Introduced By: Representatives Sherlock, Carter, McNamara, Pires and Ferguson
Date Introduced : February 9, 1999
It is enacted by the General Assembly as follows:
SECTION 1. Sections 16-57-6 and 16-57-7 of the General Laws in Chapter 16-57 entitled "Higher Education Assistance Authority" are hereby amended to read as follows:
16-57-6. Additional general powers. -- (a) In addition to the powers enumerated in section 16-57-5, the authority shall have power:
(1) To guarantee one hundred percent (100%) of the unpaid principal and accrued interest of any eligible loan made by a lender to any eligible borrower for the purpose of assisting the students in obtaining an education in an eligible institution.
(2) To procure insurance of every nature to protect the authority against losses which may be incurred in connection with its property, assets, activities, or the exercise of the powers granted under this chapter.
(3) To provide advisory, consultative, training, and educational services, technical assistance and advice to any person, firm, partnership, or corporation, whether the advisee is public or private, in order to carry out the purposes of this chapter.
(4) When the authority deems it necessary or desirable, to consent to the modification, with respect to security, rate of interest, time of payment of interest or principal, or any other term of a bond or note, contract, or agreement between the authority and the recipient or maker of a loan, bond, or note holder, or agency or institution guaranteeing the repayment of, purchasing, or selling an eligible loan.
(5) To engage the services of consultants on a contract basis for rendering professional and technical assistance and advice, and to employ attorneys, accountants, financial experts, and such other advisers, consultants, and agents as may be necessary in its judgment, and to fix their compensation.
(6) To contract for and to accept any gifts, grants, loans, funds, property, real or personal, or financial or other assistance in any form from the United States or any agency or instrumentality thereof or from the state or any agency or instrumentality thereof or from any other source, and to comply, subject to the provisions of this chapter, with the terms and conditions thereof. Loans provided pursuant to subsection (b) of this section shall be repaid to the authority and deposited as general revenues of the state.
(7) To prescribe rules and regulations deemed necessary or desirable to carry out the purposes of this chapter, including without limitation rules and regulations:
(i) To insure compliance by the authority with the requirements imposed by statutes or regulation governing the guaranty, insurance, purchase, or other dealing in eligible loans by federal agencies, instrumentalities, or corporations,
(ii) To set standards of eligibility for educational institutions, students, and lenders and to define residency and all other such terms as the authority deems necessary to carry out the purposes of this chapter, and
(iii) To set standards for the administration of programs of postsecondary student financial assistance assigned by law to the authority, including but not limited to savings programs. Administrative rules governing savings programs shall authorize the authority, in conjunction with the executive director of the Rhode Island Student Loan Authority, and the commissioner of higher education, to negotiate reciprocal agreements with institutions in other states offering similar savings programs for the purpose of maximizing educational benefits to residents, students and institutions in this state.
(8) To establish penalties for violations of any order, rule, or regulation of the authority, and a method for enforcing same.
(9) To set and collect fees and charges, in connection with its guaranties and servicing, including without limitation reimbursement of costs of financing by the authority, service charges, and insurance premiums and fees and costs associated with implementing and administering savings programs established pursuant to this chapter. Fees collected due to the Rhode Island work study program or due to unclaimed checks shall be deposited as general revenues of the state.
(10) To enter into an agreement with any university to secure positions for Rhode Island applicants in a complete course of study in its school of veterinary medicine, medicine, dentistry, optometry, and three (3) positions in osteopathic medicine and to guarantee and pay the university for each position.
(11) To enter into agreements with loan applicants providing preferential rates and terms relative to other applicants; provided, that the loan applicants agree to work in a licensed child care facility in Rhode Island for at least two (2) years upon completion or graduation in a course of study in early childhood education or child care.
(12) To develop and administer, in conjunction with the executive director of the Rhode Island Student Loan Authority, and the commissioner of higher education, savings programs on behalf of itself, the state, students, parents or any other private parties, all in cooperation with such other public and private parties and in accordance with such criteria or guidelines as the authority shall deem appropriate to effectuate the purposes of this chapter. To the extent practicable, such savings programs shall provide students, parents and others an opportunity to participate conveniently and shall enable them to set aside relatively small amounts of money at a time and shall incorporate or be available in conjunction with, directly or indirectly, tuition agreements from as many eligible institutions as feasible.
(13) In connection with any savings program, the authority may accept, hold and invest funds of students, parents, institutions of higher education and others and may establish special accounts for carrying out the purposes of this chapter.
(14) To enter into contracts with institutions of higher education,
financial institutions, financial consultants {DEL and DEL}
{ADD , ADD} attorneys {ADD and other qualified entities on terms and
conditions and for a term as it may deem advisable or desirable for
the purpose of establishing and maintaining savings programs authorized
pursuant to this chapter.
(15) To create and supervise a marketing plan dedicated to the promotion of savings programs created pursuant to this chapter and to hire professional consultants and attorneys for such purposes.
(16) To assist the general treasurer in the implementation of the college and university savings bond program established under chapter 15 of title 35.
(b) The authority shall enter into agreements with the prospective students to the university for the repayment by the students of the money advanced under such terms and conditions as are reasonable. The authority may charge students interest on the money advanced hereunder at a fixed or variable rate not exceeding the greater of seven and one-half percent (7 1/2%) per annum or the maximum rate allowable under 42 U.S.C. section 292 et seq. and the regulations promulgated thereunder by the United States office of education.
16-57-7. Directors, officers, and employees. --
(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 {DEL four (4) DEL} {ADD six (6) ADD} 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 {DEL . DEL}
{ADD , the state treasurer and the chairman of the Rhode Island
independent higher education association or their designees. ADD}
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) (1) 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.
(2) 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 that retirement program while an employee of the authority or become a participant in the employees' retirement system of the state.
(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 bylaws of the authority.
SECTION 2. This act shall take effect upon passage.
