2019 -- S 0633

========

LC002196

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

____________

J O I N T   R E S O L U T I O N

AUTHORIZING THE ISSUANCE AND REFINANCING OF GARVEE BONDS

     Introduced By: Senators Goodwin, and Ruggerio

     Date Introduced: March 19, 2019

     Referred To: Senate Finance

     (Dept. of Transportation)

     SECTION 1. This joint resolution consists of joint resolutions submitted pursuant to

chapter 18 of title 35.

     SECTION 2. Refinancing of GARVEE Bonds.

     WHEREAS, The Rhode Island Department of Transportation ("RIDOT") has

undertaken five (5) major transportation projects, and these projects were either

substantially completed or nearing completion in the year 2019; and

     WHEREAS, The construction of these projects was deemed critical in order to preserve

and maintain the public safety and continued economic success and viability of the state of Rhode

Island, its ports and infrastructure; and

     WHEREAS, RIDOT explored various options to finance the costs of the five (5) major

transportation projects and determined that the federal-aid financing program authorized in

federal law by Section 311 of the National Highway System Designation Act of 1995 and

commonly referred to as the Grant Anticipation Revenue Vehicle Program ("GARVEE

Program") represented the best financing mechanism for the state of Rhode Island in as much as

the GARVEE Program accelerated the funding and construction of the five (5) major

transportation projects; and

     WHEREAS, The general assembly, in Chapter 376, Article 36, Section 8 of the Public

Laws of 2003, authorized the Rhode Island Economic Development Corporation, now the Rhode

Island commerce corporation ("commerce corporation"), to issue bonds ("GARVEE Bonds") or

other debt instruments on behalf of RIDOT and such GARVEE Bonds are secured by future

appropriations for federal-aid transportation projects whereby such amounts are used to cover an

assortment of bond-related costs, including principal and interest payments, issuance costs,

insurance, and other costs incidental to financing; and

     WHEREAS, GARVEE Bonds may be issued as special, limited obligations payable

solely from federal transportation funds, subject to annual appropriation by the state, without a

full faith and credit pledge by the state; and the holders of the GARVEE Bonds may not look to

any other revenues of the commerce corporation, the state or RIDOT for the payment of the

GARVEE Bonds; and

     WHEREAS, The original Public Corporation Debt Management authorization in Article

36 of the FY 2004 Budget as enacted included a total of seven hundred nine million six hundred

thousand dollars ($709,600,000) in GARVEE funding to be distributed across five (5) projects, as

follows: one hundred twenty-six million two hundred thousand dollars ($126,200,000) for the

Sakonnet River Bridge; three hundred forty-eight million three hundred thousand dollars

($348,300,000) for the Route I-195 Relocation; eighty-five million four hundred thousand dollars

($85,400,000) for the Washington Bridge; forty-two million five hundred thousand dollars

($42,500,000) for the Freight Rail Improvement Program (FRIP); and one hundred seven million

two hundred thousand dollars ($107,200,000) for Route 403; and

     WHEREAS, Interest rates are at historical lows and the existing revenue available to

RIDOT is insufficient to fund the necessary program to replace, reconstruct, and maintain Rhode

Island's bridges and otherwise bring the state's transportation infrastructure into a state of good

repair; and

     WHEREAS, It would be in the best interests of the state to maximize all potential sources

of revenue to provide a more robust infrastructure program; now, therefore be it

     RESOLVED AND ENACTED, That the governor of the state of Rhode Island or the

director of the department of transportation or the director of the department of administration or

the chief executive officer or the chief operating officer of the commerce corporation each be and

each hereafter are, acting singly, authorized and empowered by the general assembly to enter into

a financing lease, guarantee, loan and trust agreement, indenture or other obligations or contracts

or agreements and to take such other actions as such official shall deem necessary or appropriate

in order to issue or facilitate the refinancing and restructuring by the commerce corporation of the

previously issued GARVEE Bonds pursuant to the authorization granted in Chapter 376, Article

36, Section 8 of the Public Laws of 2003; and be it further

     RESOLVED, That the commerce corporation or any subsidiary thereof or other

instrumentality, agency or quasi-public corporation otherwise authorized and empowered to

LC002196 - Page 2 of 5

refinance and restructure the bonds specified in this Joint Resolution each be and each hereafter

are, acting singly, authorized and empowered by the general assembly to provide for the

necessary security for such bonds consistent with the provisions of this Joint Resolution,

including any action to pledge, assign or otherwise transfer the right to receive all or any portion

of future Federal Highway Administration (FHWA) appropriations for federal-aid transportation

projects or other revenues permitted by the laws of the state of Rhode Island to secure or provide

for the payment of any such GARVEE or other bonds; and be it further

     RESOLVED, That notwithstanding the amount of total debt service referenced in

Chapter 376, Article 36, Section 8 of the Public Laws of 2003 and Chapter 241, Article 7, Section

5 of the Public Laws of 2012, any refinancing and restructuring may be structured to provide a

net benefit to RIDOT with the approval of the governor; and be it further

     RESOLVED, That no other changes in allocations or expenditure are authorized beyond

the amendments included in this Joint Resolution; and be it further

     RESOLVED, That this general assembly hereby approves refinancing and restructuring

of the existing GARVEE Bonds in order to provide funding for critical and transportation

infrastructure needs; and be it further

     RESOLVED, That this joint resolution shall take effect immediately upon its passage by

the general assembly.

     SECTION 3. Issuance of GARVEE Bonds.

     WHEREAS, The Rhode Island department of transportation ("the department") has

completed a detailed review of available funding sources for transportation reconstruction,

maintenance, and repair and has determined that the funding available to carry out an immediate

program of bridge reconstruction and preventative maintenance (the "program") is insufficient;

and

     WHEREAS, The limitation in funding has occurred, in part, due to the absence of a state­

funded capital investment program in transportation infrastructure, and the level funding of

federal appropriations to the state, along with a reduction in federal funding through the

elimination of federal earmarks and expiration of additional special federal funds; and

     WHEREAS, Congress has enacted the Fixing America's Surface Transportation (FAST)

Act, which provides an increase in available federal funding; and

     WHEREAS, The department has explored various options to finance the costs of a robust

infrastructure program and concluded that the federal-aid financing program authorized in federal

law by Section 311 of the National Highway System Designation Act of 1995 and commonly

referred to as the Grant Anticipation Revenue Vehicle Program ("GARVEE program") represents

LC002196 - Page 3 of 5

the best financing mechanism for the state of Rhode Island inasmuch as the GARVEE program

accelerates the funding available to ensure that more Rhode Island bridges do not become

structurally deficient; and

     WHEREAS, The GARVEE program allows a state to issue bonds ("GARVEE Bonds")

or other debt instruments backed by future appropriations for federal-aid transportation projects

whereby such amounts are used to cover an assortment of bond-related costs, including principal

and interest payments, issuance costs, insurance, and other costs incidental to financing; and

     WHEREAS, Among other advantages, GARVEE Bonds may be issued as special

revenue bonds without a full faith and credit pledge by the state of Rhode Island; and

     WHEREAS, This general assembly finds that the reconstruction, maintenance, and repair

of the transportation infrastructure of the state is critical for economic development and the

general welfare of both businesses and residents; and

     WHEREAS, The general assembly has studied the issue of sustainable transportation

funding and has determined that no single approach, instrument or method is able to provide

sufficient revenue to maintain the state transportation system in a state of good repair; and

     WHEREAS, The department has determined that GARVEE Bonds should be utilized to

fund the bridge replacement, reconstruction, and maintenance component of the ten (10) year

capital program known as RhodeWorks; and

     WHEREAS, In connection with the issuance of GARVEE Bonds, the state of Rhode

Island, acting by and through RIDOT, may elect to receive in lieu of certain monies which would

otherwise have been received as reimbursement from FHWA for project costs for bridges in the

RhodeWorks program, debt service payments to repay indebtedness in the form of bonds or notes

issued to finance the costs of the construction and financing bridges in the RhodeWorks program;

and

     WHEREAS, The Rhode Island Public Corporation Debt Management Act (chapter 8 of

title 35) requires the general assembly to provide its consent to the issuance of certain obligations

for essential public facilities of the type referenced herein; and

     WHEREAS, The design, construction, equipping and completion of these improvements

will be financed in whole or in part through revenue bonds issued pursuant to the GARVEE

program by the Rhode Island commerce corporation ("commerce corporation") or through

revenue bonds issued pursuant to the GARVEE program by another agency, instrumentality or

quasi-public corporation established by the state of Rhode Island now or hereafter and otherwise

authorized and empowered pursuant to law to issue bonds of the type referenced herein for the

types of projects enumerated herein, with such issuance having an expected term of fifteen (15)

LC002196 - Page 4 of 5

years, and annual revenues for the operation and maintenance of the bridges to be included in the

annual operating budget of RIDOT; and

     WHEREAS, The capital costs and anticipated bond issuance amounts associated with

these projects are estimated to be two hundred million dollars ($200,000,000); now, therefore, be

it

     RESOLVED AND ENACTED, That the bridges in the RhodeWorks program are each

essential public facilities and critical to ensure the economic viability of the citizens, businesses,

transportation, marine trades and port facilities of the state of Rhode Island and otherwise in the

best interests of the state of Rhode Island, and that this general assembly hereby approves

financing not to exceed two hundred million dollars ($200,000,000) in principal amount of

GARVEE Bonds, the repayment of which shall be derived from and supported by FHWA funds

due the state of Rhode Island. The term of the GARVEE Bonds shall not exceed fifteen (15) years

and the total debt service on the GARVEE Bonds shall not exceed two hundred seventy-five

million dollars ($275,000,000); and be it further

     RESOLVED, That the governor of the state of Rhode Island or the director of the

department of transportation or the director of the department of administration or the chief

executive officer or the chief operating officer of the commerce corporation each be and each

hereafter are, acting singly, authorized and empowered by the general assembly to enter into a

financing lease, guarantee, loan and trust agreement, indenture or other obligations or contracts or

agreements and to take such other actions as such official shall deem necessary or appropriate in

order to issue or facilitate the issuance of the GARVEE Bonds and to provide the commerce

corporation or any subsidiary thereof or other instrumentality, agency or quasi-public corporation

otherwise authorized and empowered to issue the bonds specified in this Joint Resolution for the

RhodeWorks program with the necessary debt service payments up to the amount specified above

and the necessary security for such bonds consistent with the provisions of this Joint Resolution,

including any action to pledge, assign or otherwise transfer the right to receive all or any portion

of future FHWA appropriations for federal-aid transportation projects or other revenues permitted

by the laws of the state of Rhode Island to secure or provide for the payment of any such

GARVEE Bonds; and be it further

     RESOLVED, That this joint resolution shall take effect immediately upon its passage.

========

LC002196

========

LC002196 - Page 5 of 5