2014 -- S 3089

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LC005889

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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 CITY OF NEWPORT TO FINANCE THE DESIGN, ACQUISITION,

DEMOLITION, CONSTRUCTION, REPAIR, REHABILITATION, IMPROVEMENT,

ALTERATION, LANDSCAPING, FURNISHING AND EQUIPPING OF MUNICIPAL

FACILITIES FOR SCHOOL, RECREATION, LIBRARY AND OTHER PUBLIC USES BY

THE ISSUANCE OF NOT MORE THAN $6,000,000 BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS THEREFOR

     Introduced By: Senator M. TeresaPaiva Weed

     Date Introduced: June 11, 2014

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. The city of Newport is hereby empowered, in addition to authority

previously granted, to issue bonds to an amount not exceeding six million dollars ($6,000,000)

from time to time under its corporate name and seal. The bonds of each issue may be issued in the

form of serial bonds or term bonds or a combination thereof and shall be payable either by

maturity of principal in the case of serial bonds or by mandatory sinking fund installments in the

case of term bonds, in annual installments of principal, the first installment to be not later than

five (5) years and the last installment not later than thirty (30) years after the date of the bonds.

All such bonds of a particular issue may be issued in the form of zero coupon bonds, capital

appreciation bonds, serial bonds or term bonds or a combination thereof. Annual installments of

principal may be provided for by maturity of principal in the case of serial bonds or by mandatory

sinking fund installments in the case of term bonds. The amount of principal appreciation each

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

indebtedness for the purposes of any constitutional or statutory debt limit or any other limitation.

The appreciation of principal after the date of original issue shall be considered interest. Only the

original principal amount shall be counted in determining the principal amount so issued and any

interest component shall be disregarded.

     SECTION 2. The bonds shall be signed by the manual or facsimile signatures of the city

finance director and the mayor and shall be issued and sold in such amounts as the city council

may authorize by resolution. The manner of sale, denominations, maturities, interest rates and

other terms, conditions and details of any bonds or notes issued under this act may be fixed by

proceedings of the city council authorizing the issue or by separate resolution of the city council

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

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

signature of the city finance director. Such election may be fixed by the proceedings of the city

council authorizing such issuance of by separate resolution of the city council, or, to the extent

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

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

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

expended to: (1) Finance the design, acquisition, demolition, construction, repair, rehabilitation,

improvement, alteration, landscaping, furnishing and equipping of municipal facilities for school,

recreation, library and other public uses in the City (the "Projects"); or (2) Pay the principal of or

interest on temporary notes issued under section three; or (3) Pay the costs in connection with the

issuance of the bonds or notes; or (4) Finance capitalized interest on the Project; or (5) Repay any

advances under section 4. No purchaser of any bonds or notes under this act shall be in any way

responsible for the proper application of the proceeds derived from the sale thereof. The proceeds

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

monies referred to in sections 6 and 9, shall be deemed appropriated for the purposes of this act

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

consolidated for the purposes of issuance and sale with any other bond issue of the city heretofore

or hereafter authorized, provided that, notwithstanding any such consolidation, the proceeds from

the sale of the bonds authorized by this act shall be expended for the purposes set forth above.

The city finance director and the mayor, on behalf of the city, are hereby authorized to execute

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

carry out the intent of this act and are also authorized to take all actions and execute all

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

documents or agreements may have a term coextensive with the maturity of the bonds authorized

hereby.

     SECTION 3. The city council may by resolution authorize the issuance from time to time

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

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

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

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

exceed the amount of available federal or state aid as estimated by the city finance director.

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

city finance director and the mayor and shall be payable within five (5) years from their

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

renewed or paid from time to time by the issuance of other notes hereunder, provided the period

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

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

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

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

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

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

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

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

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

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

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

finance director in any investment permitted under section 5. The monies in the fund and any

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

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

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

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

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

1 hereof. In such case, the city's authority to issue bonds or notes in anticipation of bonds under

this act shall continue provided that: (1) The city council passes a resolution evidencing the city's

intent to pay off the notes; and (2) That the period from the date of an original note to the

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

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

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

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

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

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

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

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

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

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

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

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

pursuant to an investment policy of the city.

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

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

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

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

provided, to the payment of project costs, to the payment of the principal of or interest on bonds

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

and marketing bonds or notes hereunder may also, in the discretion of the city finance director, be

met from bond or note proceeds exclusive of premium and accrued interest or from other monies

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

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

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

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

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

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

finance director shall be governed by any instructions adopted by resolution of the city council.

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

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

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

provisions of the city charter. No such obligation shall at any time be included in the debt of the

city for the purpose of ascertaining its borrowing capacity. The city shall annually appropriate a

sum sufficient to pay the principal and interest coming due within the year on bonds and notes

issued hereunder to the extent that monies therefor are not otherwise provided. If such sum is not

appropriated, it shall nevertheless be added to the annual tax levy. In order to provide such sum in

each year and notwithstanding any provision of law to the contrary, all taxable property in the

city shall be subject to ad valorem taxation by the city without limitation as to rate or amount.

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

any, if properly executed by officers of the city in office on the date of execution, shall be valid

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

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

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

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

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

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

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

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

may be repaid as project costs under section 2.

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

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

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

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

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

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

requirements whether or not such action is otherwise required by statute, but the validity of bonds

and notes issued hereunder shall in no way depend upon the validity or occurrence of such action.

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

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

assembly, seven (7) years after the effective date of this act.

     SECTION 12. The city finance director and the mayor, on behalf of the city, are hereby

authorized to execute such instruments, documents or other papers as either of them deem

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

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

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

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

(the "Rule") and to execute and deliver a continuing disclosure agreement or certificate in

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

order to comply with the Rule.

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

of the city at the general election to be held on November 4, 2014. The question shall be

submitted in substantially the following form: "Shall an act passed at the 2014 session of the

general assembly entitled 'AN ACT AUTHORIZING THE CITY OF NEWPORT TO FINANCE

THE DESIGN, ACQUISITION, DEMOLITION, CONSTRUCTION, REPAIR,

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REHABILITATION, IMPROVEMENT, ALTERATION, LANDSCAPING, FURNISHING

AND EQUIPPING OF MUNICIPAL FACILITIES FOR SCHOOL, RECREATION, LIBRARY

AND OTHER PUBLIC USES BY THE ISSUANCE OF NOT MORE THAN $6,000,000

BONDS, NOTES AND OTHER EVIDENCES OF INDEBTEDNESS THEREFOR,' be

approved?" and the warning for the election shall contain the question to be submitted. From the

time the election is warned and until it is held, it shall be the duty of the city clerk to keep a copy

of the act available at his or her office for public inspection, but the validity of the election shall

not be affected by this requirement. To the extent of any inconsistency between this act and the

city charter, this act shall prevail.

     SECTION 14. Sections 13 and 14 shall take effect upon the passage of this act. The

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

on the question at the election prescribed by section 13.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

AUTHORIZING THE CITY OF NEWPORT TO FINANCE THE DESIGN, ACQUISITION,

DEMOLITION, CONSTRUCTION, REPAIR, REHABILITATION, IMPROVEMENT,

ALTERATION, LANDSCAPING, FURNISHING AND EQUIPPING OF MUNICIPAL

FACILITIES FOR SCHOOL, RECREATION, LIBRARY AND OTHER PUBLIC USES BY

THE ISSUANCE OF NOT MORE THAN $6,000,000 BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS THEREFOR

***

     This act would authorize the city of Newport to issue not more than $6,000,000 bonds,

notes and other evidences of indebtedness to finance the design, acquisition, demolition,

construction, repair, rehabilitation, improvement, alteration, landscaping, furnishing and

equipping of municipal facilities for school, recreation, library and other public uses in the City.

     Sections 13 and 14 would take effect upon passage. The remainder of the Act would take

effect upon approval of the question provided for in Section 13.

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