Chapter 341
2008 -- S 3147
Enacted 07/08/08
A N A C T
AUTHORIZING
THE TOWN OF MIDDLETOWN TO FINANCE THE ACQUISITION AND PRESERVATION OF OPEN
SPACE IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $2,000,000 BONDS AND/OR
NOTES THEREFOR
Introduced
By: Senator June N. Gibbs
Date
Introduced: June 20, 2008
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 two million dollars ($2,000,000)
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 the acquisition and preservation
of open space in the town, (b) for payment of
the principal or interest on temporary notes
issued under Section, 3, (c) in payment of capitalized
interest on bonds or notes (d) in repayment of
advances under Section 4, (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
Section 6 and 9, 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 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 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 the 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 the 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 5. 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 2, 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 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 or more of
the foregoing. The cost of preparing, issuing and
marketing bonds or notes issued 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 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 any order or 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 the 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 the 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 2.
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 projects
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 projects, 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 4, 2008 or such other general or special
election (other than a primary) to be held on a
date, as shall be designated by the town council.
The question shall be submitted in substantially
the following form: "Shall an act, passed at the
2008 session of the general assembly, entitled
'AN ACT AUTHORIZING THE TOWN OF
MIDDLETOWN TO FINANCE THE ACQUISITION AND
PRESERVATION OF OPEN
SPACE IN THE TOWN BY THE ISSUANCE OF NOT MORE
THAN $2,000,000 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/her 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 passage of the
act. The remainder of this act shall take effect
upon the approval of the act by a majority of those
voting on the question at the election
prescribed by the foregoing section.
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LC03169
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