2014 -- S 2011

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LC003443

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND ECONOMIC

DEVELOPMENT CORPORATION

     

     Introduced By: Senators Sheehan, Picard, Miller, Lynch, and Algiere

     Date Introduced: January 09, 2014

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

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     SECTION 1. Sections 42-64-1.1, 42-64-7.5 and 42-64-8 of the General Laws in Chapter

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42-64 entitled "Rhode Island Commerce Corporation" are hereby amended to read as follows:

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     42-64-1.1. Change of name. [Effective January 1, 2014.] -- (a) The corporation known

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as the “Rhode Island Economic Development Corporation” shall now be known as the “Rhode

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Island Commerce Corporation.” Whenever in any general law, or public law, rule, regulation

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and/or bylaw, reference is made to the "department of economic development" or the "Rhode

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Island port authority and economic development corporation", or the "Rhode Island economic

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development corporation", the reference shall be deemed to refer to and mean the "Rhode Island

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commerce corporation," which may also be referred to as the "commerce corporation."

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      (b) Whenever in any general or public law, reference is made to the "director of the

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department of economic development" or the "executive director of the Rhode Island port

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authority and economic development corporation", the reference shall be deemed to refer to and

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mean the "executive director of the Rhode Island economic development corporation". Upon the

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appointment of a secretary of commerce; whenever in any general or public law, reference is

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made to the "director of the department of economic development" or the "executive director of

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the Rhode Island port authority and economic development corporation," of the executive director

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of the Rhode Island economic development corporation," the reference shall be deemed to refer to

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and mean the chief executive officer of the Rhode Island commerce corporation, who shall also

 

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be the secretary of the Rhode Island executive office of commerce.

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      (c) Whenever in any general or public law, reference is made to the "economic

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development council", the reference shall be deemed to refer to and mean the "board of directors

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of the Rhode Island commerce corporation".

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      (d) Nothing in this act shall be construed to change or modify the corporate existence of

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the former Rhode Island economic development corporation, which shall now be known as the

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“Rhode Island commerce corporation,” or to change or modify any contracts or agreements of

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any kind by, for, between, or to which the economic development corporation is a party or to

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effect in any way the property or assets of the Rhode Island economic development corporation.

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The commerce corporation is the successor in interest to the Rhode Island economic development

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corporation and the secretary of state shall change the name of the corporation on the articles of

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incorporation on file with the secretary of state from the Rhode Island economic development

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corporation to the Rhode Island commerce corporation effective as of January 1, 2014. All said

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contracts and agreements of whatsoever kind are hereby assigned, transferred to, and assumed by

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the Rhode Island Commerce Corporation.

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     42-64-7.5. Transfer of functions from the economic development corporation.

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[Effective January 1, 2014.] Acceptance of federal grants-- (a) Effective January 1, 2014, all

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functions formerly administered by the Rhode Island economic development corporation are

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hereby transferred to the Rhode Island commerce corporation. Also effective January 1, 2014, the

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commerce corporation shall assume all rights, duties, liabilities, and obligations of the former

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economic development corporation, and the commerce corporation shall be considered to be the

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successor-in-interest to the economic development corporation.

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      (b) In addition to any of its other powers and responsibilities, the Rhode Island

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commerce corporation is authorized and empowered to accept any grants made available by the

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United States government or any agency of the United States government, and the corporation,

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with the approval of the governor, is authorized and empowered to perform any acts and enter

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into all necessary contracts and agreements with the United States or any agency of the United

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States as may be necessary in any manner and degree that shall be deemed to be in the best

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interests of the state. The proceeds of any grants received shall be paid to the general treasurer of

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the state and deposited in a separate fund to be used solely for the purposes of the grant or grants.

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     42-64-8. Directors, officers, and employees. [Effective January 1, 2014.] -- (a) The

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powers of the Rhode Island commerce corporation shall be vested in a board of directors

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consisting of thirteen (13) members.

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      (1) The governor shall serve as a member of the board and as chairperson, ex-officio,

 

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who shall vote only in the event of a tie.

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      (2) In addition to the governor, the membership of the board shall consist of twelve (12)

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public members to be appointed by the governor.

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      (3) Each gubernatorial appointee shall be subject to the advice and consent of the senate

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

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membership of the board shall reflect the geographic diversity of the state. Four (4) of the public

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members shall be owners or principals of small businesses doing business in this state which are

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independently owned and operated and which employs one hundred (100) or fewer persons. One

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other of the public members shall be a representative of organized labor. One other of the public

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members shall be a representative of higher education. One other of the public members shall be

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a representative from the governor's work force board. One other of the public members shall be a

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representative of a minority business. One other of the public members shall be appointed on an

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interim basis by the governor when a project plan of the corporation situated on federal land is

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disapproved by the governing body of a municipality in accordance with section § 42-64-

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13(a)(4). The member shall be the mayor of the municipality within whose borders all or a

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majority of the project plan is to be carried out, or in a municipality, which has no mayor, the

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member shall be the president of the town or city council. The appointed interim member shall

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have all the powers of other members of the board only in its deliberations and action on the

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disapproval of the project plan situated on federal land and within the borders of his or her

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municipality. Upon final action by the board pursuant to section § 42-64-13(a)(5), the interim

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member's term of appointment shall automatically terminate.

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      (4) It shall be the responsibility of the corporation to conduct a training course for newly

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appointed and qualified members and new designees of ex-officio members within six (6) months

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of their qualification or designation. The course shall be developed by the executive director of

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the corporation or his or her designee, be approved by the board, and conducted by the executive

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director or his or her designee. The board may approve the use of any board or staff members or

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other individuals to assist with training. The training course shall include instruction in the

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following areas: the provisions of the entirety of chapter 64 of this title and of chapters 46 of this

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title, 14 of title 36, and 2 of title 38 of the Rhode Island general laws; and the board's rules and

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regulations. The director of the department of administration shall, within ninety (90) days of July

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15, 2005, prepare and disseminate materials relating to the provisions of chapters 46 of this title,

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14 of title 36, and 2 of title 38.

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      (5) Members of the board shall be removable by the governor, pursuant to the provisions

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of section § 36-1-7 and for cause only, and removal solely for partisan or personal reasons

 

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unrelated to capacity or fitness for the office shall be unlawful.

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      (6) The five (5) current members of the board of directors who were duly appointed and

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who have unexpired terms shall continue as directors of the corporation until February 1, 2010,

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and thereafter until their successors are appointed and qualified. Upon passage of this act, the

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governor shall appoint seven (7) members to the board, with The terms for the members of the

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board of directors were established by the appointment of twelve (12) directors in 2010 with the

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directors' initial terms expiring as follows: three (3) members shall have terms expiring on

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February 1, 2011; three (3) members shall have terms expiring on February 1, 2012; and one

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member three (3) members shall have a term terms expiring on February 1, 2013; . In January

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2010, the governor shall appoint five (5) members to the board with terms expiring as follows:

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two (2) members shall have terms expiring on February 1, 2013 and three (3) members shall have

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terms expiring on February 1, 2014. Beginning in 2011 and annually thereafter, during the month

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of January, the governor shall appoint a member or members to succeed the member or members

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whose terms will then next expire to serve for a term of four (4) years commencing on the first

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day of February and then next following, and thereafter until the successors are appointed and

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qualified. Beginning in 2011 and annually thereafter the governor shall appoint owners or

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principals of small businesses doing business in this state which that are independently owned

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and operated, and which that employs one hundred (100) or fewer persons. The members of the

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board shall be eligible to succeed themselves, but only upon reappointment and with senate

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advice and consent. The current members of the board of directors of the Rhode Island economic

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development corporation who were duly appointed and who have unexpired terms shall be

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considered as directors of the corporation until their terms expire, and thereafter until their

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successors are appointed and qualified.

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      (7) In the event of a vacancy occurring in the office of a member by death, resignation or

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otherwise, that vacancy shall be filled in the same manner as an original appointment, but only for

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the remainder of the term of the former member.

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      (b) The directors shall receive no compensation for the performance of their duties under

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this chapter, but each director shall be reimbursed for his or her reasonable expenses incurred in

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carrying out those duties. A director may engage in private employment, or in a profession or

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business.

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      (c) The chairperson shall designate a vice chairperson from among the members of the

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board who shall serve at the pleasure of the chairperson. A majority of directors holding office

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shall constitute a quorum, and, except as otherwise provided in section § 42-64-13, any action to

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be taken by the corporation under the provisions of this chapter may be authorized by resolution

 

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approved by a majority of the directors present and entitled to vote at any regular or special

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meeting at which a quorum is present. A vacancy in the membership of the board of directors

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shall not impair the right of a quorum to exercise all of the rights and perform all of the duties of

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the corporation.

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      (d) The chief executive officer of the corporation shall be executive director of the

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corporation until such time that the secretary of commerce is appointed. Upon the appointment of

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a secretary of commerce, the secretary of commerce shall be the commerce corporation's chief

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executive officer and responsible for the management of the corporation. There shall be a chief

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operating officer (COO) of the corporation and he/she shall be appointed by the secretary of

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commerce. The COO shall be the chief administrative officer of the corporation and responsible

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for the day-to-day management of the corporation. The COO shall be a professional in the area of

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economic development,; management of economic development corporations,; and shall hold the

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requisite experience and education as established by the secretary and board.

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      (e) The board of directors shall appoint a secretary and such additional officers and staff

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members as they shall deem appropriate and shall determine the amount of reasonable

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compensation, if any, each shall receive. The board of directors may vest in the executive

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director, or the director's subordinates, and, upon the appointment of a secretary of commerce, the

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chief operating officer or the chief operating officer's subordinates, the authority to appoint

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

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receive.

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

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

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approval of the board of directors.

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      (g) Notwithstanding any other law to the contrary, it shall not be or constitute a conflict

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of interest for a director, officer, or employee of any financial institution, investment banking

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firm, brokerage firm, commercial bank, trust company, building-loan association, architecture

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firm, insurance company, or any other firm, person, or corporation to serve as a director of the

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corporation, nor shall any contract or transaction between the corporation and a financial

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institution, investment banking firm, brokerage firm, commercial bank, trust company, building-

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loan association, architecture firm, insurance company, or other firm, person, or corporation be

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void or voidable by reason of that service as director of the corporation. If any director, officer, or

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employee of the corporation shall be interested either directly or indirectly, or shall be a director,

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officer, or employee of or have an ownership interest (other than as the owner of less than one

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percent (1%) of the shares of a publicly-held corporation) in any firm or corporation interested

 

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directly or indirectly in any contract with the corporation, that interest shall be disclosed to the

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corporation and set forth in the minutes of the corporation, and the director, officer, or employee

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having that ownership interest shall not participate on behalf of the corporation in the

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authorization of that contract. Interested directors may be counted in determining the presence of

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a quorum at a meeting of the board of directors of the corporation, which that authorizes the

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contract or transaction.

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      (h) Any action taken by the corporation under the provisions of this chapter may be

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authorized by vote at any regular or special meeting, and each vote shall take effect immediately.

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The corporation shall be subject to the provisions of chapter 42-46 46 of title 42 ("Open

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Meetings") and chapter 38-2 2 of title 38 ("Access to Public Records").

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      (i) The board of directors may designate from among its members an executive

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committee and one or more other committees each of which, to the extent authorized by the board

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of directors, shall have and may exercise all of the authority of the board of directors, but no

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executive committee shall have the authority of the board of directors in reference to the

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disposition of all or substantially all of the property and assets of the corporation, amending the

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by-laws of the corporation,; exercising the condemnation power conferred upon the corporation

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by section § 42-64-9; or taking actions described or referred to in section § 42-64-13(a).

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      (j) The board shall create a capital finance subcommittee which that shall be responsible

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for drafting for board approval a set of guidelines, principals, and processes for all loans, loan

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guarantees, and financing programs. The guidelines shall contain a set of metrics which that the

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board can use to determine the effectiveness of each program and to inform the governor and the

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general assembly of the outcome of the various programs and to determine if there is need for

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modification, continuance, or termination. The guidelines shall also contain measures to annually

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review the outstanding loan and loan guarantee programs to determine if the loans and loan

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guarantees were granted in accordance with the board's guidelines and principals and to

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determine the risk factors normally used by lending institutions to determine risk and potential for

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repayment. The board shall also implement the provisions of sections §§ 42-64-36 and 42-64-37.

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

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

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board of directors, may be taken without a meeting if a consent in writing, setting forth the action

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to be taken, shall be signed before or after that action by all of the directors, or all of the members

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of the committee, as the case may be.

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      (l) Employees of the corporation shall not, by reason of their employment, be deemed to

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be employees of the state for any purpose, any other provision of the general laws to the contrary

 

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notwithstanding, including, without limiting the generality of the foregoing, chapters 29, 39, and

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42 of title 28 and chapters 4, 8, 9, and 10 of title 36.

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      (m) The board shall create a set of metrics and reporting requirements to disclose the

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programs and services offered or provided by the corporation and the effectiveness of each

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offering. The board shall develop an annual report containing these metrics and shall submit the

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report to the governor and the general assembly. The annual report shall also contain

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recommendations for improving the business climate within the state and other actions the board

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deems necessary to improve its effectiveness.

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     SECTION 2. Section 42-64.3-3.1 of the General Laws in Chapter 42-64.3 entitled

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"Distressed Areas Economic Revitalization Act" is hereby amended to read as follows:

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     42-64.3-3.1. Enterprise zone council. [Effective January 1, 2014.] -- (a) There is

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created within the Rhode Island commerce corporation the "enterprise zone council," which shall

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consist of five (5) members to be appointed by the governor; one member shall be the executive

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director of the Rhode Island commerce corporation; one member shall represent the urban league

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of Rhode Island; one member shall represent the Rhode Island League of Cities and Towns; and

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two (2) members from the general public. The governor shall designate one member to serve as

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chairperson of the enterprise zone council.

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      (b) The members shall be appointed for terms of five (5) years each; provided, however,

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of the members originally appointed, one shall be appointed for a term of one year, one shall be

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appointed for a term of two (2) years, one shall be appointed for a term of three (3) years, one

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shall be appointed for a term of four (4), years and one shall be appointed for a term of five (5)

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years.

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      (c) In carrying out its powers and duties under this chapter, the council shall utilize the

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staffs and resources of the division of statewide planning and the Rhode Island economic

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development corporation. Those agencies and other departments and agencies of state

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government shall cooperate with the council in carrying out its mandate under this chapter.

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      (d) The council shall promulgate rules and regulations necessary to implement the intent

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of this chapter.

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      (e) Transfer of functions from the Rhode Island economic development corporation

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enterprise zone council. - All functions formerly administered by the Rhode Island economic

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development corporation's enterprise zone council are hereby transferred to the Rhode Island

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commerce corporation.

 

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     SECTION 3. This act shall take effect upon passage and apply retroactively to January 1,

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2014.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - RHODE ISLAND ECONOMIC

DEVELOPMENT CORPORATION

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     This act would make technical changes to the establishment of the Rhode Island

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Commerce Corporation, allow it to accept federal grants, and establish a twelve (12) member

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board of directors, all having three (3) year terms.

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     This act would take effect upon passage and apply retroactively to January 1, 2014.

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