Chapter 318

2005 -- S 1178

Enacted 07/15/05

A N A C T

RELATING TO SEPARATION OF POWERS

Introduced By: Senator J. Michael Lenihan

Date Introduced: June 16, 2005

It is enacted by the General Assembly as follows:

     SECTION 1. Sections 42-64-8 and 42-64-28 of the General Laws in Chapter 42-64

entitled "Rhode Island Economic Development Corporation" are hereby amended to read as

follows:

42-64-8. Directors, officers, and employees. -- (a) (1) The powers of the corporation

shall be vested in a board of directors consisting of thirteen (13) nine (9) members.

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

(who shall vote only in the event of a tie).

(2) In addition to the governor, the The membership of the board shall consist of eight (8)

public members to be appointed by the governor

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

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

(2) members from the house of representatives to be appointed by the speaker of the house of

representatives, one of whom shall be from the minority party, one member from the senate who

shall be appointed by the president of the senate, and one member of the minority party from the

senate who shall be appointed by the president of the senate. The public member next appointed

after August 8, 1996, and each of his or her successors, One of the public members shall serve as

small business ombudsperson, and shall be an owner or principal of a small business doing

business and located in this state, which that is independently owned and operated and not

dominant in this its field, and which that employs one hundred (100) or fewer persons at the time

of his or her appointment. The small business ombudsperson shall advocate all action as Directors

that may be necessary and proper to maintain and encourage the continued viability of small

businesses in the state. The second One other of the public member members next appointed after

August 8, 1996, and each of his or her successors, shall be a representative of organized labor.

The remaining public member shall be appointed on an interim basis by the governor when a

project plan of the corporation situated on federal land is disapproved by the governing body of a

municipality in accordance with subsection (a)(4) of section 42-64-13. The member shall be the

mayor of the municipality within whose borders all or a majority of the project plan is to be

carried out, or in a municipality which has no mayor, the member shall be the president of the

town or city council. The appointed interim member shall have all the powers of other members

of the board only in its deliberations and action on the disapproval of the project plan situated on

federal land and within the borders of his or her municipality. Upon final action by the board

pursuant to subsection (a)(5) of section 42-64-13, the interim member's term of appointment shall

automatically terminate.

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

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

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

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

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

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

following areas: the provisions of the entirety of chapter 42-64 and of chapters 42-46, 36-14, and

38-2.

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

of section 36-1-7 of the general laws and for cause only, and removal solely for partisan or

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

(2)(6) The members of the board of directors who are not appointees of the speaker or

the president and, furthermore, were duly appointed before the effective date of this act of the

Rhode Island port authority and economic development corporation in office on July 1, 1995

shall continue as directors of the corporation for the remainder of their appointed terms, and

thereafter until their successors are appointed to the board of directors and have qualified.

Annually during the month of January, the governor shall appoint a member or members to

succeed the member or members whose terms will then next expire to serve for a term of four (4)

years commencing on the first day of February and then next following, and thereafter until the

successors are appointed and qualified. The members of the board shall be eligible to succeed

themselves, but only upon reappointment and with senate advice and consent. The governor shall

appoint the additional member authorized by this act to serve for a term expiring January 31,

1999. The legislative members of the board of directors shall cease to be on the board as of the

effective date of this act. serve as members until the expiration of the balance of the legislative

term which they are serving at the time of their appointment to the board of directors, and

thereafter until their successors are appointed to the board of directors and have qualified.

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

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

the remainder of the term of the former member.

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

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

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

business.

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

board who shall serve at the pleasure of the chairperson. Five (5) directors shall constitute a

quorum, and, except as otherwise provided in section 42-64-13, 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 directors present and entitled to vote at any regular or special meeting at which a

quorum is present. A vacancy in the membership of the board of directors shall not impair the

right of a quorum to exercise all of the rights and perform all of the duties of the corporation.

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

corporation, appointed by the governor with the advice and consent of the senate. The executive

director of the corporation shall be entitled to receive for his or her services any reasonable

compensation as the board of directors may determine.

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

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

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

or the director's subordinates the authority to appoint additional staff members and to determine

the amount of compensation each individual shall receive.

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

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

approval of the board of directors.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

a quorum at a meeting of the board of directors of the corporation which authorizes the contract

or transaction.

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

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

All meetings shall be open to the public and all records shall be a matter of public record except

that if a majority of the board of directors decides that it would be in the best interests of the

corporation and the state to hold an executive session in private, then the board of directors is

authorized to transact any business it deems necessary at that executive session in private, and the

record of the executive session shall not become a matter of public record until the transaction

discussed has in the opinion of the board of directors been completed.

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

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

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

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

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

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

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

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

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

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

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

of the committee, as the case may be.

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

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

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

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

42-64-28. Annual report. Annual financial reports and performance report.-- The

board shall approve and the corporation shall submit to the governor, the president pro-tem of the

senate, and the speaker of the house of representatives, and the secretary of state, within six (6)

months eleven (11) months after the close of its fiscal year, a complete and detailed financial

reports and a performance report. These reports shall cover the corporation and its subsidiaries and

shall be posted electronically on the general assembly and the secretary of state’s websites as

prescribed in section 42-20-8.1.

(a) The financial reports shall setting set forth the corporations:

     (1) its operations and accomplishments;

     (2) its receipts and expenditures during the fiscal year in accordance with the categories

and classifications established by the corporation for its operating and capital outlay purposes

including a listing of all private consultants engaged by the corporation on a contract basis and a

statement of the total amount paid to each private consultant;, a listing of any staff supported by

these funds, and a summary of any clerical, administrative or technical support received;

     (3) its assets and liabilities at the end of its fiscal year including a schedule of its leases

and mortgages and the status of the reserve, special or other funds; and

     (4) a schedule of the bonds and notes outstanding at the end of its fiscal year together

with a statement of amounts redeemed and incurred during the fiscal year.

(5) The reports shall be prepared by independent certified public accountants in

accordance with generally accepted principles of accounting.

(b) The performance report shall include:

(1) a summary of performance during the previous fiscal year including

accomplishments, shortcomings in general and relative to plan, and actions to be taken to remedy

such shortcomings;

(2) for all board meetings and public hearings held by the corporation: the subjects

addressed, decisions rendered, actions considered and their disposition; and, the minutes of these

meetings and hearings if requested by the governor, the president of the senate, the speaker of the

house of representatives, or the secretary of state;

(3) rules or regulations promulgated by the board or corporation, a summary of studies

conducted, policies and plans developed, approved, or modified, and programs administered,

initiated or terminated;

(4) a synopsis of hearings, complaints, suspensions, or other legal matters related to the

authority of the board or corporation;

(5) a summary of any training courses held pursuant to subdivision 42-64-8(a)(5);

(6) a briefing on anticipated plans and activities in the upcoming fiscal year; and findings

and recommendations for improvements.

(c) The director of the department of administration shall be responsible for the

enforcement of the provisions of this section.

     SECTION 2. Severability. If any provision of this act or the application thereof to any

person or circumstances is held invalid, such invalidity shall not affect other provisions or

applications of the act, which can be given effect without the invalid provisions or application,

and to this end the provisions of this act are declared to be severable.

     SECTION 3. This act shall take effect upon passage.

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LC03539

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