2016 -- S 2820

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT

     Introduced By: Senator Daniel DaPonte

     Date Introduced: March 23, 2016

     Referred To: Senate 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 such 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), which shall be

collected and enforced by the general treasurer.

     (c) Each state, municipal and regional authority, agency, board, commission, and public

and quasi-public corporation having authority to issue revenue or general obligation bonds or

notes shall provide the board annually, by the end of each fiscal year, the following information

for each outstanding debt incurred:

     (1) The principal amount of the issue outstanding;

     (2) The amount of proceeds of the issue that remains unspent;

     (3) The amount of debt authorized by the bond act or other appropriate authorization

relevant to the issue that remains authorized but unissued; and

     (4) A list of the purposes for which the debt has been issued and the amounts expended

for each purpose in the prior fiscal year from the proceeds of the issue.

      (c)(d) 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)(e) 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. Section 45-12-3 of the General Laws in Chapter 45-12 entitled

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

     45-12-3. Statements to accompany bills to general assembly to authorize

indebtedness. – (a) Whenever any bill is presented to either house of the general assembly to

authorize any city or town to issue bonds or other indebtedness, every such bill shall be

accompanied by a resolution or ordinance of the city or town council to the general assembly and

the division of debt management within the office of the general treasurer stating the purpose for

which the proceeds from the sale of the bonds or other indebtedness are to be used.

     (b) Legislation authorizing any city or town to issue bonds or other indebtedness that is

transmitted to the general assembly and the division of debt management shall be accompanied

by a report summarizing relevant financial information, as determined by the rules and

regulations promulgated by the board.

     SECTION 3. 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. Public finance management board approval. -- (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 authority, agency, board, commission, fire,

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

financing lease in a principal 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 chapter 18 of title 35 (public corporation debt management); or

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

     (b) The board shall be authorized through staff to approve or deny categories of debt

deemed to be especially low-risk or time sensitive, without a board vote.

     (c) Any proposed debt issuance, which is not considered by the board within one hundred

twenty (120) days after it is submitted, shall be considered approved for the purposes of this

section.

     (d) 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 education building

corporation for nonprofit corporations or by the Rhode Island industrial facilities corporation.

     (e) 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 chapter 34 of title 42.

     SECTION 4. 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 STATE AFFAIRS AND GOVERNMENT

***

     This act would require that the public finance management board be provided with a final

report of any public debt issuance within thirty (30) days of issuance, and that any issuer of public

debt provide the public finance management board with an annual report detailing the specifics

for each outstanding debt incurred. This act would further require municipalities to provide the

division of debt management with the applicable resolution or ordinance stating the purpose of

any public debt issuance, and would further require that, subject to certain limitations, no public

debt issuance would be incurred in an amount greater than $1,000,000 without the prior approval

of the public finance management board.

     This act would take effect on January 1, 2017.

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