2017 -- S 0946

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LC002798

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

AUTHORIZING THE TOWN OF LINCOLN TO ISSUE BONDS AND NOTES IN AN

AMOUNT NOT EXCEEDING $60,000,000 TO FINANCE THE CONSTRUCTION,

RENOVATION, REHABILITATION, REPAIR, IMPROVEMENTS, FURNISHING AND

EQUIPPING OF AND/OR ADDITIONS TO LINCOLN HIGH SCHOOL AND SCHOOL

FACILITIES IN THE TOWN

     

     Introduced By: Senators Paolino, and Pearson

     Date Introduced: June 08, 2017

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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

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previously granted, to issue bonds in an amount not exceeding sixty million dollars ($60,000,000)

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

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the form of zero coupon bonds, capital appreciation bonds, 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 installments of principal,

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the first installment to be not later than five (5) years and the last installment not later than thirty

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(30) years after the date the bonds are issued. All such bonds of a particular issue may be issued

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

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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. The bonds may be sold by a negotiated sale or by competitive bid and may be issued

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pursuant to a resolution or an indenture of trust. Annual installments of principal may be provided

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for by maturity of principal in the case of serial bonds or by mandatory serial redemption in the

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case of term bonds. The amount of principal appreciation each year on any bonds, after the date

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of original issuance, shall not be considered to be principal indebtedness for the purposes of any

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constitutional or statutory debt limit or any other limitation. The appreciation of principal after

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the date of original issue shall be considered interest. Only the original principal amount shall be

 

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counted in determining the principal amount so issued and any interest component or premium

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shall be disregarded.

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     SECTION 2. The bonds shall be signed by the town director of finance, the town

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administrator and the president of the town council and shall be issued and sold in such amounts

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as the town council may authorize. The manner of sale, denominations, maturities, interest rates

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

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

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

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officers authorized to sign the bonds or notes. The proceeds derived from the sale of the bonds

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shall be delivered to the director of finance, and such proceeds exclusive of premiums and

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accrued interest shall be expended: (1) For the construction, renovation, rehabilitation, repair,

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improvements, furnishing and equipping of and/or additions to Lincoln High School and school

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facilities in the Town; (2) For payment of the principal or interest on temporary notes issued

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under Section 3; (3) In payment of capitalized interest on bonds or notes; (4) In repayment of

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advances under Section 4; or (5) In payment of related costs of issuance of any bonds or notes.

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No purchaser of any bonds or notes under this act shall be in any way responsible for the proper

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application of the proceeds derived from the sales thereof. The project shall be carried out and all

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contracts made therefor on behalf of the town by the town administrator, subject to approval of

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the town council. The proceeds of bonds or notes issued under this act, any applicable federal or

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state assistance and other moneys referred to in Sections 6 and 9, shall be deemed appropriated

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for the purposes of this act without further action than that required by this act. The bond issue

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authorized by this act may be consolidated for the purposes of issuance and sale with any other

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bond issue of the town heretofore or hereafter authorized; provided that, notwithstanding any

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such consolidation, the proceeds from the sale of the bonds authorized by this act shall be

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expended for the purposes set forth above. The director of finance, the town administrator and

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the 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 the Rule and to execute and

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deliver a 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 manual or facsimile signatures of the director of finance,

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the town manager and the president of the town council, shall be payable within five (5) years

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

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may be renewed or paid from time to time by the issue of other notes thereunder; provided, the

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

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

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

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by the issuance of additional temporary notes, provided that no such refunding shall result in any

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amount of such temporary notes outstanding at any one time in excess of two hundred percent

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(200%) of the amount of bonds which may be issued under this act; and provided, further, that if

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the issuance of any such refunding notes results in any amount of such temporary notes

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outstanding at any one time in excess of the amount of bonds which may be issued under this act,

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the proceeds of such refunding notes shall be deposited in a separate fund established with the

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bank which is paying agent for the notes being refunded. Pending their use to pay the notes being

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refunded, moneys in the fund shall be invested for the benefit of the town by the paying agent at

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the direction of the director of finance in any investment permitted under Section 5. The moneys

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

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applied by the paying agent solely to the payment or prepayment of the principal of and interest

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

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excess moneys in the fund shall be distributed to the town. The town may pay the principal of and

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interest on notes in full from other than the issuance of refunding notes prior to the issuance of

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

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

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

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

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of any other note 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 and any earnings or net profit realized from the deposit or

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

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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 hereunder may also, in the discretion of the director of

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

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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 projects 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 of the general laws. No

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such obligation shall at any time be included in the debt of the town for the purpose of

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

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

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

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

 

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

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subject to ad valorem 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

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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 of 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 for,

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

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

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

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

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assembly.

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     SECTION 12. The director of finance, the town administrator, and the president of the

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town council, on behalf of the town, are hereby authorized to execute such documents or other

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papers as either of them deem necessary or desirable to carry out the intent of this act and are also

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authorized to take all actions and execute all documents or agreements necessary to comply with

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federal tax and securities laws, which documents or agreements may have a term coextensive

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

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

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

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such officers in order to comply with the Rule.

 

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     SECTION 13. This act shall constitute an enabling act of the general assembly that is

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required pursuant to §16-7-44. Bonds or other evidences of indebtedness issued under this act for

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school projects shall not be eligible for state aid reimbursement pursuant to §16-7-44 unless the

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school projects have been approved by the Rhode Island Department of Education.

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Notwithstanding anything contained in this act, the town may enter into financing agreements

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with the Rhode Island Health and Educational Building Corporation pursuant to Chapter 38.1 of

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Title 45 of the General Laws.

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     SECTION 14. The question of the approval of this act shall be submitted to the electors

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of the town at a special election (other than a primary), on a date as shall be designated by the

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

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passed at the 2017 session of the General Assembly, entitled, ‘AN ACT AUTHORIZING THE

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TOWN OF LINCOLN TO ISSUE GENERAL OBLIGATION BONDS AND NOTES IN AN

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AMOUNT NOT TO EXCEED SIXTY MILLION DOLLARS ($60,000,000) FOR THE

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PURPOSE OF FINANCING THE CONSTRUCTION, RENOVATION, REHABILITATION,

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REPAIR, IMPROVEMENTS, FURNISHING AND EQUIPPING OF AND/OR ADDITIONS

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TO LINCOLN HIGH SCHOOL AND SCHOOL FACILITIES IN THE TOWN' be approved?"

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and the warning for the election shall contain the question to be submitted. From the time the

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

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act available at their office for public inspection, but the validity of the election shall not be

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affected by this requirement. The town of Lincoln is authorized to hold a special election for

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consideration of the above question any time prior to December 31, 2018, as determined by the

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town council.

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     SECTION 15. This section and the foregoing section shall take effect upon the passage of

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

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

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF LINCOLN TO ISSUE BONDS AND NOTES IN AN

AMOUNT NOT EXCEEDING $60,000,000 TO FINANCE THE CONSTRUCTION,

RENOVATION, REHABILITATION, REPAIR, IMPROVEMENTS, FURNISHING AND

EQUIPPING OF AND/OR ADDITIONS TO LINCOLN HIGH SCHOOL AND SCHOOL

FACILITIES IN THE TOWN

***

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     This act would authorize the town of Lincoln to issue bonds and notes in an amount not

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exceeding $60,000,000 to finance the construction, renovation, rehabilitation, repair,

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improvements, furnishing and equipping of and/or additions to Lincoln High School and school

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facilities in the town, including financing through the Rhode Island Health and Educational

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Building Corporation.

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     Sections 14 and 15 would take effect upon passage. The remainder of the act would take

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effect upon approval of the question provided for in Section 14.

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