§ 46-12.8-8. Authority of local governmental units to issue obligations — Terms.
(a) In addition to the powers of any local governmental unit provided in any bond act, whenever a local governmental unit has applied for and accepted a loan from the agency and entered into a loan agreement therefor, any local governmental obligations issued by the local governmental unit to evidence the loan may be issued in accordance with, and subject to the limitations of this chapter, notwithstanding the provisions of the bond act authorizing the obligation or any other general or special law or provision of municipal charter to the contrary. The provisions of this chapter shall apply to the issuance of local governmental obligations issued under the authority of any bond act, whether heretofore or hereafter enacted. Notwithstanding the foregoing, no local governmental obligation shall be issued unless authorized by a vote of the body or bodies required by the charter, ordinances, or laws governing the local governmental unit, or the applicable bond act for the authorization of indebtedness of the local governmental unit.
(b) Local governmental obligations issued by any local governmental unit shall be dated, may bear interest at such rate or rates, including rates variable, from time to time, subject to such minimum or maximum rate, if any, as may be determined by such index or other method of determination provided in the applicable loan agreement, shall mature in such amount or amounts and at such time or times, not later than the maximum dates, if any, provided herein, and may be made redeemable in whole or in part before maturity at the option of the local governmental unit or at the option of the agency, at such price or prices and under such terms and conditions as may be fixed in the loan agreement prior to the issue of the local governmental obligations. Local governmental obligations may be issued as serial bonds or term bonds or any combination thereof with such provision, if any, for sinking funds for the payment of bonds as the local governmental unit and the agency may agree. The local governmental obligations may be sold at private sale and may be in such form, payable to the bearer thereof or the registered owner, whether certificated or uncertificated, be in such denominations, payable at such place or places, within or without the state, and otherwise bear such terms and conditions not inconsistent with this chapter, as provided in the applicable loan agreement or as the agency and the local governmental unit shall otherwise agree. The local governmental obligations may be issued in principal amount equal to the loan evidenced thereby or at such discount as the agency and the local governmental unit shall agree.
(c) Local governmental obligations shall be payable within a period not exceeding the greater of the period, if any, specified in the applicable bond act or the useful life of the approved project financed by such obligations as determined by the department, or if incurred to finance more than one project, the average useful life of the projects. Except as otherwise provided in this chapter, the local governmental obligations shall be payable by such equal, increasing, or decreasing installments of principal, annual or otherwise, as will extinguish the obligations at maturity, the first installment to be payable no later than one year after the date of issuance of the obligations or one year after the date of completion of the approved project financed by the obligations, as determined by the department, whichever date is later, and the remaining installments of principal, if any, to be in such amounts and payable on such dates as the agency and the local governmental unit shall agree.
(d) If a local governmental unit has authorized borrowing in accordance with this chapter and the issuance of local governmental obligations to evidence the borrowing under any bond act, the local governmental unit may, subject to the applicable loan agreement and with the approval of the agency, issue notes to the agency in anticipation of the loan. The issuance of the notes shall be governed by the provisions of this chapter relating to the issue of bonds other than notes, to the extent applicable, provided the maturity date of the notes shall not exceed five (5) years from the date of issue of the notes, or the expected date of completion of the approved project financed thereby as determined by the department, if later. Notes issued for less than the maximum maturity date may be renewed by the issue of other notes maturing no later than the maximum maturity date.
(e) A local governmental unit may issue local governmental obligations to refund or pay at maturity or earlier redemption any local governmental obligations outstanding under any loan agreement, or to refund or pay any other debt of the local governmental unit issued to finance the approved project to which the loan agreement pertains. The refunding local governmental obligations may be issued in sufficient amounts to pay or provide for the principal of the obligations refunded, any redemption premium thereon, any interest accrued and to accrue to the date of payment of the obligations, the costs of issuance of the refunding obligations and any reserves required by the applicable loan agreement. The issue of refunding local governmental obligations, the amount and dates of maturity or maturities of local governmental obligations, the amount and dates of maturity or maturities and other details thereof, the security therefor, and the rights, duties, and obligations of the local governmental unit in respect to the same shall be governed by the provisions of this chapter relating to the issue of local governmental obligations other than refunding obligations as this chapter may be applicable.
(f) Except as otherwise provided in § 46-12.8-9, the applicable bond act, or by agreement between the agency and a local governmental unit, all local governmental obligations issued in accordance with this section shall be general obligations of the local governmental unit issuing the obligations for which its full faith and credit are pledged and for the payment of which all taxable property in the local governmental unit shall be subject to ad valorem taxation without limit as to rate or amount except as otherwise provided by law.
History of Section.
P.L. 1993, ch. 313, § 1; P.L. 1993, ch. 396, § 1.