Introduced By: Representatives Martineau, Benoit, Montanaro, S. Smith and Menard
Date Introduced : June 16, 1998 February 3, 1998
It is enacted by the General Assembly as follows:
SECTION 1. Section 42-64-7 of the General Laws in Chapter 42-64 entitled "Rhode Island Economic Development Corporation" is hereby amended to read as follows:
42-64-7. Additional general powers. -- In addition to the powers hereinbefore enumerated, except to the extent inconsistent with any specific provision of this chapter, the corporation shall have power:
(a) To undertake the planning, development, construction, financing, management, operation of any project, and all activities in relation thereto.
(b) To sell, mortgage, lease, exchange, transfer, or otherwise dispose of or encumber any port project, (or in the case of a sale, to accept a purchase money mortgage in connection therewith) or to grant options for any purposes with respect to any real or personal property or interest therein, all of the foregoing for such consideration as the corporation shall determine. Any lease by the corporation to another party may be for such part of the corporation's property, real or personal, for such period, upon such terms or conditions, with or without an option on the part of the lessee to purchase any or all of the leased property for such consideration, at or after the retirement of all indebtedness incurred by the corporation on account thereof, as the corporation shall determine.
Without limiting the generality of the foregoing, the corporation is expressly empowered to lease or sell any part of the real or personal property owned or controlled by the corporation to the state, or any department thereof or to any municipality. The provisions of this section or of any other laws of this state (other than this chapter) restricting the power of the state, its departments or any municipality, to lease or sell property, or requiring or prescribing publication of notice of intention to lease or sell, advertising for bids, the terms of contracts of lease or sale, that would in any manner interfere with the purpose of this section which is to provide for the mutual cooperation by and between the corporation and the state, its departments or any municipality, to the fullest extent possible, are not applicable to leases and sales made pursuant to this section.
(c) To prepare or cause to be prepared plans, specifications, designs, and estimates of costs for the construction, reconstruction, rehabilitation, improvement, alteration, or repair of any project, and from time to time to modify such plans, specifications, designs, or estimates.
(d) To manage any project, whether then owned or leased by the corporation, and to enter into agreements with the state or any municipality or any agency or instrumentality thereof, or with any person, firm, partnership, or corporation, either public or private, for the purpose of causing any project to be managed.
(e) To provide advisory, consultative, training, and educational services, technical assistance, and advice to any person, firm, partnership, or corporation, whether the same be public or private, in order to carry out the purposes of this chapter.
(f) Subject to the provisions of any contract with note holders or bond holders to consent to the modification, with respect to rate of interest, time of payments of any installment of principal or interest, security or any other term of any mortgage, mortgage loan, mortgage loan commitment, contract, or agreement of any kind to which the corporation is a party.
(g) In connection with any property on which it has made a mortgage loan, to foreclose on that property or commence an action to protect or enforce any right conferred upon it by law, mortgage, contract, or other agreement and to bid for and purchase the property at any foreclosure or any other sale, or to acquire or take possession of the property; and in that event the corporation may complete, administer, pay the principal of, or interest on any obligations incurred in connection with such property, dispose of, and otherwise deal with such property in a manner as may be necessary or desirable to protect the interest of the corporation therein.
(h) As security for the payment of principal and interest on any bonds or notes or any agreements made in connection therewith, to mortgage and pledge any or all of its projects and property, whether then owned or thereafter acquired, and to pledge the revenues and receipts from all or part thereof, and to assign or pledge the leases, sales contracts or loan agreements or other agreements on any portion or all of its projects and property and to assign or pledge the income received by virtue of the lease, sales contracts, loan agreements or other agreements.
(i) To invest any funds of the corporation including funds held in reserve or sinking funds, or any moneys not required for immediate use or disbursement at the discretion of the corporation, in (1) obligations of the state or the United States, (2) obligations of the principal and interest of which are guaranteed by the state or the United States, (3) obligations of agencies and instrumentalities of the state or the United States, or (4) certificates of deposits of banks and trust companies or shares of building loan associations organized under the laws of the state or doing business in the state or (5) such obligations, securities, and other investments as shall be specified in resolutions of the corporation.
(j) To engage the services of consultants on a contract basis for rendering professional and technical assistance and advice, and to employ architects, engineers, attorneys, accountants, construction, and financial experts and such other advisors, consultants, and agents as may be necessary in his or her judgment, and to fix their compensation.
(k) To contract for and to accept any gifts or grants or loans or funds or property or financial or other assistance in any form from the United States or any agency or instrumentality thereof or from the state or any agency or instrumentality thereof or from any other source and to comply, subject to the provisions of this chapter, with the terms and conditions thereof.
(l) To enter into agreements with any municipality or political subdivision, either directly or on behalf of any other party which holds legal title to all or any portion of a project as the lessee from the corporation designated pursuant to paragraph (c) of section 42-64-20, providing that the corporation or such lessee shall pay annual sums in lieu of taxes to such municipality or political subdivision of the state in respect to any real or personal property which is owned by the corporation or such lessee and is located in the municipality or political subdivision.
(m) To borrow money and to issue negotiable bonds and notes, and to provide for the rights of the holders thereof, for the purpose of providing funds to pay all or any part of the cost of any port project or for the purpose of refunding any bonds theretofore issued.
(n) To construct, acquire, own, repair, develop, operate, maintain, extend, and improve, rehabilitate, renovate, furnish, and equip one or more port projects and to pay all or any part of the costs thereof from the proceeds of bonds of the corporation or from any contribution, gift, or donation or other funds made available to the corporation for those purposes.
(o) To fix, charge and collect rents, fees, tolls, and charges for the use of any port project and to alter and investigate rates, and practices of charging, which affect port projects so as to increase commerce in the state.
(p) To prescribe rules and regulations deemed necessary or desirable to carry out the purposes of this chapter including rules and regulations to insure maximum use and proper operation of port projects.
(q) To establish penalties for violations of any order, rule, or regulation of the corporation, and a method of enforcing the same.
(r) To develop, maintain, and operate foreign trade zones under such terms and conditions as may be prescribed by law.
(s) To impose administrative penalties in accordance with the provisions of section 42-64-9.2.
(t) To make assessments and impose reasonable and just user charges, and to pay for such expenses as may be required by law or as may be determined by the corporation to be necessary for the maintenance and operation of the sewage treatment facility.
(u) To establish a sewage pretreatment program, and to require as a condition to the grant or reissuance of any approval, license, or permit required under the program that the person applying for the approval, license or permit, pay to the corporation a reasonable fee based on the cost of reviewing and acting upon the application and based on the costs of implementing the program. In addition, where a violation of any of the provisions of this title or any permit, rule, regulation, or order issued pursuant thereto have occurred, the violator shall reimburse the corporation for the actual costs of implementing and enforcing the terms of the permit, rule, regulation or order as a condition to the grant or reissuance of any approval.
{ADD (v) To assist urban communities revitalize their local economics. ADD}
{ADD (w) To provide assistance to minority businesses and to neighborhoods where there is insufficient economic and business investment. ADD}
{ADD (x) To support and assist entrepreneurial activity by minorities and by low and moderate income persons. ADD}
SECTION 2. Chapter 42-64 of the General Laws entitled "Rhode Island Economic Development Corporation" is hereby amended by adding thereto the following section:
42-64-13.1. Assistance to urban communities for economic revitalization. -- {ADD (a) The corporation shall in furtherance of its responsibility to assist urban communities provide for the establishment of an urban enterprise equity fund, the establishment of an urban business incubator, and such other programs and activities as the corporation may deem appropriate to assist with urban revitalization. ADD}
{ADD (b) For purposes of this section, the following words and terms shall have the following meanings: ADD}
{ADD 1. The "Fund" shall mean a revolving loan fund used to provide equity to assist start-up and existing businesses in securing resources from lenders including but not limited to private sector lending institutions, and federal and non-federal public sector lenders. ADD}
{ADD 2. "Equity" shall mean cash or cash equivalents, through personal or other assets that are either pledged to or become part of a small business venture. Equity constitutes resources that are considered part of the balance sheet of the small business. ADD}
{ADD 3. "Friendly Debt" shall be a loan from an institution, bank, non-bank or any other resource, by which terms and conditions are established for repayment of said debt. For the purposes of this legislation, "friendly debt" shall be deeply subordinated on the balance sheet of the business, and by this deep subordination is converted to equity on the balance sheet. Friendly debt by virtue of its subordination shall be the last loan to be paid out of the cash flow of the business and payment shall be established by the parties based on the ability to repay. ADD}
{ADD 4. "Small Business" shall mean any corporation, partnership, sole proprietorship, or other business entity qualifying as "small" under the standards contained in 13 CFR section 121. ADD}
{ADD 5. "Urban" shall mean any community which exceeds two thousand (2000) persons per square mile as established by the most recent federal census. ADD}
{ADD (c) Establishment of an Urban Enterprise Equity Fund. -- In order to provide "Friendly Debt", commonly referred to as either "Equity" or "Equity Debt", to assist small businesses finance investments, the general assembly hereby establishes the urban enterprise fund. ADD}
{ADD This fund will be located at and administered by the economic development corporation, hereinafter referred to as the corporation for the purposes of providing equity to assist small businesses in obtaining additional resources for capital investments. Seventy-five percent (75%) of the fund financing shall be targeted to urban small businesses located in enterprise zones established pursuant to chapter 42-64. The corporation shall be responsible for the establishment of "the urban enterprise fund" and for the adoption of rules and standards and guidelines, eligibility qualifications, and performance measures for the fund. Such rules shall limit the amount of such equity from the fund in any small business to an amount not to exceed one hundred thousand ($100,000) dollars and shall provide that at no time will the corporation be allowed to take Warrant Positions, or in any other manner or method have any ownership interest based on such equity in the small business to which it is providing equity financing. ADD}
{ADD Nothing herein provided with regard to equity and friendly debt shall be deemed to prevent or restrict the corporation or other private lenders form providing additional financing to the small business under traditional methods, conventional financing with or without credit enhancements for the purposes of fulfilling the necessary instruments to finance the small business. ADD}
{ADD In the implementation of the provisions of this paragraph, the corporation is encouraged to utilize credit enhancements such as the US Small Business Administration's (SBA) Guaranteed Loan Program in conjunction with SBA's participating lenders to make the small business financing transactions in the best interest of the small businesses. ADD}
{ADD The corporation will annually report the status and performance of the Urban Enterprise Equity Fund to the General Assembly on or before the first Tuesday of November. ADD}
{ADD (d) Establishment of an Urban Business Incubator. -- There is hereby authorized, established, and created an urban business incubator to be located in an enterprise zone, as defined in chapter 42-64-3. The incubator shall be designed to foster the growth of businesses through a multi-tenant, mixed-use facility serving companies in a variety of industries including, but not limited to: services, distribution, light manufacturing, or technology-based businesses. The incubator shall provide a range of services designed to assist these new businesses, including, but not limited to: flexible leases, shared office equipment, use of common areas such as conference rooms, and will provide (directly or indirectly) easily accessible business management, training, financial, legal, accounting, and marketing services. ADD}
{ADD The incubator shall be established as a non-business corporation, and shall have tax exempt status under US Internal Revenue Code section 501(c)(3), and shall have a independent board of directors. The board of directors, in consultation with the corporations shall adopt guidelines and performance measures for the purposes of operating and monitoring the incubator. ADD}
{ADD (e) The General Assembly shall annually appropriate such sums as it deems necessary to carry out provisions of section 42-64-13.1 (c) and (d). ADD}
SECTION 3. This act shall take effect July 1, 1998.
