2019 -- H 5390

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LC001497

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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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, Hull, Almeida, and Diaz

     Date Introduced: February 14, 2019

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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hereby amended by adding thereto the following chapter:

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CHAPTER 32

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MUNICIPAL WATER SUPPLY SYSTEMS TRANSACTIONS ACT

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     46-32-1. Short title.

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

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Transactions Act."

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     46-32-2. Legislative findings.

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

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

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

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

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

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

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

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

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management system.

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     (b) It is hereby found and declared that:

 

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

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

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

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

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Rhode Island most efficiently and cost-effectively.

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

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municipal water supply systems and regional water quality management district commissions

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

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

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dispose and treat sewage and waste water.

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

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

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

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

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disposal systems that protect public health, promote environmental stewardship, reduce

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redundancy, maintain customer confidence, and support a prosperous economy.

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

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

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and treatment services vested with the operating, financing and regulatory powers to provide

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appropriate means for addressing such needs.

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

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

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

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

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

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

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

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

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operations for the purposes aforesaid.

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

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shall be considered a "public utility" as defined in § 39-1-2.

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

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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,

 

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

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     46-32-4. Rate determinations.

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

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

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     (b) Subsequent to a transaction, rates and charges shall be established such as to provide

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

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

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on any notes or bonds, together with the maintenance of proper reserves therefore, in addition to

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paying, as the same shall become due, all expenses of operating and maintaining the water supply

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system, together with proper reserves for depreciation, maintenance, and contingencies and all

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other obligations and indebtedness.

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

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

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

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

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     (d) Subject to the foregoing, during the five (5) years subsequent to the effective date of a

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transaction, 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 power to approve or in any

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way affect an increase in rates applicable to affected residential, commercial, industrial or

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wholesale ratepayers such that during said five (5) year period would exceed, in total, the

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percentage rate increase for such water ratepayers during the five (5) year period prior to the

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effective date of the transaction. Notwithstanding the foregoing, the Rhode Island public utilities

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commission and the Rhode Island division of public utilities and carriers shall have the authority

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to increase such rate to cure, avoid, or otherwise respond to a water shortage or other water

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emergency. Nothing herein shall be construed to limit any party to a transaction from recovering

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all payments, rates, rents, assessments, fees and other costs or charges of all costs of service from

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all water users in its system.

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

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

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

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

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

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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

 

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

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

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

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

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     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

***

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

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quality management district commission to enter into a transaction with municipal water supply

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systems or regional water quality management district commissions notwithstanding any charter,

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other laws or ordinances, general, special, or local, or of any rule or regulation of any state public

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body to the contrary.

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     This act would take effect upon passage.

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