State Codes and Statutes
Statutes > Rhode-island > Title-35 > Chapter-35-20 > 35-20-7SECTION 35-20-7
§ 35-20-7 Subsidiaries prohibited. –(a) Except as expressly authorized by law, no public corporation shall have theright to exercise or perform any of its powers and functions through anysubsidiary or any other separate corporation or entity. Except as expresslyauthorized by law, no public corporation shall direct, require, or permit anyof its directors, officers, or employees to create any subsidiary organizations.
(b) In any case in which a public corporation is expresslyauthorized by law to create or to act through a subsidiary or other separatecorporation or entity, no such subsidiary or other separate corporation orentity shall have the power to issue bonds, notes or other securities withoutthe authorization of the legislature. In accordance herewith, universityheights housing corporation for the purpose of financing and/or rehabilitatinguniversity heights and RIH equity corporation for the purpose of financinginvestments in low-income housing tax credit eligible properties, which aresubsidiaries of Rhode Island housing and mortgage finance corporation arespecifically authorized to issue debt for their corporate purposes. Provided,however, that nothing herein shall prohibit a wholly owned subsidiary of apublic corporation from issuing notes or other evidences of indebtedness wherethe only payee or obligee on the instruments is the subsidiary's parent publiccorporation; and provided further, however, that nothing herein shall prohibita wholly owned subsidiary of a public corporation from issuing notes or otherevidences of indebtedness in connection with its purchase or lease of businessequipment or other personal property used by the subsidiary in the ordinarycourse of its usual and regular business.
