2018 -- H 8123

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LC005523

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO WATERS AND NAVIGATION -- THE MUNICIPAL WATER SUPPLY

SYSTEMS TRANSACTIONS ACT

     Introduced By: Representatives Slater, and Diaz

     Date Introduced: April 26, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 46 of the General Laws entitled "WATERS AND NAVIGATION" is

hereby amended by adding thereto the following chapter:

CHAPTER 32

MUNICIPAL WATER SUPPLY SYSTEMS TRANSACTIONS ACT

     46-32-1. Short title.

     This act shall be known and may be cited as the "Municipal Water Supply Systems

Transactions Act."

     46-32-2. Legislative findings.

     (a) The purpose of this chapter is to authorize municipal water supply systems and

regional water quality management district commissions to enter into transactions with other

municipal water supply systems and regional water quality management district commissions as

well as any public or private operator of a water supply system or water quality management

system, notwithstanding the provisions of any charter, other laws or ordinances, general, special,

or local, or of any rule or regulation of any state public body, restricting or regulating in any

manner the power of any municipal water supply system, regional water quality management

district commission, or public or private operator of a water supply system or water quality

management system.

     (b) It is hereby found and declared that:

     (1) Municipal water supply systems and regional water quality management district

commissions providing the protection, development, management, financial security, and use of

water should be integrated with each other or with other public or private operators of water

supply systems or water quality management systems in a manner that serves the citizens of

Rhode Island most efficiently and cost-effectively.

     (2) It is in the state's economic and environmental interests to coordinate the efforts of

municipal water supply systems and regional water quality management district commissions

with each other or with other public or private operators of water supply systems or water quality

management systems to collect, treat, distribute, store and protect water supplies, and to collect,

dispose and treat sewage and waste water.

     (3) Coordination of municipal water supply systems and regional water quality

management district commissions with each other or with other public or private operators of

water supply systems or water quality management systems provides efficiencies inuring to the

benefit of the state's citizens in the form of reliable, cost-effective, high-quality water that

protects public health, promotes environmental stewardship, reduces redundancy, maintains

customer confidence, and supports a prosperous economy.

     (4) It is in the economic and environmental interests of Rhode Island citizens to develop

and facilitate efficient planning for the delivery of drinking water and sewage collection, disposal,

and treatment services through relationships vested with the operating, financing and regulatory

powers to provide appropriate means for addressing such needs.

     46-32-3. Powers to enter into transactions.

     (a) Notwithstanding the provisions of any charter, other laws or ordinances, general,

special, or local, or of any rule or regulation restricting or regulating in any manner the power of

municipal water supply systems or regional water quality management district commissions, such

municipal water supply systems and regional water quality management district commissions are

authorized to enter into transactions ("transactions") with other municipal water supply systems,

regional water quality management district commissions, and public or private operators of water

supply systems or water quality management systems to facilitate the coordination of their

operations for the purposes aforesaid.

     (b) Upon the consummation of a transaction, subject to § 46-32-5, the resulting, surviving

entity shall be considered a "public utility" as defined in § 39-1-2 with respect to such municipal

water supply system.

     (c) Notwithstanding the foregoing, §§ 39-3-24, 39-3-25 or any other general law to the

contrary, neither the Rhode Island public utilities commission nor the Rhode Island division of

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public utilities and carriers shall have any jurisdiction, authority, or other power to approve,

reject, review, or in any way affect any transaction.

     46-32-4. Rate determinations.

     (a) Any existing rates and charges, which are in effect at the time a transaction is

consummated, shall continue in full force and effect until otherwise determined by this section.

     (b) Upon consummation of a transaction, rates and charges shall be established such as to

provide revenues sufficient at all times to pay, as the same shall become due, any and all

payments required to be made to a municipality that has entered into a transaction, the principal

and interest on any notes or bonds, together with the maintenance of proper reserves therefore, in

addition to paying, as the same shall become due, all expenses of operating and maintaining the

water supply system, together with proper reserves for depreciation, maintenance, and

contingencies and all other obligations and indebtedness.

     (c) The Rhode Island public utilities commission and the Rhode Island division of public

utilities and carriers shall recognize and apply all payments made to a municipality pursuant to a

transaction in its review and approval of rates, including, but not limited to, those payments and

fees referenced in §§ 46-32-3 and 46-32-5, respectively.

     (d) Subject to the foregoing, for the five (5) years following a transaction, neither the

Rhode Island public utilities commission nor the Rhode Island division of public utilities and

carriers shall have any jurisdiction, authority or power to approve, reject, review, or in any way

affect percentage increases in rates of a transacting party. However, percentage increases in rates

applicable to affected residential, commercial, industrial and whole sale ratepayers during the five

(5) years following a transaction may not exceed, in total, the percentage rate increase for such

ratepayers during the five (5) years prior to the transaction. Notwithstanding the foregoing, the

Rhode Island public utilities commission and the Rhode Island division of public utilities and

carriers shall have the authority to increase such rate to cure, avoid, or otherwise respond to a

water shortage or other water emergency. Nothing herein shall be construed to limit any party to a

transaction from recovering all payments, rates, rents, assessments, fees and other costs or

charges of all costs of service from all water users in its system.

     46-32-5. Special provisions applicable to transactions.

     (a) Each party to a transaction shall pay its own reasonably incurred fees, costs and

expenses, including, but not limited to, legal, accounting, and engineering fees. Notwithstanding

the foregoing, in the event a transaction is consummated, the terms of such transaction may

provide for reimbursement of the aforesaid fees, costs, and expenses, which may be financed to

the extent permitted under applicable law. In the event that the transacting parties' costs are

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financed, payment of such costs shall not be subject to review and approval by the Rhode Island

public utilities commission or the Rhode Island division of public utilities and carriers.

     (b) In any transaction, the transacting parties are authorized to assume such debts related

to such properties and assets being transferred as such parties shall deem appropriate. Such debts

may include notes, bonds, and any other outstanding debts.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO WATERS AND NAVIGATION -- THE MUNICIPAL WATER SUPPLY

SYSTEMS TRANSACTIONS ACT

***

     This act would authorize any municipal water supply system and any regional water

quality management district commission to enter into an agreement called a "transaction"

enabling certain water supply systems to merge and be deemed a public utility pursuant to chapter

1 of title 39.

     This act would take effect upon passage.

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LC005523

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