Chapter
365
2003
-- S 1130
Enacted
07/17/03
AN ACT
AUTHORIZING THE TOWN OF
MIDDLETOWN TO FINANCE THE CONSTRUCTION, FURNISHING AND EQUIPPING OF AN
ELEMENTARY SCHOOL THROUGH THE ISSUANCE OF NOT MORE THAN $8,400,000 BONDS AND/OR
NOTES
Introduced By: Senator June N. Gibbs
Date Introduced:
June 10, 2003
It is enacted by the General
Assembly as follows:
SECTION
1. The town of Middletown is hereby empowered, in addition to authority
previously granted, to issue bonds
to an amount not exceeding eight million four hundred
thousand dollars ($8,400,000) from
time to time under its corporate name and seal. The bonds of
each issue may be issued in the
form of zero coupon bonds, capital appreciation bonds, 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 serial redemption 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. The amount of principle
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. For each issue the amounts payable
annually for principal and
interest combined either shall be as nearly equal from year to year as is
practicable in the opinion of the
officers authorized to issue the bonds, or shall be arranged in
accordance with a schedule
providing for a more rapid amortization of principal.
SECTION
2. The bonds shall be signed by the town finance director and by the president
of the town council and shall be
issued and sold in such amounts as the town council may
authorize. 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 the proceedings
of the town council authorizing
the issue or by separate resolution of the town 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 town finance director. The
proceeds derived from the sale of the bonds shall be delivered
to the town finance director, and
such proceeds, exclusive of premiums and accrued interest, shall
be expended (a) to finance the
construction, furnishing and equipping of an elementary school,
(b) for payment of the principal
or interest on temporary notes issued under section three, (c) in
payment of capitalized interest on
bonds or notes, (d) in repayment of advances under section
four, or (e) in payment of related
costs of issuance of any bonds or notes. 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 sales
thereof. The project shall be carried out and all contracts made
therefor on behalf of the town by
the town council. The proceeds of bonds or notes issued under
this act, any applicable federal
or state assistance, and the other moneys referred to in section six
and nine, 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 town 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 town finance
director and the president of the
town council, on behalf of the town, 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 town council may by resolution authorize the issue from time to time of
interest bearing or discounted
notes in anticipation of the issue of bonds or in anticipation of the
receipt of federal or state aid
for the purposes of this act. The amount of original notes 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 town finance director. Temporary
notes issued hereunder shall be
signed by the manual or facsimile signatures of the town finance
director and by the president of
the town council 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 issue of other notes thereunder, provided the period
from the date of an original note to
the maturity or 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, moneys in
the fund shall be invested for the
benefit of the town by the paying agent at the direction of the
town finance director in any
investment permitted under section five. The moneys 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 moneys in
the fund shall be distributed to
the town. The town 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 town's authority to issue bonds or notes in anticipation of
bonds under this act shall
continue provided that 1) the town council passes a resolution
evidencing the town's intent to
pay off the notes without extinguishing the authority to issue
bonds or 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 town finance director, with the approval of
the town council, may, to the
extent that bonds or notes may be issued hereunder, apply funds in
the treasury of the town to the
purposes specified in section two, 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.
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 town
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 town council or
pursuant to an investment policy
of the town.
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 premiums arising from the
sale of bonds or notes hereunder
and any earnings or net profit realized from the deposit or
investment of funds hereunder
shall, in the discretion of the 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 the
cost of the project, to the payment of the principal of or interest
on bonds or notes issued hereunder
or to any one (1) or more of the foregoing. The cost of
preparing, issuing and marketing
bonds or notes issued hereunder may also, in the discretion of
the town finance director, be met
from bond or note proceeds exclusive of accrued interest or
from other moneys available
therefor. Any balance of bond or note proceeds remaining after
payment of the cost of the
projects 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 town from property taxes. In exercising any discretion
under this section, the town
finance director shall be governed by any instructions adopted by
resolution of the town council.
SECTION
7. All bonds and notes issued under this act and the debts evidenced thereby
shall be obligatory on the town in
the same manner and to the same extent as other debts lawfully
contracted by it and shall be
excepted from the operation of section 45-12-2 of the general laws.
No such obligation shall at any
time be included in the debt of the town for the purpose of
ascertaining its borrowing
capacity. The town 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 moneys 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 town shall be
subject to ad valorem
taxation by the town without limitation as to rate or amount.
SECTION
8. Any bonds or notes issued under the provisions of this act, if properly
executed by officers of the town
in office on the date of execution, shall be valid 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 town, acting by resolution of its town council, is authorized to apply
for, contract for and expend any
federal or state advances or other grants or assistance which may
be available for the purposes of
this act, and any such expenditures may be in addition to other
moneys 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 two.
SECTION
10. Bonds and notes may be issued under this act without obtaining the
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 town council, without further action by the general
assembly.
SECTION
12. The town finance director and the president of the town council, on behalf
of the town, are hereby authorized
to execute such 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 town at a general or
special election (other than a primary) to be held prior to December 31,
2003, as shall be designated by
the town council. The question shall be submitted in substantially
the following form: “Shall an act,
passed at the 2003 session of the general assembly, entitled
‘AN ACT AUTHORIZING THE TOWN OF
MIDDLETOWN TO FINANCE THE
CONSTRUCTION, FURNISHING AND
EQUIPPING OF AN ELEMENTARY SCHOOL
THROUGH THE ISSUANCE OF NOT MORE
THAN $8,400,000 BONDS AND/OR NOTES’
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 town 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.
SECTION
14. This section and the foregoing section 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 the foregoing section.
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LC03368
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