Chapter 016

 2007 -- H 5189

Enacted 05/03/07

 

A N A C T

AUTHORIZING THE TOWN OF CHARLESTOWN TO FINANCE AFFORDABLE HOUSING INITIATIVES IN THE TOWN CONSISTENT WITH THE APPROVED CHARLESTOWN AFFORDABLE HOUSING PLAN BY THE ISSUANCE OF NOT MORE THAN $1,000,000 BONDS AND/OR NOTES THEREFOR

          

     Introduced By: Representatives Walsh, and Scott

     Date Introduced: January 24, 2007

 

It is enacted by the General Assembly as follows:

 

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

previously granted, to issue general obligation bonds and notes to an amount not exceeding one

million dollars ($1,000,000) from time to time under its corporate name and seal. The bonds of

each issue may be issued in the form of 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. All such bonds of a particular issue may be issued in the form of zero coupon

bonds, capital appreciation bonds, serial bonds or term bonds or a combination thereof. Annual

installments of principal may be provided for by maturity of principal in the case of serial bonds

or by mandatory serial redemption in the case of term bonds. The amount of principal

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.

     SECTION 2. The bonds shall be signed by the manual or facsimile signatures of the town

treasurer and 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. The proceeds derived from the sale of the bonds

shall be delivered to the town treasurer, and such proceeds, exclusive of premiums and accrued

interest, shall be expended (a) to finance affordable housing initiatives in the town consistent with

the approved Charlestown affordable housing plan, (b) in payment of the principal of and/or

interest on temporary notes issued under Section 3 of this act, (c) in repayment of advances made

pursuant to Section 4 of this act and/or (d) in payment of costs of issuance associated with the

issuance of bonds or notes hereunder. 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 sale 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 6 and 9 of this act, shall be deemed

appropriated for the purpose of this act without further action than that required by this act. The

bonds authorized by this act may be consolidated for the purpose of issuance and sale with any

other bonds 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 treasurer 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, including Rule 15c2-12 of the

Securities and Exchange Commission and to execute and deliver a continuing disclosure

agreement or certificate in connection with the bonds or notes.

     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 treasurer. Temporary notes

issued hereunder shall be signed by the town treasurer and 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 hereunder, provided the period from the date of an original notes to the maturity of

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 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

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 treasurer in any investment permitted under section

five. The moneys in the fund and any investments held as apart 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 treasurer, 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

treasurer 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 shall, in the discretion of the town treasurer, 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 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

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

available therefor. Any balance of bond or notes proceeds remaining after payment of the cost of

the project 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 treasurer 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 Rhode Island

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 2 of this act.

     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 authorized but unissued authority to issue bonds

and notes under this act may be extinguished by ordinance of the town council, without further

action by the general assembly, seven (7) years after the effective date of this act.

     SECTION 12. The borrowing authorized by this act has been approved by the

Charlestown electorate at a local referendum conducted at the November general election in 2006

and this act shall become effective without further vote of the Charlestown electorate or financial

town meeting.

     SECTION 13. This act shall take effect upon passage.

     

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LC00167

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