LA 051

2020 -- S 2863 Enacted 06/27/2020

A N   A C T

AUTHORIZING THE TOWN OF MIDDLETOWN TO FINANCE ACQUIRING AND PRESERVING OPEN SPACE AND ACQUIRING, PRESERVING, RESTORING AND IMPROVING RECREATIONAL AREAS IN THE TOWN BY THE ISSUANCE OF NOT MORE THAN $5,000,000 BONDS AND/OR NOTES THEREFOR

Introduced By: Senator Louis P. DiPalma

Date Introduced: June 10, 2020

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 five million dollars ($5,000,000)

from time to time under its corporate name and seal. The bonds of each issue may be issued in the

form of 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 sinking fund 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.

All such bonds of a particular issue may be issued in the form of zero coupon bonds, capital

appreciation bonds, serial bonds or term bonds or any combination thereof. 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.

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. 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

acquiring and preserving open space and acquiring, preserving, restoring and improving

recreational areas 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 hereunder, provided the period from the date of an

original note to the maturity of 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 one 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, to the extent permitted by applicable federal laws, any net 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 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 § 45-12-2 of the general laws and

provisions of the town charter. 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, seven (7) years after the effective date of this act.

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 15 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 3, 2020 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 2020 session of the general assembly, entitled "AN ACT AUTHORIZING THE TOWN OF

MIDDLETOWN TO FINANCE ACQUIRING AND PRESERVING OPEN SPACE AND

ACQUIRING, PRESERVING, RESTORING AND IMPROVING RECREATIONAL AREAS IN

THE TOWN BY THE ISSUANCE OF NOT MORE THAN $5,000,000 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 the clerk's office for public inspection, but the

validity of the election shall not be affected by this requirement.

SECTION 14. Sections 13 and 14 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 section 13.

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LC005411

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