HB 1409 – AS INTRODUCED
HOUSE BILL 1409
This bill permits municipalities to exercise a right of first refusal in the sale of the property or stock of a water utility.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [
in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Eight
AN ACT creating a right of first refusal for a municipality in which certain utility property or stock is proposed to be sold by a utility.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Paragraphs; Definitions. Amend RSA 38:1 by inserting after paragraph V the following new paragraphs:
VI. “Covered utility” means any utility that owns and operates a water utility plant or water utility property that is partially or entirely within the boundaries of a municipality.
VII. “Stock of a utility” means the stock of, or other proprietary interests in, an entity that owns or operates the plant and property of a water utility, or the stock of, or other proprietary interests in, any water utility holding company.
2 Establishment, Acquisition, and Expansion of Plants. Amend RSA 38:2, II to read as follows:
II. For these purposes, take, purchase, and hold in fee simple or otherwise lease or otherwise acquire and maintain any real or personal estate and any rights therein, including water rights and stock of a utility under RSA 38:8 and RSA 38:11.
3 New Section; Acquisition of Stock of a Utility. Amend RSA 38 by inserting after section 2-a the following new section:
38:2-b Acquisition of the Stock of a Utility. If the governing body of the municipality and a water utility agree upon the price for the plant and property of the utility to be acquired under RSA 38:8 and RSA 38:11, or the municipality exercises its right of first refusal under RSA 374:32-a, the municipality may, for the purpose of obtaining control of the plant and property of the water utility, acquire and hold the stock of the utility or the stock of the entity that owns or operates the plant and property of the water utility, or establish a voluntary corporation under RSA 292 for the purpose of acquiring and holding the stock of the utility. Upon ratification by the municipal governing body of the acquisition of such stock under RSA 38:13, any voluntary corporation established for the purpose of acquiring and holding stock shall constitute a body politic and corporate of the municipality. Prior to the acquisition of the stock of a utility, the governing body of the municipality acquiring such stock shall find that the acquisition of the stock of the utility rather than the direct acquisition of the plant and property of the utility:
I. Is within the policy of and the purposes of RSA 38.
II. Will provide a more orderly method for the municipality to obtain control of the plant and property of the utility.
III. Will be financially beneficial to the municipality, in the best interests of the municipality, and provide a public benefit.
4 Acquisition by Agreement. Amend RSA 38:8 to read as follows:
38:8 By Agreement. The governing body of a municipality may negotiate and agree with the utility upon the price to be paid for such plant and property or the governing body of a municipality may negotiate and agree with a water utility upon the price to be paid for the stock of such utility under RSA 38:2-b; provided, however, that such agreement shall not be binding upon the municipality until ratified pursuant to RSA 38:13.
5 Public Interest Determination. Amend RSA 38:11 to read as follows:
38:11 Public Interest Determination by Commission. When making a determination as to whether the purchase or taking of utility plant or property is in the public interest under this chapter, the commission may set conditions and issue orders to satisfy the public interest. The commission need not make any public interest determinations when the municipality and utility agree upon the sale of utility plant and property or the stock of a utility.
6 Ratification of Acquisition. Amend RSA 38:13 to read as follows:
38:13 Ratification. Within 90 days of the final determination of the price to be paid for the plant and property of a utility to be acquired under the provisions of RSA 38:8, 374:32-a, 38:9, or 38:10 or the price to be paid for the stock of a utility to be acquired under RSA 38:8 or 374:32-a and any consequential damages under RSA 38:33, the municipality shall decide whether or not to acquire the plant and property or stock at such price by a vote to issue bonds and notes pursuant to RSA 33-B as may be necessary and expedient for the purpose of defraying the cost of purchasing or taking the plant, property, [
or] facilities, or stock of the utility which the municipality may thus acquire. The municipality is authorized to hold a special meeting, if necessary, to take such vote without having to petition the superior court for permission to do so. An affirmative vote under RSA 33-B shall constitute ratification on the part of the municipality of the final determination of the price to be paid for the plant and property or stock under the provisions of RSA 38:8, 38:9, or 38:10 and any consequential damages under RSA 38:33. If the money is so raised it shall immediately be paid to the utility, which shall thereupon execute a proper conveyance and surrender the plant and property or stock to the municipality. If the ratifying vote provided for in this section shall be in the negative, no other action under this chapter shall be had during the ensuing period of 2 years.
7 Operation of Plant. Amend RSA 38:14 to read as follows:
38:14 Operation of Plant. A municipality, which has so acquired the plant, property, [
or] facilities, or stock of a public utility in any other municipality, may operate within such other municipality as a public utility with the same rights and franchises which the owners of such outlying plant, as purchased, would have had such purchase not been made. The operation by a municipality outside its own limits shall be subject to the jurisdiction of the commission except as provided in RSA 362. If the outlying municipality shall itself vote to establish a municipal plant all the provisions of this chapter shall be binding as to such determination.
8 Incorporators. Amend the introductory paragraph of RSA 292:1 to read as follows:
292:1 Incorporators; Purposes. Five or more persons of lawful age may associate together by articles of agreement to form, or a municipality may by articles of incorporation form, a corporation, for any of the following purposes:
9 New Paragraph; Purposes. Amend RSA 292:1 by inserting after paragraph XIV the following new paragraph:
XIV-a. The purchase of the stock of a utility under RSA 38:8 and RSA 38:11.
10 New Section; Right of First Refusal. Amend RSA 374 by inserting after section 32 the following new section:
374:32-a Right of First Refusal for Water Utility Plant or Property.
I. A covered utility, as defined in RSA 38:1, VI, shall not convey, transfer, lease, or otherwise dispose of, directly or indirectly, any interest in its water utility plant or property to another person or persons, nor shall the commission approve or find such conveyance, transfer, or other disposition to be in the public good under RSA 374:30 or any other statute, unless the covered utility first offers the municipality in writing a right of first refusal to acquire that interest, on the terms and conditions on which the covered utility proposes to sell it to the other persons, and subject to the requirements of RSA 38:3, 38:4, and 38:5. The municipality must either accept or reject the offer within 30 days after the actions required by RSA 38:3, 38:4, and 38:5 have been taken.
II. The right of first refusal described in paragraph I shall also apply to:
(a) A proposed sale of stock of a covered utility, either by the covered utility or by its equity holders, or of an entity that controls the covered utility, in one or a series of interdependent transactions, if after giving effect to the transactions, voting or operational control of the covered utility will be transferred to one or more persons acting collectively who did not possess such voting or operational control immediately prior to the transaction.
(b) Any other form of transaction, including voting trusts or agreements or grants of proxies, that would have the effect described in subparagraph (a).
11 Effective Date. This act shall take effect upon its passage.