ARTICLE 7 SUBSTITUTE A AS AMENDED

 

RELATING TO DEBT MANAGEMENT ACT JOINT RESOLUTIONS

 

SECTION 1.     This article shall serve as joint resolutions required pursuant to Rhode Island General Laws 35-18-1, et seq.

SECTION 2.  Neighborhood Opportunities Program

WHEREAS, The state of Rhode Island has a significant need for affordable housing; and

WHEREAS, These projects will increase the amount of affordable housing and transitional housing service available in the state to its citizens; and

WHEREAS, The state developed and utilized a program in fiscal year 2002 that would allow the Neighborhood Opportunities Program to be financed through bonds issued by the Rhode Island Housing and Mortgage Finance Corporation, insured, secured, or otherwise credit-enhanced or purchased by a major financial institution, to be repaid by the state (the "Financing"); and

WHEREAS,  This financing proposal is a prudent funding mechanism that provides replacement funding for these housing programs and an additional $7,500,000 for the Neighborhood Opportunities Program in fiscal year 2007; and

WHEREAS, $7,500,000 of funding for the Neighborhood Opportunities Program could result in creation of over 200 units of affordable housing; and

WHEREAS, The Rhode island Public Corporation Debt Management Act (R.I. General Laws section 35-18-1, et seq.) requires the General Assembly to provide its consent to the issuance or incurring by the state of Rhode Island of certain obligations including financing guarantees or other agreements; and

WHEREAS,  This act shall serve as the concurrent resolution of approval required by the Rhode Island Public Corporation Debt Management Act (R.I. General Laws section 35-18-1 et seq.); and

WHEREAS, The project costs associated with the Neighborhood Opportunities Program are estimated to be $7,500,000 in fiscal year 2007. The total financing obligation of the state of Rhode Island would be approximately $8.9 million, with $7.5 million deposited in the construction fund provided that up to $0.06 million be made available to pay the associated costs of financing if required. Total payments on the state's obligation over six (6) years on the $7.5 million issuance are projected to be $8.9 million, assuming an average effective interest rate of 5.0%. The payments would be financed within the Department of Administration from general revenue appropriations; now, therefore be it

RESOLVED, That providing affordable housing and transitional housing services to the state's population is a priority of this general assembly; and be it further

RESOLVED, That this general assembly hereby authorizes the Governor, the director of the department of administration or other appropriate state officials to enter into a financial obligation, guarantee, or other agreement, or agreements evidencing the financing obligation of the state of Rhode Island for the term of the financing in an amount not to exceed $8.9 million for the provision of funds for the Neighborhood Opportunities Program in fiscal year 2007 limited to the purpose of providing housing rental units; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon passage by the general assembly.

SECTION 3.  Department of Administration Vehicle Lease Purchase.

WHEREAS,  the state of Rhode Island finds that it is cost-effective to use the state’s tax-exempt borrowing capacity to finance vehicles, trucks and heavy equipment; and

WHEREAS, the state of Rhode Island finds that it is cost-effective when such borrowings are consolidated into one borrowing package rather than executed on an individual basis with financing companies; and

WHEREAS, the Rhode Island Public Corporation Debt Management Act (R.I. General Laws Section 35-18-1, et seq) requires the general assembly to provide its consent to the issuance of debt incurring by the state of Rhode Island and other public agencies of certain obligations; and

WHEREAS, this methodology has been approved in past years by the general assembly; and

WHEREAS, the state of Rhode Island Department of Administration desires to enter into financing agreements to finance the purchase of thirty (30) State Police Trooper vehicles and associated equipment, heavy equipment for the Department of Transportation, and other replacement vehicles for various state agencies, as required; and

WHEREAS, the Department of Administration estimates that the total issuance for vehicles and equipment will not exceed $10.5 million, with $10,450,000 deposited in the vehicle replacement fund and $50,000 available to pay the associated costs of financing. Total lease payments over a period of three (3) years for State Police and other vehicles and ten (10) years for transportation heavy equipment are projected to be $10,245,800, assuming an average coupon of 4.0 percent. The lease payments would be financed within the various general revenue, federal, restricted, and other fund appropriations available to the respective departments; now, therefore, be it

RESOLVED, That it is cost-effective when such borrowings are consolidated into one borrowing package; and be it further

RESOLVED, That this general assembly hereby approves financing in an amount not to exceed $10,500,000 for the purchase of vehicles, heavy equipment and trucks during fiscal year 2007; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by this General Assembly.

SECTION 4.  Information Technology Improvements.

WHEREAS, The computer systems that currently support the Division of Motor Vehicles are outdated and put the operations of the driver licenses and registrations systems at risk of operation; and

WHEREAS, The enterprise infrastructure of the state’s wide and local area networks need upgrades to protect them from cyber security attack; and

WHEREAS, An integrated professional licensing software platform would increase the regulatory compliance of licensees and increase access and convenience to the public of licensing rules, regulations, and application processing; and

WHEREAS, Public education would benefit from outfitting teachers with skills in the use of information systems; and

 WHEREAS, The state would benefit from a taxation database to enhance tax policy analysis, audits and tax collections; and

WHEREAS, The court system requires timely and integrated data systems capable of interacting with other state systems; and

WHEREAS, the project costs associated with the Innovative Technology Initiative is  $49.3 million.  The total financing obligation of the State of Rhode Island would be approximately $49.9 million, with $49.3 million deposited in the construction fund, and $0.6 million available to pay the associated costs of financing.  Total payments on the State’s obligation over ten (10) years on the $49.3 million issuance are projected to be $63.1 million, assuming an average effective interest rate of 4.5%.  The payments would be financed within the Department of Administration from general revenue appropriations and Division of Motor Vehicles transaction fees; now, therefore be it

RESOLVED, That this General Assembly hereby approves financing in an amount not to exceed $37.0 million for the provision of funds for Innovative Technology including $0.5 million to pay costs of financing; provided, that $3,900,000 be made available from the construction fund for the enterprise infrastructure of the state' s wide and local area network ; and provided, further, that $1,010,234 be made available from the construction fund for an integrated professional licensing software platform; and provided, further, that $15,195,154 million be made available from the construction fund  for comprehensive education information systems in the department of elementary and secondary education; and provided, further, that $2,500,000 be available from the construction fund to develop a taxation data base; and provided, further, that $13,900,000 be available from the construction fund to develop integrated data systems for the judiciary; and be it further

RESOLVED, That the General Assembly hereby approves financing in an amount not to exceed $13,000,000 to develop computer systems to  support  the division of motor vehicles, including $12,795,000 for the project and $205,000 for associated cost of financing; provided that costs of financing would be borne by a surcharge on all transactions over the ten year period; and provided further that the department of administration shall develop and adopt by rule and regulation pursuant to this section that surcharge and structure not to exceed seven (7) years and that all revenues from that surcharge be used exclusively for the payment of the principal, interest, and issuance costs associated  with the $13,000,000 cost of the system; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by the general assembly.

SECTION 5.  School for the Deaf

WHEREAS The State currently lacks the appropriate facility with furnishings, and equipment to educate and serve the deaf population; and

WHEREAS, The General Assembly funded a study in the FY 2006 budget to determine the cost of a new facility, and

WHEREAS, The study revealed that a new facility would cost approximately $31.16 million; and

WHEREAS, There is state-owned property in Lincoln, Rhode Island which is suitable for the facility; and

WHEREAS, The project costs associated with constructing and equipping a new School for the Deaf are estimated to be $31.16 million.  The total financing obligation of the State of Rhode Island would be approximately $31.25 million, with $31.16 million deposited in the construction fund, and $90,000 available to pay the associated costs of financing.  Total payments on the State’s obligation over twenty (20) years on the $31.25 million issuance are projected to be $49.6 million, assuming an average effective interest rate of 5.0%.  The payments would be financed within the Department of Administration from general revenue appropriations; now, therefore, be it

RESOLVED, That a new School for the Deaf is needed to provide an environment conducive to learning; and be it further

RESOLVED, That this General Assembly hereby approves financing in an amount not to exceed $31.25 million for the construction of a new School for the Deaf; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by this General Assembly. 

SECTION 6.  Urban Revitalization Program

WHEREAS, The Rhode Island Economic Development Corporation (the "Corporation") is a public instrumentality of the State of Rhode Island (the "State"), created by the General Assembly pursuant to Rhode Island General Laws Section 42-64-4 et seq. (as enacted, reenacted, and amended, the ("Act"); and

WHEREAS, The general assembly finds that small businesses are the backbone of the Rhode Island economy and that the 24,000 small businesses in Rhode Island are responsible for 196,000 jobs, $16.8 billion in gross state product, and $41.5 million in state tax revenues; and

WHEREAS, Finding good locations for small business growth in urban communities is difficult and is often a serious impediment to the growth of minority and women owned small businesses; and

WHEREAS, The Corporation currently has a number of programs that provide assistance to small businesses to gain access to capital, but that in some cases these programs do not meet the needs of those urban minority and women owned small businesses and the communities they serve and are not of a large enough scale to address the problems and opportunities presented by the nearly 11,000 vacant properties in Rhode Island's core cities; and

WHEREAS, Stimulating the redevelopment and revitalization of commercial and mixed use properties in urban communities is a critical component of the states job creation strategy and compliments the investments that the state and other organizations are making in affordable housing, education, adult literacy, job training, and social series in these communities; and

WHEREAS, The Urban Revitalization Fund of Rhode Island, a nonprofit Rhode Island based Community Development Financial Institution as certified by the United States Treasury Department  has the ability to leverage private sector funds and deliver financial products to for-profit and not-for-profit developers in order to stimulate positive urban economic growth; and

WHEREAS, The act also provides that the Corporation shall have the power to purchase, take, receive, lease, or otherwise acquire, own, hold, improve, use, and otherwise deal in and with, real or personal property, or any interest therein, wherever situated; to sell, convey, mortgage, pledge, lease, exchange, transfer, and otherwise dispose of all or any part of its property and assets for any consideration and upon any terms and conditions as the corporation shall determine; to lend money for its purposes, invest and reinvest its funds, and at its option to take and hold real and personal property at security for the payment of funds so loaned or invested; to acquire or contract to acquire, from any person, firm, corporation, municipality, the federal government, or the state, or any agency of either the federal government or the state, by grant, purchase, lease, gift, condemnation, or otherwise, or to obtain options for the acquisition of any property, real or personal, improved or unimproved, and interests in land less than the fee thereof; and to own, hold, clear, improve, develop, and rehabilitate, and to sell, assign, exchange, transfer, convey, lease, mortgage, or otherwise dispose or encumber that property for the purposes of carrying out the provisions and intent of this chapter, for any consideration as the corporation shall determine; and to be a promoter, partner, member, associate, or manager of any partnership, enterprise, or venture; and

WHEREAS, The act authorizes the Corporation to make contracts and guarantees and incur liabilities, borrow money at any rates of interest as the corporation may determine; to make and execute agreements of lease, conditional sales contracts, installment sales contracts, loan agreements, mortgages, construction contracts, operation contracts, and other contracts and instruments necessary or convenient in the exercise of the powers and functions of the corporation; and

WHEREAS, Pursuant to Rhode Island general laws sections 35-18-3 and 35-18-4, the Corporation hereby requests the approval of the general assembly of the Corporation's issuance of not more than $2,000,000 Rhode Island Economic Development Corporation Guarantees (the "Obligations") for the purpose of supporting commercial revitalization projects in urban areas; and

WHEREAS, The financing of the program will be accomplished through issuance of guarantees by the Corporation; and

WHEREAS, The Corporation will make up to $2,000,000 in guarantees available to or on behalf of The Urban Revitalization Fund of Rhode Island; and

WHEREAS, The Urban Revitalization Fund intends to initiate a program to utilize the guarantee in order to make loans at a three and one-half percent (3.5%) weighted average interest rate with thirty-six (36) month maximum terms; and

WHEREAS, The program will directly benefit the state; and

WHEREAS, The total obligations related to the program are anticipated to be $2,000,000; now, therefore be it

RESOLVED, That this general assembly finds that the program is a project of a type and nature consistent with the purposes and within the powers of the Corporation to undertake, and hereby approves the Corporation's issuance of not more than $2,000,000 in guarantees to or on behalf of The Urban Revitalization Fund of Rhode Island in order to secure a line of credit to fund loans for urban revitalization projects and that may not be used for overhead; and be it further

RESOLVED, That these funds are to be used strictly to secure a line of credit to fund guarantees of loans for urban revitalization projects, which guarantees may be of principal and capital interest related to such loans, but shall not be used for overhead other than a fee to The Urban Revitalization Fund of no more than one percent (1%) of any loan made; and be it further

RESOLVED, That the program shall allow The Urban Revitalization Fund to use the secured line of credit to secure guarantees of loans to individual companies in lesser amounts, provided that no guarantee made by The Urban Revitalization Fund under this program shall have a term in excess of ten (10) years and the maximum value of any guarantee conveyed under the authority of the program shall not exceed twenty five percent (25%) of the total loan amount; and further, The Urban Revitalization Fund shall not issue any guarantee after the tenth (10th) anniversary of the effective date of this act; however, payments may, if necessary and within the limits of the maximum annual and programmatic guarantee amounts, be made after such term has expired if a claim arising from nonpayment was made within the approved ten (10) year term; and be it further

RESOLVED, That the Rhode Island Economic Development Corporation will approve and enter into a contract with The Urban Revitalization Fund, and such contract will include such terms as the Rhode Island Economic Development Corporation deems reasonable and necessary for the administration and monitoring of the program in order to protect the fiscal and policy interests of the state, to assure compliance with the terms of this authorization, and to track the impact of the program, and shall limit the issuance of loan guarantees to seven hundred thousand dollars ($700,000) in any one year period; and further shall not include for the payment of any fees to the Corporation for the issuance of the guarantee; and be it further

RESOLVED, That The Urban Revitalization Fund shall provide the Corporation with the name of any borrower receiving the benefit of the guarantee program and the Corporation shall not approve any other incentives for the benefit of the borrower during the term of the loan guarantee, including, but not limited to, approvals under section 42-64-20 for "project status"; and be it further

RESOLVED,  That the obligations will be special obligations of the Corporation payable from funds received by the Corporation upon request to the state as may be required from time to time; and be it further

RESOLVED, That the General Assembly shall appropriate the amount of fifty thousand dollars ($50,000) to the Corporation for the purposes of establishing a capital reserve fund pursuant to section 42-64-18, which amount shall be deemed the minimum capital reserve fund requirement pursuant to that section; on or before December first of each year, the Corporation shall make and deliver to the governor a certificate stating the sum, if any, required to restore the capital reserve fund to the minimum capital reserve fund requirement for the fund. During each January session of the general assembly, the governor shall submit to the general assembly as part of the governor's budget, the amount, if any, required to restore the capital reserve fund to the minimum capital reserve fund requirement for the fund. All sums appropriated by the general assembly for this purpose, and paid to the corporation, if any, shall be deposited by the corporation in the applicable capital reserve fund. The maximum fiscal year obligation of the Corporation and the state is $2,000,000 and the likely maximum fiscal year obligation is $356,934; and be it further

RESOLVED, That the obligation will not constitute indebtedness of the state or any of its subdivisions or a debt for which the full faith and credit of the state or any of its subdivisions is pledged except to the extent that the same replenishes the capital reserve fund, subject to annual budget appropriations; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by this general assembly and shall act to repeal the prior resolution of the general assembly found at 2005 Public Laws Chapter 117, Article 6, Section 12; provided, that the creation or issuance of any guarantee by the Corporation shall be not later than twelve (12) months from the date of such passage and any initial claims upon such guarantees shall be made no later than ten (10) years from the date of such creation or issuance.

SECTION 7.  Energy Service Companies - Equipment Replacement.

WHEREAS, in FY 2005 Rhode Island state government expended approximately $38.0 million on energy utilities for state-owned facilities; and

WHEREAS, energy prices increased significantly during FY 2006 and are expected to continue to rise in FY 2007; and

WHEREAS, the State of Rhode Island owns in excess of two hundred (200) buildings with boilers, heating systems, air conditioning systems, lighting and control systems many of which are antiquated, inefficient, and are expensive to maintain; and

WHEREAS, Various private sector companies, hereinafter referred to as energy service companies are willing to guarantee energy savings to pay for the cost of the replacement of these antiquated and inefficient boilers, heating and air conditioning, lighting and other building systems and equipment; and

WHEREAS, several state agencies are seeking to retain energy service companies to undertake energy service contracts; and

WHEREAS, State facilities/agencies seeking to undertake energy savings contracts to replace old and obsolete equipment that would be normally be done through the capital budget process and the estimated costs of such contracts include:

Department of Administration not to exceed $6.0 million;

University of Rhode Island not to exceed $18.1 million;

Rhode Island College not to exceed $7.5 million;

Rhode Island Airport Corporation not to exceed $5.0 million;

now, therefore, be it

RESOLVED, That the State of Rhode Island is authorized to proceed with the aforementioned projects in the amounts specified above, exclusive of financing and servicing costs; and be it further

RESOLVED, That these contracts will be structured so that, at a minimum, the annual principal, interest and service and maintenance costs resulting from these contracts would be completely offset by the annual energy savings guaranteed by the energy service companies; and be it further  

RESOLVED, That these contracts would be multi-year contracts of up to a term of eighteen years.  In addition to saving energy and helping to protect the state from future energy cost increases, these contracts would aide in reducing maintenance costs by providing new equipment and replacing older energy consuming systems; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by this General Assembly.

SECTION 8. University of Rhode Island Land Parcel

WHEREAS, The University of Rhode Island is proposing a project which involves the purchase of a 114 acre parcel of undeveloped land located immediately north of the University's developed Kingston Campus property; and

WHEREAS, The parcel is bound on all sides by University land holdings; to the west by Plains Road and 123 acres of University land, to the north by a 128 acre undeveloped parcel also owned by the University and to the east by another 11 acre University parcel; and

WHEREAS, The purchase of this parcel enables contiguous ownership of a large land area north and west of the Kingston Campus; and

WHEREAS, The acquisition of this privately held parcel is of potential importance to the future of the University and Campus development; and

WHEREAS, The parcel is presently being appraised to determine its value; and

WHEREAS, The University will make payments totaling not greater than one million four hundred and ninety-five thousand dollars ($1,495,000) to purchase the property through an installment purchase agreement with an expected term of eight (8) years; and

WHEREAS, The annual payments will be supported by the University general revenues; and

RESOLVED, That the total amount of the installment purchase payments shall be limited to not more than $1,495,000 and payments of not more than $140,000 will be made in five of the years and not more than $265,000 will be made in three years of the eight year term; and be it further

RESOLVED, That this Joint Resolution shall take effect upon passage by this general assembly.

SECTION 9. Student Athlete Development Center

WHEREAS,  The University of Rhode Island is proposing a project which involves the construction of a Student Athlete Development Center located adjacent to and part of the Keaney Gymnasium and Tootell Center at the University of Rhode Island's Kingston Campus; and

WHEREAS, The project will involve the construction of the Center and the renovation to portions of Keaney Gymnasium and Tootell Center that will be utilized in support of the Center; and

WHEREAS, The student athlete development facilities that currently support University of Rhode Island student athletes are outdated, inadequate, and in disrepair; and

WHEREAS, The infrastructure of the University is critical to the success of student athletes and the University; and

WHEREAS, Funding for this project will be financed through Rhode Island Health and Educational Building Corporation revenue bonds; and

WHEREAS, The project costs are estimated to be $7,000,000. The total financing obligation of the University would be approximately $7,210,000, with $7,000,000 deposited in the construction fund, and $210,000 available to pay the associated costs of financing. Total payments on the University's obligation over twenty (20) years on the $7,210,000 issuance are projected to be $11,200,000, assuming an average interest rate of 4.75 percent; and

WHEREAS, Debt service payments would be supported by University general revenues; now, therefore be it

RESOLVED, That this General Assembly hereby approved financing in an amount not to exceed $7,210,000 for the construction of a Student Athlete Development Center; and be it further

RESOLVED, That this Joint Resolution shall take effect immediately upon its passage by this General Assembly.

SECTION 10. Healthcare Information Exchange

WHEREAS, A statewide health information exchange would improve the quality, safety, and value of healthcare in the state and allow patients and providers to have their healthcare information when and where they need it by facilitating the exchange of medical information; and

WHEREAS, The total project costs associated with the Healthcare Information Exchange are estimated to be $20 million; and

WHEREAS, There are significant benefits to numerous participants in the healthcare industry in Rhode Island; and

WHEREAS, The financing for this project could be provided by the Rhode Island Health and Educational Building Corporation or another quasi-public agency through the issuance of revenue bonds to a Regional Health Information Organization to be repaid through subscriber charges; and

WHEREAS, This Regional Health Information Organization would be determined by the department of administration following an open bid process and would among other things provide administrative and financial services, operational support; and

WHEREAS, The total financing obligation of the State of Rhode Island for a $20 million health information exchange would be approximately $6.0 million, with $5.9 million deposited in the construction fund, and $0.1 million available to pay the associated costs of financing. Total payments on the state's obligation over ten (10) years on the $6.0 million issuance are projected to be $8.0 million, assuming an average effective interest rate of 5.5%. The payments for the state's share would be financed by various state departments subscribing to the system from general revenue appropriations, federal and any other sources which might be available; now, therefore be it

RESOLVED, That this General Assembly hereby authorizes the Department of Administration and the Department of Human Services to commit to financing their shares of the initial capitalization and operations of a Health Information Exchange;

Provided all Rhode Island domiciled insurers (for both their insured and self-insured plans for Rhode Island residents administered by them or their affiliates), Medicare, and Medicaid participants participate in the same capitalization and operations using a common participation formula in which the state of Rhode Island is a party only to the extent of its Medicaid and state employee and retired employee health plans; and

Provided further that each participants' share shall be its covered Rhode Island population divided by the total covered Rhode Island population of all participants or some like formula; and

Provided, further that the annual costs of the State of Rhode Island share shall be incorporation into the operating budgets of the respective departments to be approved by the general assembly; now, therefore be it

RESOLVED, That the general assembly approves financing in an amount not to exceed $6.0 million plus interest for the provision of funds for the State of Rhode Island's share of the capital costs associated with the Healthcare Information Exchange and authorizes subscription charges to be paid to include the debt service and the operational costs based upon the state's share of the project; and be it further

RESOLVED, That this Joint Resolution shall take effect upon signed agreements between the Regional Health Information Organization and all Rhode Island domiciled insurers, Medicare, and sixty days after submission of those agreements to the Chairperson of the House Finance Committee and the Senate Finance committee and their respective fiscal advisors.

SECTION 11. Masonic Temple

WHEREAS, The Rhode Island Economic Development Corporation (the "Corporation") entered into that certain Ground Lease dated December 20, 2002 (the "Ground Lease") by and between the Corporation and Masonic Hotel Developer, LLC (the "Developer") pursuant to which the Developer is restoring, rehabilitating, redeveloping and preserving the historic Masonic Temple structure (the "Masonic Temple") in order for it to be utilized as a hotel and hospitality center; and

WHEREAS, The Developer will invest in excess of $70,000,000 in the Masonic Temple to facilitate such restoration and reuse of the Masonic Temple; and

WHEREAS, The Developer also has invested in the Veterans Memorial Auditorium located adjacent to the Masonic Temple and has cooperated with and donated funds to the Veterans Memorial Auditorium Foundation with respect to the coordinated restoration and rehabilitation of the Veterans Memorial Auditorium in conjunction with the restoration and reuse of the Masonic Temple; and   

WHEREAS, The General Assembly finds that the State of Rhode Island tax credits earned pursuant to R.I.G.L. section 44-33.2-1 et seq. (historic structures – tax credits) (the "Historic Tax Credits") have had and continue to have the desired effect of stimulating, promoting and encouraging the redevelopment and reuse of historic structures by modern commercial, residential and manufacturing enterprises in order to foster civic beauty, promote public education, pleasure and welfare and otherwise generally improve and enhance the economic well being of the citizens of the State of Rhode Island;

WHEREAS, It is anticipated that the Historic Tax Credits with respect to the Masonic Temple will be sold, transferred and conveyed in a manner that results in market conditions causing the user of the Historic Tax Credits to obtain such Historic Tax Credits for an amount that is less than the face amount of the credits; and

WHEREAS, Notwithstanding the fact that the Historic Tax Credits when they are sold, will be acquired by the ultimate users of the credits for an amount that is less than the face amount of the credits, the State of Rhode Island still is obligated to honor the Historic Tax Credits at the full face amount of the credits and is obligated to allow the ultimate users to reduce their tax liabilities to the State of Rhode Island by the full face amount of the credits; and 

WHEREAS, The Developer and the Corporation desire to amend the Ground Lease to provide that Corporation may invest in the Developer, or any affiliate, subsidiary, successor, or related entity in order for the Corporation to control the utilization of the Historic Tax Credits with respect to the Masonic Temple thereby resulting in a savings to the State of Rhode Island; and   

WHEREAS, The Developer will be entitled to Historic Tax Credits related to the Masonic Temple in an amount equal to no less than $24,000,000; and

WHEREAS, The Developer has offered to contribute and convey control of the rights to the Historic Tax Credits related to the Masonic Temple to an entity that would be controlled by the Corporation in exchange for the Corporation investing $14,000,000 in the Developer or an entity affiliated with it; and

WHEREAS, The Corporation would borrow such $14,000,000 plus costs on or about March 2007 at rates not to exceed the national average Prime Rate of interest as set forth from to time in the Wall Street Journal, with a term of repayment of not more than three (3) years; and

WHEREAS, By way of example, if the Corporation borrowed $14,000,000 to invest in the Developer as its affiliate, subsidiary, successor or related entity plus $280,000 of borrowing and transactional costs at a rate per annum of 7% for a term of 3 years with annual payments of amortized principal plus interest, the total cost of the borrowing and investment would be $16,324,350; and

WHEREAS, In furtherance of said example, if the Corporation invested in Developer, its affiliate, subsidiary or successor in a manner that results in control of the utilization of the Historic Tax Credits related to the Masonic Temple of $24,000,000 in value, then the State of Rhode Island would save the difference between $24,000,000 minus $16,324,350 minus fees that otherwise would be paid to utilize the Historic Tax Credits ($2,400,000), resulting in a net savings to the State of $5,275,560; and

WHEREAS, Pursuant to R.I.G.L. section 35-18-1 et seq., the Corporation hereby requests the approval of the General Assembly of the Corporation's borrowing of up to $14,280,000 at an amortized rate not to exceed the Prime Rate for a term not to exceed three (3) years (the "Obligations") for the purpose of supporting investment by the Corporation in the Developer or any affiliate, subsidiary, successor, or related party that would allow the Corporation to control the rights to the Historic Tax Credits with respect to the Masonic Temple.

NOW, THEREFORE, be it resolved as follows:

RESOLVED, That the Corporation, in conjunction with the amendment to the Ground Lease, is authorized to enter into the Obligations for an amount not to exceed $14,280,000 at a rate per year not to exceed the national average Prime Rate as published from time to time in the Wall Street Journal, for a term not to exceed three (3) years in the form of borrowings, lines of credit, direct loans, notes, bonds or other cost effective means of incurring the Obligations, with transactional costs (including, but not limited to bank or other borrowing charges, other than interest, fees, charges, costs and legal fees) not to exceed two percent (2%) of the Obligations, in order to facilitate the Corporation acquiring an interest in the Developer or its affiliate, subsidiary, or other related entity, such that the control of the Historic Tax Credits related to the Masonic Temple shall be under the control and authority of the Corporation.

RESOLVED, That the utilization of the Obligations to invest in the Developer or any subsidiary, successor, or affiliate thereof shall allow the Corporation to acquire control over the Historic Tax Credits relating to the Masonic Temple which otherwise could have reduced the tax revenue available to the State of Rhode Island by an amount equal to no less than $24,000,000; and   

RESOLVED, The Corporation shall request the Governor to include in each of the fiscal years following the undertaking by the Corporation of the Obligations an amount equal to the debt service of the Obligations pursuant to the terms set forth in these Resolutions and the General Assembly shall appropriate to the Corporation amounts sufficient to satisfy the debt service of the Obligations.

SECTION 12. This article shall take effect upon passage.