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art.007/9/007/8/007/7/007/6/007/5/007/4/007/3/007/2/007/1

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     ARTICLE 7

RELATING TO HIGHER EDUCATION ASSISTANCE AUTHORITY

     SECTION 1. Chapter 16-37 entitled "Best and Brightest Scholarship Fund" is hereby

repealed.

     16-37-1 Short title. -- This chapter shall be known and may be cited as the "Best and

Brightest Scholarship Act."

     16-37-2 Establishment of scholarship fund. – There is established the best and brightest

scholarship fund, sometimes referred to as the "fund" or the "scholarship fund," which shall be

utilized to attract the best and the brightest of the state's high school graduates, as defined in this

chapter, into public school teaching within the state. The general assembly shall annually

appropriate any funds as it deems necessary to implement the purposes of this chapter.

     16-37-3 Scholarship committee – Members – Meetings – Officers. – There is

established the best and brightest scholarship committee, consisting of nine (9) members: one

shall be the commissioner of elementary and secondary education, or the commissioner's

designee; one shall be the commissioner of higher education, or the commissioner's designee; one

shall be the president of the Rhode Island Federation of Teachers, or the president's designee; one

shall be the president of the National Education Association of Rhode Island, or the president's

designee; one shall be the president of the Rhode Island association of school committees, or the

president's designee; one shall be the president of the Rhode Island Association of

Superintendents of Schools, or the president's designee; one shall be the executive director of the

Rhode Island higher education assistance authority, or the director's designee; and two (2) shall

be the parents of public or private school students, to be appointed by the governor for a two (2)

year term. The committee shall elect a chairperson, vice-chairperson, secretary, and treasurer for

one year terms.

     16-37-4 Scholarship committee – Powers. – The committee is authorized and

empowered:

     (1) To adopt rules and regulations designed to implement the provisions of this chapter;

     (2) To adopt selection criteria, consistent with this chapter, for best and brightest

scholars;

     (3) To select annually the best and brightest scholars;

     (4) To grant appropriate extensions pursuant to § 16-37-8;

     (5) To supervise the disbursement of the best and brightest scholarship fund;

     (6) To work in cooperation with the Rhode Island higher education assistance authority

which is directed to provide the committee with staff assistance necessary to carry out the

purposes of this chapter;

     (7) To receive donations and grants from sources including, but not limited to, the federal

government, governmental and private foundations, and corporate and individual donors; these

donations and grants to be deposited in the scholarship fund.

     16-37-5 Eligibility for scholarship. – To be considered for the scholarship, all applicants

must:

     (1) Be a graduating senior at a public, parochial, or private high school in Rhode Island;

     (2) Be accepted for admission at an accredited college or university in the United States

or Canada;

     (3) Achieve one or more of the following distinctions:

     (i) Be in the top ten percent (10%) of the applicant's graduating class as of the end of the

second quarter of the senior year;

     (ii) Have a score in the ninetieth (90th) percentile or above on either the mathematics or

verbal section of the scholastic aptitude test (S.A.T.);

     (iii) Have a combined mathematics and verbal S.A.T. score in the eighty-fifth (85th)

percentile or above.

     16-37-6 Award of scholarship – Conditions. – At any time that sufficient funds become

available the committee shall award scholarships in the amount of five thousand dollars ($5,000)

for each of the four (4) years of college attendance to each of the eligible applicants which the

committee deems to be most qualified for the scholarship; provided, that to maintain entitlement

to the scholarship each recipient must:

     (1) Be enrolled as a full time student in an accredited college or university;

     (2) Pursue a course of study leading to Rhode Island teacher certification; and

     (3) Maintain satisfactory progress as determined by the college or university attended by

the recipient.

     16-37-7 Requirement of public school teaching services. – Each recipient of the

scholarship shall be required to teach in the public schools of this state for two (2) years for each

year of scholarship assistance. This requirement must be completed within ten (10) years of

college graduation if the scholarship was used for all four (4) years of college, within eight (8)

years if used for three (3) full years of college, within six (6) years if used for two (2) full years of

college, and within four (4) years if used for one full year of college; provided, however, that a

recipient shall be granted an extension of the requirement upon a showing by the recipient that he

or she:

     (1) Returns to a full time course of study related to the field of public school teaching or

administration;

     (2) Is serving, not in excess of three (3) years, as a member of the armed forces of the

United States;

     (3) Is temporarily totally disabled for a period of time not to exceed three (3) years as

established by the sworn affidavit of a qualified physician; or

     (4) Is seeking and unable to find employment in Rhode Island as a certified public school

teacher.

     16-37-8 Failure to comply with § 16-37-7 – Exceptions. – Any recipient who fails to

comply with the requirements of § 16-37-7 shall be required to reimburse the scholarship fund for

all money received by the recipient, together with interest at a rate to be set by the Rhode Island

higher education assistance authority in conformity with the interest rate of the guaranteed

student loan program in effect at the time any required repayment begins; provided, that no

person shall be required to reimburse the fund who has become permanently disabled as

determined by a physician qualified by this state to render this opinion.

     16-37-9 Severability. – If any provision of this chapter or of any rule or regulation made

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

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

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

of any section or sections or parts of any section or sections of this chapter shall not affect the

validity of the remainder of this chapter.

     SECTION 2. Sections 16-41-3 and 16-41-5 of the General Laws in Chapter 16-41

entitled "New England Higher Education Compact" are hereby amended to read as follows:

     16-41-3 Rhode Island board members – Qualifications. – (a) The authority governor

shall appoint four (4) resident members from Rhode Island who shall serve in accordance with

article II of the compact. In the month of May in each year the authority governor shall appoint

successors to those members of the compact whose terms shall expire in that year, to hold office

on the first day of June in the year of appointment and until the first day of June in the third year

after their successors are appointed and qualified.

     (b) The president of the senate shall appoint two (2) members of the senate to serve in

accordance with article II for the member's legislative term.

     (c) The speaker of the house shall appoint two (2) members of the house to serve in

accordance with article II for the member's legislative term.

     (d) Any vacancy of a member which shall occur in the commission shall be filled by the

appointing authority for the remainder of the unexpired term. All members shall serve without

compensation but shall be entitled to receive reimbursement for reasonable and necessary

expenses actually incurred in the performance of their duties.

     16-41-5 Repayment of loans. – (a) Dental, medical, optometry, osteopathic, and

veterinary medical students that attend schools under the Rhode Island health professions contract

program which are supported by funds from the state may decrease their indebtedness to the state

under the following options:

     (1) Upon completion of his or her dental, medical, optometry, osteopathic, or veterinary

training, including internship and residency training, a student who establishes residency in the

state will be relieved of fifteen percent (15%) of that indebtedness per year for each year that the

student is employed by the state in a full time capacity for a maximum cancellation of seventy-

five percent (75%) for five (5) years of employment.

     (2) Any graduate who establishes residency in the state will be relieved of ten percent

(10%) of that indebtedness per year for each year that he or she practices dentistry, medicine,

optometry, osteopathy, or veterinary medicine in the state in a full time capacity for a maximum

cancellation of fifty percent (50%) for five (5) years of practice.

     (b) In no event shall any student's cancellation of indebtedness under subsection (a)

exceed seventy-five percent (75%).

     (c) In no event shall any student be entitled to a refund of any sums paid on his or her

indebtedness by virtue of the provisions of this section.

     (d) The authority office of the postsecondary commissioner shall promulgate rules and

regulations which are necessary and proper to promote the full implementation of this section.

     SECTION 3. Sections 16-56-3, 16-56-7, 16-56-8, 16-56-9 and 16-56-13 of the General

Laws in Chapter 16-56 entitled "Postsecondary Student Financial Assistance" are hereby

repealed.

     16-56-3 General eligibility requirements. – (a) Eligibility of individuals. An applicant

is eligible for a monetary award when the authority finds:

     (1) That the applicant is a resident of this state;

     (2) That the applicant is enrolled or intends to be enrolled in a program of study which

leads to a certificate or degree at an eligible postsecondary institution;

     (3) That the applicant exhibits financial need.

     (b) Eligibility of institutions. An applicant may apply for an award for the purpose of

attending an institution of postsecondary education whether designated as a university, college,

community college, junior college, or scientific or technical school, which either:

     (1) Is an institution that has gained accreditation from an accrediting agency which is

recognized by the United States office of education; or

     (2) Has gained the explicit endorsement from the authority for the purpose of Rhode

Island postsecondary student financial assistance.

     § 16-56-7 Need based scholarships. – (a) Amount of funds allocated. In accordance with

authority policies, the authority shall allocate annually to need based scholarships any portion of

the total appropriation to this chapter as it may deem appropriate for the purpose of carrying out

the provisions of this section.

     (b) Definitions.

     (1) "Educational costs" means the same as defined in § 16-56-6.

     (2) "Family contribution" means the same as defined in § 16-56-6.

     (3) "Federal grant assistance" means the same as defined in § 16-56-6.

     (4) "Self-help" means the same as defined in § 16-56-6.

     (5) "State grant assistance" shall be of any sum awarded to the student as determined in

need based grants pursuant to § 16-56-6.

     (c) Eligibility of individuals. Eligibility for need based scholarships shall be determined

by the authority when it is established that the applicant is found to meet the general eligibility

requirements as stated in § 16-56-3; and that the applicant is judged to be an outstanding student

on the basis of criteria approved by the authority. The criteria, at a minimum, shall consider the

following:

     (1) A student's scholastic ability and promise; and/or

     (2) A student's subject competencies including those that might extend beyond the

academic fields.

     (d) Amount of the awards. The amount of the need based scholarships shall be not less

than two hundred and fifty dollars ($250) and no greater than two thousand dollars ($2,000) and

shall be based upon the following formula: need equals educational costs less the sum of family

contribution plus self-help plus federal grant assistance plus state grant assistance. Honorary

awards shall be presented to students who are determined to have insufficient financial need for

monetary awards.

     (e)(1) Number and terms of awards. The number of awards to be granted in any one fiscal

year shall be contingent upon the funds allocated to this section. Students determined to be most

outstanding shall receive priority for an award.

     (2) Each award is renewable by the authority annually for a period of time equivalent to

what is reasonably required for the completion of a baccalaureate or associate degree. The

authority shall grant a renewal only upon the student's application and upon the authority's

finding that:

     (i) The applicant has completed successfully the work of the preceding year and has

demonstrated continued scholarly achievement;

     (ii) The applicant remains a resident of this state; and

     (iii) The applicant's financial situation continues to warrant receipt of a monetary award.

     16-56-8 Need based work opportunities. – (a) Amount of funds allocated. The authority

shall allocate an amount annually to need based work opportunities not exceeding twenty percent

(20%) of the total appropriation to this chapter.

     (b) Eligibility of individuals. Eligibility for need based work opportunities shall be

determined by the authority when it is established that the applicant is found to meet the general

eligibility requirements stated in § 16-56-3.

     (c) Number and terms of work opportunities.

     (1) Each applicant is eligible for consideration for participation in need based work

opportunities for a period of time equivalent to what is reasonably required for the completion of

the baccalaureate or associate degree. The authority shall grant a renewal only upon the student's

application and upon the authority's finding that:

     (i) The applicant has completed successfully the academic work of the preceding year;

     (ii) The applicant remains a resident of this state; and

     (iii) The applicant's financial situation continues to warrant the work opportunities.

     (2) If the funds available are insufficient to satisfy fully the financial need of the total

number of applicants, priorities shall be determined by the authority.

     (d) Suitable employment. Students may enter into employment with agencies deemed

eligible for participation in the federal college work study program.

     16-56-9 Granting of awards. – The authority may distribute the funds allocated to the

need based work opportunity program to eligible Rhode Island institutions or directly to eligible

students as the authority may deem appropriate.

     16-56-13 Income exclusion from financial aid needs test. – Notwithstanding any other

provision of this chapter, chapter 57 of this title, or any other general or public law, or regulations

issued pursuant to these, to the extent permitted by federal law, the first twenty-five thousand

dollars ($25,000) of Rhode Island savings bond investment or the first twenty-five thousand

dollars ($25,000) of United States savings bonds issued after December 31, 1989 or any

combination of these not exceeding twenty-five thousand dollars ($25,000) shall not be

considered in evaluating the financial situation of a student, or be deemed a financial resource of

or a form of financial aid or assistance to the student, for the purposes of determining the

eligibility of the student for any guaranteed loan, scholarship, grant, monetary assistance, or need

based work opportunity, awarded by the Rhode Island higher education assistance authority or the

state pursuant to any other law of this state; nor shall any Rhode Island savings bond investment

or United States savings bonds issued after December 31, 1989, provided for a student reduce the

amount of any guaranteed loan, scholarship, grant, or monetary assistance which the student is

entitled to be awarded by the Rhode Island higher education assistance authority in accordance

with any other law of this state.

     SECTION 4. Sections 16-56-2, 16-56-5, 16-56-6, and 16-56-10 of the General Laws in

Chapter 16-56 entitled "Postsecondary Student Financial Assistance" are hereby amended to read

as follows.

     16-56-2 General appropriation. -- (a) The general assembly shall appropriate annually a

sum to provide postsecondary financial assistance pay every award authorized by §§ 16-56-2 –

16-56-12. For each fiscal year the appropriation shall be determined by multiplying forty percent

(40%) of the October enrollment for the prior four (4) June graduating classes eligible for new or

renewed awards times one thousand dollars ($1,000). This sum may be supplemented from time

to time by other sources of revenue including but not limited to federal programs.

     (b) Notwithstanding the provisions of subsection (a), the sums appropriated in each fiscal

year are the sums appropriated for this purpose in Article 1 of P.L. 1992, ch. 133.

     16-56-5 Annual evaluation. -- An evaluation of this chapter shall be performed annually

by the authority office of the postsecondary commissioner. The evaluation shall provide, as a

minimum, a summary of the following information relating to award recipients: family income,

student financial needs, basic educational opportunity grant awards, state awards, institutional

based student assistance awards, federally guaranteed loans, other student assistance, institution

attended, and other pertinent information.

     16-56-6 Need based grants. -- (a) Amount of funds allocated. In accordance with

authority policies, the authority shall allocate annually to need based grants any portion of the

total appropriation to this chapter as it may deem appropriate for the purpose of carrying out the

provisions of this section. The commissioner of postsecondary education shall allocate annually

the appropriation for need based scholarships and grants. Of the total amount appropriated for

need based scholarship and grants, the lesser of twenty percent (20%) or two million dollars

($2,000,000) shall be distributed to qualified students attending participating independent, non-

profit, higher education institutions in Rhode Island. The remainder of funds shall be limited to

public higher education institutions in Rhode Island. As part of the annual budget submission, the

office of postsecondary commissioner shall include a plan of how the need based scholarship and

grant funds will be allocated to each public institution receiving funds pursuant to this chapter,

and how the funds will be distributed to students attending independent, non-profit institutions.

     (b) Definitions. The following words and phrases have the following definitions for the

purpose of this chapter except to the extent that any of these words or phrases is specifically

qualified by its context:

     (1) "Educational costs" shall be equal to the costs to a student attending the institution of

the student's choice.

     (2) "Family contribution" shall be the sum expected to be contributed by the family,

which amount shall be determined by an approved needs analysis system.

      (3) "Federal grant assistance" shall be that grant-in-aid which is provided by the federal

government to students for the purpose of attending postsecondary education. This assistance

may include, but not necessarily be limited to, basic educational opportunity grants, social

security benefits, and veterans survivors' benefits.

      (4) "Self-help" shall be a sum determined by the authority and shall be a total determined

by considering the ability of the student to earn or borrow during full time enrollment.

     (b)(c) Eligibility of individuals. Eligibility for need based grants and scholarships shall be

determined by the authority when it is established that the applicant is found to meet the general

eligibility requirements stated in § 16-56-3 office of the postsecondary commissioner.

     (d) Amount of the awards. The amount of the need based grants shall be not less than two

hundred and fifty dollars ($250) and no greater than two thousand dollars ($2,000) and shall be

based upon the following formula: need equals educational cost less the sum of family

contribution plus self-help plus federal grant assistance.

     (c)(e) Number and terms of awards. (1) The number of awards to be granted in any one

fiscal year shall be contingent upon the funds allocated to this section.

     (2) If the funds available are insufficient to satisfy fully the financial need of the eligible

students, priority of students shall be determined by the authority.

     (3) Each applicant is eligible for consideration for an award for a period of time

equivalent to what is required for the completion of a baccalaureate or associate degree on a full

time basis. The authority shall grant a renewal only upon the student's application and upon the

authority's finding that:

     (i) The applicant has completed successfully the work of the preceding year;

     (ii) The applicant remains a resident of the state; and

     (iii) The applicant's financial situation continues to warrant receipt of a monetary award.

     16-56-10 Rules and regulations. -- In addition to the powers and duties prescribed in

previous sections of this chapter, the authority office of the postsecondary commissioner shall

promulgate rules and regulations and take any other actions which will promote the full

implementation of all provisions of this chapter.

     SECTION 5. Sections 16-57-5, 16-57-6, 16-57-6.6, 16-57-11, 16-57-13, 16-57-14, 16-

57-15 and 16-57-17 of the General Laws in Chapter 16-57 entitled "Higher Education Assistance

Authority" [See Title 16 Chapter 97 – The Rhode Island Board of Education Act] are hereby

repealed.

     16-57-5 General powers. – The authority shall have all of the powers necessary and

convenient to carry out and effectuate the purposes and provisions of this chapter, including

without limiting the generality of the foregoing the power:

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

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

facsimile of it, to be impressed or affixed or in any other manner reproduced.

     (3) To acquire the assets and assume the liabilities or to effect the merger into itself of

any corporation or other organization incorporated or organized under the laws of this state,

which corporation or organization has as its principal business the guaranteeing of loans to

students in eligible institutions, all upon any terms and for any consideration as the authority shall

deem to be appropriate.

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

of interest as the authority may determine.

     (5) To make and execute all contracts, agreements, and instruments necessary or

convenient in the exercise of the powers and functions of the authority granted by this chapter.

     (6) To lend money for its purposes, and to invest and reinvest its funds.

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

powers granted by this chapter, within or without the state.

     (8) To elect, appoint, or employ in its discretion officers and agents of the authority, and

define their duties.

     (9) To make and alter bylaws, not inconsistent with this chapter, for the administration

and regulation of the affairs of the authority, and the bylaws may contain provisions indemnifying

any person who is or was a director, officer, employee, or agent of the authority, in the manner

and to the extent provided in § 7-1.2-814.

     (10) To have and exercise all powers necessary or convenient to effect its purposes.

     16-57-6 Additional general powers. – (a) In addition to the powers enumerated in § 16-

57-5, the authority shall have power:

     (1) To guarantee one hundred percent (100%) of the unpaid principal and accrued interest

of any eligible loan made by a lender to any eligible borrower for the purpose of assisting the

students in obtaining an education in an eligible institution.

     (2) To procure insurance of every nature to protect the authority against losses which may

be incurred in connection with its property, assets, activities, or the exercise of the powers granted

under this chapter.

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

assistance and advice to any person, firm, partnership, or corporation, whether the advisee is

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

     (4) When the authority deems it necessary or desirable, to consent to the modification,

with respect to security, rate of interest, time of payment of interest or principal, or any other term

of a bond or note, contract, or agreement between the authority and the recipient or maker of a

loan, bond, or note holder, or agency or institution guaranteeing the repayment of, purchasing, or

selling an eligible loan.

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

and technical assistance and advice, and to employ attorneys, accountants, financial experts, and

any other advisers, consultants, and agents as may be necessary in its judgment, and to fix their

compensation.

     (6) To contract for and to accept any gifts, grants, loans, funds, property, real or personal,

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

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

state, or from any other source, and to comply, subject to the provisions of this chapter, with the

terms and conditions of those entities. Loans provided pursuant to subsection (b) of this section

shall be repaid to the authority and deposited as general revenues of the state.

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

purposes of this chapter, including without limitation rules and regulations:

     (i) To insure compliance by the authority with the requirements imposed by statutes or

regulation governing the guaranty, insurance, purchase, or other dealing in eligible loans by

federal agencies, instrumentalities, or corporations,

     (ii) To set standards of eligibility for educational institutions, students, and lenders and to

define residency and all other terms as the authority deems necessary to carry out the purposes of

this chapter, and

     (iii) To set standards for the administration of programs of postsecondary student

financial assistance assigned by law to the authority, including but not limited to savings

programs. Administrative rules governing savings programs shall authorize the authority, in

conjunction with the executive director of the Rhode Island student loan authority and the

commissioner of higher education, to negotiate reciprocal agreements with institutions in other

states offering similar savings programs for the purpose of maximizing educational benefits to

residents, students and institutions in this state.

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

and a method for enforcing these.

     (9) To set and collect fees and charges, in connection with its guaranties and servicing,

including without limitation reimbursement of costs of financing by the authority, service

charges, and insurance premiums and fees and costs associated with implementing and

administering savings programs established pursuant to this chapter. Fees collected due to the

Rhode Island work study program or due to unclaimed checks shall be deposited as general

revenues of the state.

     (10) To enter into an agreement with any university to secure positions for Rhode Island

applicants in a complete course of study in its school of veterinary medicine, medicine, dentistry,

optometry, and three (3) positions in osteopathic medicine and to guarantee and pay the

university for each position.

     (11) To enter into agreements with loan applicants providing preferential rates and terms

relative to other applicants; provided, that the loan applicants agree to work in a licensed child

care facility in Rhode Island for at least two (2) years upon completion or graduation in a course

of study in early childhood education or child care.

     (12) To develop and administer, in conjunction with the executive director of the Rhode

Island student loan authority and the commissioner of higher education, savings programs on

behalf of itself, the state, students, parents, or any other private parties, all in cooperation with

any other public and private parties and in accordance with any criteria or guidelines as the

authority shall deem appropriate to effectuate the purposes of this chapter. To the extent

practicable, these savings programs shall provide students, parents, and others an opportunity to

participate conveniently and shall enable them to set aside relatively small amounts of money at a

time and shall incorporate or be available in conjunction with, directly or indirectly, tuition

agreements from as many eligible institutions as feasible.

     (13) In connection with any savings program, the authority may accept, hold, and invest

funds of students, parents, institutions of higher education, and others and may establish special

accounts for carrying out the purposes of this chapter.

     (14) To enter into contracts with institutions of higher education, financial institutions,

financial consultants, attorneys, and other qualified entities on terms and conditions and for a

term as it may deem advisable or desirable for the purpose of establishing and maintaining

savings programs authorized pursuant to this chapter.

     (15) To create and supervise a marketing plan dedicated to the promotion of savings

programs created pursuant to this chapter and to hire professional consultants and attorneys for

these purposes.

     (16) To assist the general treasurer in the implementation of the college and university

savings bond program established under chapter 15 of title 35.

     (b) The authority shall enter into agreements with the prospective students to the

university for the repayment by the students of the money advanced under any terms and

conditions as are reasonable. The authority may charge students interest on the money advanced

under this chapter at a fixed or variable rate not exceeding the greater of seven and one-half

percent (7 1/2%) per annum or the maximum rate allowable under 42 U.S.C. § 292 et seq. and the

regulations promulgated under that act by the United States office of education.

     16-57-6.6. Exclusion from financial aid needs test. -- Notwithstanding any other

provision of this chapter or chapter 56 of this title, no moneys invested in the tuition savings

program shall be considered to be an asset for purposes of determining an individual's eligibility

for a need based grant, need based scholarship or need based work opportunity offered by the

state under the provisions of chapter 56 of this title.

     16-57-11 Exemption from taxation. – (a) The exercise of the powers granted by this

chapter will be in all respects for the benefit of the people of this state, the increase of their

commerce, welfare, and prosperity and for the improvement of their living conditions and will

constitute the performance of an essential governmental function and the authority shall not be

required to pay any taxes or assessments upon or in respect of any transaction or of any property

or money of the authority, levied by any municipality or political subdivision of the state.

      (b) The authority shall not be required to pay state taxes of any kind, and the authority,

its property, and money shall at all times be free from taxation of every kind by the state and by

the municipalities and all political subdivisions of the state. The authority shall not be required to

pay any transfer tax of any kind on account of instruments recorded by it or on its behalf.

     § 16-57-13 Authorization to accept appropriated money. – The authority is authorized

to accept any money as may be appropriated by the general assembly for effectuating its

corporate purposes including, without limitation, the payment of the initial expenses of

administration and operation and the establishment of reserves or contingency funds to be

available for the payment of obligations of the authority and to reimburse the authority for sums

forgiven pursuant to § 16-41-5.

     16-57-14 Assistance by state officer, departments, boards, and commissions. – (a) All

state agencies may render any services to the authority within their respective functions as may be

requested by the authority.

     (b) Upon request of the authority, any state agency is authorized and empowered to

transfer to the authority any officers and employees as it may deem necessary to assist the

authority in carrying out its functions and duties under this chapter. Officers and employees

transferred shall not lose their civil service status or rights.

     16-57-15 Annual report. – The authority shall submit to the governor within four (4)

months after the close of its fiscal year a report of its activities for the preceding fiscal year, and

the report shall set forth a complete operating and financial statement covering the authority's

operations during the preceding fiscal year. The authority shall include in its report the names and

addresses of each recipient. The authority shall cause an audit of its books and accounts to be

made at least once each fiscal year by certified public accountants selected by it and its cost shall

be paid by the authority from funds available to it pursuant to this chapter.

     16-57-17 Other statutes. – Nothing contained in this chapter shall restrict or limit the

powers of the authority arising under any laws of this state except where those powers are

expressly contrary to the provisions of this chapter. This chapter shall be construed to provide a

complete additional and alternative method for doing the things authorized by it and shall be

regarded as supplemental and in addition to the powers conferred by other laws. The making of

any guaranty under the provisions of this chapter need not comply with the requirements of any

other statute applicable to the making of guaranties. Except as provided in this chapter no

proceedings or notice of approval shall be required for the making of any guaranty.

     SECTION 6. Sections 16-57-1, 16-57-2, 16-57-3, 16-57-4, 16-57-6.1, 16-57-6.2, 16-57-

6.3, 16-57-6.5, 16-57-7, 16-57-8, 16-57-9, 16-57-10 and 16-57-12 of the General Laws in Chapter

16-57 entitled "Higher Education Assistance Authority" [See Title 16 Chapter 97 – The Rhode

Island Board of Education Act] are hereby amended to read as follows:

     16-57-1 Short title. -- This chapter shall be known as the "Rhode Island Higher

Education Assistance Authority Act".

     16-57-2 Findings. -- The purpose of this chapter is to authorize a system of financial

assistance, consisting of loan guaranties, savings programs, and other aids, for qualified students,

parents, and others responsible for paying the costs of education to enable them to obtain an

education beyond the high school level by attending public or private educational institutions.

The general assembly has found and declares that it is in the public interest and essential to the

welfare and well being of the inhabitants of the state and to the proper growth and development

of the state to foster and provide financial assistance to qualified students, parents, and others

responsible for paying the costs of education in order to help prospective students to obtain an

education beyond the high school level. The general assembly has found that many inhabitants of

the state who are fully qualified to enroll in appropriate educational institutions for furthering

their education beyond the high school level lack the financial means and are unable, without

financial assistance as authorized under this chapter, to pay the cost of their education, with a

consequent irreparable loss to the state of valuable talents vital to its welfare. The general

assembly also recognizes that educational institutions for higher education are in need of

appropriate additional means to provide financial assistance to qualified students, parents, and

others responsible for paying the costs of education. The general assembly has determined that

the establishment of a proper system of financial assistance, containing eligibility opportunities

for students and residents of this state and other states serves a public purpose and is fully

consistent with the long established policy of the state to encourage, promote, and assist the

education of the people of the state. The general assembly further finds that higher education

financial assistance needs of Rhode Islanders will be better served by transferring all of the

functions and programs of the Rhode Island higher education assistance authority to the Rhode

Island division of higher education assistance and the office of the general treasurer.

     16-57-3 Definitions. -- As used in this chapter, the following words and terms have the

following meanings unless the context indicates another or different meaning or intent:

     (1) "Authority" means the governmental agency and public instrumentality previously

authorized, created, and established pursuant to § 16-57-4.

      (2) "Commissioner of higher postsecondary education" means the commissioner

appointed by the Rhode Island board of governors for higher education council on postsecondary

education pursuant to § 16-59-6 or his or her designee.

     (3)"Eligible borrower" means a student, or the parent of a student, who is either a resident

of the state or who, under rules promulgated by the authority office, is qualified to make an

eligible loan.

     (4) "Eligible institution", subject to further particular or more restrictive definition by

regulation of the authority office, means:

     (i) An institution of higher learning;

     (ii) A vocational school; or

     (iii) With respect to students who are nationals of the United States, an institution outside

the United States which is comparable to an institution of higher education or to a vocational

school and which has been approved by the authority and by the commissioner of postsecondary

education for purposes of the guaranteed student loan program.

     (5) "Eligible loan" means a loan to a student or to the parent of a student insured or

guaranteed by the commissioner of postsecondary education, by the authority, or by any other

governmental or private agency, corporation, or organization having a reinsurance or guaranty

agreement with the commissioner applicable to the student loan.

     (6) "Guaranteed student loan program" means the program of federal student loan

insurance and reinsurance administered by the commissioner of postsecondary education.

     (7) "Lender", subject to further particular or more restrictive definition by regulation of

the authority office, means any governmental or private agency, corporation, organization, or

institution designated as an "eligible lender" by federal statute, regulation, or administrative

ruling for the purposes of the guaranteed student loan program.

     (8) "Participant" means an individual, corporation, trust or other "person" within the

meaning of § 529 of the Internal Revenue Code [26 U.S.C. § 529], who makes contributions to

the tuition savings program established pursuant to § 16-57-6.1 for purposes of paying qualified

higher education expenses on behalf of a beneficiary.

     (9) "Participating institution" means an institution for higher education which agrees to

participate in a savings program or prepaid tuition program established pursuant to this chapter.

     (10) "Prepaid tuition program" means a program administered by the authority division,

in conjunction with the executive director of the Rhode Island Student Loan Authority, and the

commissioner of postsecondary higher education, which provides a means for qualified students,

parents and others responsible for paying the costs of education to fix all or a portion of the direct

cost of attendance at participating institutions in one or more future years.

     (11) "Program" means the tuition savings program established pursuant to § 16-57-6.1.

     (12) "Qualified higher education expenses" means the costs of tuition, fees, books,

supplies and equipment required for enrollment or attendance at an institution of higher

education, and other education costs defined by federal law.

     (13) "Secretary" means the United States secretary of education.

     (14) "State" means the state of Rhode Island and Providence Plantations.

     (15)"Student", as used with reference to the guaranteed student loan program and the

parent loan program, means an individual who, under rules promulgated by the authority division,

is enrolled or accepted for enrollment at an eligible institution and who is making suitable

progress in his or her education toward obtaining a degree or other appropriate certification in

accordance with standards acceptable to the authority.

     (16) "Tuition savings program" or "Savings program" means a program approved and

administered by the authority General Treasurer, in conjunction with the executive director of the

Rhode Island Student Loan Authority, and the commissioner of postsecondary higher education,

designed to facilitate and encourage savings by or on behalf of students, future students and

parents for the purpose of paying the costs of attending institutions of higher education.

     (17) "Council" means the council on postsecondary education established pursuant to §

16-59-1.

     (18) "Division" means the Rhode Island division of higher education assistance, the

division authorized, created and established pursuant to § 16-57-4.

     16-57-4 Creation. -- (a) There is authorized, created, and established within the office of

the commissioner of postsecondary education, a division of higher education assistance hereby

granted and authorized to use all of public corporation of the state having a distinct legal

existence from the state and not constituting a department of state government, which is a

governmental agency and public instrumentality of the state, to be known as the "Rhode Island

higher education assistance authority" with the powers set forth in this chapter, for the purposes

of guaranteeing eligible loans to students in eligible institutions and to parents of those students

and of administering other programs of postsecondary student financial assistance assigned by

law to the authority division.

     (b) The exercise by the authority division of the powers conferred by this chapter shall be

deemed and held to be the performance of an essential governmental function of the state for

public purposes. It is the intent of the general assembly by the passage of this chapter to vest in

the authority division office all powers, authority, rights, privileges, and titles which may be

necessary to enable it to accomplish the purposes set forth in this section and this chapter and the

powers granted by it shall be liberally construed in conformity with these purposes.

     (c) The authority and its corporate existence shall be terminated on July 1, 2015 or upon

approval by the U.S. department of education, whichever is later, and continue until terminated

by law or until the authority shall cease entirely and continuously to conduct or be involved in

any business in furtherance of its purposes; provided, that no termination shall take effect so long

as the authority shall have guaranties or other obligations outstanding, unless adequate provision

shall have been made for the payment of the obligations pursuant to the documents securing them

or to this law. Upon termination of the existence of the authority, all its rights and properties shall

pass to and be vested in the state. At no time shall the assets or other property of the authority

inure to the benefit of any person or other corporation or entity. division of higher education

assistance, except as otherwise provided in § 16-57-6.1 and except for any real property held by

the authority, the legal title to which is hereby passed to and vested in (in trust for the state) the

council on postsecondary education. The division shall continue until terminated by law or until

the division shall cease entirely and continuously to conduct or be involved in any business in

furtherance of its purposes; provided, that no termination shall take effect so long as the division

shall have guaranties or other obligations outstanding, unless adequate provision shall have been

made for the payment of the obligations pursuant to the documents securing them or to this law.

Upon termination of the existence of the division, all its rights and properties shall pass to and be

vested in the state. At no time shall the assets or other property of the division inure to the benefit

of any person or other corporation or entity.

     (d) Except as provided in § 16-57-6.1, effective July 1, 2015 or upon approval by the

U.S. department of education, whichever is later:

     (i) All functions formerly administered by the Rhode Island higher education assistance

authority are hereby transferred to the Rhode Island division of higher education assistance;

     (ii) The Rhode Island division of higher education assistance shall assume all rights,

duties, assets, liabilities and obligations of the former Rhode Island higher education assistance

authority and the Rhode Island division of higher education assistance shall be considered to be

the successor-in-interest to the Rhode Island higher education assistance authority; and

     (iii) All contracts and agreements of whatsoever kind of the Rhode Island higher

education assistance authority are hereby assigned, transferred to and assumed by the Rhode

Island division of higher education assistance.

     (e) Upon the completion of the transfer, the corporation known as the "Rhode Island

higher education assistance authority" shall cease to exist. Whenever in any general law or public

law reference is made to the "Rhode Island higher education assistance authority," the reference

shall be deemed to refer to and mean the "Rhode Island division of higher education assistance,"

which also may be referred to as the "division."

     16-57-6.1 Tuition savings program. -- (a) The authority general treasurer shall, in

conjunction with the division, the state investment commission, executive director of the Rhode

Island student loan authority and the commissioner of higher postsecondary education, shall

establish in any form as it he or she deems appropriate, a tuition savings program to allow persons

to save money for the sole purpose of meeting qualified higher education expenses.

     (b) All money received in connection with the tuition savings program shall be

segregated from all other funds of the authority into two (2) funds, a program fund and an

administrative fund. No more than two percent (2%) of money in the program fund may be

transferred annually to the administrative fund for the purpose of paying operating costs of

administering the tuition savings program. Money accrued by participants in the program fund

may be used for payments to an eligible institution. All proceeds from the tuition savings program

shall be directed to the administrative fund, and to the extent they exceed the operating costs of

administering the tuition savings program, said excess shall be used for financial aid related

activities in Rhode Island pursuant to § 16-56-6.

     (c) The state investment commission shall invest money within the program fund in any

investments which are authorized by the general laws, including equities and fixed income

securities. The composition of investments shall be determined by the state investment

commission, subject to the approval of the authority. The state investment commission shall

consider the recommendations of the commissioner of higher education and the executive director

of the Rhode Island Student Loan Authority with respect to the appropriate composition of

investments within the program fund.

     (d) A participant may at any time withdraw funds from the participant's account in the

tuition savings program in an amount up to the value of the account at the time the withdrawal is

implemented, less such administrative fee as may be levied by the authority treasurer in

connection with the withdrawal.

     (e) Notwithstanding any of the foregoing provisions, no administrative fee may be levied

by the authority treasurer in the event that a participant requests withdrawal of funds from the

participant's account in the tuition savings program on account of, and within the meanings of §

529 of the Internal Revenue Code [26 U.S.C. § 529]:

     (1) The death of the beneficiary of the account;

     (2) The disability of the beneficiary; or

     (3) A scholarship, allowance, or payment received by the beneficiary to the extent that

the amount of the refund does not exceed the amount of the scholarship, allowance, or payment.

     (f) In the event that a participant requests a withdrawal from an account in the tuition

savings program other than (1) a withdrawal used for qualified higher education expenses of the

beneficiary of the account, or (2) for a reason referred to in subdivision (e)(1), (e)(2), or (e)(3) of

this section, the authority treasurer shall impose a more than de minimus penalty on the earnings

portion of the withdrawal in accordance with § 529 of the Internal Revenue Code [26 U.S.C. §

529]; provided that no penalty shall be imposed with respect to any such withdrawal, or any other

withdrawal, from any account in the tuition savings plan to which the tax made applicable by §

529 of the Internal Revenue Code [26 U.S.C. § 529] is effective.

     (g) Resources of the authority and the Rhode Island student loan authority shall be

employed to effect implementation of the tuition savings program.

     16-57-6.2 Ownership of assets -- Transfer of ownership rights. -- (a) The participant

retains ownership of all assets properly allocated to an account maintained for the participant in

the tuition savings program up to the date of withdrawal or distribution of these from the

program.

     (b) All assets of the tuition savings program shall be considered to be held in trust. As

required by the Internal Revenue Code, no interest in the tuition savings program or any portion

of these may be used as security for a loan.

     (c) Any amounts paid to the administrative fund of the tuition savings program are owned

by the authority. These amounts may include, but are not limited to, appropriated state funds.

     (d)(c) A participant may transfer ownership rights in the tuition savings program to

another participant or designate a new beneficiary insofar as permitted by § 529 of the Internal

Revenue Code [26 U.S.C. § 529] under such conditions as the authority treasurer deems

appropriate.

     16-57-6.3 Tax exempt earnings. -- (a) For state income tax purposes, annual earnings of

the tuition savings program and the prepaid tuition program shall be exempt from tax to the

program, and shall not be includible in the Rhode Island income of either beneficiaries or

participants in the program until withdrawn or distributed from it, and then in accordance with

chapter 30 of title 44.

      (b) The tax administrator, in consultation with the authority, may adopt rules and

regulations necessary to monitor, implement, and administer the Rhode Island personal income

tax provisions referred to in subsection (a) relating to this chapter. These regulations shall provide

for each taxable year for the timely submission to the tax administrator by the program manager

of the tuition savings program of this information in the form the tax administrator shall prescribe

concerning contributions to, and withdrawals including transfers and rollovers from, the tuition

savings program during that year.

     16-57-6.5 Annual audited financial report to the governor and general assembly. –

(a) The authority treasurer, shall submit to the governor, the speaker of the house of

representatives, the president of the senate, and the secretary of state an annual audited financial

report, prepared in accordance with generally accepted accounting principles, on the operations of

the tuition savings program by November 1 of each year. The annual audit shall be made either

by the auditor general or by an independent certified public accountant approved by the auditor

general and shall include direct and indirect costs attributable to the use of outside consultants,

independent contractors, and any other persons who are not state employees.

     (b) The annual audited financial report shall be supplemented by the following

information, to be submitted by April 1 of each year, on the operations of the program for the

previous calendar year:

     (1) A summary of meetings or hearings held, meeting minutes, subjects addressed,

decisions rendered, rules or regulations promulgated, studies conducted, policies and plans

developed, approved, or modified, and programs administered or initiated; and a summary of any

clerical, administrative or technical support received; a summary of performance during the

previous fiscal year including accomplishments, shortcomings and remedies; a synopsis of

hearings, complaints, suspensions or other legal matters related to the authority of the board; a

summary of any training courses held pursuant to subsection 16-57-7(a)(2); a briefing on

anticipated activities in the upcoming fiscal year; and findings and recommendations for

improvements;

     (2)(1) A summary of the benefits provided by the tuition savings program including the

number of participants and beneficiaries;

     (3)(2) Any other information which is relevant in order to make a full, fair and effective

disclosure of the assets and operations of the program; and

     (4)(3) The foregoing supplemental information shall be posted electronically on the

general assembly's and the secretary of state's websites as prescribed in § 42-20-8.2 of the Rhode

Island general laws. The treasurer director of the department of administration shall be

responsible for the enforcement of this provision.

     16-57-7 Directors, officers, and employees Council on Postsecondary Education.--

(a)(1) The powers of the authority shall be vested in a board of directors consisting of nine (9)

members, five (5) of whom shall be appointed by the governor from among members of the

general public, who are qualified by training or experience in education finance or personal

investment consulting and made in accordance with subsection (b) of this section; three (3) of

whom shall be appointed by the governor, who shall give due consideration to the

recommendations made by the chairperson of the board of governors for higher education and by

the Rhode Island Independent Higher Education Association for those appointments; and the state

general treasurer ex-officio or his or her designee who shall be a subordinate from within the

office of the general treasurer. All gubernatorial appointments made to this board shall be subject

to the advice and consent of the senate. All board members first appointed to the board after the

effective date of this act shall be residents of this state. Designees of members serving ex-officio

shall represent him or her at all meetings of the board. Except for the chairpersons of the house

and senate finance committees or their designees who shall cease to be members of the authority

upon the effective date of this act, each member shall serve until his or her successor is appointed

and qualified. The original members appointed by the governor shall be appointed in a manner as

to provide for the expiration of the term of one member on the first day of July of each year. The

council on postsecondary education established pursuant to § 16-59-1 shall retain all authority

formerly vested in the higher education assistance authority board of directors, except as provided

by § 16-57-6.1. Whenever in any general or public law reference is made to the "board of

directors of the higher education assistance authority," the reference shall be deemed to refer to

and mean the "council on postsecondary education." The council on postsecondary education

shall be the employer of record for the division of higher education assistance.

     (2) Newly appointed and qualified public members and designees of ex-officio members

shall, within six (6) months of their qualification or designation, attend a training course that shall

be developed with board approval and conducted by the chair of the board and shall include

instruction in the following areas: the provisions of chapters 16-57, 42-46, 36-14 and 38-2; and

the board's rules and regulations. The director of the department of administration shall, within

ninety (90) days of the effective date of this act, prepare and disseminate training materials

relating to the provisions of chapters 42-46, 36-14 and 38-2.

     (3) Public members of the board shall be removable by the appointing authority for cause

only, and removal solely for partisan or personal reasons unrelated to capacity or fitness for the

office shall be unlawful.

     (b) During the month of June of each year, the governor shall appoint a member to

succeed the member whose term will then next expire to serve for a term of five (5) years

commencing on the first day of July then next following, and after this, until a successor is

appointed and qualified. As soon as practicable after the effective date of this act, the governor

shall appoint a member to serve an initial term to expire on July 1, 2010. Thereafter, all members

appointed by the general treasurer shall be appointed to terms of five (5) years, and the governor

shall, during the month of June preceding the expiration of each term, appoint a member whose

term will then next expire. In the event of a vacancy occurring in the office of a member by death,

resignation, removal, or otherwise, the vacancy shall be filled in the same manner as an original

appointment but only for the remainder of the term of the former member.

     (c) The directors shall receive no compensation for the performance of their duties under

this chapter, but each director shall be reimbursed for his or her reasonable expenses incurred in

carrying out the duties. A director may engage in private employment or in a profession or

business.

     (d) Upon appointment and qualification of the original board of directors, and during the

month of July of each year after this, the board of directors shall elect one of its members to serve

as chairperson. The board may elect from among its members such other officers as they deem

necessary. Five (5) directors shall constitute a quorum and any action to be taken by the authority

under the provisions of this chapter may be authorized by resolution approved by a majority of

the directors present and voting at any regular or special meeting at which a quorum is present. A

vacancy in the membership of the board of directors shall not impair the right of a quorum to

exercise all the rights and perform all the duties of the authority.

     (e)(1) In addition to electing a chairperson, the board of directors shall appoint a secretary

and any additional officers and staff members as they shall deem appropriate. The board of

directors shall appoint an executive director who shall be in the unclassified service and vest in

that person or his or her subordinates the authorization to appoint additional staff members who

shall be in the classified service and to determine the amount of compensation each individual

shall receive. Those persons who were regularly established full time employees of the authority,

prior to March 27, 1979, and who are required to be in the classified service may be placed in

appropriate classifications within the classified service without the requirement of competitive

examination (as approved by the executive director). All employees hired after March 27, 1979,

will be hired in accordance with the requirements of the classified service for examination,

approved state lists, and other procedures of the state division of personnel. Those persons who

were regularly established full time employees of the authority, prior to March 27, 1979, shall

have the right to purchase retirement credits for the period commencing November 1, 1977, to

March 27, 1979, at the its full actuarial cost.

     (2) Any employee in either the classified or unclassified service who was, prior to his or

her hiring by the authority, a participant in the retirement program adopted for personnel at any

state or private college shall have the option to either remain with that retirement program while

an employee of the authority or become a participant in the employees' retirement system of the

state.

     (f)(b) No full time employee shall during the period of his or her employment by the

authority division engage in any other private employment, profession, or business, except with

the approval of the board of directors commissioner of postsecondary education; provided, that

the executive director shall not engage in any other private employment, profession, or business,

including, but not limited to consulting.

     (g) Notwithstanding any other law to the contrary, it shall not be or constitute a conflict

of interest for a director, officer, or employee of any financial institution, investment banking

firm, brokerage firm, commercial bank, trust company, savings and loan association, credit union,

insurance company, educational institution, or any other firm, person, or corporation to serve as a

director of the authority, nor shall any contract or transaction between the authority and any

financial institution, investment banking firm, brokerage firm, commercial bank, trust company,

savings and loan association, credit union, insurance company, educational institution, or any

other firm, person, or corporation be void or voidable by reason of any service as director of the

authority. If any director, officer, or employee of the authority shall be interested either directly or

indirectly, or shall be a director, officer, or employee of or have an ownership interest (other than

as the owner of less than one percent (1%) of the shares of a publicly held corporation) in any

firm or corporation interested directly or indirectly in any contract with the authority, the interest

shall be disclosed to the authority and set forth in the minutes of the authority, and the director,

officer, or employee having interest in this shall not participate on behalf of the authority in the

authorization of any contract. Interested directors may be counted in determining the presence of

a quorum at a meeting of the board of directors of the authority which authorizes the contract or

transaction.

     (h) Any action taken by the authority under the provisions of this chapter may be

authorized by vote at any regular or special meeting, and each vote shall take effect immediately.

     (i) The board of directors may designate from among its members an executive

committee and one or more other committees each of which, to the extent authorized by the board

of directors, shall have and may exercise all the authority of the board of directors, but no

committee shall have the authority of the board of directors in reference to the disposition of all

or substantially all the property and assets of the authority or amending the bylaws of the

authority.

     16-57-8 Designated agency. -- The authority division established within the office of the

postsecondary commissioner is designated the state agency or corporation to apply for, receive,

accept, and disburse federal funds, and funds from other public and private sources, made

available to the state for use as reserves to guarantee student loans or as administrative money to

operate student loan programs, and is designated to administer any statewide programs of student

assistance that shall be establishedunder established under federal law.

     16-57-9 Loans to minors -- Loan obligations. -- (a) Any person qualifying for an

eligible loan shall not be disqualified to receive a loan guaranteed by the authority division by

reason of his or her being a minor. For the purpose of applying for, securing, receiving, and

repaying a loan, any person shall be deemed to have full legal capacity to act and shall have all

the rights, powers, privileges, and obligations of a person of full age with respect to a loan.

     (b) No loan obligation incurred by any individual under the provisions of this chapter

may be expunged, reduced, or discharged in any proceeding, including any proceeding in federal

bankruptcy court. Any individual receiving a loan under the provisions of this chapter shall be

required to sign an affidavit acknowledging the loan and agreeing to this condition.

     16-57-10 Reserve funds. -- (a) To assure the continued operation and solvency of the

authority guaranteed student loan program for the carrying out of its corporate purposes, the

authority office of the postsecondary commissioner shall may create and establish any reserve

funds as may be necessary or desirable for its corporate purposes, and may pay into the funds any

money appropriated and made available by the state, the commissioner, or any other source for

the purpose of the funds, and any money collected by the authority division as fees for the

guaranty of eligible loans.

     (b) To assure continued solvency of the authority's, the authority operating fund shall be

used solely for the ordinary operating expenses of the authority. Furthermore, it is the intent of

the general assembly that these funds eventually be used to increase financial assistance to Rhode

Island students in the form of scholarships and grants as approved by the commissioner of

postsecondary education and as directed by the U.S. Department of Education, and in accordance

with federal statutes and regulations governing the use of funds in the guaranty agency's

operating fund pursuant to the provisions and restrictions of the 1998 reauthorization of the

federal higher education act.

     (c) Given the decline of available sources to support the agency, the Governor's FY 2016

budget recommendations shall include a proposal for the transfer of higher education assistance

authority's programs to appropriate agencies within state government. All departments and

agencies of the state shall furnish such advice and information, documentary or otherwise to the

director of the department of administration and its agents as is deemed necessary or desirable to

facilitate the recommendation.

     16-57-12 Credit of state. -- Guaranties made under the provisions of this chapter shall

not constitute debts, liabilities, or obligations of the state or of any political subdivision of the

state other than the division of higher education assistance authority or a pledge of the faith and

credit of the state or any political subdivision other than the division of higher education

assistance authority, but shall be payable solely from the revenues or assets of the authority

reserve funds set forth in § 16-57-10.

     SECTION 7. Sections 16-59-1, 16-59-4, and 16-59-6 of the General Laws in Chapter 16-

59 entitled "Board of Governors for Higher Education" [See Title 16 Chapter 97 – The Rhode

Island Board of Education Act] are hereby amended to read as follows:

     16-59-1 Council on Postsecondary Education established. -- (a) There is created a

council on postsecondary education, sometimes referred to as the "council", which shall be and is

constituted a public corporation, empowered to sue and be sued in its own name, and to exercise

all the powers, in addition to those specifically enumerated in this chapter, usually appertaining to

public corporations entrusted with control of postsecondary educational institutions and

functions. Upon its organization the council shall be invested with the legal title (in trust for the

state) to all property, real and personal, now owned by and/or under the control or in custody of

the board of regents for education for the use of the University of Rhode Island, Rhode Island

College, Community College of Rhode Island and the system of community colleges of Rhode

Island including all departments, divisions, and branches of these.

     (b) The council is empowered to hold and operate the property in trust for the state; to

acquire, hold, and dispose of the property and other like property as deemed necessary for the

execution of its corporate purposes. The council is made successor to all powers, rights, duties,

and privileges formerly belonging to the board of regents for education pertaining to

postsecondary education and the board of governors for higher education.

     (c) The council shall be the employer of record for higher education and the office of

postsecondary education. It shall retain all authority formerly vested in the board of education

regarding the employment of faculty and staff at the public higher education institutions.

     (d) The council shall be the governing body for the Rhode Island division of higher

education assistance and shall retain all authority formerly vested in the higher education

assistance authority board of directors pursuant to § 16-57-7; however, any debts, liabilities, or

obligations of the council that result from its status as such governing body shall be payable

solely from the revenues or assets of reserve funds set forth and established by the prior Rhode

Island higher education assistance authority and/or the Rhode Island division of higher education

assistance created pursuant to Chapter 57 of this title, and not from any assets or property held by

the council on public higher education pursuant to this chapter.

     (e) The council on postsecondary education shall be the employer of record for the

division of higher education assistance.

     16-59-4 Powers and duties of the council on postsecondary education. – (a) The

council on postsecondary education shall have, in addition to those enumerated in § 16-59-1, the

following powers and duties:

     (1) To approve a systematic program of information gathering, processing, and analysis

addressed to every level, aspect, and form of higher education in this state especially as that

information relates to current and future educational needs so that current needs may be met with

reasonable promptness and plans formulated to meet future needs as they arise in the most

efficient and economical manner possible.

     (2) To develop and approve a strategic plan implementing broad goals and objectives for

higher education in the state as established by the board of education, including a comprehensive

capital development program.

     (3) To formulate broad policy to implement the goals and objectives established and

adopted by the board of education, to adopt standards and require enforcement and to exercise

general supervision over all higher public education in the state and over independent higher

education in the state as provided in subdivision (8) and (9) of this section. The board of

education and the council shall not engage in the operation or administration of any subordinate

committee, university, junior college, or community college, except its own office of

postsecondary education and except as specifically authorized by an act of the general assembly;

provided, the presidents of each institution of higher learning shall be the chief administrative and

executive officers of that institution; and provided that nothing contained in this section shall

prohibit their direct access to or interfere with the relationship between the presidents and the

board of education and the council.

     (4) To communicate with and seek the advice of the commissioner of postsecondary

education, the presidents of the public higher education institutions and all those concerned with

and affected by its determinations as a regular procedure in arriving at its conclusions and in

setting its policy.

     (5) To prepare and maintain a five (5) year funding plan for higher education that

implements the strategic financing recommendations of the board of education; to prepare with

the assistance of the commissioner of postsecondary education and to present annually to the state

budget officer in accordance with § 35-3-4 a state higher education budget, which shall include,

but not be limited to, the budget of the office of postsecondary education and the budget of the

state colleges. In the preparation of the budget, the council shall implement priorities established

by the board of education of expenditures for public higher education purposes of state revenues

and other public resources made available for the support of higher public education. Prior to

submitting the budget to the state budget officer as required by the budget office instructions and

this subsection, the council shall present the budget to the board of education for its review and

approval. Nothing contained in this subdivision shall authorize the council to alter the allocation

of grants or aid otherwise provided by law.

     (6) To maintain an office of postsecondary commissioner; to provide for its staffing and

organization; and to manage and oversee a commissioner of postsecondary education pursuant to

duties and responsibilities defined in § 16-59-6 and § 16-59-7. The commissioner of

postsecondary education and the office of postsecondary commissioner shall have the duties and

responsibilities as defined in §§ 16-59-6 and 16-59-7.

     (7) To appoint and dismiss presidents of the public institutions of higher learning with the

assistance of the commissioner of postsecondary education, and to establish procedures for this,

and with the assistance of the commissioner to approve or disapprove vice presidents of the

public institutions of higher learning appointed by the respective presidents of the public

institutions of higher learning.

     (8) To establish other educational agencies or subcommittees necessary or desirable for

the conduct of any or all aspects of higher education and to determine all powers, functions, and

composition of any agencies or subcommittees and to dissolve them when their purpose shall

have been fulfilled.

     (9) To exercise the authority vested in the board of regents for education with relation to

independent higher educational institutions within the state under the terms of chapter 40 of this

title, and other laws affecting independent higher education in the state.

     (10) To enforce the provisions of all laws relating to higher education, public and

independent.

     (11) To be responsible for all the functions, powers, and duties which were vested in the

board of regents for education relating to higher education, including but not limited to the

following specific functions:

     (i) To approve the role and scope of programs at public institutions of higher learning

with the assistance of the commissioner of postsecondary education which shall include but not

be limited to populations to be served, the type and level of programs and academic fields

offered.

     (ii) To adopt and require standard accounting procedures for the office of postsecondary

commissioner and all public colleges and universities.

     (iii) To approve a clear and definitive mission for each public institution of higher

learning with the assistance of the commissioner of postsecondary education that is consistent

with the role and scope of programs at the public institutions.

     (iv) To promote maximum efficiency, economy, and cooperation in the delivery of public

higher educational services in the state and cooperation with independent institutions of higher

education.

     (12) To incorporate into its own affirmative action reporting process periodic reports

monitoring specific faculty and staff searches by the chairperson of the search committee to

include the rationale for granting those interviews and the final hiring results. The institutions

must empower their affirmative action officer to monitor searches in this manner, to intervene

during the search, and, when necessary, to cause a search to cease if affirmative action goals are

not being adequately served.

     (13) To incorporate a specific category for accountability on affirmative action goals and

implementation as part of the board's annual evaluations and three (3) year reviews for the

presidents of each of the public institutions of higher education.

     (14) To make a formal request of the governor that whenever an opportunity arises to

make new appointments to the board, that the governor make every effort to increase the number

of African Americans, Native Americans, Asians, and Hispanics on the board.

     (15) To develop coherent plans for the elimination of unnecessary duplication in public

higher education and addressing the future needs of public education within the state in the most

efficient and economical manner possible.

     (16) To delegate to the presidents of each public higher education institution the authority

and responsibility for operational and management decisions related to their institutions,

consistent with the goals of the statewide strategic plan for postsecondary education provided

however that the presidents may be required to provide information or updates to the council

regarding any delegated operational or management decisions.

     (17) To serve as the governing body of the division of higher education assistance and

exercise all powers and duties of the division of higher education assistance as set forth under the

terms of Chapter 57 of this title; however, any debts, liabilities, or obligations of the council that

result from its status as such governing body shall be payable solely from the revenues or assets

of reserve funds set forth and established by the prior Rhode Island higher education assistance

authority and/or the Rhode Island division of higher education assistance created pursuant to

Chapter 57 of this title, and not from any assets or property held by the council on postsecondary

education pursuant to this chapter.

     (18) To guarantee one hundred percent (100%) of the unpaid principal and accrued

interest of any eligible loan made by a lender to any eligible borrower in existence prior to July 1,

2015 for the purpose of assisting the students in obtaining an education in an eligible institution,

subject, however, to the limitation regarding any debts, liabilities, or obligations of the council set

forth in section (17) above, and in § 16-57-12.

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

purposes of serving as a guaranty agency for the loans set forth in § 16-59-4 (18), including

without limitation rules and regulations:

     (i) To ensure compliance by the division with the requirements imposed by statutes or

regulation governing the guaranty, insurance, purchase, or other dealing in eligible loans by

federal agencies, instrumentalities, or corporations,

     (ii) To set standards of eligibility for educational institutions, students, and lenders and to

define residency and all other terms as the division deems necessary to carry out the purposes of

this chapter, and

     (iii) To set standards for the administration of programs of postsecondary student

financial assistance assigned by law to the division, including but not limited to savings

programs. Administrative rules governing savings programs shall authorize the division, in

conjunction with commissioner of postsecondary education, to negotiate reciprocal agreements

with institutions in other states offering similar savings programs for the purpose of maximizing

educational benefits to students in this state.

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

and a method for enforcing these.

     (21) To set and collect fees and charges, in connection with its guaranties and servicing,

including without limitation reimbursement of costs of financing by the division, service charges,

and insurance premiums and fees and costs associated with implementing and administering

savings programs established pursuant to this chapter.

     (22) To hold and operate property previously held by the higher education assistance

authority in trust for the state, and to acquire, hold, and dispose of the property and other like

property as deemed necessary for the execution of its corporate purposes.

     16-59-6 Commissioner of postsecondary education. -- The council on postsecondary

education, with approval of the board, shall appoint a commissioner of postsecondary education,

who shall serve at the pleasure of the council, provided that his or her initial engagement by the

council shall be for a period of not more than three (3) years. For the purpose of appointing,

retaining, or dismissing a commissioner of postsecondary education, the governor shall serve as

an additional voting member of the council. The position of commissioner shall be in the

unclassified service of the state and he or she shall serve as the chief executive officer of the

council on postsecondary education, and as the chief administrative officer of the office of

postsecondary commissioner, and the executive director of the division of higher education

assistance. The commissioner of postsecondary education shall have any duties that are defined in

this section and in this title and other additional duties as may be determined by the council, and

shall perform any other duties as may be vested in him or her by law. In addition to these duties

and general supervision of the office of postsecondary commissioner and the appointment of the

several officers and employees of the office, it shall be the duty of the commissioner of

postsecondary education:

     (1) To develop and implement a systematic program of information gathering,

processing, and analysis addressed to every aspect of higher education in the state, especially as

that information relates to current and future educational needs.

     (2) To prepare a strategic plan for higher education in the state aligned with the goals of

the board of education's strategic plan; to coordinate the goals and objectives of the higher public

education sector with the goals of the council on elementary and secondary education, and

activities of the independent higher education sector where feasible.

     (3) To communicate with and seek the advice of those concerned with and affected by the

board of education's and council's determinations.

     (4) To implement broad policy as it pertains to the goals and objectives established by the

board of education and council on postsecondary education; to promote better coordination

between higher public education in the state, independent higher education in the state as

provided in subdivision (10) of this section and pre k-12 education; to assist in the preparation of

the budget for public higher education and to be responsible upon direction of the council for the

allocation of appropriations, the acquisition, holding, disposition of property.

     (5) To be responsible for the coordination of the various higher educational functions of

the state so that maximum efficiency and economy can be achieved.

     (6) To assist the board of education in preparation and maintenance of a five (5) year

strategic funding plan for higher education; to assist the council in the preparation and

presentation annually to the state budget officer in accordance with § 35-3-4 of a total public

higher educational budget.

     (7) To recommend to the council on postsecondary education after consultation with the

presidents, a clear and definitive mission for each public institution of higher learning.

     (8) To annually recommend to the council on postsecondary education after consultation

with the presidents, the creation, abolition, retention, or consolidation of departments, divisions,

programs, and courses of study within the public colleges and universities to eliminate

unnecessary duplication in public higher education, to address the future needs of public higher

education in the state, and to advance proposals recommended by the presidents of the public

colleges and universities pursuant to §§ 16-32-2.1, 16-33-2.1 and 16-33.1-2.1 of the general laws.

     (9) To supervise the operations of the office of postsecondary commissioner, including

the division of higher education assistance, and any other additional duties and responsibilities

that may be assigned by the council.

     (10) To perform the duties vested in the council with relation to independent higher

educational institutions within the state under the terms of chapter 40 of this title and any other

laws that affect independent higher education in the state.

     (11) To be responsible for the administration of policies, rules, and regulations of the

council on postsecondary education with relation to the entire field of higher education within the

state, not specifically granted to any other department, board, or agency and not incompatible

with law.

     (12) To prepare standard accounting procedures for public higher education and all public

colleges and universities.

     (13) To carry out the policies and directives of the board of education and the council on

postsecondary education through the office of postsecondary commissioner and through

utilization of the resources of the public institutions of higher learning.

     (14) To exercise all powers and duties of the division of higher education assistance as

set forth under the terms of chapter 57 of this title.

     SECTION 8. Section 16-62-3 of the General Laws in Chapter 16-62 entitled "The Rhode

Island Student Loan Authority" is hereby amended to read as follows:

     16-62-3 Definitions. -- As used in this chapter, the following words and terms shall have

the following meanings unless the context shall indicate another or different meaning or intent:

     (1) "Authority" means the governmental agency and public instrumentality authorized,

created, and established pursuant to § 16-62-4.

     (2) "Bonds" and "notes" means the bonds, notes, securities, or other obligations or

evidences of indebtedness issued by the authority pursuant to this chapter, all of which shall be

issued under the name of or known as obligations of the Rhode Island student loan authority.

     (3) "Education loan" means a loan to a student or the parent, legal guardian, or sponsor of

the student, or to an eligible institution, for the purpose of financing a student's attendance at the

eligible institution. The loan may provide that the student, parent, legal guardian, or sponsor of

the student or eligible institution may be held jointly and severally liable for the education loan.

     (4) "Eligible institution" means, subject to further particular or more restrictive definition

by regulation of the authority: (i) an institution of higher learning, (ii) a vocational school, or (iii)

with respect to students who are nationals of the United States, an institution outside the United

States which is comparable to an institution of higher education or to a vocational school and

which has been approved by the authority and by the secretary for purposes of the guaranteed

student loan program.

     (5) "Eligible loan" means a loan to a student or to the parent of a student insured or

guaranteed by the secretary, Rhode Island division of higher education assistance authority, or by

any other governmental or private agency, corporation, or organization having a reinsurance or

guaranty agreement with the secretary applicable to that loan.

     (6) "Guaranteed student loan program" means the program of federal student loan

insurance and reinsurance administered by the secretary.

     (7) "Lender" means, subject to further particular or more restrictive definition by

regulation of the authority, any governmental or private agency, corporation, organization, or

institution (including educational institutions and the authority itself) designated as an "eligible

lender" by federal statute, regulation, or administrative ruling for the purposes of the guaranteed

student loan program.

     (8) "Secretary" means the United States secretary of education or the secretary of health

and human services.

     (9) "State" means the state of Rhode Island and Providence Plantations.

     (10) "Student" means an individual who under rules promulgated by the authority meets

the enrollment and satisfactory progress requirement necessary for making an eligible student

loan or an education loan, as applicable. This designation shall include dependent and

independent undergraduate students, and graduate and professional students. 25-2-18.1

     SECTION 9. Section 16-63-7 of the General Laws in Chapter 16-63 entitled "Adult

Education" [See Title 16 Chapter 97 – The Rhode Island Board of Education Act] is hereby

amended to read as follows:

     16-63-7 Functions of office. -- The functions of the office may include, but may not

necessarily be limited to, the following:

     (1) The development of recommendations to the commissioner and the implementation of

any approved recommendations, including:

     (i) The utilization of federal and state funds for any purpose prescribed or allowed by the

laws and/or regulations authorizing and/or appropriating those funds;

     (ii) The sub-granting of those federal and state funds to selected deliverers of programs

and services, including those contemplated in subdivisions (2) and (3);

     (iii) The operation and networking of statewide adult level guidance services;

     (iv) The operation of a high school equivalency or general educational development,

testing, and certification program;

     (v) Administration of the provisions for the approval and regulation of private career,

trade, and technical schools, pursuant to chapter 40 of this title, and of any other nonpublic

entities, whether non-business or proprietary, which provide or purport to provide adult education

programs and services to residents of the state;

     (vi) Professional development of administrators, teachers, counselors, paraprofessionals,

and other personnel employed or engaged in delivering adult education programs and services

within the state; and

     (vii) Continuous research and planning in adult education, including assistance to the

commission in conducting the comprehensive study of adult education prescribed in § 16-58-6,

needs assessments in conjunction with local planning and assessment processes, and the

development and utilization of relevant data.

     (2) Coordination with programs and services administered and/or operated by other

agencies and institutions, including:

     (i) All programs in categories 1, 2, 3, and 5 as defined by this chapter;

     (ii) Outreach, recruitment, and intake for program components throughout the delivery

system defined in this chapter;

     (iii) Dissemination of information on financial aid for adult learners, including loans,

grants, scholarships, and other forms of financial aid, in cooperation with the Rhode Island

division of higher education assistance authority, pursuant to chapters 56 and 57 of this title;

     (iv) Psychological testing in relation to education and training, basic skills diagnostic and

evaluation services, and multi-phasic vocational testing;

     (v) Competency based adult high school diploma assessment and certification, as

conducted by local education agencies in accordance with this chapter; and

     (vi) The college level examination program and other mechanisms for establishing and

recording postsecondary achievement and competencies in terms of academic credit.

     (3) General advocacy and communicative relationships with other agencies, institutions,

and organizations engaged in or interested in adult education or related activities in the state,

including:

     (i) Programs and services for adult learners in public and private colleges, schools, and

other settings, at elementary, secondary, and postsecondary levels;

     (ii) Adult education programs and services, in any of the categories defined in this

chapter, conducted in libraries and other community based settings;

     (iii) Pre-service, in-service, and upgrading education and training programs, generally in

category 2 as defined by this chapter, conducted in employment settings;

     (iv) Activities, generally in category 2 as defined by this chapter, conducted in the state

pursuant to the Job Training Partnership Act, 29 U.S.C. § 1501 et seq., and any amendments to it,

extensions of it, or successor legislation;

     (v) All activities in categories 4 and 6, as defined by this chapter;

     (vi) Programs and services, generally in categories 1, 2, 3, 5, and 7, as defined by this

chapter, conducted in custodial, correctional, and curative institutions in the state;

     (vii) Programs and services for adults with special needs, such as people with disabilities,

immigrants and refugees, women and displaced homemakers, senior citizens, persons of

multilingual or multicultural backgrounds, and persons being discharged from the care of

institutions referenced in subdivision (3)(vi);

     (viii) Programs of family and homelife education and parent effectiveness training;

     (ix) Educational and public service programming on radio and television, including that

transmitted electronically and through cable systems; and

     (x) Automobile and motorcycle driver safety education; and

     (4) Staff support services for the commission.

     SECTION 10. Section 22-13-9 of the General Laws in Chapter 22-13 entitled "Auditor

General" is hereby amended to read as follows:

     22-13-9 Access to executive sessions of a public agency -- Access to records --

Disclosure by the auditor general. -- (a) Whenever a public agency goes into executive session,

the auditor general or his or her designated representative shall be permitted to attend the

executive session or if the auditor general or his or her designee is not in attendance at the

executive session, the auditor general or his or her designee, upon written request, shall be

furnished with copies of all data or materials furnished to the members of the public agency at the

executive session. If the auditor general or his or her designee attends the executive session, the

auditor general shall be furnished the same data in the same form and at the same time as

members of the public agency.

     (b) Within three (3) working days of a written request by the auditor general, the public

agency shall furnish a copy, whether approved by the agency or not, of the minutes of any

meeting, including any executive session of the public agency.

     (c) The auditor general shall have full and unlimited access to any and all records of any

public agency, in whatever form or mode the records may be, unless the auditor general's access

to the records is specifically prohibited or limited by federal or state law. In no case shall any

confidentiality provisions of state law be construed to restrict the auditor general's access to the

records; provided, the auditor general's access to any confidential data shall not in any way

change the confidential nature of the data obtained. Where an audit or investigative finding

emanates from confidential data, specific confidential information will not be made public. The

records shall include those in the immediate possession of a public agency as well as records

which the agency itself has a right to. In the event of a dispute between the agency involved and

the auditor general as to whether or not the data involved are confidential by law, the matter will

be referred to the attorney general for resolution.

     (d)(1) If in the course of an executive session any fact comes to the attention of the

auditor general or his or her designated representative, which in his or her judgment constitutes an

impropriety, irregularity, or illegal transaction, or points to the onset of an impropriety or illegal

transaction, then the auditor general shall disclose that information to the joint committee on

legislative services, the director of administration, and the chairperson of the public agency

involved. Where the facts or the data upon which the facts are based are deemed confidential

pursuant to the provisions of federal or state law, the auditor general's access to the information

shall not in any way change the confidential nature of the data obtained.

     (2) In the event of a dispute between the agency involved and the auditor general as to

whether or not the data involved are confidential by law, the matter will be referred to the

attorney general for resolution.

     (e) The auditor general or his or her designated representative shall be immune from any

liability to any party for claims arising out of disclosure authorized by this section.

     (f) For the purposes of this section, the phrase "public agency" shall include the

following: the Rhode Island industrial building authority, the Rhode Island recreational building

authority, the Rhode Island economic development corporation, the Rhode Island industrial

facilities corporation, the Rhode Island refunding bond authority, the Rhode Island housing and

mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island

public transit authority, the Rhode Island student loan authority, the water resources board, the

Rhode Island health and educational building corporation, the Rhode Island higher education

assistance authority, the Rhode Island turnpike and bridge authority, the Narragansett Bay

commission, the convention center authority, their successors and assigns, and any other body

corporate and politic which has been or which is subsequently created or established within this

state.

     SECTION 11. Sections 23-14.1-2, 23-14.1-3, 23-14.1-4, 23-14.1-5, 23-14.1-6, 23-14.1-8

and 23-14.1-9 of the General Laws in Chapter 23-14.1 entitled "Health Professional Loan

Repayment Program" are hereby amended to read as follows:

     23-14.1-2 Definitions. -- For the purpose of this chapter, the following words and terms

have the following meanings unless the context clearly requires otherwise:

     (1) "Authority" means the higher education assistance authority.

     (2)(1) "Board" means the health professional loan repayment board.

     (2) "Commissioner" means the commissioner of postsecondary education.

     (3) "Community health center" means a health care facility as defined and licensed under

chapter 17 of this title.

     (4) "Director" means the director of the higher education assistance authority. "Division"

means the Rhode Island division of higher education assistance.

     (5) "Eligible health professional" means a physician, dentist, dental hygienist, nurse

practitioner, certified nurse midwife, physician assistant, or any other eligible health care

professional under § 338A of the Public Health Service Act, 42 U.S.C. § 254l, licensed in the

state who has entered into a contract with the board to serve medically underserved populations.

     (6) "Loan repayment" means an amount of money to be repaid to satisfy loan obligations

incurred to obtain a degree or certification in an eligible health profession as defined in

subdivision (5).

     23-14.1-3 Health professional loan repayment program established. -- There is

established within the division higher education assistance authority, to be administered by the

commissioner director, the health professional loan repayment program whose purpose shall be to

provide loan repayment to eligible health professionals to defray the cost of their professional

education.

     23-14.1-4 Health professional loan repayment board. -- (a) There is created the health

professional loan repayment board, which shall consist of the director of the department of health

and eight (8) members appointed by the governor with the advice and consent of the senate. The

governor shall give due consideration to any recommendations for nominations submitted to him

or her by the Rhode Island Medical Society; the Rhode Island Dental Association; the Rhode

Island Health Center Association; the dean of the Brown University Medical School; the dean of

the College of Nursing at the University of Rhode Island; the Rhode Island State Nurses'

Association; the Hospital Association of Rhode Island; the Rhode Island division of higher

education assistance authority. All appointed members shall serve for terms of three (3) years and

shall receive no compensation for their services. Board members shall be eligible to succeed

themselves.

     (b) The director of the department of health shall serve as chairperson. The board shall

elect such other officers as it deems necessary from among its members. All meetings shall be

called by the chairperson.

     (c) Members of the board shall be removable by the governor pursuant to the provisions

of § 36-1-7 of the general laws and for cause only, and removal solely for partisan or personal

reasons unrelated to capacity or fitness for the office shall be unlawful.

     23-14.1-5 Duties of the board. -- The board shall:

     (1) Determine which areas of the state shall be eligible to participate in the loan

repayment program each year, based on health professional shortage area designations.

     (2) Receive and consider all applications for loan repayment made by eligible health

professionals.

     (3) Conduct a careful and full investigation of the ability, character, financial needs, and

qualifications of each applicant.

     (4) Consider the intent of the applicant to practice in a health professional shortage area

and to adhere to all the requirements for participation in the loan repayment program.

     (5) Submit to the commissioner director a list of those individuals eligible for loan

repayment and amount of loan repayment to be granted.

     (6) Promulgate rules and regulations to ensure an effective implementation and

administration of the program.

     (7) Within ninety (90) days after the end of each fiscal year, the board shall approve and

submit an annual report to the governor, the speaker of the house of representatives, the president

of the senate, and the secretary of state, of its activities during that fiscal year. The report shall

provide: an operating statement summarizing meetings or hearings held, including meeting

minutes, subjects addressed, decisions rendered, applications considered and their disposition,

rules or regulations promulgated, studies conducted, polices and plans developed, approved, or

modified, and programs administered or initiated; a consolidated financial statement of all funds

received and expended including the source of the funds, a listing of any staff supported by these

funds, and a summary of any clerical, administrative or technical support received; a summary of

performance during the previous fiscal year including accomplishments, shortcomings and

remedies; a synopsis of hearings, complaints, suspensions, or other legal matters related to the

committee; a summary of any training courses held pursuant to this chapter; a briefing on

anticipated activities in the upcoming fiscal year, and findings and recommendations for

improvements. The report shall be posted electronically on the websites of the general assembly

and the secretary of state pursuant to the provisions of § 42-20-8.2. The director of the department

of administration shall be responsible for the enforcement of the provisions of this subsection.

     (8) Conduct a training course for newly appointed and qualified members within six (6)

months of their qualification or designation. The course shall be developed by the chair of the

board, be approved by the board, and be conducted by the chair of the board. The board may

approve the use of any board and/or staff members and/or individuals to assist with training. The

training course shall include instruction in the following areas: the provisions of chapters 42-46,

36-14 and 38-2; and the board's rules and regulations. The director of the department of

administration shall, within ninety (90) days of June 16, 2006, prepare and disseminate training

materials relating to the provisions of chapters 42-46, 36-14, and 38-2.

     23-14.1-6 Duties of the director Duties of the Commissioner. -- The director

commissioner shall:

     (1) Grant loan repayments to successful applicants as determined by the board.

     (2) Enter into contracts, on behalf of the division higher education assistance authority

with each successful applicant, reflecting the purpose and intent of this chapter.

     23-14.1-8 Contracts required. -- Prior to being granted loan repayment each eligible

health professional shall enter into a contract with the authority division agreeing to the terms and

conditions upon which the loan repayment is granted. The contract shall include any provisions

that are required to fulfill the purposes of this chapter and those deemed advisable by the director

commissioner.

     23-14.1-9 Penalty for failure to complete contract. -- (a) If the recipient of a loan

repayment fails, without justifiable cause, to practice pursuant to the terms and conditions of his

or her contract with the authority division, a penalty for the failure to complete the contract will

be imposed. If the recipient fails to complete the period of obligated service, he or she shall be

liable to the state of Rhode Island for:

     (1) An amount equal to the total paid on behalf of the recipient; and

     (2) An unserved obligation penalty equal to the number of months of obligated service

not completed by the recipient multiplied by one thousand dollars ($1,000).

     (b) If the recipient fails to complete one year of service, he or she shall be liable to the

state of Rhode Island for:

     (1) An amount equal to the total paid on behalf of the recipient; and

     (2) An unserved obligation penalty equal to the number of months in the full period

multiplied by one thousand dollars ($1,000).

     (c) Any amount owed shall be paid to the State of Rhode Island within one year of the

date that the recipient is in breach of contract.

     (d) Where the director commissioner, subject to the approval of the board, determines

that there exists justifiable cause for the failure of a recipient to practice pursuant to the terms and

conditions of the contract, he or she may relieve the recipient of the obligation to fulfill any or all

of the terms of the contract.

     SECTION 12. Section 25-2-18.1 of the General Laws in Chapter 25-2 entitled "Days of

Special Observance" is hereby amended to read as follows:

     25-2-18.1 Martin Luther King, Jr. State Holiday Commission. -- (a) There is created a

permanent commission to be known as the Martin Luther King, Jr. State Holiday Commission to

consist of thirteen (13) members, three (3) of whom shall be from the house of representatives,

not more than two (2) from the same political party, to be appointed by the speaker; three (3) of

whom shall be from the senate, not more than two (2) from the same political party to be

appointed by the president of the senate; three (3) of whom shall be representatives of the general

public, to be appointed by the speaker; two (2) of whom shall be representatives of the general

public to be appointed by the president of the senate; one of whom shall be a representative of the

governor's office, to be appointed by the governor; and one of whom shall be the lieutenant

governor, all of the foregoing to be known as commission members. The commission shall

appoint not more than sixteen (16) representatives from organizations and groups generally

identified with and thought to epitomize the ideals of Dr. Martin Luther King, Jr., all of whom

shall be known as non-voting affiliate members, to serve for two (2) year terms.

     (b) The purpose of the commission shall be to plan, supervise and administer, in

conjunction with the federal Martin Luther King Day Commission and the Martin Luther King

Center for Non-Violent Social Change, an appropriate celebration to commemorate the birthday

of Dr. Martin Luther King, Jr., and the annual observance of Dr. Martin Luther King Day, which

will be observed on the third Monday in January each year. The commission shall not limit its

activities to the annual celebration, but shall endeavor to promote educational efforts throughout

the year, as well as to promote seminar events during the annual celebration that will be of

informative value to all segments of the Rhode Island community.

     (c) The members of the commission shall, in February of each odd-numbered year, elect

from among themselves a chairperson, who shall be a legislator, and a vice-chairperson, who

shall not be a government official or employee. Vacancies in the commission shall be filled in

like manner as the original appointment.

     (d) The commission is empowered to appoint committees to study specialized areas of

concern and to report their findings and recommendations to the commission; provided, however,

that one of these committees shall be an education committee.

     (e) The commission is empowered to establish a Martin Luther King Scholarship Fund

and to award scholarships from the fund. Decisions concerning scholarship awards shall be made

by the education committee of the commission in conjunction with the division of higher

education assistance authority.

     (f) The commission is empowered to apply for and receive grants, appropriations, or gifts

from any federal, state, or local agency, from any public or private foundation, and from any

person, firm, or corporation in order to carry out the purposes of this chapter. The allocation of

any funds received shall be decided by a majority vote of voting members in attendance at a

meeting duly convened for the conduct of business by the commission.

     (g) Seven (7) members of the commission shall constitute a quorum.

     (h) The commission shall meet at least four (4) times per year.

     (i) The commission shall adopt policies concerning the responsibilities of its voting

members and non-voting affiliate members, including attendance at commission meetings.

      (j) All departments and agencies of the state shall furnish advice and information,

documentary and otherwise, to the commission and its agents as may be necessary or desirable to

facilitate the purposes of this chapter.

     (k) The speaker is authorized and directed to provide suitable quarters for the

commission.

      (l) The commission shall file a report with the general assembly outlining its plans for

the celebration on or before December 15th each year prior to the celebration.

     SECTION 13. Section 30-30-2 of the General Laws in Chapter 30-30 entitled "Benefits