2022 -- H 8274

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LC006008

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

AUTHORIZING THE CITY OF EAST PROVIDENCE TO FINANCE THE CONSTRUCTION,

RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND

EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES IN THE CITY BY THE ISSUANCE

OF NOT MORE THAN $148,000,000 BONDS, NOTES AND/OR OTHER EVIDENCES OF

INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A

REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 48.5% FOR

     EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT THE

AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

SCHOOL BUILDING AUTHORITY CAPITAL FUND

     Introduced By: Representatives Amore, Kazarian, Henries, and Cassar

     Date Introduced: May 20, 2022

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. The city of East Providence is hereby empowered, in addition to authority

previously granted, to issue bonds and other evidences of indebtedness (hereinafter "bonds") up to

an amount not exceeding one hundred forty-eight million dollars ($148,000,000) from time to time

under its corporate name and seal or a facsimile of such seal; provided, however, that bonds shall

not be issued unless the conditions of section 2 hereof as to the level of state aid are met. The bonds

of each issue may be issued in the form of serial bonds or term bonds or a combination thereof and

shall be payable either by maturity of principal in the case of serial bonds or by mandatory sinking

fund installments in the case of term bonds, in annual installments of principal, the first installment

to be not later than five (5) years and the last installment not later than thirty (30) years after the

date of the bonds. All such bonds of a particular issue may be issued in the form of zero coupon

bonds, capital appreciation bonds, serial bonds or term bonds or a combination thereof. The amount

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

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

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

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

amount so issued and any interest component shall be disregarded.

     SECTION 2. The city may be eligible for school housing aid reimbursement on debt

service pursuant to chapter 7 of title 16, or for a grant, loan or other "financial assistance" as defined

in § 45-38.2-1, from the school building authority capital fund under chapter 38.2 of title 45. The

amount of borrowing authorized pursuant to this act shall be reduced by the amount of any grant

received by the city from the school building authority capital fund. Bonds, notes or other evidences

of indebtedness shall not be issued under this act unless the city has received preliminary indication

from the Rhode Island department of education ("RIDE") confirming that the then-current school

housing aid reimbursement rate under chapter 7 of title 16, as amended from time to time, or

financial assistance from the school building authority capital fund, or pursuant to any other law

hereafter enacted providing for funds to municipalities for school housing purposes, is not less than

fifty percent (50%) of debt service for those expenditures which are eligible for state aid.

     SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the city

director of finance and the mayor and shall be issued and sold in such amounts as the city council

may authorize by resolution. The manner of sale, denominations, maturities, interest rates and other

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

proceedings of the city council authorizing the issue or by separate resolution of the city council

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

authorized to sign the bonds. Notwithstanding anything contained in this act to the contrary, the

city may enter into financing agreements with the Rhode Island health and educational building

corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, with respect to bonds

or notes issued in connection with such financing agreements, if any, the city may elect to have the

provisions of chapter 38.1 of title 45 apply to the issuance of the bonds or notes issued hereunder

to the extent the provisions of chapter 38.1 of title 45 are inconsistent herewith. In addition, the city

may enter into financing agreements with the Rhode Island infrastructure bank pursuant to the

provisions of chapter 12.2 of title 46 and, with respect to bonds or notes issued in connection with

such financing agreements, if any, the city may elect to have the provisions of chapter 12.2 of title

46 apply to the issuance of the bonds or notes issued hereunder to the extent the provisions of

chapter 12.2 of title 46 are inconsistent herewith. Such election may be fixed by the proceedings of

the city council authorizing such issuance of by separate resolution of the city council, or, to the

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

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

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

expended: (1) For the construction, renovation, improvement, alteration, repair, furnishing and

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equipping of schools and school facilities in the city and all costs related thereto; (2) In payment of

the principal of or interest on temporary notes issued under section 4; (3) In repayment of advances

under section 5; (4) In payment of related costs of issuance of any bonds or notes; and/or (5) In

payment of capitalized interest during construction of the project (the "project"). No purchaser of

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

proceeds derived from the sale thereof. The project shall be carried out and all contracts made

therefor on behalf of the city by the city school building committee. The proceeds of bonds or notes

issued under this act, any applicable federal or state assistance and the other monies referred to in

sections 7 and 10 shall be deemed appropriated for the purposes of this act without further action

than that required by this act. The bonds authorized by this act may be consolidated for the purpose

of issuance and sale with any other bonds of the city heretofore or hereafter authorized; provided

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

by this act shall be expended for the purposes set forth above.

     SECTION 4. The city council may by resolution authorize the issuance from time to time

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

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

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

(without any reduction for any grant to be received from the school building authority capital fund),

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

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

issued hereunder shall be signed by the manual or facsimile signatures of the city director of finance

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

principal of and interest on notes issued for a shorter period may be renewed or paid from time to

time by the issuance of other notes hereunder; provided, the period from the date of an original note

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

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

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

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

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

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

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

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

established with the bank which is paying agent for the notes being refunded. Pending their use to

pay the notes being refunded, monies in the fund shall be invested for the benefit of the city by the

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paying agent at the direction of the city director of finance in any investment permitted under

section 6. The monies in the fund and any investments held as part of the fund shall be held in trust

and shall be applied by the paying agent solely to the payment or prepayment of the principal of

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

any excess monies in the fund shall be distributed to the city. The city may pay the principal of and

interest on notes in full from other than the issuance of refunding notes prior to the issuance of

bonds pursuant to section 1 hereof. In such case, the city's authority to issue bonds or notes in

anticipation of bonds under this act shall continue provided that: (1) The city council passes a

resolution evidencing the city's intent to pay off the notes without extinguishing the authority to

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

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

     SECTION 5. Pending any authorization or issue of bonds hereunder or pending or in lieu

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

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

treasury of the city to the purposes specified in section 3, such advances to be repaid without interest

from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable federal

or state assistance or from other available funds.

     SECTION 6. Any proceeds of bonds or notes issued hereunder or of any applicable federal

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

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

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

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

applicable law of the State of Rhode Island or resolution of the city council or pursuant to an

investment policy of the city.

     SECTION 7. Any accrued interest received upon the sale of bonds or notes hereunder shall

be applied to the payment of the first interest due thereon. Any premium arising from the sale of

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

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

provided, to the payment of the project costs, to the payment of the principal of or interest on bonds

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

and marketing bonds or notes hereunder may also, in the discretion of the city director of finance,

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

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

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

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payment of the principal of or interest on bonds or notes issued hereunder. To the extent permitted

by applicable federal laws, any earnings or net profit realized from the deposit or investment of

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

from property taxes. In exercising any discretion under this section, the city director of finance shall

be governed by any instructions adopted by resolution of the city council.

     SECTION 8. All bonds and notes issued under this act and the debts evidenced thereby

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

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

any time be included in the debt of the city for the purpose of ascertaining its borrowing capacity.

The city shall annually appropriate a sum sufficient to pay the principal and interest coming due

within the year on bonds and notes issued hereunder to the extent that monies therefor are not

otherwise provided. If such sum is not appropriated, it shall nevertheless be added to the annual tax

levy. In order to provide such sum in each year and notwithstanding any provision of law to the

contrary, all taxable property in the city shall be subject to ad valorem taxation by the city without

limitation as to rate or amount.

     SECTION 9. Any bonds or notes issued under the provisions of this act, and coupons, if

any, if properly executed by officers of the city in office on the date of execution, shall be valid and

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

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

     SECTION 10. The city, acting by resolution of its city council, is authorized to apply for,

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

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

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

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

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

repaid as project costs under section 3.

     SECTION 11. Bonds and notes may be issued under this act without obtaining the approval

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

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

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

in land, and in the levy and collection of assessments or other charges permitted by law on account

of any such project, all action shall be taken which is necessary to meet constitutional requirements

whether or not such action is otherwise required by statute, but the validity of bonds and notes

issued hereunder shall in no way depend upon the validity or occurrence of such action.

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     SECTION 12. The city director of finance and the mayor, on behalf of the city, are hereby

authorized to execute such instruments, documents or other papers as either of them deem necessary

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

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

which instruments, documents or agreements may have a term coextensive with the maturity of the

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

"Rule") and to execute and deliver a continuing disclosure agreement or certificate in connection

with the bonds or notes in the form as shall be deemed advisable by such officers in order to comply

with the Rule.

     SECTION 13. All or any portion of the authorized but unissued authority to issue bonds

and notes under this act may be extinguished by resolution of the city council after seven (7) years

shall have passed from the approval of this act provided for in section 14, without further action by

the general assembly.

     SECTION 14. At the general election to be held on November 8, 2022 or at a local election,

other than a primary, to be held on a date designated by the city council, there shall be submitted

to electors of the city a question in substantially the following form: "Shall An Act passed at the

January, 2022 Session of the General Assembly Entitled 'AN ACT AUTHORIZING THE CITY

OF EAST PROVIDENCE TO FINANCE THE CONSTRUCTION, RENOVATION,

IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS

AND SCHOOL FACILITIES IN THE CITY AND ALL COSTS RELATED THERETO BY THE

ISSUANCE OF NOT MORE THAN $148,000,000 BONDS, NOTES AND/OR OTHER

EVIDENCES OF INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE

HOUSING AID AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS

THAN 48.5% FOR EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT

THE AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

SCHOOL BUILDING AUTHORITY CAPITAL FUND' be approved?" and the warning for the

election shall contain the question to be submitted. From the time the election is warned and until

it is held, it shall be the duty of the city clerk to keep a copy of this act available at the clerk's office

for public inspection, but the validity of the election shall not be affected by this requirement. To

the extent of any inconsistency between this act and the city charter, this act shall prevail.

     SECTION 15. This act shall constitute an enabling act of the general assembly that is

required pursuant to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under

this act for school projects shall not be eligible for state housing aid reimbursement pursuant to §

16-7-44 unless the school projects described herein have been approved by RIDE.

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     SECTION 16. Sections 14 and 16 shall take effect upon the passage. The remainder of this

act shall take effect upon the approval of this act by a majority of those voting on the question at

the election prescribed by section 14.

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LC006008

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EXPLANATION

OF

A N   A C T

AUTHORIZING THE CITY OF EAST PROVIDENCE TO FINANCE THE CONSTRUCTION,

RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND

EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES IN THE CITY BY THE ISSUANCE

OF NOT MORE THAN $148,000,000 BONDS, NOTES AND/OR OTHER EVIDENCES OF

INDEBTEDNESS THEREFOR, SUBJECT TO APPROVAL OF STATE HOUSING AID AT A

REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 48.5% FOR

     EXPENDITURES ELIGIBLE FOR STATE AID AND PROVIDED THAT THE

AUTHORIZATION SHALL BE REDUCED BY ANY GRANT RECEIVED FROM THE

SCHOOL BUILDING AUTHORITY CAPITAL FUND

***

     This act would authorize the city of East Providence to issue bonds and notes in an amount

not exceeding one hundred forty-eight million dollars ($148,000,000) to finance the construction,

renovation, improvement, alteration, repair, furnishing and equipping of schools and school

facilities in the city and all costs related thereto, subject to approval of state housing aid at a

reimbursement rate or state share ratio of not less than forty-eight and five-tenths percent (48.5%)

for expenditures eligible for state aid and provided that the authorization would be reduced by any

grant received from the school building authority capital fund. The city may be eligible for school

housing aid reimbursement on debt service pursuant to chapter 7 of title 16, or for a grant, loan or

other "financial assistance" as defined in § 45-38.2-1, from the school building authority capital

fund under chapter 38.2 of title 45. The amount of borrowing authorized pursuant to this act would

be reduced by the amount of any grant received by the city from the school building authority

capital fund. Bonds, notes or other evidences of indebtedness would not be issued under this act

unless the city has received preliminary indication from the Rhode Island department of education

("RIDE") confirming that the then-current school housing aid reimbursement rate under chapter 7

of title 16, as amended from time to time, or financial assistance from the school building authority

capital fund, or pursuant to any other law hereafter enacted providing for funds to municipalities

for school housing purposes, is not less than forty-eight and five-tenths percent (48.5%) of those

expenditures which are eligible for state aid.

     This act would constitute an enabling act of the general assembly that is required pursuant

to § 16-7-44. Any bonds, notes or other evidences of indebtedness issued under this act for school

projects would not be eligible for state housing aid reimbursement pursuant to § 16-7-44 unless the

school projects described herein have been approved by the Rhode Island department of education.

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     Sections 14 and 16 would take effect upon the passage. The remainder of this act would

take effect upon the approval of this act by a majority of those voting on the question at the election

prescribed by section 14.

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