Chapter 315
2011 -- H 6232
Enacted 07/12/11
A N A C T
RELATING TO
STATE AFFAIRS AND GOVERNMENT -- INDUSTRIAL--
RECREATIONAL
BUILDING AUTHORITY
Introduced By: Representatives Jackson, Martin, and Reilly
Date Introduced: June 08, 2011
It is enacted by the
General Assembly as follows:
SECTION 1. Sections 42-34-6 and 42-34-7 of the General Laws
in Chapter 42-34
entitled "Industrial-Recreational Building
Authority" are hereby amended to read as follows:
42-34-6.
Definitions. -- As used in this chapter, the
following words and terms have the
following meanings unless the context shall indicate another or
different meaning or intent:
(1) (a)
"Cost of project" means, in the case of an industrial project
described in
subdivision (3)(a), the cost or fair market value of acquisition,
whichever is lower, or the cost of
construction, alteration, reconstruction, expansion or
rehabilitation of an industrial project by a
local industrial development corporation or by a project owner,
and in the case of an industrial
project described in subdivision (3)(b), the cost of
acquisition by a local development corporation
or by a project owner. There may be included in cost of
project the costs of all financing charges,
existing encumbrances, interest during construction period,
engineering, architectural and legal
services, plans, specifications, surveys, cost estimates,
studies, and other expenses as may be
necessary or incident to the development, construction,
financing, and placing in operation of an
industrial project.
(b) "Cost of
project" , in the case of a recreational project
described in subdivision (4)
means the cost or fair market value of new construction
(including renovations or remodeling of
existing structures if the authority determines that such
renovation or remodeling adds fifty
percent (50%) or more to the fair market value of the
structure exclusive of the value of the land
upon which it rests if any), lands, property
rights, machinery, easements, franchises, fixtures,
financing charges, interest, engineering and legal services,
plans, specifications, surveys, cost
estimates, studies, and other expenses as may be necessary or
incident to the development,
construction, financing, and placing in operation of a
recreational project; provided, however, that
in the expense of any renovations or remodeling of
existing structures shall not be included in
"cost of project"
to the extent that expense exceeds the fair market value of the structure
(exclusive of the land upon
which it rests if any) as so renovated or remodeled.
(2) "Federal
agency" means and includes the
the
heretofore or hereafter created, designated, or established by
the
(3) (a)
"Industrial project" means lands or buildings or other real estate
improvements in
expanded, renovated, or rehabilitated by a local development
corporation or by a project owner,
together with all easements and other interests in the
property, provided that the industrial project
is to be used:
(i)
By any industry for the manufacturing, processing, or assembling of raw
materials or
manufactured products, or
(ii) For the providing
of research or warehousing facilities for the benefit of any such
industry, or
(iii) An office and/or
wholesale and/or retail facility, which facility is to be at least fifty-
one percent (51%) owner-occupied, and provided further
that the authority has determined that
the industrial project or other real estate improvement
will tend to provide gainful employment
for the people of
Island, increase the tax base of the economy,
diversify and expand industry so that periods of
large scale unemployment and distressed times may be avoided,
and generally benefit economic
development in
land provided the term of the lease extends at least until
the "maturity date", as defined in this
section.
(b) "Industrial
project" also means any machinery and equipment provided:
(i)
The machinery and equipment has been acquired for use in connection with any
building new or otherwise, or other real estate improvement in
manufacturing, processing, or assembling of raw materials or
manufactured products or for the
providing of research facilities in connection therewith,
furniture and/or fixtures, or used for
office and/or wholesale and/or retail purposes in a facility
which is at least fifty-one percent
(51%) owner-occupied;
(ii) The authority has
determined that the machinery and equipment will tend to provide
gainful employment for the people of
unemployment in
industry so that periods of large scale unemployment and
distressed times may be avoided, and
generally benefit economic development in
(iii) The owner
therefore has agreed not to remove the machinery and equipment from
the building or real estate improvement until the
principal obligation of any mortgage on the
machinery and equipment, the mortgage payments under which are
insured by the authority
pursuant to section 42-34-10, has been paid in full, except
that the machinery and equipment may
be removed from the building or real estate improvement
with the prior written consent of the
authority if such owner has agreed to substitute in place
thereof other machinery and equipment
approved by the authority and the mortgage within such
reasonable period of time as the authority
shall prescribe.
(c) An "industrial
project" as defined herein shall cost more than one hundred thousand
dollars ($100,000); provided, however, where the authority
commences to insure mortgage
payments on an "industrial project" defined in
subdivision (3)(b) at the same time as it
commences to insure mortgage payments on an "industrial
project" defined in subdivision (3)(a)
it shall have the power to commence insuring mortgage
payments on such "industrial project"
defined in subdivision (3)(b) without limitation as to the
minimum amount of one hundred
thousand dollars ($100,000) provided for herein.
(d) An "industrial
project" under the provisions of subdivisions (3)(a)
and (3)(b) may
include a real estate improvement or machinery and equipment
suitable for the abatement or
control of industrial pollution to be used in connection with
any buildings, real estate
improvement, or machinery and equipment; provided, however, that
the determinations under the
provisions of subdivisions (3)(a) and (3)(b) of this section
need not be made by the authority.
(4) "Recreational
project" means any building, facility, development, or improvement in
improvement in and to the land upon which it may be located,
provided that the owner's interest
be in fee simple or be a leasehold interest in land owned
by the state of
term expiring not less than ten (10) years after the date
of recording the mortgage hereinafter
defined, and provided the building, facility, development, or
improvement is designed in whole or
in part to attract tourists to this state and including,
without limiting in any way the generality of
the foregoing, marinas, ships, beaches, bathing
facilities, ski facilities, convention facilities,
hotels, motels, golf courses, camp grounds, arenas,
theaters, lodges, guest cottages, and all types
of facilities, and furniture and/or fixtures, related
thereto as may be determined from time to time
by the authority and which the authority has determined
will contribute to the health and welfare
of the people or will tend to improve the economy of the
state, increase employment, or provide a
wider tax base. A "recreational project" as
defined herein shall cost more than twenty-five
thousand dollars ($25,000).
(5) "Industrial
pollution" means any gaseous, liquid, or solid waste substance, or
combination thereof, resulting from the operations of an industry
referred to in subdivision (3)(a)
of this section, which pollute the land, water, or air
of
(6) "Local
development corporation" means any corporation or foundation organized and
operated primarily for the purposes of fostering, encouraging,
and assisting the physical location,
settlement, and resettlement of industrial and manufacturing
enterprises or recreational enterprise
within the state or promoting the industry or recreational
promotion of the state, including, for
recreational purposes, the Rhode Island industrial facilities
corporation no part of the net earnings
of which inures to the benefit of any private shareholder
or individual.
(7) "Maturity
date" means the date on which the mortgage indebtedness would be
extinguished if paid in accordance with periodic payments provided
for in the mortgage.
(8) (a)
"Mortgage" means for a subdivision (3)(a) or
(3)(b) project above a first mortgage
or security agreement on an industrial project creating
and constituting a first lien of record,
together with bonds, notes, evidences of indebtedness, or
other credit instruments issued by a
mortgagor to finance such project and secured thereby;
provided, however, a first mortgage shall
include a second or subsequent mortgage or security agreement
on an industrial project if:
(i)
The holder of such second or subsequent mortgage or security agreement is also
the
holder of a prior mortgage or security agreement on such
industrial project under which prior
mortgage or security agreement the authority is already
insuring mortgage payments and;
(ii) No other person or
legal entity holds an intervening mortgage, security interest or
lien on such industrial project prior to such second or
subsequent mortgage or security interest;
and provided further, that "mortgage" shall
also mean a second mortgage or security agreement
that: (A) is issued by a project owner to a local
development corporation; and (B) involves a
principal obligation that does not exceed forty percent (40%)
of the cost of project. Industrial
projects described in subdivisions (3)(a), (3)(b), and (3)(d)
may be financed and secured together
if the requirements of section 42-34-10 are met.
(b)
"Mortgage" means for the purpose of a subdivision (4) project above,
a first
mortgage (including a first preferred ship mortgage) on
a recreational project together with bonds,
notes, evidences of indebtedness, or other credit
instruments issued by a mortgagor to finance
such project and secured thereby.
(9)
"Mortgagee" means the original lender approved by the authority under
a mortgage,
and its successors and assigns and may include all
insurance companies, trust companies, banks,
building and loan associations, credit unions, savings and
loan associations, investment
companies, savings banks, local development corporations,
individuals, executors, administrators,
guardians, conservators, trustees, and other fiduciaries;
including pension, retirement and profit-
sharing funds; provided, however, that where there has been
appointed a trustee under an
indenture of trust or other similar document for the benefit of
the holders of bonds or notes issued
to finance an industrial project secured by a mortgage,
"mortgagee" means such trustee. A local
development corporation can be a second mortgagee only for a
subdivision (3)(a) or (3)(b) project
above if the second mortgage or security agreement is
issued by the project owner to the local
development corporation and the principal obligation of the
second mortgage does not exceed
forty percent (40%) of the cost of the project.
(10) "Project
owner" means any business entity, other than a local development
corporation, that owns an industrial project.
(11)
"Mortgagor" means a local development corporation as defined herein.
(12) "Mortgage
payments" means periodic payments by the mortgagor to the mortgagee
required by the mortgage, and may include interest,
installments of principal, taxes and
assessments, land lease rentals, mortgage insurance premiums and
hazard insurance premiums, or
any of them as the authority may prescribe.
(13) “Ship” means a
sailing vessel which is:
(i)
Over one hundred fifty feet (150´) in length overall;
(ii) Registered with
the
(iii) Displaces at
least four hundred fifty (450) registered tons; and
(iv)
Has its hailing port in
42-34-7.
Powers. -- The authority is authorized and
empowered:
(1) To adopt bylaws for
the regulation of its affairs and the conduct of its business;
(2) To adopt an
official seal and alter it at pleasure;
(3) To maintain an
office at such place or places within the state as it may designate;
(4) To sue and be sued
in its own name, plead and be impleaded;
service of process in
any action shall be made by service upon the manager of
the authority either in hand or by
leaving a copy of the process at the office of the manager
with some person having charge
thereof;
(5) To employ such
assistants, agents and other employees as may be necessary or
desirable for its purposes, all of whom shall be in the
classified service of the state; to contract for
and engage consultants; and to utilize the services of
other governmental agencies;
(6) To accept from a
federal agency, loans or grants for use in carrying out its purposes,
and to enter into agreements with that agency respecting
any such loans or grants;
(7) In connection with
the insuring of payments of any mortgage, to request for its
guidance a finding of the planning board of the municipality,
or if there is no planning board, a
finding of the municipal officers of the municipality, in
which the industrial project is proposed to
be located, or of the regional planning board of which
the municipality is a member, as to the
expediency and advisability of the project;
(8) To enter into
agreements with prospective mortgagees and mortgagors, for the
purpose of planning, designing, constructing, acquiring,
altering, and financing industrial
projects;
(9) To acquire,
purchase, manage and operate, and hold and dispose of real and personal
property, to take assignments of rentals and leases, and make
and enter into all contracts, leases,
agreements, and arrangements necessary or incidental to the
performance of its duties;
(10) To enter into
agreements with a mortgagee as to the manner of pursuing remedies in
the event of a default and the application of any
proceeds derived from those remedies against the
authority's obligations to insure incurred under section
42-34-10, after determining that the
agreements will, in the opinion of the authority, further the
purposes of this chapter or protect the
mortgage insurance fund. Any such agreement shall not operate
so as to make any insurance
issued under section 42-34-10 void or voidable;
(11) When in the
opinion of the authority it is necessary or advisable, in order to further
the purposes of this chapter or to safeguard the mortgage
insurance fund, to purchase, acquire,
take assignments of notes, mortgages, and other forms of
security and evidences of indebtedness,
to purchase, acquire, attach, seize, accept, or take
title to any industrial or recreational project by
conveyance or when an insured mortgage thereon is clearly in
default, by foreclosure, and to sell,
lease, or rent an industrial or recreational project for a
use specified in section 42-34-6, or for any
other use;
(12) To exercise all of
the powers which a private insurance company engaged in the
business of insuring mortgages would have, to the extent that
those powers are not inconsistent
with the provisions or purposes of this chapter;
(13) To report annually
to the governor and the general assembly as to the activities of
the authority for the previous fiscal year;
(14) To do all acts and
things necessary or convenient to carry out the powers expressly
granted in this chapter; provided, however, that in all
matters concerning the internal
administrative functions of the authority the purchasing procedures
of the state relating to office
space, supplies, facilities, materials, equipment, and
professional services, shall be followed;
(15) To determine
whether or not a building facility, development, or improvement and
the land upon which it is located, if any, is or
will constitute a recreational project. Any
determinations made by the authority under this subdivision and
subdivision (16) of this section
shall be deemed final and conclusive and not subject to
review directly or indirectly;
(16) To determine
whether or not such a project will tend to accomplish the purposes of
this chapter;
(17) To do all acts and
things necessary or convenient to carry out the powers expressly
granted in this chapter; provided, however, that in all
matters concerning the internal
administrative functions of the authority the purchasing procedures
of the state relating to office
space, supplies, facilities, materials, equipment, and
professional services, shall be followed.
SECTION 2. This act shall take effect upon passage.
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LC02806
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