ARTICLE 24 AS AMENDED

RELATING TO ECONOMIC DEVELOPMENT

 

     SECTION 1. Section 1 of Chapter 26 of the 2010 Public Laws entitled "AN ACT

RELATING TO ECONOMIC DEVELOPMENT" is hereby repealed.

 

     SECTION 1. WHEREAS, The Rhode Island Economic Development Corporation was

created by the general assembly pursuant to chapter 64 of title 42 of the general laws in order to,

among other things, promote the retention and expansion of businesses and the creation of jobs in

Rhode Island; and

     WHEREAS, One of the methods utilized by the Rhode Island Economic Development

Corporation to help promote and expand businesses in Rhode Island is the use of its quasi-public

corporation powers to issue bonds and debt and guarantees of debt; and

     WHEREAS, Rhode Island continues to suffer from continuing high unemployment and

other ill effects from the most recent national recession; and

     WHEREAS, One of Rhode Island's economic development's strategies of continuing to

optimize its knowledge economy assets such, as the sciences, technology, digital media,

innovative manufacturing and other technologies, requires adequate access to capital; and

     WHEREAS, Rhode Island companies in growth phases are limited in their ability to

obtain reasonable credit without access to credit enhancement; and

     WHEREAS, The Rhode Island Economic Development Corporation desires to create a

loan guarantee and bond program pursuant to which it will be able to guarantee loan repayments

either directly or through the issuance of its bonds in order to induce lending to companies

growing their employment in Rhode Island;

     WHEREAS, The Rhode Island Economic Development Corporation seeks to have

authority pursuant to chapter 18 of title 35 of the general laws to guarantee debts or otherwise

issue its bonds for this purpose not to exceed one hundred twenty five million dollars

($125,000,000) in the aggregate of unpaid principal, thereby limiting the contingent long-term

cost of such program to the state; and

     WHEREAS, The Rhode Island Economic Development Corporation requests the

approval of the general assembly prior to undertaking such program; now, therefore be it

     RESOLVED, That the Rhode Island Economic Development Corporation (the

"corporation") is hereby empowered and authorized pursuant to chapter 18, title 35 of the general

laws, and notwithstanding any provisions of chapter 64, title 42 of the general laws to the

contrary, to create the corporation's Job Creation Guaranty Program (the "program"). Under the

program, the corporation may from time to time issue its bonds, guaranty debt service thereon or

on bonds issued by the Rhode Island industrial facilities corporation, or guaranty the debt service

of another provided that the principal amount of bonds or other obligations guaranteed pursuant

to the program shall not at any time exceed one hundred twenty-five million dollars

($125,000,000). The guaranty of any bond or other obligation may extend to repayment of the

principal thereof, sinking payments therefore, interest thereon, and payment of any redemption

price or premium in connection with the redemption thereof prior to maturity;

     RESOLVED, That guaranties or bonds issued by the corporation shall be approved by its

board of directors, or a committee of the board as so designated by the board, and shall be

executed by its executive director or any authorized officer of the corporation as authorized in a

resolution approved by the board of directors of the corporation from time to time in a form the

corporation may prescribe. The board of directors of the corporation in authorizing any such

guaranty or bond obligations shall consider and be guided by the following objectives:

     (a) Priority will be given to projects that promptly create permanent, full-time jobs with

annual wages in excess of two hundred fifty percent (250%) of the then current minimum wage

earned annually with industry comparable benefits. A full-time job shall mean one in which the

employee works a minimum of thirty (30) hours per week within this state.

     (b) Any guaranty or bond obligations hereby authorized should leverage capital

formation to facilitate business development with new and existing companies that will create or

retain jobs in this state. The documentation reflecting guaranty and bond obligations authorized

hereby shall contain adequate legal provisions for assuring performance by the borrower of

creating and retaining new jobs within this state.

     (c) Priority shall be given to guarantees that align with the State’s economic development

strategy to expand high-wage jobs in knowledge industry growth clusters or with respect to assets

related thereto.

     (d) Guarantees or loan obligations from the program’s borrower will be collateralized by

any and all available assets of the borrower and guarantors, where applicable, including

subordinate collateral positions, cross collateralization with other lenders and collateralized

guarantees as appropriate.

     (e) Insurances, including hazard and key person life, may be required where appropriate.

     (f) The corporation may utilize such data and retain experts as necessary to assess and

validate associated guaranty risk, and the corporation may charge borrower reasonable fees for

the corporation’s guaranty and reimbursement of expenses;

     RESOLVED, that in order assure any payments due on guarantees or bond obligations

issued by the corporation in connection with the program pursuant to this authorization are made,

to assure the continued operation and solvency of the corporation for the carrying out of its

corporate purposes, and except as otherwise set forth in these authorizing resolutions in

accordance with the provisions of chapter 64, title 42 of the general laws: (i) The corporation

shall create a reserve fund from which shall be charged any and all expenses of the corporation

with respect to guarantee or bond obligations of the corporation pursuant to these resolutions

resulting from a program borrower’s default; and (ii) The corporation shall credit to the reserve

fund no less than fifty percent (50%) of all program receipts of the corporation including guaranty

fees, premiums and any other receipts or recoveries from collections received pursuant to the

corporation’s rights to recover payments as a guarantor; and (iii) To the extent the corporation’s

obligations as a guarantor or pursuant to its program bond obligations are not satisfied by

amounts in its guaranty reserve fund, the executive director of the corporation shall annually, on

or before December 1st, make and deliver to the governor a certificate stating the minimum

amount, if any, required for the corporation to make payments due on such guarantees. During

each January session of the general assembly, the governor shall submit to the general assembly,

as part of the governor’s budget, the total of such sums, if any, required to pay any and all

obligations of the corporation under such guarantees or bond obligations pursuant to the terms of

this authorization. All sums appropriated by the general assembly for that purpose, and paid to the

corporation, if any, shall be utilized by the corporation to make payments due on such guarantees

or bond obligations. Any recoveries by the corporation of guarantee payments are to be returned

to the guarantee reserve fund and utilized to reduce any obligation of the state pursuant to any

guarantees entered into by the corporation;

     RESOLVED, on or before January 1 of each year, the corporation shall issue a report on

all guarantees issued by the corporation pursuant to this authorization. The report shall include at

a minimum: a list of each guarantee issued; a description of the borrower on behalf of which the

guarantee was issued; the lender or lenders that made the loan, and the amount of such loan, to

such borrower; the amount of principal and interest on each such loan outstanding as of the date

of such report; a summary of the collateral securing the repayment of such loan for which the

guarantee was issued; and a summary of the economic impacts made by such borrower as a result

of the guaranteed loan, including but not limited to the number, type and wages of jobs created by

such borrower, any impacts on the industry in which the borrower operates and an estimate of

income taxes for the state of Rhode Island generated by the employees of such borrower and the

borrower itself.

 

     SECTION 2. Section 1 of Chapter 29 of the 2010 Public Laws entitled “AN ACT

RELATING TO AUTHORIZING THE ECONOMIC DEVELOPMENT CORPORATION TO

CREATE THE JOB CREATION GUARANTY PROGRAM” is hereby repealed.

 

     SECTION 1. WHEREAS, The Rhode Island Economic Development Corporation was

created by the general assembly pursuant to chapter 64 of title 42 of the general laws in order to,

among other things, promote the retention and expansion of businesses and the creation of jobs in

Rhode Island; and

     WHEREAS, One of the methods utilized by the Rhode Island Economic Development

Corporation to help promote and expand businesses in Rhode Island is the use of its

quasi-public corporation powers to issue bonds and debt and guarantees of debt; and

     WHEREAS, Rhode Island continues to suffer from continuing high unemployment and

other ill effects from the most recent national recession; and

     WHEREAS, One of Rhode Island's economic development's strategies of continuing to

optimize its knowledge economy assets such, as the sciences, technology, digital media,

innovative manufacturing and other technologies, requires adequate access to capital; and

     WHEREAS, Rhode Island companies in growth phases are limited in their ability to

obtain reasonable credit without access to credit enhancement; and

     WHEREAS, The Rhode Island Economic Development Corporation desires to create a

loan guarantee and bond program pursuant to which it will be able to guarantee loan repayments

either directly or through the issuance of its bonds in order to induce lending to companies

growing their employment in Rhode Island;

     WHEREAS, The Rhode Island Economic Development Corporation seeks to have

authority pursuant to chapter 18 of title 35 of the general laws to guarantee debts or otherwise

issue its bonds for this purpose not to exceed one hundred twenty five million dollars

($125,000,000) in the aggregate of unpaid principal, thereby limiting the contingent long-

term Cost of such program to the state; and

     WHEREAS, The Rhode Island Economic Development Corporation requests the

approval of the general assembly prior to undertaking such program; now, therefore be it

     RESOLVED, That the Rhode Island Economic Development Corporation (the

"corporation") is hereby empowered and authorized pursuant to chapter 18, title 35 of the general

laws, and notwithstanding any provisions of chapter 64, title 42 of the general laws to the

contrary, to create the corporation's Job Creation Guaranty Program (the "program"). Under the

program, the corporation may from time to time issue its bonds, guaranty debt service thereon or

on bonds issued by the Rhode Island industrial facilities corporation, or guaranty the debt service

of another provided that the principal amount of bonds or other obligations guaranteed pursuant

to the program shall not at any time exceed one hundred twenty-five million dollars

($125,000,000). The guaranty of any bond or other obligation may extend to repayment of the

principal thereof, sinking payments therefore, interest thereon, and payment of any redemption

price or premium in connection with the redemption thereof prior to maturity;

     RESOLVED, That guaranties or bonds issued by the corporation shall be approved by its

board of directors, or a committee of the board as so designated by the board, and shall be

executed by its executive director or any authorized officer of the corporation as authorized in a

resolution approved by the board of directors of the corporation from time to time in a form the

corporation may prescribe. The board of directors of the corporation in authorizing any such

guaranty or bond obligations shall consider and be guided by the following objectives:

     (a) Priority will be given to projects that promptly create permanent, full-time jobs with

annual wages in excess of two hundred fifty percent (250%) of the then current minimum wage

earned annually with industry comparable benefits. A full-time job shall mean one in which the

employee works a minimum of thirty (30) hours per week within this state.

     (b) Any guaranty or bond obligations hereby authorized should leverage capital

formation to facilitate business development with new and existing companies that will create or

retain jobs in this state. The documentation reflecting guaranty and bond obligations authorized

hereby shall contain adequate legal provisions for assuring performance by the borrower of

creating and retaining new jobs within this state.

     (c) Priority shall be given to guarantees that align with the State’s economic development

strategy to expand high-wage jobs in knowledge industry growth clusters or with respect to assets

related thereto.

     (d) Guarantees or loan obligations from the program’s borrower will be collateralized by

any and all available assets of the borrower and guarantors, where applicable, including

subordinate collateral positions, cross collateralization with other lenders and collateralized

guarantees as appropriate.

     (e) Insurances, including hazard and key person life, may be required where appropriate.

     (f) The corporation may utilize such data and retain experts as necessary to assess and

validate associated guaranty risk, and the corporation may charge borrower reasonable fees for

the corporation’s guaranty and reimbursement of expenses;

     RESOLVED, that in order assure any payments due on guarantees or bond obligations

issued by the corporation in connection with the program pursuant to this authorization are made,

to assure the continued operation and solvency of the corporation for the carrying out of its

corporate purposes, and except as otherwise set forth in these authorizing resolutions in

accordance with the provisions of chapter 64, title 42 of the general laws: (i) The corporation

shall create a reserve fund from which shall be charged any and all expenses of the corporation

with respect to guarantee or bond obligations of the corporation pursuant to these resolutions

resulting from a program borrower’s default; and (ii) The corporation shall credit to the reserve

fund no less than fifty percent (50%) of all program receipts of the corporation including guaranty

fees, premiums and any other receipts or recoveries from collections received pursuant to the

corporation’s rights to recover payments as a guarantor; and (iii) To the extent the corporation’s

obligations as a guarantor or pursuant to its program bond obligations are not satisfied by

amounts in its guaranty reserve fund, the executive director of the corporation shall annually, on

or before December 1st, make and deliver to the governor a certificate stating the minimum

amount, if any, required for the corporation to make payments due on such guarantees. During

each January session of the general assembly, the governor shall submit to the general assembly,

as part of the governor’s budget, the total of such sums, if any, required to pay any and all

obligations of the corporation under such guarantees or bond obligations pursuant to the terms of

this authorization. All sums appropriated by the general assembly for that purpose, and paid to the

corporation, if any, shall be utilized by the corporation to make payments due on such guarantees

or bond obligations. Any recoveries by the corporation of guarantee payments are to be returned

to the guarantee reserve fund and utilized to reduce any obligation of the state pursuant to any

guarantees entered into by the corporation;

     RESOLVED, on or before January 1 of each year, the corporation shall issue a report on

all guarantees issued by the corporation pursuant to this authorization. The report shall include at

a minimum: a list of each guarantee issued; a description of the borrower on behalf of which the

guarantee was issued; the lender or lenders that made the loan, and the amount of such loan, to

such borrower; the amount of principal and interest on each such loan outstanding as of the date

of such report; a summary of the collateral securing the repayment of such loan for which the

guarantee was issued; and a summary of the economic impacts made by such borrower as a result

of the guaranteed loan, including but not limited to the number, type and wages of jobs created by

such borrower, any impacts on the industry in which the borrower operates and an estimate of

income taxes for the state of Rhode Island generated by the employees of such borrower and the

borrower itself.

 

     SECTION 3. This article shall take effect upon passage.