2012 -- H 7917

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LC02118

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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 - INDEBTEDNESS OF TOWNS AND CITIES

     Introduced By: Representatives Tomasso, Nunes, Serpa, Guthrie, and Morgan

     Date Introduced: March 07, 2012

     Referred To: House Municipal Government

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 45-12-4.4 of the General Laws in Chapter 45-12 entitled

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"Indebtedness of Towns and Cities" is hereby amended to read as follows:

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     45-12-4.4. Borrowing in payment of certain judgments. -- (a) A city or town may

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authorize the issuance of bonds, notes, or other evidences of indebtedness to pay the uninsured

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portion of any court judgment or settlement, except any court judgment or settlement arising out

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of any pension obligation of a city or town; provided, however, that the outstanding principal

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amount, in aggregate, shall not exceed five percent (5%) of the total amount of the city or town's

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most recently adopted municipal budget. Notwithstanding the aforementioned, the town of

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Coventry is authorized to issue bonds, notes, or other evidences of indebtedness to pay the

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uninsured portion of any court judgment or settlement, except any court judgment or settlement

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arising out of any pension obligation of a city or town; provided, however, that the outstanding

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principal amount, in aggregate, shall not exceed ten percent (10%) of the total amount of the town

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of Coventry's most recently adopted municipal budget.

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      (b) These bonds, notes, or other evidences of indebtedness are subject to the maximum

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aggregate indebtedness permitted to be issued by any city or town under section 45-12-2.

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      (c) The bonds, notes, or other evidences of indebtedness may be issued to pay a

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judgment or settlement or may be issued to pay or refund notes issued under section 45-12-4.1.

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      (d) The denominations, maturities, interest rates, methods of sale, and other terms,

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conditions, and details of any bonds or notes issued under the provisions of this section may be

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fixed by the vote or resolution of the city or town council authorizing them, or if no provision is

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made in the vote or resolution, by the treasurer or other officer authorized to issue the bonds or

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notes or to hire the money; provided, that the payment of principal of bonds shall be by sufficient

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annual payments that will extinguish the debt at maturity, the first of these annual payments to be

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made not later than one year, and the last payment not later than fifteen (15) years after the date

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of the bonds.

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      (e) The bonds, notes, or other evidences of indebtedness may be issued under this section

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by any political subdivision without obtaining the approval of its electors, notwithstanding the

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provisions of sections 45-12-19 and 45-12-20 and notwithstanding any provision of its charter to

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the contrary, unless the electors when assembled in a meeting are the local legislative body for

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the purpose of authorizing indebtedness of the political subdivision.

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     SECTION 2. This act shall take effect upon passage.

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LC02118

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO TOWNS AND CITIES - INDEBTEDNESS OF TOWNS AND CITIES

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     This act would increase the amount that the town of Coventry may borrow to finance a

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court judgment or settlement from five percent (5%) to ten percent (10%) of Coventry's most

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recently adopted municipal budget.

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     This act would take effect upon passage.

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LC02118

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