Chapter 134

2008 -- H 8109 AS AMENDED

Enacted 07/01/08

A N A C T

RELATING TO TOWNS AND CITIES -- OPEB TRUSTS

Introduced By: Representative Peter F. Kilmartin

Date Introduced: April 02, 2008

It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 45-21 of the General Laws entitled "Retirement of Municipal

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

45-21-65. Other post-employment benefits -- OPEB trusts. – (a) Notwithstanding the

provisions of any general or special law, or the provisions of any municipality's home rule

charter, to the contrary, for purposes of funding any unfunded liability for other post-employment

benefits including, but not limited to, health care and dental care benefits hereinafter referred to

as ("OPEB") in accordance with government accounting standards board statements 43 and 45, a

municipality, acting by its treasurer or director of finance, upon an approving resolution of the

city or town council or agency board as applicable, may enter into a trust agreement between the

municipality and a corporate trustee which shall be a bank or trust company doing business in the

state. This trust agreement shall be in any form deemed proper by the treasurer or director of

finance of the municipality, and shall be executed by its treasurer or director of finance and

countersigned by its mayor or president of the town council. It shall be lawful for any bank or

trust company doing business in the state to act as a depository or trustee under this trust

agreement, and to furnish indemnification and pledge securities that may be required by any

municipality.

(b) OPEB trust funds shall be credited with all amounts appropriated or otherwise made

available by the municipality for the purposes of meeting the current and future OPEB costs

payable by the municipality. OPEB trust funds shall also be credited with all amounts contributed

or otherwise made available by employees of the municipality for the purpose of meeting future

OPEB costs payable by the municipality. Amounts in an OPEB trust fund, including any earnings

or interest accruing from the investment of these amounts, shall be expended only for the

payment of the costs payable by the municipality for OPEB or as otherwise permitted by the

terms of the trust and applicable law. The director of finance or treasurer, as applicable, shall

invest and reinvest the amounts in the OPEB trust fund not needed for current disbursement in

any investment permitted for the municipality's pension funds consistent with the prudent person

rule and investment policies of the municipality, if any.

(c) Municipalities are hereby authorized to enter into agreements, trusts, contracts, and

other arrangements with the state and any of its departments, agencies, boards or commissions

relating to the execution, management or operation of the OPEB trust funds, including, but not

limited to, investments, and the state and its departments, agencies, boards and commissions are

hereby authorized to enter into such agreements, contracts and other arrangements with

municipalities. Notwithstanding any provisions of any general or special law or principle of

equity to the contrary, the state shall have no liability to any municipality for entering into such

agreements. A municipality may employ any qualified bank, trust company, corporation, firm or

person to advise it on the investment of the OPEB trust fund and may pay from the OPEB trust

fund for this advice and other services. Procurement for these services shall be subject to the

procurement procedures and rules governing municipalities in the state.

(d) Any OPEB trusts that have been created by municipalities and are in effect on the

date hereof are hereby ratified and confirmed.

(e) Nothing herein shall be construed to exempt OPEB trusts from the Rhode Island

Access to Public Records Act, RIGL 38-2-1 et seq.

     SECTION 2. Chapter 16-2 of the General Laws entitled "School Committees and

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

16-2-9.5. Other post-employment benefits -- OPEB trusts. – (a) Notwithstanding the

provisions of any general or special law, or the provisions of any municipality's home rule

charter, to the contrary, for purposes of funding any unfunded liability for other post-employment

benefits including, but not limited to, health care and dental care benefits hereinafter referred to

as ("OPEB") in accordance with government accounting standards board statements 43 and 45, a

school district, acting by its business manager or superintendent, upon an approving resolution of

the school committee or school board as applicable, may enter into a trust agreement between the

school district and a corporate trustee which shall be a bank or trust company doing business in

the state. This trust agreement shall be in any form deemed proper by the business manager or

superintendent, and shall be executed by its business manager or superintendent and

countersigned by the chair of the school committee of the school district. It shall be lawful for any

bank or trust company doing business in the state to act as a depository or trustee under this trust

agreement, and to furnish indemnification and pledge securities that may be required by any

school district.

(b) OPEB trust funds shall be credited with all amounts appropriated or otherwise made

available by the school district for the purposes of meeting the current and future OPEB costs

payable by the school district. OPEB trust funds shall also be credited with all amounts

contributed or otherwise made available by employees of the school district for the purpose of

meeting future OPEB costs payable by the school district. Amounts in an OPEB trust fund,

including any earnings or interest accruing from the investment of these amounts, shall be

expended only for the payment of the costs payable by the school district for OPEB or as

otherwise permitted by the terms of the trust and applicable law. The business manager or

superintendent, as applicable, shall invest or reinvest the amounts in the OPEB trust fund in any

investment permitted for the state pension funds consistent with the investment policies of the

state general treasurer's office.

(c) School districts are hereby authorized to enter into agreements, trusts, contracts, and

other arrangements with the state and any of its departments, agencies, boards or commissions

relating to the execution, management or operation of the OPEB trust funds, including, but not

limited to, investments, and the state and its department, agencies, boards and commissions are

hereby authorized to enter into such agreements, contracts and other arrangements with school

districts. Notwithstanding any provisions of any general or special law or principle of equity to

the contrary, the state shall have no liability to any school district for entering into such

agreements. A school district may employ any qualified bank, trust company, corporation, firm or

person to advise it on the investment of the OPEB trust fund and may pay from the OPEB trust

fund for this advice and other services. Procurement for these services shall be subject to the

procurement procedures and rules governing school districts in state law.

(d) Nothing contained herein will prevent any school district from entering into

agreements with other school districts per section 16-2-9.2 for the purposes of jointly pooling

their investments or collectively entering into an agreement with a corporate trustee, as defined in

subsection (a) of this section.

(e) Nothing herein shall be construed to exempt OPEB trusts from the Rhode Island

Access to Public Records Act, RIGL 38-2-1 et seq.

     SECTION 3. This act shall take effect upon passage.

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LC02520/4

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