It is enacted by the General Assembly as follows:

SECTION 1. Section 46-12.8-9 of the General Laws in Chapter 46-12.8 entitled "Water Projects Revolving Loan Fund" is hereby amended to read as follows:

46-12.8-9. Power of local governmental units to issue limited obligations payable from drinking water system revenues -- (a) If required by the applicable loan agreement, and notwithstanding any general or special law or municipal charter, ordinance or local law to the contrary, local governmental obligations shall may be authorized and issued as limited obligations payable solely from drinking water system revenues pledged to their payment in accordance with section 46-12.8-10. If required by the applicable loan agreement, local governmental obligations issued in accordance with this section shall also be general obligations of the local governmental unit and secured by a pledge of its full faith and credit. Notwithstanding section 45-12-2 or any general or special law or , municipal charter, ordinance or local law to the contrary, all local governmental units shall have the power to authorize and issue local governmental obligations payable solely from drinking water system revenues pursuant to this section without limit as to amount, and the amount of principal and premium, if any, and interest on the obligations shall not be included in the computation of any limit on the indebtedness of the local governmental unit or on the total taxes which may be levied or assessed by the local governmental unit in any year or on any assessment, levy, or other charge made by the local governmental unit on any other political subdivision or instrumentality of the state. This Limited obligations shall be authorized by the affirmative vote of the legislative body of the local governmental unit, notwithstanding the provisions of any general or special law, municipal charter, ordinance or local law requiring further approval of general obligations of the local governmental unit and this chapter shall constitute the bond act for the authorization and issuance of the local governmental obligations payable solely from drinking water system revenues by local governmental units. Any local governmental obligations issued in accordance with this section that are payable solely from drinking water system revenues shall recite on their face that they are limited obligations payable solely from drinking water system revenues pledged to their payment and that they are not secured by a pledge of the full faith and credit of the local governmental unit.

(b) The issue authorization, issuance and sale of local governmental obligations in accordance with this section, the maturity or maturities and other terms thereof, the security therefor, the rights of the holders thereof, and the rights, duties, and obligations of the local governmental unit in respect of the same, and the form details and manner of sale thereof shall be governed by the provisions of this chapter relating to the issue of local governmental obligations generally to the extent applicable and not inconsistent with this section.

SECTION 2. This act shall take effect upon passage.