§ 46-15.1-7. Purchases from and leases, pledges and sales to others. (a) Any city, town, district, or other municipal, quasi municipal, or public or private corporation or company engaged in the water supply business in Rhode Island is authorized, from time to time, to sell or otherwise convey to the board any water supply facilities held by that entity, and to lease from the board with or without an option to purchase, or contract with the board for the use of any water supply facilities, or any interest therein, held by the board under this chapter, or to contract to purchase water to be supplied by the board under this chapter. Any city, town, district, or other municipal, quasi municipal, or public or private corporation or company engaged in the water supply business in Rhode Island and constituting a "public utility" within the meaning of § 39-1-2(20) is further authorized to pledge to the board water fees and charges. The provisions of any other laws or ordinances, general, special, or local, or of any rule or regulation of the state or any municipality, or of any municipal charter provision, restricting or regulating in any manner the power of the state or any municipality to lease (as lessee or lessor) or sell or convey property, real, personal, or mixed, or to pledge water fees and charges shall not apply to leases and sales made with the board pursuant to this chapter.

(b) Any city, town, district, or other municipal, quasi municipal, or public or private corporation or company which so leases water facilities from the board, or so contracts with the board for the use thereof, is authorized, from time to time, to contract with any other public or private water system for the purchase or sale of water to be conveyed or processed through or in such facilities, and the latter is similarly authorized to enter into a contract with the former.

(c) Any lease, pledge agreement or contract under this section shall be for a term not exceeding fifty (50) years. A lease, pledge agreement, or contract may be made by a city, town, or district hereunder, either prior or subsequent to the making of any appropriations which may be needed to carry out the obligations of the city, town, or district under the lease, pledge agreement, or contract. Any such lease, pledge agreement, or contract shall provide for cooperative undertakings between the city, town or district and the board regarding the construction or installation of facilities for water supply being financed.

(1) Notwithstanding any contrary provisions of any other laws or ordinances, general, special or local, or of any rule or regulation of the state or any municipality, or any municipal charter provision, restricting in any manner the power of a municipality to incur debt, the obligations of any city, town, or district, under any lease, pledge agreement or contract shall not be considered indebtedness within the meaning of any limitation of indebtedness or of any provision relating to the manner of authorizing or incurring indebtedness.

(2) Pledges or grants of security interests by a city, town or district hereunder shall be valid and binding from the time when the pledge or grant in security interest is made; the water fees and charges or other monies so pledged and then held or thereafter received by such city, town or district shall be immediately subject to the lien of the pledge without any physical delivery thereof, or further act; and the lien of any such pledge or grant of a security interest shall be valid and binding as against all parties having claims of any kind in tort, contract, or otherwise against such city, town or district, irrespective of whether the parties have notice thereof.

(3) The agreement by which a pledge or grant of a security interest is created need not be filed or recorded except in the records of the board, and no filing need be made under the Uniform Commercial Code.

History of Section. (P.L. 1970, ch. 304, § 1; P.L. 1981, ch. 80, § 8; P.L. 1986, ch. 56, § 4; P.L. 1992, ch. 468, § 1; P.L. 2007, ch. 340, § 49.)