Chapter 263
2004 -- S 2760
Enacted 07/02/04
A N A C T
RELATING
TO THE INDEBTEDNESS OF TOWNS AND CITIES
Introduced
By: Senators Goodwin, Ruggerio, and Perry
Date
Introduced: February 11, 2004
It is
enacted by the General Assembly as follows:
SECTION
1. Chapter 45-12 of the General Laws entitled "Indebtedness of Towns and
Cities"
is hereby amended by adding thereto the following section:
45-12-5.4.
Variable rate obligations and interest rate exchange agreements. – In
connection
with the issuance of duly authorized bonds, notes or other obligations of a
city or
town
with a population greater than one hundred twenty-five thousand (125,000)
inhabitants,
notwithstanding
any other authority to the contrary, such bonds, notes or other obligations may
be
issued
in the form of variable rate obligations, so-called. In connection therewith,
any such city
or
town, acting through its finance director or treasurer, may enter into
agreements with banks,
trust
companies or other financial institutions within or without the state, whether
in the form of
letters
or lines of credit, liquidity facilities, insurance or other support
arrangements. Any bonds,
notes
or other obligations issued as variable rate obligations shall bear such terms
as may be fixed
by
the vote or resolution of the city or town authorizing the bonds, notes or
other obligations, or
in
absence of foregoing such terms as the finance director or treasurer shall
determine, including
provisions
for prepayment at any time with or without premium at the option of the city or
town,
may
be sold at a premium or discount, and may bear interest or not and if interest
bearing, may
bear
interest at such rate or rates variable from time to time as determined by such
index, banking
loan
rate or other method specified in any such agreement. Any such agreement may
also include
such
other covenants and provisions for protecting the rights, security and remedy
of the lenders
as
may, in the discretion of the finance director or treasurer, be reasonable and
proper and not in
violation
of law. The finance director or treasurer of the city or town may also enter
into
agreements
with brokers for the placement or marketing of any such bonds, notes or other
obligations
issued as variable rate obligations.
In
addition, the finance director or treasurer of a city or town with a population
greater
than
one hundred twenty-five thousand (125,000) inhabitants, with the approval of
the city or
town
council, may from time to time, enter into and amend interest rate exchange
agreements,
including,
but not limited to, interest rate "caps," "floors,"
"collars," or "swaps" that the finance
director
or treasurer determines to be necessary or desirable for the purpose of
generating savings,
managing
an interest rate, or similar risk that arises in connection with, or subsequent
to or is
incidental
to the issuance, carrying or securing of variable rate obligations, fixed rate
bonds or
fixed
rate obligations. Such interest rate exchange agreements shall contain such
provisions,
including
payment, term, security, default and remedy provisions, and shall be with such
parties,
as
the finance director or treasurer shall determine to be necessary or desirable
after due
consideration
to the creditworthiness of those parties. Any municipal public buildings
authority
established
pursuant to title 45, chapter 50 of the general laws and any redevelopment agency
operating
pursuant to title 45, chapter 31 of the general laws, which public buildings
authority or
redevelopment
agency has been established by a city or town with a population greater than
one
hundred
twenty-five thousand (125,000) inhabitants, shall also have the authority to
enter into
interest
rate exchange agreements as set forth in this paragraph.
SECTION
2. This act shall take effect on July 1, 2005.
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LC01880
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