Chapter 263

2004 -- S 2760

Enacted 07/02/04

 

 

A N A C T

RELATING TO THE INDEBTEDNESS OF TOWNS AND CITIES

     

     

     Introduced By: Senators Goodwin, Ruggerio, and Perry

     Date Introduced: February 11, 2004

 

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Chapter 45-12 of the General Laws entitled "Indebtedness of Towns and

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

     45-12-5.4. Variable rate obligations and interest rate exchange agreements. – In

connection with the issuance of duly authorized bonds, notes or other obligations of a city or

town with a population greater than one hundred twenty-five thousand (125,000) inhabitants,

notwithstanding any other authority to the contrary, such bonds, notes or other obligations may be

issued in the form of variable rate obligations, so-called. In connection therewith, any such city

or town, acting through its finance director or treasurer, may enter into agreements with banks,

trust companies or other financial institutions within or without the state, whether in the form of

letters or lines of credit, liquidity facilities, insurance or other support arrangements. Any bonds,

notes or other obligations issued as variable rate obligations shall bear such terms as may be fixed

by the vote or resolution of the city or town authorizing the bonds, notes or other obligations, or

in absence of foregoing such terms as the finance director or treasurer shall determine, including

provisions for prepayment at any time with or without premium at the option of the city or town,

may be sold at a premium or discount, and may bear interest or not and if interest bearing, may

bear interest at such rate or rates variable from time to time as determined by such index, banking

loan rate or other method specified in any such agreement. Any such agreement may also include

such other covenants and provisions for protecting the rights, security and remedy of the lenders

as may, in the discretion of the finance director or treasurer, be reasonable and proper and not in

violation of law. The finance director or treasurer of the city or town may also enter into

agreements with brokers for the placement or marketing of any such bonds, notes or other

obligations issued as variable rate obligations.

     In addition, the finance director or treasurer of a city or town with a population greater

than one hundred twenty-five thousand (125,000) inhabitants, with the approval of the city or

town council, may from time to time, enter into and amend interest rate exchange agreements,

including, but not limited to, interest rate "caps," "floors," "collars," or "swaps" that the finance

director or treasurer determines to be necessary or desirable for the purpose of generating savings,

managing an interest rate, or similar risk that arises in connection with, or subsequent to or is

incidental to the issuance, carrying or securing of variable rate obligations, fixed rate bonds or

fixed rate obligations. Such interest rate exchange agreements shall contain such provisions,

including payment, term, security, default and remedy provisions, and shall be with such parties,

as the finance director or treasurer shall determine to be necessary or desirable after due

consideration to the creditworthiness of those parties. Any municipal public buildings authority

established pursuant to title 45, chapter 50 of the general laws and any redevelopment agency

operating pursuant to title 45, chapter 31 of the general laws, which public buildings authority or

redevelopment agency has been established by a city or town with a population greater than one

hundred twenty-five thousand (125,000) inhabitants, shall also have the authority to enter into

interest rate exchange agreements as set forth in this paragraph.

     SECTION 2. This act shall take effect on July 1, 2005.

     

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LC01880

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