Rhode Island House Bill H8205

Rhode Island 2024 Regular Session

• Introduced: 4/25/24
• Refer: 4/25/24
• Report Pass: 5/15/24
• Engrossed: 5/29/24
• Refer: 5/30/24
• Report Pass: 6/4/24
• Enrolled: 6/6/24
• Passed: 6/15/24

Caption

Adds the town of Warren to those towns and cities authorized to issue bonds to finance the uninsured portion of a settlement arising out of litigation against the town or city.

Impact

The addition of Warren to this category of towns allows it to issue bonds that cover lawsuits in which it might lose, ensuring that local governments can settle court judgments without immediate budgetary constraints. The legislation stipulates that the outstanding principal for such indebtedness shall not exceed 10% of the town's most recently adopted municipal budget, thus placing limits on financial exposure while providing a safety net for possible legal liabilities. This act is expected to improve fiscal management for municipalities facing litigation, particularly those without sufficient insurance coverage.

Summary

House Bill 8205, introduced in the Rhode Island General Assembly, seeks to amend existing laws regarding the indebtedness of towns and cities. Specifically, the bill adds the town of Warren to the list of municipalities authorized to issue bonds, notes, or other forms of indebtedness to cover the uninsured portion of any court judgment or settlement. This update reflects a significant change in financial policy for municipalities involved in litigation, aiming to provide them with greater flexibility in managing their financial obligations arising from legal disputes.

Contention

While the bill passed with overwhelming support in the House with 67 votes in favor and none against, there may be underlying concerns regarding the broader consequences of allowing municipalities to accrue additional debt through bond issuances. Critics could be worried about the long-term fiscal implications of increased indebtedness and the potential for exacerbating financial difficulties in towns that may already struggle under existing obligations. However, no public dissent was noted during the voting process, indicating a collective acknowledgment of the need for such provisions among legislators.