2012 -- H 7052

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LC00357

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

RELATING TO TOWNS AND CITIES -- BUDGET COMMISSIONS

     Introduced By: Representatives Melo, Silva, Mattiello, Gallison, and Savage

     Date Introduced: January 05, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 45-9-6 of the General Laws in Chapter 45-9 entitled "Budget

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Commissions" is hereby amended to read as follows:

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     45-9-6. Composition of budget commission. -- (a) If a budget commission is established

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under section 45-9-5 or section 45-12-22.7, it shall consist of five (5) members: three (3) of

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whom shall be designees of the director of revenue, one of whom shall be the elected chief

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executive officer of the city and one of whom shall be the president of the city or town council. In

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cities or towns in which the elected chief executive officer for purposes of this chapter is the

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president of the city or town council, one member shall be the appointed city or town manager or

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town administrator (or, if none, the city or town chief financial officer) as the fifth (5th) member.

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The budget commission shall act by a majority vote of all its members. The budget commission

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shall initiate and assure the implementation of appropriate measures to secure the financial

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stability of the city or town. The budget commission shall continue in existence until the director

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of revenue abolishes it.

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      The budget commission shall be subject to chapter 36-2 of the general laws, "Access to

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Public Records," and chapter 36-14 of the general laws, "Code of Ethics". The budget

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commission shall be subject to chapter 42-46 of the general laws "Open Meetings" when meeting

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to take action on the following matters:

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      (1) Levy and assessment of taxes;

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      (2) Rulemaking or suspension of rules;

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      (3) Adoption of a municipal budget;

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      (4) Approval of collective bargaining agreements and amendments to collective

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bargaining agreements; and

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      (5) Making a determination under section 45-9-7 that the powers of the budget

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commission are insufficient to restore fiscal stability to the city or town.

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      (b) Action by the budget commission under this chapter shall constitute action by the

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city or town for all purposes under the general laws, under any special law and under the city or

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town charter.

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      (c) Until the budget commission ceases to exist, no appropriation, borrowing

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authorization, transfer, or other municipal spending authority shall take effect until approved by

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the budget commission. The budget commission shall approve all appropriations, borrowing

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authorizations, transfers and other municipal spending authorizations, in whole or part.

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      (d) In addition to the authority and powers conferred elsewhere in this chapter, and

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notwithstanding any city or town charter provision or local ordinance to the contrary, the budget

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commission shall have the power to:

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      (1) Amend, formulate and execute the annual municipal budget and supplemental

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municipal budgets of the city or town, including the establishment, increase or decrease of any

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appropriations and spending authority for all departments, budget commissions, committees,

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agencies or other units of the city or town; provided, however, that notwithstanding sections 16-2-

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9 and 16-2-18 of the general laws, this clause shall fully apply to the school department and all

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school spending purposes;

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      (2) Implement and maintain uniform budget guidelines and procedures for all

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departments;

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      (3) Amend, formulate and execute capital budgets, including to amend any borrowing

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authorization, or finance or refinance any debt in accordance with the law;

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      (4) Amortize operational deficits in an amount as the director of revenue approves and

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for a term not longer than five (5) years;

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      (5) Develop and maintain a uniform system for all financial planning and operations in

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all departments, offices, boards, commissions, committees, agencies or other units of the city's or

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town's government;

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      (6) Review and approve or disapprove all proposed contracts for goods or services;

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      (7) Notwithstanding any general or special law to the contrary, establish, increase or

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decrease any fee, rate or charge, for any service, license, permit or other municipal activity,

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otherwise within the authority of the city or town;

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      (8) Appoint, remove, supervise and control all city and town employees and have control

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over all personnel matters other than disciplinary matters; provided, that the budget commission

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shall hold all existing powers to hire and fire and set the terms and conditions of employment

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held by other employees or officers of the city or town; provided, further, that the budget

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commission shall have the authority to exercise all powers otherwise available to a municipality

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regarding contractual obligations during a fiscal emergency; provided, further, that no city or

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town employee or officer shall hire, fire, transfer or alter the compensation or benefits of a city or

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town employee except with the written approval of the budget commission; and provided, further,

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that the budget commission may delegate or otherwise assign these powers with the approval of

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the director of revenue;

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      (9) Alter or eliminate the compensation and/or benefits of elected officials of the city or

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town to reflect the fiscal emergency and changes in the responsibilities of the officials as

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provided by this chapter;

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      (10) Employ, retain and supervise such managerial, professional and clerical staff as are

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necessary to carry out its responsibilities; provided, however, that such employment, retention

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and supervisory decisions are subject to the approval of the director of revenue; provided, further,

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that the budget commission shall not be subject to chapter 37-2 or chapter 45-55 of the general

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laws in employing such staff; provided, further, that the budget commission, with the approval of

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the director of revenue, shall have authority to set the compensation, terms and conditions of

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employment of its own staff; provided, further, that the city or town shall annually appropriate

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amounts sufficient for the compensation of personnel hired under this clause as determined and

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fixed by the budget commission; provided, further, that if the city or town fails to appropriate

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such amounts, the director of revenue shall direct the general treasurer to deduct the necessary

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funds from the city's or town's distribution of state aid and shall expend those funds directly for

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the benefit of the budget commission;

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      (11) Reorganize, consolidate or abolish departments, commissions, authorities, boards,

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offices or functions of the city or town, in whole or in part, and to establish such new

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departments, commissions, authorities, boards, offices or functions as it deems necessary, and to

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transfer the duties, powers, functions and appropriations of one department, commission, board,

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office or other unit to another department, commission, authority, board or office and in

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connection therewith remove and appoint new members for any such commission, authority,

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board or department which appointees shall serve the remainder of any unexpired term of their

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predecessor;

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      (12) Appoint, in consultation with the director of revenue, persons to fill vacancies on

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any authority, board, committee, department or office;

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      (13) Sell, lease or otherwise transfer real property and other assets of the city or town

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with the approval of the director of revenue;

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      (14) Purchase, lease or otherwise acquire property or other assets on behalf of the city or

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town with the approval of the director of revenue;

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      (15) Enter into contracts, including, but not limited to, contracts with other governmental

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entities, and such other governmental entities are hereby authorized to enter into such contracts;

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      (16) Adopt rules and regulations governing the operation and administration of the city

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or town which permit the budget commission to effectively carry out this chapter under

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subsection 42-35-3(b) of the general laws;

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      (17) Alter or rescind any action or decision of any municipal officer, employee, board,

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authority or commission within fourteen (14) days after receipt of notice of such action or

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decision;

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      (18) Suspend, in consultation with the director of revenue any rules and regulations of

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the city or town;

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      (19) Notwithstanding any other general law, special act, charter provision or ordinance,

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and in conformity with the reserved powers of the general assembly pursuant to Article XIII,

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section 5 of the Constitution of the state, a budget commission is authorized to issue bonds, notes

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or certificates of indebtedness to fund the deficit of a city or town without regard to section 45-

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12-22.4 of the general laws, to fund cash flow and to finance capital projects. Bonds, notes or

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certificates of indebtedness issued under authority of this chapter shall be general obligation

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bonds backed by the full faith and credit and taxing power of the city or town; provided, however,

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that the budget commission may pledge future distributions of state aid for the purpose of retiring

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such bonds, notes or certificates of indebtedness. If any state aid is so pledged, the budget

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commission shall execute on behalf of the city or town a trust agreement with a corporate trustee,

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which may be any bank or trust company having the powers of a trust company within the state,

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and any state aid so pledged shall be paid by the general treasurer directly to the trustee to be held

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in trust and applied to the payment of principal and interest on such bonds, notes or certificates of

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indebtedness; any earnings derived from the investment of such pledged aid shall be applied as

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needed to the payment of that principal and interest and for trustee's fees and related expenses,

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with any excess to be paid to the city or town. Bonds, notes or certificates of indebtedness

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authorized under authority of this chapter shall be executed on behalf of the city or town by a

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member of the commission and, except as provided for in this chapter, may be subject to the

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provisions of chapter 45-12 of the general laws so far as apt, or may be subject to the provisions

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of any special bond act enacted authorizing the issuance of bonds of a city or town so far as apt,

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provided, however that any bonds or notes issued for school purposes must be approved by the

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general assembly in order to qualify for school housing aid as set forth in chapter 16-7 of the

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general laws; and

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      (20) Exercise all powers under the general laws and this chapter or any special act, any

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charter provision or ordinance that any elected official of the city or town may exercise, acting

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separately or jointly; provided, however, that with respect to any such exercise of powers by the

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budget commission, the elected officials shall not rescind or take any action contrary to such

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action by the budget commission so long as the budget commission continues to exist.

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     (21) Certify to the Rhode Island department of revenue the need to advance payments of

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the state’s basic education program under chapter 7 of title 16 of the Rhode Island general laws in

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the amount determined by the budget commission. Said amount shall be advanced, subject to

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approval of the director of the department of revenue, notwithstanding any general or public law

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to the contrary. The director of the department of revenue shall provide notice of any advance

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payments to the fiscal advisors of the house and senate finance committees. The state general

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treasurer shall deduct the estimated cost to the state’s general fund resulting from any advance

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payments.

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     SECTION 2. This act shall take effect upon passage.

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LC00357

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TOWNS AND CITIES -- BUDGET COMMISSIONS

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     This act would authorize a Budget Commission established under Title 45 of the Rhode

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Island General Laws to certify to the Rhode Island Department of Revenue the need to advance

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payments of the state’s basic education program.

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     This act would take effect upon passage.

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LC00357

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