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MUNICIPAL ELECTRIC REVENUE BONDS

RSA tit. XXXIV, ch. 374-B
in effect

RSA 374-B:1 Definitions.

374-B:1. Definitions. In this chapter: I. "Commission" means the public utilities commission. II. "Electric power facilities" means generating units rated 25 megawatts or above and transmission facilities rated 69 kilovolts or above. III. "Municipality" means a city, town or village district engaged in the generation and sale or the purchase and sale of electricity or the distribution thereof, for ultimate consumption by the public under provisions of RSA 38, RSA 52 or any special laws. Except where otherwise specifically provided, a municipality may exercise any of its powers or authority contained in this chapter through its municipal officers or members of the board of commissioners in whom the management of its electric system is vested. Source. 1975, 501:1. 1997, 206:4, eff. July 1, 1997.

RSA 374-B:2 Authorization and Issuance of Bonds.

374-B:2. Authorization and Issuance of Bonds. I. Any municipality, when authorized by a 3/5 vote as defined in RSA 33:8 for bonds or notes not in excess of $100,000, or in RSA 33:8-a for other bonds or notes for towns and village districts or in RSA 33:9 for cities, may, subject to the approval of the commission under RSA 369:1, borrow money through the issue of revenue bonds to finance project costs, or its share of project costs, of electric power facilities. The commission in rendering its decision shall, in addition to the other requirements of said RSA 369:1, approve only such issue as the commission finds, after notice and opportunity for hearing, is appropriate to finance an electric power facility which is both consistent with the power needs of the state and necessary to supply the load plus reserve requirements created by the municipality's retail customers, and by such wholesale customers as may have existed on the day of the vote of the municipality, said load plus reserve requirements to be forecast by the municipality at a time 3 years beyond the scheduled date for commencement of commercial operation of the facility; in evaluating the ability of the municipality to supply its load plus reserve requirements at said time, the commission shall deduct from these requirements all capacity in other generating units to which the municipality will then be entitled by ownership or contract, including any contracts for the purchase of electricity to be in force at said time. The project costs to be financed may include finance charges, interest prior to and during the carrying out of any project and for a reasonable period thereafter, prepayments under contracts made pursuant to RSA 374-A:2, the funding of notes issued for project costs as hereinafter provided, such reserves for debt service (including a common reserve for debt service established pursuant to an agreement for consolidation of indebtedness under paragraph VI) or other capital or current expenses as may be required by a trust agreement or resolution securing notes or bonds, and all other expenses incidental to the determination of the feasibility of any project or to carrying out the project or to placing the project in operation. II. The bonds of each issue may mature at a time or times not exceeding 40 years from their dates of issue, may be made redeemable before maturity with or without premiums, and the first payment of principal may be made payable within 2 years after such time as the electric power facility being financed is projected to be in normal operation. Subject to this chapter and to the terms of the commission's approval and of the authorizing vote, the municipality shall determine the date or dates of the bonds, their denomination or denominations, the place or places of payment of the principal and interest, which may be at any bank or trust company within or without the state, their interest rate or rates, maturity or maturities, redemption privileges, if any, and the form and other details of the bonds. The bonds shall be signed by the treasurer, shall be countersigned by the mayor or city manager, as the case may be, of a city or by a majority of the members of the governing board of a town or village district, either manually or by facsimile, and shall bear the seal of the municipality or a facsimile thereof. Any coupons attached thereto shall bear the facsimile signature of the treasurer. III. In case any officer whose signature or a facsimile of whose signature shall appear on any bonds, coupons or notes issued under this chapter shall cease to be such officer before the delivery thereof, such signature or such facsimile shall nevertheless be valid and sufficient for all purposes the same as if he had remained in office and until after such delivery. IV. The bonds may be issued in coupon or in registered form, or both, and provision may be made for the registration of any coupon bonds as to principal alone and also as to both principal and interest, for the reconversion into coupon bonds of bonds registered as to both principal and interest, and for the interchange of registered and coupon bonds. Subject to this chapter and to the terms of the commission's approval and of the authorizing vote, the municipality may sell the bonds in such manner, either at public or private sale, for such price, as it may determine will best effect the purpose of this chapter. V. Prior to the preparation of definitive bonds, the municipality may issue interim receipts or temporary bonds, with or without coupons exchangeable for definitive bonds when such bonds shall have been executed and are available for delivery. VI. Upon the votes of 2 or more municipalities authorizing the issue of revenue bonds in conformity with this chapter, including approval of the commission as to each of said municipalities, or notes in anticipation thereof, for project costs of the same facilities, said municipalities may enter into an agreement for the consolidation of the indebtedness so authorized and the issuance of such revenue bonds, or notes in anticipation thereof, by one such municipality on behalf of itself and one or more others if the authorizing votes provide for such consolidation. The agreement for consolidation shall require the participating municipalities, severally and not jointly, to provide the funds necessary to pay their respective shares of the principal and interest on the bonds or notes so issued. Such obligation of each participating municipality shall be payable solely from the funds provided therefor under this chapter and may be secured in the same manner as bonds or notes issued separately by it under this chapter. Source. 1975, 501:1, eff. June 24, 1975. 2020, 38:20, eff. Sept. 27, 2020.

RSA 374-B:3 Temporary Notes.

374-B:3. Temporary Notes. In anticipation of the authorization or issue of bonds under this chapter, and subject to the approval of the commission under RSA 369:1 or RSA 369:7, a municipality, when authorized by a 3/5 vote as defined in RSA 33:8 for towns and village districts or in RSA 33:9 for cities, may issue temporary notes. Subject to the terms of the commission's approval and of the authorizing vote, the municipality may provide for the sale of the notes at public or private sale and may determine the interest rate or rates, maturity or maturities, redemption privileges, if any, form, denomination or denominations and place or places of payment or provide for the determination thereof by the treasurer. Temporary notes issued hereunder shall be executed in the manner provided herein for bonds and shall be payable within 6 years from their respective dates, but the principal of and interest on notes issued for a shorter period may be renewed or paid from time to time by the issue of other notes under this chapter, provided the period from the date of issue of an original note to the maturity of any note issued to renew or pay the same debt or the interest thereon shall not exceed 6 years. Unless otherwise provided in the authorizing vote or in the approval of the commission, the municipality may cause notes to be refunded to the extent provided in this chapter. To the extent of any borrowing in anticipation of bonds, the maximum maturity of an equivalent amount of the bonds shall be measured from the date of the anticipatory borrowing. Source. 1975, 501:1, eff. June 24, 1975. 2020, 38:21, eff. Sept. 27, 2020.

RSA 374-B:4 Resolution or Trust Agreement Securing Bonds or Notes.

374-B:4. Resolution or Trust Agreement Securing Bonds or Notes. I. In the discretion of the municipality, but subject to the terms of the commission's approval and of the authorizing vote, any bonds or notes issued hereunder may be secured by a resolution of the municipality or by a trust agreement between the municipality and a corporate trustee, which may be any trust company or bank having powers of a trust company in the state of New Hampshire or in the commonwealth of Massachusetts, and such trust agreement shall be in such form and executed in such manner as may be determined by the municipality. Such trust agreement or resolution may pledge or assign, in whole or in part, the revenues and other moneys derived or to be derived by the municipality from its electric system and any contract or other rights to receive the same, whether then existing or thereafter coming into existence and whether then held or thereafter acquired by the municipality and the proceeds thereof, but shall not convey or mortgage the plant or any part thereof. Such trust agreement or resolution may contain, with respect to the electric plant and its finances, such provisions for protecting and enforcing the rights, security and remedies of the bondholders or noteholders as may be reasonable and proper and not in violation of law, including, without limiting the generality of the foregoing, provisions defining defaults and providing for remedies in the event thereof which may include the acceleration of maturities and covenants setting forth duties of, and limitations on, the municipality in relation to the acquisition, construction, improvements, enlargement, alteration, equipping, furnishing, maintenance, use, operation, repair, insurance and disposition of property, the custody, safeguarding, investment and application of moneys, the issue of additional bonds or notes, the fixing, revision and collection of fees and charges, the obligations of the municipality to pay for electricity used by it, the use of any surplus bond or note proceeds, the establishment of reserves from bond or note proceeds or revenues, and the replacement of bonds, notes or coupons which shall become mutilated or be destroyed or lost. Such trust agreement or resolution may provide for the payment of debt service on general obligation bonds and notes issued by the municipality for electric purposes from the revenues or other moneys so pledged, either on a party with any or all bonds and notes issued hereunder or otherwise. Subject to this chapter, moneys subject to the trust agreement or resolution shall be held, invested and applied as provided therein, provided that moneys not deposited in trust with a corporate trustee shall be in the custody of the treasurer. Moneys to be applied pursuant to the trust agreement or resolution shall be deemed appropriated for the purposes to which they are to be so applied. II. It shall be lawful for any bank or trust company to act as a depository or trustee of the proceeds of the bonds or notes or of revenues or other moneys under any such trust agreement or resolution and to furnish such indemnifying bonds or to pledge such securities as may be required by the trust agreement or resolution. Any such trust agreement or resolution may set forth the rights and remedies of the bondholders or noteholders and of the trustee, and may restrict the individual right of action by bondholders or noteholders. All expenses incurred in carrying out the provisions of such trust agreement or resolution may be treated as current operating expenses. Sums required to be reserved from revenues pursuant to such trust agreement or resolution for the same purposes as any municipality is required to carry a depreciation account under RSA 374:10 shall be in lieu of an equivalent allowance for depreciation. The pledge by any such trust agreement or resolution shall be valid and binding and shall be deemed continuously perfected for the purposes of RSA 382-A from the time when the pledge is made; the revenues, moneys, rights and proceeds so pledged and then held or thereafter acquired or received by the municipality shall immediately be subject to the lien of such pledge without any physical delivery or segregation thereof or further act; and the lien of any such pledge shall be valid and binding as against all parties having claims of any kind in tort, contract or otherwise against the municipality, irrespective of whether such parties have notice thereof. Neither the resolution nor any trust agreement by which a pledge is created need be filed or recorded except in the records of the municipality, and no filing need be made under RSA 382-A. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:5 Investment of Proceeds.

374-B:5. Investment of Proceeds. Subject to the trust, agreement or resolution, the proceeds of bonds or notes issued under this chapter and any other moneys governed by the trust agreement or resolution may be deposited or invested in demand deposits, time deposits or savings deposits in banks which are members of the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United States or by any agency or instrumentality thereof or as may be provided by any other applicable law. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:6 Bonds and Notes Payable Solely From Certain Funds; Exclusion From Debt Limit.

374-B:6. Bonds and Notes Payable Solely From Certain Funds; Exclusion From Debt Limit. The bonds and notes issued under this chapter shall be payable solely from the funds provided therefor hereunder, the liability of the municipality from other funds being limited to obligations undertaken by it to pay for the electricity used by it, and a statement to this effect shall be included on the face of such bonds and notes. The bonds and notes and such obligations shall not at any time be included in the debt of the municipality for the purpose of ascertaining its borrowing capacity. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:7 Trust Funds.

374-B:7. Trust Funds. All moneys received by the municipality under this chapter shall be deemed to be trust funds to be held and applied solely as provided in this chapter; provided, however, that RSA 31:19-38 shall not apply thereto. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:8 Remedies.

374-B:8. Remedies. Any holder of bonds or notes issued under this chapter, or of any of the coupons appertaining thereto, and the trustee under a trust agreement or resolution securing the same, except to the extent the rights herein given may be restricted by such trust agreement or resolution, may bring suit upon the bonds, notes or coupons and may, either at law or in equity, by suit, action, mandamus or other proceedings, protect and enforce any and all rights under the laws of the state or granted under this chapter or under such trust agreement or resolution, and may enforce and compel the performance of all duties required by this chapter or by such trust agreement or resolution to be performed by the municipality or by any officer thereof. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:9 Bonds and Notes Eligible for Investment.

374-B:9. Bonds and Notes Eligible for Investment. Bonds and notes issued under this chapter are securities in which all public officers and public bodies of the state and its political subdivisions, all insurance companies, trust companies, banking associations, credit unions, building and loan associations, investment companies, executors, administrators, trustees and other fiduciaries, pension, profit-sharing and retirement funds may properly invest funds, including capital in their control or belonging to them. Such bonds and notes are securities which may properly be deposited with and received by any state or municipal officer or any agency or political subdivision of the state for any purpose for which the deposit of bonds or obligations of the state is now or may hereafter be authorized by law. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:10 Investment Securities.

374-B:10. Investment Securities. Notwithstanding any provision of this chapter or any recitals in any bonds and notes issued under this chapter, all such bonds and notes shall be deemed to be investment securities under RSA 382-A. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:11 Tax Exemption.

374-B:11. Tax Exemption. The bonds and notes issued under this chapter, their transfer and the income therefrom, including any profit made on the sale thereof, shall at all times be free from taxation within the state. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:12 Revenue Refunding Bonds.

374-B:12. Revenue Refunding Bonds. Any municipality having bonds outstanding under this chapter, when authorized by a 3/5 vote as defined in RSA 33:8 for towns and village districts and in RSA 33:9 for cities, may issue refunding bonds for the purpose of paying bonds issued by or on its behalf, at maturity or upon acceleration or redemption, subject to the approval of the commission under RSA 369:1. The refunding bonds may be issued in sufficient amounts to pay or provide the principal of the bonds being refunded, together with any redemption premium thereon, any interest accrued or to accrue to the date of payment of such bonds, the expenses of issue of the refunding bonds, the expenses of redeeming the bonds being refunded, and such reserves for debt service (including a common reserve for debt service established pursuant to an agreement for consolidation of indebtedness under RSA 374-B:2, VI) or other capital or current expenses from the proceeds of such refunding bonds as may be required by a trust agreement or resolution securing bonds or notes. The refunding bonds may be issued not more than 5 years prior to the maturity or redemption date of bonds being refunded. The issue of refunding bonds, the maturities and other details thereof, the security therefor, the rights of the holders thereof, and the rights, duties and obligations of the municipality in respect of the same shall be governed by the provisions of this chapter relating to the issue of bonds other than refunding bonds insofar as the same may be applicable, but no bonds shall be refunded to a date later than the refunded bonds could have matured hereunder. Source. 1975, 501:1, eff. June 24, 1975. 2020, 38:22, eff. Sept. 27, 2020.

RSA 374-B:13 No Other Proceedings Required; Issuance of Bonds or Notes Under Other Authority Not Precluded.

374-B:13. No Other Proceedings Required; Issuance of Bonds or Notes Under Other Authority Not Precluded. Bonds and notes may be issued under this chapter without the consent of any department, division, commission or agency of the state or of any political subdivision thereof and without any proceedings or the happening of any other conditions or things than those proceedings, conditions or things which are specifically required therefor by this chapter. Except as expressly provided in this chapter, RSA 33 shall not apply to the issue of bonds and notes hereunder. The provisions of this chapter authorizing the issue of bonds and notes shall not be deemed to preclude the issue of bonds and notes under any other authority. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:14 Payments in Lieu of Taxes.

374-B:14. Payments in Lieu of Taxes. In connection with all sales, use and excise taxes imposed with respect to electric power facilities, materials included or to be included therein, or energy produced thereat and sold at wholesale therefrom, by any laws of the state, a municipality participating in an electric power facility by ownership, prepayment or contract for purchase of capacity and related energy from a specifically identified generating unit shall be subject to payments in lieu of such taxes in the same manner and under the same procedures as a corporation which is a domestic electric utility is subject to such taxes and shall be limited to only those exemptions as are available to such a corporation. Source. 1975, 501:1, eff. June 24, 1975.

RSA 374-B:15 Applicability of Chapter.

374-B:15. Applicability of Chapter. This chapter shall be applicable only to such cities, towns and village districts as on January 1, 1975, met the definition of "municipality" as defined in RSA 374-B:1, III, and to such additional cities, towns or village districts as begin after that date to engage in the generation and sale or the purchase and sale of electricity or the transmission thereof, for ultimate consumption by the public, under RSA 38, RSA 52, or any special laws and which comply with the following: I. Such an additional city, town or village district shall first acquire or establish a plant for the manufacture or distribution of electricity only after the commission, after notice and opportunity for hearing, shall have found that there is a public need for such acquisition or establishment and that the terms thereof are in the public interest; and II. The determinations of the commission required under RSA 38:9 or RSA 38:10 have been made not more than 12 months following the initial vote taken under RSA 38:3, RSA 38:4 or RSA 38:5, except that this provision shall not apply to any vote taken prior to June 24, 1975. Source. 1975, 501:1. 1997, 206:5, eff. July 1, 1997.

RSA 374-B:16 Severability.

374-B:16. Severability. This chapter shall be construed in all respects so as to meet all constitutional requirements. Except as expressly provided, the provisions of this chapter shall not affect the interpretation of other laws. If any provision or clause of this chapter, or the application thereof to any person or circumstance, is held invalid, such invalidity shall not affect other provisions or applications of the chapter, except as hereinafter set forth in this section. In the event it is finally determined by a court of competent jurisdiction that a municipality is not subject, with respect to any electric power facilities financed under this chapter, to payments in lieu of taxes under RSA 374-B:14 by reason of the unconstitutionality of said section, or that the borrowing limitation set forth in RSA 374-B:2, I, is unconstitutional, the municipality involved shall, and any person may, file written notice of such decision with the commission. Such notice shall include a statement that it is filed pursuant to this section. After such a filing the commission shall not have any further authority to approve the issue of bonds under this chapter except: I. If it finds that any electric utility has, prior to such filing, undertaken substantial expense or liability in expectation of such bond financing; or II. If notes have been issued, prior to such a filing, under RSA 374-B:3 in anticipation of revenue bonds. Source. 1975, 501:1, eff. June 24, 1975.
Source: New Hampshire General Court (gc.nh.gov)URL: https://gc.nh.gov/rsa/html/NHTOC/NHTOC-XXXIV-374-B.htmFetched: 10/20/2026

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