2024 -- S 2858 | |
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LC005055 | |
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STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2024 | |
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A N A C T | |
AUTHORIZING THE CITY OF PROVIDENCE TO ISSUE NOT TO EXCEED $400,000,000 | |
GENERAL OBLIGATION BONDS AND NOTES TO FINANCE THE CONSTRUCTION, | |
RELATED DEMOLITION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, | |
LANDSCAPING, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL | |
FACILITIES THROUGHOUT THE CITY AND ALL COSTS RELATED THERETO, | |
SUBJECT TO APPROVAL OF STATE HOUSING AID AT A REIMBURSEMENT RATE OR | |
STATE SHARE RATIO OF NOT LESS THAN 75% AT THE TIME OF ISSUANCE AND | |
PROVIDED THAT THE AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF | |
CERTAIN GRANTS RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE | |
ISLAND DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL | |
BUILDING AUTHORITY | |
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Introduced By: Senators Bissaillon, Ruggerio, Quezada, Zurier, Mack, Ciccone, Miller, | |
Date Introduced: March 22, 2024 | |
Referred To: Senate Finance | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. The city of Providence is hereby authorized, in addition to authority |
2 | previously granted, to issue bonds up to an amount not exceeding four hundred million dollars |
3 | ($400,000,000) from time to time under its corporate name and seal or a facsimile of such seal; |
4 | provided, however, that bonds shall not be issued unless the conditions of section 2 hereof as to the |
5 | level of state aid are met. The bonds of each issue may be issued in the form of serial bonds or term |
6 | bonds or a combination thereof and shall be payable either by maturity of principal in the case of |
7 | serial bonds or by mandatory sinking fund installments in the case of term bonds, in annual |
8 | installments of principal, the first installment to be not later than five (5) years and the last |
9 | installment not later than thirty (30) years after the date of the bonds. All such bonds of a particular |
10 | issue may be issued in the form of zero coupon bonds, capital appreciation bonds, serial bonds or |
11 | term bonds or a combination thereof. The amount of principal appreciation each year on any bonds, |
12 | after the date of original issuance, shall not be considered to be principal indebtedness for the |
13 | purposes of any constitutional, charter or statutory debt limit or any other limitation. The |
14 | appreciation of principal after the date of original issue shall be considered interest. Only the |
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1 | original principal amount shall be counted in determining the principal amount so issued and any |
2 | interest component shall be disregarded. |
3 | SECTION 2. The city may be eligible for school housing aid reimbursement on debt |
4 | service pursuant to chapter 7 of title 16, or for a grant, loan or other financial assistance from |
5 | proceeds of bonds issued by the State of Rhode Island (the "state"), from the Rhode Island |
6 | department of education ("RIDE") or from the Rhode Island school building authority. The |
7 | principal amount of borrowing authorized pursuant to this act shall be reduced by the amount of |
8 | certain grants actually received by the city from state bond proceeds, from RIDE or from the Rhode |
9 | Island school building authority; provided, however, that the amount of borrowing authorized shall |
10 | not be reduced by the amount of any grant received by the city for any portion of the project |
11 | financed by capital reserve funds. Bonds and notes shall not be issued under this act unless the city |
12 | has received a letter from RIDE confirming that the then-current school housing aid reimbursement |
13 | rate under chapter 7 of title 16, as amended from time to time, or financial assistance from the |
14 | school building authority capital fund, or pursuant to any other law hereafter enacted providing for |
15 | funds to municipalities for school housing purposes, is not less than seventy-five percent (75%) of |
16 | debt service for those expenditures which are eligible for state aid. Such school housing aid |
17 | reimbursement rate or state share ratio may be increased through the award of incentives pursuant |
18 | to §§ 16-7-39, 16-7-40 and 16-105-3 of the general laws at the completion of each project. |
19 | Notwithstanding any other provision of the general laws governing school housing aid |
20 | reimbursement rates or share ratios or any school-related regulations, for any project financed with |
21 | proceeds of bonds issued pursuant to this act, the school housing aid ratio for such project shall be |
22 | increased by the percentages provided in § 16-17-40 as it may be amended from time to time, so |
23 | long as the construction of the project commences by December 30, 2024 and is completed by |
24 | December 30, 2029, or such later dates as may be set forth in § 16-7-40, as amended from time to |
25 | time. |
26 | SECTION 3. The bonds shall be signed by the manual or facsimile signatures of the city |
27 | treasurer and the mayor and shall be issued and sold in such amounts as the city council may |
28 | determine by resolution. The manner of sale, denominations, maturities, interest rates and other |
29 | terms, conditions and details of any bonds or notes issued under this act may be fixed by the |
30 | proceedings of the city council authorizing the issuance or by separate resolution of the city council |
31 | or, to the extent provisions for these matters are not so made, they may be fixed by the officers |
32 | authorized to sign the bonds or notes. Notwithstanding anything contained in this act to the |
33 | contrary, the city may enter into financing agreements with the Rhode Island Health and |
34 | Educational Building Corporation pursuant to chapter 7 of title 16 and chapter 38.1 of title 45 and, |
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1 | with respect to bonds or notes issued in connection with such financing agreements, if any, the city |
2 | may elect to have the provisions of chapter 38.1 of title 45 apply to the issuance of the notes or |
3 | bonds issued hereunder to the extent the provisions of chapter 38.1 of title 45 are inconsistent |
4 | herewith. In addition, the city may enter into financing agreements with the Rhode Island |
5 | Infrastructure Bank pursuant to the provisions of chapter 12.2 of title 46 and, with respect to notes |
6 | or bonds issued in connection with such financing agreements, if any, the city may elect to have |
7 | the provisions of chapter 12.2 of title 46 apply to the issuance of the bonds or notes issued hereunder |
8 | to the extent the provisions of chapter 12.2 of title 46 are inconsistent herewith. Such election may |
9 | be fixed by the proceedings of the city council authorizing such issuance or by separate resolution |
10 | of the city council, or, to the extent provisions for these matters are not so made, they may be fixed |
11 | by the officers authorized to sign the bonds or notes. The proceeds derived from the sale of the |
12 | bonds shall be delivered to the city treasurer, and such proceeds, exclusive of premiums and accrued |
13 | interest, shall be expended: (1) For the construction, related demolition, renovation, improvement, |
14 | alteration, repair, landscaping, furnishing and equipping of schools and school facilities throughout |
15 | the city of Providence and all costs related thereto (the "projects"); (2) In payment of the principal |
16 | of or interest on temporary notes issued under section 4; (3) In repayment of advances under section |
17 | 5; (4) In payment of related costs of issuance of any bonds or notes; and/or (5) In payment of |
18 | capitalized interest during construction of the projects. No purchaser of any bonds or notes under |
19 | this act shall be in any way responsible for the proper application of the proceeds derived from the |
20 | sale thereof. The proceeds of bonds or notes issued under this act, any applicable federal or state |
21 | assistance and the other monies referred to in sections 7 and 10 shall be deemed appropriated for |
22 | the purposes of this act without further action than that required by this act. The bonds authorized |
23 | by this act may be consolidated for the purpose of issuance and sale with any other bonds of the |
24 | city heretofore or hereafter authorized; provided that, notwithstanding any such consolidation, the |
25 | proceeds from the sale of the bonds authorized by this act shall be expended for the purposes set |
26 | forth above. |
27 | SECTION 4. The city council may by resolution authorize the issuance from time to time |
28 | of interest bearing or discounted notes in anticipation of the issuance of bonds under section 3 or |
29 | in anticipation of the receipt of federal or state aid for the purposes of this act. The amount of |
30 | original notes issued in anticipation of bonds may not exceed the amount of bonds which may be |
31 | issued under this act and the amount of original notes issued in anticipation of federal or state aid |
32 | may not exceed the amount of available federal or state aid as estimated by the city treasurer. |
33 | Temporary notes issued hereunder shall be signed by the manual or facsimile signatures of the city |
34 | treasurer and the mayor and shall be payable within five (5) years from their respective dates, but |
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1 | the principal of and interest on notes issued for a shorter period may be renewed or paid from time |
2 | to time by the issuance of other notes hereunder; provided the period from the date of an original |
3 | note to the maturity of any note issued to renew or pay the same debt or the interest thereon shall |
4 | not exceed five (5) years. Any temporary notes in anticipation of bonds issued under this section |
5 | may be refunded prior to the maturity of the notes by the issuance of additional temporary notes; |
6 | provided that, no such refunding shall result in any amount of such temporary notes outstanding at |
7 | any one time in excess of two hundred percent (200%) of the amount of bonds which may be issued |
8 | under this act; and provided, further, that if the issuance of any such refunding notes results in any |
9 | amount of such temporary notes outstanding at any one time in excess of the amount of bonds |
10 | which may be issued under this act, the proceeds of such refunding notes shall be deposited in a |
11 | separate fund established with the bank which is the paying agent for the notes being refunded. |
12 | Pending their use to pay the notes being refunded, monies in the fund shall be invested for the |
13 | benefit of the city by the paying agent at the direction of the city treasurer in any investment |
14 | permitted under section 6. The monies in the fund and any investments held as a part of the fund |
15 | shall be held in trust and shall be applied by the paying agent solely to the payment or prepayment |
16 | of the principal of and interest on the notes being refunded. Upon payment of all principal of and |
17 | interest on the notes, any excess monies in the fund shall be distributed to the city. The city may |
18 | pay the principal of and interest on notes in full from other than the issuance of refunding notes |
19 | prior to the issuance of bonds pursuant to section 1 hereof. In such case, the city's authority to issue |
20 | bonds or notes in anticipation of bonds under this act shall continue; provided that: (1) The city |
21 | council passes a resolution evidencing the city's intent to pay off the notes without extinguishing |
22 | the authority to issue bonds or notes; and (2) That the period from the date of an original note to |
23 | the maturity date of any other note shall not exceed five (5) years. |
24 | SECTION 5. Pending any authorization or issuance of bonds hereunder or pending or in |
25 | lieu of any authorization or issuance of notes hereunder, the city treasurer, with the approval of the |
26 | city council may, to the extent that bonds or notes may be issued hereunder, apply funds in the |
27 | general treasury of the city to the purposes specified in section 3, such advances to be repaid without |
28 | interest from the proceeds of bonds or notes subsequently issued or from the proceeds of applicable |
29 | federal or state assistance or from other available funds. |
30 | SECTION 6. Any proceeds of bonds or notes issued hereunder or of any applicable federal |
31 | or state assistance, pending their expenditure may be deposited or invested by the city treasurer, in |
32 | demand deposits, time deposits or savings deposits in banks which are members of the Federal |
33 | Deposit Insurance Corporation or in obligations issued or guaranteed by the United States of |
34 | America or by any agency or instrumentality thereof or as may be provided in any other applicable |
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1 | law of the State of Rhode Island or resolution of the city council or pursuant to an investment policy |
2 | of the city. |
3 | SECTION 7. Any accrued interest received upon the sale of bonds or notes hereunder shall |
4 | be applied to the payment of the first interest due thereon. Any premiums arising from the sale of |
5 | bonds or notes hereunder and, to the extent permitted by applicable federal laws, any net earnings |
6 | or profits realized from the deposit or investment of funds hereunder shall, in the discretion of the |
7 | city treasurer, be applied to the cost of preparing, issuing, and marketing bonds or notes hereunder |
8 | to the extent not otherwise provided, to the payment of the cost of the projects, to the payment of |
9 | the principal of or interest on bonds or notes issued hereunder, to the revenues of the city and dealt |
10 | with as part of the revenues of the city from property taxes to the extent permitted by federal law, |
11 | or to any one or more of the foregoing. The cost of preparing, issuing, and marketing bonds or notes |
12 | hereunder may also, in the discretion of the city treasurer, be met from bond or note proceeds |
13 | exclusive of premium and accrued interest or from other monies available therefor. Any balance of |
14 | bond or note proceeds remaining after payment of the cost of the projects and the cost of preparing, |
15 | issuing and marketing bonds or notes hereunder shall be applied to the payment of the principal of |
16 | or interest on bonds or notes issued hereunder. To the extent permitted by applicable federal laws, |
17 | any earnings or net profit realized from the deposit or investment of funds hereunder may, upon |
18 | receipt, be added to and dealt with as part of the revenues of the city from property taxes. In |
19 | exercising any discretion under this section, the city treasurer shall be governed by any instructions |
20 | adopted by resolution of the city council. |
21 | SECTION 8. All bonds and notes issued under this act and the debt evidenced hereby shall |
22 | be obligatory on the city in the same manner and to the same extent as other debts lawfully |
23 | contracted by it and shall be excepted from the operation of § 45-12-2 and any provision of the city |
24 | charter. No such obligation shall at any time be included in the debt of the city for the purpose of |
25 | ascertaining its borrowing capacity. The city shall annually appropriate a sum sufficient to pay the |
26 | principal and interest coming due within the year on bonds and notes issued hereunder to the extent |
27 | that monies therefor are not otherwise provided. If such sum is not appropriated, it shall |
28 | nevertheless be added to the annual tax levy. In order to provide such sum in each year and |
29 | notwithstanding any provisions of law to the contrary, all taxable property in the city shall be |
30 | subject to ad valorem taxation by the city without limitation as to rate or amount. |
31 | SECTION 9. Any bonds or notes issued under the provisions of this act, if properly |
32 | executed by the officers of the city in office on the date of execution, shall be valid and binding |
33 | according to their terms notwithstanding that before the delivery thereof and payment therefor any |
34 | or all of such officers shall for any reason have ceased to hold office. |
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1 | SECTION 10. The city, acting by resolution of its city council is authorized to apply for, |
2 | contract for and expend any federal or state advances or other grants of assistance which may be |
3 | available for the purposes of this act, and any such expenditures may be in addition to other monies |
4 | provided in this act. To the extent of any inconsistency between any law of this state and any |
5 | applicable federal law or regulation, the latter shall prevail. Federal and state advances, with interest |
6 | where applicable, whether contracted for prior to or after the effective date of this act, may be |
7 | repaid as a cost of the projects under section 3. |
8 | SECTION 11. Bonds and notes may be issued under this act without obtaining the approval |
9 | of any governmental agency or the taking of any proceedings or the happening of any conditions |
10 | except as specifically required by this act for such issue. In carrying out any project financed, in |
11 | whole or in part, under this act, including where applicable the condemnation of any land or interest |
12 | in land, and in the levy and collection of assessments or other charges permitted by law on account |
13 | of any such project, all action shall be taken which is necessary to meet constitutional requirements |
14 | whether or not such action is otherwise required by statute, but the validity of bonds and notes |
15 | issued hereunder shall in no way depend upon the validity or occurrence of such action. |
16 | SECTION 12. The city treasurer and the mayor, on behalf of the city are hereby authorized |
17 | to execute such instruments, documents or other papers as either of them deem necessary or |
18 | desirable to carry out the intent of this act and are also authorized to take all actions and execute all |
19 | documents necessary to comply with federal tax and securities laws, which documents or |
20 | agreements may have a term coextensive with the maturity of the bonds authorized hereby, |
21 | including Rule 15c2-12 of the Securities and Exchange Commission (the "Rule") and to execute |
22 | and deliver a continuing disclosure agreement or certificate in connection with the bonds or notes |
23 | in the form as shall be deemed advisable by such officers in order to comply with the Rule. |
24 | SECTION 13. All or any portion of the authorized but unissued authority to issue bonds |
25 | and notes under this act may be extinguished by resolution of the city council, without further action |
26 | by the general assembly, seven (7) years after the effective date of this act. |
27 | SECTION 14. This act shall constitute an enabling act of the general assembly that is |
28 | required pursuant to § 16-7-44. Any bonds issued under this act for school projects shall not be |
29 | eligible for state aid reimbursement pursuant to § 16-7-44 unless the school projects described |
30 | herein have been approved by RIDE. |
31 | SECTION 15. At the general election on November 5, 2024 or at an election, other than a |
32 | primary, to be held on a date designated by the city council, there shall be submitted to electors of |
33 | the city a question in substantially the following form: "Shall an act passed at the 2024 session of |
34 | the general assembly entitled 'AN ACT AUTHORIZING THE CITY OF PROVIDENCE TO |
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1 | ISSUE NOT TO EXCEED $400,000,000 GENERAL OBLIGATION BONDS AND NOTES TO |
2 | FINANCE THE CONSTRUCTION, RELATED DEMOLITION, RENOVATION, |
3 | IMPROVEMENT, ALTERATION, REPAIR, LANDSCAPING, FURNISHING AND |
4 | EQUIPPING OF SCHOOLS AND SCHOOL FACILITIES THROUGHOUT THE CITY AND |
5 | ALL COSTS RELATED THERETO, SUBJECT TO APPROVAL OF STATE HOUSING AID |
6 | AT A REIMBURSEMENT RATE OR STATE SHARE RATIO OF NOT LESS THAN 75% AT |
7 | THE TIME OF ISSUANCE AND PROVIDED THAT THE AUTHORIZATION SHALL BE |
8 | REDUCED BY THE AMOUNT OF CERTAIN GRANTS RECEIVED FROM STATE BOND |
9 | PROCEEDS, FROM THE RHODE ISLAND DEPARTMENT OF EDUCATION OR FROM THE |
10 | RHODE ISLAND SCHOOL BUILDING AUTHORITY' be approved?" and the warning for the |
11 | election shall contain the question to be submitted. From the time the election is warned and until |
12 | it is held, it shall be the duty of the city clerk to keep a copy of this act available at the clerk's office |
13 | for public inspection, but the validity of the election shall not be affected by this requirement. To |
14 | the extent of any inconsistency between this act and the city charter, this act shall prevail. To the |
15 | extent of any inconsistency between this act and any private, public, general, special or any other |
16 | law, and the city home rule charter and city ordinances, this act shall prevail. |
17 | SECTION 16. Sections 15 and 16 of this act shall take effect upon passage. The remainder |
18 | of the act shall take effect upon approval by the electors of the city of the question provided for in |
19 | section 15. |
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LC005055 | |
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EXPLANATION | |
OF | |
A N A C T | |
AUTHORIZING THE CITY OF PROVIDENCE TO ISSUE NOT TO EXCEED $400,000,000 | |
GENERAL OBLIGATION BONDS AND NOTES TO FINANCE THE CONSTRUCTION, | |
RELATED DEMOLITION, RENOVATION, IMPROVEMENT, ALTERATION, REPAIR, | |
LANDSCAPING, FURNISHING AND EQUIPPING OF SCHOOLS AND SCHOOL | |
FACILITIES THROUGHOUT THE CITY AND ALL COSTS RELATED THERETO, | |
SUBJECT TO APPROVAL OF STATE HOUSING AID AT A REIMBURSEMENT RATE OR | |
STATE SHARE RATIO OF NOT LESS THAN 75% AT THE TIME OF ISSUANCE AND | |
PROVIDED THAT THE AUTHORIZATION SHALL BE REDUCED BY THE AMOUNT OF | |
CERTAIN GRANTS RECEIVED FROM STATE BOND PROCEEDS, FROM THE RHODE | |
ISLAND DEPARTMENT OF EDUCATION OR FROM THE RHODE ISLAND SCHOOL | |
BUILDING AUTHORITY | |
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1 | This act would authorize the city of Providence to issue not more than $400,000,000 |
2 | general obligation bonds and notes to finance the construction, related demolition, renovation, |
3 | improvement, alteration, repair, landscaping, furnishing and equipping of schools and school |
4 | facilities throughout the city of Providence and all costs related thereto, subject to approval of state |
5 | housing aid at a reimbursement rate or state share ratio of not less than 75% at the time of issuance |
6 | and provided that the authorization would be reduced by the amount of certain grants actually |
7 | received by the city from state bond proceeds, from RIDE or from the Rhode Island school building |
8 | authority. |
9 | This act would constitute an enabling act of the general assembly that is required pursuant |
10 | to § 16-7-44. Any bonds and notes issued under this act for school projects would not be eligible |
11 | for state aid reimbursement pursuant to § 16-7-44 unless the school projects described herein have |
12 | been approved by the Rhode Island Department of Education ("RIDE"). This act would also |
13 | provide that for any project financed pursuant to this act, the school housing aid ratio for such |
14 | project would be increased by the percentages provided in § 16-7-40, so long as the construction |
15 | of the project commences by December 30, 2024 and is completed by December 30, 2029, or such |
16 | later dates as may be set forth in § 16-7-40, as amended from time to time. |
17 | To the extent of any inconsistency between this act and any private, public, general, special |
18 | or any other law, and the city home rule charter and city ordinances, this act would prevail. |
19 | Sections 15 and 16 of this act would take effect upon passage. The remainder of the act |
20 | would take effect upon approval by the electors of the city of the question provided for in section |
21 | 15. |
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