Chapter 421
2006 -- S 3152
Enacted 07/06/06
A N A C T
AUTHORIZING
THE TOWN OF MIDDLETOWN TO FINANCE ROAD CONSTRUCTION AND DRAINAGE AND SIDEWALK
IMPROVEMENTS IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $1,000,000 BONDS
AND/OR NOTES THEREFOR
Introduced
By: Senator June N. Gibbs
Date
Introduced: June 08, 2006
It is enacted by the General Assembly as
follows:
SECTION 1. The
town of Middletown is hereby empowered, in addition to authority
previously granted, to issue bonds to an amount
not exceeding one million dollars ($1,000,000)
from time to time under its corporate name and
seal. The bonds of each issue may be issued in
the form of zero coupon bonds, capital
appreciation bonds, 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 five (5) years and the last installment not later
than thirty (30) years after the date of the
bonds. 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. For
each issue the amounts payable annually for
principal and interest combined either shall be
as nearly equal from year to year as is practicable
in the opinion of the officers authorized to
issue the bonds, or shall be arranged in accordance
with a schedule providing for a more rapid
amortization of principal.
SECTION 2. The
bonds shall be signed by the town finance director and by the president
of the town council and shall be issued and sold
in such amounts as the town council may
authorize. 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 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. Interest coupons (if
any) shall bear the manual or facsimile signature
of the town finance director. The proceeds
derived from the sale of the bonds shall be delivered
to the town finance director, and such proceeds
exclusive of premiums and accrued interest shall
be expended (a) for road construction and
drainage and sidewalk improvements in the town, (b)
for payment of the principal or interest on
temporary notes issued under section three, (c) in
payment of capitalized interest on bonds or
notes (d) in repayment of advances under section
four, or (e) in payment of related costs of
issuance of any bonds or notes. 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 sales thereof. The
project shall be carried out and all contracts made
therefor on behalf of the town by the town
council. The proceeds of bonds or notes issued under
this act, any applicable federal or state
assistance and 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. The 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. The town finance
director and the president of the town council,
on behalf of the town, 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 documents or agreements necessary to comply
with federal tax and securities laws, which
documents or agreements may have a term
coextensive with the maturity of the bonds authorized
hereby.
SECTION 3. The
town council may by resolution authorize the issue 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 town finance director. Temporary
notes issued hereunder shall be signed by the
manual or facsimile signatures of the town finance
director and by 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 thereunder, provided the period
from the date of an original note to the maturity
or any note issued to renew or pay the same debt
or the 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, moneys in
the fund shall be invested for the benefit of
the town by the paying agent at the direction of the
town finance director in any investment
permitted under section five. The moneys in the fund
and any investments 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
and interest on the notes, any excess moneys in
the fund shall be distributed to the town. 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 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 4. Pending
any authorization or issue of bonds hereunder or pending or in lieu
of any authorization or issue of notes
hereunder, the town finance director, 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 town
finance director 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 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 and any
earnings or net profit realized from the deposit or
investment of funds hereunder shall, in the
discretion of the finance director, 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 cost of the
project, 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 town
finance director, be met from bond or note
proceeds exclusive of accrued interest or from other
moneys 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 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 town from property taxes. In
exercising any discretion under this section, the
town finance director 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 or 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 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.
SECTION 11. All or
any portion of the authority to issue bonds and notes under this act
may be extinguished by resolution of the town
council, without further action by the general
assembly.
SECTION 12. The
town finance director and the president of the town council, on behalf
of the town, are hereby authorized to execute
such 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 documents or agreements
necessary to comply with federal tax and
securities laws, which 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. The
question of the approval of this act shall be submitted to the electors
of the town at the election to be held on
November 7, 2006 or such other general or special
election (other than a primary) to be held prior
to December 31, 2006, as shall be designated by
the town council. 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 MIDDLETOWN TO FINANCE ROAD CONSTRUCTION
AND DRAINAGE AND
SIDEWALK IMPROVEMENTS IN THE TOWN BY THE
ISSUANCE OF NOT MORE THAN
$1,000,000 BONDS AND/OR NOTES THEREFOR' 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
town clerk to keep a copy of the act available at his
office for public inspection, but the validity
of the election shall not be affected by this
requirement.
SECTION 14. 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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LC03446
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