| 2/20/2013 |
Shekarchi bill seeks to rein in EDC authority
STATE HOUSE – Legislation introduced by Rep. K. Joseph Shekarchi of Warwick would strike only a few words from existing state law, but the end result, he says, is greater financial protection for the state and its taxpayers.
The Shekarchi bill, (2013-H5463), which has been referred to the House Committee on Finance, would prohibit the RI Economic Development Corporations from guaranteeing any loans and obligations.
“This legislation is not about 38 Studios, specifically, but we certainly learned, painfully, from that situation what the financial implications can be when a quasi-public agency guarantees loans on behalf of the state,” said Representative Shekarchi (D-Dist. 23, Warwick). “EDC has a role to play in the economic well-being of Rhode Island, but I believe there need to be boundaries regarding fiscal matters beyond which the corporation is not allowed to go.”
Under the Shekarchi bill, the EDC “shall not guarantee any loan or obligation, nor shall it pledge the faith and credit of the state or any of its subdivisions.”
The legislation, if approved, will not in any way affect the way the EDC functions or restrict the job the agency was created to do, said Representative Shekarchi. “They can still make contracts, make loans, execute lease agreements, acquire property, undertake planning and development of projects, and the like.”
“But in a case such as 38 Studios,” said Representative Shekarchi, “the agency’s guarantee did not involve its own money. It involved the full faith and credit of the state and its taxpayers and I am one of those who believe the EDC, as a quasi-public agency, should not have that kind of authority.”
Representative Shekarchi said he hopes that efforts by the governor’s office to re-tool the EDC are successful. “The EDC is the point agency for promoting Rhode Island, attracting and growing businesses that create jobs for our citizens. We need a strong, well-functioning EDC but not one that acts with the kind of uncontrolled autonomy that leads to situations such as the 38 Studios mess,” he said.
The Rhode Island Public Expenditure Council recently presented a report that the governor had requested, recommending changes in the way Rhode Island pursues economic growth, including appointment of a state commerce secretary who would shape the state’s businesses policies and oversee a new Executive Office of Commerce. One independent study and report called for elimination of the EDC, replacing it with a strategic office that answers to the governor, a research body based in the state’s universities and a new board of directors that would collaborate with the private sector and administer programs.
“Until any of that comes to fruition,” said Representative Shekarchi, “we need to protect our taxpayers and prevent future loan guarantee problems.”
Co-sponsors of the bill include Rep. John J. Lombardi (D-Dist. 8, Providence), Rep. Mia A. Ackerman (D-Dist. 45, Cumberland, Lincoln), Rep. Robert B. Jacquard (D-Dist. 17, Cranston) and Rep. John J. DeSimone (D-Dist. 5, Providence).
For more information, contact:
Randall T. Szyba, Publicist
State House Room 20
Providence, RI 02903
(401) 222-2457 |
LEGISLATIVE INFO
