Public Utilities and Carriers

Public Utilities Commission

SECTION 39-1-59

§ 39-1-59 True sale.

(a) To better implement the purposes of §§ 39-1-43 – 39-1-60, inclusive, with a view to maximizing customer savings intended to be accomplished thereby, in the event that all or a portion of the interest of an electric distribution company or assignee in a securitization order, including any intangible transition property arising therefrom, is transferred in a transaction that is approved in the securitization order and which the governing documentation expressly states to be a sale or other absolute transfer of the transferor's right, title and interest in the portion of such order and intangible transition property so transferred, then such transfer shall be treated as a sale or other absolute transfer of the interest so transferred, as in a true sale and not as a pledge or other financing thereof and shall be deemed to constitute a sufficient transfer of dominion over such transferred portion of the securitization order and the intangible transition property to constitute a true sale. For this purpose, the absolute nature of such a sale or other transfer shall not be affected or impaired in any manner by, among other things: (i) the assignor's retention of bare legal title to intangible transition property for the purpose of servicing or supervising the servicing of such property and collections with respect thereto; (ii) the assignor's retention, or acquisition, as a part of the assignment transaction or otherwise, of a de minimis equity interest not exceeding five percent (5%) in the intangible transition property for investment purposes, or the provision of credit enhancement at market rates for the same de minimis portion of such property; (iii) any provision in the securitization order determining the order in which amounts are deemed collected, on either a priority or ratable basis, in respect of intangible transition charges and other rates or charges, excluding taxes, collected from customers of the electric distribution company, in the event of partial payment; (iv) the fact that only a portion of the intangible transition property is transferred; or (v) the fact that the electric distribution company or an affiliate thereof acts as the collector of intangible transition charges in connection with intangible transition property.

(b) Notwithstanding such a sale or other absolute transfer of intangible transition property, the consideration received by an electric distribution company or assignee in respect of any such sale or transfer shall not be subject to any state or local taxes, or any surcharges based on such taxes, now or hereafter imposed, nor shall the assignee of intangible transition property be considered to be a public utility or a party providing electric services for purposes of this chapter. The electric distribution company or other party providing electric services with respect to which intangible transition charges are authorized and/or required to be imposed shall be the party obligated to collect and/or be liable to pay each of the foregoing taxes with respect to such charges. In addition, notwithstanding such sale or other absolute transfer, the commission shall continue to have jurisdiction to take such further actions as are required or permitted to be taken with respect to the securitization order in accordance with the terms of such order, and pursuant to the provisions of this chapter, notwithstanding that the assignee or financing party is not an electric distribution company or other party that would otherwise be subject to the jurisdiction of the commission.

History of Section.
(P.L. 1997, ch. 142, § 1; P.L. 2006, ch. 216, § 9.)