§ 45-12-5.1. Callable bonds. (a) Bonds issued by any cities, towns or other political subdivisions of this state may be issued subject to call and prepayment prior to their stated maturities at the option of the issuer. All, or less than all, of the bonds comprising an issue may be subject to call simultaneously or from time to time.

(b) Every bond issued subject to prepayment shall indicate:

(1) That the bond is subject to call and prepayment;

(2) The time or times at which the bond may be prepaid;

(3) The schedule of premiums, if any, which are payable; and

(4) The time and type of notice which must be given by the issuer before the bond can be prepaid.

(c) The coupons, if any, attached to the bonds shall, as appropriate, indicate that they may become void as a result of the bond being called for prepayment. Unless otherwise provided in the proceedings authorizing the issue of bonds, the officers of the city, town or other political subdivision authorized to sell the bonds shall determine whether the bonds shall be issued subject to call and prepayment, and if issued, the officers shall decide the details of these bonds. No bond shall be called for prepayment, unless the issuer has deposited with the paying agent or agents for the bond for prepayment a sufficient amount of cash, or securities issued by the United States of America, the state of Rhode Island, or its political subdivisions, with maturities and interest rates adequate to provide a sufficient amount of cash, to pay the bond in full on the date on which it is prepayable. The notice may state: (1) that it is conditioned on the deposit of moneys, in an amount necessary to effect the redemption with the paying agent or agents no later than the redemption date; and/or (2) that the city, town or political subdivision retains the right to rescind such notice on or prior to the scheduled redemption date, and such notice and optional redemption shall be of no effect if such monies are not so deposited or if the notice is rescinded. Bonds may be prepaid with the proceeds of refunding bonds as provided in the following section, or with other funds available for that purpose; and cities, towns and other political subdivisions may raise money by taxation for the purpose of prepaying bonds. For the purposes of this section "bond" shall include note. The powers conferred by this section may be used with regard to bonds authorized for any purpose by any general, special, or other law, including § 45-12-5.2.

History of Section. (P.L. 1977, ch. 37, § 1; P.L. 1986, ch. 110, § 2; P.L. 2007, ch. 252, § 1; P.L. 2007, ch. 292, § 1.)