2013 -- H 5098

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LC00091

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO PUBLIC FINANCE -- PUBLIC CORPORATION DEBT MANAGEMENT

     Introduced By: Representatives Costantino, Abney, Dickinson, McLaughlin, and Baldelli-Hunt

     Date Introduced: January 16, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 35-18-3 of the General Laws in Chapter 35-18 entitled "Public

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Corporation Debt Management" is hereby amended to read as follows:

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     35-18-3. Approval by the general assembly. -- (a) No elected or appointed state official

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may enter into any financing lease or into any guarantee with any person without the prior

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approval of the general assembly unless:

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      (1) The governor certifies that federal funds will be available to make all of the payments

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which the state is or could be obligated to make under the financing lease or guarantee; or

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      (2) The general assembly has adjourned for the year with the expectation that it will not

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meet again until the following year and the governor certifies that action is necessary, because of

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events occurring after the general assembly has adjourned, to protect the physical integrity of an

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essential public facility, to ensure the continued delivery of essential public services, or to

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maintain the credit worthiness of the state in the financial markets.

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      (b) No bonds may be issued or other obligation incurred by any public corporation to

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finance, in whole or in part, the construction, acquisition, or improvement of any essential public

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facility without the prior approval of the general assembly, unless:

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      (1) The governor certifies that federal funds will be available to make all of the payments

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required to be made by the public corporation in connection with the bond or obligation. The

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certification shall be transmitted to the speaker of the house and the president of the senate with

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copies to the chairpersons of the respective finance committees and fiscal advisors; or

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      (2) The general assembly has adjourned for the year with the expectation that it will not

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meet again until the following year and the governor certifies that action is necessary, because of

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events occurring after the general assembly has adjourned, to protect the physical integrity of an

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essential public facility, to ensure the continued delivery of essential public services, or to

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maintain the credit worthiness of the state in the financial markets. The certification shall be

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transmitted to the speaker of the house and the president of the senate, with copies to the

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chairpersons of the respective finance committees and fiscal advisors.

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      (c) In addition to, and not by way of limitation on, the exemptions provided in

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subsections (a) and (b), prior approval by the general assembly shall not be required under this

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chapter for bonds or other obligations issued by, or financing leases or guarantee agreements

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entered into by:

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      (1) The Rhode Island Industrial Facilities Corporation; provided financing leases, bonds

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or other obligations are being issued for an economic development project;

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      (2) The Rhode Island clean water finance agency;

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      (3) The Rhode Island housing and mortgage finance corporation;

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      (4) The Rhode Island student loan authority;

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      (5) Any public corporation to refund any bond or other obligation issued by the public

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corporation to finance the acquisition, construction, or improvement of an essential public facility

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provided that the governor certifies to the speaker of the house and the president of the senate,

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with copies to the chairpersons of the respective finance committees and fiscal advisors that the

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refunding shall provide a net benefit to the issuer; provided, however, obligations of the Rhode

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Island resource recovery corporation outstanding on July 31, 1999, may be refunded by the

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issuance of obligations on or before August 1, 1999;

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      (6) The Narragansett Bay water quality management district commission; and

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      (7) The Rhode Island health and educational building corporation, except bonds or other

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obligations issued in connection with the acquisition, construction, or improvement of any facility

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used by any state agency, department, board, or commission, including the board of governors for

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higher education, to provide services to the public pursuant to the requirements of state or federal

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law, and all fixtures for any of those facilities.

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      (d) Nothing contained in this section applies to any loan authorized to be borrowed under

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Article VI, section 16 or 17 of the Rhode Island Constitution.

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      (e) Nothing in this section is intended to expand in any way the borrowing authority of

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any public corporation under its charter.

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      (f) (1) Any certification made by the governor under subsection (a), (b), or (c) of this

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section may be relied upon by any person, including without limitation, bond counsel.

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      (2) The certifications shall be transmitted to the speaker of the house and the president of

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the senate with copies to the chairpersons of the respective finance committees and fiscal

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advisors.

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      (g) Except as provided for in this chapter, the requirements of this chapter supersede any

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other special or general provision of law, including any provision which purports to exempt sales

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or leases between the state and a public corporation from the operation of any law.

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     (h) Effective February 1, 2013, and notwithstanding any provisions of the general and/or

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other public laws to the contrary, at any time when the Rhode Island Economic Development

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Corporation seeks or proposes to guarantee annual debt service or issue bonds of the corporation,

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including, but not limited to, actions with respect to the Job Creation Guaranty Program and/or

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any successor or similar program in an amount equal to or greater than two million dollars

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($2,000,000), the corporation shall seek approval from the general assembly prior to so doing. In

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so applying, the corporation shall itemize and identify any and all individuals and/or entities that

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would be in receipt of such proposed guarantee of annual debt service, bonds, or funds directly

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generated from the issuance of such bonds, in an amount equal to or greater than two million

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dollars ($2,000,000). The provisions of this subsection shall be in addition to any other

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applications or approval required from the general assembly pursuant to this section and/or

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chapter.

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     SECTION 2. This act shall take effect upon passage.

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LC00091

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC FINANCE -- PUBLIC CORPORATION DEBT MANAGEMENT

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     This act would require the Rhode Island Economic Development Corporation to itemize

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and identify any and all individuals and entities who would be in receipt of any proposed

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guarantee of annual debt service, bonds, or funds from bonds issued or guaranteed by the

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corporation, in an amount equal to or greater than two million dollars ($2,000,000).

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     This act would take effect upon passage.  

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LC00091

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