2014 -- H 7295

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LC003673

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - SELECT COMMISSION TO

INVESTIGATE THE FAILURE OF PUBLIC LOAN GUARANTEE PROGRAMS

     Introduced By: Representatives Chippendale, Morgan, Hull, MacBeth, and Nunes

     Date Introduced: January 30, 2014

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 155

SELECT COMMISSION TO INVESTIGATE THE FAILURE OF PUBLIC LOAN

GUARANTEE PROGRAMS

     42-155-1. Responsibilities of the commission. -- A commission is hereby created

consisting of nine (9) citizens of the state for the purpose of conducting an inquiry into the

creation and administration of loan guarantee programs funded or managed by the state of Rhode

Island, its municipalities, or quasi-public agencies thereof; and the failure of entities of

government which might have prevented the loss of taxpayer dollars related thereto.   The

responsibilities of the commission shall include, but not be limited to:

     (1) Investigation as to the circumstances surrounding the enactment and administration of

the Rhode Island jobs guaranty fund. 

     (2) Investigation of the failed state investment in the 38 Studios video game company.

     (3) Investigation of the administration of the industrial and recreational building

authority.

     (4) Investigation of the failed state investment in the CAPCO steel company.

     (5) Investigation of the role state officials may have played in the administration of the

various loan guarantee programs. 

     (6) Investigation of transactions at the economic development corporation which may

have resulted from improper and/or insider influence and/or information. 

     (7) Investigation of those individuals and entities whose negligence and/or misconduct

directly or indirectly contributed to such financial loss sustained by the state and its citizens.

     (8) Making a public presentation of the evidence uncovered by the aforesaid investigation

at hearings to be conducted by the commission. 

     (9) Making recommendations as to prosecutions of any criminal wrongdoing uncovered

by the investigation at hearings conducted by the commission.

     (10) Making recommendations as to legislation to reform the administration of public

funds by quasi-public entities.

     42-155-2. Composition. – The commission shall be composed of nine (9) members, five

(5) of whom shall be appointed by the governor, one of whom the governor shall designate as

chairman; one member who shall be appointed by the attorney general, one member who shall be

appointed by the speaker of the house of representatives, one member who shall be appointed by

the president of the senate, and one member who shall be appointed jointly by the minority

leaders of the house of representatives and senate. All commission members shall be subject to

the provisions of chapter 14 of title 36, the Rhode Island code of ethics in government, and those

members who are not already subject to the code of ethics shall be required to file a financial

statement pursuant to the provisions of § 36-14-17 within thirty (30) days of his or her

appointment to the commission.

     42-155-3. Quorum. – (a) A quorum of the commission for the transaction of business

shall consist of a majority of its members. Unless otherwise provided, decisions of the

commission shall be by a majority of the votes cast. A vote by any member of the commission

may be cast only in person and not by proxy. A member must be present in person to be counted

toward a quorum. For the purpose of receiving evidence during the investigative phase of

the commission's duties, a quorum shall consist of one member. Transcripts of the testimony of

all witnesses appearing at such sessions shall be maintained. All commission members shall

receive notification of all such meetings.

     (b) All commission hearings and meetings shall be conducted by the chairperson or a

member designated by the chairperson.

     (c) The chairperson shall give posted notice of each hearing or meeting at least forty-

eight (48) hours prior to the time such hearing or meeting is to begin. The commission shall be

subject to chapter 42-46, the "Open meetings law."

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     42-155-4. Powers of the commission – rules and regulations. – The commission is

authorized and empowered to do all things necessary and engage in all activities it deems

necessary to carry out the responsibilities set forth in § 42-155-1. The commission is further

authorized and empowered to adopt by a majority vote of its members, and from time to time to

amend by a majority vote, the rules of procedure which shall govern all facets of the commission

inquiry and the powers and duties of the special counsel which are deemed necessary to carry out

the responsibilities set forth in § 42-155-1.

     42-155-5. Special counsel. – The commission is authorized to supervise special counsel

and such assistant special counsel, investigators, and clerical personnel as are necessary to

implement the duties and responsibilities of this commission in its investigation of the failure of

publicly funded loan guarantee programs. The attorney general is hereby authorized to appoint

and empower special counsel and assistant special counsel as special assistant attorney general

for the purpose of investigating, indicting, informing against and prosecuting criminal acts within

the scope of his/her inquiry. The special counsel and assistant special counsels are hereby

authorized to, with the approval of the governor, bring civil actions in the name of the state of

Rhode Island and the Rhode Island economic development corporation. All criminal and civil

actions commenced pursuant to this authority shall have precedence on all court calendars, and all

hearings and trials in such actions shall be accelerated, subject to applicable procedural rules.

     42-155-6. Subpoena power. – The commission shall have the authority to issue

subpoenas and orders for attendance of witnesses and the production of books, accounts, papers,

documents and records. The members of the commission are hereby severally authorized and

empowered to administer oaths and take oral or written evidence under oath or affirmation. All

subpoenas issued shall be served as subpoenas in civil actions in the superior court are now

served. Any person who shall neglect or refuse to attend and give testimony or to answer any

lawful inquiry or to produce documentary material, may be adjudged in criminal or civil

contempt by the presiding justice of the superior court or his/her designee. The commission and

the superior court shall follow the procedure set forth in § 22-6-2.1. If a person is adjudged to be

in civil contempt, he/she shall remain in contempt until such time as he/she purges himself/herself

of contempt by testifying or producing documentary material. Any person who commits perjury

or false swearing in response to the subpoena or order of the commission shall be subject to the

penalty for perjury pursuant to the provisions of chapter 33 of title 11. Notwithstanding any other

provision of the general laws, any rule or regulation or common law right to the contrary, no

person or business entity shall be allowed to assert a privilege against or interpose an objection to

the production and/or disclosure of books, accounts, papers, documents and records, or

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information maintained in any form pertaining to accounts, loans, and other financial transactions

associated with publicly funded loan guarantee programs which are the subject of this

investigation.

     42-155-7. Immunity of witnesses during commission proceedings. – (a) In the case of

any individual who has been or may be called to testify or provide other information at any

proceeding in connection with the investigation by the commission, the presiding justice of the

superior court or his/her designee shall issue in accordance with subsections (b) and (c) of this

section, upon the request of the chairperson of the commission, an order requiring such

individuals to give testimony or provide other information which he/she refuses to give or provide

on the basis of his/her privilege against self-incrimination. 

     (b) Before issuing an order under subsection (a) of this section the presiding justice shall

be required to specifically find that the request for such an order has been approved by an

affirmative vote of a majority of the members of the commission five (5) days or more prior to

the day on which the request for such an order was made, the attorney general was served with

notice of an intention to request the order.

     (c) The presiding justice or his/her designee, after notice to the witness, shall order the

witness to answer all questions put to him/her or produce the evidence. The witness may not

refuse to comply with the order on the basis of his/her privilege against self-incrimination, but the

witness shall not be prosecuted or subjected to penalty or forfeiture for, or on account of, any

transaction or matter regarding which in accordance with the order, he/she gave answer or

produced evidence, and no testimony or other information compelled under the order or any

information directly or indirectly derived from such testimony or other information shall be used

against the witness in any criminal case except he/she may be prosecuted or subjected to penalty

or forfeiture for any perjury false swearing or contempt committed in answering or failing to

answer or producing, or failing to produce, evidence with the order.

     42-155-8. Funding. – The members of the commission shall serve without compensation.

All expenses incurred by the commission including the cost of the special counsel and assistant

special counsels shall be paid out of the general revenue of the state of Rhode Island.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - SELECT COMMISSION TO

INVESTIGATE THE FAILURE OF PUBLIC LOAN GUARANTEE PROGRAMS

***

     This act would establish a select commission to investigate the failure of public loan

guarantee programs and prescribes its powers and duties.

     This act would take effect upon passage.

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