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6/28/2024
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New law will streamline financial guarantees from developers
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STATE HOUSE — A new law sponsored by Rep. Leonela Felix will streamline the way developers provide financial guarantees to municipalities on public projects.
The legislation (2024-H 7950A), which was signed into law Tuesday, is one of the 15 bills from House Speaker K. Joseph Shekarchi’s 2024 legislative package to help address the state’s housing crisis.
The law requires municipalities to allow at least three disclosed types of financial security (such as surety bonds, letters of credit or cash) provided by developers on projects that include public improvements. Allowing varying types of financial options ensures that developers can choose the method that best suits their circumstances, which encourages development. Municipalities will not be able to limit the bond to one specific type, but still retain their ability to require bonds and improvement guarantees for public improvements.
“Construction and improvement guarantees are an important way for municipalities in Rhode Island to ensure projects are completed in a satisfactory manner by providing a financial guarantee that the work will be completed,” said Representative Felix (D-Dist. 61, Pawtucket). “In streamlining this process, this law will spur competition by allowing more companies to bid on public improvement projects, and allow them to move forward more quickly by not delaying them over the need for a specific type of improvement guarantee.”
The law also updates language in the statute from “planning board” to “permitting authority,” reflecting that the project may have been approved by a planning board, technical review committee or administrative officer.
For more information, contact:
Tristan Grau, Publicist
State House Room B20
Providence, RI 02903
401.222.4935
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