It is enacted by the General Assembly as follows:

SECTION 1. The town of Smithfield is hereby empowered, in addition to authority previously granted, to issue bonds to an amount not exceeding six million dollars ($6,000,000) from time to time under its corporate name and seal or a facsimile of such seal for the purpose of extending and maintaining sewer lines as set forth in section two hereof. The bonds of each issue shall mature in annual installments of principal, the first installment to be not later than two (2) years and the last installment not later than twenty (20) years after the date of the bonds. For each issue, the amounts payable annually for principal and interest combined 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 treasurer and countersigned by the town clerk and shall be issued and sold at not less than par and accrued interest in such amounts as the town council may authorize by majority vote of all its members. The manner of sale, denominations, maturities, interest rate or 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 their 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 town council may provide that any bonds or notes issued under this act and any other authorized issue of bonds or notes of the town may be consolidated issued at the same time as a single bond or note issue, provided that the last installment of any such consolidated issue shall not be later than the times specified in the applicable provisions of section one or section three. The bonds may be made callable with or without premium. The proceeds derived from the sale of the bonds shall be delivered to the town treasurer, and such proceeds exclusive of premiums and accrued interest shall be expended (a) for the extension and maintenance of sewer lines within the town and for the payment of other costs incidental and related thereto or (b) in payment of the principal of or interest on temporary notes issued under section three or (c) in repayment of advances made under section four. 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 sale thereof. The property or properties shall be acquired 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 the other moneys referred to in section six shall be deemed appropriated for the purposes of this act without further action than that required by this act.

SECTION 3. The town council may be resolution authorize the issue from time to time of interest bearing or discounted notes in anticipation of the issue of bonds under section two 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 treasurer. Temporary notes issued hereunder shall be signed by the town treasurer and countersigned by the town clerk 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 notes issued to renew or pay the same debt or the interest thereon shall not exceed five (5) years. The period for which bonds may be issued under this act need not be reduced by the period of any temporary loans hereunder. The proceeds derived from the sale of such temporary notes shall be used only for the purposes for which the proceeds of bonds issued under this act may be used.

SECTION 4. Pending any issue of bonds or notes hereunder, the town treasurer, 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 for 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 treasurer 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 the state of Rhode Island, or by an agency, instrumentality or political subdivision of either of them, or as may be provided in any other applicable law of the state of Rhode Island.

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 shall, in the discretion of the town treasurer, 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 property or properties, 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 treasurer, be met from bond or note proceeds exclusive of premium and accrued interest or from other moneys available therefor. Any balance of bond or note proceeds remaining after payment of the cost of the property or properties 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. Any earnings or net profit realized from the deposit or investment of funds hereunder shall upon receipt be added to and used for the same purposes as the proceeds of bonds or notes issued hereunder. In exercising any discretion under this section, the town treasurer shall be governed by any instructions adopted by resolution of the town council. The treasurer is authorized to take any action deemed by him or her necessary to assure that interest on the bonds or notes issued hereunder remains excludable from gross income of the recipients thereof for federal income tax purposes, including, without limitation, paying to the federal government any rebate of earnings derived from the deposit or investment of the proceeds of such bonds or notes that may be required therefor.

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 is authorized to assess fees and charges upon the users of the improvements to be constructed hereunder in sufficient amounts to pay principal and interest on any bonds or notes issued pursuant to the authority hereof. 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 acquiring any property financed in whole or in part under this act, 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. The question of the approval of this act shall be submitted to the electors of the town at a special or regular election, which may coincide with the general state election, in the town. The question shall be submitted in substantially the following form: "Shall an act passed at the 1994 session of the general assembly entitled 'An Act Authorizing the Town of Smithfield to Issue not Exceeding $6,000,000 Bonds or Notes for the Extension and Maintenance of Sewer Lines, and Related Purposes' 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 this act available at his or her office for public inspection but the validity of the election shall not be affected by this requirement.

SECTION 12. 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.