§ 46-12.2-11 - Authority of local governmental units to issue obligations – Terms.
SECTION 46-12.2-11
§ 46-12.2-11 Authority of localgovernmental units to issue obligations – Terms. – (a) In addition to the powers of any local governmental unit provided in anybond act, whenever a local governmental unit has applied for and accepted aloan from the agency and entered into a loan agreement therefor, any localgovernmental obligations issued by the local governmental unit to evidence theloan may be issued in accordance with, and subject to the limitations of thischapter, notwithstanding the provisions of the bond act authorizing theobligation or any other general or special law or provision of municipalcharter to the contrary. The provisions of this chapter shall apply to theissuance of local governmental obligations under authority of any bond actheretofore enacted and under authority of any bond act hereafter enacted unlessthe bond act expressly provides that the provisions of this chapter shall notso apply. Notwithstanding the foregoing, no local governmental obligation shallbe issued unless authorized by a vote of the body or bodies required by thecharter, ordinances, or laws governing the local governmental unit, or theapplicable bond act for the authorization of indebtedness of the localgovernmental unit.
(b) Local governmental obligations issued by any localgovernmental unit shall be dated, may bear interest at such rate or rates,including rates variable, from time to time, subject to such minimum or maximumrate, if any, as may be determined by such index or other method ofdetermination provided in the applicable loan agreement, shall mature in suchamount or amounts and at such time or times, not later than the maximum dates,if any, provided herein, and may be made redeemable in whole or in part beforematurity at the option of the local governmental unit or at the option of theagency, at such price or prices and under such terms and conditions as may befixed in the loan agreement prior to the issue of the local governmentalobligations. Local governmental obligations may be issued as serial bonds orterm bonds or any combination thereof with such provision, if any, for sinkingfunds for the payment of bonds as the local governmental unit and the agencymay agree. The local governmental obligations may be sold at private sale andmay be in such form, payable to the bearer thereof or the registered owner,whether certificated or uncertificated, be in such denominations, payable atsuch place or places, within or without the state, and otherwise bear suchterms and conditions, not inconsistent with this chapter, as provided in theapplicable loan agreement or as the agency and the local governmental unitshall otherwise agree. The local governmental obligations may be issued inprincipal amount equal to the loan evidenced thereby or at such discount as theagency and the local governmental unit shall agree.
(c) Local governmental obligations shall be payable within aperiod not exceeding the greater of the period, if any, specified in theapplicable bond act or the useful life of the approved project financed by suchobligations as determined by the department, or, if incurred to finance morethan one project, the average useful life of the projects. Except as otherwiseprovided in this chapter, the local governmental obligations shall be payableby such equal, increasing, or decreasing installments of principal, annual orotherwise, as will extinguish the obligations at maturity, the firstinstallment to be payable no later than one year after the date of issuance ofthe obligations or one year after the date of completion of the approvedproject financed by the obligations, as determined by the department, whicheverdate is later, and the remaining installments of principal, if any, to be insuch amounts and payable on such dates as the agency and the local governmentalunit shall agree.
(d) If a local governmental unit has authorized borrowing inaccordance with this chapter and the issuance of local governmental obligationsto evidence the borrowing under any bond act, the local governmental unit may,subject to the applicable loan agreement and with the approval of the agency,issue notes to the agency of the loan. The issuance of the notes shall begoverned by the provisions of this chapter relating to the issue of bonds otherthan notes, to the extent applicable, provided the maturity date of the notesshall not exceed five (5) years from the date of issue of the notes, or theexpected date of completion of the approved project financed thereby asdetermined by the department, if later. Notes issued for less than the maximummaturity date may be renewed by the issue of other notes maturing no later thanthe maximum maturity date.
(e) A local governmental unit may issue local governmentalobligations to refund or pay at maturity or earlier redemption any localgovernmental obligations outstanding under any loan agreement, or to refund orpay any other debt of the local governmental unit issued to finance theapproved project to which the loan agreement pertains. The refunding localgovernmental obligations may be issued in sufficient amounts to pay or providefor the principal of the obligations refunded, any redemption premium thereon,any interest accrued and to accrue to the date of payment of the obligations,the costs of issuance of the refunding obligations and any reserves required bythe applicable loan agreement. The issue of refunding local governmentalobligations, the amount and dates of maturity or maturities and other detailsthereof, the security therefor, and the rights, duties, and obligations of thelocal governmental unit in respect to the same shall be governed by theprovisions of this chapter relating to the issue of local governmentalobligations other than refunding obligations as this chapter may be applicable.
(f) Except as otherwise provided in § 46-12.2-12, theapplicable bond act, or by agreement between the agency and a localgovernmental unit, all local governmental obligations issued in accordance withthis section shall be general obligations of the local governmental unitissuing the obligations for which its full faith and credit are pledged and forthe payment of which all taxable property in the local governmental unit shallbe subject to ad valorem taxation without limit as to rate or amount except asotherwise provided by law.