2014 -- H 8305

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LC005777

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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

     

     Introduced By: Representative Spencer E.Dickinson

     Date Introduced: June 11, 2014

     Referred To: House Judiciary

     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

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

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CHAPTER 155

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RHODE ISLAND CREDIT RATING AGENCIES ACT OF 2014

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     42-155-1. Short title. -- This chapter shall be known and may be cited as the "Rhode

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Island Credit Rating Agencies Act of 2014."

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     42-155-2. Definitions. -- As used in this chapter, the following words and terms shall

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have the following meanings:

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     (1) "Credit rating agency" means any person or entity which, for monetary fees, dues, or

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on a cooperative nonprofit basis, regularly engages in whole or in part in the practice of

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assembling or evaluating consumer credit information or other information on consumers,

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municipalities, states, or subdivisions thereof for the purpose of furnishing credit reports to third

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parties. The term includes a company or business or entity that assigns credit ratings that

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evaluate:

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     (i) The debtor's ability to pay back the debt by making timely interest payments;

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     (ii) The likelihood of the debtor defaulting on the debt; and

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     (iii) The creditworthiness of issuers of debt obligations or debt instruments.

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     (2) "State actions" shall include any actions of the state, its agencies, or any municipality

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or subdivision thereof.

 

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     42-155-3. Cause of action for improper influence on state actions by credit rating

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agencies. -- (a) No credit rating agency shall determine, adjust, or lower the credit or bond rating

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of the state of Rhode Island, any state agency or any municipality or any political subdivision

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thereof, or threaten to do so, by using reasons other than generally accepted market factors and

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other generally accepted practices, for the purposes of attempting to intimidate or otherwise

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influence state actions. The provisions of this section shall apply to any credit rating agency as

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well as to any persons, subdivisions, or agents acting for or on behalf of a credit rating agency.

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     (b) Upon receipt of a formal request by resolution from either the house of

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representatives or the senate, the department of attorney general shall investigate allegations of a

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violation of this section. In the event the attorney general determines that there has been a

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violation of this section, the attorney general is authorized to initiate a civil action in superior

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court for the county of Providence against any credit rating agency or persons, subdivisions, or

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agent(s) of the credit rating agency. In the event the superior court finds there has been a violation

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of this section, the court may award monetary and injunctive relief, including, but not limited to,

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actual damages sustained by the state as a result of the violation, as well as costs, punitive

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damages, and any other relief that the court deems appropriate, including reasonable attorneys'

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fees.

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     (c) Provided, however, the cause of action provided for under this section shall not

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preclude any other available action under state or federal law, but shall be in addition to any other

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liability arising from the actions set forth in subsection (a) herein. In the event that the attorney

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general, in the course of an investigation initiated pursuant to this section, determines that other

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state and/or federal violations have taken place, the attorney general is authorized to pursue any

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and all causes of action and remedies available on behalf of the state. This may include pursuit of

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actions in any and all appropriate courts, both state and federal, and before any applicable

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administrative boards, departments, or entities.

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     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

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     This act would establish a cause of action for improper influence on state actions by

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credit rating agencies. The act would direct the attorney general to investigate allegations of

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improper influence, and to initiate a civil action in superior court against a credit rating agency in

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the event the attorney general determines there has been a violation of this section. The court

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would be authorized to provide both injunctive and monetary relief in the event that a violation is

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found.

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     This act would take effect upon passage.

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