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art.007/6/007/5/007/4/007/3/007/2/007/1

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ARTICLE 7 AS AMENDED

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RELATING TO DEBT MANAGEMENT ACT JOINT RESOLUTIONS

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     SECTION 1. This article consists of joint resolutions that are submitted pursuant to

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Rhode Island General Laws § 35-18-1, et seq.

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     SECTION 2. Information Technology Improvements.

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     WHEREAS, The division of taxation is the primary revenue collecting agency for the

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State of Rhode Island, administering fifty-seven (57) different tax/fee types and collecting nearly

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three billion dollars per year. Currently an assortment of software systems is being utilized to

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administer these taxes and fees. The most critical of these systems is built on forty (40) year old

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technology that is increasingly difficult and expensive to use and maintain; and

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     WHEREAS, Recognizing the need to better serve the citizens of Rhode Island and the

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need to modernize its technology, and to support related tax enforcement activities, the State of

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Rhode Island and the division of taxation would benefit from the acquisition of a modern

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integrated tax system that would centralize all taxpayer information in one computer system; and

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     WHEREAS, The State of Rhode Island is actively reforming its education system by,

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among other initiatives, developing enterprise data systems that will offer five platforms,

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including the instruction management system and the educator evaluation system. These data

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systems will provide an unprecedented level of student and teacher data to track student, teacher,

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and school performance and address the student achievement gaps; and

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     WHEREAS, Rhode Island’s local education agencies (“LEAs”), districts, charter schools

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and state schools need to upgrade their existing technology infrastructure in order to provide

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twenty-first century technology-based learning, including e-learning opportunities, on-line

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textbooks, and on-line assessments. In addition, several LEAs have insufficient wireless access

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in their classrooms to access new data systems and on-line resources; and

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     WHEREAS, The project costs associated with these information technology

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improvements are estimated to be $44.8 million. The total financing obligation of the State of

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Rhode Island would be approximately $45.3 million, with $44.8 million deposited in the project

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fund and $0.5 million allocated to pay the associated costs of financing. Total payments on the

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State’s obligation over ten (10) years on the $45.3 million issuance are projected to be $66.6

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million, assuming an average interest rate of 4.0%. The payments would be financed within the

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department of administration from general revenue appropriations; now, therefore, be it

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     RESOLVED, That this general assembly hereby approves financing in an amount not to

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exceed $45.3 million for the provision of funds for information technology improvements,

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including $0.5 million to pay costs of financing; that $19.8 million be made available from the

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project fund for improvements to the technology infrastructure of local education agencies; that

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$25.0 million be made available from the project fund for an integrated tax system; and provided

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further, that any funding amount from federal forfeiture funds for law and tax enforcement

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received for these purposes may be used to reduce the amount of borrowed funds; be it further

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     RESOLVED, That this joint resolution shall take effect immediately upon its passage by

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the general assembly.

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     SECTION 3. Rhode Island Airport Corporation.

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     WHEREAS, The Rhode Island economic development corporation is a public

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instrumentality of the State of Rhode Island (the "state"), created by the general assembly

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pursuant to Rhode Island general laws §§ 42-64-1 et seq. (as enacted, reenacted and amended, the

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"act"); and

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     WHEREAS, The act declares, in part, that new industrial, manufacturing, recreational,

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and commercial facilities are required to attract and house new industries and thereby reduce the

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hazards of unemployment; and that unaided efforts of private enterprises have not met, and

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cannot meet, the needs of providing those facilities due to problems encountered in assembling

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suitable building sites, lack of adequate public service, unavailability of private capital for

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development, and the inability of private enterprise alone to plan, finance, and coordinate

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industrial, recreational, and commercial development; and

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     WHEREAS, The act further declares it to be the public policy of the state to furnish

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proper and adequate airport facilities within the state and to encourage the integration of these

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facilities so far as practicable; and

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     WHEREAS, In furtherance of these goals, it is the policy of the state to retain existing

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industries and to induce, encourage and attract new industries through the acquisition,

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construction, reconstruction and rehabilitation of industrial, manufacturing, recreational, and

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commercial facilities, as well as transportation, residential, environmental, utility, public service,

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institutional and civic and community facilities, and to develop sites for such facilities; and

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     WHEREAS, The act has empowered the Rhode Island economic development

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corporation to establish subsidiary corporations to exercise its powers and functions, or any of

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them, and, pursuant to such power, the Rhode Island economic development corporation has

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established the Rhode Island airport corporation to plan, develop, construct, finance, manage, and

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operate airport facilities in the state; and

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     WHEREAS, The act provides that the Rhode Island airport corporation shall have the

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power to purchase, take, receive, lease or otherwise acquire, own, hold, improve, use and

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otherwise deal in and with, real or personal property, or any interest therein, wherever situated;

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and

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     WHEREAS, The act also provides that the Rhode Island airport corporation shall have

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the power to sell, mortgage, lease, exchange, transfer or otherwise dispose of or encumber any

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project, (or in the case of a sale, to accept a purchase money mortgage in connection therewith) or

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to grant options for any such purposes with respect to any real or personal property or interest

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therein, all of the foregoing for such consideration as the Rhode Island airport corporation shall

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determine. Any lease by the Rhode Island airport corporation to another party may be for such

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part of the Rhode Island airport corporation's property, real or personal, for such period, upon

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such terms or conditions, with or without an option on the part of the lessee to purchase any or all

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of the leased property for such consideration, at or after the retirement of all indebtedness

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incurred by the Rhode Island airport corporation on account thereof, as the Rhode Island airport

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corporation shall determine; and

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     WHEREAS, The act authorizes the Rhode Island economic development corporation to

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borrow money and issue bonds for any of its corporate purposes; and

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     WHEREAS, Pursuant to §§ 35-18-3 and 35-18-4 of Rhode Island general laws, the

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Rhode Island economic development corporation requests the approval of the general assembly of

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the Rhode Island economic development corporation's issuance of airport revenue bonds (the

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"bonds") for the purpose of providing funds to the Rhode Island airport corporation for financing

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the various capital projects including, but not limited to, a de-icer management system, runway

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and taxiway improvements, noise mitigation and land acquisition, and facility developments (the

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“Fiscal Year 2013 Airport Project"), funding capitalized interest, costs of issuing the bonds and

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related costs, and the establishment of reserves for the project and the bonds, including a debt

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service reserve fund; and

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     WHEREAS, The Rhode Island airport corporation anticipates the need to utilize short

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term borrowings to fund timing differences between construction activities and receipt of federal

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grants;

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     WHEREAS, The financing of the Fiscal Year 2013 Airport Project will be accomplished

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through one or more loan agreements having the Rhode Island airport corporation as borrower,

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such agreement or agreements to require that the Rhode Island airport corporation make loan

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payments in an amount no less than the debt service on the bonds; now, therefore, be it

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     RESOLVED, The general assembly hereby approves the Rhode Island economic

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development corporation's issuance of the bonds. The bonds will be special obligations of the

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Rhode Island economic development corporation, payable exclusively from loan repayments

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under a loan agreement with the Rhode Island airport corporation and from bond proceeds, funds,

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accounts, and properties and the proceeds thereof pledged therefor, and thus the Rhode Island

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economic development corporation's maximum liability will be limited to loan repayments

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received under the loan agreement and the aggregate amount of such other funds, accounts,

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properties, and proceeds; and be it further

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     RESOLVED, That the total amount of debt approved to be issued in the aggregate shall

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be not more than $174,000,000. Total debt service on the bonds is not expected to exceed

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$12,000,000 annually and $351,000,000 in the aggregate based on level annual payments, an

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average interest rate of 6.83%, and a 30-year maturity. Total debt service on short-term

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borrowings to fund timing differences between construction activities and receipt of federal

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grants is not expected to exceed $6,700,000 annually and $34,000,000 in the aggregate based on

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an average interest rate of 4.00% and an 8-year maturity; and be it further

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     RESOLVED, That the general assembly hereby approves the Rhode Island airport

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corporation's entering into the loan agreements described above. Payments under the loan

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agreements shall be derived exclusively from project revenues and such other proceeds, funds,

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accounts, projects and the proceeds thereof as the Rhode Island airport corporation may pledge

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therefore; and be it further

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     RESOLVED, That none of the bonds or the loan agreements shall constitute indebtedness

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of the state or a debt for which the full faith and credit of the state is pledged or a moral

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obligation thereof; and be it further

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     RESOLVED, That this resolution shall apply to debt issued within one (1) year of the

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date of passage of this resolution.

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     SECTION 4. Rhode Island Resource Recovery Corporation

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     WHEREAS, The Rhode Island resource recovery corporation (the “corporation”) is a

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public corporation of the State of Rhode Island (the “state”), constituting a public instrumentality

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and agency exercising public and essential governmental functions of the state, created by the

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general assembly pursuant to Rhode Island general laws §§ 23-19-1 et seq., entitled the “Rhode

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Island resource recovery corporation act” (as enacted, reenacted and amended, the “act”); and

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     WHEREAS, Pursuant to the act, the corporation is designated to carry out the provisions

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of the act; and

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     WHEREAS, Also pursuant to the act, the purposes of the corporation include the

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planning, design, construction, financing, management, ownership, operation, and maintenance of

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transfer stations, waste processing facilities, resource recovery facilities, and all other solid waste

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management facilities and the provision of solid waste management services to municipalities and

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persons within the state; and

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     WHEREAS, For the purpose of planning, designing, constructing, financing, managing,

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owning, operating, and maintaining transfer stations, waste processing facilities, resource

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recovery facilities, and all other solid waste management facilities and providing solid waste

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management services to municipalities and persons within the state, the corporation is authorized

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to issue from time to time its negotiable bond and notes in one or more series in such principal

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amounts as in the opinion of the corporation shall be necessary to provide sufficient funds for

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achieving its purpose, including the payment of interest on the bonds and notes of the

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corporation, the establishment of reserves to secure the bonds and notes, and the making of all

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other expenditures of the corporation incident to and necessary or convenient to carrying out its

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purposes and powers; and

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     WHEREAS, Pursuant to Rhode Island general laws §§ 35-18-3 and 35-18-4, the

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corporation has requested the approval of the general assembly of the corporation’s issuance of

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not more than $40 million of revenue bonds (the “bonds) for the purpose of providing funds for

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capital projects and for costs associated with the bonds including capitalized interest, debt service

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reserve and costs of issuance; and

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     WHEREAS, The corporation will use the bond proceeds to fund the design and

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construction of a leachate pretreatment facility to comply with projected changes in discharge

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standards for the disposal of wastewater, including leachate, into a public sewer system. The

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treatment facility (the “facility” or the “project”) is expected to have the capacity of pretreating

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650,000 gallons of wastewater daily and utilize sequencing batch reactor technology for

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wastewater treatment; and

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     WHEREAS, The corporation currently discharges wastewater/leachate flows from

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several sources from its solid waste operations, including leachate from primary and secondary

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collection systems in phases II/III, IV and V of the central landfill, underdrains constructed under

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the liners of various sections of the landfill as required by Rhode Island department of

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environmental management (“RIDEM”) regulations, discharge from the phase I hot spot

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treatment system operated as part of superfund remediation requirements, and condensate from

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the landfill gas collection and treatment systems and sanitary flows from the various buildings

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and facilities on site; and

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     WHEREAS, The landfill-related leachate is currently discharged through the Cranston

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sewer system to the Cranston wastewater treatment facility (“WWTF”); and

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     WHEREAS, The corporation does not currently pretreat the collected flows prior to

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discharge into the Cranston WWTF; and

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     WHEREAS, The corporation has received final approval from the RIDEM for the

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construction of phase VI of the landfill, which will include a primary and secondary leachate

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collection system and will operate for approximately 20 years; and

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     WHEREAS, Municipal wastewater treatment plants that the corporation can potentially

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discharge into are currently implementing upgrades to their facilities to meet lower effluent

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discharge standards required by their permits with RIDEM; and

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     WHEREAS, The corporation has previously engaged an engineering consultant to

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conduct a preliminary evaluation of future requirements to treat wastewater discharges from the

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various operations at the Shun Pike facilities; and

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     WHEREAS, Over the past several years the engineering consultant has been assisting the

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corporation in evaluating approaches to treat wastewater flows, consisting primarily of landfill

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leachate, to meet the discharge standards established by municipal wastewater treatment facilities

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that are in proximity to the corporation’s operations; and

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     WHEREAS, The engineering consultant has issued a report indicating that based on these

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standards, and the more stringent effluent standards anticipated in the future, the corporation will

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be required to construct a new pretreatment plant facility on-site to comply with these standards

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prior to discharging wastewater into any municipal sewer system; and

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     WHEREAS, The engineering consultant has proposed utilizing a reliable, cost-effective

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and high-efficiency technology, sequential batch reactors, which are basically industrial tanks in

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which all metabolic processing and solid / liquid separation occurs in one tank and in a

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continuously repeated time sequence; and

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     WHEREAS, Sequential batch reactor processes are known to save more than 60% of the

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expenses required for conventional activated sludge processing and achieve high effluent quality

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in a very short aeration time; and

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     WHEREAS, The estimated cost of the project is anticipated to be approximately $35

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million to $40 million; and

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     WHEREAS, In the event that not all of the bond proceeds are used to carry out the

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specified project, the corporation will use any remaining funds to pay debt service on the bonds;

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now, therefore, be it

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     RESOLVED, That this general assembly hereby approves the corporation’s issuance of

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not more than the total of the competitively awarded contract plus financing costs, or $40 million,

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whichever is less, of bonds for the purpose of providing funds for the project and for costs

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associated with bonds including capitalized interest, debt service reserve and costs of issuance;

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and be it further

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     RESOLVED, That the bonds will be general obligations of the corporation payable from

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the corporation’s revenues and thus the corporation’s maximum liability will be for the total debt

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service on the bonds which is estimated to be $3.0 million per year or $59 million in the

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aggregate based on an average interest rate of 4.0 percent and a 20 year maturity; and be it further

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     RESOLVED, That the bonds will not constitute indebtedness of the state or any of its

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subdivisions or a debt for which the full faith and credit of the state or any of its subdivisions is

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pledged except to the extent that the state provides the corporation with annual budget

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appropriations pursuant to Rhode Island general laws § 23-19-13(i) and the corporation’s

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revenues are not otherwise sufficient to pay debt service on the bonds, the maximum possible

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financial obligation of the state under the bonds will be to appropriate for any deficiency; and be

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it further

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     RESOLVED, That this joint resolution shall take effect immediately upon its passage by

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this general assembly, provided that the delivery of the bonds shall be not later than one (1) year

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from the date of such passage.

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     SECTION 5. GARVEE Program.

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     WHEREAS, The Rhode Island Department of Transportation (“RIDOT”) has undertaken

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five (5) major transportation projects, and these projects were either substantially completed or

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under construction in the year 2011; and

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     WHEREAS, The construction of these projects was deemed critical in order to preserve

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and maintain the public safety and continued economic success and viability of the State of

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Rhode Island, its ports and infrastructure; and

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     WHEREAS, RIDOT explored various options to finance the costs of the five (5) major

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transportation projects and determined that the federal-aid financing program authorized in

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federal law by Section 311 of the National Highway System Designation Act of 1995 and

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commonly referred to as the Grant Anticipation Revenue Vehicle Program (“GARVEE

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Program”) represented the best financing mechanism for the State of Rhode Island, inasmuch as

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the GARVEE Program accelerated the funding and construction of the five (5) major

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transportation projects; and

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     WHEREAS, The General Assembly, in Chapter 376, Article 36, Sections 8 and 9 of the

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Rhode Island Public Laws of 2003, granted RIDOT, through the Rhode Island Economic

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Development Corporation (“RIEDC”), the authorization to issue bonds (“GARVEE Bonds”) or

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other debt instruments backed by future appropriations for federal-aid transportation projects

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whereby such amounts are used to cover an assortment of bond-related costs, including principal

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and interest payments, issuance costs, insurance, and other costs incidental to a financing; and

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     WHEREAS, The original Public Corporation Debt Management authorization in Chapter

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376, Article 36, Sections 8 and 9 of the Rhode Island Public Laws of 2003 included a total of

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$709.6 million in GARVEE funding to be distributed across five projects, as follows: $126.2

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million for the Sakonnet River Bridge; $348.3 million for the Route I-195 Relocation; $85.4

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million for the Washington Bridge; $42.5 million for the Freight Rail Improvement Program

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(FRIP), and $107.2 million for Route 403; and

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     WHEREAS, Additional grants and Federal earmark funding have been received for the

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completion of the Washington Bridge project, while, at the same time, preliminary cost estimates

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for the Sakonnet River Bridge replacement, which were used to allocate GARVEE proceeds,

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have proven to be lower than the funding required; and

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     WHEREAS, The reallocation of GARVEE funds to the Sakonnet River Bridge project

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will allow an equal amount of Federal highway funding to be applied to other highway projects

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included in the Rhode Island Transportation Improvement Program (“TIP”); and

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     WHEREAS, The reallocated GARVEE financing associated with these projects is

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estimated to be:

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     (1) For the Sakonnet River Bridge: (a) a total capital cost of one hundred twenty seven

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million three hundred eighty two thousand five hundred sixty six dollars ($127,382,566); (b) the

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total debt issuance of GARVEE and/or other than GARVEE Bonds associated with payment of

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the capital costs, financing costs, costs of issuance or insurance or credit enhancement would be

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an amount not to exceed one hundred thirty five million eight hundred twenty five thousand

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dollars ($135,825,000); (c) with respect to the total debt issuance of one hundred thirty five

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million eight hundred twenty five thousand dollars ($135,825,000) referenced in subsection (b)

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above, an amount not to exceed twenty five million two hundred forty eight thousand dollars

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($25,248,000) of bonds would be repaid by the State of Rhode Island with other than FHWA

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funds (the "State Match Bonds"); (d) total debt service payments on the State Match Bonds over

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an expected twenty (20) year period on the twenty five million two hundred forty eight thousand

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dollars ($25,248,000) issuance are projected to be thirty seven million four hundred fifty eight

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thousand dollars ($37,458,000), assuming an average coupon rate of 5.1%; and (e) the debt

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service payments on the State Match Bonds are supported from the Motor Fuel Tax Allocation as

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hereinafter defined; and total debt service on all bonds of two hundred four million five hundred

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thirty two thousand nine hundred twenty dollars ($204,532,920); and

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      (2) For the Washington Bridge: (a) a total capital cost of $75,845,000; (b) the total debt

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issuance of GARVEE and/or other than GARVEE Bonds associated with payment of the capital

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costs, financing costs, costs of issuance or insurance or credit enhancement would be an amount

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not to exceed $75,845,000; and (c) no State Match Bonds will be issued in connection with the

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Washington Bridge as all costs related to the construction and financing of this project will be

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covered by the FHWA funds due the State of Rhode Island; and total debt service on all bonds of

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one hundred eighteen million four hundred twenty two thousand five hundred dollars

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($118,422,500); now, therefore, be it

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     RESOLVED, That this General Assembly finds that the Projects are essential public

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facilities and are of a type and nature consistent with the purposes and within the powers of the

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Department of Transportation to undertake, and hereby approves that the Sakonnet River Bridge

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and Washington Bridge remain critical components of the infrastructure of the State of Rhode

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Island, and that it is in the best interests of the State to maximize the use of proceeds from the

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GARVEE bonds already issued. Therefore, this General Assembly hereby approves the following

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reallocation in GARVEE bond proceeds:

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      (1) For the New Sakonnet Bridge: the issuance of an amount not to exceed one hundred

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twenty seven million three hundred eighty two thousand five hundred sixty six dollars

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($127,382,566) in GARVEE Bonds, the repayment of which shall be derived from and supported

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by FHWA funds due the State of Rhode Island, and an amount not to exceed twenty five million

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two hundred forty eight thousand dollars ($25,248,000) in State Match Bonds and to incur and

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pay debt service payments for such State Match Bonds in an amount not to exceed thirty seven

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million four hundred fifty eight thousand dollars ($37,458,000) and total debt service on all bonds

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of two hundred four million five hundred thirty two thousand nine hundred twenty dollars

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($204,532,920) as specified in (1) above for bonds issued for the Sakonnet River Bridge, such

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debt service payments to be made from the Motor Fuel Tax Allocation, as hereinafter defined, or

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such other revenue source as the Rhode Island General Assembly shall designate from time to

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time for the construction, design, maintenance, completion, finance costs, including, but not

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limited to, costs of issuance, credit enhancement, legal counsel and underwriter fees and expenses

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and other costs associated with the Sakonnet River Bridge.

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      (2) For the Washington Bridge: the issuance of an amount not to exceed $75,845,000 in

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GARVEE Bonds, the repayment of which shall be wholly derived from and supported by FHWA

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funds due the State of Rhode Island; and total debt service on all bonds of one hundred eighteen

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million four hundred twenty two thousand five hundred dollars ($118,422,500); and be it further

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     RESOLVED, That no other changes in allocation or expenditure are authorized beyond

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the amendments included in this Joint Resolution, and that no additional GARVEE bond issuance

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is required beyond the limits specified in Chapter 376, Article 36, Sections 8 and 9 of the Rhode

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Island Public Laws of 2003.

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     SECTION 6. This article shall take effect upon passage.