§ 45-58-11. Bonds. (a) The utility district shall have the power and is hereby authorized from time to time to issue its negotiable bonds for any of its corporate or district purposes and to secure the payment of the bonds in such manner and by such means as may be provided in the resolution or resolutions of the utility district authorizing the bonds, subject to the regulatory jurisdiction of the division of public utilities and carriers in the manner prescribed in § 39-3-15, where applicable.

(b) The utility district is specifically authorized to secure bonds that it may issue from time to time by a pledge of, or creation of other security interest in, the revenues of the utility district, which pledge or security interest may be enforceable by the grant of a conditional franchise, in the event of default in the payment of the bonds, entitling the secured party or trustee to enter upon and take control of the utility district's facilities and service and to provide utility service and receive the revenues from the utility district's facilities and service for such period, not exceeding twenty (20) years, as may be necessary to recover all payments due on the bonds.

(c) The bonds of the utility district shall be authorized by resolution of the board of utility commissioners. The bonds shall bear such date or dates, mature at such time or times not exceeding forty (40) years from their issuance, bear interest at such rate or rates payable at such time or times, be in such denominations and in such form, carry such registration privileges, be executed in such manner, be payable in such medium of payment, at such place or places and such time or times and be subject to redemption at such premium, if required, and on such terms, as the resolution may provide. The bonds so authorized and issued pursuant to this chapter may be sold at public or private sale for any price or prices that the utility district shall determine.

(d) Pending the issuance of bonds in definitive form, the utility district may issue bond anticipation notes or interim receipts in such form as the board of utility commissioners may elect.

(e) The utility district is hereby authorized to provide for the issuance of refunding bonds of the utility district for the purpose of refunding any bonds then outstanding which shall have been issued under the provisions of this chapter, including the payment of any redemption premium on the bonds or interest accrued or to accrue to the earliest or subsequent date of redemption, purchase or maturity of the bonds and, if deemed advisable by the utility district, for the additional purpose of paying all or a part of the cost of acquiring, constructing, reconstructing, rehabilitating, or improving any property, facilities or systems or parts of property facilities or systems of the utility district. The proceeds of bond or notes issued for the purpose of refunding outstanding bonds or notes may be applied, in the discretion of the utility district, to the purchase, retirement at maturity or redemption of outstanding bonds or notes either on their earliest or a subsequent redemption date and may, pending that application, be placed in escrow in the same manner and through the same means as are generally available to and incumbent upon political subdivisions of the state.

(f) It is hereby declared that the utility district and the carrying out of its corporate, district and political subdivision purposes is in all respects for the benefit of the people of the state and for the improvement of their health, welfare and prosperity, and the utility district will be performing an essential governmental function in the exercise of the powers conferred by this chapter. The state therefore covenants with the holders of the utility district's bonds that the utility district shall not be required to pay taxes or payments in lieu of taxes to the state or any other political subdivision of the state upon any property of the utility district or under its jurisdiction, control or supervision, or upon any of the utility district's activities in the operation or maintenance of the property or upon any earnings, revenues, moneys or other income derived by the utility district, and that the bonds of the utility district and the income from the bonds shall at all times be exempt from taxation by the state and its political subdivisions. Notwithstanding the foregoing, nothing in this section shall be deemed to prohibit the division of public utilities and carriers, the public utilities commission and the department of attorney general from assessing the utility in accordance with the provisions of §§ 39-1-23, 39-1-26, 39-19-9 and 39-19-14.

(g) The state does hereby pledge to and agree with the holders of the bonds, notes or other indebtedness of the utility district that the state will not limit or alter the rights vested in the utility district until the bonds, notes or other evidence of indebtedness, together with the interest on the debt, are fully met and discharged.

(h) Any resolution or resolutions authorizing any bond, or any issue of bonds, may contain provisions which shall be a part of the contract with the bondholders of the bonds thereby authorized, as to:

(1) Pledging all or any part of the money, earnings, income, and revenues derived from all or any part of the property of the utility district to secure the payment of any bonds or of any issue of bonds subject to such agreements with bondholders as may then exist;

(2) The rates to be fixed and the charges to be collected and the amounts to be raised in each year and the use and disposition of the earnings and other revenue;

(3) The setting aside of reserves and the creation of sinking funds and the regulation and disposition thereof;

(4) Limitations on the right of the utility district to restrict and regulate the use of the properties in connection with which the bonds are issued;

(5) Limitations on the purposes to which the proceeds of sale of any issue of bonds may be put;

(6) Limitations on the issuance of additional bonds, including refunding bonds and the terms upon which additional bonds may be issued and secured;

(7) The procedure, if any, by which the terms of any contract with bondholders may be amended or abrogated, the percentage of bondholders whose consent shall be required for such amendment or abrogation, and the manner in which consent may be given;

(8) The creation of special funds into which any earnings or revenues of the utility district may be deposited, and the investment of the funds;

(9) The appointment of a fiscal agent and the determination of its powers and duties;

(10) Limitations on the power of the utility district to sell or otherwise dispose of its properties;

(11) The preparation of annual budgets by the authority and the employment of consultants and auditors;

(12) The rights and remedies of bondholders in the event of failure on the part of the utility district to perform any covenant or agreement relating to a bond indenture;

(13) Covenanting that as long as any bonds are outstanding the utility district shall use its best efforts to establish and maintain its rates and charges at levels adequate at all times to pay and provide for all operating expenses of the utility district, all payments of principal, redemption premium (if any), and interest on bonds, notes or other evidences of indebtedness incurred or assumed by the utility district, all renewals, repairs and replacements to the property and facilities of the utility district, and all other amounts which the utility district may be required by law to pay; and

(14) Any other matters of like or different character which in any way affect the security or protection of the bonds.

(i) The bonds of the utility district 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, savings banks, and savings 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 whomsoever, who are now or may thereafter be authorized to invest in bonds or other obligation of the state may properly and legally invest funds including capital in their control or belonging to them. The bonds are also hereby made securities which may be deposited with and shall be received by all public officers and bodies of this state, and all municipalities and municipal subdivisions, for any purpose for which the deposit of bonds or other obligations of this state is now or may thereafter be required.

History of Section. (P.L. 2001, ch. 12, § 1; P.L. 2001, ch. 47, § 1.)