2012 -- H 8234

=======

LC02726

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

AUTHORIZING THE TOWN OF MIDDLETOWN TO FINANCE RENOVATIONS AND

IMPROVEMENTS TO THE FIRE DEPARTMENT AND DEPARTMENT OF PUBLIC

WORKS FACILITY IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $7,500,000

BONDS AND/OR NOTES THEREFOR

     Introduced By: Representatives Ruggiero, Reilly, and Jackson

     Date Introduced: May 31, 2012

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. The town of Middletown is hereby empowered, in addition to authority

1-2

previously granted, to issue bonds to an amount not exceeding seven million five hundred

1-3

thousand dollars ($7,500,000) from time to time under its corporate name and seal. The bonds of

1-4

each issue may be issued in the form of zero coupon bonds, capital appreciation bonds, serial

1-5

bonds or term bonds or a combination thereof and shall be payable either by maturity of principal

1-6

in the case of serial bonds or by mandatory serial redemption in the case of term bonds, in annual

1-7

installments of principal, the first installment to be not later than five (5) years and the last

1-8

installment not later than thirty (30) years after the date of the bonds. The amount of principal

1-9

appreciation each year on any bonds, after the date of original issuance, shall not be considered to

1-10

be principal indebtedness for the purposes of any constitutional or statutory debt limit or any

1-11

other limitation. The appreciation of principal after the date of original issue shall be considered

1-12

interest. Only the original principal amount shall be counted in determining the principal amount

1-13

so issued and any interest component shall be disregarded. For each issue the amounts payable

1-14

annually for principal and interest combined either shall be as nearly equal from year to year as is

1-15

practicable in the opinion of the officers authorized to issue the bonds, or shall be arranged in

1-16

accordance with a schedule providing for a more rapid amortization of principal.

1-17

     SECTION 2. The bonds shall be signed by the town finance director and by the president

1-18

of the town council and shall be issued and sold in such amounts as the town council may

2-1

authorize. The manner of sale, denominations, maturities, interest rates and other terms,

2-2

conditions and details of any bonds or notes issued under this act may be fixed by the proceedings

2-3

of the town council authorizing the issue or by separate resolution of the town council or, to the

2-4

extent provisions for these matters are not so made, they may be fixed by the officers authorized

2-5

to sign the bonds or notes. Interest coupons (if any) shall bear the manual or facsimile signature

2-6

of the town finance director. The proceeds derived from the sale of the bonds shall be delivered to

2-7

the town finance director, and such proceeds exclusive of premiums and accrued interest shall be

2-8

expended: (a) For renovations and improvements to the Fire Department and Department of

2-9

Public Works Facility in the town; (b) For payment of the principal or interest on temporary notes

2-10

issued under section three; (c) In payment of capitalized interest on bonds or notes; (d) In

2-11

repayment of advances under section four; or (e) In payment of related costs of issuance of any

2-12

bonds or notes. No purchaser of any bonds or notes under this act shall be in any way responsible

2-13

for the proper application of the proceeds derived from the sales thereof. The project shall be

2-14

carried out and all contracts made therefor on behalf of the town by the town council. The

2-15

proceeds of bonds or notes issued under this act, any applicable federal or state assistance and

2-16

other moneys referred to in section six and nine, shall be deemed appropriated for the purposes of

2-17

this act without further action than that required by this act. The bond issue authorized by this act

2-18

may be consolidated for the purposes of issuance and sale with any other bond issue of the town

2-19

heretofore or hereafter authorized, provided that, notwithstanding any such consolidation, the

2-20

proceeds from the sale of the bonds authorized by this act shall be expended for the purposes set

2-21

forth above. The town finance director and the president of the town council, on behalf of the

2-22

town, are hereby authorized to execute such instruments, documents or other papers as either of

2-23

them deem necessary or desirable to carry out the intent of this act and are also authorized to take

2-24

all actions and execute all documents or agreements necessary to comply with federal tax and

2-25

securities laws, which documents or agreements may have a term coextensive with the maturity

2-26

of the bonds authorized hereby.

2-27

     SECTION 3. The town council may by resolution authorize the issue from time to time of

2-28

interest bearing or discounted notes in anticipation of the issue of bonds or in anticipation of the

2-29

receipt of federal or state aid for the purposes of this act. The amount of original notes issued in

2-30

anticipation of bonds may not exceed the amount of bonds which may be issued under this act

2-31

and the amount of original notes issued in anticipation of federal or state aid may not exceed the

2-32

amount of available federal or state aid as estimated by the town finance director. Temporary

2-33

notes issued hereunder shall be signed by the manual or facsimile signatures of the town finance

2-34

director and by the president of the town council and shall be payable within five (5) years from

3-1

their respective dates, but the principal of and interest on notes issued for a shorter period may be

3-2

renewed or paid from time to time by the issue of other notes thereunder, provided the period

3-3

from the date of an original note to the maturity or any note issued to renew or pay the same debt

3-4

or the interest thereon shall not exceed five (5) years. Any temporary notes in anticipation of

3-5

bonds issued under this section may be refunded prior to the maturity of the notes by the issuance

3-6

of additional temporary notes, provided that no such refunding shall result in any amount of such

3-7

temporary notes outstanding at any one time in excess of two hundred percent (200%) of the

3-8

amount of bonds which may be issued under this act, and provided further that if the issuance of

3-9

any such refunding notes results in any amount of such temporary notes outstanding at any one

3-10

time in excess of the amount of bonds which may be issued under this act, the proceeds of such

3-11

refunding notes shall be deposited in a separate fund established with the bank which is paying

3-12

agent for the notes being refunded. Pending their use to pay the notes being refunded, moneys in

3-13

the fund shall be invested for the benefit of the town by the paying agent at the direction of the

3-14

town finance director in any investment permitted under section five. The moneys in the fund and

3-15

any investments held as a part of the fund shall be held in trust and shall be applied by the paying

3-16

agent solely to the payment or prepayment of the principal of and interest on the notes being

3-17

refunded. Upon payment of all principal of and interest on the notes, any excess moneys in the

3-18

fund shall be distributed to the town. The town may pay the principal of and interest on notes in

3-19

full from other than the issuance of refunding notes prior to the issuance of bonds pursuant to

3-20

Section 1 hereof. In such case, the town’s authority to issue bonds or notes in anticipation of

3-21

bonds under this act shall continue provided that (1) The town council passes a resolution

3-22

evidencing the town’s intent to pay off the notes without extinguishing the authority to issue

3-23

bonds or notes and (2) That the period from the date of an original note to the maturity date of

3-24

any other note shall not exceed five (5) years.

3-25

     SECTION 4. Pending any authorization or issue of bonds hereunder or pending or in lieu

3-26

of any authorization or issue of notes hereunder, the town finance director, with the approval of

3-27

the town council, may, to the extent that bonds or notes may be issued hereunder, apply funds in

3-28

the treasury of the town to the purposes specified in section two, such advances to be repaid

3-29

without interest from the proceeds of bonds or notes subsequently issued or from the proceeds of

3-30

applicable federal or state assistance or from other available funds.

3-31

     SECTION 5. Any proceeds of bonds or notes issued hereunder or of any applicable

3-32

federal or state assistance, pending their expenditure, may be deposited or invested by the town

3-33

finance director in demand deposits, time deposits or savings deposits in banks which are

3-34

members of the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by

4-1

the United States of America or by any agency or instrumentality thereof or as may be provided

4-2

in any other applicable law of the state of Rhode Island or resolution of the town council or

4-3

pursuant to an investment policy of the town.

4-4

      SECTION 6. Any accrued interest received upon the sale of bonds or notes hereunder

4-5

shall be applied to the payment of the first interest due thereon. Any premiums arising from the

4-6

sale of bonds or notes hereunder and any earnings or net profit realized from the deposit or

4-7

investment of funds hereunder shall, in the discretion of the finance director, be applied to the

4-8

cost of preparing, issuing, and marketing bonds or notes hereunder to the extent not otherwise

4-9

provided, to the payment of the cost of the project, to the payment of the principal of or interest

4-10

on bonds or notes issued hereunder or to any one (1) or more of the foregoing. The cost of

4-11

preparing, issuing and marketing bonds or notes hereunder may also, in the discretion of the town

4-12

finance director, be met from bond or note proceeds exclusive of accrued interest or from other

4-13

moneys available therefor. Any balance of bond or note proceeds remaining after payment of the

4-14

cost of the projects and the cost of preparing, issuing and marketing bonds or notes hereunder

4-15

shall be applied to the payment of the principal of or interest on bonds or notes issued hereunder.

4-16

To the extent permitted by applicable federal laws, any earnings or net profit realized from the

4-17

deposit or investment of funds hereunder may, upon receipt, be added to and dealt with as part of

4-18

the revenues of the town from property taxes. In exercising any discretion under this section, the

4-19

town finance director shall be governed by any instructions adopted by resolution of the town

4-20

council.

4-21

     SECTION 7. All bonds and notes issued under this act and the debts evidenced thereby

4-22

shall be obligatory on the town in the same manner and to the same extent as other debts lawfully

4-23

contracted by it and shall be excepted from the operation of section 45-12-2 of the general laws.

4-24

No such obligation shall at any time be included in the debt of the town for the purpose of

4-25

ascertaining its borrowing capacity. The town shall annually appropriate a sum sufficient to pay

4-26

the principal and interest coming due within the year on bonds and notes issued hereunder to the

4-27

extent that moneys therefor are not otherwise provided. If such sum is not appropriated, it shall

4-28

nevertheless be added to the annual tax levy. In order to provide such sum in each year and

4-29

notwithstanding any provision of law to the contrary, all taxable property in the town shall be

4-30

subject to ad valorem taxation by the town without limitation as to rate or amount.

4-31

     SECTION 8. Any bonds or notes issued under the provisions of this act, if properly

4-32

executed by officers of the town in office on the date of execution, shall be valid and binding

4-33

according to their terms notwithstanding that before the delivery thereof and payment therefor

4-34

any or all of such officers shall for any reason have ceased to hold office.

5-1

      SECTION 9. The town, acting by resolution of its town council is authorized to apply

5-2

for, contract for and expend any federal or state advances or other grants or assistance which may

5-3

be available for the purposes of this act, and any such expenditures may be in addition to other

5-4

moneys provided in this act. To the extent of any inconsistency between any law of this state and

5-5

any applicable federal law or regulation, the latter shall prevail. Federal and state advances, with

5-6

interest where applicable, whether contracted for prior to or after the effective date of this act,

5-7

may be repaid as project costs under section two.

5-8

     SECTION 10. Bonds and notes may be issued under this act without obtaining the

5-9

approval of any governmental agency or the taking of any proceedings or the happening of any

5-10

conditions except as specifically required by this act for such issue. In carrying out any project

5-11

financed in whole or in part under this act, including where applicable the condemnation of any

5-12

land or interest in land, and in the levy and collection of assessments or other charges permitted

5-13

by law on account of any such project, all action shall be taken which is necessary to meet

5-14

constitutional requirements whether or not such action is otherwise required by statute; but the

5-15

validity of bonds and notes issued hereunder shall in no way depend upon the validity or

5-16

occurrence of such action.

5-17

     SECTION 11. All or any portion of the authority to issue bonds and notes under this act

5-18

may be extinguished by resolution of the town council, without further action by the general

5-19

assembly.

5-20

     SECTION 12. The town finance director and the president of the town council, on behalf

5-21

of the town, are hereby authorized to execute such documents or other papers as either of them

5-22

deem necessary or desirable to carry out the intent of this act and are also authorized to take all

5-23

actions and execute all documents or agreements necessary to comply with federal tax and

5-24

securities laws, which documents or agreements may have a term coextensive with the maturity

5-25

of the bonds authorized hereby, including Rule 15c2-12 of the Securities and Exchange

5-26

Commission (the Rule) and to execute and deliver a continuing disclosure agreement or

5-27

certificate in connection with the bonds or notes in the form as shall be deemed advisable by such

5-28

officers in order to comply with the Rule.

5-29

     SECTION 13. The question of the approval of this act shall be submitted to the electors

5-30

of the town at the election to be held on November 6, 2012 or such other general or special

5-31

election (other than a primary) to be held prior to December 31, 2012, as shall be designated by

5-32

the town council. The question shall be submitted in substantially the following form: "Shall an

5-33

act, passed at the 2012 session of the general assembly, entitled "AN ACT AUTHORIZING THE

5-34

TOWN OF MIDDLETOWN TO FINANCE RENOVATIONS AND IMPROVEMENTS TO

6-1

THE FIRE DEPARTMENT AND DEPARTMENT OF PUBLIC WORKS FACILITY IN THE

6-2

TOWN BY THE ISSUANCE OF NOT MORE THAN $7,500,000 BONDS AND/OR NOTES

6-3

THEREFOR" be approved?" and the warning for the election shall contain the question to be

6-4

submitted. From the time the election is warned and until it is held, it shall be the duty of the

6-5

town clerk to keep a copy of the act available at his office for public inspection, but the validity of

6-6

the election shall not be affected by this requirement.

6-7

     SECTION 14. This section and the foregoing section shall take effect upon the passage of

6-8

this act. The remainder of this act shall take effect upon the approval of this act by a majority of

6-9

those voting on the question at the election prescribed by the foregoing section.

=======

LC02726

========

EXPLANATION

OF

A N A C T

AUTHORIZING THE TOWN OF MIDDLETOWN TO FINANCE RENOVATIONS AND

IMPROVEMENTS TO THE FIRE DEPARTMENT AND DEPARTMENT OF PUBLIC

WORKS FACILITY IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $7,500,000

BONDS AND/OR NOTES THEREFOR

***

7-1

     This act would authorize the town of Middletown to issue not more than $7,500,000

7-2

bonds and notes to finance renovations and improvements to the Fire Department and Department

7-3

of Public Works Facility in the town. Sections 13 and 14 would take effect upon passage. The

7-4

remainder of the act would take effect upon approval of the question provided for in Section 13.

=======

LC02726

=======