Chapter 13: Financial Assistance to Counties, Towns and Cities

Any town, city or county which is or shall hereafter be unable to finance the ordinary needs of government, or to meet outstanding or maturing obligations to pay, owing to the inability to collect taxes already assessed, or the extraordinary demands made upon it for unemployment relief, and which is or may become unable to borrow through the ordinary banking channels or the issuance and sale of bonds sufficient money to meet such governmental needs, or outstanding or maturing obligations to pay, may apply to the governor and council for financial assistance from the state. Such application may be made by either the selectmen or town meeting in the case of a town, the mayor or council in the case of a city or the county commissioners or county convention in the case of a county.

If, upon investigation, the governor and council shall determine that an emergency exists in such town, city or county, and that such town, city or county is unable to borrow money through the usual banking channels, upon reasonable conditions as regards payment of interest or otherwise, or is prevented by the existing laws of the state relating to borrowing by towns, cities or counties and the issuance of bonds, or is unable to place loans owing to its impaired financial condition, the governor and council are hereby authorized to issue a certificate under the seal of the state declaring the existence of such emergency and authorizing such town, city or county to issue emergency notes or bonds, in such amounts payable at such times and with such rates of interest as the governor and council may determine, and when necessary the governor and council are hereby authorized in the name of the state to guarantee the payment of said notes or bonds and the interest thereon.

Said notes or bonds, when issued, shall be legal obligations of said town, city or county and shall be executed and issued in the manner now provided by law for the execution and issuance of notes or bonds by such political subdivisions, but the governor and council shall act as agent of said town, city or county for the sale of said notes or bonds and their action in reference thereto shall be binding upon said town, city or county.

All money realized from such emergency loans shall be deposited with the state treasurer or in such banks as the governor and council may determine, and shall be paid over to the disbursing officer of such town, city or county only on the order of the governor, in such amounts as he may determine. The governor is hereby authorized to appoint a fiscal agent to supervise and direct the incurring of obligations against, and the expenditure of, said funds. If it becomes necessary, said funds, on order of the governor, may be paid over to such fiscal agent, to be by him disbursed for the benefit of such town, city or county.

If in the opinion of the governor and council it shall become necessary, they are hereby authorized, at any time before said loans are paid, to empower the fiscal agent appointed by the governor to countersign all warrants or orders for the payment of any money drawn upon any funds held by the treasurer of the political subdivision whose emergency loans authorized by this act shall remain unpaid, and after being notified by the governor and council of such action the treasurer of such political subdivision shall pay out no money unless upon warrant or order countersigned by such fiscal agent.

The governor and council, before such certificate is issued or the payment of such loans is guaranteed by the state, may impose such further restrictions, conditions and stipulations as will protect the state's interest and insure an orderly, economical and efficient conduct of the fiscal affairs of the political subdivision for which said money is borrowed.

All expenses incident to the making of said loans or the compensation of any fiscal agent shall be paid from the proceeds of such loans on order of the governor.