Chapter 346

2006 -- S 3038 SUBSTITUTE A

Enacted 07/07/06

 

A N  A C T

IN AMENDMENT OF CHAPTER 218 OF THE PUBLIC LAWS OF 1993 ENTITLED "AN ACT RELATING TO THE TOWN OF NORTH SMITHFIELD TO CREATE THE NORTH SMITHFIELD WATER AUTHORITY AND TO PROVIDE FOR ITS POWERS AND DUTIES"

          

     Introduced By: Senators Tassoni, P Fogarty, and Cote

     Date Introduced: April 27, 2006

 

It is enacted by the General Assembly as follows:

 

      SECTION 1. Chapter 218 of the Public Laws of 1993 entitled "AN ACT RELATING TO

THE TOWN OF NORTH SMITHFIELD TO CREATE THE NORTH SMITHFIELD WATER

AUTHORITY AND TO PROVIDE FOR ITS POWERS AND DUTIES" is hereby repealed in its

entirety.

 

      SECTION 1. Chapter 218 of the Public Laws of 1993 entitled "AN ACT RELATING TO

THE TOWN OF NORTH SMITHFIELD TO CREATE THE NORTH SMITHFIELD WATER

AUTHORITY AND TO PROVIDE FOR ITS POWERS AND DUTIES" is hereby repealed in its

entirety.

      "SECTION 1. There is hereby created the North Smithfield Water Authority with its

powers and duties as follows:

      Sec. 1. SHORT TITLE. This act shall be known as the "North Smithfield Water

Authority Act".

      Sec. 2. LEGISLATIVE FINDINGS.

      (a) It is hereby found and declared that there exists in the town of North Smithfield

conditions of substantial and persistent water supply issues which causes hardship to many

individual's and families, impedes economic and physical development of the town of North

Smithfield, and adversely affects the welfare and prosperity of the people resident in said town;

that unless steps are taken to provide for alternate management of the water supply system in said

town, these conditions shall continue; that if these conditions are not alleviated there will be a

material adverse impact to the safety and general welfare of the people of said town;

      (b) It is further found and declared that the efficient way of correcting these conditions is

the creation of a public authority which shall have as its purpose the acquisition, construction,

operation, maintenance, repair and replacement of water supply systems for the purpose of

providing adequate water to residents of said town.

      (c) The purpose of this act is to create a North Smithfield Water Authority having

existence separate and apart from the state and town of North Smithfield, with the power and

authority to acquire, develop, construct, operate and maintain all properties which shall be

necessary for the purpose set forth above, and hereinafter set forth.

      Sec. 3. DEFINITIONS. As used in this act, the following words and terms shall have the

following meanings, unless the context shall indicate another or different meaning or intent.

      (a) "Authority": The public corporation and instrumentality authorized, created and

established pursuant to section 4 hereof and any subsidiary public corporation as defined in

section 6.1 hereof.

      (b) "Bonds and notes": The bonds, notes, securities or other obligations or evidences of

indebtedness issued by the authority pursuant to this act, all of which shall be issued under the

name of and known as obligations of the North Smithfield Water Authority.

      (c) "Local governing body": Any town or city council, commission or other elective

governing body, now on hereafter vested by state statute, charter or other law with jurisdiction to

initiate and adopt local ordinances, whether or not such local ordinances require the approval of

the elected or appointed chief executive officer or other official body to become effective.

      (d) "Municipality": Any city or town now existing or hereafter created, or any state

agency.

      (e) "North Smithfield": The town of North Smithfield, Rhode Island.

      (f) "Personal property": All tangible and intangible personal property, new or used,

including without limiting the generality of the foregoing, all machinery, equipment,

transportation equipment, pipelines, pipes, and all other personal property incidental to and

included or necessary for the operation of a water supply and distribution system. Personal

property shall also mean and include any and all interest, in such property which are less than full

title, such as leasehold interests, security interest, and every other interest or right, legal or

equitable.

      (g) "Real property": Land, structures, new or used, franchises and interests in land,

including lands under water, riparian rights, space rights and air rights, and all other things and

rights included within said term. Real property shall also mean and include and all interest in such

property less than fee simple, such as in easements, incorporal hereditaments and every estate,

interest or right, legal or equitable, including terms for years and liens thereon by way of

judgments, mortgages or otherwise, and also claims for damages to such real property.

      (h) "State": The State of Rhode Island and Providence Plantations.

      (i) "Water supply facility": Any real or personal property, or any combination thereof,

related to or incidental or intended or utilized for the supply, transmission, distribution or

furnishing of water for fire protection, domestic, manufacturing, commercial, industrial,

municipal or other purposes, and including artesian and other wells, reservoirs, dams, related

equipment, pipelines, treatment plants and other similar facilities.

      Sec. 4. CREATION. There is hereby authorized, created and established a public

corporation of the state, having a distinct existence from the state or any municipality, and not

constituting a department of state government or any municipality which is a public

instrumentality of the state to be known as the "North Smithfield Water Authority" for such

purposes and with such powers as set forth in this act.

      Sec. 5. PURPOSES. The authority is authorized, created and established for the following

purposes: to acquire, construct, own, develop, operate, manage, maintain, repair, replace,

improve, dispose of, enlarge, and extend water supply facilities within and without North

Smithfield for the purpose of meeting the present and future requirements and needs for fire

protection and potable water within in and all areas of said town.

      Sec. 6. POWERS.

      Except to the extent inconsistent with any specific provision of this act, the authority

shall have the power:

      (1) to sue and be sued, complain and defend, in its corporate name;

      (2) to have a seal which may be altered at pleasure and to use the same by causing it, or a

facsimile thereof, to be impressed or affixed or in any other manner reproduced;

      (3) to purchase, take, receive, lease or otherwise acquire, own, hold, develop, improve,

operate, manage, construct, maintain, replace and repair, use or otherwise deal in and with, real or

personal property, or any interest therein, wherever situated;

      (4) to sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of,

all or any part of its property and assets for such consideration and upon such terms and

conditions as the authority shall determine;

      (5) to produce, transmit, distribute and sell water within or without the territorial limits of

North Smithfield;

      (6) to fix rates and collect charges for the use of the facilities of, or services rendered by,

or any commodities furnished by, the authority without obtaining the consent to or approval

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

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

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

resolutions authorizing the fixing and collection thereof provided, however, that the authority

shall be regarded as a public utility under section 39-1-2 of the general laws if and only if and to

the extent it sells water, on a wholesale or retail basis, outside the territorial limits of North

Smithfield.

      (7) to make such contracts and guarantees and to incur liabilities and borrow money at

such rates of interest and on such terms and conditions as the authority may determine;

      (8) to make and execute agreements of lease, conditional sales contracts, installment sales

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

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

the authority granted by this act;

      (9) to lend money for its purposes, invest and reinvest its funds and at its option to take

and hold real and personal property as security for the funds so loaned or invested;

      (10) to acquire, contract or obtain options to acquire, from any person, firm, corporation,

municipality, the federal government or the state, or any agency of either the federal government

or state by grant, purchase, lease, gift, condemnation or otherwise, any property, real or personal,

improved or unimproved; and to own, hold, clear, develop, maintain, operate and rehabilitate,

sell, assign, exchange, transfer, convey, lease, mortgage, or otherwise dispose or encumber the

same for the purposes of carrying out the provisions and intent of this act for such consideration

and on such terms and conditions as the authority shall determine;

      (11) to conduct its activities, carry on its operations and have offices and exercise its

power granted by this act within or without North Smithfield or the state;

      (12) to elect or appoint officers and agents of the authority and to define their duties and

fix their compensation, except as otherwise expressly limited herein;

      (13) to make and alter bylaws not inconsistent with this act, for the administration and

regulation of the affairs of the authority and such bylaws may contain provisions indemnifying

and advancing expenses to any person who is or was a director, officer, employee or agent of the

authority; or is or was serving at the request of the authority as a director, officer, employee or

agent of another corporation, partnership, company, joint venture, trust or other enterprise in the

manner and to the extent provided in section 7-1.1-4.1 of the Rhode Island Business Corporation

Act, and to purchase and maintain insurance on behalf of any director, officer, employee or agent

against any liability asserted against him and incurred by such director, officer, employee or agent

in any such capacity or arising our of such directors' officer's, employee's or agent's status,

whether or not the authority would have the power to indemnify under the provisions of this Act;

      (14) to be a promoter, stockholder, partner, member, associate or manager of any

corporation, partnership, company, enterprise or venture;

      (15) to enter into cooperative agreements with other cities, counties, town or water

companied within or without North Smithfield or the state for the interconnection of water

facilities or for any other lawful corporate purpose necessary or desirable to effect the purposes of

this act;

      (16) to create or acquire subsidiary public corporations pursuant to section 6.1 hereof;

      (17) to have and exercise all powers necessary or convenient to effect its purposes.

      Sec. 6.1 SUBSIDIARIES.

      (a) The authority shall have the right to exercise and perform its powers and functions, or

any of them, through one or more subsidiary corporations. The authority by resolution of the

board of directors may direct any of its directors, officers or employees to create or acquire

subsidiary corporations in the manner described in subsection (b) hereof.

      (b) As used herein, "subsidiary public corporation" means a corporation created pursuant

to the provisions hereof or any other corporation which owns or operates a water supply facility

and one hundred percent (100%) of whose voting stock is owned by the authority and any

municipality.

      (c) The person or persons directed by the resolution hereinbefore referred to in subsection

(a) shall prepare articles of incorporation setting forth:

      (i) the name of the subsidiary public corporation;

      (ii) the period of duration, which may be perpetual;

      (iii) the purpose or purposes for which the subsidiary public corporation is organized

which shall not be more extensive than the purposes of the authority set forth in section 5;

      (iv) the number of directors (which may, but need not be, more than one) constituting the

initial board of directors and their names and business or residence addresses;

      (v) the name and business or residence address of the persons preparing the articles of

incorporation;

      (vi) the date when corporate existence shall begin (which shall not be earlier than the

filing of the articles of incorporation with the secretary of state as hereinafter provided);

      (vii) any provision, not inconsistent with law, which the board of directors elect to set

forth in the articles of incorporation for the regulation of the internal affairs of the subsidiary

public corporation; and

      (viii) a reference to the resolution of the board of directors authorizing the preparation of

the articles of incorporation.

     Duplicate originals of the articles of incorporation shall be delivered to the secretary of state. If

the secretary of state finds that the articles of incorporation conform to the provisions of this

subsection (b), he or she shall endorse on each of such duplicate originals the word "Filed," and

the month, day and year of the filing thereof; file one (1) of such duplicate originals in his or her

office; and a certificate of incorporation to which he or she shall affix the other duplicate original.

No filing fees shall be payable upon the filing of articles of incorporation. Upon the issuance of

the certificate of incorporation or upon such later date specified in the articles of incorporation,

the corporate existence shall begin and such certificate of incorporation shall be conclusive

evidence that all conditions precedent required to be performed have been compiled with and that

the subsidiary public corporation has been duly and validly incorporated under the provisions

hereof.

      (d) The authority may transfer to any subsidiary public corporation any moneys, property,

real or personal or water supply facility in order to carry out the purposes of this chapter. Each

such subsidiary public corporation shall have all the powers, privileges, rights, immunities tax

exemptions and other exemptions of, and shall be subject to the limitations imposed on its

operations to the same extent as, the authority except to the extent that the articles of

incorporation of any such subsidiary public corporation, as the same may be amended from time

to time, shall contain an express limitation thereof and except that if any time any person, other

than the authority and any municipality, shall own any voting stock of such subsidiary public

corporation, such subsidiary public corporation shall not have the condemnation power contained

in section 8 hereof, and shall not be exempt from taxation as provided in section 14 hereof.

      Sec. 6.2. AMENDMENT OF THE ARTICLES OF INCORPORATION OF A

SUBSIDIARY PUBLIC CORPORATION.

      (a) Notwithstanding the provisions of any legislative act incorporating and subsidiary

public corporation, a subsidiary public corporation may amend its articles of incorporation, from

time to time, in any and as many respects as may be desired, so long as its articles of

incorporation as amended contain only such provisions as might be lawfully contained as

provided in section 6.1 hereof in original articles of incorporation at the time of making such

amendment. In particular, and without limitation upon such general power of amendment,

subsidiary public corporation may amend its articles of incorporation, from time to time as:

      (i) to change its corporate name:

      (ii) to change its period or duration; and

      (iii) to change, enlarge or diminish its corporate purposes.

      (b) Amendments to the articles of incorporation of a subsidiary public corporation shall

be made by the adoption of a resolution by the board of directors of the authority setting forth the

amendment. The resolution may incorporate the amendment in restated articles of incorporation

which contain a statement that except for the designated amendment the restated articles of

incorporation correctly set forth without change the corresponding provisions of the articles of

incorporation as therefore amended, and that the restated articles of incorporation together with

the designated amendment supersede any legislative act incorporating or amending the charter of,

such subsidiary public corporation inconsistent therewith, the original articles of incorporation

and all amendments thereto.

      (c) The articles of amendment shall be executed in duplicate by the subsidiary public

corporation by its president or a vice president and by its secretary or an assistant secretary, and

shall set forth;

      (i) the name of the corporation;

      (ii) the amendment so adopted;

      (iii) the date of the adoption of the amendment by the board of directors of the authority;

and

      (iv) if, pursuant to subsection (e) hereof, the amendment is to become effective at a time

subsequent to the issuance of the certificate of amendment by the secretary of state, the date when

the amendment is to become effective.

      (v) Duplicate originals of the articles of amendment shall be delivered to the secretary of

state. If the secretary of state finds that the articles of amendment conform to law, he or she shall

endorse on each of such duplicate originals the word "Filed," and the month, day and year of the

filing thereof; file one (1) of such duplicate originals in his or her office; and issue a certificate of

amendment to which he or she shall affix the other duplicate original. No filing fees shall be

payable upon the filing of articles of amendment. The certificate of amendment, together with the

duplicate original of the articles of amendment affixed thereto by the secretary of state shall be

returned to the subsidiary public corporation or its representative.

      (e)(i) Upon the issuance of the certificate of amendment by the secretary of state or upon

such later date, not more than thirty (30) days after the filing of the articles of amendment shall

become effective and the articles of incorporation shall be deemed to be amended accordingly.

      (ii) No amendment shall affect any existing cause of action in favor of or against such

subsidiary public corporation, or any pending suit to which such subsidiary public corporation

shall be a party, or the existing rights of any persons and, in the event the corporate name shall be

changed by amendment, no suit brought by or against such corporation under its former name

shall abate for that reason.

      (f) (i) A subsidiary public corporation may at any time restate its articles of incorporation

as theretofore amended, by a resolution adopted by the board of directors of the authority. Upon

the adoption of such resolution, restated articles of incorporation shall be executed in duplicate by

the subsidiary public corporation by its president or a vice president and by its secretary or

assistant secretary and shall set forth all of the provisions of the articles of incorporation as

theretofore amended together with a statement that the restated articles of incorporation correctly

set forth without change the corresponding provisions of the articles of incorporation as

theretofore amended and that the restated articles of incorporation supersede any legislative act

incorporating or amending the charter of , such subsidiary public corporation, the original articles

of incorporation and all amendments thereto.

      (ii) Duplicate originals of the restated articles of incorporation shall be delivered to the

secretary of state. If the secretary of state finds that such restated articles of incorporation

conform to law, he or she shall endorse on each of such duplicate originals the word "Filed," and

the month, day and year of the filing thereof; file one (1) of such duplicate originals in his or her

office; and issue a restated certificate of incorporation, to which he or she shall affix the other

duplicate original. No filing fees shall be payable upon the filing of articles of amendment. The

restated certificate of incorporation, together with the duplicate original of the restated articles of

incorporation affixed thereto by the secretary of state, shall be returned to the subsidiary public

corporation or its representative.

      Sec. 6.3. VOLUNTARY DISSOLUTION OF A SUBSIDIARY PUBLIC

CORPORATION.

      (a) A subsidiary public corporation may be dissolved by the adoption of a resolution to

dissolve the subsidiary public corporation by the board of directors of the authority. Upon the

adoption of such resolution, a statement of intent to dissolve shall be executed in duplicate by the

subsidiary public corporation by its president or a vice president and by its secretary or an

assistant secretary, which statement shall set forth:

      (i) the name of the subsidiary public corporation;

      (ii) the names and respective addresses of its officers;

      (iii) the names and respective addresses of its directors;

      (iv) a copy of the resolution adopted by the board of directors of the authority authorizing

the dissolution of the subsidiary public corporation; and

      (v) if, pursuant to subsection (c) hereof, the date when the subsidiary public corporation

is to cease to carry on its business is to be subsequent to the date of such filing, the date when the

corporation is to cease to carry on its business.

      (b) Duplicate originals of the statement of intent to dissolve shall be delivered to the

secretary of state. If the secretary of state finds that such statement conforms to law, he or she

shall endorse on each of such duplicate originals the word "Filed," and the month, day and year of

the filing thereof; file one (1) of such duplicate originals in his or her office; and return the other

duplicate original to the subsidiary public corporation or its representative.

      (c) Upon the filing by the secretary of state of a statement of intent to dissolve, or upon

such later date, not more than thirty (30) days after such filing, as may be set forth in the

statement, the subsidiary public corporation shall cease to carry on its business, except insofar as

may be necessary for the winding up thereof, but its corporate existence shall continue until a

certificate of dissolution has been issued by the secretary of state.

     After the filing by the secretary of state of a statement of intent to dissolve;

      (i) the subsidiary public corporation shall immediately cause notice thereof to be mailed

to each known creditor of the subsidiary public corporation; and

      (ii) the subsidiary public corporation shall proceed to collect its assets, sell or otherwise

dispose of such of its properties as are not to be distributed in kind to the authority, pay, satisfy

and discharge its liabilities and obligations and do all other acts required to liquidate its business

and affairs, and, after paying or adequately providing for the payment of all its obligations,

distribute the remainder of its assets, either in cash or in kind, to the authority and any

municipality owning any of its voting commons stock, in accordance with their respective

percentage interests.

      (e) When all debts, liabilities and obligations of the subsidiary public corporation have

been paid and discharged, or adequate provision has been made therefore, and all of the

remaining property and assets of the subsidiary public corporation have been distributed, articles

of dissolution shall be executed in duplicate by the subsidiary public corporation by its president

or a vice president and by is secretary or an assistant secretary, which statement shall set forth;

      (i) the name of the subsidiary public corporation;

      (ii) that the secretary of state has theretofore filed a statement of intent to dissolve the

subsidiary public corporation, and the date on which such statement was filed;

      (iii) that all debts, obligations and liabilities of the subsidiary public corporation have

been paid and discharged or that adequate provision ahs been made therefore;

      (iv) that all the remaining property and assets of the subsidiary public corporation have

been distributed to the authority and any municipality owning any of its voting stock; and

      (v) that there are no suits pending against the subsidiary public corporation in any court,

or that adequate provision has been made for the satisfaction of any judgment, order or decree

which may be entered against it in any pending suit.

      (f) Duplicate originals of such articles of dissolution shall be delivered to the secretary of

state. If the secretary of state finds that the such articles of dissolution conform to law, he or she

shall endorse on each of such duplicate originals the word "Filed," and the month, day and year of

the filing thereof; file one (1) of such duplicate originals in his or her office; and issue a

certificate of dissolution to which he or she shall affix the other supplicate original. No filing fees

shall be payable upon the filing of articles of amendment. The certificate of dissolution, together

with the duplicate original of the articles of dissolution affixed thereto by the secretary of state,

shall be returned to the representative of the dissolved subsidiary public corporation. Upon the

issuance of such certificate of dissolution the existence of the subsidiary public corporation shall

cease, except for the purpose of suits, other proceedings and appropriate corporate action by

directors and officers as provided herein.

      (g) The dissolution of a subsidiary public corporation either;

      (i) by the issuance of a certificate of dissolution by the secretary of state, or

      (ii) by expiration of its period of duration, shall not take away or impair any remedy

available to or against such subsidiary public corporation, its directors, or officers, for any right or

claim existing, or any liability incurred, prior to such dissolution if action or other proceeding

thereon is commenced within two (2) years after the date of such dissolution.

     Any such action or proceeding by or against the subsidiary public corporation may be prosecuted

or defended by, the subsidiary public corporation in its corporate name. The directors and officers

shall have power to take such corporate or other action as shall be appropriate to protect such

remedy, right or claim. If such subsidiary public corporation was dissolved by the expiration of

its period of duration, such subsidiary public corporation may amend its articles of incorporation

at any time during such period of two (2) years so as to extend its period of duration.

      Sec. 6. 4 MERGER OF OR INTO SUBSIDIARY CORPORATION.

      The authority may, at any time, or from time to time, merge any subsidiary public

corporation into itself or may merge with any subsidiary corporation upon an approval of a plan

of merger by the directors of the authority. Articles of merger shall be executed in duplicate by

the surviving corporation, by its president or a vice president and its secretary or an assistant

secretary and by one of its officers signing such articles and shall set forth:

      (a) the plan of merger; and

      (b) if the merger is to become effective at a time subsequent to the issuance of a

certificate of merger by the secretary of state, as hereinafter provided, the date when the merger

or consolidation is to become effective.

      Duplicate originals of the articles of merger shall be delivered to the secretary of state. If

the secretary of state finds that such articles conform to law, he or she shall endorse on each of

such duplicate originals the words "Filed," and the month and day and year of the filing thereof;

file one of such duplicate originals in his or her office; and issue a certificate of merger to which

he or she shall affix the other duplicate original. No filing fees shall be payable upon the filing of

articles of amendment. The certificate of merger, together with the duplicate originals of the

articles of merger affixed thereto by the secretary of state shall be returned to the surviving or

new corporation, as the case may be, or to its representative. The merger shall become effective

upon the issuance of the certificate of merger by the secretary of state or upon such later date, not

more than thirty (30) days of the filing of the articles of merger, as may be set forth in the plan.

When a merger or consolidation becomes effective:

      (a) The several corporations, including the authority, parties to the plan of merger, shall

be a single corporation which shall be the corporation designated in the plan of merger as the

surviving corporation.

      (b) The separate existence of all corporations party to the plan of merger, except the

surviving corporation, shall cease.

      (c) Notwithstanding:

      (i) any provisions of the articles of incorporation of the surviving corporation,

      (ii) the fact that such surviving corporation may have been chartered legislatively, or

      (iii) the fact that the authority is not the surviving corporation, such surviving corporation

shall have all the rights, privileges, and immunities and shall be subject to all the duties and

liabilities of the authority.

      (d) Such surviving corporation shall thereupon and thereafter possess all the rights,

privileges, and immunities and franchises of a public or private nature of each of the merging

corporations, including the rights, privileges, and immunities of the authority if the authority is

not the surviving corporation; and all property, real, personal and mixed, and all debts due on

whatever account, and all of the choses in action, and action, and all of the interest of or

belonging to or due to each of the corporations so merged shall be taken and deemed to be

transferred to and vested in such single corporation without act or deed; and the title to any real

estate or interest therein vested in any of such corporations shall not revert or be in any way

impaired by reason of such merger or consolidation.

      Such surviving corporation shall thenceforth be responsible and liable for all of the

liabilities and obligations of each of the corporations so merged, including without limiting the

generality of the foregoing, the authority; and any claim existing or action or proceeding pending

by or against any of such corporations may be prosecuted as if such merger had not taken place or

such surviving corporation may be substituted in its place. Neither the rights of creditors nor liens

upon the property of any such corporation shall be impaired by such merger or consolidation.

      The articles of incorporation of the surviving corporation shall be deemed to be amended

to the extent, if any, that changes in its articles of incorporation are stated in the plan of merger,

notwithstanding the provisions of any other legislative act incorporating, or amending the charter

of, such corporation to the contrary.

      Sec. 6.5. GUARANTEES.

      In addition to, and not in limitation of, any of the powers such subsidiary public

corporation may have or exercise pursuant to the provisions of this act, each such subsidiary

corporation shall have the power to guarantee the obligations on debts of the authority, and to

mortgage, pledge, lease, transfer or exchange all or any part of its property or assets to secure any

such guarantee.

      Sec. 7. DIRECTORS, OFFICERS AND EMPLOYEES.

      (a) The powers of the authority shall be vested in a board of directors which shall consist

of seven members, each to be appointed by the North Smithfield town administrator with and

after the advice and consent of the local governing body of North Smithfield. Without imposing

any legal obligation or restriction, the North Smithfield town administrator shall endeavor to

appoint persons who are fairly representative of the areas of North Smithfield which from time to

time will be impacted by the authority and who have the knowledge and experience which

enables them to make a meaningful contribution to the authority's activities and the management

of its affairs. Two members of the board of directors first appointed for a term of one year, two

such members shall serve for a term of two years, and three such members shall serve for a term

of three years, and in each case thereafter until their successors are chosen and qualified. Not

earlier than sixty (60) days prior to the expiration of any term of a member of the board of

directors, a successor shall be similarly appointed to serve for a term of three years from the

expiration of the term, and thereafter until such appointee's successor is chosen and shall have

qualified. In the event of a vacancy occurring in the board of directors by reason of death,

resignation or removal of a member, a new member shall be similarly appointed to serve for the

unexpired term, and thereafter until his successor is chosen and shall have qualified.

     (b) The directors shall receive compensation and be reimbursed for his or her reasonable

expenses incurred in carrying out his or her duties as a director only as may be authorized at any

time and from time to time by the North Smithfield town administrator with and after the advice

and consent of the local governing body of North Smithfield. A director may engage in private

employment of a profession or business. The corporation shall be a public body for purposes of

section 9-1-31.1 of the general laws.

     (c) There shall be a chairman of the board of directors who shall be selected to serve at

the pleasure of the board of directors by an affirmative vote of not less than five members thereof.

The chairman shall designate a vice chairman who shall serve at the pleasure of the chairman.

Except as otherwise provided, herein, four (4) directors shall constitute a quorum and any action

to be taken by the authority under the provisions of the Act may be authorized by a resolution

approved by not less than a majority of the directors at any regular or special meeting at which a

quorum is present. A vacancy in the membership of the board of directors shall not impair the

right of a quorum to exercise all rights and to perform all duties of the authority.

     (d) Notwithstanding the provisions of the foregoing paragraph (c) the following actions

may be authorized only by an affirmative vote of not less than five (5) directors:

     (1) selection, appointment, setting the salary and determination, of the executive officer

of the authority, who shall have the title of executive director;

     (2) the sale of all, or substantially all, of the real and personal property of the authority;

     (3) the exercise of the power of eminent domain inferred upon the authority;

     (4) applications for, or setting of, rates for the authority's products and services;

     (5) the issuance of bonds, notes, or the borrowing of amounts in excess of, or the entry

into, any one or more series of contracts for a single purpose calling for the expenditure of five

hundred thousand dollars ($500,000) or more; and

     (6) the adoption of an annual budget.

     (e) In addition to an executive director, the board of directors shall appoint a secretary

and such additional officers, staff members and employees as it shall deem appropriate, and shall

determine the amount of reasonable compensation, if any, each shall receive. The board of

directors may vest in the executive director and his subordinates the authority to appoint

additional staff members, and to determine the amount of compensation such individuals shall

receive.

     (f) No full-time employee of the authority shall, during the period of his employment by

the authority, engage in any other private employment, profession or business, except with the

approval of the board of directors. No person shall be appointed executive director, if within one

year prior to the effective date of such appointment such person shall have been a member of the

authority's board of directors, or of the local governing body, or the North Smithfield town

administrator.

     (g) If any director, officer or employee of the authority shall be interested, directly or

indirectly, or shall be a director, officer or employee of, or have ownership interest (other than as

the owner of less than one percent of the shares of a publicly held corporation) in any firm,

person or corporation interested, directly or indirectly, in any contract with the authority, such

interest shall be disclosed to the authority and set forth in the minutes of the authority, and the

direct, officer or employee having such interest shall not participate on behalf of the authority in

the authorization of any such contract. Interested directors may be counted in determining the

presence of a quorum at the meeting of the board of directors of the authority which authorizes

the contract or transaction.

     (h) Any action taken by the authority under the provisions of this act may be authorized

by a vote at any regular or special meeting, and each such vote shall take effect immediately. The

board of directors may designate from among its members an executive committee, and one (1) or

more other committees, each of which to the extent authorized by the board of directors shall

have and exercise all authority of the board of directors, except no such committee shall have the

authority of the board of directors in reference to the matters set forth in subsection (d) of this

section, or amending the bylaws of the authority.

     (i) Any action required by this act to be taken at a meeting of the board of directors, or a

committee thereof, may be taken without a meeting if a consent in writing setting forth the action

to be taken shall be signed before or after such action by all of the directors or all of the members

of the committee, as the case may be.

     (j) Employees of the authority shall not, by reason of such employment, be deemed to be

employees of the state nor any municipality for any purpose, any provision of the general laws to

the contrary notwithstanding.

     Sec. 8. CONDEMNATION OF POWER

     (a) if for any of the purposes of this act, the authority shall find it necessary to acquire

any real property, whether for immediate or future use, the authority may find and determine that

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

construction or operation of a water supply facility, and upon such determination, the said

property shall be deemed to be required for such public use until otherwise determined by the

authority; and with the exceptions hereinafter specifically noted, the said determination shall not

be affected by the fact that such property has theretofore been taken for, or is then devoted to, a

public use; but the public use in the hands or under the control of the authority shall be deemed

superior to the public use in the hands of any other person, association or corporation; provided

further, however, that no real property or interest, estate or right therein belonging to the state

shall be acquired without consent of the state; and no real property or interest, estate or right

therein belonging to any municipality shall be acquired without the consent of such municipality;

     (b) The authority may proceed to acquire and is hereby authorized to any proceed to

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

right of eminent domain in the manner prescribed in this act.

     (c) Nothing herein contained shall be construed to prohibit the authority from bringing

any proceedings to remove a cloud on title or such other proceedings as it may, in its discretion,

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

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

presumed upon the adoption by the authority of a vote determining that the acquisition of such

property or any interest therein described in such vote is necessary for the acquisition,

construction or operation of a water supply facility. Within six (6) months after its passage, the

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

together with a statement signed by the chairman or vice-chairman of the authority that such

property indicating the nature and extent of the state or interest therein taken as aforesaid and a

plat thereof, which copy of the vote and statement of the chairman or vice-chairman shall be

certified by the secretary or an assistant secretary of the authority and the description and plat

shall be certified by the city or town clerk for the city or town within which the real property lies.

     (e) Forthwith thereafter the authority shall cause to be filed in the superior court in and

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

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

persons entitled thereto the sum set forth in such statement. The authority shall satisfy the court

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

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

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

balance shall be ordered repaid forthwith to the authority.

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

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

court, title to said real property in fee simple absolute or such lesser estate or interest therein

specified in said resolution shall vest in the authority, and said real property shall be deemed to be

condemned and taken for the use of the authority and the tight to just compensation for the same

shall vest in the persons entitled thereto, and the authority thereupon may taken possession of said

real property. No sum so paid into the court shall be charged with clerks' fees of any nature.

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

taking of such land or other real property shall be served upon the owners or persons having any

estate or interest in such real property by the sheriff or his deputies of the county in which the real

estate is situated by leaving a true and attested copy of the vote, statement, description and plat

with each of such persons personally, or at the last and usual place of abode in this state with

some person living there, and in case any of such persons are absent, from this state and have no

last and usual place of abode therein occupied by any person, such copy shall be left with the

person or persons, if any, in charge of, or having possession of such real property taken of such

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

same is known to the officer serving such notice.

     (h) After the filing of such vote, description and plat, the authority shall cause a copy of

the vote and description to be published in some newspaper having general circulation in the city

or town in which the real property lies at least once a week for three (3) successive weeks.

     (i) If any party agree with the authority upon the price to be paid for the value of the real

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

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

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

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

employee of the authority for any property or interest therein acquired from such official or

employee unless the amount of such payment is determined by the court to constitute just

compensation to be awarded in said proceedings.

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

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

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

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

personal notice, may within one (1) year from the time the sum of money estimated to be just

compensation is deposited in the superior court to the use of the persons entitled thereto, apply by

petition to the superior court for the county in which said real property is situated, setting forth

the taking of his or her land or his or her estate or interest therein and paying for an assessment or

damages by the court or by a jury. Upon the filing of such petition the court shall cause twenty

(20) days' notice of the pendency thereof to be given to the authority by serving the chairman or

vice chairman of the authority with a certified copy thereof.

     (k) After the service of such notice the court may proceed to the trial thereof. Such trial

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

fact relating to the value of such real property, and any estate or interest therein, and the amount

thereof and the appurtenant damage to any remainder and the amount thereof, and such trial and

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

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

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

thereof against any other property of the authority.

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

estate or interest therein, or to different estate or interests in the same real property, said court

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

necessary issued for the trial thereof.

     (m) If any real property or any estate or interest therein, in which any infant or other

person not capable in law to act in his or her own behalf is interested, is taken under the

provisions of this act, said superior court, upon the filing therein of a petition by or in behalf of

such infant or person or by the authority may appoint a guardian ad litem for such infant or other

person. Guardians may, with the advice and consent of said superior court, and upon such terms

as said superior land of such infant or other person or for any such estate or interest therein. Any

lawfully appointed, qualified and acting guardian or other fiduciary of the estate of any such

infant or other person, with the approval of the court of probate within this state having

jurisdiction to authorize the sale of lands and properties within this state of such infant or other

person, may before the filing of any such petition, agree with such infant or other person for any

taking of his or her real property or of his or her interest or estate therein, and may upon receiving

such amount, release to the authority all claims for damages for such infant or other person for

such taking.

     (n) In case any owner of or any person having any estate or interest in such real property

shall fail to file his petition as above provided, the superior court for the county in which the real

property is situated in its discretion, any permit the filing of such petition within one (1) year

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

estimated to be just compensation for the property taken; provided, such person shall have had no

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

person or persons claiming to won such real property or estate or interest therein shall have been

paid the value thereof; and provided, no judgment has been rendered against the authority for the

payment of such value to any other person or persons claiming to own such real estate.

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

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

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

years fro the first publication of the copy of the vote, statement and description, may petition such

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

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

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

order said sum to be deposited in the registry of such court in a special account to accommodate

for the benefit of the person or persons, if any, entitled thereto. The receipt of the clerk of the

superior court therefor shall constitute a discharge of the authority from all liability in connection

with such taking. When the person entitled to the money deposited shall have satisfied the

superior court of his or her right to receive the same, the court shall cause it to be paid over to him

or her, with all accumulations thereon.

     (p) The superior court shall have power to make such orders with respect to

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

     (q) Whenever in the opinion of the authority a substantial saving in the cost of acquiring

title can be affected by conveying other real property, title to which is in the authority, to the

person or persons from whom the estate or interest in real property is being purchased or taken or

by the construction or improvement by the authority of any work or facility upon the remaining

real property of the person or persons from whom the estate or interest in real property is being

purchased or taken, the authority shall be and hereby is authorized to convey such other real

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

purchased or taken and to construct or improve any work or facility upon the remaining land of

such person or persons.

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

for property or interest therein taken or to be taken by eminent domain by the authority, the

authority or any owner may apply to the court for an order directing an owner or the authority, as

the case may be, to show cause why further proceedings should not be expedited, and the court

may upon such application make an order requiring that the hearing proceed and that any other

steps be taken with all possible expedition.

     Sec. 9. BONDS AND NOTES OF THE AUTHORITY.

     (a) The authority shall have the power and is hereby authorized to issue from time to time

its negotiable bonds and notes in one or more series in such principal amounts as in the opinion of

the authority shall be necessary to provide sufficient funds for achieving its purposes, including

the payment of interest on bonds and notes of the authority, the establishment of reserves to

secure such bonds and notes (including the reserve funds created pursuant to section 12 hereof),

and the making of all other expenditures of the authority incident to and necessary or convenient

to carrying out its corporate purposes and powers.

     (b) All bonds and notes issued by the authority may be secured by the full faith and credit

of the authority and may be payable solely out of the revenues, earnings and receipts of the

authority. Such bonds and notes may be executed and delivered by the authority at any time, from

time to time, may be in such form and denominations and of such tenor and maturities, and may

be in bearer form or in registered form, as to principal and interest or as to principal alone, all as

the authority may determine.

     (c) Bonds may be payable in such installments, and at such times not exceeding fifty (50)

years from the date thereof, as shall be determined by the authority.

     (d) Except for notes issued pursuant to section 10, notes, and any renewals thereof, may

be payable in such installments and at such times not exceeding ten (10) years from the date of

the original issue of such notes, as shall be determined by the authority.

     (e) Bonds and notes may be payable at such places, whether within or without the state,

may bear interest at such rate or rates payable at such time or times and at such place or places

and evidenced in such manner, and may contain such provisions not inconsistent herewith, all as

shall be provided in the proceedings of the authority under which they shall be authorized to be

issued.

     (f) There may be retained by provision made in the proceedings under which any bonds

or notes of the authority are authorized to be issued an option to redeem all or any part thereof at

such prices and upon such notice, and on such further terms and conditions as shall be set forth on

the record of such proceedings and on the face of the bonds and notes.

     (g) Any bonds or notes of the authority may be sold from time to time at such prices, at

public or private sale, and in such manner as shall be determined by the authority, and the

authority shall pay all expenses, premiums and commissions that it shall deem necessary or

advantageous in connection with the issuance and sale thereof.

     (h) Moneys of the authority, including proceeds from the sale of bonds or notes, and

revenues, receipts and income from any of its water supply facilities, may be invested and

reinvested in such obligations securities and other investments consistent herewith as shall be

specified in the resolutions under which such bonds or notes are authorized.

     (i) Issuance by the authority of one or more series of bonds or notes for one or more

purposes shall not preclude it from issuing other bonds or notes, but the proceedings whereunder

any subsequent bonds or notes may be issued shall recognize and protect a prior pledge or

mortgage made for a prior issue of bonds or notes unless, in the proceedings authorizing such

prior issue, the right is reserved to issue subsequent bonds or notes on a parity with such prior

issue.

     (j) The authority is authorized to issue bonds or notes for the purpose of refunding its

bonds or notes then outstanding, including the payment of any redemption premium thereon and

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

maturity, of such bonds, or notes, and, if deemed advisable by the authority, for the additional

purpose of pay all or part of the cost of acquiring, constructing, reconstructing, rehabilitating, or

improving any water supply facility. The proceeds of bonds or notes issued for the purpose of

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

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

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

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

the United States of America, or in certificates of deposit or time deposits secured or guaranteed

by the state or the United States, or an instrumentality of either, maturing at such time or times as

shall be appropriate to assure the prompt payment, as to principal, interest and redemption

premium, if any, of the outstanding bonds or notes to be so refunded. The interest, income and

profits, if any, earned or realized on any such investment may also be applied to the payment of

the outstanding bonds or notes to be so refunded. After the terms of the escrow have been fully

satisfied and carried out, any balance of such proceeds and interest, income and profits, if any,

earned or realized on the statements thereof may be returned to the authority for use by it in

furtherance of its purposes. The portion of the proceeds of bonds or notes issued for the additional

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

developing or improving any water supply facility, may be invested and reinvested in such

obligations, securities and other statements consistent herewith as shall be specified in the

resolutions which such bonds or notes are authorized and which shall mature not later than the

times when such proceeds will be needed for such purposes. The interest income and profits, if

any, earned or realized on such investments may be applied to the payment of all parts of such

costs, or to the making of such loans, or may be used by the authority otherwise in furtherance of

its purposes. All such bonds or notes shall issued and secured and shall be subject to the

provisions of this act in the same manner and to the same extent as any other bonds or notes

issued pursuant to this act.

     (k) The directors, the executive director of the authority, and other persons executing

such bonds or notes shall not be subject to personal liability or accountability by reason of the

issuance thereof.

     (l) Bonds or notes may be issued under the provisions of this act without obtaining the

consent of any department, division, commission, board, body, bureau, or agency of the state, and

without any other proceedings or the happening of any conditions or things other than those

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

of the resolution authorizing the issuance of such bonds or notes or the trust agreement securing

the same.

     (m) The authority, subject to such agreements with noteholders or bondholders as may

then be in force, shall have power out of any funds available therefor to the purchase bonds or

notes of the authority, which shall thereupon be cancelled, at a price not exceeding:

     (1) if the bonds or notes are then redeemable, the redemption price then applicable plus

accrued interest to the next interest payment date, or

     (2) if the bonds or notes are not then redeemable, the redemption price applicable on the

earliest date that the bonds or notes become subject to redemption, plus the interest that would

have accrued to such date.

     (n) Whether or not the bonds and notes are of such form and character as to be negotiable

instruments under the terms of the state uniform commercial code, the bonds and notes are hereby

made negotiable instruments within the meaning of an for all the purposes of the state uniform

commercial code, subject only to the provisions of the bonds and notes for registration.

     (o) If a director or officer of the authority whose signature appears on bonds, notes or

coupons shall cease to be a director or officer before the delivery of such bonds or notes, such

signature shall, nevertheless, be valid and sufficient for all purposes, the same as if such director

or officer had remained in office until such delivery.

     Sec, 10. SHORT TERM NOTES. Money borrowed by the authority for the purpose of

providing temporary financing of the authority operations pending the issuance of bonds or other

notes shall be evidenced by notes or other obligations. The principal and interest of all notes or

other obligations of the authority so issued under the provisions of this section 10 shall be payable

no later than the fifth anniversary of the date of issue thereof, and shall be payable from the

following: (i) from the proceeds of bonds subsequently issued, or (ii) from the proceeds of

subsequent borrowings which comply with the provisions hereof, or (iii) from general revenues of

the authority which may be equal and proportionate with but not superior to that securing bonds

then outstanding or subsequently issued. Notwithstanding any other provisions of this Act, all

such notes shall be deemed to be negotiable instruments under the laws of the state subject only

to the provisions for registration contained therein. Such notes or other obligations or any issue

thereof shall be in a form and contain such other provisions as the authority may determine and

such notes or resolutions or proceedings authorizing such notes or other obligations or any issue

thereof may contain, in addition to any provisions, conditions, covenants or limitations authorized

by this Act, any provisions, conditions, covenants or limitations which the authority is authorized

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

relating thereto. The authority may issue such notes or other obligations in such manner either

publicly or privately on such terms as it may determine to be in its best interests. Such notes or

other obligations may e issued under the provisions of this Act without obtaining the consent of

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

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

or things which are specifically required by this Act and by the provisions and resolutions

authorizing the issuance of such notes or obligations.

     Sec. 11. SECURITY FOR BONDS OR NOTES.

     (a) The principal of and interest on any bonds or notes issued by the authority may be

secured by a pledge of any revenues and receipts of the authority and may be secured by a

mortgage or other instrument covering all or any part of one or more water supply facilities,

including all or part of any additions, improvements, extensions to or enlargements of such

facilities thereafter made.

     (b) The resolution under which the bonds or notes are authorized to e issued and any such

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

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

collection of rents, payments or repayments or other revenues therefrom, including moneys

received in repayment of loans, and interest thereon, the creation and maintenance of special

funds from such rents or other revenues and the rights and remedies available in the event of

default, all as the authority shall deem advisable.

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

of any of the bonds or notes of the authority shall continue in effect until the principal of and

interest on the bonds or notes for the benefit of which the same was made shall have been fully

paid, or until provision shall have been made for such payment in the manner provided in the

resolutions under which such bonds or notes were authorized.

     (d) The authority may provide in any proceedings under which bonds or notes may be

authorized that any water supply facility or part thereof may be constructed, reconstructed,

rehabilitated or improved by the authority, or any lessee, vendee, obligor or any designee of the

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

for disbursements to be made for the cost of such construction, and for all such certificates and

approvals of construction and disbursements as the authority shall deem necessary and provide

for in such proceedings.

     (e) Any resolution under which bonds or notes of the authority are authorized to be issued

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

trustees such properties, rights, powers and duties in trust as the authority may determine

including any or all of the rights, powers and duties of the trustee appointed by the holders of any

issue of bonds or notes pursuant to section 18, in which event the provisions of section 18

authorizing the appointment of a trustee by such holders of bonds or notes shall not apply.

     Sec. 12. RESERVE AND APPROPRIATIONS.

     To assure the continued operations and solvency of the authority for the carrying out of

its corporate purposes:

     (a) The authority may create and establish one or more special funds (herein referred to

as "capital reserve fund"), and may pay into each such capital reserve fund (i) any moneys

appropriated and made available by the state, or any municipality for the purpose of such fund,

(ii) proceeds from the sale of notes or bonds to the extent provided in the resolution or resolutions

of the authority authorizing the issuance thereof, and (iii) any other moneys that may be made

available to the authority for the purpose of such fund from any other source. All moneys held in

a capital reserve fund, except as hereinafter provided, shall e used solely for the payment of the

principal of bonds secured in whole or in part by such fund or of the sinking fund payments

hereinafter mentioned with respect to such bonds, the purchase or redemption of such bonds, the

payment of interest on such bonds or the payment of any redemption premium required to be paid

when such bonds are redeemed prior to maturity, provided that moneys in such fund shall not be

withdrawn therefrom [except for the purpose of making (with respect to bonds secured in whole

or in part by such fund) payment when due of principal, interest, redemption premiums and the

sinking fund payments hereinafter mentioned, for the payment of which other moneys of the

authority are not available] if such withdrawal would reduce the amount of such fund to less than

the minimum capital reserve requirement established for such fund as hereinafter provided. Any

income or interest earned by, or incremental to, any capital reserve fund due to the investment of

the funds thereof may be transferred by the authority to other funds or accounts of the authority if

such transfer would not reduce the amount of the capital reserve fund below the minimum capital

reserve fund requirement for such fund.

     (b) The authority shall not at any time issue bonds secured in whole or in part by a capital

reserve fund if, upon the issuance of such bonds, the amount of such capital reserve fund would e

les than the minimum capital reserved required for such fund, unless the authority, at the time of

issuance of such bonds, shall deposit in such fund from the proceeds of the bonds so to e issued,

or from other sources, an amount that, together with the amount then in such fund, is not less than

the minimum capital reserve fund requirement for such fund. For the purpose of this section, the

term "minimum capital reserve fund requirement" shall mean, as of any particular date of

computation, an amount of money, as provided in the resolution or resolutions of the authority

authorizing the bonds or notes with respect to which such fund is established, equal to not more

than the greatest of the respective amounts, for the current or any future fiscal year of the

authority, of annual debt service on the bonds of the authority secured in whole or in part by such

fund, such annual debt service for any fiscal year being the amount of money equal to the sum of

(i) the interest payable during such fiscal year on all bonds secured in whole or in part by such

fund outstanding on the date of computation; plus (ii) the principal amount of all such bonds and

bond anticipation notes outstanding on said date of computation that mature during such fiscal

year; plus (iii) all amounts specified in any resolution of the authority authorizing such bonds as

payable during such fiscal year as a sinking fund payment with respect to any of such bonds that

mature after such fiscal year, all calculated on the assumption that such bonds will after said date

of computation cease to be outstanding by reason, but only by reason, of the payment of bonds

when due and application in accordance with the resolution authorizing those bonds of all of such

sinking fund payments payable at or after said date of computation;

     (c) In computing the amount of the capital reserve funds for the purpose of this section,

securities in which all or a portion of such funds shall e invested, shall be valued as provided in

the proceedings under which the bonds are authorized but in no event shall be valued at a value

greater than par.

     (d) The authority may create and establish such other fund or funds as may be necessary

or desirable for its corporate purposes.

     (e) The authority may by resolution permit the issuance of bonds and notes to carry out

the purposes of this Act without establishing a capital reserve fund pursuant to this section and

without complying with the limitations set forth in this section. Bonds and notes issued pursuant

to this paragraph may be secured by such other funds or methods as the authority may in its

discretion determine by resolution.

     Sec. 13. TRUST FUNDS. All moneys received pursuant to the authority of this Act

whether as proceeds from the sale of bonds or notes or as revenues, receipts or income, shall e

trust funds to be held and applied solely as provided in the proceedings under which such bonds

or notes are authorized. Any officer with whom or any bank or trust company with which such

moneys shall be deposited as trustee hereof shall hold and apply the same for the purposes

thereof, subject to the applicable provisions of this Act, the proceedings authorizing the bonds or

notes and the trust agreement securing such bonds or notes, if any.

     Sec. 14. EXEMPTION FROM TAXATION.

     (a) The exercise of the powers granted by this Act will e in all respects for the benefit of

the people of this state, the increase of their commerce, welfare and prosperity and for the

improvement of their health and living conditions and will constitute the performance of an

essential governmental function and the authority shall not be required to pay any taxes or

assessments upon or in respect of any water supply facilities or of any property or moneys of the

authority, leveled by any municipality or political subdivision of the state; provided, however,

that the authority shall make payments in lieu of real property taxes and assessments and

franchise fees, to North Smithfield, with respect to water supply facilities located in such

municipality and revenues derived from sales therein during such times as the authority derives

revenue from the lease or operation of the same. Such payments in lieu of taxes and assessments

and franchise fees shall be made in such amounts as shall be agreed upon by the authority, and

the local governing body of North Smithfield. Failing such agreement, the amount of such

payment in lieu of taxes and fees shall be determined by the authority suing a formula that shall

reasonably assure that such amounts approximate the average amount of real property taxes and

assessments and franchise fees which would have been paid with respect to such water supply

facilities of a similar size and nature and sales of water within North Smithfield. North Smithfield

is empowered to accept at its option an amount of payments in lieu of taxes and fees less than that

determined by the authority.

     (b) The authority shall no be required to pay state taxes of any kind, and the authority, its

property and moneys and, except for estate, inheritance and gift taxes, any bonds or notes issued

under the provisions of this Act and the income (including gain from sale or exchange) therefrom

shall at all times be free from taxation of every kind by the state and by the municipalities and all

political subdivisions of the state. The authority shall not be required to ay any transfer tax of any

kind on account of instruments recorded by it or on its behalf.

     Sec. 15. NOTES AND BONDS AS LEGAL INVESTMENTS. The notes and bonds of

the authority are hereby made securities in which all public officers and bodies of this state and

all municipalities and municipal subdivisions, all insurance companies and associations, and other

persons carrying on an insurance business, all banks, bankers, trust companies, saving banks and

saving associations, including savings and loan associations, building and loan associations,

investment companies and other persons carrying on a banking business, all administrators,

guardians, executors, trustees and other fiduciaries, and all other persons whatsoever who are now

or may hereafter be authorized to invest in bonds or obligations of the state, may properly and

legally invest funds, including capital, in their control or belonging to them.

     Sec. 16. AGREEMENT OF THE STATE. The state does hereby pledge to and agree with

the holders of bonds or notes issued under this act, that the state will not limit or alter the rights

hereby vested in the authority to fulfill the terms of any agreements made with the holders until

such bonds or notes, together with interest thereon, with interest on any unpaid installments of

interest, and all costs and expenses in connection with any action or proceeding by or on behalf

such holders, are fully met and discharged. The authority is authorized to include this pledge and

agreement of the state in any agreement with the holders of such bonds or notes.

     Sec. 17. CREDIT OF STATE. Obligations issued under the provisions of this act, except

those obligations guaranteed by any municipality, shall not constitute a debt, liability or

obligation of the state or of any political subdivision thereof other than the authority or a pledge

of the faith and credit of the state or any political subdivision other than the authority, but shall be

payable solely from the revenues or assets of the authority. Each obligation issued under this act,

except those obligations guaranteed by any municipality, shall contain on the face thereof a

statement to the effect that the authority shall not be obligated to pay the same or interest thereon

except from revenues or assets pledged therefore and that neither the faith and credit nor the

taxing power of the state or any political subdivision thereof other than the authority is pledged to

the payment of the principal of or the interest on such obligation.

     Sec. 18. REMEDIES OF BONDHOLDERS AND NOTEHOLDERS.

     (a) In the event that the authority shall default in the payment of principal of or interest

on any bonds or notes issued under this act after the same shall become due, whether at maturity

or upon call for redemption, and such default shall continue for a period of thirty (30) days, or in

the event that the authority shall fail or refuse to comply with the provisions of this act, or shall

default in any agreement made with the holders of an issue of bonds or notes of the authority, the

holders of twenty-five percentum (25%) in aggregate principal amount of the bonds or notes of

such issue then outstanding, by instrument or instruments filed in the office of the secretary of

state and proved or acknowledged in the same manner as a deed to be recorded, may appoint a

trustee to represent the holders of such bonds or notes for the purposes therein provided.

     (b) Such trustee may, and upon written request of the holders of twenty-five percentum

(25%) in principal amount of such bonds or notes then outstanding shall, in his or her or its own

name:

     (1) enforce all rights of the bondholders of noteholders, including the right to require the

authority to collect rent, interest, repayments and payments on the leases, mortgages, loan

agreements and sales agreements held by it adequate to carry out any agreement as to, or pledge

of, such rent, interest repayments and payments, and to require the authority to carry out any

other agreements with the holders of such bonds or notes and to perform its duties under this act;

     (2) enforce all rights of the bondholders or noteholders so as to carry out any contract as

to, or pledge of, revenues, and to require the authority to carry out and perform the terms of any

contract with the holders of its bonds or notes or its duties under this act;

     (3) bring suit upon all or any part of such bonds or notes;

     (4) by action or suit, require the authority to account as if it were the trustee of an express

trust for the holders of such bonds or notes;

     (5) by action or suit, enjoin any acts or things which may be unlawful or in violation of

the rights of the holders of such bonds or notes;

     (6) declare all such bonds or notes due and payable and, if all defaults shall be made

good, then, with the consent of the holders of twenty-five percentum (25%) of the principal

amount of such bonds or notes then outstanding, to annul such declaration and its consequences.

     (c) Such trustee shall in addition to the foregoing have and possess all the powers

necessary appropriate for the exercise of any functions specifically set forth herein or incident to

the general representation of bondholders of noteholders in the enforcement and protection of

their rights.

     (d) Before declaring the principal of bonds or notes due and payable, the trustee shall first

give thirty (30) days' notice in writing to the governor of the state, the local governing body of

North Smithfield, and to the authority.

     (e) The superior court of Providence County shall have jurisdiction of any suit, action or

proceeding by the trustee on behalf of bondholders or noteholders.

     Sec. 19. AUTHORIZATION TO ACCEPT APPROPRIATED MONEYS. The authority

is authorized to accept such moneys as may be appropriated from time to time by the general

assembly or any municipality for effectuating its corporate purposes including, without limitation,

the payment of the initial expenses of administration and operation and the establishment of

reserves or contingency funds to be available for the payment of the principal of and the interest

on any bonds, notes and other obligations of the authority.

     Sec. 20 ADVANCES AND GUARANTEE. North Smithfield is authorized to advance

funds to the authority for any of its corporation purposes, such funds to be repaid without interest

from the proceeds of the first bonds thereafter issued by the authority for such purposes, North

Smithfield is further authorized by action of the local governing body to guarantee the bonds,

notes or other indebtedness of the authority, and the amount of such guarantee shall be exempt

from the operation of the provisions of section 45-12-2 of the general laws.

     Sec. 21. AUTHORITY CHARGES AS A LIEN AGAINST PROPERTY. The authority's

charges for the provision of water shall be billed to each user not less frequently than once each

calendar quarter; and all such charges and other fees and charges for services or facilities

provided by the authority, together with interest accruing thereon, shall constitute a lien upon the

estates, be they real or personal, of such user on a parity with a lien for municipal taxes until paid

in full, but such lien shall not be subject to termination under the provisions of section 44-9-1 of

the general laws. The authority shall have the same right to enforce the liens against the estates,

and to collect such charges and interest from the owners thereof, as the tax collector in the case of

municipal taxes assessed against residents of the state.

     Sec. 22. RIGHT TO ALTER, REMAND OR REPEAL. The right to alter, amend or

appeal this act is hereby expressly reserved to the general assembly, but no such alteration,

amendment or repeal shall operate to impair the obligation of any contract made by the authority

under any power conferred by this act.

     Sec. 23. CONTRACTS. The owner or owners of any water supply facilities which the

authority is authorized to acquire pursuant to the terms of this act, are hereby authorized to

acquire pursuant to the terms of this act, are hereby authorized to sell or otherwise transfer the

same to the authority, and in the case of the sale or transfer of water facilities pursuant to this

provision, it shall be lawful to dissolve such corporation, any other provisions of law to the

contrary notwithstanding. The authority may enter into contracts from time to time with any

public water supply agency or private water company providing for the purchase or sale of water

for periods not exceeding fifty (50) years, and all such agencies and companies are authorized to

enter into such contracts with the authority.

     Sec. 24. OTHER STATUTES AND ORDINANCES. Nothing herein contained shall

restrict or limit the powers of the authority arising under any laws of this state, or any ordinances

of any municipality, except if such powers are expressly contrary to the provisions of this act.

This act shall be construed to provide a complete additional alternative method for doing the

things authorized hereby, and shall be regarded as supplemental and in addition to the powers

conferred by other laws. The issuance of all bonds, notes and other obligations of the authority

under the provisions of this act need not comply with the requirements of any other statute

applicable to the issue of the same, and contracts for the construction and acquisition of water

supply facilities undertaken pursuant to this act need not comply with any other provisions of

state law and municipal ordinances applicable to such contracts for the construction and

acquisition of state or municipality owned property. No proceedings or notice of approval shall be

required for the issuance of any bonds, notes or other obligations or any instrument of security

therefore except as herein provided. The authority shall be exempt from the provisions of any

zoning, planning other land use control ordinance adopted by any municipality.

     Sec. 25. ANNUAL REPORT. The authority shall submit to the North Smithfield town

administrator and the local governing body of North Smithfield, within six months after the close

of its fiscal year a complete and detailed report setting forth: (1) its operations and

accomplishments; (2) its receipts and expenditures during such fiscal year accordance with the

categories and classifications established by the authority for its operating and capital outlay

purposes; (3) its assets and liabilities at the end of its fiscal year including a schedule of its leases

and mortgages and the status of the reserve, special or other of its fiscal year together with a

statement of amounts redeemed and incurred during such fiscal year. Such reports shall be

prepared independent certified public accountants in accordance with generally accepted

principles of accounting.

     Sec. 26. LIABILITY OF THE AUTHORITY. The authority shall, subject to the period of

limitations set forth in section 9-1-25 of the general laws, be liable in actions of tort only to the

extent that such actions do not arise from the performance of any functions found or deemed to be

essential or discretionary governmental functions. Any recovery in such action or any recovery by

any person in any one or more of any such actions against the authority, its directors, employees

or agents shall not exceed one hundred thousand dollars ($100,000) per plaintiff in the absence of

fraud or willful misconduct.

     Sec. 27. INCONSISTENT PROVISIONS. Insofar as the provisions of this act are

inconsistent with the provisions of any other law or ordinance, general, special or local, the

provisions of this act shall be controlling.

     Sec. 28. LIBERAL CONSTRUCTION. This act being necessary for the welfare of the

state and its inhabitants shall be liberally construed so as to effect its purposes.

     Sec. 29. SEVERABILITY. If any clause, sentence, paragraph, section, or part of this act

shall be adjudged by an court of competent jurisdiction to be invalid, such judgment shall not

affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to clause,

sentence, paragraph, section or part directly involved in the controversy in which such judgment

shall have been rendered.

     Sec. 30. REPEALS. All acts or parts of acts inconsistent with the provisions of this act

are hereby repealed to the extent of such inconsistency.

     Sec. 31. OPEN MEETINGS AND PUBLIC RECORDS. All meetings of the North

Smithfield Water Authority shall be open to the public and subject to the provisions of chapter

42-46 of the general laws. All records of the authority shall be public records and subject to the

provisions of chapter 38-2 of the general laws.

 

     Section 2. REFERENDA. The question of the approval of this act shall be submitted to

the qualified electors of North Smithfield at the election the date of which shall be determined by

agreement by the local governing body of North Smithfield. The question shall be substantially in

the following form: "Shall an Act passed at the 2006 Session of the General Assembly entitled

'An Act in amendment of Chapter 218 of the Public Laws of 1993 entitled 'An Act Relating to the

Town of North Smithfield To Create the North Smithfield Water Authority and To Provide for Its

Powers and Duties' be approved?", and the warning for the election shall contain the question to

be submitted. From the time the election is warned and until it is held it shall be the duty of the

clerk of North Smithfield to keep a copy of the act available at his or her office for public

inspection but the failure of the clerk to perform this duty shall not effect the validity of the

election.

 

     Section 3. EFFECTIVENESS. This section and section 2 shall take effect upon the

passage of this act. The remainder of this act shall take effect upon the approval of this act by a

majority of those voting on the question in such town at the election prescribed by section 2

hereof.

 

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LC03072/SUB A

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