Chapter
486
2006 -- H 8224
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: Representatives Long, Rice, and Jackson
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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LC03439
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