2012 -- H 7730

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LC01784

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

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J O I N T R E S O L U T I O N

APPROVING THE ISSUANCE OF HARBOR, PIER, AND PORT REVENUE BONDS BY

THE RHODE ISLAND ECONOMIC DEVELOPMENT CORPORATION FOR PURPOSES OF

FINANCING IMPROVEMENT IN AND AROUND QUONSET POINT

     Introduced By: Representatives Melo, Silva, Ruggiero, Ehrhardt, and Valencia

     Date Introduced: February 16, 2012

     Referred To: House Finance

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     WHEREAS, the Rhode Island economic development corporation (“QDC”) 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 sections 42-64-1 et seq. (as enacted, reenacted and

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amended, the "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 cannot

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meet the needs of providing those facilities due to problems encountered in assembling suitable

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

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

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recreational, and commercial development; and

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

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expansion and development of the state’s harbors and ports and to foster and improve the

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handling of waterborne commerce from and to any port of this state and other states and foreign

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countries; 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, harbors and ports, residential, environmental,

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utility, public service, institutional and civic and community facilities, and to develop sites for

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such facilities; and

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     WHEREAS, the act has empowered the Rhode Island economic development corporation

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

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     WHEREAS, the general assembly, pursuant to Rhode Island general laws §§ 42-64.10-1

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et seq. (as enacted, reenacted and amended, the "QDC Act") created the Quonset development

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corporation as a subsidiary of the Rhode Island economic development corporation; and

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     WHEREAS, the QDC Act provides that the Quonset development corporation shall have

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the 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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including those certain transportation, harbor, pier and waterfront facilities located at the Quonset

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business park; and

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     WHEREAS, the QDC Act also provides that the Quonset development corporation shall

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

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

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

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or interest therein, as the lawful agent and attorney-in-fact of the Rhode Island economic

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development corporation with respect to all property of the Rhode Island economic development

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corporation at the Quonset business park, all of the foregoing for such consideration as the

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Quonset development corporation shall determine. Any lease by the Quonset development

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corporation to another party may be for such part of the Quonset business park, real or personal,

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for such period, upon such terms or conditions, with or without an option on the part of the lessee

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to purchase any or all of the leased property for such consideration, at or after the retirement of all

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indebtedness incurred by the Quonset development corporation on account thereof, as the

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Quonset development 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 has requested the approval of the general

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assembly of the Rhode Island economic development corporation's issuance of harbor, pier and

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port revenue bonds (the "bonds") for the purpose of providing funds to the Quonset development

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corporation for financing the various capital projects including, but not limited to, harbor, pier,

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port, channel, dredging and all other costs related to the improvement to the Davisville piers

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improvements project at the Quonset business park (the "2012 Davisville piers project") funding,

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capitalized interest, costs of issuing the Bonds and related costs, and the establishment of reserves

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for the project and the bonds, including a debt service reserve fund; and

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     WHEREAS, the financing of the 2012 Davisville piers project and repayment of the

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bonds will be accomplished through one or more loan agreements having the Quonset

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development corporation as borrower, such agreement or agreements to require that the Quonset

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development corporation make loan payments in an amount equal to the debt service on the

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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 Quonset development corporation and from bond proceeds,

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

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Island 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 be

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not more than $7.5 million. Total debt service on the bonds is not expected to exceed $911,200

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annually and $9,112,000 in the aggregate, based on an average interest rate of 4.0 percent and a

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10-year maturity; and be it further

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     RESOLVED, that the general assembly hereby approves the Quonset development

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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 Quonset development corporation may pledge

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therefor; 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 bonds issued within one (1) year of the

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date of passage of this resolution; and be 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.

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LC01784

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