2016 -- H 7796

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LC005089

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

____________

A N   A C T

RELATING TO PUBLIC FINANCE - BONDING AND LEASING AUTHORITY OF CITIES

AND TOWNS

     Introduced By: Representatives Morin, Messier, Casey, and Phillips

     Date Introduced: March 02, 2016

     Referred To: House Finance

     (General Treasurer)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-10.1-4 of the General Laws in Chapter 42-10.1 entitled "Public

Finance Management Board" is hereby amended to read as follows:

     42-10.1-4. Notice of debt issue to board. -- (a) Each state, municipal and regional

department, authority, agency, board, commission, and public and quasi-public corporation

having authority to issue revenue or general obligation bonds or notes shall, no later than thirty

(30) days prior to the sale of any such debt issue at public or private sale, give written notice of

the proposed sale to the board and each issuer shall, within thirty (30) days after such sale, submit

to the board a report of final sale.

      (b) The notice of proposed debt shall include one proposed sale date, the name of the

issuer, the nature of the debt issue, and the estimated principal amount thereof, and such further

information as may be required by rule of the board and shall be delivered in accordance with

procedures to be established by rule of the board, and the notice of final sale shall be made on a

form approved by the board and contain all of the information requested on said form. Any issuer

which fails to submit the report of proposed debt or report of final sale by the appropriate

deadline shall be subject to a per diem fine of two hundred fifty dollars ($250).

      (c) Failure of delivery of the above notice or of the time or efficiency thereof shall not

affect the validity of the issuance of any debt, bond or note.

      (d) The board shall submit a report annually on or before September 30th of each year to

the director of administration, the speaker of the house, the chairman of the house finance

committee, the president of the senate, the chairman of the senate finance committee, and the

auditor general on debt issues by cities and towns and other authorities subject to the provision of

chapter 45-12, which report shall include the information set forth in division (b) of this section

and shall be for the notices of debt issues received during the state's fiscal year next preceding.

An electronic transmission of the report shall be considered an acceptable submission.

     SECTION 2. Chapter 42-10.1 of the General Laws entitled "Public Finance Management

Board" is hereby amended by adding thereto the following section:

     42-10.1-9. Board approval required. – (a) Notwithstanding any provision of general

law, special law, public corporation, or municipal charter to the contrary, no public corporation,

body corporate and politic, instrumentality, authority or agency created by statute, city or town,

any municipal and regional department, authority, agency, board, commission, fire, water, sewer

or regional school district shall incur an obligation to borrow money or enter into any financing

lease in an amount greater than one million dollars ($1,000,000) without the prior approval of the

board, unless:

     (1) The general assembly approves the borrowing by special statutory authority or by

approval as provided for in the public corporation debt management act, chapter 18 of title 35; or

     (2) The borrowing has received the express consent of the voters.

     (b) In addition to and not by way of limitation on, the exemptions provided in subsections

(a)(1) and (2) of this section, prior approval by the board shall not be required under this chapter

for conduit obligations issued by the Rhode Island health and educational building corporation for

nonprofit corporations or by the Rhode Island industrial facilities corporation.

     (c) Prior approval of the board shall be required for any insurance of the payment of

mortgage loans by the Rhode Island industrial-recreational building authority pledging the faith

and credit of the state pursuant to §42-34-3.

     SECTION 3. This act shall take effect on January 1, 2017.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC FINANCE - BONDING AND LEASING AUTHORITY OF CITIES

AND TOWNS

***

     This act would require public finance management board approval of municipal leases in

excess of one million dollars ($1,000,000) and notice to the board of the issuance of new

borrowing obligations.

     This act would take effect on January 1, 2017.

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