure Bank, the city of Central Falls shall be considered

an "educational institution" within the meaning of subdivision 45-38.1-3(13) of the general laws.

     16-7-41.1. Eligibility for reimbursement.

     (a) School districts, not municipalities, may apply for and obtain approval for a project

under the necessity of school construction process set forth in the regulations of the board of

regents for elementary and secondary education, provided, however, in the case of municipality

which issues bonds through the Rhode Island Health and Educational Building Corporation or the

Rhode Island Infrastructure Bank to finance or refinance school facilities for a school district

which is not part of the municipality, the municipality may apply for and obtain approval for a

project. Such approval will remain valid until June 30 of the third fiscal year following the fiscal

year in which the board of regents for elementary and secondary education's approval is granted.

Only those projects undertaken at school facilities under the care and control of the school

committee and located on school property may qualify for reimbursement under §§ 16-7-35 -- 16-

7-47. Facilities with combined school and municipal uses or facilities that are operated jointly

with any other profit or non-profit agency do not qualify for reimbursement under §§ 16-7-35 --

16-7-47. Projects completed by June 30 of a fiscal year are eligible for reimbursement in the

following fiscal year. A project for new school housing or additional housing shall be deemed to

be completed when the work has been officially accepted by the school committee or when the

housing is occupied for its intended use by the school committee, whichever is earlier.

     (b) Notwithstanding the provisions of this section, the board of regents shall not grant

final approval for any project between June 30, 2011 and May 1, 2015 except for projects that are

necessitated by immediate health and safety reasons. In the event that a project is requested

during the moratorium because of immediate health and safety reasons, those proposals shall be

reported to the chairs of the house and senate finance committees.

     (c) Any project approval granted prior to the adoption of the school construction

regulations in 2007, and which are currently inactive; and any project approval granted prior to

the adoption of the school construction regulations in 2007 which did not receive voter approval

or which has not been previously financed, are no longer eligible for reimbursement under this

chapter. The department of elementary and secondary education shall develop recommendations

for further cost containment strategies in the school housing aid program.

     (d) Beginning July 1, 2015, the council on elementary and secondary education shall

LC001744 - Page 4 of 26

approve new necessity of school construction applications on an annual basis. The department of

elementary and secondary education shall develop an annual application timeline for LEAs

seeking new necessity of school construction approvals.

     16-7-44. School housing project costs.

     School housing project costs, the date of completion of school housing projects, and the

applicable amount of school housing project cost commitments shall be in accordance with the

regulations of the commissioner of elementary and secondary education and the provisions of §§

16-7-35 -- 16-7-47; provided, however, that school housing project costs shall include the

purchase of sites, buildings, and equipment, the construction of buildings, and additions or

renovations of existing buildings and/or facilities. School housing project costs shall include the

cost of interest payment on any bond issued after July 1, 1988, provided that such bond is

approved by the voters on or before June 30, 2003, or issued by a municipal public building

authority or by the appropriate approving authority on or before June 30, 2003. Except as

provided in § 16-7-41(d), those projects approved after June 30, 2003, interest payments may

only be included in project costs provided that the bonds for these projects are issued through the

Rhode Island Health and Educational Building Corporation or the Rhode Island infrastructure

bank. School housing project costs shall exclude: (1) any bond issuance costs incurred by the

municipality or regional school district; (2) demolition costs for buildings, facilities, or sites

deemed surplus by the school committee; and (3) restrictions pursuant to § 16-7-44.1 below. A

building, facility, or site is declared surplus by a school committee when the committee no longer

has such building, facility, or site under its direct care and control and transfers control to the

municipality, § 16-2-15. The board of regents for elementary and secondary education will

promulgate rules and regulations for the administration of this section. These rules and

regulations may provide for the use of lease revenue bonds, capital leases, or capital reserve

funding, to finance school housing provided that the term of any bond, or capital lease shall not

be longer than the useful life of the project and these instruments are subject to the public review

and voter approval otherwise required by law for the issuance of bonds or capital leases. Cities or

towns issuing bonds, or leases issued by municipal public buildings authority for the benefit of a

local community pursuant to chapter 50 of title 45 shall not require voter approval. Effective

January 1, 2008, and except for interim finance mechanisms, refunding bonds, borrowing from

the school building authority capital fund, and bonds issued by the Rhode Island Health and

Educational Building Corporation or the Rhode Island infrastructure bank to finance school

housing projects for towns, cities, or regional school districts borrowing for which has previously

been authorized by an enabling act of the general assembly, all bonds, notes and other forms of

LC001744 - Page 5 of 26

indebtedness issued in support of school housing projects shall require passage of an enabling act

by the general assembly.

     SECTION 2. Sections 24-18-3 and 24-18-7of the General Laws in Chapter 24-18 entitled

"Municipal Road and Bridge Revolving Fund" are hereby amended to read as follows:

     24-18-3. Definitions.

     As used in this chapter, the following terms, unless the context requires a different

interpretation, shall have the following meanings:

     (1) "Agency" means the Rhode Island infrastructure bank as set forth in chapter 46-12.2;

     (2) "Annual construction plan" means the finalized list of approved projects to commence

construction each calendar year;

     (3) "Approved project" means any project approved by the agency for financial

assistance;

     (4) "Department" means the department of transportation, or, if the department shall be

abolished, the board, body, or commission succeeding to the principal functions thereof or upon

whom the powers given by chapter 5 of title 37 to the department shall be given by law.

     (5) "Eligible project" means an infrastructure plan, or portion of an infrastructure plan,

that meets the project evaluation criteria;

     (6) "Financial assistance" means any form of financial assistance other than grants

provided by the agency to a city or town in accordance with this chapter for all or any part of the

cost of an approved project, including, without limitation, temporary and permanent loans, with

or without interest, guarantees, insurance, subsidies for the payment of debt service on loans,

lines of credit, and similar forms of financial assistance;

     (7) "Infrastructure plan" means a project proposed by a city or town that would make

capital improvements to roads, bridges and appurtenances thereto consistent with project

evaluation criteria;

     (8) "Market rate" means the rate the city or town would receive in the open market at the

time of the original loan agreement as determined by the agency in accordance with its rules and

regulations;

     (9) "Project evaluation criteria" means the criteria used by the department to evaluate

infrastructure plans and rank eligible projects and shall include, but not be limited to:

     (i) The the extent to which the project generates economic benefits, ;

     (ii) The the extent to which the project would be able to proceed at an earlier date, ;

     (iii) The the likelihood that the project would provide mobility benefits, ;

     (iv) The the cost effectiveness of the project, ;

LC001744 - Page 6 of 26

     (v) The the likelihood that the project would increase safety, ; and

     (vi) The the project's readiness to proceed within the forthcoming calendar year;

     (10) "Project priority list" means the list of eligible projects ranked in the order in which

financial assistance shall be awarded by the agency pursuant to § 24-18-7;

     (11) "Revolving fund" means the municipal road and bridge revolving fund established

under § 24-18-4; and

     (12) "Subsidy assistance" means credit enhancements and other measures to reduce the

borrowing costs for a city or town.

     24-18-7. Procedure for project approval.

     (a) By September 1, 2013, the department shall promulgate rules and regulations

establishing the project evaluation criteria and the process through which a city or town may

submit an infrastructure plan. By December 31, 2013, the agency shall promulgate rules and

regulations to effectuate the provisions of this chapter which may include, without limitation,

forms for financial assistance applications, loan agreements, and other instruments. All rules and

regulations promulgated pursuant to this chapter shall be promulgated in accordance with the

provisions of chapter 42-35.

     (b) Beginning with the calendar year 2013 and for each calendar year thereafter, cities

Cities and towns shall have from September 15th through October 15th to submit an

infrastructure plan plans to the department in accordance with the department's rules and

regulations promulgated pursuant to section (a) of this section. In the event that October 15th is a

Saturday, Sunday, or a general holiday as enumerated in § 25-1-1, the deadline shall be extended

through the next day that is not a Saturday, Sunday, or a general holiday as enumerated in § 25-1-

1.

     (c) By the end of each calendar year, the The department shall evaluate all submitted

infrastructure plans and, in accordance with the project evaluation criteria, identify all eligible

projects, and after a public hearing, the department shall finalize and provide the agency and

statewide planning with a project priority list for the forthcoming calendar year The agency shall

not award financial assistance to any project not listed on the project priority list.

     (d) By the end of each calendar year, the agency shall determine the maximum amount of

financial assistance available for the forthcoming calendar year, provided that it shall not exceed

an amount of twenty million dollars ($20,000,000); and provided further that the The agency shall

not obligate more than fifty percent (50%) of available funding in any calendar year to any one

city or town unless there are no other eligible projects on the project priority list.

     (e) Upon issuance of the project priority list, the agency shall award financial assistance

LC001744 - Page 7 of 26

to cities and towns for approved projects provided, however, that the agency does not exceed its

maximum annual amount of financial assistance. The agency may decline to award financial

assistance to an approved project which the agency determines will have a substantial adverse

effect on the interests of holders of bonds or other indebtedness of the agency or the interests of

other participants in the financial assistance program, or for good and sufficient cause affecting

the finances of the agency. All financial assistance shall be made pursuant to a loan agreement

between the agency and the city or town, acting by and through the officer or officers, board,

committee, or other body authorized by law, or otherwise its chief executive officer, according to

terms and conditions as determined by the agency, and each loan shall be evidenced and secured

by the issue to the agency of city or town obligations in fully marketable form in principal

amount, bearing interest at the rate or rates specified in the applicable loan agreement, and shall

otherwise bear such terms and conditions as authorized by this chapter and/or the loan agreement.

     SECTION 3. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of

Utilities and Carriers" is hereby amended to read as follows:

     39-2-1.2. Utility base rate -- Advertising, demand-side management and renewables.

     (a) In addition to costs prohibited in § 39-1-27.4(b), no public utility distributing or

providing heat, electricity, or water to or for the public shall include as part of its base rate any

expenses for advertising, either direct or indirect, which promotes the use of its product or

service, or is designed to promote the public image of the industry. No public utility may furnish

support of any kind, direct or indirect, to any subsidiary, group, association, or individual for

advertising and include the expense as part of its base rate. Nothing contained in this section shall

be deemed as prohibiting the inclusion in the base rate of expenses incurred for advertising,

informational or educational in nature, which is designed to promote public safety conservation of

the public utility's product or service. The public utilities commission shall promulgate such rules

and regulations as are necessary to require public disclosure of all advertising expenses of any

kind, direct or indirect, and to otherwise effectuate the provisions of this section.

     (b) Effective as of January 1, 2008, and for a period of fifteen (15) years thereafter, each

electric-distribution company shall include a charge per kilowatt-hour delivered to fund demand-

side management programs. The 0.3 mills per kilowatt-hour delivered to fund renewable energy

programs shall remain in effect until December 31, 2022. The electric-distribution company shall

establish and, after July 1, 2007, maintain, two (2) separate accounts, one for demand-side

management programs (the "demand-side account"), which shall be funded by the electric

demand-side charge and administered and implemented by the distribution company, subject to

the regulatory reviewing authority of the commission, and one for renewable-energy programs,

LC001744 - Page 8 of 26

which shall be administered by the Rhode Island commerce corporation pursuant to § 42-64-13.2

and shall be held and disbursed by the distribution company as directed by the Rhode Island

commerce corporation for the purposes of developing, promoting, and supporting renewable

energy programs.

     During the time periods established in subsection (b), the commission may, in its

discretion, after notice and public hearing, increase the sums for demand-side management and

renewable resources. In addition, the commission shall, after notice and public hearing, determine

the appropriate charge for these programs. The office of energy resources and/or the administrator

of the renewable energy programs may seek to secure for the state an equitable and reasonable

portion of renewable energy credits or certificates created by private projects funded through

those programs. As used in this section, "renewable-energy resources" shall mean: (1) Power

generation technologies, as defined in § 39-26-5, "eligible renewable-energy resources",

including off-grid and on-grid generating technologies located in Rhode Island, as a priority; (2)

Research and development activities in Rhode Island pertaining to eligible renewable-energy

resources and to other renewable-energy technologies for electrical generation; or (3) Projects and

activities directly related to implementing eligible renewable-energy resources projects in Rhode

Island. Technologies for converting solar energy for space heating or generating domestic hot

water may also be funded through the renewable-energy programs. Fuel cells may be considered

an energy efficiency technology to be included in demand-sided management programs. Special

rates for low-income customers in effect as of August 7, 1996, shall be continued, and the costs of

all of these discounts shall be included in the distribution rates charged to all other customers.

Nothing in this section shall be construed as prohibiting an electric-distribution company from

offering any special rates or programs for low-income customers which are not in effect as of

August 7, 1996, subject to the approval by the commission.

     (1) The renewable energy investment programs shall be administered pursuant to rules

established by the Rhode Island commerce corporation. Said rules shall provide transparent

criteria to rank qualified renewable-energy projects, giving consideration to:

     (i) the feasibility of project completion;

     (ii) the anticipated amount of renewable energy the project will produce;

     (iii) the potential of the project to mitigate energy costs over the life of the project; and

     (iv) the estimated cost per kilo-watt hour (kwh) of the energy produced from the project.

     (c) [Deleted by P.L. 2012, ch. 241, art. 4, § 14].

     (d) The executive director of the commerce corporation is authorized and may enter into

a contract with a contractor for the cost-effective administration of the renewable-energy

LC001744 - Page 9 of 26

programs funded by this section. A competitive bid and contract award for administration of the

renewable-energy programs may occur every three (3) years and shall include, as a condition, that

after July 1, 2008, the account for the renewable-energy programs shall be maintained and

administered by the commerce corporation as provided for in subsection (b).

     (e) Effective January 1, 2007, and for a period of sixteen (16) years thereafter, each gas-

distribution company shall include, with the approval of the commission, a charge per deca therm

delivered to fund demand-side management programs (the "gas demand-side charge"), including,

but not limited to, programs for cost-effective energy efficiency, energy conservation, combined

heat and power systems, and weatherization services for low-income households.

     (f) Each gas company shall establish a separate account for demand-side management

programs (the "gas demand-side account"), which shall be funded by the gas demand-side charge

and administered and implemented by the distribution company, subject to the regulatory

reviewing authority of the commission. The commission may establish administrative

mechanisms and procedures that are similar to those for electric demand-side management

programs administered under the jurisdiction of the commission and that are designed to achieve

cost-effectiveness and high, life-time savings of efficiency measures supported by the program.

     (g) The commission may, if reasonable and feasible, except from this demand-side

management charge:

     (i) Gas used for distribution generation; and

     (ii) Gas used for the manufacturing processes, where the customer has established a self-

directed program to invest in and achieve best-effective energy efficiency in accordance with a

plan approved by the commission and subject to periodic review and approval by the

commission, which plan shall require annual reporting of the amount invested and the return on

investments in terms of gas savings.

     (h) The commission may provide for the coordinated and/or integrated administration of

electric and gas demand-side management programs in order to enhance the effectiveness of the

programs. Such coordinated and/or integrated administration may after March 1, 2009, upon the

recommendation of the office of energy resources, be through one or more third-party entities

designated by the commission pursuant to a competitive selection process.

     (i) Effective January 1, 2007, the commission shall allocate from demand-side

management gas and electric funds authorized pursuant to this section, an amount not to exceed

two percent (2%) of such funds on an annual basis for the retention of expert consultants, and

reasonable administration costs of the energy efficiency and resources management council

associated with planning, management, and evaluation of energy-efficiency programs, renewable-

LC001744 - Page 10 of 26

energy programs, system reliability least-cost procurement, and with regulatory proceedings,

contested cases, and other actions pertaining to the purposes, powers, and duties of the council,

which allocation may by mutual agreement, be used in coordination with the office of energy

resources to support such activities.

     (j) Effective January 1, 2016, the commission shall annually allocate from the

administrative funding amount allocated in (i) from the demand-side management program as

described in subsection (i) as follows: fifty percent (50%) for the purposes identified in

subsection (i) and fifty percent (50%) annually to the office of energy resources for activities

associated with planning, management, and evaluation of energy-efficiency programs, renewable-

energy programs, system reliability, least-cost procurement, and with regulatory proceedings,

contested cases, and other actions pertaining to the purposes, powers, and duties of the office of

energy resources.

     (k) On April 15, of each year, the office and the council shall submit to the governor, the

president of the senate, and the speaker of the house of representatives, separate financial and

performance reports regarding the demand-side management programs, including the specific

level of funds that were contributed by the residential, municipal, and commercial and industrial

sectors to the overall programs; the businesses, vendors, and institutions that received funding

from demand-side management gas and electric funds used for the purposes in this section; and

the businesses, vendors, and institutions that received the administrative funds for the purposes in

subsections (i) and (j). These reports shall be posted electronically on the websites of the office of

energy resources and the energy efficiency resource management council.

     (l) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank,

each electric-distribution company, except for the Pascoag Utility District and Block Island

Power Company, shall remit two percent (2%) of the amount of the 2014 electric demand-side

charge collections to the Rhode Island infrastructure bank in accordance with the terms of § 46-

12.2-14.1.

     (m) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank,

each gas-distribution company shall remit two percent (2%) of the amount of the 2014 gas

demand-side charge collections to the Rhode Island infrastructure bank in accordance with the

terms of § 46-12.2-14.1.

     SECTION 4. Sections 39-26.5-2, 39-26.5-4.1, 39-26.5-6 and 39-26.5-11 of the General

Laws in Chapter 39-26.5 entitled "Property Assessed Clean Energy Program" are hereby

amended to read as follows:

     39-26.5-2. Definitions.

LC001744 - Page 11 of 26

     As used in this chapter, the following definitions apply:

     (1) "Commercial property" means a property operated for commercial purposes, or a

residential property which contains five (5) or more housing units.

     (2) "Distributed generation system" means an electrical generation facility located in the

electric distribution company's load zone with a nameplate capacity no greater than five

megawatts (5 MW), using eligible renewable energy resources as defined by § 39-26-5, including

biogas created as a result of anaerobic digestion, but, specifically excluding all other listed

eligible biomass fuels, and connected to an electrical power system owned, controlled, or

operated by the electric distribution company.

     (3) "Dwelling" means a residential structure or mobile home which contains one to four

(4) family housing units, or individual units of condominiums or cooperatives.

     (4) "Eligible net-metering system" means a facility generating electricity as defined in §

39-26.4-2.

     (5) "Eligible renewable energy resources" means resources as defined in § 39-26-5.

     (6) "Energy efficiency projects" means those projects that are eligible under § 39-1-27.7

or projects that have been defined as eligible in the PACE rules and regulations.

     (7) "Institution" means a private entity or quasi-state agency.

     (8) "Loan loss reserve fund" or "(LRF)" means funds set aside to cover losses in the event

of loan defaults.

     (9) "Municipality" or "towns and cities" means any Rhode Island town or city with

powers set forth in title 45 of the general laws.

     (10) "Net metering" means using electricity as defined in § 39-26.4-2.

     (11) "PACE assessment" or "assessment" means the special assessment placed on a

PACE property owner's property tax or other municipal assessment bill in accordance with this

chapter, to be collected by or on behalf of the PACE municipality in which that PACE property is

located and remitted to the Rhode Island infrastructure bank or to the lender that has financed that

PACE project. The PACE assessment shall be owed by the current owner of the related PACE

property as of the time each PACE assessment comes due. In the event of a transfer of ownership,

all PACE assessments coming due after the date of the transfer, by foreclosure or otherwise, shall

be owed by the transferee.

     (12) "PACE lien" means the non-accelerating lien placed on a PACE property in

accordance with the rules and regulations promulgated by the Rhode Island infrastructure bank

pursuant to this chapter, in order to secure the repayment of a PACE assessment made in

connection with that PACE property and to secure the repayment of each PACE assessment to be

LC001744 - Page 12 of 26

made by that PACE property owner as each assessment comes due.

     (13) "PACE municipality" means a municipality voluntarily designated by its city or

town council as a property-assessed clean energy municipality.

     (14) "PACE project" or "project" means a distinct installation of an eligible energy

efficiency system, renewable energy net-metering system, distributed generation system,

alternative fuel infrastructure upgrade, and/or other eligible environmental health and

environmental safety upgrades.

     (15) "PACE property" or "property" means any residential property or commercial

property which is the subject of an approved application for a PACE project filed pursuant to this

chapter.

     (16) "Past due balances" means the sum of the due and unpaid assessments on a PACE

property as of the time the ownership of that PACE property is transferred. "Past due balances"

does not mean the unaccelerated balance of the PACE loan at the time that property is transferred.

     (17) "Property-assessed clean energy" or "PACE" is a voluntary financing mechanism

which allows both residential and commercial property owners to access affordable, long-term

financing for energy upgrades, and other eligible environmental health and environmental safety

upgrades on their property.

     (18) "Rhode Island infrastructure bank" means the Rhode Island infrastructure bank

("RIIB"). For the purposes of this chapter, Rhode Island infrastructure bank shall include other

related state agencies and/or third party administrators, as may be engaged by the Rhode Island

infrastructure bank for the purposes of providing the services envisioned by the rules and

regulations promulgated in accordance with § 39-26.5-11.

     39-26.5-4.1. Financing agreements -- PACE assessments -- PACE liens.

     (a) The Rhode Island infrastructure bank or a third-party capital provider may enter into a

financing agreement with a qualifying PACE property owner. After such agreement is entered

into, and upon notice from the Rhode Island infrastructure bank, the PACE municipality shall: (i)

place a caveat on the land records indicating that a PACE assessment and lien is anticipated upon

completion of the PACE project for such property; or (ii) at the direction of the Rhode Island

infrastructure bank, levy the PACE assessment and file a lien on the land records on the estimated

costs of the PACE project prior to the completion or upon the completion of said PACE project.

     (b) PACE assessments levied pursuant to this chapter and the interest, fees and any

penalties thereon shall constitute a lien against the qualifying PACE property on which they are

made until they are paid. Such lien shall be collected in the same manner as the property taxes of

the PACE municipality on real property, including, in the event of default or delinquency, with

LC001744 - Page 13 of 26

respect to any penalties, fees and remedies. Each such lien may be recorded and released in the

manner provided for property tax liens. and if the property is commercial property as defined

herein it shall be subject to the consent of existing mortgage holders. The PACE lien shall take

precedence over all other liens or encumbrances except a lien for taxes of the municipality on real

property, or if the subject property is residential property as defined herein the PACE lien shall be

subject to any prior recorded mortgage which lien for taxes or pre-recorded residential mortgage

shall have priority over such PACE assessment lien. To the extent PACE assessments are paid in

installments and any such installment is not paid when due, the PACE assessment lien may be

foreclosed to the extent of any unpaid installment payments and any penalties, interest, and fees

related thereto. In the event such PACE assessment lien is foreclosed, such PACE assessment lien

shall survive the judgment of foreclosure to the extent of any unpaid installment payments of the

PACE assessment secured by such PACE assessment lien that were not the subject of such

judgment.

     (c) Any PACE municipality may assign to the Rhode Island infrastructure bank any and

all liens filed by the PACE municipality, as provided in the written agreement between the

participating municipality and the Rhode Island infrastructure bank. The Rhode Island

infrastructure bank may sell or assign, for consideration, any and all liens received from the

participating municipality. The consideration received by the Rhode Island infrastructure bank

shall be negotiated between the Rhode Island infrastructure bank and the assignee. The assignee

or assignees of such liens shall have and possess the same powers and rights at law or in equity as

the Rhode Island infrastructure bank and the participating municipality and its tax collector would

have had if the lien had not been assigned with regard to the precedence and priority of such lien,

the accrual of interest and the fees and expenses of collection. The assignee shall have the same

rights to enforce such liens as any private party holding a lien on real property, including, but not

limited to, foreclosure and a suit on the debt. Costs and reasonable attorneys' fees incurred by the

assignee as a result of any foreclosure action or other legal proceeding brought pursuant to this

section and directly related to the proceeding shall be taxed in any such proceeding against each

person having title to any property subject to the proceedings. Such costs and fees may be

collected by the assignee at any time after demand for payment has been made by the assignee.

     39-26.5-6. Priority of PACE lien.

     (a) A PACE lien on a residential property shall be: subordinate to all liens on the

residential property in existence at the time the residential PACE lien is filed; subordinate to a

first mortgage on the residential property recorded after such PACE lien is filed; and superior to

any other lien on the residential recorded after such PACE lien is filed. This subsection shall not

LC001744 - Page 14 of 26

affect the status or priority of any other municipal or statutory lien.

     (b) At the time of a transfer of property ownership of a residential property, including by

foreclosure, the past due balances of any special assessment under this chapter shall be due for

payment. In the event of a foreclosure action, the past due balances shall include all payments on

a PACE assessment that are due and unpaid as of the date of the foreclosure. Unless otherwise

agreed by the PACE lender, all payments on the PACE assessment that become due after the date

of transfer by foreclosure or otherwise shall continue to be secured by a PACE lien on the PACE

property and shall be the responsibility of the transferee.

     (c) A PACE lien on a commercial property shall be: senior to all liens on the commercial

property in existence at the time the PACE lien is filed, subject to the consent of the senior

existing mortgage holder holders on the property; senior to all liens filed or recorded after the

time the PACE lien is created; but junior to a municipal tax lien.

     (d) At the time of a transfer of property ownership of a commercial property, including

by foreclosure, the past due balances of any PACE assessment under this chapter shall be due for

payment. Unless otherwise agreed by the PACE lender, all payments of PACE assessments that

become due after the date of transfer by foreclosure or otherwise shall be secured by a PACE lien

on the PACE property and shall be the responsibility of the transferee.

     39-26.5-11. Rules and regulations.

     (a) The Rhode Island infrastructure bank shall consult with the office of energy resources

to promulgate rules and regulations, in accordance with this section, and in accordance with

chapter 35 of title 42. Such rules and regulations should ensure that the PACE program does not

adversely affect the implementation of any other energy program in whose coordination the

Rhode Island infrastructure bank or the office of energy resources is involved. Such rules and

regulations shall include, but not be limited to, the following:

     (1) The necessary application requirements and procedures for any residential property

owner or commercial property owner seeking PACE financing;

     (2) The necessary qualifications and requirements for a proposed PACE project;

     (3) The underwriting criteria to be applied in determining the eligibility of properties and

property owners for PACE projects; and

     (4) Requirements that all existing lien holders on a property be given notice prior to a

PACE assessment and lien being filed in connection with that property and that all commercial

property owners seeking a commercial PACE loan receive consent of the primary existing

mortgage holder holders on that property prior to being eligible.

     (b) The Rhode Island infrastructure bank shall be responsible for promulgating

LC001744 - Page 15 of 26

agreements, forms and other documents necessary for the efficient administration of the PACE

program.

     SECTION 5. Sections 46-12.2-2 and 46-12.2-4.2 of the General Laws in Chapter 46-12.2

entitled "Rhode Island Infrastructure Bank" are hereby amended to read as follows:

     46-12.2-2. Definitions.

     As used in this chapter, unless the context clearly indicates otherwise, the following

words and phrases shall have the following meanings:

     (1) "Agency" means the Rhode Island clean water finance agency, and, effective

September 1, 2015 and thereafter, shall mean the Rhode Island infrastructure bank;

     (2) "Approved project" means any project or portion thereof that has been issued a

certificate of approval by the department for financial assistance from the agency, and also

includes any project approved for financial assistance from the agency in accordance with state

law, and, furthermore, shall include water pollution abatement projects funded outside of the

water pollution control revolving fund, the Rhode Island water pollution control revolving fund,

or the local interest subsidy trust fund, without the requirement of the issuance of a certificate of

approval;

     (3) "Board" means board of directors of the agency;

     (4) "Bond act" means any general or special law authorizing a local governmental unit to

incur indebtedness for all or any part of the cost of projects coming within the scope of a water

pollution abatement project, or for other projects related to this chapter, including but not limited

to § 45-12-2;

     (5) "Bonds" means bonds, notes, or other evidence of indebtedness of the agency;

     (6) "Certificate of approval" means the certificate of approval contemplated by § 46-12.2-

8;

     (7) "Chief executive officer" means the mayor in any city, the president of the town

council in any town, and the executive director of any authority or commission, unless some other

officer or body is designated to perform the functions of a chief executive officer under any bond

act or under the provisions of a local charter or other law;

     (8) "Clean Water Act" or "act" means the Federal Water Pollution Control Act, act of

June 30, 1948, ch. 758, as added Oct. 18, 1972, Pub. L. No. 92-500, 86 Stat. 896, as added Dec.

27, 1977, Pub. L. No. 95-217, 91 Stat. 1566 (codified at 33 U.S.C. § 1251 et seq., as amended and

as hereafter amended from time to time);

     (9) "Corporation" means any corporate person, including, but not limited to, bodies

politic and corporate, public departments, public offices, public agencies, public authorities,

LC001744 - Page 16 of 26

political subdivisions of the state, corporations, societies, associations, limited liability

companies, partnerships and sole proprietorships;

     (10) "Cost" as applied to any approved project, means any or all costs, whenever

incurred, approved by the agency in accordance with section eight of this chapter, of planning,

designing, acquiring, constructing, and carrying out and placing the project in operation,

including, without limiting the generality of the foregoing, amounts for the following: planning,

design, acquisition, construction, expansion, improvement and rehabilitation of facilities;

acquisition of real or personal property; demolitions and relocations; labor, materials, machinery

and equipment; services of architects, engineers, and environmental and financial experts and

other consultants; feasibility studies, plans, specifications, and surveys; interest prior to and

during the carrying out of any project and for a reasonable period thereafter; reserves for debt

service or other capital or current expenses; costs of issuance of local governmental obligations or

non-governmental obligations issued to finance the obligations including, without limitation, fees,

charges, and expenses and costs of the agency relating to the loan evidenced thereby, fees of

trustees and other depositories, legal and auditing fees, premiums and fees for insurance, letters or

lines of credit or other credit facilities securing local governmental obligations or non-

governmental obligations and other costs, fees, and charges in connection with the foregoing; and

working capital, administrative expenses, legal expenses, and other expenses necessary or

incidental to the aforesaid, to the financing of a project and to the issuance therefor of local

government obligations under the provisions of this chapter;

     (11) "Department" means the department of environmental management;

     (12) "Projected energy efficiency savings" means, at the time a loan agreement is entered

into between the agency and a local governmental unit, the savings projected to be derived from

the implementation of energy efficient and renewable energy upgrades to public buildings, as

determined in accordance with the rules and regulations promulgated by the Rhode Island

infrastructure bank pursuant to this chapter;

     (13) "Financial assistance" means any form of financial assistance provided by the

agency to a local governmental unit, person or corporation in accordance with this chapter for all

or any part of the cost of an approved project, including, without limitation, grants, temporary and

permanent loans, with or without interest, guarantees, insurance, subsidies for the payment of

debt service on loans, lines of credit, and similar forms of financial assistance; provided,

however, notwithstanding the foregoing, for purposes of capitalization grant awards made

available to the agency, pursuant to the American Recovery and Reinvestment Act of 2009 (P.L.

111-5), or as otherwise required in connection with other capitalization grant awards made

LC001744 - Page 17 of 26

available to the agency, financial assistance shall also include principal forgiveness and negative

interest loans;

     (14) "Fully marketable form" means a local governmental obligation in form satisfactory

to the agency duly executed and accompanied by an opinion of counsel of recognized standing in

the field of municipal law whose opinions have been and are accepted by purchasers of like

obligations to the effect that the obligation is a valid and binding obligation of the local

governmental unit issuing the obligation, enforceable in accordance with its terms;

     (15) "General revenues", when used with reference to a local governmental unit, means

revenues, receipts, assessments, and other moneys of the local governmental unit received from

or on account of the exercise of its powers and all rights to receive the same, including without

limitation:

     (i) Taxes,

     (ii) Wastewater system revenues,

     (iii) Assessments upon or payments received from any other local governmental unit

which is a member or service recipient of the local governmental unit, whether by law, contract,

or otherwise,

     (iv) Proceeds of local governmental obligations and loans and grants received by the

local governmental unit in accordance with this chapter,

     (v) Investment earnings,

     (vi) Reserves for debt service or other capital or current expenses,

     (vii) Receipts from any tax, excise, or fee heretofore or hereafter imposed by any general

or special law all or a part of the receipts of which are payable or distributable to or for the

account of the local governmental unit,

     (viii) Local aid distributions, and

     (ix) Receipts, distributions, reimbursements, and other assistance received by or for the

account of the local governmental unit from the United States or any agency, department, or

instrumentality thereof;

     (16) "Loan" means a loan by the agency to a local governmental unit, or person, or

corporation for costs of an approved project, including, without limitation, temporary and

permanent loans, and lines of credit;

     (17) "Loan agreement" means any agreement entered into by the agency with a local

governmental unit, person, or corporation pertaining to a loan, other financial assistance, local

governmental obligations, or non-governmental obligations, including, without limitation, a loan

agreement, trust agreement, security agreement, reimbursement agreement, guarantee agreement,

LC001744 - Page 18 of 26

financing lease agreement, appropriate agreement, or similar instrument;

     (18) "Local aid distributions" means receipts, distributions, reimbursements, and other

assistance payable by the state to or for the account of a local governmental unit, except such

receipts, distributions, reimbursements, and other assistance restricted by law to specific

statutorily defined purposes;

     (19) "Local governmental obligations" means bonds, notes, financing lease obligations,

appropriation obligations, and other evidences of indebtedness in fully marketable form issued by

a local governmental unit to evidence a loan or other financial assistance, from the agency in

accordance with this chapter or otherwise as provided herein;

     (20) "Local governmental unit" means any town, city, district, commission, agency,

authority, board, bodies politic and corporate, public corporation, or other political subdivision or

instrumentality of the state or of any political subdivision thereof, including the Narragansett Bay

commission; and, for purposes of dam safety or dam maintenance projects, any person seeking

financial assistance as a joint applicant with any of the above entities;

     (21) "Local interest subsidy trust fund" means the local interest subsidy trust fund

established under § 46-12.2-6;

     (22) "Non-governmental obligations" means bonds, notes, or other evidences of

indebtedness in fully marketable form issued by a person or corporation to evidence a loan, or

other financial assistance, from the agency in accordance with this chapter or otherwise as

provided herein.

     (23) "Person" means any natural person;

     (24) "Priority determination system" means the system by which water pollution

abatement projects are rated on the basis of environmental benefit and other criteria for funding

assistance pursuant to rules and regulations promulgated by the department as they may be

amended from time to time;

     (25) "Qualified energy conservation bond" or "QECB" means those bonds designated by

26 U.S.C. § 54D.

     (26) "Revenues", when used with reference to the agency, means any receipts, fees,

payments, moneys, revenues, or other payments received or to be received by the agency in the

exercise of its corporate powers under this chapter, including, without limitation, loan

repayments, payments on local governmental obligations, non-governmental obligations, grants,

aid, appropriations, and other assistance from the state, the United States, or any agency,

department, or instrumentality of either or of a political subdivision thereof, bond proceeds,

investment earnings, insurance proceeds, amounts in reserves, and other funds and accounts

LC001744 - Page 19 of 26

established by or pursuant to this chapter or in connection with the issuance of bonds, including,

without limitation, the water pollution control revolving fund, the Rhode Island water pollution

control revolving fund, and the local interest subsidy fund, and any other fees, charges or other

income received or receivable by the agency;

     (27) "Rhode Island water pollution control revolving fund" means the Rhode Island water

pollution control revolving fund established pursuant to § 46-12.2-6;

     (28) "Trust agreement" means a trust agreement, loan agreement, security agreement,

reimbursement agreement, currency or interest rate exchange agreement, or other security

instrument, and a resolution, loan order, or other vote authorizing, securing, or otherwise

providing for the issue of bonds, loans, or local governmental obligations or non-governmental

obligations;

     (29) "Wastewater system revenues" means all rates, rents, fee assessments, charges, and

other receipts derived or to be derived by a local governmental unit from wastewater collection

and treatment facilities and water pollution abatement projects under its ownership or control, or

from the services provided thereby, including, without limitation, proceeds of grants, gifts,

appropriations, and loans, including the proceeds of loans or grants awarded by the agency or the

department in accordance with this chapter, investment earnings, reserves for capital and current

expenses, proceeds of insurance or condemnation, and the sale or other disposition of property;

wastewater system revenues may also include rates, rents, fees, charges, and other receipts

derived by the local governmental unit from any water supply of distribution facilities or other

revenue producing facilities under its ownership or control; wastewater system revenues shall not

include any ad valorem taxes levied directly by the local governmental unit on any real and

personal property;

     (30) "Water pollution abatement project" or "project" means any project eligible pursuant

to Title VI of the Clean Water Act including, but not limited to, wastewater treatment or

conveyance project that contributes to removal, curtailment, or mitigation of pollution of the

surface water of the state, and conforms with any applicable comprehensive land use plan which

has been adopted or any dam safety, removal or maintenance project; it also means a project to

enhance the waters of the state, which the agency has been authorized by statute to participate in;

it also means any other project to which the agency has been authorized to provide financial

assistance;

     (31) "Water pollution control revolving fund" means the water pollution control

revolving fund contemplated by title VI of the Water Quality Act and established under § 46-

12.2-6;

LC001744 - Page 20 of 26

     (32) "Water Quality Act" means the Water Quality Act of 1987, Pub. L. No. 100-4, 101

Stat. 7, 33 U.S.C. § 1251 et seq., as amended from time to time.

     46-12.2-4.2. Establishment of the efficient buildings fund.

     (a) There is hereby authorized and created within the Rhode Island infrastructure bank an

efficient buildings fund for the purpose of providing technical, administrative and financial

assistance to local governmental units for energy efficient and renewable energy upgrades to

public buildings and infrastructure, including, but not limited to, streetlights. The Rhode Island

infrastructure bank shall review and approve all applications for projects to be financed through

the efficient buildings fund.

     The office of energy resources shall promulgate rules and regulations establishing a

project priority list for efficient buildings fund and the process through which a local

governmental unit may submit an application for inclusion of a project on the project priority list.

Upon issuance of the project priority list by the office of energy resources, the project priority list

shall be used by the Rhode Island infrastructure bank to determine the order in which financial

assistance shall be awarded. The Rhode Island infrastructure bank shall promulgate rules and

regulations to effectuate the provisions of this section which may include, without limitation,

forms for financial assistance applications, loan agreements, and other instruments. All rules and

regulations promulgated pursuant to this chapter shall be promulgated in accordance with the

provisions of chapter 35 of title 42. Eligibility for receipt of this financial assistance by a local

governmental unit shall be conditioned upon that local governmental unit reallocating their

remaining proportional QECB allocation to the state of Rhode Island.

     (b) The Rhode Island infrastructure bank shall have all the powers necessary and

convenient to carry out and effectuate the purposes and provisions of this section including,

without limiting the generality of the preceding statement, the authority:

     (1) To receive and disburse such funds from the state and federal government as may be

available for the purpose of the fund subject to the provisions of this section;

     (2) To make and enter into binding commitments to provide financial assistance to

eligible borrowers from amounts on deposit in the fund;

     (3) To levy administrative fees on eligible borrowers as necessary to effectuate the

provisions of this section, provided the fees have been previously authorized by an agreement

between the Rhode Island infrastructure bank and the eligible borrower;

     (4) To engage the services of third-party vendors to provide professional services;

     (5) To establish one or more accounts within the fund; and

     (6) Such other authority as granted to the Rhode Island infrastructure bank under this

LC001744 - Page 21 of 26

chapter.

     (c) Subject to the provisions of this section and to any agreements with the holders of any

bonds of the Rhode Island infrastructure bank or any trustee therefor, amounts held by the Rhode

Island infrastructure bank for the account of the fund shall be applied by the Rhode Island

infrastructure bank, either by direct expenditure, disbursement, or transfer to one or more other

funds and accounts held by the Rhode Island infrastructure bank or maintained under any trust

agreement pertaining to bonds, either alone or with other funds of the Rhode Island infrastructure

bank, to the following purposes:

     (1) To provide financial assistance to local governmental units to finance costs of

approved projects, as set forth in subsection (a), and to refinance the costs of the projects, subject

to such terms and conditions, if any, as are determined by the Rhode Island infrastructure bank;

     (2) To fund reserves for bonds of the Rhode infrastructure bank and to purchase

insurance and pay the premiums therefor, and pay fees and expenses of letters or lines of credit

and costs of reimbursement to the issuers thereof for any payments made thereon or on any

insurance, and to otherwise provide security for, and a source of payment for obligations of the

Rhode Island infrastructure bank, by pledge, lien, assignment, or otherwise as provided in this

chapter;

     (3) To pay expenses of the Rhode Island infrastructure bank in administering the fund;

     (4) To provide a reserve for, or to otherwise secure, amounts payable by borrowers on

loans and obligations outstanding in the event of default thereof; amounts in any account in the

fund may be applied to defaults on loans outstanding to the borrower for which the account was

established and, on a parity basis with all other accounts, to defaults on any loans or obligations

outstanding; and

     (5) To provide a reserve for, or to otherwise secure, by pledge, lien, assignment, or

otherwise as provided in this chapter, any bonds of the Rhode Island infrastructure bank.

     (d) In addition to other remedies of the Rhode Island infrastructure bank under any loan

agreement or otherwise provided by law, the Rhode Island infrastructure bank may also recover

from a borrower, in an action in superior court, any amount due the Rhode Island infrastructure

bank together with any other actual damages the Rhode Island infrastructure bank shall have

sustained from the failure or refusal of the borrower to make the payments or abide by the terms

of the loan agreement.

     (e) The Rhode Island infrastructure bank may create one or more loan loss reserve funds

to serve as further security for any loans made by the Rhode Island infrastructure bank or any

bonds of the Rhode Island infrastructure bank issued to fund energy efficiency improvements in

LC001744 - Page 22 of 26

public buildings in accordance with this section.

     (f) To the extent possible, and in accordance with law, the infrastructure bank Rhode

Island infrastructure bank shall encourage the use of project labor agreements for projects over

ten million dollars ($10,000,000) and local hiring on projects funded under this section.

     (g) Any financial assistance provided by the Rhode Island infrastructure bank to a public

entity for the purpose of retrofitting a school building shall not be subject to the match established

by Rhode Island general laws §§ 16-7-35 to 16-7-47, and shall be made subject to coordination

with the Rhode Island department of education. Any approved project as set forth in subsection

(a) of this section that is also an "approved project" as defined in §16-7-36 shall be eligible for

school housing aid assistance under §§16-7-35 and 16-7-47.

     SECTION 6. Section 46-15.3-11 of the General Laws in Chapter 46-15.3 entitled "Public

Drinking Water Supply System Protection" is hereby amended to read as follows:

     46-15.3-11. Disbursements from the funds.

     (a) Only suppliers which withdraw water from wells, reservoirs, springs, or other original

sources of potable water shall be entitled to disbursements from the first of the two (2) mentioned

funds created under § 46-15.3-10 administered by the water resources board. From amounts

available from bond proceeds held by the water resources board, that board shall disburse to each

supplier contributing to the fund a proportional amount based upon each supplier's pro rata

withdrawal of water by volume from wells, reservoirs, springs, or other original sources of water

averaged over the three (3) calendar years preceding disbursement as determined by the water

resources board. Suppliers shall be required to expend this money as follows: for any eligible

expenditure as defined in §46-15.3-4 including, but not limited to,

     (1) Not less than fifty-five percent (55%) shall be spent for acquisition of land or rights in

land or physical improvements to acquired land required to protect the quality of raw water of the

water supply system. Expenditures for maintenance, administration, and payment of taxes on land

acquired under this chapter shall be included within this subdivision.

     (2) Any remaining funds may be used for any eligible expenditures as defined in § 46-

15.3-4.

     (b) The city of Providence shall make expenditures from amounts available in the fund

held by the city of Providence based on the same formula as in subdivisions (a)(1) and (a)(2)

requirements set forth in subsection (a) above; provided, however, the city of Providence shall be

exempt from participating in the use of an alternate deicing mixture within the Scituate watershed

unless drinking water supply sodium levels exceed fifteen (15) ppm (parts per million) for three

(3) consecutive years or seventeen (17) ppm (parts per million) for one year. The city of

LC001744 - Page 23 of 26

Providence will monitor sodium levels and report sodium testing results to the Rhode Island

department of health and the public on a yearly basis. If drinking water supply sodium levels

exceed fifteen (15) ppm for three (3) consecutive years or seventeen (17) ppm for one year, the

city of Providence shall immediately participate in the use of an alternative deicing mixture

within the Scituate watershed. In December of 2008, the city of Providence will provide a three

(3) year report to the Rhode Island department of environmental management, the general

assembly and the public. Every three (3) years, the city of Providence will submit a report to the

general assembly on monitoring data for sodium levels within the Scituate watershed. This report

will include monitoring data from the previous three (3) year period.

     (c) In making decisions about the expenditure of money under the provisions of this

chapter, suppliers shall take into account the following factors:

     (1) The likelihood of development of the specific parcel proposed for acquisition;

     (2) The existing land uses, as well as the likelihood of development, in the watershed;

     (3) The potential threat to public drinking water sources posed by development in the

watershed including, but not limited to, the intensity of development, the types of land uses,

proximity to reservoirs and/or well heads, and the buffering and filtration capacity of the natural

systems;

     (4) Whether alternative protection measures are available and/or have been attempted,

including local land use regulations;

     (5) The number of persons who presently depend on the sources for their drinking water,

as well as the number of persons who may depend on it in the future;

     (6) The anticipated cost of the parcel proposed to be purchased, and whether less than a

fee interest may be acquired which would reduce the cost significantly while still providing

protection to the source;

     (7) Other cost effectiveness considerations, including whether protection of the source

can be provided by the construction of physical improvements;

     (8) Whether acquisition of the specific parcel, and the protection of the watershed of

which it is a part, is consistent with other planning considerations;

     (9) Proposed management techniques for the parcel proposed to be acquired which will

maximize its capacity to protect the source.

     (d) The costs of issuance of notes and bonds authorized by § 46-15.3-10 may be payable

from any monies in the water quality protection funds.

     SECTION 7. Section 46-12.2-14.1 of the General Laws in Chapter 46-12.2 entitled

"Rhode Island Infrastructure Bank" is hereby repealed.

LC001744 - Page 24 of 26

     46-12.2-14.1. Electric and gas demand side charge proceeds as further security for

debt funding energy efficiency improvements in public buildings.

     (a) Upon receipt of the electric and gas demand side charge proceeds identified in §§ 39-

2-1.2(l ) and 39-2-1.2(m), the Rhode Island infrastructure bank shall deposit the electric and gas

demand side charge proceeds in a loan loss reserve fund to provide security for any loans made

by the Rhode Island infrastructure bank or any bonds of the Rhode Island infrastructure bank

issued to fund energy efficiency improvements in public buildings pursuant to § 46-12.2-4.2. The

funds in the loan loss reserve fund described therein shall only be used after all other available

loan loss reserve funds have been applied.

     (b) After all loans and bonds in connection with the efficient buildings fund have been

repaid in full, the balance of the loan loss reserve fund, including any accrued interest, shall be

remitted to the electric and gas utilities described in § 39-2-1.2, to be used for energy efficiency

programmatic purposes.

     SECTION 8. This act shall take effect upon passage.

========

LC001744

========

LC001744 - Page 25 of 26

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO EDUCATION

***

     This act would amend several sections relative to the eligibility and award process for

projects that receive financial assistance from PACE (Property Assessment Clean Energy)

programs and the Rhode Island infrastructure bank.

     This act would take effect upon passage.

========

LC001744

========

LC001744 - Page 26 of 26