SECTION 1. Section 42-133-6 of the General Laws in Chapter 42-133 entitled "Tobacco Settlement Financing Corporation Act" is hereby repealed in its entirety.

SECTION 2. Chapter 42-133 of the General Laws entitled "Tobacco Settlement Financing Corporation Act" is hereby amended by adding thereto the following section:

42-133-6. Board and officers. -- (a) The powers of the corporation shall be vested in a board consisting of five (5) members, which shall constitute the governing body of the corporation, and which shall be comprised as follows: three (3) members appointed by the governor, one (1) member appointed by the speaker of the house of representatives, and one (1) member appointed by the majority leader of the senate (effective until January 7, 2003) and one (1) member appointed by the president of the senate (effective January 7, 2003). Each member shall serve for a term of two (2) years, except that any member appointed to fill a vacancy shall serve only until the expiration of the unexpired term of such member's predecessor in office. Each member shall continue to hold office until a successor has been appointed. Members shall be eligible for reappointment. No person shall be eligible for appointment unless such person is a resident of the state. Each member, before entering upon the duties of the office of member shall swear or solemnly affirm to administer the duties of office faithfully and impartially, and such oath or affirmation shall be filed in the office of the secretary of state.

(b) Members shall receive no compensation for the performance of their duties.

(c) The board shall elect one of its members to serve as chairperson. Three (3) members shall constitute a quorum and any action to be taken by the corporation under the provisions of this chapter may be authorized by resolution approved by a majority of the members present and voting at any regular or special meeting at which a quorum is present.

(d) In addition to electing a chairperson, the board shall appoint a secretary and such additional officers as they shall deem appropriate.

(e) Any action taken by the corporation under the provisions of this chapter may be authorized by vote at any regular or special meeting, and the vote shall take effect immediately.

(f) Any action required by this chapter to be taken at a meeting of the Board shall comply with Chapter 46 of Title 42 of the Rhode Island General Laws, entitled "Open Meetings."

(g) To the extent that administrative assistance is needed for the functions and operations of the board, the corporation may by contract or agreement obtain this assistance from the director of administration, the attorney general, and any successor officer at such cost to the corporation as shall be established by such contract or agreement. The board, however, shall remain responsible for, and provide oversight of, proper implementation of this chapter.

(h) Members of the board and persons acting on the corporation's behalf, while acting within the scope of their employment or agency, are not subject to personal liability resulting from carrying out the powers and duties conferred on them under this chapter.

(i) The state shall indemnify and hold harmless every past, present, or future board member, officer or employee of the corporation who is made a party to or is required to testify in any action, investigation, or other proceeding in connection with or arising out of the performance or alleged lack of performance of that person's duties on behalf of the corporation. These persons shall be indemnified and held harmless, whether they are sued individually or in their capacities as board members, officers or employees of the corporation, for all expenses, legal fees and/or costs incurred by them during or resulting from the proceedings, and for any award or judgment arising out of their service to the corporation that is not paid by the corporation and is sought to be enforced against a person individually, as expenses, legal fees, costs, awards or judgments occur; provided, that neither the state nor the corporation shall indemnify any member, officer, or employee:

(1) For acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;

(2) For any transaction from which the member derived an improper personal benefit; or

(3) For any malicious act.

SECTION 3. This act shall take effect upon passage.