2018 -- H 7871

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND COMMERCE

CORPORATION

     Introduced By: Representative Kenneth J. Mendonca

     Date Introduced: February 28, 2018

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-64-8 of the General Laws in Chapter 42-64 entitled "Rhode

Island Commerce Corporation" is hereby amended to read as follows:

     42-64-8. Directors, officers, and employees.

     (a) The powers of the Rhode Island commerce corporation shall be vested in a board of

directors consisting of thirteen (13) members.

     (1) The governor shall serve as a member of the board and as chairperson, ex-officio,

who shall vote only in the event of a tie.

     (2) In addition to the governor, the membership of the board shall consist of twelve (12)

public members to be appointed by the governor.

     (3) Each gubernatorial appointee shall be subject to the advice and consent of the senate

and no one shall be eligible for appointment unless he or she is a resident of this state. The

membership of the board shall reflect the geographic diversity of the state. Four (4) of the public

members shall be owners or principals of small businesses doing business in this state which are

independently owned and operated and which employs one hundred (100) or fewer persons. One

other of the public members shall be a representative of organized labor. One other of the public

members shall be a representative of higher education. One other of the public members shall be

a representative from the governor's work force board. One other of the public members shall be a

representative of a minority business. One other of the public members shall be a senior manager

of a business which derives a majority of its revenue from the defense industry and has facilities

physically located in the state. One other of the public members shall be appointed on an interim

basis by the governor when a project plan of the corporation situated on federal land is

disapproved by the governing body of a municipality in accordance with § 42-64-13(a)(4). The

member shall be the mayor of the municipality within whose borders all or a majority of the

project plan is to be carried out, or in a municipality, which has no mayor, the member shall be

the president of the town or city council. The appointed interim member shall have all the powers

of other members of the board only in its deliberations and action on the disapproval of the

project plan situated on federal land and within the borders of his or her municipality. Upon final

action by the board pursuant to § 42-64-13(a)(5), the interim member's term of appointment shall

automatically terminate.

     (4) It shall be the responsibility of the corporation to conduct a training course for newly

appointed and qualified members and new designees of ex-officio members within six (6) months

of their qualification or designation. The course shall be developed by the executive director of

the corporation or his or her designee, be approved by the board, and conducted by the executive

director or his or her designee. The board may approve the use of any board or staff members or

other individuals to assist with training. The training course shall include instruction in the

following areas: the provisions of the entirety of chapter 64 of this title and of chapters 46 of this

title, 14 of title 36, and 2 of title 38 of the Rhode Island general laws; and the board's rules and

regulations. The director of the department of administration shall, within ninety (90) days of July

15, 2005, prepare and disseminate materials relating to the provisions of chapters 46 of this title,

14 of title 36, and 2 of title 38.

     (5) Members of the board shall be removable by the governor, pursuant to the provisions

of § 36-1-7 and for cause only, and removal solely for partisan or personal reasons unrelated to

capacity or fitness for the office shall be unlawful.

     (6) The terms for the members of the board of directors were established by the

appointment of twelve (12) directors in 2010 with the directors' initial terms expiring as follows:

three (3) members shall have terms expiring on February 1, 2011; three (3) members shall have

terms expiring on February 1, 2012; three (3) members shall have terms expiring on February 1,

2013; and three (3) members shall have terms expiring on February 1, 2014. Beginning in 2011

and annually thereafter, during the month of January, the governor shall appoint a member or

members to succeed the member or members whose terms will then next expire to serve for a

term of four (4) years commencing on the first day of February and then next following, and

thereafter until the successors are appointed and qualified. Beginning in 2011 and annually

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thereafter the governor shall appoint owners or principals of small businesses doing business in

this state that are independently owned and operated, and that employ one hundred (100) or fewer

persons. The members of the board shall be eligible to succeed themselves, but only upon

reappointment and with senate advice and consent.

     (7) In the event of a vacancy occurring in the office of a member by death, resignation or

otherwise, that vacancy shall be filled in the same manner as an original appointment, but only for

the remainder of the term of the former member.

     (b) 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 those duties. A director may engage in private employment, or in a profession or

business.

     (c) The chairperson shall designate a vice chairperson from among the members of the

board who shall serve at the pleasure of the chairperson. A majority of directors holding office

shall constitute a quorum, and, except as otherwise provided in § 42-64-13, any action to be taken

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

by a majority of the directors present and entitled to vote 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 of the rights and perform all of the duties of the

corporation.

     (d) The chief executive officer of the corporation shall be executive director of the

corporation until such time that the secretary of commerce is appointed. Upon the appointment of

a secretary of commerce, the secretary of commerce shall be the commerce corporation's chief

executive officer and responsible for the management of the corporation. There shall be a chief

operating officer (COO) of the corporation and he/she shall be appointed by the secretary of

commerce. The COO shall be the chief administrative officer of the corporation and responsible

for the day-to-day management of the corporation. The COO shall be a professional in the area of

economic development; management of economic development corporations; and shall hold the

requisite experience and education as established by the secretary and board.

     (e) The board of directors shall appoint a secretary and such additional officers and staff

members as they shall deem appropriate and shall determine the amount of reasonable

compensation, if any, each shall receive. The board of directors may vest in the executive

director, or the director's subordinates, and, upon the appointment of a secretary of commerce, the

chief operating officer or the chief operating officer's subordinates, the authority to appoint

additional staff members and to determine the amount of compensation each individual shall

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receive.

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

corporation, engage in any other private employment, profession or business, except with the

approval of the board of directors.

     (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, building-loan association, architecture

firm, insurance company, or any other firm, person, or corporation to serve as a director of the

corporation, nor shall any contract or transaction between the corporation and a financial

institution, investment banking firm, brokerage firm, commercial bank, trust company, building-

loan association, architecture firm, insurance company, or other firm, person, or corporation be

void or voidable by reason of that service as director of the corporation. If any director, officer, or

employee of the corporation 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 corporation, that interest shall be disclosed to the

corporation and set forth in the minutes of the corporation, and the director, officer, or employee

having that ownership interest shall not participate on behalf of the corporation in the

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

a quorum at a meeting of the board of directors of the corporation that authorizes the contract or

transaction.

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

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

The corporation shall be subject to the provisions of chapter 46 of title 42 ("Open Meetings") and

chapter 2 of title 38 ("Access to Public Records").

     (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 of the authority of the board of directors, but no

executive committee shall have the authority of the board of directors in reference to the

disposition of all or substantially all of the property and assets of the corporation, amending the

by-laws of the corporation; exercising the condemnation power conferred upon the corporation by

§ 42-64-9; or taking actions described or referred to in § 42-64-13(a).

     (j) The board shall create a capital finance subcommittee that shall be responsible for

drafting for board approval a set of guidelines, principals, and processes for all loans, loan

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guarantees, and financing programs. The guidelines shall contain a set of metrics that the board

can use to determine the effectiveness of each program and to inform the governor and the

general assembly of the outcome of the various programs and to determine if there is need for

modification, continuance, or termination. The guidelines shall also contain measures to annually

review the outstanding loan and loan guarantee programs to determine if the loans and loan

guarantees were granted in accordance with the board's guidelines and principals and to

determine the risk factors normally used by lending institutions to determine risk and potential for

repayment. The board shall also implement the provisions of §§ 42-64-36 and 42-64-37.

     (k) Any action required by this chapter to be taken at a meeting of the board of directors,

or any action that may be taken at a meeting of the board of directors, or committee of the board

of directors, may be taken without a meeting if a consent in writing, setting forth the action to be

taken, shall be signed before or after that action by all of the directors, or all of the members of

the committee, as the case may be.

     (l) Employees of the corporation shall not, by reason of their employment, be deemed to

be employees of the state for any purpose, any other provision of the general laws to the contrary

notwithstanding, including, without limiting the generality of the foregoing, chapters 29, 39, and

42 of title 28 and chapters 4, 8, 9, and 10 of title 36.

     (m) The board shall create a set of metrics and reporting requirements to disclose the

programs and services offered or provided by the corporation and the effectiveness of each

offering. The board shall develop an annual report containing these metrics and shall submit the

report to the governor and the general assembly. The annual report shall also contain

recommendations for improving the business climate within the state and other actions the board

deems necessary to improve its effectiveness.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND COMMERCE

CORPORATION

***

     This act would provide that the board of directors of the Rhode Island Commerce

Corporation shall include a senior manager of a business which derives a majority of its revenue

from the defense industry and has facilities located in the state.

     This act would take effect upon passage.

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