Chapter 002

2013 -- S 0126

Enacted 04/03/13

A N A C T

RELATING TO TOWNS AND CITIES - INDEBTEDNESS OF TOWNS AND CITIES

Introduced By: Senator Louis P. DiPalma

Date Introduced: January 24, 2013

It is enacted by the General Assembly as follows:

SECTION 1. Section 45-12-4.4 of the General Laws in Chapter 45-12 entitled

"Indebtedness of Towns and Cities" is hereby amended to read as follows:

45-12-4.4. Borrowing in payment of certain judgments. -- (a) A city or town may

authorize the issuance of bonds, notes, or other evidences of indebtedness to pay the uninsured

portion of any court judgment or settlement, except any court judgment or settlement arising out

of any pension obligation of a city or town; provided, however, that the outstanding principal

amount, in aggregate, shall not exceed five percent (5%) of the total amount of the city or town's

most recently adopted municipal budget. Notwithstanding the aforementioned, the town towns of

Coventry and Middletown are is authorized to issue bonds, notes, or other evidences of

indebtedness to pay the uninsured portion of any court judgment or settlement, except any court

judgment or settlement arising out of any pension obligation of a city or town; provided,

however, that the outstanding principal amount, in aggregate, shall not exceed ten percent (10%)

of the total amount of the town of Coventry's applicable municipality's most recently adopted

municipal budget.

      (b) These bonds, notes, or other evidences of indebtedness are subject to the maximum

aggregate indebtedness permitted to be issued by any city or town under section 45-12-2.

      (c) The bonds, notes, or other evidences of indebtedness may be issued to pay a

judgment or settlement or may be issued to pay or refund notes issued under section 45-12-4.1.

      (d) The denominations, maturities, interest rates, methods of sale, and other terms,

conditions, and details of any bonds or notes issued under the provisions of this section may be

fixed by the vote or resolution of the city or town council authorizing them, or if no provision is

made in the vote or resolution, by the treasurer or other officer authorized to issue the bonds or

notes or to hire the money; provided, that the payment of principal of bonds shall be by sufficient

annual payments that will extinguish the debt at maturity, the first of these annual payments to be

made not later than one year, and the last payment not later than fifteen (15) years after the date

of the bonds.

      (e) The bonds, notes, or other evidences of indebtedness may be issued under this section

by any political subdivision without obtaining the approval of its electors, notwithstanding the

provisions of sections 45-12-19 and 45-12-20 and notwithstanding any provision of its charter to

the contrary, unless the electors when assembled in a meeting are the local legislative body for

the purpose of authorizing indebtedness of the political subdivision.

SECTION 2. This act shall take effect upon passage.

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LC00290

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