2024 -- S 3046

========

LC006071

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO TOWNS AND CITIES -- INDEBTEDNESS OF TOWNS AND CITIES

     Introduced By: Senator Walter S. Felag

     Date Introduced: May 03, 2024

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 45-12-4.4 of the General Laws in Chapter 45-12 entitled

"Indebtedness of Towns and Cities" is hereby amended to read as follows:

     45-12-4.4. Borrowing in payment of certain judgments.

     (a) A city or town may authorize the issuance of bonds, notes, or other evidences of

indebtedness to pay the uninsured portion of any court judgment or settlement, except any court

judgment or settlement arising out of any pension obligation of a city or town; provided, however,

that the outstanding principal amount, in aggregate, shall not exceed five percent (5%) of the total

amount of the city or town’s most recently adopted municipal budget. Notwithstanding the

aforementioned, the towns of Coventry and, Middletown and Warren are authorized to issue bonds,

notes, or other evidences of indebtedness to pay the uninsured portion of any court judgment or

settlement, except any court judgment or settlement arising out of any pension obligation of a city

or town; provided, however, that the outstanding principal amount, in aggregate, shall not exceed

ten percent (10%) of the total amount of the applicable municipality’s most recently adopted

municipal budget.

     (b) These bonds, notes, or other evidences of indebtedness are subject to the maximum

aggregate indebtedness permitted to be issued by any city or town under § 45-12-2.

     (c) The bonds, notes, or other evidences of indebtedness may be issued to pay a judgment

or settlement or may be issued to pay or refund notes issued under § 45-12-4.1.

     (d) The denominations, maturities, interest rates, methods of sale, and other terms,

conditions, and details of any bonds or notes issued under the provisions of this section may be

fixed by the vote or resolution of the city or town council authorizing them, or if no provision is

made in the vote or resolution, by the treasurer or other officer authorized to issue the bonds or

notes or to hire the money; provided, that the payment of principal of bonds shall be by sufficient

annual payments that will extinguish the debt at maturity, the first of these annual payments to be

made not later than one year, and the last payment not later than fifteen (15) years after the date of

the bonds.

     (e) The bonds, notes, or other evidences of indebtedness may be issued under this section

by any political subdivision without obtaining the approval of its electors, notwithstanding the

provisions of §§ 45-12-19 and 45-12-20 and notwithstanding any provision of its charter to the

contrary, unless the electors when assembled in a meeting are the local legislative body for the

purpose of authorizing indebtedness of the political subdivision.

     SECTION 2. This act shall take effect upon passage.

========

LC006071

========

LC006071 - Page 2 of 3

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- INDEBTEDNESS OF TOWNS AND CITIES

***

     This act would add the town of Warren to those towns and cities authorized to issue bonds

to finance the uninsured portion of a settlement arising out of litigation against the town or city.

     This act would take effect upon passage.

========

LC006071

========

LC006071 - Page 3 of 3