2013 -- S 0609 SUBSTITUTE A AS AMENDED

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LC01737/SUB A

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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 -- QUASI-PUBLIC

CORPORATIONS ACCOUNTABILITY AND TRANSPARENCY ACT

     Introduced By: Senators Sheehan, Ciccone, DiPalma, Sosnowski, and Lynch

     Date Introduced: March 06, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Title 42 of the General Laws entitled "State Affairs and Government" is

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hereby amended by adding thereto the following chapter:

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     CHAPTER 155

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     QUASI-PUBLIC CORPORATIONS

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     ACCOUNTABILITY AND TRANSPARENCY ACT

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     42-155-1. Title. -- This chapter shall be known and may be cited as the "Quasi-Public

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Corporations Accountability and Transparency Act."

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     42-155-2. Legislative findings. -- It is hereby found that:

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      (1) Quasi-public corporations are established and empowered by state law, and would

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not exist but for their relationship with the state.

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     (2) Quasi-public corporations perform essential government functions and/or provide

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essential government services.

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     (3) Many quasi-public corporations are granted the public power to collect fees and/or

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generate other revenue and incur debt.

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     (4) Quasi-public corporations manage significant public resources; however, the majority

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are exempt from many kinds of public oversight, such as executive and legislative budgetary

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review required of state agencies and departments.

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     (5) It is essential that quasi-public corporations provide more, not less transparency by

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making their decisions and budgets especially transparent and open to public scrutiny, and by

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demonstrating a commitment to protecting the interests of Rhode Island taxpayers by achieving

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the highest standards of transparent, effective and ethical operation.

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     (6) Quasi-public corporations are governed by independent boards that serve a critical

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oversight function, and there exists a need to strengthen the ability of board members to carry out

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this oversight role.

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     (7) Rhode Island citizens rely on their government to provide oversight of quasi-public

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corporations, with a goal of ensuring that these state entities carry out their government missions

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effectively, and exemplify a commitment to transparent, accountable and effective government.

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42-155-3. Definitions. -- As used in this chapter: (a) "quasi-public corporation" means

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any body corporate and politic created or to be created pursuant to the general laws, including,

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but not limited to. the following:

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     (1) Capital center commission;

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     (2) Rhode Island convention center authority;

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     (3) Rhode Island industrial facilities corporation;

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     (4) Rhode Island industrial-recreational building authority;

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     (5) Rhode Island small business loan fund corporation;

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     (6) Quonset development corporation;

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     (7) Rhode Island airport corporation;

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     (8) 1-195 redevelopment district commission;

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     (9) Rhode Island health and educational building corporation;

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     (10) Rhode Island housing and mortgage finance corporation;

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     (11) Rhode Island higher education assistance authority;

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     (12) Rhode Island student loan authority;

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     (13) Narragansett bay commission;

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     (14) Rhode Island clean water finance agency;

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     (15) Rhode Island water resources board;

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     (16) Rhode Island resource recovery corporation.

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     (17) Rhode Island public rail corporation;

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     (18) Rhode Island public transit authority;

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     (19) Rhode Island turnpike and bridge authority;

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     (20) Rhode Island tobacco settlement financing corporation: and

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     (21) Any subsidiary of the Rhode Island economic development corporation.

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     (b) Cities, towns, and any corporation created by a city or town pursuant to ordinance,

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and fire and water districts are not subject to the provisions of this chapter.

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     42-155-4. Role and responsibilities of board members. -- (g) Board members of quasi-

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public corporations shall:

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     (1) Execute oversight of the corporation and the chief executive and other

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     management in the effective and ethical management of the corporation;

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     (2) Understand, review and monitor the implementation of fundamental financial and

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management controls and operational decisions of the corporations;

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     (3) Adopt a code of ethics applicable to each officer, director and employee of the

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corporation that, at a minimum, includes the standards established in chapter 36-14 ("Code of

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Ethics");

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     (4) Adopt a mission statement expressing the purpose and goals of the corporation, a

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description of the stakeholders of the corporation and their reasonable expectations from the

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corporation and a list of measurements by which performance of the corporation and the

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achievement of its goals may be evaluated. Each corporation shall at least once every three (3)

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years publish a self-evaluation based on the stated measurements;

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     (5) Adopt and periodically update an indemnification policy which shall be set forth in

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the bylaws of the corporation: and

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     (6) Perform each of their duties as board members, including, but not limited to, those

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imposed by this section, in good faith and with that degree of diligence, care and skill which an

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ordinarily prudent person in like position would use under similar circumstances, and ultimately

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apply independent judgment in the best interest of the quasi-public corporation, its mission and

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the public;

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     (b) Board members of quasi-public corporations shall establish and maintain written

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policies and procedures for the following:

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     (1) Internal accounting and administrative controls in accordance with the provisions of

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chapter 35-20. the ("Public Corporation Financial Integrity and Accountability Act");

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     (2) Travel, including lodging, meals and incidental expenses; provided however that no

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reimbursement shall exceed the allowable state employee reimbursement amount per day;

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     (3) Grants, charitable and civic donations and/or contributions, provided however that all

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such grants, donations or contributions shall be voted by the full board during an open meeting

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and the vote shall be recorded in the minutes of the meeting, together with:

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     (i) The citation to the specific state statute authorizing the action;

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     (ii) An explanation of how the grant, donation or contribution relates to the quasi-public

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corporation's mission;

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     (iii) The identity of each board member or employee of the quasi-public corporation that

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will receive any benefit from the grant, donation or contribution including without limitation

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tickets to events, meals, and golf;

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     (iv) Any disclosure required by chapter 36-14 ("Code of Ethics"); and

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     (v) Each such grant, donation or contribution shall be clearly identified in the financial

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statements of the quasi-public corporation.

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     (4) Credit card use, provided, however that pursuant to section 35-20-10, no credit card

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shall be used for personal use;

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     (5) Employee reimbursement, including requests by management for business expenses.

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and expenses classified as gifts or entertainment;

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     (6) Personnel, including hiring, dismissing, promoting and compensating employees of

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the quasi-public corporation; a requirement of board approval in an open meeting before a

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position may be created or a vacancy filled;

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     (7) Marketing expenses; and

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     (8) Lobbyists' expenses;

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     (c) The written policies and procedures required by this section and any additional

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written policies and procedures that the board may adopt shall be approved by the board during

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an open meeting and the vote shall be recorded in the minutes of the meeting.

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     (d) Any board member who fails to attend more than fifty percent (50%) of all meetings

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held during any calendar year shall be deemed to have resigned, unless the board member

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requests in writing to the chairperson to serve the remaining term of his or her appointment,

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setting forth the reason or reasons for the absences, and the majority of the board members

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approve the request.

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     (e) No board member shall serve in a paid or voluntary capacity as an officer, employee

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or consultant of the quasi-public corporation.

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     42-155-5. Executive compensation. -- (a) Each quasi-public corporation shall establish a

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committee on executive compensation which shall meet independently of management and which

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shall:

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     (1) Recommend to the full board the compensation packages of the executive and senior

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management of the corporation. The compensation package of the executive officer shall be

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based on a comprehensive and objective analysis of comparable compensation of similar officers

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of state government, other authorities, quasi-public corporations, and private-sector employees

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with similar functions and responsibilities. The committee may retain a consultant to assist in the

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comparability study. When calculating compensation, the committee shall consider the value of

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the retirement plan in the overall compensation package;

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     (2) Prepare clear written job descriptions and clear written expectations of job

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performance for the executive officer and senior management;

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     (3) Conduct the job performance review of the executive officer at least annually; and

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     (4) Negotiate the employment contract of the executive officer which shall be approved

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by the full board during an open meeting.

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     42-155-6. Transparency requirements established. -- The following shall be public

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record, available to the public upon request and posted directly or via direct link, on the website

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of each quasi-public corporation:

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     (1) Job descriptions of the executive director and management;

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     (2) Employment contracts of the executive director and management;

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     (3) Compensation comparability studies of the executive;

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     (4) Quarterly financial statements;

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     (5) Capital improvement plans;

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     (6) Operating budgets;

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     (7) Strategic plan;

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     (8) Agendas and minutes of the open meetings of the board;

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     (9) Quarterly contracting reports required by section 42-90-1;

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     (10) Regulations:

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     (11) Enabling legislation;

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     (12) Mission statement;

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     (13) Board members;

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     (14) Organizational chart;

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     (15) By-laws of the quasi-public corporation;

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     (16) All reports and audits required by this chapter; and

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     (17) Within ten (10) business days of execution, a copy of each contract for legal,

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medical, accounting, engineering, or any other professional, financial, technical, or consultant

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services for the quasi-public corporation, pursuant to the provisions of chapter 38-2 et seq.

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(Access to Public Records Act).

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     42-155-7. Audit of quasi-public corporations. -- (a) Commencing January 1, 2014, and

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every three (3) years thereafter, each quasi-public corporation shall be subject to a performance

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audit conducted in compliance with the generally acceptable governmental auditing standards, by

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the chief of the bureau of audits or a certified public accounting firm qualified in

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performance audits. The chief of the bureau of audits shall establish a rotating schedule

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identifying the year in which each quasi-public corporation shall be audited. The schedule shall

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be posted on the website of the bureau of audits.

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     (b) If the audit is not directly performed by the chief of the bureau of audits, the selection

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of the auditor and the scope of the audit shall be subject to the approval of the chief of the bureau

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of audits.

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     (c) The audit shall be conducted in conformance with subsections 35-7-3(b) through (d).

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     (d) Each quasi-public corporation shall be responsible for all costs associated with its

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own audit.

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     (e) The results of the audit shall be made public upon completion and posted on the

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websites of the bureau of audits and the quasi-public corporation.

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     42-155-8. Outside employment. -- No employee of a quasi-public corporation may

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accept outside employment which will impair his or her judgment as to duties and responsibilities

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in the course of employment with the quasi-public corporation. Generally, outside employment is

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barred if the private employer can benefit from the official actions of the employee of the quasi-

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public corporation.

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     42-155-9. Purchases. -- Notwithstanding any other provision of the general or public

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laws, to the contrary, the corporation shall be considered a public agency and subject to the

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provisions of chapter 37-2 (“State Purchases”).

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     42-155-10. Rules and regulations and other statutes. -- When issuing rules and

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regulations or any amendments to rules and regulations or when adopting by-laws or amendments

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to by-laws each quasi-public corporation shall be subject to the provisions of chapter 42-35 (“The

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Administrative Procedures Act”).

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     42-155-11. Severability. -- If any provision of this chapter or of any rule or regulation

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made under this chapter, or its application to any person or circumstance is held invalid by a court

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of competent jurisdiction, the remainder of the chapter, rule, or regulation and the application of

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the provision to other persons or circumstances shall not be affected by this invalidity. The

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invalidity of any section or sections or parts of any section or sections shall not affect the validity

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of the remainder of the chapter.

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     SECTION 2. This act shall take effect upon passage.

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LC01737/SUB A

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- QUASI-PUBLIC

CORPORATIONS ACCOUNTABILITY AND TRANSPARENCY ACT

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     This act would impose standards of accountability and transparency on quasi-public

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corporations.

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     This act would take effect upon passage.

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LC01737/SUB A

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