Senate Resolution #633 (2019)

JOINT RESOLUTION AUTHORIZING THE ISSUANCE OF GARVEE BONDS

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Changes since original draft

  • 2019 – S 0633
  • 2019 – S 0633 SUBSTITUTE A
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  • LC002196
  • LC002196/SUB A
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  • S T A T E O F R H O D E I S L A N D
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • J O I N T R E S O L U T I O N
  • AUTHORIZING THE ISSUANCE AND REFINANCING OF GARVEE BONDS
  • S TATE OF RHODE IS L AND
  • IN GENERAL ASSEMBLY
  • JANUARY SESSION, A.D. 2019
  • ____________
  • J O I N T R E S O L U T I O N
  • AUTHORIZING THE ISSUANCE OF GARVEE BONDS
  • Introduced By: Senators Goodwin, and Ruggerio
  • Date Introduced: March 19, 2019
  • Referred To: Senate Finance
  • (Dept. of Transportation)
  • SECTION 1. This joint resolution consists of joint resolutions submitted pursuant to chapter 18 of title 35.
  • SECTION 2. Refinancing of GARVEE Bonds.
  • WHEREAS, The Rhode Island Department of Transportation ("RIDOT") has undertaken five (5) major transportation projects,and these projects were either substantially completed or nearing completion in the year 2019; and
  • WHEREAS, The construction of these projects was deemed critical in order to preserve and maintain the public safety and continued economic success and viability of the state of Rhode Island, its ports and infrastructure; and
  • WHEREAS, RIDOT explored various options to finance the costs of the five (5) major transportation projects and determined that the federal-aid financing program authorized in federal law by Section 311 of the National Highway System Designation Act of 1995 and commonly referred to as the Grant Anticipation Revenue Vehicle Program ("GARVEE Program") represented the best financing mechanism for the state of Rhode Island in as much as the GARVEE Program accelerated the funding and construction of the five (5) major transportation projects; and
  • WHEREAS, The general assembly, in Chapter 376, Article 36, Section 8 of the Public Laws of 2003, authorized the Rhode Island Economic Development Corporation, now the Rhode Island commerce corporation ("commerce corporation"), to issue bonds ("GARVEE Bonds") or other debt instruments on behalf of RIDOT and such GARVEE Bonds are secured by future appropriations for federal-aid transportation projects whereby such amounts are used to cover an assortment of bond-related costs, including principal and interest payments, issuance costs, insurance, and other costs incidental to financing; and
  • WHEREAS, GARVEE Bonds may be issued as special, limited obligations payable solely from federal transportation funds, subject to annual appropriation by the state, without a full faith and credit pledge by the state; and the holders of the GARVEE Bonds may not look to any other revenues of the commerce corporation, the state or RIDOT for the payment of the GARVEE Bonds; and
  • WHEREAS, The original Public Corporation Debt Management authorization in Article 36 of the FY 2004 Budget as enacted included a total of seven hundred nine million six hundred thousand dollars ($709,600,000) in GARVEE funding to be distributed across five (5) projects, as follows: one hundred twenty-six million two hundred thousand dollars ($126,200,000) for the Sakonnet River Bridge; three hundred forty-eight million three hundred thousand dollars ($348,300,000) for the Route I-195 Relocation; eighty-five million four hundred thousand dollars ($85,400,000) for the Washington Bridge; forty-two million five hundred thousand dollars ($42,500,000) for the Freight Rail Improvement Program (FRIP); and one hundred seven million two hundred thousand dollars ($107,200,000) for Route 403; and
  • WHEREAS, Interest rates are at historical lows and the existing revenue available to RIDOT is insufficient to fund the necessary program to replace, reconstruct, and maintain Rhode Island's bridges and otherwise bring the state's transportation infrastructure into a state of good repair; and
  • WHEREAS, It would be in the best interests of the state to maximize all potential sources of revenue to provide a more robust infrastructure program; now, therefore be it
  • RESOLVED AND ENACTED, That the governor of the state of Rhode Island or the director of the department of transportation or the director of the department of administration or the chief executive officer or the chief operating officer of the commerce corporation each be and each hereafter are, acting singly, authorized and empowered by the general assembly to enter into a financing lease, guarantee, loan and trust agreement, indenture or other obligations or contracts or agreements and to take such other actions as such official shall deem necessary or appropriate in order to issue or facilitate the refinancing and restructuring by the commerce corporation of the previously issued GARVEE Bonds pursuant to the authorization granted in Chapter 376, Article 36, Section 8 of the Public Laws of 2003; and be it further
  • RESOLVED, That the commerce corporation or any subsidiary thereof or other instrumentality, agency or quasi-public corporation otherwise authorized and empowered to refinance and restructure the bonds specified in this Joint Resolution each be and each hereafter are, acting singly, authorized and empowered by the general assembly to provide for the necessary security for such bonds consistent with the provisions of this Joint Resolution, including any action to pledge, assign or otherwise transfer the right to receive all or any portion of future Federal Highway Administration (FHWA) appropriations for federal-aid transportation projects or other revenues permitted by the laws of the state of Rhode Island to secure or provide for the payment of any such GARVEE or other bonds; and be it further
  • RESOLVED, That notwithstanding the amount of total debt service referenced in Chapter 376, Article 36, Section 8 of the Public Laws of 2003 and Chapter 241, Article 7, Section 5 of the Public Laws of 2012, any refinancing and restructuring may be structured to provide a net benefit to RIDOT with the approval of the governor; and be it further
  • RESOLVED, That no other changes in allocations or expenditure are authorized beyond the amendments included in this Joint Resolution; and be it further
  • RESOLVED, That this general assembly hereby approves refinancing and restructuring of the existing GARVEE Bonds in order to provide funding for critical and transportation infrastructure needs; and be it further
  • RESOLVED, That this joint resolution shall take effect immediately upon its passage by the general assembly.
  • SECTION 3. Issuance of GARVEE Bonds.
  • SECTION 1. This joint resolution is submitted pursuant to chapter 18 of title 35.
  • SECTION 2. Issuance of GARVEE Bonds.
  • WHEREAS, The Rhode Island department of transportation ("the department") has completed a detailed review of available funding sources for transportation reconstruction, maintenance, and repair and has determined that the funding available to carry out an immediate program of bridge reconstruction and preventative maintenance (the "program") is insufficient; and
  • WHEREAS, The limitation in funding has occurred, in part, due to the absence of a state­ funded capital investment program in transportation infrastructure, and the level funding of federal appropriations to the state, along with a reduction in federal funding through the elimination of federal earmarks and expiration of additional special federal funds; and
  • WHEREAS, Congress has enacted the Fixing America's Surface Transportation (FAST) Act, which provides an increase in available federal funding; and
  • WHEREAS, The limitation in funding has occurred, in part, due to the absence of a state­ funded capital investment program in transportation infrastructure, and the level funding of federal appropriations to the state, along with a reduction in federal funding through the elimination of federalearmarks and expiration of additional specialfederalfunds; and
  • WHEREAS, Congress has enacted the Fixing America's Surface Transportation (FAST) Act, which provides an increase in available federalfunding; and
  • WHEREAS, The department has explored various options to finance the costs of a robust infrastructure program and concluded that the federal-aid financing program authorized in federal law by Section 311 of the National Highway System Designation Act of 1995 and commonly referred to as the Grant Anticipation Revenue Vehicle Program ("GARVEE program") represents the best financing mechanism for the state of Rhode Island inasmuch as the GARVEE program accelerates the funding available to ensure that more Rhode Island bridges do not become structurally deficient; and
  • WHEREAS, The GARVEE program allows a state to issue bonds ("GARVEE Bonds") or other debt instruments backed by future appropriations for federal-aid transportation projects whereby such amounts are used to cover an assortment of bond-related costs, including principal and interest payments, issuance costs, insurance, and other costs incidental to financing; and
  • WHEREAS, Among other advantages, GARVEE Bonds may be issued as special revenue bonds without a full faith and credit pledge by the state of Rhode Island; and
  • WHEREAS, This general assembly finds that the reconstruction, maintenance, and repair of the transportation infrastructure of the state is critical for economic development and the general welfare of both businesses and residents; and
  • WHEREAS, This general assembly finds that the reconstruction, maintenance, and repair of the transportation infrastructure of the state is critical for economic development and the generalwelfare of both businesses and residents; and
  • WHEREAS, The general assembly has studied the issue of sustainable transportation funding and has determined that no single approach, instrument or method is able to provide sufficient revenue to maintain the state transportation system in a state of good repair; and
  • WHEREAS, The department has determined that GARVEE Bonds should be utilized to fund the bridge replacement, reconstruction, and maintenance component of the ten (10) year capital program known as RhodeWorks; and
  • WHEREAS, In connection with the issuance of GARVEE Bonds, the state of Rhode Island, acting by and through RIDOT, may elect to receive in lieu of certain monies which would otherwise have been received as reimbursement from FHWA for project costs for bridges in the RhodeWorks program, debt service payments to repay indebtedness in the form of bonds or notes issued to finance the costs of the construction and financing bridges in the RhodeWorks program; and
  • WHEREAS, The Rhode Island Public Corporation Debt Management Act (chapter 8 of title 35) requires the general assembly to provide its consent to the issuance of certain obligations for essential public facilities of the type referenced herein; and
  • WHEREAS, The Rhode Island Public Corporation Debt Management Act (chapter 8 of title 35) requires the general assembly to provide its consent to the issuance of certain obligations for essentialpublic facilities of the type referenced herein; and
  • WHEREAS, The design, construction, equipping and completion of these improvements will be financed in whole or in part through revenue bonds issued pursuant to the GARVEE program by the Rhode Island commerce corporation ("commerce corporation") or through revenue bonds issued pursuant to the GARVEE program by another agency, instrumentality or quasi-public corporation established by the state of Rhode Island now or hereafter and otherwise authorized and empowered pursuant to law to issue bonds of the type referenced herein for the types of projects enumerated herein, with such issuance having an expected term of fifteen (15) years, and annual revenues for the operation and maintenance of the bridges to be included in the annual operating budget of RIDOT; and
  • WHEREAS, The capital costs and anticipated bond issuance amounts associated with these projects are estimated to be two hundred million dollars ($200,000,000); now, therefore, be it
  • RESOLVED AND ENACTED, That the bridges in the RhodeWorks program are each essential public facilities and critical to ensure the economic viability of the citizens, businesses, transportation, marine trades and port facilities of the state of Rhode Island and otherwise in the best interests of the state of Rhode Island, and that this general assembly hereby approves financing not to exceed two hundred million dollars ($200,000,000) in principal amount of GARVEE Bonds, the repayment of which shall be derived from and supported by FHWAfunds due the state of Rhode Island. The term of the GARVEE Bonds shall not exceed fifteen (15) years and the total debt service on the GARVEE Bonds shall not exceed two hundred seventy-five million dollars ($275,000,000); and be it further
  • RESOLVED, That the governor of the state of Rhode Island or the director of the department of transportation or the director of the department of administration or the chief executive officer or the chief operating officer of the commerce corporation each be and each hereafter are, acting singly, authorized and empowered by the general assembly to enter into a financing lease, guarantee, loan and trust agreement, indenture or other obligations or contracts or agreements and to take such other actions as such official shall deem necessary or appropriate in order to issue or facilitate the issuance of the GARVEE Bonds and to provide the commerce corporation or any subsidiary thereof or other instrumentality, agency or quasi-public corporation otherwise authorized and empowered to issue the bonds specified in this Joint Resolution for the RhodeWorks program with the necessary debt service payments up to the amount specified above and the necessary security for such bonds consistent with the provisions of this Joint Resolution, including any action to pledge, assign or otherwise transfer the right to receive all or any portion of future FHWA appropriations for federal-aid transportation projects or other revenues permitted by the laws of the state of Rhode Island to secure or provide for the payment of any such GARVEE Bonds; and be it further
  • WHEREAS, The capital costs and anticipated bond issuance amounts associated with
  • LC002196/SUB A - Page 2of 3 these projects are estimated to be two hundred million dollars ($200,000,000); now, therefore, be it
  • RESOLVED AND ENACTED, That the bridges in the RhodeWorks program are each essential public facilities and critical to ensure the economic viability of the citizens, businesses, transportation, marine trades and port facilities of the state of Rhode Island and otherwise in the best interests of the state of Rhode Island, and that this general assembly hereby approves financing not to exceed two hundred million dollars ($200,000,000) in principal amount of GARVEE Bonds, the repayment of which shall be derived from and supported by FHWAfunds due the state of Rhode Island. The termof the GARVEE Bonds shall not exceedfifteen(15) years and the total debt service on the GARVEE Bonds shall not exceed two hundred seventy-five million dollars ($275,000,000); and be it further
  • RESOLVED, That the governor of the state of Rhode Island or the director of the department of transportation or the director of the department of administration or the chief executive officer or the chief operating officer of the commerce corporation each be and each hereafter are, acting singly, authorized and empowered by the general assembly to enter into a financing lease, guarantee, loan and trust agreement, indenture or other obligations or contracts or agreements and to take such other actions as such officialshalldeem necessary or appropriate in order to issue or facilitate the issuance of the GARVEE Bonds and to provide the commerce corporation or any subsidiary thereof or other instrumentality, agency or quasi-public corporation otherwise authorized and empowered to issue the bonds specified in this Joint Resolution for the RhodeWorks program with the necessarydebt service payments up to the amount specified above and the necessary security for such bonds consistent with the provisions of this Joint Resolution, including any action to pledge, assign or otherwise transfer the right to receive all or any portion of future FHWA appropriations for federal-aid transportation projects or other revenues permitted by the laws of the state of Rhode Island to secure or provide for the payment of any such GARVEE Bonds; and be it further
  • RESOLVED, That this joint resolution shall take effect immediately upon its passage.
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Votes

NOTE: Electronic voting records are unofficial and may not be accurate. For an official vote tally, check the House or Senate Journal from the day of the vote.

Floor vote for Passage

May 14, 2019 at 4:26pm
Yeas: 32 / Nays: 5 / Not voting: 1 / Recused: 0
Legislator Vote
Sen. Algiere N
Sen. Archambault Y
Sen. Bell Y
Sen. Cano Y
Sen. Ciccone Y
Sen. Conley Y
Sen. Coyne Y
Sen. Crowley Y
Sen. Cruz N
Sen. DiPalma Y
Sen. Euer Y
Sen. Felag Y
Sen. Gallo Y
Sen. Goldin Y
Sen. Goodwin Y
Sen. Lawson Y
Sen. Lombardi Y
Sen. Lombardo Y
Sen. Lynch Prata Y
Sen. McCaffrey Y
Sen. McKenney Y
Sen. Metts Y
Sen. Miller Y
Sen. Morgan N
Sen. Murray Y
Sen. Nesselbush Y
Sen. Paolino N
Sen. Pearson Y
Sen. Picard NV
Sen. Quezada Y
Sen. Raptakis Y
Sen. Rogers N
Sen. Ruggerio Y
Sen. Satchell Y
Sen. Seveney Y
Sen. Sheehan Y
Sen. Sosnowski Y
Sen. Valverde Y