Rhode Island 2023 Regular Session

Rhode Island House Bill H6211 Compare Versions

Only one version of the bill is available at this time.

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5	5	2023 -- H 6211
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7	7	LC002617
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9	9	S TATE OF RHODE IS LAND
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	J O I N T R E S O L U T I O N
15	15	A N D A N A C T
16	16	AUTHORIZING THE STATE TO ENTER INTO A FINANCING AGREEMENT RE LATING
17	17	TO SCHOOL CONSTRUCTI ON IN THE CITY OF PAWTUCKET
18	18	Introduced By: Representatives Messier, Alzate, Kazarian, Cruz, Henries, Stewart, and
19	19	Shallcross Smith
20	20	Date Introduced: March 24, 2023
21	21	Referred To: House Finance
22	22
23	23
24	24	WHEREAS, Pursuant to Article XII of the Rhode Island Constitution, it is the duty of the 1
25	25	State of Rhode Island (the "state") and the Rhode Island general assembly to promote public 2
26	26	schools as the diffusion of knowledge is essential to the preservation of the rights and liberties of 3
27	27	the Rhode Island people; and 4
28	28	WHEREAS, It is the duty of the state and the Rhode Island general assembly to adopt all 5
29	29	means which they deem necessary and proper to secure to the people, the advantages and 6
30	30	opportunities of education and guarantee adequate public school housing for all public school 7
31	31	children in the state; and 8
32	32	WHEREAS, School facilities provide more than a place for instruction. The physical 9
33	33	learning environment contributes to the successful performance of educational programs designed 10
34	34	to meet students' educational needs, and good educational outcomes depend on safe healthy 11
35	35	school buildings. Every student needs a safe, healthy, and sanitary learning environment that 12
36	36	promotes student learning and development; and 13
37	37	WHEREAS, School buildings in the city of Pawtucket (the "city"), Rhode Island are in 14
38	38	need of major repairs and upgrades, presently interfere with the effective operation of schools, 15
39	39	and negatively affect the health, safety, and welfare of the children of Pawtucket; and 16
40	40	WHEREAS, At the general election held on November 8, 2022, the electors of the city 17
41	41	approved a project consisting of the acquisition, construction, improvement, furnishing 18
42	42	and equipping of a new high school and school facilities and all expenses incident 19
43	43
44	44
45	45	LC002617 - Page 2 of 5
46	46	thereto including, but not limited to, costs of design, demolition, athletic fields, landscaping and 1
47	47	parking and costs of financing (the "project"); and 2
48	48	WHEREAS, Due to financial hardships of the city of Pawtucket, increases in interest 3
49	49	rates, and post-supply chain issues, the city is not currently able to finance the construction, 4
50	50	renovation, improvement, alteration, repair, furnishing and equipping of schools and school 5
51	51	facilities [without certain legislative changes and support from the state]; and 6
52	52	WHEREAS, The state currently provides state housing aid reimbursement to the city of 7
53	53	Pawtucket at a rate of approximately 83.7%; and 8
54	54	WHEREAS, The state's reimbursement costs are directly related to the interest rates the 9
55	55	city pays on its general obligation school bonds; and 10
56	56	WHEREAS, The state is able to issue appropriation-backed bonds at lower interest rates 11
57	57	than the city is able to obtain on its general obligation bonds; and 12
58	58	WHEREAS, It is less costly for the state to finance its share of the project at lower 13
59	59	interest rates than for the city to finance the project at higher interest rates and seek state housing 14
60	60	aid reimbursement from the state; and 15
61	61	WHEREAS, The project will be financed through bonds issued by the Rhode Island 16
62	62	Health and Educational Building Corporation (the "corporation") under its school financing 17
63	63	revenue bond program, with an expected term of not to exceed thirty (30) years and it is 18
64	64	anticipated that the state will be a signatory to the financing agreement with the corporation (the 19
65	65	"financing agreement"); and 20
66	66	WHEREAS, It is anticipated that the state's payment obligations to the corporation under 21
67	67	the financing agreement will be subject to appropriation therefor by the general assembly in each 22
68	68	budget year; and 23
69	69	WHEREAS, The Rhode Island public corporation debt management act (defined below) 24
70	70	requires the general assembly to provide its consent to the issuance or incurring by the State of 25
71	71	Rhode Island of certain obligations, including financing guarantees or other payment agreements; 26
72	72	and 27
73	73	WHEREAS, The total project costs covered by the financing agreement are expected to 28
74	74	be $330,000,000 plus original issue premium, if any, and such additional amount as is required to 29
75	75	finance costs of issuance, funding of debt service reserves, if required, and capitalized interest. 30
76	76	Debt service payments will be supported by revenues received by the corporation under the 31
77	77	financing agreement which include annual appropriations for debt service made by the state and 32
78	78	payments from the city of Pawtucket under the financing agreement. Total debt service on the 33
79	79	bonds issued by the corporation (the "corporation bonds") in not expected to exceed $22,201,000 34
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83	83	annually and $435,652,875 in the aggregate based on an average interest rate of five percent 1
84	84	(5.00%). 2
85	85	SECTION 1. NOW THEREFORE, be it resolved and enacted by the general assembly as 3
86	86	follows: 4
87	87	RESOLVED AND ENACTED, That this act shall serve as the joint resolution required 5
88	88	pursuant to chapter 18 of title 35 of the Rhode Island General Laws ("Rhode Island public 6
89	89	corporation debt management act"); and be it further 7
90	90	RESOLVED AND ENACTED, That this general assembly hereby approves the 8
91	91	financing for the project in an amount up to $330,000,000, plus original issue premium, if any, 9
92	92	and such additional amount as is required to finance costs of issuance, funding of debt service 10
93	93	reserves, if required, and capitalized interest thereon; and be it further 11
94	94	RESOLVED AND ENACTED, That the state, acting through the governor and the 12
95	95	general treasurer, may execute the financing agreement as contemplated herein and any other 13
96	96	agreements necessary to effectuate the purposes of this act; and be it further 14
97	97	RESOLVED AND ENACTED, That the corporation bonds will be special obligations of 15
98	98	the corporation payable from funds received by the corporation under the financing agreement 16
99	99	and other revenues received by the corporation, in any combination or priority as may be 17
100	100	designated in the proceedings of the corporation authorizing the issuance of such debt. The total 18
101	101	debt service on the corporation bonds is estimated to average approximately twenty-two million, 19
102	102	two hundred one thousand dollars ($22,201,000) per year or approximately four hundred thirty-20
103	103	five million six hundred fifty-two thousand and eight hundred seventy-five dollars 21
104	104	($435,652,875) in the aggregate, at an average interest rate of approximately five percent (5%) 22
105	105	and an approximately thirty (30) year maturity; and be it further 23
106	106	RESOLVED AND ENACTED, That the corporation bonds will not constitute 24
107	107	indebtedness of the state or any of its subdivisions or a debt for which the full faith and credit of 25
108	108	the state or any of its subdivisions is pledged; and be it further 26
109	109	RESOLVED AND ENACTED, That the state's authority to incur the obligations set forth 27
110	110	herein will expire within five (5) years of the date of passage of this act if such financing 28
111	111	transaction is not executed prior to that date; and be it further 29
112	112	RESOLVED AND ENACTED, That from and after the date that the governor and the 30
113	113	general treasurer enter into such financing agreement, that the project shall not be eligible for 31
114	114	state housing aid reimbursement calculated pursuant to § 16-7-39 but shall be eligible for state 32
115	115	housing aid "bonus" incentives pursuant to § 16-7-40 and foundational aid offered on a pay-as-33
116	116	you-go basis pursuant to § 45-38.2-4; and be it further 34
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120	120	RESOLVED AND ENACTED, That no corporation bonds shall be issued unless the 1
121	121	project shall be approved by the Rhode Island department of education; and be it further 2
122	122	RESOLVED AND ENACTED, that the governor, the general treasurer, on behalf of the 3
123	123	state are hereby authorized to execute such documents or other papers as either of them deem 4
124	124	necessary or desirable to carry out the intent of this act and are also authorized to take all actions 5
125	125	and execute all documents or agreements necessary to comply with federal tax and securities 6
126	126	laws, which documents or agreements may have a term coextensive with the maturity of the 7
127	127	corporation bonds authorized hereby, including Rule 15c2-12 of the Securities and Exchange 8
128	128	Commission (the "rule") and to execute and deliver a continuing disclosure agreement or 9
129	129	certificate in connection with the corporation bonds in the form as shall be deemed advisable by 10
130	130	such officers in order to comply with the rule. 11
131	131	SECTION 2. This act shall take effect upon passage. 12
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133	133	LC002617
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138	138	EXPLANATION
139	139	BY THE LEGISLATIVE COUNCIL
140	140	OF
141	141	J O I N T R E S O L U T I O NJ O I N T R E S O L U T I O N
142	142	A N D A N A C T
143	143	AUTHORIZING THE STATE TO ENTER INTO A FINANCING AGREEMENT RE LATING
144	144	TO SCHOOL CONSTRUCTION IN THE CITY OF PAWTUCKET
145	145	***
146	146	This act would serve as the joint resolution required pursuant to chapter 18 of title 35 of 1
147	147	the Rhode Island general laws ("Rhode Island public corporation debt management act") 2
148	148	authorizing the State of Rhode Island to finance the acquisition, construction, improvement, 3
149	149	furnishing and equipping of a new high school and school facilities and all expenses incident 4
150	150	thereto, including but not limited to costs of design, demolition, athletic fields, landscaping and 5
151	151	parking. 6
152	152	The project would not be eligible for state housing aid reimbursement calculated pursuant 7
153	153	to § 16-7-39 but would be eligible for state housing aid "bonus" incentives pursuant to § 16-7-40 8
154	154	and foundational aid offered on a pay-as-you-go basis pursuant to § 45-38.2-4. No bonds would 9
155	155	be issued under the act unless the school projects have been approved by the Rhode Island 10
156	156	Department of Education. 11
157	157	This act would take effect upon passage. 12
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159	159	LC002617
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