2013 -- H 6059

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LC02460

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO HIGHWAYS -- MUNICIPAL ROAD AND BRIDGE REVOLVING FUND

     Introduced By: Representatives Fox, Ackerman, Marshall, E Coderre, and Messier

     Date Introduced: May 01, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 24 of the General Laws entitled "HIGHWAYS" is hereby amended by

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adding thereto the following chapter:

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     CHAPTER 18

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     MUNICIPAL ROAD AND BRIDGE REVOLVING FUND

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     24-18-1. Short title. -- This act shall be known and may be cited as the "Municipal Road

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and Bridge Revolving Fund Act of 2013."

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     24-18-2. Legislative findings. -- The general assembly finds and declares that:

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     (1) Transportation plays a critical role in enabling economic activity in the state of Rhode

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Island;

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     (2) Cities and towns can lower the costs of borrowing for road and bridge projects

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through cooperation with the Rhode Island Clean Water Finance Agency;

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     (3) The Rhode Island Clean Water Finance Agency benefits from the highest bond rating

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of any public entity in the state of Rhode Island; and

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     (4) Greater coordination among cities and towns will enable more efficient allocation of

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infrastructure resources by the state of Rhode Island.

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     24-18-3. Definitions. -- As used in this chapter, the following terms, unless the context

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requires a different interpretation, shall have the following meanings:

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     (1) "Agency" means the Rhode Island clean water finance agency as set forth in chapter

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46-12.2;

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     (2) "Annual construction plan" means the finalized list of approved projects to commence

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construction each calendar year;

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     (3) "Approved project" means any project approved by the agency for financial

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assistance;

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     (4) "Department" means the department of transportation, or, if the department shall be

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abolished, the board, body, or commission succeeding to the principal functions thereof or upon

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whom the powers given by chapter 5 of title 37 to the department shall be given by law.

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     (5) "Eligible project" means an infrastructure plan, or portion of an infrastructure plan,

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that meets the project evaluation criteria;

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     (6) "Financial assistance" means any form of financial assistance other than grants

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provided by the agency to a city or town in accordance with this chapter for all or any part of the

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cost of an approved project, including, without limitation, temporary and permanent loans, with

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or without interest, guarantees, insurance, subsidies for the payment of debt service on loans,

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lines of credit, and similar forms of financial assistance;

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     (7) "Infrastructure plan" means a project proposed by a city or town that would make

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capital improvements to roads, sidewalks, and bridges consistent with project evaluation criteria;

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     (8) "Market rate" means the rate the city or town would receive in the open market at the

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time of the original loan agreement as determined by the agency in accordance with its rules and

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regulations;

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     (9) "Project evaluation criteria" means the criteria used by the department to evaluate

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infrastructure plans and rank eligible projects and shall include the extent to which the project

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generates economic benefits, the extent to which the project would be able to proceed at an earlier

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date, the likelihood that the project would provide mobility benefits, the cost effectiveness of the

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project, and the likelihood that the project would increase safety;

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     (10) "Project priority list" means the list of eligible projects ranked in the order in which

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financial assistance shall be awarded by the agency pursuant to section 7 of this chapter;

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     (11) "Revolving fund" means the municipal road and bridge revolving fund established

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under section 4 of this chapter; and

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     (12) "Subsidy assistance" means credit enhancements and other measures to reduce the

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borrowing costs for a city or town.

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     24-18-4. Establishment of the municipal road and bridge revolving fund. -- (a) There

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is hereby established a municipal road and bridge revolving fund. The agency shall establish and

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set up on its books the revolving fund, to be held in trust and to be administered by the agency

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solely as provided in this chapter and in any trust agreement securing bonds of the agency. The

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agency shall deposit the following monies into the fund:

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     (1) Amounts appropriated or designated to the agency by the state for the purposes of this

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chapter;

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     (2) Loan repayments and other payments received by the agency pursuant to loan

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agreements with cities and towns executed in accordance with this chapter;

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     (3) Investment earnings on amounts credited to the fund;

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     (4) Proceeds of bonds of the agency to the extent required by any trust agreement for

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such bonds;

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     (5) Administrative fees levied by the agency;

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     (6) Other amounts required by provisions of this chapter or agreement, or any other law

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or any trust agreement pertaining to bonds to be credited to the revolving fund; and

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     (7) Any other funds permitted by law which the agency in its discretion shall determine

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to credit thereto.

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     (b) The agency shall establish and maintain fiscal controls and accounting procedures

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conforming to generally accepted government accounting standards sufficient to ensure proper

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accounting for receipts in and disbursements from the revolving fund.

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     24-18-5. Administration. -- (a) The agency shall have all the powers necessary and

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convenient to carry out and effectuate the purposes and provisions of this chapter including,

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without limiting the generality of the preceding statement, the authority:

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     (1) To receive and disburse such funds from the state as may be available for the purpose

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of the revolving fund subject to the provisions of this chapter;

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     (2) To make and enter into binding commitments to provide financial assistance to local

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cities and towns from amounts on deposit in the revolving fund;

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     (3) To enter into binding commitments to provide subsidy assistance for loans and city

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and town obligations from amounts on deposit in the revolving fund;

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     (4) To levy administrative fees on cities and towns as necessary to effectuate the

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provisions of this chapter, provided the fees have been previously authorized by an agreement

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between the agency and the city or town;

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     (5) To engage the services of third-party vendors to provide professional services; and

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     (6) To establish one or more accounts within the revolving fund; and

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     (7) Such other authority as granted to the agency under chapter 46-12.2.

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     (b) Subject to the provisions of this chapter, to the provisions of any agreement with the

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state authorized by section 24-18-6, and to any agreements with the holders of any bonds of the

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agency or any trustee therefor, amounts held by the agency for the account of the revolving fund

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shall be applied by the agency, either by direct expenditure, disbursement, or transfer to one or

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more other funds and accounts held by the agency or maintained under any trust agreement

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pertaining to bonds, either alone or with other funds of the agency, to the following purposes:

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     (1) To provide financial assistance to cities and towns to finance costs of approved

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projects, and to refinance the costs of the projects, subject to such terms and conditions, if any, as

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are determined by the department and/or the agency in accordance with section 24-18-7;

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     (2) To fund reserves for bonds of the agency and to purchase insurance and pay the

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premiums therefor, and pay fees and expenses of letters or lines of credit and costs of

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reimbursement to the issuers thereof for any payments made thereon or on any insurance, and to

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otherwise provide security for, and a source of payment for obligations of the agency, by pledge,

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lien, assignment, or otherwise as provided in chapter 46-12.2;

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     (3) To pay expenses of the agency and the department in administering the revolving

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fund. As part of the annual appropriations bill, the department shall set forth the gross amount of

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expenses received from the agency and a complete, specific breakdown of the sums retained

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and/or expended for administrative expenses;

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     (4) To pay or provide for subsidy assistance equivalent to one third (1/3) of the market

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rate or such other subsidy assistance as determined by the agency;

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     (5) To provide a reserve for, or to otherwise secure, amounts payable by cities and towns

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on loans and city and town obligations outstanding in the event of default thereof; amounts in any

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account in the revolving fund may be applied to defaults on loans outstanding to the city or town

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for which the account was established and, on a parity basis with all other accounts, to defaults on

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any loans or city or town obligations outstanding; and

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     (6) To provide a reserve for, or to otherwise secure, by pledge, lien, assignment, or

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otherwise as provided in chapter 46-12.2, any bonds of the agency.

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     (c) In addition to other remedies of the agency under any loan agreement or otherwise

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provided by law, the agency may also recover from a city or town, in an action in superior court,

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any amount due the agency together with any other actual damages the agency shall have

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sustained from the failure or refusal of the city or town to make the payments or abide by the

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terms of the loan agreement.

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     (d) The agency shall provide an annual report detailing the uses of the fund to the speaker

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of the house and the senate president. The initial report shall be due no later than January 1, 2015.

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     24-18-6. Payment of state funds. -- (a) Subject to the provisions of subsection (b), upon

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the written request of the agency, the general treasurer shall pay to the agency, from time to time,

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from the proceeds of any bonds or notes issued by the state for the purposes of this chapter or

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funds otherwise lawfully payable to the agency for the purposes of this chapter, such amounts as

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shall have been appropriated or lawfully designated for the revolving fund. All amounts so paid

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shall be credited to the revolving fund in addition to any other amounts credited or expected to be

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credited to the revolving fund.

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     (b) The agency and the state shall enter into, execute, and deliver one or more agreements

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setting forth or otherwise determining the terms, conditions, and procedures for, and the amount,

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time, and manner of payment of, all amounts available from the state to the agency under this

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section.

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     24-18-7.  Procedure for project approval. -- (a) By September 1, 2013, the department

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shall promulgate rules and regulations establishing the project evaluation criteria and the process

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through which a city or town may submit an infrastructure plan. By December 31, 2013, the

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agency shall promulgate rules and regulations to effectuate the provisions of this chapter which

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may include, without limitation, forms for financial assistance applications, loan agreements, and

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other instruments. All rules and regulations promulgated pursuant to this chapter shall be

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promulgated in accordance with the provisions of chapter 42-35.

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     (b) Beginning with the calendar year 2013 and for each calendar year thereafter, cities

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and towns shall have from September 15th through October 15th to submit an infrastructure plan to

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the department. In the event that October 15th is a Saturday, Sunday, or a general holiday as

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enumerated in section 25-1-1, the deadline shall be extended through the next day that is not a

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Saturday, Sunday, or a general holiday as enumerated in section 25-1-1.

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     (c) By the end of each calendar year, the department shall evaluate all submitted

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infrastructure plans and, in accordance with the project evaluation criteria, identify all eligible

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projects, and the department shall finalize and provide the agency and statewide planning with a

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project priority list for the forthcoming calendar year.

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     (d) By the end of each calendar year, the agency shall determine the maximum amount of

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financial assistance available for the forthcoming calendar year, provided that it shall not exceed

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an amount of twenty million dollars ($20,000,000); and provided further that the agency shall not

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obligate more than fifty percent (50%) of available funding in any calendar year to any one city

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or town unless there are no other eligible projects on the project priority list.

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     (e) Upon issuance of the project priority list, the agency shall award financial assistance

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to cities and towns for approved projects provided, however, that the agency does not exceed its

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maximum annual amount of financial assistance. The agency may decline to award financial

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assistance to an approved project which the agency determines will have a substantial adverse

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effect on the interests of holders of bonds or other indebtedness of the agency or the interests of

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other participants in the financial assistance program, or for good and sufficient cause affecting

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the finances of the agency. All financial assistance shall be made pursuant to a loan agreement

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between the agency and the city or town, acting by and through the officer or officers, board,

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committee, or other body authorized by law, or otherwise its chief executive officer, according to

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terms and conditions as determined by the agency, and each loan shall be evidenced and secured

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by the issue to the agency of city or town obligations in fully marketable form in principal

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amount, bearing interest at the rate or rates specified in the applicable loan agreement, and shall

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otherwise bear such terms and conditions as authorized by this chapter and/or the loan agreement.

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     24-18-8. Inspection of approved projects. -- For any approved project, the department

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shall have the authority to inspect the construction and operation thereof to ensure compliance

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with the provisions of this chapter.

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     24-18-9. Expenses incurred by the department. -- (a) In order to provide for the

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expenses of the department under this chapter, the agency shall transfer to the department an

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amount from the revolving fund equal to the amount authorized by the general assembly.

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     24-18-10. Severability. -- If any provision of this chapter or the application of this

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chapter to any person or circumstances is held invalid, the invalidity shall not affect other

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provisions or applications of the chapter, which can be given effect without the invalid provision

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or application, and to this end the provisions of this chapter are declared to be severable.

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     SECTION 2. Sections 46-12.2-4, 46-12.2-14, 46-12.2-15, 46-12.2-16, 46-12.2-17, 46-

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12.2-18, 46-12.2-19, 46-12.2-20, 46-12.2-21, 46-12.2-22 and 46-12.2-25 of the General Laws in

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Chapter 46-12.2 entitled "Rhode Island Clean Water Finance Agency" are hereby amended to

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read as follows:

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     46-12.2-4. General powers and duties of agency. -- (a) The agency shall have all

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powers necessary or convenient to carry out and effectuate the purposes and provisions of this

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chapter and chapter 24-18, including without limiting the generality of the foregoing, the powers

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and duties:

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     (1) To adopt and amend bylaws, rules, regulations, and procedures for the governance of

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its affairs, the administration of its financial assistance programs, and the conduct of its business;

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     (2) To adopt an official seal;

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     (3) To maintain an office at such place or places as it may determine;

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     (4) To adopt a fiscal year;

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     (5) To adopt and enforce procedures and regulations in connection with the performance

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of its functions and duties;

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     (6) To sue and be sued;

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     (7) To employ personnel as provided in § 46-12.2-5, and to engage accounting,

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management, legal, financial, consulting and other professional services;

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     (8) Except as provided in this chapter, to receive and apply its revenues to the purposes of

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this chapter without appropriation or allotment by the state or any political subdivision thereof;

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     (9) To borrow money, issue bonds, and apply the proceeds thereof, as provided in this

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chapter and chapter 24-18, and to pledge or assign or create security interests in revenues, funds,

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and other property of the agency and otherwise as provided in this chapter and chapter 24-18, to

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pay or secure the bonds; and to invest any funds held in reserves or in the water pollution control

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revolving fund, the Rhode Island water pollution control revolving fund, the municipal road and

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bridge fund established under chapter 24-18, or the local interest subsidy trust fund, or any

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revenues or funds not required for immediate disbursement, in such investments as may be legal

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investments for funds of the state;

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     (10) To obtain insurance and to enter into agreements of indemnification necessary or

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convenient to the exercise of its powers under this chapter and chapter 24-18;

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     (11) To apply for, receive, administer, and comply with the conditions and requirements

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respecting any grant, gift, or appropriation of property, services, or moneys;

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     (12) To enter into contracts, arrangements, and agreements with other persons, and

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execute and deliver all instruments necessary or convenient to the exercise of its powers under

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this chapter and chapter 24-18; such contracts and agreements may include without limitation,

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loan agreements with local governmental units, capitalization grant agreements, intended use

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plans, operating plans, and other agreements and instruments contemplated by title VI of the

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Clean Water Act, 33 U.S.C. § 1381 et seq., or this chapter, agreement and instruments

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contemplated by chapter 24-18, grant agreements, contracts for financial assistance or other forms

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of assistance from the state or the United States, and trust agreements and other financing

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agreements and instruments pertaining to bonds;

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     (13) To authorize a representative to appear on its own behalf before other public bodies,

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including, without limiting the generality of the foregoing, the congress of the United States, in

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all matters relating to its powers and purposes;

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     (14) To provide financial assistance to local governmental units to finance costs of

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approved projects, and to acquire and hold local governmental obligations at such prices and in

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such manner as the agency shall deem advisable, and sell local governmental obligations acquired

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or held by it at prices without relation to cost and in such manner as the agency shall deem

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advisable, and to secure its own bonds with such obligations all as provided in this chapter and

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chapter 24-18;

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     (15) To establish and collect such fees and charges as the agency shall determine to be

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reasonable;

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     (16) To acquire, own, lease as tenant, or hold real, personal or mixed property or any

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interest therein for its own use; and to improve, rehabilitate, sell, assign, exchange, lease as

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landlord, mortgage, or otherwise dispose of or encumber the same;

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     (17) To do all things necessary, convenient, or desirable for carrying out the purposes of

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this chapter and chapter 24-18 or the powers expressly granted or necessarily implied by this

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chapter and chapter 24-18;

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     (18) To conduct a training course for newly appointed and qualified members and new

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designees of ex-officio members within six (6) months of their qualification or designation. The

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course shall be developed by the executive director, approved by the board of directors, and

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conducted by the executive director. The board of directors may approve the use of any board of

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directors or staff members or other individuals to assist with training. The training course shall

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include instruction in the following areas: the provisions of chapters 46-12.2, 42-46, 36-14, and

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38-2; and the agency's rules and regulations. The director of the department of administration

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shall, within ninety (90) days of the effective date of this act [July 15, 2005], prepare and

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disseminate, training materials relating to the provisions of chapters 42-46, 36-14 and 38-2; and

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     (19) Upon the dissolution of the water resources board (corporate) pursuant to § 46-15.1-

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22, to have all the powers and duties previously vested with the water resources board

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(corporate), as provided pursuant to chapter 46-15.1.

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     (20) To meet at the call of the chair at least eight (8) times per year. All meetings shall be

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held consistent with chapters 42-46.

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     (b) Notwithstanding any other provision of this chapter, the agency shall not be

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authorized or empowered:

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     (1) To be or to constitute a bank or trust company within the jurisdiction or under the

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control of the department of banking and insurance of the state, or the commissioner thereof, the

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comptroller of the currency of the United States of America, or the Treasury Department thereof;

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or

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     (2) To be or constitute a bank, banker or dealer in securities within the meaning of, or

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subject to the provisions of, any securities, securities exchange, or securities dealers' law of the

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United States or the state.

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     46-12.2-14. Bonds of the agency. -- (a) The agency may provide by resolution of the

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board of directors for the issuance, from time to time, of bonds of the agency for any of its

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corporate purposes, including those set forth in chapter 24-18, or for the borrowing of money in

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anticipation of the issuance of the bonds. Bonds issued by the agency may be issued as general

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obligations of the agency or as special obligations payable solely from particular revenues or

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funds as may be provided for in any trust agreement or other agreement securing bonds. The

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agency may also provide by resolution of the board of directors for the issuance, from time to

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time, of temporary notes in anticipation of the revenues to be collected or received by the agency,

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including, without limitation, in anticipation of any payments to the agency from the state

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pursuant to section 46-12.2-7, or in anticipation of the receipt of other grants or aid. The issue of

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notes shall be governed by the provisions of this chapter and chapter 24-18, as applicable,

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relating to the issue of bonds of the agency other than temporary notes as this chapter these

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chapters may be applicable; provided, however, that notes issued in anticipation of revenues shall

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mature no later than one year from their respective dates, or the date of expected receipt of the

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revenues, if later, and notes issued in anticipation of grants, or other aid and renewals thereof,

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shall mature no later than six (6) months after the expected date of receipt of the grant or aid.

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      (b) The bonds of each issue shall be dated, may bear interest at such rate or rates,

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including rates variable from time to time as determined by such index, banker's loan rate, or

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other method determined by the agency, and shall mature or otherwise be payable at such time or

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times, as may be determined by the agency, and may be made redeemable before maturity at the

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option of the agency or the holder thereof at such price or prices and under such terms and

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conditions as may be fixed by the agency. The agency shall determine the form of bonds, and the

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manner of execution of the bonds, and shall fix the denomination or denominations of the bonds,

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and the place or places of payment of principal, redemption premium, if any, and interest, which

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may be paid at any bank or trust company within or without the state. In case any officer whose

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signature or a facsimile of whose signature shall appear on any bonds shall cease to be the officer

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before the delivery thereof, the signature or facsimile shall nevertheless be valid and sufficient for

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all purposes as if the officer had remained in office until delivery. The agency may provide for

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authentication of bonds by a trustee, fiscal agent, registrar, or transfer agency. Bonds may be

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issued in bearer or in registered form, or both, and, if notes, may be made payable to the bearer or

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to order, as the agency may determine. The agency may also establish and maintain a system of

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registration for any bonds whereby the name of the registered owner, the rights evidenced by the

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bonds, the transfer of the bonds, and the rights and other similar matters, are recorded in books or

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other records maintained by or on behalf of the agency, and no instrument evidencing the bond or

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rights need be delivered to the registered owner by the agency. A copy of the books or other

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records of the agency pertaining to any bond registered under a registration system certified by an

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authorized officer of the agency or by the agent of the agency maintaining the system shall be

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admissible in any proceeding without further authentication. The board of directors may by

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resolution delegate to any member or officer of the agency, or any combination thereof, the

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power to determine any of the matters set forth in this section. In the discretion of the agency,

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bonds of the agency may be issued with such terms as will cause the interest thereon to be subject

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to federal income taxation. The agency may sell its bonds in such manner, either at public or

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private sale, for the price, at the rate or rates of interest, or at discount in lieu of interest, as it may

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determine will best effect the purposes of this chapter or chapter 24-18, as applicable.

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      (c) The agency may issue interim receipts or temporary bonds, exchangeable for

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definitive bonds, when the bonds shall have been executed and are available for delivery. The

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agency may also provide for the replacement of any bonds which shall have become mutilated or

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shall have been destroyed or lost. The agency, by itself or through such agency as it may select,

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may purchase and invite offers to tender for purchase any bonds of the agency at any time

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outstanding; provided, however, that no purchase by the agency shall be made at a price,

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exclusive of accrued interest, if any, exceeding the principal amount thereof or, if greater, the

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redemption price of the bonds when next redeemable at the option of the agency, and may resell

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any bonds so purchased in such manner and for such price as it may determine will best effect the

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purposes of this chapter or chapter 24-18, as applicable.

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      (d) In the discretion of the board of directors, any bonds issued under this section may be

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secured by a trust agreement in such form and executed in such manner as may be determined by

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the board of directors, between the agency and the purchasers or holders of the bonds, or between

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the agency and a corporate trustee which may be any trust company or bank having the powers of

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a trust company within or without the state. The trust agreement may pledge or assign, in whole

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or in part, any loan agreements and local governmental obligations, and the revenues, funds, and

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other assets or property held or to be received by the agency, including without limitation all

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moneys and investments on deposit from time to time in the water pollution control revolving

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fund, the Rhode Island water pollution control revolving fund, and the local interest subsidy trust

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fund, or the municipal road and bridge revolving fund, as applicable, and any contract or other

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rights to receive the same, whether then existing or thereafter coming into existence and whether

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then held or thereafter acquired by the agency, and the proceeds thereof. The trust agreement may

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contain such provisions for protecting and enforcing the rights, security, and remedies of the

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bondholders as may be reasonable and proper including, without limiting the generality of the

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foregoing, provisions defining defaults and providing for remedies in the event thereof which

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may include the acceleration of maturities, restrictions on the individual right of action by

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bondholders, and covenants setting forth the duties of and limitations on the agency in relation to

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the custody, safeguarding, investment, and application of moneys, the enforcement of loan

11-1

agreements and local governmental obligations, the issue of additional or refunding bonds, the

11-2

fixing, revision, charging, and collection of charges, the use of any surplus bond proceeds, the

11-3

establishment of reserves, and the making and amending of contracts.

11-4

      (e) In the discretion of the board of directors, any bonds issued under authority of this

11-5

chapter or chapter 24-18 may be issued by the agency in the form of lines of credit or other

11-6

banking arrangements under terms and conditions, not inconsistent with this chapter or chapter

11-7

24-18, and under such agreements with the purchasers or makers thereof or any agent or other

11-8

representative of such purchasers or makers, as the board of directors may determine to be in the

11-9

best interests of the agency. In addition to other security provided herein or otherwise by law,

11-10

bonds issued by the agency under any provision of this chapter or chapter 24-18 may be secured,

11-11

in whole or in part, by financial guarantees, by insurance, or by letters or lines of credit issued to

11-12

the agency or a trustee or any other person, by any bank, trust company, insurance or surety

11-13

company, or other financial institution, within or without the state, and the agency may pledge or

11-14

assign, in whole or in part, any loan agreements and local governmental obligations, and the

11-15

revenues, funds, and other assets and property held or to be received by the agency, and any

11-16

contract or other rights to receive the same, whether then existing or thereafter coming into

11-17

existence and whether then held or thereafter acquired by the agency, and the proceeds thereof, as

11-18

security for the guarantees or insurance or for the reimbursement by the agency to any issuer of

11-19

the line or letter of credit.

11-20

      (f) It shall be lawful for any bank or trust company to act as a depository or trustee of the

11-21

proceeds of bonds, revenues, or other moneys under a trust agreement of the agency, and to

11-22

furnish indemnification and to provide security as may be required by the agency. It is hereby

11-23

declared that any pledge or assignment made by the agency under this chapter or chapter 24-18 is

11-24

an exercise of the governmental powers of the agency, and loan agreements, local governmental

11-25

obligations, revenues, funds, assets, property, and contract or other rights to receive the same and

11-26

the proceeds thereof, which are subject to the lien of a pledge or assignment created under this

11-27

chapter or chapter 24-18, shall not be applied to any purposes not permitted by the pledge or

11-28

assignment.

11-29

      (g) Any holder of a bond issued by the agency under the provisions of this chapter or

11-30

chapter 24-18 and any trustee or other representative under a trust agreement securing the trustee

11-31

or representative, except to the extent the rights herein given may be restricted by the trust

11-32

agreement, may bring suit upon the bonds in the superior court and may, either at law or in

11-33

equity, by suit, action, mandamus, or other proceeding for legal or equitable relief, protect and

11-34

enforce any and all rights under the laws of the state or granted hereunder or under the trust

12-1

agreement, and may enforce and compel performance of all duties required by this chapter,

12-2

chapter 24-18, or by the trust agreement, to be performed by the agency or by any officer thereof.

12-3

     46-12.2-15. Refunding bonds. -- The agency may issue refunding bonds for the purpose

12-4

of paying any of its bonds, issued pursuant to this chapter or chapter 24-18, at or prior to maturity

12-5

or upon acceleration or redemption or purchase and retirement. Refunding bonds may be issued at

12-6

such times at or prior to the maturity, redemption, or purchase and retirement of the refunded

12-7

bonds as the board of directors deems to be in the interest of the agency. Refunding bonds may be

12-8

issued in sufficient amounts to pay or provide for payment of the principal of the bonds being

12-9

refunded, together with any redemption premium thereon, any interest or discount accrued or to

12-10

accrue to the date of payment of the bonds, the costs of issuance of the refunding bonds, the

12-11

expenses of paying, redeeming, or purchasing the bonds being refunded, the costs of holding and

12-12

investing proceeds of refunding bonds pending payment, redemption, or purchase and reserves

12-13

for debt service or other expenses from the proceeds of refunding bonds as may be required by a

12-14

trust agreement securing the bonds. Pending application, the proceeds of the refunding bonds may

12-15

be placed in escrow. The issue and sale of refunding bonds, the maturities, and other details

12-16

thereof, the security therefor, the rights of the holders thereof, and the rights, duties, and

12-17

obligations of the agency in respect of the same shall be governed by the provisions of this

12-18

chapter and chapter 24-18, as applicable, relating to the issue of bonds other than refunding bonds

12-19

insofar as this chapter these chapters may be applicable.

12-20

     46-12.2-16. Bonds eligible for investment. -- Bonds issued by the agency under this

12-21

chapter or chapter 24-18 and local governmental obligations issued hereunder are hereby made

12-22

securities in which all public officers and agencies of the state and its political subdivisions, all

12-23

insurance companies, trust companies in their commercial departments, savings banks,

12-24

cooperative banks, banking associations, investment companies, executors, administrators,

12-25

trustees, and other fiduciaries may properly invest funds, including capital in their control or

12-26

belonging to them. The bonds and local governmental obligations are hereby made securities

12-27

which may properly be deposited with and received by any state or municipal officer of any

12-28

agency or political subdivision of the state for any purpose for which the deposit of bonds or

12-29

obligations of the state or any political subdivision is now or may hereafter be authorized by law.

12-30

     46-12.2-17. No additional consent required. -- Except as provided in this section, bonds

12-31

and local governmental obligations may be issued under this chapter or chapter 24-18 without

12-32

obtaining the consent of any executive office, department, division, commission, board, bureau,

12-33

or agency of the state or any political subdivision thereof, and without any other proceedings or

12-34

the happening of any condition, or acts other than those proceedings, conditions, or acts which are

13-1

specifically required therefor hereunder or under any applicable bond act, and the validity of and

13-2

security for any bonds issued by the agency pursuant to this chapter or chapter 24-18, and any

13-3

local governmental obligations issued in accordance herewith, shall not be affected by the

13-4

existence or nonexistence of any consent or other proceedings, conditions, or acts. Nothing in this

13-5

chapter or chapter 24-18 shall exempt the agency from the provisions of chapter 10.1 of title 42

13-6

entitled "Public Finance Management Board," and the Narragansett Bay water quality

13-7

management district commission shall not issue any bonds, notes, or other indebtedness without

13-8

the approval of the division of public utilities as required by section 39-3-15.

13-9

     46-12.2-18. Bonds not obligations of the state. -- Bonds issued by the agency under the

13-10

provisions of this chapter or chapter 24-18 shall not be deemed to be a debt or a pledge of the

13-11

faith and credit of the state or of any of its political subdivisions, but shall be payable solely from

13-12

the revenues, funds, assets, and other property of the agency from which they are made payable

13-13

pursuant to this chapter or chapter 24-18. Bonds issued by the agency under the provisions of this

13-14

chapter and chapter 24-18 shall recite that neither the state nor any political subdivisions thereof

13-15

shall be obligated to pay the bonds, and that neither the faith and credit nor the taxing power of

13-16

the state or of any political subdivision thereof is pledged to the payment of the principal of or

13-17

interest on the bonds. Further, every bond shall recite whether it is a general obligation of the

13-18

agency, or a special obligation thereof payable solely from particular revenues, funds, assets, or

13-19

other property pledged to its payment.

13-20

     46-12.2-19. Lien status -- Recording. -- (a) Notwithstanding any provision of any other

13-21

law, including the Uniform Commercial Code:

13-22

      (1) Any pledge or assignment of revenues of any kind, funds, loan agreements, local

13-23

governmental obligations, property, or assets made pursuant to the provisions of this chapter or

13-24

chapter 24-18 by the agency, or any local governmental unit hereunder, shall be valid and binding

13-25

against all parties having claims of any kind in tort, contract, or otherwise, whether or not the

13-26

parties have notice thereof, and shall be deemed continuously perfected from the time it is made;

13-27

      (2) No filing of any kind with respect to a pledge or assignment need be made under the

13-28

Uniform Commercial Code, as amended, or otherwise;

13-29

      (3) Unless otherwise provided in the loan agreement, a pledge of revenues of any kind

13-30

shall be deemed to include a pledge of any accounts or general intangibles from which the

13-31

pledged revenues are derived, whether existing at the time of the pledge or thereafter coming into

13-32

existence, and whether held at the time of the pledge or thereafter acquired by the agency or local

13-33

governmental unit, and the proceeds of the accounts or general intangibles; and

14-34

      (4) The pledge of revenues of any kind, accounts, and general intangibles shall be

14-35

subject to the lien of the pledge without delivery or segregation, and the lien of the pledge shall

14-36

be valid and binding against all parties having claims of contract or tort or otherwise against the

14-37

agency or local governmental unit.

14-38

      (b) A pledge of revenues of any kind under this chapter or chapter 24-18 shall constitute

14-39

a sufficient appropriation thereof for the purposes of any provision for appropriation, and the

14-40

revenues may be applied as required by the pledge without further appropriation.

14-41

      (c) For the purposes of this section, the word "pledge" shall be construed to include the

14-42

grant of a security interest under the Uniform Commercial Code.

14-43

     46-12.2-20. Bonds and local government obligations as investment securities. --

14-44

Notwithstanding any of the provisions of this chapter, chapter 24-18, or any recitals in any bonds

14-45

or local governmental obligations issued hereunder, all bonds and local governmental obligations

14-46

shall be deemed to be investment securities under the Uniform Commercial Code.

14-47

     46-12.2-21. Proceeds received by agency as trust funds. -- All moneys received by the

14-48

agency pursuant to the provisions of this chapter or chapter 24-18, whether as proceeds from the

14-49

issue of bonds or as revenues or otherwise, shall be deemed to be trust funds to be held and

14-50

applied solely as provided in this chapter these chapters.

14-51

     46-12.2-22. Tax exemption. -- Bonds issued by the agency and local governmental

14-52

obligations issued by any local governmental unit in accordance with this chapter or chapter 24-

14-53

18, their transfer and the income therefrom, including any profit made on the sale thereof, shall, at

14-54

all times, be exempt from taxation by and within the state. The agency shall not be required to

14-55

pay any taxes, assessments, or excises upon its income, existence, operation, or property.

14-56

     46-12.2-25. Supplemental powers -- Inconsistent laws. -- The provisions of this chapter

14-57

and chapter 24-18 shall be deemed to provide an additional, alternative, and complete method for

14-58

accomplishing the purposes of this chapter these chapters, and shall be deemed and construed to

14-59

be supplemental and additional to, and not in derogation of, powers conferred upon the agency,

14-60

the department, and local governmental units by other laws; provided, however, that insofar as

14-61

the provisions of this chapter these chapters are inconsistent with the provisions of any general or

14-62

special law, municipal charter, administrative order or regulations, the provisions of this chapter

14-63

these chapters shall be controlling. Any amounts appropriated by this chapter these chapters to

14-64

the agency or the department shall be in addition to any other amounts appropriated to the agency

14-65

or the department by any other law.

15-66

     SECTION 3. This act shall take effect upon passage.

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LC02460

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO HIGHWAYS -- MUNICIPAL ROAD AND BRIDGE REVOLVING FUND

***

16-1

     This act would provide for a municipal road and bridge revolving fund to be administered

16-2

by the Rhode Island clean water finance agency in order to lower the cost of borrowing for road

16-3

and bridge projects of cities and towns.

16-4

     This act would take effect upon passage.

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LC02460

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