LA 110
2018 -- S 2990
Enacted 07/05/2018

A N   A C T
AUTHORIZING THE TOWN OF SMITHFIELD TO ISSUE NOT TO EXCEED $45,000,000 IN GENERAL OBLIGATION BONDS, NOTES AND OTHER EVIDENCE OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 40% FOR EXPENDITURES ELIGIBLE FOR REIMBURSEMENT

Introduced By: Senator Stephen R. Archambault
Date Introduced: June 20, 2018

It is enacted by the General Assembly as follows:
     SECTION 1. The town of Smithfield is hereby empowered, in addition to authority
previously granted, to issue bonds and other evidences of indebtedness (hereinafter "bonds") up
to an amount not exceeding forty-five million dollars ($45,000,000) from time to time under its
corporate name and seal or a facsimile of such; provided, however, that bonds shall not be issued
unless the conditions of Section 4 hereof as to the level of state school housing aid are met. 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 sinking fund installments 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. 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 countersigned by the town manager and the town clerk and shall be issued and sold
in such amounts as the town council may authorize by resolution. 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. Notwithstanding
anything contained in this act to the contrary, the town may enter into financing agreements with
the Rhode Island Health and Educational Building Corporation pursuant to chapter 7 of title 16
and chapter 38.1 of title 45 and, with respect to notes or bonds issued in connection with such
financing agreements, if any, the town may elect to have the provisions of chapter 38.1 of title 45
apply to the issuance of the bonds or notes issued hereunder to the extent the provisions of
chapter 38.1 of title 45 are inconsistent herewith. In addition, the town may enter into financing
agreements with the Rhode Island Infrastructure Bank pursuant to the provisions of chapter 12.2
of title 46 and, with respect to notes or bonds issued in connection with such financing
agreements, if any, the town may elect to have the provisions of chapter 12.2 of title 46 apply to
the issuance of the bonds or notes issued hereunder to the extent the provisions of chapter 12.2 of
title 46 are inconsistent herewith. Such election may be fixed by the proceedings of the town
council authorizing such issuance of 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: (1)
For the construction, renovation, improvement, alteration, repair, furnishing and equipping of
schools and school facilities in the town of Smithfield and all expenses incident thereto; (2) In
payment of the principal of or interest on temporary notes issued under section 3; (3) In
repayment of advances under section 5; (4) In payment of related costs of issuance of any bonds
or notes; and/or (5) In payment of capitalized interest during construction of the project (the
"project"). 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 proceeds of bonds or
notes issued under this act, any applicable federal or state assistance and the other monies referred
to in sections 7 and 10 shall be deemed appropriated for the purposes 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.
     SECTION 3. The town council may by resolution authorize the issuance from time to
time of interest bearing or discounted notes in anticipation of the issuance 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 manual or facsimile signatures of the
town treasurer and countersigned by the town manager and the town clerk 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 issuance of other notes
hereunder, provided the period from the date of an original note to the maturity of any note issued
to renew or pay the same debt or 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, monies 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 6.
The monies in the fund and any investments held as 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 monies 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. Bonds and notes shall not be issued unless the town has received a letter
from the Rhode Island Department of Elementary and Secondary Education confirming that the
then-current reimbursement rate or state share ratio pursuant to §§ 16-7-35 through 16-7-47, as
amended from time to time, or pursuant to any other law hereafter enacted providing for funds to
municipalities for school housing aid purposes, is not less than forty percent (40%) of debt
service for those costs which are eligible for state school housing aid.
     SECTION 5. 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 2, 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 6. 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 7. 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 premium 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 project costs, 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 hereunder may also, in the discretion of the town treasurer,
be met from bond or note proceeds exclusive of accrued interest or from other monies 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 treasurer shall be governed by any instructions adopted by resolution of the town council.
     SECTION 8. 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 § 45-12-2. 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 monies
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 9. Any bonds or notes issued under the provisions of this act, and coupons, if
any, 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 10. 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 the
monies 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.
     SECTION 11. 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 12. The town treasurer and town manager, 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 instruments, documents or agreements necessary to comply with federal tax and
securities laws, which instruments, 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. All or any portion of the authorized but unissued authority to issue bonds
and notes under this act may be extinguished by resolution of the town council after seven (7)
years shall have passed from the approval of this act provided for in section 14, without further
action by the general assembly.
     SECTION 14. At the general election to be held on November 6, 2018 or at a local
election, other than a primary, to be held on a date designated by the town council, there shall be
submitted to electors of the town a question in substantially the following form: "Shall An Act
Passed at the 2018 Session of the General Assembly Entitled 'AN ACT AUTHORIZING THE
TOWN OF SMITHFIELD TO ISSUE NOT TO EXCEED $45,000,000 IN GENERAL
OBLIGATION BONDS, NOTES AND OTHER EVIDENCE OF INDEBTEDNESS TO
FINANCE THE CONSTRUCTION, RENOVATION, IMPROVEMENT, ALTERATION,
REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES
THROUGHOUT THE TOWN, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A
REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 40% FOR
EXPENDITURES ELIGIBLE FOR REIMBURSEMENT' 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 this act available at the clerk's
office for public inspection, but the validity of the election shall not be affected by this
requirement. To the extent of any inconsistency between this act and the town charter, this act
shall prevail.
     SECTION 15. Sections 14 and 15 of this act shall take effect upon passage. 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 section 14.
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LC005934
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