Title 42
State Affairs and Government

Chapter 64
Rhode Island Commerce Corporation

§ 42-64-18. Reserve funds and appropriations.

To assure the continued operation and solvency of the Rhode Island commerce corporation for the carrying out of its corporate purposes:

(1) The corporation may create and establish one or more special funds, “capital reserve funds,” and may pay into each capital reserve fund: (i) any moneys appropriated and made available by the state for the purpose of the fund; (ii) proceeds from the sale of notes or bonds to the extent provided in the resolution or resolutions of the corporation authorizing the issuance thereof; and (iii) any other moneys that may be made available to the corporation for the purpose of that fund from any other source. All moneys held in a capital reserve fund, except as provided, shall be used solely for the payment of the principal of bonds secured in whole or in part by that fund or of the sinking fund payments hereinafter mentioned with respect to the bonds, the purchase or redemption of the bonds, the payment of interest on the bonds or the payment of any redemption premium required to be paid when the bonds are redeemed prior to maturity; provided, that moneys in the fund shall not be withdrawn (except for the purpose of making (with respect to bonds secured in whole or in part by the fund) payment when due of principal, interest, redemption premiums, and the sinking fund payments hereinafter mentioned, for the payment of which other moneys of the corporation are not available) if the withdrawal would reduce the amount of the fund to less than the minimum capital reserve requirement established for the fund as provided in this section. Any income or interest earned by, or incremental to, any capital reserve fund due to the investment of the funds may be transferred by the corporation to other funds or accounts of the corporation if the transfer would not reduce the amount of the capital reserve fund below the minimum capital reserve fund requirement for the fund;

(2) The corporation shall not at any time issue bonds secured in whole or in part by a capital reserve fund if, upon the issuance of the bonds, the outstanding principal balance of such bonds would exceed the sum of two hundred fifty million dollars ($250,000,000), or the amount of the capital reserve fund would be less than the minimum capital reserve required for the fund, unless the corporation, at the time of issuance of the bonds, shall deposit in the fund from the proceeds of the bonds to be issued, or from other sources, an amount that, together with the amount then in the fund, is not less than the minimum capital reserve fund requirement for the fund. For the purpose of this section, the term “minimum capital reserve fund requirement” means, as of any particular date of computation, an amount of money, as provided in the resolution or resolutions of the corporation authorizing the bonds or notes with respect to which the fund is established, equal to not more than the greatest of the respective amounts, for the current or any future fiscal year of the corporation, of annual debt service on the bonds of the corporation secured in whole or in part by the fund, the annual debt service for any fiscal year being the amount of money equal to the sum of: (i) the interest payable during the fiscal year on all bonds secured in whole or in part by the fund outstanding on the date of computation plus; (ii) the principal amount of all the bonds and bond anticipation notes outstanding on the date of computation that mature during the fiscal year; plus (iii) all amounts specified in any resolution of the corporation authorizing the bonds as payable during the fiscal year as a sinking fund payment with respect to any of the bonds that mature after the fiscal year, all calculated on the assumption that the bonds will after the date of computation cease to be outstanding by reason, but only by reason, of the payment of bonds when due and application in accordance with the resolution authorizing those bonds of all of the sinking fund payments payable at or after the date of computation;

(3) In computing the amount of the capital reserve funds for the purpose of this section, securities in which all or a portion of the funds shall be invested, shall be valued as provided in the proceedings under which the bonds are authorized but in no event shall be valued at a value greater than par;

(4) In order further to assure the continued operation and solvency of the corporation for the carrying out of its corporate purposes, the executive director shall annually, on or before December first, make and deliver to the governor a certificate stating the sum, if any, required to restore each capital reserve fund to the minimum capital reserve fund requirement for the fund. During each January session of the general assembly, the governor shall submit to the general assembly printed copies of a budget including the total of the sums, if any, as part of the governor’s budget required to restore each capital reserve fund to the minimum capital reserve fund requirement for the fund. All sums appropriated by the general assembly for this purpose, and paid to the corporation, if any, shall be deposited by the corporation in the applicable capital reserve fund;

(5) All amounts paid over to the corporation by the state pursuant to the provisions of this section shall constitute and be accounted for as advances by the state to the corporation and, subject to the rights of the holders of any bonds or notes of the corporation issued before or after, shall be repaid to the state without interest from all available operating revenues of the corporation in excess of amounts required for the payment of bonds, notes, or other obligations of the corporation, the capital reserve funds and operating expenses;

(6) The corporation may create and establish any other fund or funds as may be necessary or desirable for its corporate purposes;

(7) The corporation may by resolution permit the issuance of bonds and notes to carry out the purposes of this chapter without establishing a capital reserve fund pursuant to this section and without complying with the limitations set forth in this section. Bonds and notes issued pursuant to this subsection may be secured by any other funds or methods as the corporation may in its discretion determine by resolution;

(8) On or before January 1 of each year, the Rhode Island commerce corporation shall issue a report on all such bonds issued by the corporations. The report shall include at a minimum the following: a list of each bond issued; the purpose of each bond issued; the amount of each bond issued; the amount of principal and interest of each bond issued paid to date; the outstanding principal balance of each bond issued; and the total outstanding principal balance of all such bonds issued subject to this section. The report shall be transmitted to the chairpersons of the house and senate finance committees, with copies to the house and senate fiscal advisors.