§ 45-12-5.2 - Issuance of refunding bonds to pay outstanding bonds.
SECTION 45-12-5.2
§ 45-12-5.2 Issuance of refunding bonds topay outstanding bonds. – (a) Any city, town or political subdivision of this state may issue refundingbonds in order to pay all or any designated part of an issue of outstandingbonds, including principal, redemption premium, if any, interest on theoutstanding bonds coming due on or prior to the date on which those bonds areto be redeemed, and the costs of issuing the refunding bonds.
(b) No bonds shall be issued under this section, however,more than six (6) months prior to the date on which the outstanding bonds areto be redeemed, unless the proceedings authorizing the refunding bonds includeor incorporate specific findings to the effect that the refunding will resultin a financial benefit to the political subdivision.
(c) Refunding bonds shall be authorized by ordinance orresolution of the town council or city council. The proceedings authorizing theissue of refunding bonds shall contain a general description of the bonds whichare to be refunded.
(d) Notwithstanding any provision of any municipal charter tothe contrary, refunding bonds may be sold at public or private sale, and mayprovide for annual or more frequent equal, diminishing, or increasinginstallments of principal and deferral of the first installment of principal.In all other respects, refunding bonds shall be payable not later than the lastdate that could have been the final maturity date of the bonds being refunded.
(e) The proceeds of refunding bonds, exclusive of costs ofissuance any premium and accrued interest shall, upon their receipt, be paidimmediately to the paying agent for the bonds which are to be refunded, andthat paying agent shall hold those proceeds in trust until they are applied torefund bonds. While the proceeds are held in trust they may be invested for thebenefit of the issuer in obligations of the United States of America, the stateof Rhode Island, or its political subdivisions.
(f) Between the authorization of refunding bonds and the useof their proceeds to refund bonds, the refunding bonds shall not be deemeddebts of the issuer in determining its borrowing capacity for any purpose. Uponthe use of the proceeds of refunding bonds, the refunding bonds shall betreated as debt of the issuer for the purposes and to the same extent as therefunded bonds were so treated.
(g) As used in this section, "bonds" includes notes,including notes in anticipation of bonds.
(h) The powers conferred by this section and the precedingsection are in addition to and not in substitution for, or diminution of, anyother powers conferred, cities, towns and other on political subdivisions ofthis state.
(i) Refunding bonds may be issued under this section by anycity, town or other political subdivision without obtaining the approval of itselectors, notwithstanding the provisions of §§ 45-12-19 and 45-12-20and notwithstanding any provision of its charter to the contrary.Notwithstanding any provisions to the contrary of any special law authorizingthe issuance of bonds by a city, town or other political subdivision, any notesin anticipation of bonds issued or to be issued under that law may be refundedprior to the maturity of the notes by the issuance, in accordance with thissection, of additional notes; provided, that no refunding results in anaggregate amount of notes outstanding under a special law at any one time inexcess of two hundred percent (200%) of the amount of bonds authorized but notyet issued under the special law. The officers authorized to issue the originalnotes being refunded are authorized, without any additional proceedings by thelocal legislative body, to issue the refunding notes in accordance with thissection.