2015 -- H 5063

========

LC000370

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

____________

A N   A C T

AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE REPAIR AND

REHABILITATION OF LOCAL ROAD INFRASTRUCTURE BY THE ISSUANCE OF NOT

MORE THAN $2,500,000 OF BONDS AND/OR NOTES THEREFOR

     

     Introduced By: Representative Brian C. Newberry

     Date Introduced: January 08, 2015

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

1

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

2

previously granted, to issue general obligation bonds and notes to an amount not exceeding two

3

million five hundred thousand dollars ($2,500,000) from time to time under its corporate name

4

and seal. The bonds of each issue may be issued in the form of serial bonds or term bonds or a

5

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

6

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

7

principal, in such installments as are fixed by the proceedings of the town council authorizing the

8

issue or by separate resolution of the town council. All such bonds of a particular issue may be

9

issued in the form of zero coupon bonds, capital appreciation bonds, serial bonds or term bonds or

10

a combination thereof, and may bear interest at a fixed rate or rates or at a variable or auction rate

11

or rates, as determined by the proceedings of the town council authorizing the issue or by separate

12

resolution of the town council. The bonds may be sold by a negotiated sale or by competitive bid

13

and issued pursuant to a resolution or an indenture of trust, as is determined by the proceedings of

14

the town council authorizing the issue or by separate resolution of the town council, provided that

15

the final maturity of such bonds shall not exceed thirty (30) years from and after the date the

16

bonds are issued. Annual installments of principal may be provided for by maturity of principal in

17

the case of serial bonds or by mandatory serial redemption in the case of term bonds. The amount

18

of principal appreciation each year on any bonds, after the date of original issuance, shall not be

 

1

considered to be principal indebtedness for the purposes of any constitutional or statutory debt

2

limit or any other limitation. The appreciation of principal after the date of original issue shall be

3

considered interest. Only the original principal amount shall be counted in determining the

4

principal amount so issued and any interest component shall be disregarded.

5

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

6

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

7

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

8

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

9

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

10

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

11

the bonds or notes. The proceeds derived from the sale of the bonds shall be delivered to the

12

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

13

expended: (1) For the purpose of financing the repair and rehabilitation of local road

14

infrastructure; (2) In payment of the principal of and/or interest on temporary notes issued under

15

section 3; (3) In repayment of advances made pursuant to section 4; and/or (4) In payment of

16

costs of issuance associated with the issuance of bonds or notes hereunder. No purchaser of any

17

bonds or notes under this act shall be in any way responsible for the proper application of the

18

proceeds derived from the sale thereof. The proceeds of bonds or notes issued under this act, any

19

applicable federal or state assistance and the other monies referred to in sections 6 and 9, shall be

20

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

21

act. This bond issue authorized by this act may be consolidated for the purpose of issuance and

22

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

23

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

24

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

25

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

26

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

27

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

28

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

29

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

30

including Rule 15c2-12 of the Securities and Exchange Commission and to execute and deliver a

31

continuing disclosure agreement or certificate in connection with the bonds or notes.

32

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

33

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

34

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

 

LC000370 - Page 2 of 7

1

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

2

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

3

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

4

issued hereunder shall be signed by the director of finance and the president of the town council

5

and shall be payable within five (5) years from their respective dates, but the principal of and

6

interest on notes issued for a shorter period may be renewed or paid from time to time by the

7

issue of other notes hereunder, provided the period from the date of an original note to the

8

maturity of any notes issued to renew or pay the same debt or the interest thereon shall not exceed

9

five (5) years. Any temporary notes in anticipation of bonds issued under this section may be

10

refunded prior to the maturity of the notes by the issuance of additional temporary notes, provided

11

that no such refunding shall result in any amount of such temporary notes outstanding at any one

12

time in excess of two hundred percent (200%) of the amount of bonds which may be issued under

13

this act, and provided further that if the issuance of any such refunding notes results in any

14

amount of such temporary notes outstanding at any one time in excess of the amount of bonds

15

which may be issued under this act, the proceeds of such refunding notes shall be deposited in a

16

separate fund established with the bank which is paying agent for the notes being refunded.

17

Pending their use to pay the notes being refunded, monies in the fund shall be invested for the

18

benefit of the town by the paying agent at the direction of the director of finance in any

19

investment permitted under section 5. The monies in the fund and any investments held as a part

20

of the fund shall be held in trust and shall be applied by the paying agent solely to the payment or

21

prepayment of the principal of and interest on the notes being refunded. Upon payment of all

22

principal of and interest on the notes, any excess monies in the fund shall be distributed to the

23

town. The town may pay the principal of and interest on notes in full from other than the issuance

24

of refunding notes prior to the issuance of bonds pursuant to section 1 hereof. In such case, the

25

town’s authority to issue bonds or notes in anticipation of bonds under this act shall continue

26

provided that: (1) The town council passes a resolution evidencing the town’s intent to pay off the

27

notes; and (2) That the period from the date of an original note to the maturity date of any other

28

notes shall not exceed five (5) years.

29

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

30

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

31

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

32

treasury of the town to the purposes specified in section 2, such advances to be repaid without

33

interest from the proceeds of bonds or notes subsequently issued or from the proceeds of

34

applicable federal or state assistance or from other available funds.

 

LC000370 - Page 3 of 7

1

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

2

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

3

of finance in demand deposits, time deposits or savings deposits in banks which are members of

4

the Federal Deposit Insurance Corporation or in obligations issued or guaranteed by the United

5

States of America or by any agency or instrumentality thereof or as may be provided in any other

6

applicable law of the state of Rhode Island or resolution of the town council or pursuant to an

7

investment policy of the town.

8

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

9

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

10

sale of bonds or notes hereunder shall, in the discretion of the director of finance, be applied to

11

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

12

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

13

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

14

issuing and marketing bonds or notes issued hereunder may also, in the discretion of the director

15

of finance, be met from bond or note proceeds exclusive of accrued interest or from other monies

16

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

17

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

18

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

19

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

20

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

21

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

22

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

23

council.

24

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

25

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

26

contracted by it and shall be excepted from the operation of § 45-12-2. No such obligation shall

27

at any time be included in the debt of the town for the purpose of ascertaining its borrowing

28

capacity. The town shall annually appropriate a sum sufficient to pay the principal and interest

29

coming due within the year on bonds and notes issued hereunder to the extent that monies

30

therefor are not otherwise provided. If such sum is not appropriated, it shall nevertheless be added

31

to the annual tax levy. In order to provide such sum in each year and notwithstanding any

32

provision of law to the contrary, all taxable property in the town shall be subject to ad valorem

33

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

34

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

 

LC000370 - Page 4 of 7

1

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

2

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

3

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

4

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

5

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

6

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

7

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

8

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

9

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

10

may be repaid as project costs under section 2.

11

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

12

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

13

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

14

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

15

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

16

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

17

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

18

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

19

occurrence of such action.

20

     SECTION 11. The question of the approval of this act shall be submitted to the electors

21

of the town at a general or special election (other than a primary election) to be held on a date as

22

shall be designated by the town council. The question shall be submitted in substantially the

23

following form: "Shall an act, passed at the 2015 session of the general assembly, entitled 'AN

24

ACT AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE REPAIR

25

AND REHABILITATION OF LOCAL ROAD INFRASTRUCTURE BY THE ISSUANCE OF

26

NOT MORE THAN $2,500,000 OF BONDS AND/OR NOTES THEREFOR' be approved?" The

27

warning for the election shall contain the question to be submitted. From the time the election is

28

warned and until it is held, it shall be the duty of the town clerk to keep a copy of the act available

29

at his or her office for public inspection, but the validity of the election shall not be affected by

30

this requirement. To the extent of any inconsistency between this act and the town charter, this act

31

shall prevail.

 

LC000370 - Page 5 of 7

1

     SECTION 12. Sections 11 and 12 shall take effect upon the passage of this act. The

2

remainder of this act shall take effect upon the approval of this act by a majority of those voting

3

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

========

LC000370

========

 

LC000370 - Page 6 of 7

EXPLANATION

OF

A N   A C T

AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE REPAIR AND

REHABILITATION OF LOCAL ROAD INFRASTRUCTURE BY THE ISSUANCE OF NOT

MORE THAN $2,500,000 OF BONDS AND/OR NOTES THEREFOR

***

1

     This act would authorize the town of North Smithfield to issue two million five hundred

2

thousand dollars $2,500,000 of general obligation bonds and notes in order to finance the repair

3

and rehabilitation of local road infrastructure.

4

     Sections 11 and 12 would take effect upon passage. The remainder of the act would take

5

effect upon approval of the act by the electors of the town of North Smithfield.

========

LC000370

========

 

LC000370 - Page 7 of 7