Rhode Island General Laws
Chapter 45-12 - Indebtedness of Towns and Cities
Section 45-12-5. - Sale of evidences of indebtedness — Annual payments — Terms.

§ 45-12-5. Sale of evidences of indebtedness — Annual payments — Terms.
(a) A city or town which has authorized the borrowing of money under the provisions of this chapter may sell the bonds, notes, or other evidence of the indebtedness authorized at public or private sale, or may use these in payment of its debts. 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 serial 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 dated 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 a combination thereof. Annual installments of principal may be provided for by maturity of principal in the case of serial bonds or by mandatory serial redemption in the case of term bonds. 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.
(b) The manner of sale, denominations, maturities, interest rates and the uses of the proceeds thereof (including, but not limited to, the costs of issuance and capitalized interest) and other terms, conditions, and details of any bonds, notes or other evidence of indebtedness issued under this section may be fixed by the ordinance or resolution of the city or town council authorizing the issue or by separate resolution of the city or 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, notes or other evidence of indebtedness. The officers authorized to sign the bonds, notes or other evidence of indebtedness on behalf of the city or town are authorized to execute such instruments, documents or other papers as they deem necessary or desirable to effectuate the issuance of the bonds, notes or other evidence of indebtedness and are also authorized to take all actions and execute all documents or agreements necessary to comply with federal tax and securities laws, including rule 15c2-12 of the Securities and Exchange Commission or any similar rule or regulation now or hereafter adopted by the Securities and Exchange Commission, which documents or agreements may have a term coextensive with the maturity of the bonds, notes or other evidence of indebtedness authorized hereby and to execute and deliver a continuing disclosure agreement or certificate in connection with the bonds, notes or other evidence of indebtedness.
(c) Pending any authorization or issue of bonds hereunder or pending or in lieu of any authorization or issue of notes hereunder, the city or town council, to the extent that bonds or notes may be issued hereunder, may, by resolution apply funds in the treasury of the city or town to the purposes for which bonds or notes will be issued, 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.
(d) 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 premium arising from the sale of bonds or notes hereunder shall, in the discretion of the finance director or 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 project costs, 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 finance director or 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 project 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 may, upon receipt, be added to and dealt with as part of the revenues of the city or town from property taxes. In exercising any discretion under this section, the finance director or treasurer shall be governed by any instructions adopted by resolution of the city or town council.
History of Section.G.L. 1923, ch. 47, § 30; P.L. 1930, ch. 1617, § 3; G.L. 1938, ch. 329, § 27; G.L. 1956, § 45-12-5; P.L. 1977, ch. 222, § 2; P.L. 1982, ch. 153, § 1; P.L. 2007, ch. 252, § 1; P.L. 2007, ch. 292, § 1.

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