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RI Senate OKs bill to give EDC new name, new rules

David Klepper, Associated Press

PROVIDENCE, R.I. (AP) -- State lawmakers endorsed another plan designed to refashion Rhode Island's Economic Development Corp. on Tuesday as questions and anger over the agency's failed investment in 38 Studios continues to resonate in the Statehouse.

The Senate voted 31-3 to rechristen the EDC the Rhode Island Commerce Corp. The legislation would also require the creation of a new mission statement and code of ethics for the quasi-public agency.

The bill's sponsor, Sen. James Sheehan, said his proposal will bring accountability to the agency, which has faced criticism for backing a $75 million loan guarantee for former Red Sox pitcher Curt Schilling's video game company. The company has declared bankruptcy, leaving the state on the hook for $112 million.

The House has endorsed legislation that would also rename the EDC the Commerce Corp. and would place it under the control of a new secretary of commerce.

Sheehan said both chambers will now sift through the differences of the proposals to craft a compromise.

"In terms of accountability, in terms of transparency, this is a good bill," he said of the Senate legislation. "But we'll analyze the House bill, finding differences, finding commonalities. I'm not going to get into 'my bill is better than your bill.'"

Democratic Gov. Lincoln Chafee opposes the bills, saying reconfiguring the agency is a distraction from work to improve the economy. He vowed last week to veto the House legislation, but it passed with enough votes to block a veto should he follow through on his threat.

A growing number of lawmakers are calling for the state to default on the money it owes bondholders for the failed 38 Studios investment, and the debate has become one of the thorniest facing lawmakers as they seek to adjourn their 2013 session.

On Tuesday, Sen. Edward O'Neill called on Sheehan, who chairs the Senate Oversight Committee, to call an immediate meeting to commission a formal risk assessment of what would happen should the state default on the debt. O'Neill favors defaulting, saying in an interview that taxpayers shouldn't have to foot the bill.

Sheehan said there may not be enough time left in the session to commission a formal assessment, but he noted that both the House and Senate have explored the implications of a default. He said the bill that the Senate passed Tuesday is intended to prevent the state from taking such a risky gamble in the future.