2013 -- H 5463

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LC00435

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND ECONOMIC

DEVELOPMENT CORPORATION

     Introduced By: Representatives Shekarchi, Lombardi, Ackerman, Jacquard, and DeSimone

     Date Introduced: February 14, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 42-64-6, 42-64-7, 42-64-15 and 42-64-23 of the General Laws in

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Chapter 42-64 entitled "Rhode Island Economic Development Corporation" are hereby amended

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to read as follows:

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     42-64-6. General powers. -- (a) Except to the extent inconsistent with any specific

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provision of this chapter, the Rhode Island economic development corporation shall have the

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power:

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      (1) To sue and be sued, complain and defend, in its corporate name.

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      (2) To have a seal, which may be altered at pleasure and to use the seal by causing it, or

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a facsimile of the seal, to be impressed or affixed, or in any other manner reproduced.

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      (3) 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 in real or personal property,

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wherever situated.

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      (4) To sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of

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all or any part of its property and assets for any consideration and upon any terms and conditions

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as the corporation shall determine.

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      (5) To make contracts and guarantees and incur liabilities, borrow money at any rates of

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interest as the corporation may determine.

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      (6) To make and execute agreements of lease, conditional sales contracts, installment

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sales contracts, loan agreements, mortgages, construction contracts, operation contracts, and other

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contracts and instruments necessary or convenient in the exercise of the powers and functions of

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the corporation granted by this chapter.

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      (7) To lend money for its purposes, invest and reinvest its funds, and at its option to take

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and hold real and personal property as security for the payment of funds so loaned or invested.

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      (8) To acquire or contract to acquire, from any person, firm, corporation, municipality,

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the federal government, or the state, or any agency of either the federal government or the state,

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by grant, purchase, lease, gift, condemnation, or otherwise, or to obtain options for the acquisition

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of any property, real or personal, improved or unimproved, and interests in land less than the fee

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thereof; and to own, hold, clear, improve, develop, and rehabilitate, and to sell, assign, exchange,

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transfer, convey, lease, mortgage, or otherwise dispose or encumber that property for the

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purposes of carrying out the provisions and intent of this chapter, for any consideration as the

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corporation shall determine.

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      (9) To conduct its activities, carry on its operations, and have offices and exercise the

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powers granted by this chapter, within or outside of the state.

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      (10) To elect or appoint officers and agents of the corporation, and define their duties

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and fix their compensation.

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      (11) To make and alter by-laws, not inconsistent with this chapter, for the administration

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and regulation of the affairs of the corporation, and those by-laws may contain provisions

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indemnifying any person who is or was a director, officer, employee, or agent of the corporation,

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or is or was serving at the request of the corporation as a director, officer, employee, or agent of

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another corporation, partnership, joint venture, trust, or other enterprise, in the manner and to the

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extent provided in section 7-1.2-814 of the business corporation act.

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      (12) To be a promoter, partner, member, associate, or manager of any partnership,

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enterprise, or venture.

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      (13) To have and exercise all powers necessary or convenient to effect its purposes;

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provided, however, that the corporation shall not have any power to create, empower or otherwise

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establish any corporation, subsidiary corporation, corporate body, any form of partnership, or any

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other separate entity without the express approval and authorization of the general assembly.

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      (b) Express approval and authorization of the general assembly shall be deemed to have

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been given for all legal purposes on July 1, 1995 for the creation and lawful management of a

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subsidiary corporation created for the management of the Quonset Point/Davisville Industrial

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Park, that subsidiary corporation being managed by a board of directors, the members of which

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shall be constituted as follows: (1) two (2) members who shall be appointed by the town council

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of the town of North Kingstown; (2) two (2) members who shall be residents of the town of North

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Kingstown appointed by the governor; (3) four (4) members who shall be appointed by the

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governor; (4) the chairperson, who shall be the executive director of the Rhode Island economic

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development corporation; and (5) non-voting members who shall be the members of the general

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assembly whose districts are comprised in any part by areas located within the town of North

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Kingstown.

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      The approval and authorization provided herein shall terminate upon the establishment

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of the Quonset Development Corporation as provided for in chapter 64.10 of this title.

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     42-64-7. Additional general powers. -- In addition to the powers enumerated in section

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42-64-6, except to the extent inconsistent with any specific provision of this chapter, the Rhode

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Island economic development corporation shall have power:

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      (1) To undertake the planning, development, construction, financing, management,

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operation of any project, and all activities in relation thereto.

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      (2) (i) To sell, mortgage, lease, exchange, transfer, or otherwise dispose of or encumber

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

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with any port project) or to grant options for any purposes with respect to any real or personal

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property or interest in real or personal property, all of the foregoing for consideration as the

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corporation shall determine. Any lease by the corporation to another party may be for any part of

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the corporation's property, real or personal, for any period, upon any terms or conditions, with or

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without an option on the part of the lessee to purchase any or all of the leased property for any

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consideration, at or after the retirement of all indebtedness incurred by the corporation on account

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thereof, as the corporation shall determine.

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      (ii) Without limiting the generality of the foregoing, the corporation is expressly

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empowered to lease or sell any part of the real or personal property owned or controlled by the

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corporation to the state, or any department of the state or to any municipality. The provisions of

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this section or of any other laws of this state (other than this chapter) restricting the power of the

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state, its departments or any municipality, to lease or sell property, or requiring or prescribing

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publication of notice of intention to lease or sell, advertising for bids, the terms of contracts of

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lease or sale, that would in any manner interfere with the purpose of this section, which is to

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provide for the mutual cooperation by and between the corporation and the state, its departments

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or any municipality, to the fullest extent possible, are not applicable to leases and sales made

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pursuant to this section.

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      (3) To prepare or cause to be prepared plans, specifications, designs, and estimates of

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costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any

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project, and from time to time to modify those plans, specifications, designs, or estimates.

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      (4) To manage any project, whether then owned or leased by the corporation, and to

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enter into agreements with the state or any municipality or any agency or their instrumentalities,

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or with any person, firm, partnership, or corporation, either public or private, for the purpose of

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causing any project to be managed.

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      (5) To provide advisory, consultative, training, and educational services, technical

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assistance, and advice to any person, firm, partnership, or corporation, whether it is public or

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private, in order to carry out the purposes of this chapter.

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      (6) Subject to the provisions of any contract with note holders or bond holders to consent

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to the modification, with respect to rate of interest, time of payments of any installment of

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principal or interest, security or any other term of any mortgage, mortgage loan, mortgage loan

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commitment, contract, or agreement of any kind to which the corporation is a party.

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      (7) In connection with any property on which it has made a mortgage loan, to foreclose

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on that property or commence an action to protect or enforce any right conferred upon it by law,

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mortgage, contract, or other agreement and to bid for and purchase the property at any foreclosure

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or any other sale, or to acquire or take possession of the property; and in that event the

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corporation may complete, administer, pay the principal of, or interest on any obligations incurred

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in connection with the property, dispose of, and otherwise deal with the property in a manner as

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may be necessary or desirable to protect the interest of the corporation therein.

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      (8) As security for the payment of principal and interest on any bonds or notes or any

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agreements made in connection therewith, to mortgage and pledge any or all of its projects and

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property, whether then owned or thereafter acquired, and to pledge the revenues and receipts from

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all or part thereof, and to assign or pledge the leases, sales contracts or loan agreements or other

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agreements on any portion or all of its projects and property and to assign or pledge the income

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received by virtue of the lease, sales contracts, loan agreements or other agreements.

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      (9) To invest any funds of the corporation, including funds held in reserve or sinking

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funds, or any moneys not required for immediate use or disbursement at the discretion of the

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corporation, in: (i) obligations of the state or the United States, (ii) obligations of the principal

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and interest of which are guaranteed by the state or the United States, (iii) obligations of agencies

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and instrumentalities of the state or the United States, or (iv) certificates of deposits of banks and

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trust companies or shares of building loan associations organized under the laws of the state or

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doing business in the state or (v) any obligations, securities, and other investments as shall be

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specified in resolutions of the corporation.

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      (10) To engage the services of consultants on a contract basis for rendering professional

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and technical assistance and advice, and to employ architects, engineers, attorneys, accountants,

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construction, and financial experts and any other advisors, consultants, and agents as may be

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necessary in his or her judgment, and to fix their compensation.

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      (11) To contract for and to accept any gifts or grants or loans or funds or property or

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financial or other assistance in any form from the United States or any agency or instrumentality

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of the United States or from the state or any agency or instrumentality of the state or from any

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other source and to comply, subject to the provisions of this chapter, with the terms and

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conditions of this contract.

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      (12) To enter into agreements with any municipality or political subdivision, either

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directly or on behalf of any other party which holds legal title to all or any portion of a project as

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the lessee from the corporation designated pursuant to section 42-64-20(c), providing that the

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corporation or the lessee shall pay annual sums in lieu of taxes to the municipality or political

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subdivision of the state in respect to any real or personal property which is owned by the

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corporation or the lessee and is located in the municipality or political subdivision.

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      (13) To borrow money and to issue negotiable bonds and notes, and to provide for the

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rights of the holders of these bonds and notes, for the purpose of providing funds to pay all or any

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part of the cost of any port project or for the purpose of refunding any of these bonds issued.

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      (14) To construct, acquire, own, repair, develop, operate, maintain, extend, and improve,

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rehabilitate, renovate, furnish, and equip one or more port projects and to pay all or any part of

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the costs of these bonds and notes from the proceeds of bonds of the corporation or from any

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contribution, gift, or donation or other funds made available to the corporation for those purposes.

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      (15) To fix, charge and collect rents, fees, tolls, and charges for the use of any port

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project and to alter and investigate rates, and practices of charging, which affect port projects so

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as to increase commerce in the state.

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      (16) To prescribe rules and regulations deemed necessary or desirable to carry out the

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purposes of this chapter including rules and regulations to insure maximum use and proper

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operation of port projects.

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      (17) To establish penalties for violations of any order, rule, or regulation of the

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corporation, and a method of enforcing these penalties.

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      (18) To develop, maintain, and operate foreign trade zones under those terms and

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conditions that may be prescribed by law.

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      (19) To impose administrative penalties in accordance with the provisions of section 42-

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64-9.2.

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      (20) To make assessments and impose reasonable and just user charges, and to pay for

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those expenses that may be required by law or as may be determined by the corporation to be

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necessary for the maintenance and operation of the sewage treatment facility.

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      (21) To establish a sewage pretreatment program, and to require as a condition to the

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grant or re-issuance of any approval, license, or permit required under the program that the person

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applying for the approval, license or permit, pay to the corporation a reasonable fee based on the

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cost of reviewing and acting upon the application and based on the costs of implementing the

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program. In addition, where a violation of any of the provisions of this title or any permit, rule,

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regulation, or order issued pursuant to this title have occurred, the violator shall reimburse the

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corporation for the actual costs of implementing and enforcing the terms of the permit, rule,

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regulation or order as a condition to the grant or re-issuance of any approval.

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      (22) To assist urban communities revitalize their local economics.

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      (23) To provide assistance to minority businesses and to neighborhoods where there is

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insufficient economic and business investment.

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      (24) To support and assist entrepreneurial activity by minorities and by low and

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moderate income persons.

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      (25) To issue bonds and notes of the type and for those projects and for those purposes

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specified in any Joint Resolution of the General Assembly adopted by the Rhode Island house of

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representatives and the Rhode Island senate; pursuant to section 18 of title 35 of the general laws

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entitled "the Rhode Island Public Corporation Debt Management Act"; and to make such

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determinations, enter into such agreements, to deliver such instruments and to take such other

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actions as it shall deem necessary or desirable to effectuate the financing of such projects.

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     42-64-15. Bonds and notes of the corporation. -- (a) The Rhode Island economic

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development corporation shall have the power and is authorized to issue from time to time its

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negotiable bonds and notes in one or more series in any principal amounts as in the opinion of the

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corporation shall be necessary to provide sufficient funds for achieving its purposes, including the

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payment of interest on bonds and notes of the corporation, the establishment of reserves to secure

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those bonds and notes (including the reserve funds created pursuant to section 42-64-18), and the

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making of all other expenditures of the corporation incident to and necessary or convenient to

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carrying out its corporate purposes and powers.

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      (b) All bonds and notes issued by the corporation may be secured by the full faith and

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credit of the corporation or may be payable solely out of the revenues and receipts derived from

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the lease, mortgage, or sale by the corporation of its projects or of any part of its projects, or from

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any other revenues or from repayment from any loans made by the corporation with regard to any

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of its projects or any part of its projects, all as may be designated in the proceedings of the

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corporation under which the bonds or notes shall be authorized to be issued. The bonds and notes

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may be executed and delivered by the corporation at any time from time to time, may be in any

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form and denominations and of any tenor and maturities, and may be in bearer form or in

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registered form, as to principal and interest or as to principal alone, all as the corporation may

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determine.

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      (c) Bonds may be payable in any installments, and at times not exceeding fifty (50) years

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from their date, as shall be determined by the corporation.

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      (d) Except for notes issued pursuant to section 42-64-16, notes, and any renewals, may

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be payable in any installments and at any times not exceeding ten (10) years from the date of the

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original issue of the notes, as shall be determined by the corporation.

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      (e) Bonds and notes may be payable at any places, whether within or outside of the state,

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may bear interest at any rate or rates payable at any time or times and at any place or places and

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evidenced in any manner, and may contain any provisions not inconsistent with this section, all as

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shall be provided in the proceedings of the corporation under which they shall be authorized to be

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issued.

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      (f) There may be retained by provision made in the proceedings under which any bonds

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or notes of the corporation are authorized to be issued an option to redeem all or any part of these

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bonds or notes, at any prices and upon any notice, and on any further terms and conditions as

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shall be set forth on the record of the proceedings and on the face of the bonds or notes.

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      (g) Any bonds or notes of the corporation may be sold from time to time at those prices,

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at public or private sale, and in any manner as shall be determined by the corporation, and the

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corporation shall pay all expenses, premiums, and commissions that it shall deem necessary or

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advantageous in connection with the issuance and sale of these bonds and notes.

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      (h) Moneys of the corporation, including proceeds from the sale of bonds or notes, and

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revenues, receipts and income from any of its projects or mortgages, may be invested and

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reinvested in any obligations, securities, and other investments consistent with this section as

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shall be specified in the resolutions under which the bonds or notes are authorized.

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      (i) Issuance by the corporation of one or more series of bonds or notes for one or more

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purposes shall not preclude it from issuing other bonds or notes in connection with the same

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project or any other project, but the proceedings whereunder any subsequent bonds or notes may

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be issued shall recognize and protect a prior pledge or mortgage made for a prior issue of bonds

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or notes unless in the proceedings authorizing that prior issue the right is reserved to issue

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subsequent bonds or notes on a parity with that prior issue.

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      (j) The corporation is authorized to issue bonds or notes for the purpose of refunding its

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bonds or notes then outstanding, including the payment of any redemption premium and any

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interest accrued or to accrue to the earliest or subsequent date of redemption, purchase, or

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maturity of the bonds or notes, and, if deemed advisable by the corporation, for the additional

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purpose of paying all or part of the cost of acquiring, constructing, reconstructing, rehabilitating,

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or improving any project, or the making of loans on any project. The proceeds of bonds or notes

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issued for the purpose of refunding outstanding bonds or notes may be applied, in the discretion

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of the corporation, to the purchase, retirement at maturity, or redemption of the outstanding bonds

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or notes either on their earliest or a subsequent redemption date, and may, pending that

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application, be placed in escrow. Those escrowed proceeds may be invested and reinvested in

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obligations of or guaranteed by the United States, or in certificates of deposit or time deposits

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secured or guaranteed by the state or the United States, or an instrumentality of either, maturing at

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any time or times as shall be appropriate to assure the prompt payment, as to principal, interest,

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and redemption premium, if any, of the outstanding bonds or notes to be so refunded. The

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interest, income and profits, if any, earned or realized on the investment may also be applied to

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the payment of the outstanding bonds or notes to be so refunded. After the terms of the escrow

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have been fully satisfied and carried out, any balance of the proceeds and interest, income and

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profits, if any, earned or realized on the investments may be returned to the corporation for use by

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it in furtherance of its purposes. The portion of the proceeds of bonds or notes issued for the

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additional purpose of paying all or part of the cost of acquiring, constructing, reconstructing,

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rehabilitating, developing, or improving any project, or the making of loans on any project, may

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be invested and reinvested in any obligations, securities, and other investments consistent with

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this section as shall be specified in the resolutions under which those bonds or notes are

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authorized and which shall mature not later than the times when those proceeds will be needed for

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those purposes. The interest, income and profits, if any, earned or realized on those investments

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may be applied to the payment of all parts of the costs, or to the making of loans, or may be used

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by the corporation otherwise in furtherance of its purposes. All bonds or notes shall be issued and

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secured and shall be subject to the provisions of this chapter in the same manner and to the same

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extent as any other bonds or notes issued pursuant to this chapter.

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      (k) The directors, the executive director of the corporation, and other persons executing

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bonds or notes shall not be subject to personal liability or accountability by reason of the issuance

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of these bonds and notes.

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      (l) Bonds or notes may be issued under the provisions of this chapter without obtaining

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the consent of any department, division, commission, board, body, bureau, or agency of the state,

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and without any other proceedings or the happening of any conditions or things other than those

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proceedings, conditions, or things which are specifically required by this chapter and by the

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provisions of the resolution authorizing the issuance of bonds or notes or the trust agreement

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securing them.

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      (m) The corporation, subject to any agreements with note holders or bondholders as may

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then be in force, shall have power out of any funds available therefor to purchase bonds or notes

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of the corporation, which shall thereupon be cancelled, at a price not exceeding:

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      (1) If the bonds or notes are then redeemable, the redemption price then applicable plus

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accrued interest to the next interest payment date; or

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      (2) If the bonds or notes are not then redeemable, the redemption price applicable on the

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earliest date that the bonds or notes become subject to redemption, plus the interest that would

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have accrued to that date.

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      (n) Whether or not the bonds and notes are of a form and character as to be negotiable

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instruments under the terms of the Rhode Island Uniform Commercial Code, title 6A, the bonds

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and notes are hereby made negotiable instruments within the meaning of and for all the purposes

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of the Rhode Island Uniform Commercial Code, subject only to the provisions of the bonds and

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notes for registration.

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      (o) If a director or officer of the corporation whose signature appears on bonds, notes, or

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coupons shall cease to be a director or officer before the delivery of those bonds or notes, that

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signature shall, nevertheless, be valid and sufficient for all purposes, the same as if the director or

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officer had remained in office until the delivery.

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     42-64-23. Credit of state. -- (a) Obligations issued under the provisions of this chapter,

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except those obligations secured by mortgages which are insured by the industrial building

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authority, shall not constitute a debt, liability or obligation of the state or of any political

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subdivision of the state other than the Rhode Island economic development corporation or a

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pledge of the faith and credit of the state or any political subdivision other than the corporation

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but shall be payable solely from the revenues or assets of the corporation. Each obligation issued

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under this chapter, except those obligations secured by mortgages which are insured by the

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industrial building authority, shall contain on its face a statement to the effect that the corporation

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shall not be obligated to pay the obligation or interest on the obligation except from revenues or

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assets pledged therefor and that neither the faith and credit nor the taking power of the state or

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any political subdivision of the state other than the corporation is pledged to the payment of the

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principal of or the interest on the obligation.

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      (b) Obligations issued under the provisions of this chapter which are secured by

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mortgages insured by the industrial building authority, in addition to being payable from the

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revenues or assets of the corporation, shall be secured by a pledge of the faith and credit of the

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state consistent with the terms and limitations of chapter 34 of this title.

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     (c) Notwithstanding any provision of law to the contrary contained in any general or

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public law, rule or regulation, Rhode Island economic development corporation shall not

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guarantee any loan or obligation, nor shall it pledge the faith and credit of the state or any of its

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subdivisions.

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     SECTION 2. This act shall take effect upon passage.

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LC00435

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND ECONOMIC

DEVELOPMENT CORPORATION

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     This act would prohibit the economic development corporation from guaranteeing any

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loans and obligations.

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     This act would take effect upon passage.

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LC00435

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