The bill amends Section 45-12-4.4 of the General Laws in Chapter 45-12, titled "Indebtedness of Towns and Cities," to allow cities and towns to issue bonds, notes, or other evidences of indebtedness to pay for the uninsured portion of any court judgment or settlement, excluding those arising from pension obligations. The amendment specifies that the outstanding principal amount of such indebtedness cannot exceed five percent (5%) of the city or town's most recently adopted municipal budget. However, an exception is made for the towns of Coventry, Middletown, and now including Warren, which are authorized to issue indebtedness up to ten percent (10%) of their respective municipal budgets.

The bill also outlines that these financial instruments are subject to the maximum aggregate indebtedness permitted for any city or town under § 45-12-2 and provides details on the issuance process, including denominations, maturities, interest rates, and methods of sale. It states that the principal of the bonds must be paid in annual installments to extinguish the debt by maturity, with the first payment due no later than one year and the last no later than fifteen years from the date of the bonds. Additionally, the bill allows for the issuance of these bonds or notes without the approval of the electors, despite any contrary provisions in the city or town's charter or §§ 45-12-19 and 45-12-20. The act will take effect upon passage.

Statutes affected:
8205: 45-12-4.4