Chapter 435

2006 -- H 6750 SUBSTITUTE A AS AMENDED

Enacted 07/07/06

 

A N A C T

RELATING TO SEPARATION OF POWERS

          

     Introduced By: Representatives E Coderre, Crowley, Kilmartin, Davey, and Gallison

     Date Introduced: January 10, 2006

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Section 19-1-2 of the General Laws in Chapter 19-1 entitled "Definitions

and Establishment of Financial Institutions" is hereby amended to read as follows:

 

     19-1-2. Board of bank incorporation. -- (a) The (i) There is hereby authorized, created

and established within the department of business regulation a five (5) member board of bank

incorporation, (hereinafter the “board”), all of whom shall be voting members and serve without

compensation. Three (3) who serve as ex-officio shall be the director of the department of

business regulation (hereinafter the “director”) director or his or her designee, the general

treasurer or his or her designee, and the attorney general or his or her designee., one member of

the house of representatives, to be appointed by the speaker, and one member of the senate, to be

appointed by the president of the senate, shall constitute a board of bank incorporation, The other

two (2) members of the board shall be members of the general public qualified by training or

experience in the fields of finance or banking, appointed by the governor with the advice and

consent of the senate. In appointing public members pursuant to this section, the governor shall

solicit and give due consideration of the recommendations of the general treasurer with respect

thereto. The designee of a member serving as ex-officio shall be a subordinate from within the

department of the ex-officio member and shall represent him or her at all meetings of the board.

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

board shall elect a chair and may elect from among its own members such other officers as they

deem necessary.

      (ii) The board is a public policy appellate board established to consider appeals from a

decision of the director or the director's designee concerning major banking matters which affect

the citizens and tax base of the state and to exercise the powers and perform the duties conferred

or imposed upon it by this title.

      (iii) 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 director or his or her designee

and shall include instruction in the provisions of chapters 19-1, 42-46, 36-14, and 38-2 of Rhode

Island general laws; 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.

      (iv) 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.

     (v) Three (3) members of the board of bank incorporation shall constitute a quorum for

the transaction of business. A majority vote of those present shall be required for action. No

vacancy in the membership of the board shall impair the right of a quorum to exercise all of the

rights and perform all of the duties of the board. Any vacancy which may occur in the board shall

be filled by the governor with the advice and consent of the senate, for the remainder of the

unexpired term in the same manner as the member's predecessor as prescribed in this section.

      (vi) Those members of the board as of the effective date of this act who are members of

the general assembly shall cease to be members of the board on the effective date of this act, and

the governor shall thereupon nominate one new member who shall serve an initial term of three

(3) years and one new member who shall serve an initial term of four (4) years. Thereafter, all

appointed members of the board shall be appointed to terms of four (4) years and be eligible for

reappointment.

      (b)(i) The board of bank incorporation may adopt, and amend from time to time, rules

and regulations for the orderly conduct of its affairs and for the administration of its duties

pursuant to this title. The board of bank incorporation shall collect a filing fee with respect to

applications submitted to it. All fees pursuant to this section shall be paid to the director, to and

for the use of the board of bank incorporation. The fees to be charged for each type of application

shall be established annually at the board of bank incorporation's first public hearing. The board

of bank incorporation shall publish notice of its proposed fee structure at least once a week for

three (3) successive weeks in a newspaper of general circulation.

     (ii) Within ninety (90) days after the end of each fiscal year during which the board has

conducted business, 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, meeting minutes if requested, subjects addressed, decisions rendered,

rules or regulations promulgated, studies conducted, policies 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

authority of the board; a summary of any training courses held pursuant to subsection 19-1-2

(a)(iv); a briefing on anticipated activities in the upcoming fiscal year; and findings and

recommendations for improvements. The report shall be posted electronically on the general

assembly and the secretary of state’s websites as prescribed in section 42-20-8.2 of the Rhode

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

enforcement of this provision.

 

     SECTION 2. Sections 16-57-6.5 and 16-57-7 of the General Laws in Chapter 16-57

entitled "Higher Education Assistance Authority" are hereby amended to read as follows:

 

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

(a) The authority, in conjunction with the general treasurer and the executive director of the

Rhode Island student loan authority, shall submit to the governor, and the general assembly 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 audit 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) Any studies or evaluations prepared in the subject year; 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) A summary of the benefits provided by the tuition savings program including the

number of participants and beneficiaries; and

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

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

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

enforcement of this provision.

 

        16-57-7. Directors, officers, and employees. -- (a) (1) The powers of the authority

shall be vested in a board of directors consisting of nine (9) members, five (5) members of whom

to be 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; and six (6) members serving ex officio,

who shall be the chairperson of the finance committees of the senate and house of representatives

or their designees, and two (2) members of the board of governors for higher education 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, and the chairperson of the Rhode Island Independent Higher

Education Association or their designees. 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 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 governor may remove any member appointed by him or her for

misfeasance, malfeasance, or nonfeasance in office.

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

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

approval of the board of directors; 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.

 

     SECTION 3. Section 16-62-7 of the General Laws in Chapter 16-62 entitled "The Rhode

Island Student Loan Authority" is hereby amended to read as follows:

 

     16-62-7. Directors, officers, and employees. -- (a) The powers of the authority shall be

vested in a board of directors consisting of seven (7) members as follows: six (6) five (5)

members appointed by the governor to the Rhode Island higher education assistance authority

from among members of the general public as provided in section 16-57-7, all appointments

subject to the advice and consent of the senate; and the general treasurer, ex-officio. The general

treasurer may designate a subordinate within his or her department or agency to represent him or

her at all meetings of the board.

      (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 board of directors shall elect one of its members to serve as chairperson. Four (4)

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.

      (d) 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 and shall determine

the amount of compensation, if any, each shall receive. The board of directors may appoint a

chief executive officer and vest in that person or his or her subordinates the authority to appoint

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

receive.

      (e) No fulltime employee shall during the period of his or her employment by the

authority engage in any other private employment, profession, or business, including, but not

limited to, consulting.

      (f) 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, that interest

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

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

authorization of this 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.

      (g) 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.

      (h) 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.

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

or any action which may be taken at a meeting of the board of directors, or committee of it, 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.

      (j) The board shall 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 chair of the board, approved by the board, and

conducted by the chair of the board. 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 subject area of this chapter and chapters 46 of title 42, 14 of title 36, and 2 of title 38; 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, disseminate training materials relating to the

provisions of chapters 46 of title 42, 14 of title 36, and 2 of title 38.

 

       SECTION 4. Severability. If any provision of this act or the application thereof to any

person or circumstances is held invalid, such invalidity shall not affect other provisions or

applications of the act, which can be given effect without the invalid provision or application, and

to this end the provisions of this act are declared to be severable.

 

           SECTION 5. This act shall take effect upon passage.

     

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LC00329/SUB A/5

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