§ 45-12-32. Inability to pay interest or principal of bonds, notes or certificates of indebtedness - Notice - Certification to general treasurer - Payment by general treasurer. (a) If it appears to the treasurer or finance director of a city, town or district, including a regional school district, that the city, town or district is, or is likely to be, unable to pay in whole or in part the principal or interest, or both, on any of its bonds, notes or certificates of indebtedness when due, the treasurer or finance director shall forthwith notify the city manager, town manager, town administrator or mayor, the city council or town council, the regional district school committee in a regional school district, or the board of any other type of district, of the inability or likely inability. If the city manager, town manager, town administrator, mayor, town council or city council, committee or board, whether or not so notified, finds upon investigation that the payment cannot or is not likely to be made when due, he, she or they shall certify the inability or likely inability to the director of revenue. Upon receipt of the certificate, the director of revenue shall immediately investigate the circumstances and, if the director finds that the city, town or district is, or in the director's opinion will be, unable to make the payment when due, the director shall forthwith certify the inability, the amount of the due or overdue payment and the name of the paying agent for the bonds, notes or certificates of indebtedness to the general treasurer.

(b) Notwithstanding any provision of general or special law or any rules or regulations with respect to the timing of payment of state aid payments, not later than three (3) days after receipt of the certification from the director of revenue or one business day prior to the date on which the principal or interest, or both, becomes due, whichever is later, the general treasurer shall pay to the paying agent the amount of the due or overdue payment certified to him/her to the extent of the sums otherwise then payable and the sums estimated to become payable during the remainder of the fiscal year, from the treasury, to the city, town or district.

(c) The amounts so paid to the paying agent shall be in trust and shall be exempt from being levied upon, taken, sequestered or applied for any purpose other than paying principal or interest, or both, on bonds, notes or certificates of indebtedness of the city, town or district.

(d) Any amounts paid by the general treasurer under the provisions of this section, together with all costs accruing to the state as a result of actions undertaken pursuant to this section, including administrative costs as well as loss of interest income, shall be charged against the amounts otherwise payable or becoming payable from the treasury to the city, town or district.

(e) For purposes of this section, the sums otherwise payable from the treasury to a city or town shall be the funds made available to cities and towns:

(1) As state aid pursuant to chapter 45-13 of the general laws, but specifically excluding reimbursements to cities and towns for the cost of state mandates pursuant to § 45-13-9;

(2) As school housing aid pursuant to §§ 16-7-35 - 16-7-47 of the general laws, but subject to any pledge to bonds issued to finance school projects by the Rhode Island health and educational building corporation, and specifically excluding school operations aid provided for in §§ 16-7-15 - 17-7-34.3 of the general laws;

(3) In replacement of motor vehicle and trailer excise taxes pursuant to chapter 44-34.1 of the general laws;

(4) From the public service corporation tax pursuant to chapter 44-13 of the general laws; and

(5) From the local meal and beverage tax pursuant to § 44-18-18.1 and the hotel tax pursuant to § 44-18-36.1; and

(6) Pursuant to all acts supplementing such chapters listed in subdivisions (1) - (5) above or pursuant to any other law hereafter enacted providing for funds to municipalities in lieu of or in substitution for the funds provided pursuant to acts supplementing such chapters listed in (1) - (5).

History of Section. (P.L. 2010, ch. 24, § 3; P.L. 2010, ch. 27, § 3.)