Rhode Island General Laws 35-20-7. Subsidiaries prohibited
(a) Except as expressly authorized by law, no public corporation shall have the right to exercise or perform any of its powers and functions through any subsidiary or any other separate corporation or entity. Except as expressly authorized by law, no public corporation shall direct, require, or permit any of its directors, officers, or employees to create any subsidiary organizations.
Terms Used In Rhode Island General Laws 35-20-7
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
- Personal property: All property that is not real property.
- Public corporation: means any body corporate and politic created or to be created pursuant to statute, including, without limitation, the Rhode Island industrial recreational building authority, the Rhode Island economic development corporation and any subsidiaries thereof, the Rhode Island industrial facilities corporation, the Rhode Island refunding bond authority, the Rhode Island health and educational building authority, the board of governors for higher education, the Rhode Island housing and mortgage finance corporation, the Rhode Island resource recovery corporation, the Rhode Island public transit authority, the Rhode Island student loan authority, the water resources board corporate, the Narragansett Bay water quality management district commission, the Rhode Island health and educational building corporation, the Rhode Island depositors economic protection corporation, the Rhode Island convention center authority, the Rhode Island turnpike and bridge authority, their successors and assigns. See Rhode Island General Laws 35-20-5
(b) In any case in which a public corporation is expressly authorized by law to create or to act through a subsidiary or other separate corporation or entity, no such subsidiary or other separate corporation or entity shall have the power to issue bonds, notes or other securities without the authorization of the legislature. In accordance herewith, university heights housing corporation for the purpose of financing and/or rehabilitating university heights and RIH equity corporation for the purpose of financing investments in low-income housing tax credit eligible properties, which are subsidiaries of Rhode Island housing and mortgage finance corporation are specifically authorized to issue debt for their corporate purposes. Provided, however, that nothing herein shall prohibit a wholly owned subsidiary of a public corporation from issuing notes or other evidences of indebtedness where the only payee or obligee on the instruments is the subsidiary’s parent public corporation; and provided further, however, that nothing herein shall prohibit a wholly owned subsidiary of a public corporation from issuing notes or other evidences of indebtedness in connection with its purchase or lease of business equipment or other personal property used by the subsidiary in the ordinary course of its usual and regular business.
History of Section.
P.L. 1995, ch. 86, § 1.