§ 45-12-5.2. Issuance of refunding bonds to pay outstanding bonds.
(a) Any city, town or political subdivision of this state may issue refunding bonds in order to pay all or any designated part of an issue of outstanding bonds, including principal, redemption premium, if any, interest on the outstanding bonds coming due on or prior to the date on which those bonds are to be redeemed, and the costs of issuing the refunding bonds.
(b) No bonds shall be issued under this section, however, more than six (6) months prior to the date on which the outstanding bonds are to be redeemed, unless the proceedings authorizing the refunding bonds include or incorporate specific findings to the effect that the refunding will result in a financial benefit to the political subdivision.
(c) Refunding bonds shall be authorized by ordinance or resolution of the town council or city council. The proceedings authorizing the issue of refunding bonds shall contain a general description of the bonds which are to be refunded.
(d) Notwithstanding any provision of any municipal charter to the contrary, refunding bonds may be sold at public or private sale, and may provide for annual or more frequent equal, diminishing, or increasing installments of principal and deferral of the first installment of principal. In all other respects, refunding bonds shall be payable not later than the last date that could have been the final maturity date of the bonds being refunded.
(e) The proceeds of refunding bonds, exclusive of costs of issuance any premium and accrued interest shall, upon their receipt, be paid immediately to the paying agent for the bonds which are to be refunded, and that paying agent shall hold those proceeds in trust until they are applied to refund bonds. While the proceeds are held in trust they may be invested for the benefit of the issuer in obligations of the United States of America, the state of Rhode Island, or its political subdivisions.
(f) Between the authorization of refunding bonds and the use of their proceeds to refund bonds, the refunding bonds shall not be deemed debts of the issuer in determining its borrowing capacity for any purpose. Upon the use of the proceeds of refunding bonds, the refunding bonds shall be treated as debt of the issuer for the purposes and to the same extent as the refunded bonds were so treated.
(g) As used in this section, “bonds” includes notes, including notes in anticipation of bonds.
(h) The powers conferred by this section and the preceding section are in addition to and not in substitution for, or diminution of, any other powers conferred, cities, towns and other on political subdivisions of this state.
(i) Refunding bonds may be issued under this section by any city, town or other political subdivision without obtaining the approval of its electors, notwithstanding the provisions of §§ 45-12-19 and 45-12-20 and notwithstanding any provision of its charter to the contrary. Notwithstanding any provisions to the contrary of any special law authorizing the issuance of bonds by a city, town or other political subdivision, any notes in anticipation of bonds issued or to be issued under that law may be refunded prior to the maturity of the notes by the issuance, in accordance with this section, of additional notes; provided, that no refunding results in an aggregate amount of notes outstanding under a special law at any one time in excess of two hundred percent (200%) of the amount of bonds authorized but not yet issued under the special law. The officers authorized to issue the original notes being refunded are authorized, without any additional proceedings by the local legislative body, to issue the refunding notes in accordance with this section.
History of Section.
P.L. 1977, ch. 37, § 1; P.L. 1982, ch. 153, § 1; P.L. 1985, ch. 31, § 1; P.L. 1986,
ch. 408, § 1; P.L. 2007, ch. 252, § 1; P.L. 2007, ch. 292, § 1.