2014 -- H 8305

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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:

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

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

CHAPTER 155

RHODE ISLAND CREDIT RATING AGENCIES ACT OF 2014

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

Island Credit Rating Agencies Act of 2014."

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

have the following meanings:

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

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

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

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

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

evaluate:

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

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

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

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

or subdivision thereof.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

fees.

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

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

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

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

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

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

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

administrative boards, departments, or entities.

     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

***

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

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

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

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

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

found.

     This act would take effect upon passage.

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