2012 -- S 3031

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LC02731

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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A N A C T

AUTHORIZING THE TOWN OF MIDDLETOWN TO FINANCE THE CONSTRUCTION OF

A BEACH PAVILION, INCLUDING A BATHHOUSE, CONCESSION STAND AND OTHER

RELATED BEACH FACILITIES, AND IMPROVEMENTS TO RECREATIONAL AREAS IN

THE TOWN BY THE ISSUANCE OF NOT MORE THAN $6,000,000 BONDS AND/OR

NOTES THEREFOR

     Introduced By: Senator Louis P. DiPalma

     Date Introduced: May 31, 2012

     Referred To: Senate Housing & Municipal Government

It is enacted by the General Assembly as follows:

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     SECTION 1. The town of Middletown is hereby empowered, in addition to authority

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previously granted, to issue bonds to an amount not exceeding six million dollars ($6,000,000)

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from time to time under its corporate name and seal. The bonds of each issue may be issued in the

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form of zero coupon bonds, capital appreciation bonds, serial bonds or term bonds or a

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combination thereof and shall be payable either by maturity of principal in the case of serial

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bonds or by mandatory serial redemption in the case of term bonds, in annual installments of

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principal, the first installment to be not later than five (5) years and the last installment not later

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than thirty (30) years after the date of the bonds. The amount of principal appreciation each year

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on any bonds, after the date of original issuance, shall not be considered to be principal

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indebtedness for the purposes of any constitutional or statutory debt limit or any other limitation.

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The appreciation of principal after the date of original issue shall be considered interest. Only the

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original principal amount shall be counted in determining the principal amount so issued and any

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interest component shall be disregarded. For each issue the amounts payable annually for

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principal and interest combined either shall be as nearly equal from year to year as is practicable

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in the opinion of the officers authorized to issue the bonds, or shall be arranged in accordance

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with a schedule providing for a more rapid amortization of principal.

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     SECTION 2. The bonds shall be signed by the town finance director and by the president

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of the town council and shall be issued and sold in such amounts as the town council may

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authorize. The manner of sale, denominations, maturities, interest rates and other terms,

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conditions and details of any bonds or notes issued under this act may be fixed by the proceedings

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of the town council authorizing the issue or by separate resolution of the town council or, to the

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extent provisions for these matters are not so made, they may be fixed by the officers authorized

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to sign the bonds or notes. Interest coupons (if any) shall bear the manual or facsimile signature

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of the town finance director. The proceeds derived from the sale of the bonds shall be delivered to

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the town finance director, and such proceeds exclusive of premiums and accrued interest shall be

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expended (a) For the construction of a beach pavilion, including a bathhouse, concession stand

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and other related beach facilities, and for improvements to recreational areas in the town, (b) For

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payment of the principal or interest on temporary notes issued under section three, (c) In payment

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of capitalized interest on bonds or notes (d) In repayment of advances under section four, or (e) In

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payment of related costs of issuance of any bonds or notes. No purchaser of any bonds or notes

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under this act shall be in any way responsible for the proper application of the proceeds derived

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from the sales thereof. The project shall be carried out and all contracts made therefor on behalf

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of the town by the town council. The proceeds of bonds or notes issued under this act, any

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applicable federal or state assistance and other moneys referred to in section six and nine, shall be

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deemed appropriated for the purposes of this act without further action than that required by this

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act. The bond issue authorized by this act may be consolidated for the purposes of issuance and

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sale with any other bond issue of the town heretofore or hereafter authorized, provided that,

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notwithstanding any such consolidation, the proceeds from the sale of the bonds authorized by

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this act shall be expended for the purposes set forth above. The town finance director and the

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president of the town council, on behalf of the town, are hereby authorized to execute such

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instruments, documents or other papers as either of them deem necessary or desirable to carry out

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the intent of this act and are also authorized to take all actions and execute all documents or

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agreements necessary to comply with federal tax and securities laws, which documents or

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agreements may have a term coextensive with the maturity of the bonds authorized hereby.

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     SECTION 3. The town council may by resolution authorize the issue from time to time of

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interest bearing or discounted notes in anticipation of the issue of bonds or in anticipation of the

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receipt of federal or state aid for the purposes of this act. The amount of original notes issued in

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anticipation of bonds may not exceed the amount of bonds which may be issued under this act

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and the amount of original notes issued in anticipation of federal or state aid may not exceed the

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amount of available federal or state aid as estimated by the town finance director. Temporary

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notes issued hereunder shall be signed by the manual or facsimile signatures of the town finance

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director and by the president of the town council and shall be payable within five (5) years from

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their respective dates, but the principal of and interest on notes issued for a shorter period may be

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renewed or paid from time to time by the issue of other notes thereunder, provided the period

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from the date of an original note to the maturity or any note issued to renew or pay the same debt

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or the interest thereon shall not exceed five (5) years. Any temporary notes in anticipation of

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bonds issued under this section may be refunded prior to the maturity of the notes by the issuance

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of additional temporary notes, provided that no such refunding shall result in any amount of such

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temporary notes outstanding at any one time in excess of two hundred percent (200%) of the

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amount of bonds which may be issued under this act, and provided further that if the issuance of

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any such refunding notes results in any amount of such temporary notes outstanding at any one

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time in excess of the amount of bonds which may be issued under this act, the proceeds of such

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refunding notes shall be deposited in a separate fund established with the bank which is paying

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agent for the notes being refunded. Pending their use to pay the notes being refunded, moneys in

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the fund shall be invested for the benefit of the town by the paying agent at the direction of the

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town finance director in any investment permitted under section five. The moneys in the fund and

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any investments held as a part of the fund shall be held in trust and shall be applied by the paying

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agent solely to the payment or prepayment of the principal of and interest on the notes being

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refunded. Upon payment of all principal of and interest on the notes, any excess moneys in the

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fund shall be distributed to the town. The town may pay the principal of and interest on notes in

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full from other than the issuance of refunding notes prior to the issuance of bonds pursuant to

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Section 1 hereof. In such case, the town’s authority to issue bonds or notes in anticipation of

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bonds under this act shall continue provided that (1) The town council passes a resolution

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evidencing the town’s intent to pay off the notes without extinguishing the authority to issue

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bonds or notes and (2) That the period from the date of an original note to the maturity date of

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any other note shall not exceed five (5) years.

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     SECTION 4. Pending any authorization or issue of bonds hereunder or pending or in lieu

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of any authorization or issue of notes hereunder, the town finance director, with the approval of

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the town council, may, to the extent that bonds or notes may be issued hereunder, apply funds in

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the treasury of the town to the purposes specified in section two, such advances to be repaid

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without interest from the proceeds of bonds or notes subsequently issued or from the proceeds of

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applicable federal or state assistance or from other available funds.

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     SECTION 5. Any proceeds of bonds or notes issued hereunder or of any applicable

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federal or state assistance, pending their expenditure, may be deposited or invested by the town

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finance director in demand deposits, time deposits or savings deposits in banks which are

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members of the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by

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the United States of America or by any agency or instrumentality thereof or as may be provided

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in any other applicable law of the state of Rhode Island or resolution of the town council or

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pursuant to an investment policy of the town.

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     SECTION 6. Any accrued interest received upon the sale of bonds or notes hereunder

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shall be applied to the payment of the first interest due thereon. Any premiums arising from the

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sale of bonds or notes hereunder and any earnings or net profit realized from the deposit or

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investment of funds hereunder shall, in the discretion of the finance director, be applied to the

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cost of preparing, issuing, and marketing bonds or notes hereunder to the extent not otherwise

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provided, to the payment of the cost of the project, to the payment of the principal of or interest

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on bonds or notes issued hereunder or to any one or more of the foregoing. The cost of preparing,

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issuing and marketing bonds or notes hereunder may also, in the discretion of the town finance

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director, be met from bond or note proceeds exclusive of accrued interest or from other moneys

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available therefor. Any balance of bond or note proceeds remaining after payment of the cost of

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the projects and the cost of preparing, issuing and marketing bonds or notes hereunder shall be

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applied to the payment of the principal of or interest on bonds or notes issued hereunder. To the

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extent permitted by applicable federal laws, any earnings or net profit realized from the deposit or

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investment of funds hereunder may, upon receipt, be added to and dealt with as part of the

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revenues of the town from property taxes. In exercising any discretion under this section, the

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town finance director shall be governed by any instructions adopted by resolution of the town

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council.

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     SECTION 7. All bonds and notes issued under this act and the debts evidenced thereby

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shall be obligatory on the town in the same manner and to the same extent as other debts lawfully

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contracted by it and shall be excepted from the operation of section 45-12-2 of the general laws.

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No such obligation shall at any time be included in the debt of the town for the purpose of

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ascertaining its borrowing capacity. The town shall annually appropriate a sum sufficient to pay

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the principal and interest coming due within the year on bonds and notes issued hereunder to the

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extent that moneys therefor are not otherwise provided. If such sum is not appropriated, it shall

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nevertheless be added to the annual tax levy. In order to provide such sum in each year and

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notwithstanding any provision of law to the contrary, all taxable property in the town shall be

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subject to ad valorem taxation by the town without limitation as to rate or amount.

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     SECTION 8. Any bonds or notes issued under the provisions of this act, if properly

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executed by officers of the town in office on the date of execution, shall be valid and binding

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according to their terms notwithstanding that before the delivery thereof and payment therefor

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any or all of such officers shall for any reason have ceased to hold office.

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     SECTION 9. The town, acting by resolution of its town council is authorized to apply for,

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contract for and expend any federal or state advances or other grants or assistance which may be

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available for the purposes of this act, and any such expenditures may be in addition to other

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moneys provided in this act. To the extent of any inconsistency between any law of this state and

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any applicable federal law or regulation, the latter shall prevail. Federal and state advances, with

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interest where applicable, whether contracted for prior to or after the effective date of this act,

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may be repaid as project costs under section two.

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     SECTION 10. Bonds and notes may be issued under this act without obtaining the

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approval of any governmental agency or the taking of any proceedings or the happening of any

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conditions except as specifically required by this act for such issue. In carrying out any project

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financed in whole or in part under this act, including where applicable the condemnation of any

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land or interest in land, and in the levy and collection of assessments or other charges permitted

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by law on account of any such project, all action shall be taken which is necessary to meet

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constitutional requirements whether or not such action is otherwise required by statute; but the

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validity of bonds and notes issued hereunder shall in no way depend upon the validity or

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occurrence of such action.

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     SECTION 11. All or any portion of the authority to issue bonds and notes under this act

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may be extinguished by resolution of the town council, without further action by the general

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assembly.

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     SECTION 12. The town finance director and the president of the town council, on behalf

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of the town, are hereby authorized to execute such documents or other papers as either of them

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deem necessary or desirable to carry out the intent of this act and are also authorized to take all

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actions and execute all documents or agreements necessary to comply with federal tax and

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securities laws, which documents or agreements may have a term coextensive with the maturity

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of the bonds authorized hereby, including Rule 15c2-12 of the Securities and Exchange

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Commission (the Rule) and to execute and deliver a continuing disclosure agreement or

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certificate in connection with the bonds or notes in the form as shall be deemed advisable by such

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officers in order to comply with the Rule.

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     SECTION 13. The question of the approval of this act shall be submitted to the electors

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of the town at the election to be held on November 6, 2012 or such other general or special

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election (other than a primary) to be held on a date as shall be designated by the town council.

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The question shall be submitted in substantially the following form: "Shall an act, passed at the

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2012 session of the general assembly, entitled 'AN ACT AUTHORIZING THE TOWN OF

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MIDDLETOWN TO FINANCE THE CONSTRUCTION OF A BEACH PAVILION,

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INCLUDING A BATHHOUSE, CONCESSION STAND AND OTHER RELATED BEACH

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FACILITIES, AND IMPROVEMENTS TO RECREATIONAL AREAS IN THE TOWN BY

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THE ISSUANCE OF NOT MORE THAN $6,000,000 BONDS AND/OR NOTES THEREFOR'

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be approved?" and the warning for the election shall contain the question to be submitted. From

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the time the election is warned and until it is held, it shall be the duty of the town clerk to keep a

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copy of the act available at his office for public inspection, but the validity of the election shall

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not be affected by this requirement.

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     SECTION 14. This section and the foregoing section shall take effect upon the passage of

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this act. The remainder of this act shall take effect upon the approval of this act by a majority of

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those voting on the question at the election prescribed by the foregoing section.

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LC02731

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