2013 -- H 5364

=======

LC01132

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

____________

A N A C T

RELATING TO PUBLIC FINANCE - PUBLIC CORPORATION DEBT MANAGEMENT

     Introduced By: Representatives Melo, Silva, Naughton, Gallison, and Hull

     Date Introduced: February 12, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Section 35-18-3 of the General Laws in Chapter 35-18 entitled "Public

1-2

Corporation Debt Management" is hereby amended to read as follows:

1-3

     35-18-3. Approval by the general assembly. -- (a) No elected or appointed state official

1-4

may enter into any financing lease or into any guarantee with any person without the prior

1-5

approval of the general assembly unless:

1-6

      (1) The governor certifies that federal funds will be available to make all of the payments

1-7

which the state is or could be obligated to make under the financing lease or guarantee; or

1-8

      (2) The general assembly has adjourned for the year with the expectation that it will not

1-9

meet again until the following year and the governor certifies that action is necessary, because of

1-10

events occurring after the general assembly has adjourned, to protect the physical integrity of an

1-11

essential public facility, to ensure the continued delivery of essential public services, or to

1-12

maintain the credit worthiness of the state in the financial markets.

1-13

      (b) No bonds may be issued or other obligation incurred by any public corporation to

1-14

finance, in whole or in part, the construction, acquisition, or improvement of any essential public

1-15

facility without the prior approval of the general assembly, unless:

1-16

      (1) The governor certifies that federal funds will be available to make all of the payments

1-17

required to be made by the public corporation in connection with the bond or obligation. The

1-18

certification shall be transmitted to the speaker of the house and the president of the senate with

1-19

copies to the chairpersons of the respective finance committees and fiscal advisors; or

2-20

      (2) The general assembly has adjourned for the year with the expectation that it will not

2-21

meet again until the following year and the governor certifies that action is necessary, because of

2-22

events occurring after the general assembly has adjourned, to protect the physical integrity of an

2-23

essential public facility, to ensure the continued delivery of essential public services, or to

2-24

maintain the credit worthiness of the state in the financial markets. The certification shall be

2-25

transmitted to the speaker of the house and the president of the senate, with copies to the

2-26

chairpersons of the respective finance committees and fiscal advisors.

2-27

      (c) In addition to, and not by way of limitation on, the exemptions provided in

2-28

subsections (a) and (b), prior approval by the general assembly shall not be required under this

2-29

chapter for bonds or other obligations issued by, or financing leases or guarantee agreements

2-30

entered into by:

2-31

      (1) The Rhode Island Industrial Facilities Corporation; provided financing leases, bonds

2-32

or other obligations are being issued for an economic development project;

2-33

      (2) The Rhode Island clean water finance agency;

2-34

      (3) The Rhode Island housing and mortgage finance corporation;

2-35

      (4) The Rhode Island student loan authority;

2-36

      (5) Any public corporation to refund any bond or other obligation issued by the public

2-37

corporation to finance the acquisition, construction, or improvement of an essential public facility

2-38

provided that the governor certifies to the speaker of the house and the president of the senate,

2-39

with copies to the chairpersons of the respective finance committees and fiscal advisors that the

2-40

refunding shall provide a net benefit to the issuer; provided, however, obligations of the Rhode

2-41

Island resource recovery corporation outstanding on July 31, 1999, may be refunded by the

2-42

issuance of obligations on or before August 1, 1999;

2-43

      (6) The Narragansett Bay water quality management district commission; and

2-44

      (7) The Rhode Island health and educational building corporation, except bonds or other

2-45

obligations issued in connection with the acquisition, construction, or improvement of any facility

2-46

used by any state agency, department, board, or commission, including the board of governors for

2-47

higher education, to provide services to the public pursuant to the requirements of state or federal

2-48

law, and all fixtures for any of those facilities. ; and

2-49

     (8) The state to refund any financing leases entered into with the authorization of the

2-50

general assembly, provided that the governor certifies to the speaker of the house and the

2-51

president of the senate, with copies to the chairpersons of the respective finance committees and

2-52

fiscal advisors, that the refunding shall provide a net benefit to the state.

2-53

      (d) Nothing contained in this section applies to any loan authorized to be borrowed under

2-54

Article VI, section 16 or 17 of the Rhode Island Constitution.

3-1

      (e) Nothing in this section is intended to expand in any way the borrowing authority of

3-2

any public corporation under its charter.

3-3

      (f) (1) Any certification made by the governor under subsection (a), (b), or (c) of this

3-4

section may be relied upon by any person, including without limitation, bond counsel.

3-5

      (2) The certifications shall be transmitted to the speaker of the house and the president of

3-6

the senate with copies to the chairpersons of the respective finance committees and fiscal

3-7

advisors.

3-8

      (g) Except as provided for in this chapter, the requirements of this chapter supersede any

3-9

other special or general provision of law, including any provision which purports to exempt sales

3-10

or leases between the state and a public corporation from the operation of any law.

3-11

     SECTION 2. This act shall take effect upon passage.

=======

LC01132

========

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC FINANCE - PUBLIC CORPORATION DEBT MANAGEMENT

***

4-1

     This act would provide that prior general assembly approval would not be required for

4-2

the state to refund any financing leases entered into with the authorization of the general

4-3

assembly.

4-4

     This act would take effect upon passage.

=======

LC01132

=======