It is enacted by the General Assembly as follows:

SECTION 1. Section 16-57-7 of the General Laws in Chapter 16-57 entitled "Higher Education Assistance Authority" is hereby amended to read as follows:

{ADD 16-57-7. Directors, officers and employees. -- ADD} (a) The powers of the authority shall be vested in a board of directors consisting of five (5) members to be appointed by the governor and four (4) members serving ex officio, who shall be the chairperson of the finance committees of the senate and house of representatives or their designees and two (2) members of the board of governors for higher education appointed by the chairperson of the board of governors. Each member shall serve until his or her successor is appointed and qualified. The original members appointed by the governor shall be appointed in such manner as to provide for the expiration of the term of one member on the first day of July of each year. The governor may remove any member (appointed) by him or her for misfeasance, malfeasance, or nonfeasance in office.

(b) During the month of June of each year, the governor shall appoint a member to succeed the member whose term will then next expire to serve for a term of five (5) years commencing on the first day of July then next following, and thereafter, until a successor is appointed and qualified. In the event of a vacancy occurring in the office of a member by death, resignation, removal, or otherwise, the vacancy shall be filled in like manner as an original appointment but only for the remainder of the term of the former member.

c) The directors shall receive no compensation for the performance of their duties hereunder, but each director shall be reimbursed for his or her reasonable expenses incurred in carrying out the duties. A director may engage in private employment, or in a profession or business.

(d) Upon appointment and qualification of the original board of directors, and during the month of July of each year thereafter, the board of directors shall elect one of its members to serve as chairperson. Five (5) directors shall constitute a quorum and any action to be taken by the authority under the provisions of this chapter may be authorized by resolution approved by a majority of the directors present and voting 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 the rights and perform all the duties of the authority.

(e) In addition to electing a chairperson, the board of directors shall appoint a secretary and such additional officers and staff members as they shall deem appropriate. The board of directors shall appoint an executive director who shall be in the unclassified service and vest in that person or his or her subordinates the authorization to appoint additional staff members who shall be in the classified service and to determine the amount of compensation each individual shall receive. Those persons who were regularly established full time employees of the authority, prior to March 27, 1979, and who are required to be in the classified service may be placed in appropriate classifications within the classified service without the requirement of competitive examination, (as approved by the executive director). All employees hired after March 27, 1979, will be hired in accordance with the requirements of the classified service for examination, approved state lists, and other procedures of the state division of personnel. Those persons who were regularly established full time employees of the authority, prior to March 27, 1979, shall have the right to purchase retirement credits for the period commencing November 1, 1977, to March 27, 1979, at the full actuarial cost thereof.

{ADD Any employee in either the classified or unclassified service who was, prior to his or her hire by the authority, a participant in the retirement program adopted for personnel at any state or private college shall have the option to either remain with said retirement program while an employee of the authority or become a participant in the employees' retirement system of the state. ADD}

(f) No full-time employee shall during the period of his or her employment by the authority engage in any other private employment, profession or business, except with the approval of the board of directors; provided, however, that the executive director shall not engage in any other private employment, profession or business, including, but not limited to consulting.

(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, savings and loan association, credit union, insurance company, educational institution, or any other firm, person or corporation to serve as a director of the authority nor shall any contract or transaction between the authority and any financial institution, investment banking firm, brokerage firm, commercial bank, trust company, savings and loan association, credit union, insurance company, educational institution, or any other firm, person, or corporation be void or voidable by reason of such service as director of the authority. If any director, officer, or employee of the authority 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 authority, the interest shall be disclosed to the authority and set forth in the minutes of the authority, and the director, officer, or employee having interest therein shall not participate on behalf of the authority in the authorization of any contract. Interested directors may be counted in determining the presence of a quorum at a meeting of the board of directors of the authority which authorizes the contract or transaction.

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

(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 the authority of the board of directors, but no committee shall have the authority of the board of directors in reference to the disposition of all or substantially all the property and assets of the authority or amending the by-laws of the authority.

SECTION 2. This act shall take effect upon passage.