2013 -- H 5639

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LC01573

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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 STATE AFFAIRS AND GOVERNMENT - ECONOMIC DEVELOPMENT

CORPORATION

     Introduced By: Representatives Lima, Lombardi, O'Brien, Craven, and Ruggiero

     Date Introduced: February 27, 2013

     Referred To: House Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 42-64-15 of the General Laws in Chapter 42-64 entitled "Rhode

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Island Economic Development Corporation" is hereby amended to read as follows:

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     42-64-15. Bonds and notes of the corporation. -- (a) The Rhode Island economic

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development corporation shall have the power and is authorized to issue from time to time its

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negotiable bonds and notes in one or more series in any principal amounts as in the opinion of the

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corporation shall be necessary to provide sufficient funds for achieving its purposes, including the

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payment of interest on bonds and notes of the corporation, the establishment of reserves to secure

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those bonds and notes (including the reserve funds created pursuant to section 42-64-18), and the

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making of all other expenditures of the corporation incident to and necessary or convenient to

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carrying out its corporate purposes and powers.

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      (b) All bonds and notes issued by the corporation may be secured by the full faith and

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credit of the corporation or may be payable solely out of the revenues and receipts derived from

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the lease, mortgage, or sale by the corporation of its projects or of any part of its projects, or from

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any other revenues or from repayment from any loans made by the corporation with regard to any

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of its projects or any part of its projects, all as may be designated in the proceedings of the

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corporation under which the bonds or notes shall be authorized to be issued. The bonds and notes

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may be executed and delivered by the corporation at any time from time to time, may be in any

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form and denominations and of any tenor and maturities, and may be in bearer form or in

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registered form, as to principal and interest or as to principal alone, all as the corporation may

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determine.

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      (c) Bonds may be payable in any installments, and at times not exceeding fifty (50) years

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from their date, as shall be determined by the corporation.

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      (d) Except for notes issued pursuant to section 42-64-16, notes, and any renewals, may

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be payable in any installments and at any times not exceeding ten (10) years from the date of the

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original issue of the notes, as shall be determined by the corporation.

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      (e) Bonds and notes may be payable at any places, whether within or outside of the state,

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may bear interest at any rate or rates payable at any time or times and at any place or places and

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evidenced in any manner, and may contain any provisions not inconsistent with this section, all as

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shall be provided in the proceedings of the corporation under which they shall be authorized to be

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issued.

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      (f) There may be retained by provision made in the proceedings under which any bonds

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or notes of the corporation are authorized to be issued an option to redeem all or any part of these

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bonds or notes, at any prices and upon any notice, and on any further terms and conditions as

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shall be set forth on the record of the proceedings and on the face of the bonds or notes.

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      (g) Any bonds or notes of the corporation may be sold from time to time at those prices,

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at public or private sale, and in any manner as shall be determined by the corporation, and the

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corporation shall pay all expenses, premiums, and commissions that it shall deem necessary or

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advantageous in connection with the issuance and sale of these bonds and notes.

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      (h) Moneys of the corporation, including proceeds from the sale of bonds or notes, and

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revenues, receipts and income from any of its projects or mortgages, may be invested and

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reinvested in any obligations, securities, and other investments consistent with this section as

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shall be specified in the resolutions under which the bonds or notes are authorized.

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      (i) Issuance by the corporation of one or more series of bonds or notes for one or more

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purposes shall not preclude it from issuing other bonds or notes in connection with the same

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project or any other project, but the proceedings whereunder any subsequent bonds or notes may

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be issued shall recognize and protect a prior pledge or mortgage made for a prior issue of bonds

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or notes unless in the proceedings authorizing that prior issue the right is reserved to issue

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subsequent bonds or notes on a parity with that prior issue.

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      (j) The corporation is authorized to issue bonds or notes for the purpose of refunding its

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bonds or notes then outstanding, including the payment of any redemption premium and any

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interest accrued or to accrue to the earliest or subsequent date of redemption, purchase, or

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maturity of the bonds or notes, and, if deemed advisable by the corporation, for the additional

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purpose of paying all or part of the cost of acquiring, constructing, reconstructing, rehabilitating,

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or improving any project, or the making of loans on any project. The proceeds of bonds or notes

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issued for the purpose of refunding outstanding bonds or notes may be applied, in the discretion

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of the corporation, to the purchase, retirement at maturity, or redemption of the outstanding bonds

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or notes either on their earliest or a subsequent redemption date, and may, pending that

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application, be placed in escrow. Those escrowed proceeds may be invested and reinvested in

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obligations of or guaranteed by the United States, or in certificates of deposit or time deposits

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secured or guaranteed by the state or the United States, or an instrumentality of either, maturing at

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any time or times as shall be appropriate to assure the prompt payment, as to principal, interest,

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and redemption premium, if any, of the outstanding bonds or notes to be so refunded. The

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interest, income and profits, if any, earned or realized on the investment may also be applied to

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the payment of the outstanding bonds or notes to be so refunded. After the terms of the escrow

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have been fully satisfied and carried out, any balance of the proceeds and interest, income and

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profits, if any, earned or realized on the investments may be returned to the corporation for use by

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it in furtherance of its purposes. The portion of the proceeds of bonds or notes issued for the

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additional purpose of paying all or part of the cost of acquiring, constructing, reconstructing,

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rehabilitating, developing, or improving any project, or the making of loans on any project, may

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be invested and reinvested in any obligations, securities, and other investments consistent with

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this section as shall be specified in the resolutions under which those bonds or notes are

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authorized and which shall mature not later than the times when those proceeds will be needed for

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those purposes. The interest, income and profits, if any, earned or realized on those investments

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may be applied to the payment of all parts of the costs, or to the making of loans, or may be used

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by the corporation otherwise in furtherance of its purposes. All bonds or notes shall be issued and

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secured and shall be subject to the provisions of this chapter in the same manner and to the same

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extent as any other bonds or notes issued pursuant to this chapter.

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      (k) The directors, the executive director of the corporation, and other persons executing

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bonds or notes shall not be subject to personal liability or accountability by reason of the issuance

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of these bonds and notes.

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      (l) Bonds or notes may be issued under the provisions of this chapter without obtaining

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the consent of any department, division, commission, board, body, bureau, or agency of the state,

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and without any other proceedings or the happening of any conditions or things other than those

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proceedings, conditions, or things which are specifically required by this chapter and by the

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provisions of the resolution authorizing the issuance of bonds or notes or the trust agreement

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securing them.

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      (m) The corporation, subject to any agreements with note holders or bondholders as may

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then be in force, shall have power out of any funds available therefor to purchase bonds or notes

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of the corporation, which shall thereupon be cancelled, at a price not exceeding:

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      (1) If the bonds or notes are then redeemable, the redemption price then applicable plus

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accrued interest to the next interest payment date; or

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      (2) If the bonds or notes are not then redeemable, the redemption price applicable on the

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earliest date that the bonds or notes become subject to redemption, plus the interest that would

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have accrued to that date.

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      (n) Whether or not the bonds and notes are of a form and character as to be negotiable

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instruments under the terms of the Rhode Island Uniform Commercial Code, title 6A, the bonds

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and notes are hereby made negotiable instruments within the meaning of and for all the purposes

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of the Rhode Island Uniform Commercial Code, subject only to the provisions of the bonds and

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notes for registration.

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      (o) If a director or officer of the corporation whose signature appears on bonds, notes, or

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coupons shall cease to be a director or officer before the delivery of those bonds or notes, that

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signature shall, nevertheless, be valid and sufficient for all purposes, the same as if the director or

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officer had remained in office until the delivery.

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     (p) Notwithstanding the provisions of this section, neither the corporation nor the general

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assembly shall use and/or appropriate any moneys relating to the redemption and/or payment of

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the principal of and/or the interest on any bonds, notes or other obligations of the corporation

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pertaining to the 38 Studios loan unless and until the identity of all entities and/or purchases of

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same shall be made public by the filing of a complete list with the finance committee of the house

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of representatives.

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     SECTION 2. This act shall take effect upon passage.

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LC01573

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT - ECONOMIC DEVELOPMENT

CORPORATION

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     This act would prohibit both the economic development corporation and the general

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assembly from using and/or appropriating any moneys for the redemption of any bonds, notes or

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other financial obligations incurred as a result of moneys loaned to 38 Studios unless and until

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any and all entities and/or purchases of same are publicly identified.

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     This act would take effect upon passage.

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LC01573

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