2014 -- S 3024

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LC005743

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE REPAIR AND

REHABILITATION OF LOCAL ROAD INFRASTRUCTURE BY THE ISSUANCE OF NOT

MORE THAN $2,500,000 OF BONDS AND/OR NOTES THEREFOR

     

     Introduced By: Senator E O`Neill

     Date Introduced: May 22, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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

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previously granted, to issue general obligation bonds and notes to an amount not exceeding two

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million five hundred thousand dollars ($2,500,000) from time to time under its corporate name

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and seal. The bonds of each issue may be issued in the form of serial bonds or term bonds or a

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combination thereof and shall be payable either by maturity of principal in the case of serial

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

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principal, in such installments as are fixed by the proceedings of the town council authorizing the

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issue or by separate resolution of the town council. All such bonds of a particular issue may be

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issued in the form of zero coupon bonds, capital appreciation bonds, serial bonds or term bonds or

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a combination thereof, and may bear interest at a fixed rate or rates or at a variable or auction rate

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or rates, as determined by the proceedings of the town council authorizing the issue or by separate

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resolution of the town council. The bonds may be sold by a negotiated sale or by competitive bid

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and issued pursuant to a resolution or an indenture of trust, as is determined by the proceedings of

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the town council authorizing the issue or by separate resolution of the town council, provided that

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the final maturity of such bonds shall not exceed thirty (30) years from and after the date the

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bonds are issued. Annual installments of principal may be provided for by maturity of principal in

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the case of serial bonds or by mandatory serial redemption in the case of term bonds. The amount

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

 

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

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limit or any other limitation. The appreciation of principal after the date of original issue shall be

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

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principal amount so issued and any interest component shall be disregarded.

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

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

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

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

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

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

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the bonds or notes. The proceeds derived from the sale of the bonds shall be delivered to the

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

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expended: (1) For the purpose of financing the repair and rehabilitation of local road

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infrastructure; (2) In payment of the principal of and/or interest on temporary notes issued under

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section 3; (3) In repayment of advances made pursuant to section 4; and/or (4) In payment of

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costs of issuance associated with the issuance of bonds or notes hereunder. No purchaser of any

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bonds or notes under this act shall be in any way responsible for the proper application of the

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proceeds derived from the sale thereof. The proceeds of bonds or notes issued under this act, any

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applicable federal or state assistance and the other monies referred to in sections 6 and 9, shall be

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deemed appropriated for the purpose of this act without further action than that required by this

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act. This bond issue authorized by this act may be consolidated for the purpose of issuance and

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sale with any other bond issue of the town heretofore or hereafter authorized, provided that,

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notwithstanding any such consolidation, the proceeds from the sale of the bonds authorized by

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this act shall be expended for the purposes set forth above. The director of finance and the

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president of the town council, on behalf of the town, are hereby authorized to execute such

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instruments, documents or other papers as either of them deem necessary or desirable to carry out

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the intent of this act and are also authorized to take all actions and execute all documents or

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agreements necessary to comply with federal tax and securities laws, which documents or

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agreements may have a term coextensive with the maturity of the bonds authorized hereby,

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including Rule 15c2-12 of the Securities and Exchange Commission and to execute and deliver a

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continuing disclosure agreement or certificate in connection with the bonds or notes.

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

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

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

 

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

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

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

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issued hereunder shall be signed by the director of finance and the president of the town council

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and shall be payable within five (5) years from their respective dates, but the principal of and

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interest on notes issued for a shorter period may be renewed or paid from time to time by the

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issue of other notes hereunder, provided the period from the date of an original note to the

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maturity of any notes issued to renew or pay the same debt or the interest thereon shall not exceed

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five (5) years. Any temporary notes in anticipation of bonds issued under this section may be

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refunded prior to the maturity of the notes by the issuance of additional temporary notes, provided

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that no such refunding shall result in any amount of such temporary notes outstanding at any one

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time in excess of two hundred percent (200%) of the amount of bonds which may be issued under

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this act, and provided further that if the issuance of any such refunding notes results in any

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amount of such temporary notes outstanding at any one time in excess of the amount of bonds

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which may be issued under this act, the proceeds of such refunding notes shall be deposited in a

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separate fund established with the bank which is paying agent for the notes being refunded.

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Pending their use to pay the notes being refunded, monies in the fund shall be invested for the

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benefit of the town by the paying agent at the direction of the director of finance in any

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investment permitted under section 5. The monies in the fund and any investments held as a part

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of the fund shall be held in trust and shall be applied by the paying agent solely to the payment or

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prepayment of the principal of and interest on the notes being refunded. Upon payment of all

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principal of and interest on the notes, any excess monies in the fund shall be distributed to the

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town. The town may pay the principal of and interest on notes in full from other than the issuance

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of refunding notes prior to the issuance of bonds pursuant to section 1 hereof. In such case, the

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town’s authority to issue bonds or notes in anticipation of bonds under this act shall continue

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provided that: (1) The town council passes a resolution evidencing the town’s intent to pay off the

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notes; and (2) That the period from the date of an original note to the maturity date of any other

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notes shall not exceed five (5) years.

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

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

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

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treasury of the town to the purposes specified in section 2, such advances to be repaid without

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interest from the proceeds of bonds or notes subsequently issued or from the proceeds of

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applicable federal or state assistance or from other available funds.

 

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

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

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of finance in demand deposits, time deposits or savings deposits in banks which are members of

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the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United

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States of America or by any agency or instrumentality thereof or as may be provided in any other

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applicable law of the state of Rhode Island or resolution of the town council or pursuant to an

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investment policy of the town.

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

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

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sale of bonds or notes hereunder shall, in the discretion of the director of finance, be applied to

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

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

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on bonds or notes issued hereunder or to any one or more of the foregoing. The cost of preparing,

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issuing and marketing bonds or notes issued hereunder may also, in the discretion of the director

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

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

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the project and the cost of preparing, issuing and marketing bonds or notes hereunder shall be

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

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

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

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

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

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council.

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

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

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contracted by it and shall be excepted from the operation of § 45-12-2. No such obligation shall

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at any time be included in the debt of the town for the purpose of ascertaining its borrowing

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capacity. The town shall annually appropriate a sum sufficient to pay the principal and interest

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coming due within the year on bonds and notes issued hereunder to the extent that monies

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therefor are not otherwise provided. If such sum is not appropriated, it shall nevertheless be added

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to the annual tax levy. In order to provide such sum in each year and notwithstanding any

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provision of law to the contrary, all taxable property in the town shall be subject to ad valorem

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

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

 

LC005743 - Page 4 of 6

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

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

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

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

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

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

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

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

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

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may be repaid as project costs under section 2.

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

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

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

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

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

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

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

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

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occurrence of such action.

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     SECTION 11. The question of the approval of this act shall be submitted to the electors

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of the town at the general election to be held on November 4, 2014 or at a general or special

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election (other than a primary election) to be held on a date as shall be designated by the town

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

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at the 2014 session of the general assembly, entitled 'AN ACT AUTHORIZING THE TOWN OF

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NORTH SMITHFIELD TO FINANCE THE REPAIR AND REHABILITATION OF LOCAL

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ROAD INFRASTRUCTURE BY THE ISSUANCE OF NOT MORE THAN $2,500,000 OF

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BONDS AND/OR NOTES THEREFOR' be approved?" The warning for the election shall

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contain the question to be submitted. From the time the election is warned and until it is held, it

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shall be the duty of the town clerk to keep a copy of the act available at his or her office for public

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inspection, but the validity of the election shall not be affected by this requirement. To the extent

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of any inconsistency between this act and the town charter, this act shall prevail.

 

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     SECTION 12. Sections 11 and 12 shall take effect upon the passage of this act. The

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remainder of this act shall take effect upon the approval of this act by a majority of those voting

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

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LC005743

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LC005743 - Page 6 of 6

EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE REPAIR AND

REHABILITATION OF LOCAL ROAD INFRASTRUCTURE BY THE ISSUANCE OF NOT

MORE THAN $2,500,000 OF BONDS AND/OR NOTES THEREFOR

***

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     This act would authorize the town of North Smithfield to issue two million five hundred

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thousand dollars $2,500,000 of general obligation bonds and notes in order to finance the repair

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and rehabilitation of local road infrastructure.

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     Sections 11 and 12 would take effect upon passage. The remainder of the act would take

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effect upon approval of the act by the electors of the town of North Smithfield.

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LC005743

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