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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN $25,000,000

BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION,

REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF

AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE

TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A

REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2 % FOR

EXPENDITURES ELIGIBLE FOR REIMBURSEMENT

     

     Introduced By: Representatives Serpa, and Noret

     Date Introduced: April 19, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

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

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previously granted, to issue bonds to an amount not exceeding twenty-five million dollars

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($25,000,000) from time to time under its corporate name and seal or a facsimile of such seal;

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provided, however that the bonds shall not be issued unless the conditions of section 2 hereof as to

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the level of state aid are met. The bonds of each issue may be issued in the form of serial bonds or

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term bonds or a combination thereof and shall be payable either by maturity of principal in the case

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

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of principal, the first installment to be not later than five (5) years and the last installment not later

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than thirty (30) years after the date of the bonds.

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     SECTION 2. The town may be eligible for school housing aid reimbursement on debt

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service pursuant to chapter 7 of title 16, and/or for a grant, loan or other “financial assistance” as

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defined in § 45-38.2-1(6) from the school building authority capital fund under chapter 38.2 of

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chapter 45. Bonds, notes or other evidences of indebtedness shall not be issued under this act unless

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the town has received a letter from the Rhode Island department of education (“RIDE”) confirming

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that the then-current school housing aid reimbursement rate under chapter 7 of title 16, as amended

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from time to time, or financial assistance from the school building authority capital fund, or

 

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pursuant to any other law hereafter enacted providing for funds to municipalities for school housing

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purposes, is not less than forty-nine and 2/100 percent (49.2%) for those expenditures which are

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eligible for state aid. A certificate of the officers authorized to sign such bonds or notes authorized

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hereunder that such letter has been received shall conclusively demonstrate the satisfaction of this

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condition to the issuance of indebtedness hereunder.

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     SECTION 3. This act shall constitute an enabling act of the general assembly that is

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required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under

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this act for school projects shall not be eligible for state housing aid reimbursement pursuant to §

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16-7-44 unless the school projects described herein shall have been approved by the Rhode Island

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department of education.

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     SECTION 4. The bonds shall be signed by the manual or facsimile signatures of the town

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director of finance and the president of the town council and shall be issued and sold in such

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amounts as the town council may authorize by resolution. The manner of sale, denominations,

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maturities, interest rates and other terms, conditions and details of any bonds or notes issued under

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this act may be fixed by the resolution of the town council authorizing the issue or by separate

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resolution of the town council or, to the extent provisions for these matters are not so made, they

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may be fixed by the officers authorized to sign the bonds or notes. Notwithstanding anything

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contained in this act to the contrary, the town may enter into financing agreements with the Rhode

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Island health and educational building corporation pursuant to chapter 7 of title 16 and chapter 38.1

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of title 45 and, with respect to bonds or notes issued in connection with such financing agreements,

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if any, the town acting by said officers may elect to have the provisions of chapter 38.1 of title 45

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apply to the issuance of bonds or notes issued hereunder to the extent the provisions of said chapter

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are inconsistent herewith. In addition, the town may enter into financing agreements with the Rhode

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Island infrastructure bank pursuant to the provision of chapter 12.2 of title 46 and, with respect to

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bonds or notes issued in connection with such financing agreements, if any, the town acting by said

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officers may elect to have the provisions of chapter 12.2 of title 46 apply to the issuance of bonds

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or notes issued hereunder to the extent the provisions of said chapter are inconsistent herewith.

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     SECTION 5. 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 for: (1) The construction, renovation, rehabilitation, repair, improvement, furnishing

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and/or equipping of and/or additions to schools and school facilities in the town of Coventry and

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all costs incidental thereto (the projects”); (2) In payment of the principal of or interest on temporary

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notes issued under section 6 or; (3) In repayment of advances under section 7. 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 projects shall be carried out and all contracts made

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therefor on behalf of the town by the town council or as may be otherwise directed by the town

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

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assistance and the other monies referred to in sections 9 and 12 shall be deemed appropriated for

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

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any issue of notes, authorized by this act may be consolidated for the purposes of issuance and sale

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with any other bond and/or note 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 and notes

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

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     SECTION 6. 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 authorization or issue of bonds or in

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

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

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

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

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Temporary notes issued hereunder shall be signed by the director of finance and by the president

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

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principal of and interest on notes issued for a shorter period may be renewed or paid from time to

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time by the issue of other notes hereunder; provided the period from the date of an original note to

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the maturity of any note 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 maturity of the notes by the issuance of additional temporary notes; provided that,

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

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excess of two hundred percent (200%) of the amount of bonds that may be issued under this act;

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and provided further that, if the issuance of any such refunding notes results in excess of the amount

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of bonds that may be issued under this act, the proceeds of such refunding notes shall be deposited

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in a separate fund established with the paying agent which is the paying agent for the notes being

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

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for the 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 8. 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 and interest on the notes being refunded. Upon payment of all principal

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and interest on the notes being refunded, any excess monies in the fund shall be distributed by the

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paying agent to the town. The town may pay the principal of and interest on the notes in full or in

 

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

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section 1 hereof. In such case the town’s authority to issue bonds or notes in anticipation of bonds

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under this act shall continue: provided that (1) The town council passes a resolution evidencing the

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town’s intent to pay off the notes without extinguishing the authority to issue bonds or notes; and

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(2) That the period from the date of the original note to the maturity of any other note shall not

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exceed five (5) years.

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     SECTION 7. 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 5, 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 applicable

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federal or state assistance or from other available funds.

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     SECTION 8. Any proceeds of bonds or notes issued hereunder or of any applicable federal

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

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

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

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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 9. Any accrued interest received upon the sale of bonds or notes hereunder shall

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

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bonds or notes hereunder and any earnings or net profit realized from the deposit or investment of

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funds hereunder shall, in the discretion of the director of finance, be applied: (1) To the cost of

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preparing, issuing and marketing bonds or notes hereunder to the extent not otherwise provided;

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(2) To the cost of capitalized interest on temporary notes issued under section 6 not otherwise

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provided; (3) To the payment of the cost of the projects or to the cost of additional improvements

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coming within the description of the projects in section 5; provided however, the principal amount

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of the bonds authorized hereunder shall be reduced by such amount of premium used for project

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costs; and/or (4) To the payment of the principal of or interest on bonds or notes issued hereunder;

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or to any one or more of the foregoing. The cost of preparing, issuing and marketing bonds or notes

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hereunder may also, in the discretion of the director of finance, be met from bond or note proceeds

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exclusive of accrued interest or from other monies available therefor. Any balance of bond or note

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proceeds remaining after payment of the cost of the projects and said additional improvements and

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

 

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payment of the principal of or interest on bonds or notes issued hereunder. To the extent permitted

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by applicable federal laws, any earnings or net profit realized from the deposit or investment of

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

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from property taxes. In exercising any discretion under this section, the director of finance shall be

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governed by any instructions adopted by resolution of the town council. The director of finance is

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authorized to take any action deemed by him or her necessary: (1) To assure that interest on the

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bonds or notes issued hereunder remains excludable from gross income of the recipients thereof for

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federal income tax purposes, including, without limitation, paying to the federal government any

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rebate of earnings derived from the deposit or investment of the proceeds of such bonds or notes

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that may be required therefor; (2) To comply with the requirements of federal law, including,

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without being limited to, regulations and other requirements of the Securities and Exchange

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Commission and the Municipal Securities Rulemaking Board, imposed directly on the town or on

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the underwriters of such bonds and notes and/or (3) to comply with the provisions of §§ 16-7-35

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through 16-7-47 including making all necessary contracts and agreements to issue said bonds

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and/or notes through the Rhode Island health and educational building corporation.

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     SECTION 10. All bonds or 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 at

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

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The town shall annually appropriate a sum sufficient to pay the principal and interest coming due

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within the year on bonds and notes issued hereunder to the extent that monies therefor are not

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otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual tax

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levy. In order to provide such sum in each year and notwithstanding any provision of law to the

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contrary, all taxable property in the town shall be subject to ad valorem taxation by the town without

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limitation as to rate or amount.

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     SECTION 11. 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 any

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

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     SECTION 12. 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 monies

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

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

 

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

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repaid as project costs under section 5.

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     SECTION 13. Bonds and notes may be issued under this act without obtaining the approval

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

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

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

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

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

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whether or not such action is otherwise required by statute; but the validity of bonds and notes

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

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

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     SECTION 14. 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 seven (7) years after the effective date of this act.

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     SECTION 15. The question of the approval of this act shall be submitted to the electors of

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the town at a special election to be held on October 3, 2023. The question shall be submitted in

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substantially the following form: "Shall an act, passed at the 2023 session of the General Assembly,

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entitled 'AN ACT AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN

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$25,000,000 BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION,

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REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF

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AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE

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TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A

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REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2%’ FOR

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EXPENDITURES ELIGIBLE FOR REIMBURSEMENT' be approved?" and the warning for the

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election shall contain the question to be submitted. The town board of canvassers may combine any

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two (2) or more voting districts for the election and when so combined shall be treated as a voting

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district. If so combined, the town board of canvassers shall advertise the combination of districts in

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a newspaper of general circulation in the town. From the time the election is warned and until it is

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

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

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     SECTION 16. This section and section 15 shall take effect upon passage. The remainder

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

 

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at the election prescribed by section 15.

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF COVENTRY TO ISSUE NOT MORE THAN $25,000,000

BONDS AND NOTES TO FINANCE CONSTRUCTION, RENOVATION,

REHABILITATION, REPAIR, IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF

AND/OR ADDITIONS TO SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE

TOWN, SUBJECT TO APPROVAL OF STATE SCHOOL HOUSING AID AT A

REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 49.2 % FOR

EXPENDITURES ELIGIBLE FOR REIMBURSEMENT

***

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     This act authorizes the town of Coventry to submit to the electors of the town at a special

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election to be held on October 3, 2023, a question in substantially the following form: "Shall an

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act, passed at the 2023 session of the General Assembly, entitled "AN ACT AUTHORIZING THE

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TOWN OF COVENTRY TO ISSUE NOT MORE THAN $25,000,000 BONDS AND NOTES TO

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FINANCE CONSTRUCTION, RENOVATION, REHABILITATION, REPAIR,

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IMPROVEMENT, FURNISHING AND/OR EQUIPPING OF AND/OR ADDITIONS TO

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SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE TOWN, SUBJECT TO

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APPROVAL OF STATE SCHOOL HOUSING AID AT A REIMBURSEMENT RATE OR

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STATE SHARE RATIO OF NOT LESS THAN 49.2%’ FOR EXPENDITURES ELIGIBLE FOR

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REIMBURSEMENT."

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     Section 16 and section 15 of the act would take effect upon passage. The remainder of this

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act would take effect upon the approval of this act by a majority of those voting on the question at

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the election prescribed by section 15.

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