Chapter 06-007

2006 -- S 2165

Enacted 03/10/06

A N A C T

AUTHORIZING THE TOWN OF NORTH SMITHFIELD TO FINANCE THE ACQUISITION OF LAND FOR SCHOOL FACILITIES AND THE CONSTRUCTION AND EQUIPPING OF A NEW MIDDLE SCHOOL AND SCHOOL FACILITIES IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $30,000,000 BONDS AND/OR NOTES THEREFOR     

Introduced By: Senators Tassoni, P Fogarty, and Cote

Date Introduced: January 26, 2006

It is enacted by the General Assembly as follows:

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

authority previously granted, to issue bonds to an amount not exceeding thirty million dollars

($30,000,000) from time to time under its corporate name and seal. 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 serial redemption in the

case of term bonds, in annual installments of principal, the first installment to be not later than

three (3) 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 bonds shall be signed by the manual or facsimile signatures of the town

director of finance and the president of the town council and shall be issued and sold in such

amounts as the town 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 proceedings of the town council authorizing the issue or by

separate resolution of the town 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 director of finance, and such proceeds,

exclusive of premiums and accrued interest, shall be expended as follows: a) for the purpose of

financing the acquisition of land for school facilities and the construction and equipping of a new

middle school and school facilities in the town (the "Project") b) in payments of the principal of

or interest on temporary notes issued under section three, c) in repayment of advances under

section four, d) in payment of the costs of issuance associated with the issuance of bonds or notes

hereunder and/or e) in payment of capitalized interest during construction of 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 therfor by the town council and the school committee on behalf of the town,

provided that no project shall be commenced without the approval of the school committee. The

proceeds of bonds or notes issued under this act, any applicable federal or state assistance and the

other moneys referred to in sections six and nine shall be deemed appropriated for the purposes of

this act without further action than that required by this act. This bond issue authorized by this

act may be consolidated for the purposes of issuance and sale with any other bond issue of the

town 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 3. The town council may by resolution authorize the issuance from time to

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

director of finance and the president of the town council 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 issue 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 the interest thereon shall not exceed five (5) years. The town 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 town's authority to issue bonds

or notes in anticipation of bonds under this act shall continue provided that 1) the town council

passes a resolution evidencing the town's intent to pay off the 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.

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, moneys in the fund shall be invested for the benefit of the town

by the paying agent at the direction of the director of finance in any invested permitted under

section five. The moneys in the fund and any investments held as a part of the fund shall be held

as a 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 an interest on the notes, any excess moneys in the fund shall be

distributed to the town.

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

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

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

treasury of the town to the purposes specified in section two, 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 5. 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 director

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

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 town council or pursuant to an

investment policy of the town.

     SECTION 6. 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 premiums arising from the

sale of bonds or notes hereunder shall, in the discretion of the 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 project costs, to the payment of the principal of or interest on bonds

or notes issued hereunder or to any one (1) or more of the foregoing. The cost of preparing,

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

finance, be met from bond or note proceeds exclusive of premium and accrued interest or from

other moneys available therefor. Any balance of bond or note proceeds remaining after payment

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

hereunder shall be applied to the payment of the principal of or interest on bonds or notes issued

hereunder. To the extent permitted by applicable federal laws, any earning or not 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 town from property taxes. In exercising any discretion under this

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

town council.

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

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

contracted by it and shall be excepted from the operation of section 45-12-2 of the general laws.

No such obligation shall at any time be included in the debt of the town for the purpose of

ascertaining its borrowing capacity. The town 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 moneys 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 town shall be

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

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

executed by officers of the town 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 9. The town, acting by resolution of its town council, is authorized to apply

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

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

moneys 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 two.

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

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

of the town at a general or special election to be held on a date as shall be designated by the town

council or in lieu thereof by the town administrator. The question shall be submitted in

substantially the following form: "Shall an act, passed at the 2006 session of the general

assembly, entitled 'An Act Authorizing The Town Of North Smithfield to Finance the Acquisition

of Land for School and Facilities and the Construction and Equipping of a New Middle School

and School Facilities in the Town by the Issuance of Not More Than $30,000,000 Bonds and/or

Notes Therfor' be approved?" and the warning for the election shall contain the question to be

submitted. Notwithstanding anything contained in R.I.G.L. Section 17-19-7 to the contrary, the

North Smithfield Board of Canvassers may certify the question to the Secretary of State not later

than March 28, 2006. From the time the election is warned and until it is held, it shall be the duty

of the town clerk to keep a copy of the act available at his or her 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 town charter, this act shall prevail.

     SECTION 12. This section and the foregoing section shall take effect upon the passage

of this act. 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 the foregoing section.

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LC00966

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