§ 45-12-5.2. Issuance of refunding bonds to pay outstanding bonds.
(a) Any city, town or political subdivision of this state may issue refunding bonds in
order to pay all or any designated part of an issue of outstanding bonds, including
principal, redemption premium, if any, interest on the outstanding bonds coming due
on or prior to the date on which those bonds are to 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 are to be redeemed, unless the proceedings
authorizing the refunding bonds include or incorporate specific findings to the effect
that the refunding will result in a financial benefit to the political subdivision.
(c) Refunding bonds shall be authorized by ordinance or resolution of the town council
or city council. The proceedings authorizing the issue of refunding bonds shall contain
a general description of the bonds which are to be refunded.
(d) Notwithstanding any provision of any municipal charter to the contrary, refunding
bonds may be sold at public or private sale, and may provide for annual or more frequent
equal, diminishing, or increasing installments of principal and deferral of the first
installment of principal. In all other respects, refunding bonds shall be payable
not later than the last date that could have been the final maturity date of the bonds
being refunded.
(e) The proceeds of refunding bonds, exclusive of costs of issuance any premium and accrued
interest shall, upon their receipt, be paid immediately to the paying agent for the
bonds which are to be refunded, and that paying agent shall hold those proceeds in
trust until they are applied to refund bonds. While the proceeds are held in trust
they may be invested for the benefit of the issuer in obligations of the United States
of America, the state of Rhode Island, or its political subdivisions.
(f) Between the authorization of refunding bonds and the use of their proceeds to refund
bonds, the refunding bonds shall not be deemed debts of the issuer in determining
its borrowing capacity for any purpose. Upon the use of the proceeds of refunding
bonds, the refunding bonds shall be treated as debt of the issuer for the purposes
and to the same extent as the refunded 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 preceding section are in addition to
and not in substitution for, or diminution of, any other powers conferred, cities,
towns and other on political subdivisions of this state.
(i) Refunding bonds may be issued under this section by any city, town or other 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. Notwithstanding
any provisions to the contrary of any special law authorizing the issuance of bonds
by a city, town or other political subdivision, any notes in anticipation of bonds
issued or to be issued under that law may be refunded prior to the maturity of the
notes by the issuance, in accordance with this section, of additional notes; provided,
that no refunding results in an aggregate amount of notes outstanding under a special
law at any one time in excess of two hundred percent (200%) of the amount of bonds
authorized but not yet issued under the special law. The officers authorized to issue
the original notes being refunded are authorized, without any additional proceedings
by the local legislative body, to issue the refunding notes in accordance with this
section.