Rhode Island 2023 Regular Session

Rhode Island House Bill H6221 Compare Versions

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

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5	5	2023 -- H 6221
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7	7	LC002616
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9	9	S T A T E O F R H O D E I S L A N D
10	10	IN GENERAL ASSEMBLY
11	11	JANUARY SESSION, A.D. 2023
12	12	____________
13	13
14	14	A N A C T
15	15	RELATING TO EDUCATION -- FOUNDATION LEVEL SCHOOL SUPPORT
16	16	Introduced By: Representatives Messier, Alzate, Kazarian, Cruz, Henries, Stewart, and
17	17	Shallcross Smith
18	18	Date Introduced: March 29, 2023
19	19	Referred To: House Finance
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21	21
22	22	It is enacted by the General Assembly as follows:
23	23	SECTION 1. WHEREAS, Pursuant to Article XII of the Rhode Island Constitution, it is 1
24	24	the duty of the State of Rhode Island (the “state”) and the Rhode Island general assembly to promote 2
25	25	public schools as the diffusion of knowledge is essential to the preservation of the rights and 3
26	26	liberties of the Rhode Island people; and 4
27	27	WHEREAS, It is the duty of the state and the Rhode Island general assembly to adopt all 5
28	28	means which they deem necessary and proper to secure to the people the advantages and 6
29	29	opportunities of education and guarantee adequate public school housing for all public school 7
30	30	children in the state; and 8
31	31	WHEREAS, School facilities provide more than a place for instruction. The physical 9
32	32	learning environment contributes to the successful performance of educational programs designed 10
33	33	to meet students’ educational needs, and good educational outcomes depend on safe healthy school 11
34	34	buildings. Every student needs a safe, healthy, and sanitary learning environment that promotes 12
35	35	student learning and development; and 13
36	36	WHEREAS, School buildings in various municipalities and school districts in Rhode 14
37	37	Island are in need of major repairs and upgrades, presently interfere with the effective operation of 15
38	38	schools, and negatively affect the health, safety and welfare of the children of such municipalities 16
39	39	and school districts; and 17
40	40	WHEREAS, At the general elections held on November 6, 2018, and November 8, 2022, 18
41	41	the electors of the State of Rhode Island approved a total of $500,000,000 in general obligation 19
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45	45	bonds of the state to provide funding for construction and renovation of public schools; and 1
46	46	WHEREAS, The state currently provides state housing aid reimbursement to 2
47	47	municipalities and districts for school housing construction as a percentage of debt service; and 3
48	48	WHEREAS, The state’s reimbursement costs are directly related to the interest rates the 4
49	49	municipalities and school districts pay on their general obligation school bonds; and 5
50	50	WHEREAS, The state is able to issue appropriation-backed bonds at lower interest rates 6
51	51	than many municipalities and districts are able to obtain on their general obligation bonds; and 7
52	52	WHEREAS, It is less costly for the state to finance its share of a school project at lower 8
53	53	interest rates than for such municipalities and districts to finance the projects at higher interest rates 9
54	54	and seek state housing aid reimbursement from the state. NOW THEREFORE: 10
55	55	SECTION 2. Section 16-7-40 of the General Laws in Chapter 16-7 entitled "Foundation 11
56	56	Level School Support [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is 12
57	57	hereby amended to read as follows: 13
58	58	16-7-40. Increased school housing ratio. 14
59	59	(a)(1) In the case of regional school districts, the school housing aid ratio shall be increased 15
60	60	by two percent (2%) for each grade so consolidated. 16
61	61	(2) Regional school districts undertaking renovation project(s) shall receive an increased 17
62	62	share ratio of four percent (4%) for those specific project(s) only, in addition to the combined share 18
63	63	ratio calculated in § 16-7-39 and this subsection. 19
64	64	(b) In the case of projects undertaken by districts specifically for the purposes of school 20
65	65	safety and security, the school housing aid share ratio shall be increased by five percent (5%) for 21
66	66	these specific projects only, in the calculation of school housing aid. The increased share ratio shall 22
67	67	continue to be applied for as long as the project(s) receives state housing aid. In order to qualify for 23
68	68	the increased share ratio, seventy-five percent (75%) of the project costs must be specifically 24
69	69	directed to school safety and security measures. The council on elementary and secondary 25
70	70	education shall promulgate rules and regulations for the administration and operation of this 26
71	71	section. 27
72	72	(c) For purposes of addressing health and safety deficiencies as defined by the school 28
73	73	building authority, including the remediation of hazardous materials, the school housing aid ratio 29
74	74	shall be increased by five percent (5%) so long as the construction of the project commences by 30
75	75	December 30, 2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty 31
76	76	million dollar ($250,000,000) general obligation bond is approved on the November 2018 ballot. 32
77	77	In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a 33
78	78	minimum of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 34
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82	82	(d) For purposes of educational enhancement, including projects devoted to the 1
83	83	enhancement of early childhood education and career and technical education, the school housing 2
84	84	aid ratio shall be increased by five percent (5%) so long as construction of the project commences 3
85	85	by December 30, 2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty 4
86	86	million dollar ($250,000,000) general obligation bond is approved on the November 2018 ballot. 5
87	87	In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a 6
88	88	minimum of five hundred thousand dollars ($500,000) must be specifically directed to these 7
89	89	purposes. 8
90	90	(e) For replacement of a facility that has a facilities condition index of sixty-five percent 9
91	91	(65%) or higher, the school housing ratio shall be increased by five percent (5%) so long as 10
92	92	construction of the project commences by December 30, 2023 2024, is completed by December 30, 11
93	93	2028 2029, does not receive a bonus pursuant to subsection (f) or subsection (g), and a two hundred 12
94	94	fifty million dollar ($250,000,000) general obligation bond is approved on the November 2018 13
95	95	ballot. In order to qualify for the increased share ratio, twenty-five percent (25%) of the project 14
96	96	costs or a minimum of five hundred thousand dollars ($500,000) must be specifically directed to 15
97	97	this purpose. 16
98	98	(f) For any new construction or renovation that increases the functional utilization of any 17
99	99	facility from less than sixty percent (60%) to more than eighty percent (80%), including the 18
100	100	consolidation of school buildings within or across districts, the school housing aid ratio shall be 19
101	101	increased by five percent (5%) so long as construction of the project commences by December 30, 20
102	102	2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty million dollar 21
103	103	($250,000,000) general obligation bond is approved on the November 2018 ballot. In order to 22
104	104	qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a minimum 23
105	105	of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 24
106	106	(g) For any new construction or renovation that decreases the functional utilization of any 25
107	107	facility from more than one hundred twenty percent (120%) to between eighty-five percent (85%) 26
108	108	to one hundred five percent (105%), the school housing ratio shall be increased by five percent 27
109	109	(5%) so long as construction of the project commences by December 30, 2023 2024, is completed 28
110	110	by December 30, 2028 2029, and a two hundred fifty million dollar ($250,000,000) general 29
111	111	obligation bond is approved on the November 2018 ballot. In order to qualify for the increased 30
112	112	share ratio, twenty-five percent (25%) of the project costs or a minimum of five hundred thousand 31
113	113	dollars ($500,000) must be specifically directed to this purpose. 32
114	114	(h) For consolidation of two (2) or more school buildings, within or across districts into 33
115	115	one school building, the school housing aid ratio shall be increased by five percent (5%) so long as 34
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119	119	construction of the project commences by December 30, 2023 2024, is completed by December 30, 1
120	120	2028 2029, a two hundred fifty million dollar ($250,000,000) general obligation bond is approved 2
121	121	on the November 2018 ballot, and does not receive a bonus pursuant to subsection (f) or subsection 3
122	122	(g). In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs 4
123	123	or a minimum of five hundred thousand dollars ($500,000) must be specifically directed to this 5
124	124	purpose. 6
125	125	(i) Any regionalized and/or non-regionalized school district receiving an increased share 7
126	126	ratio for a project approved prior to July 1, 2018, shall continue to receive the increased share ratio 8
127	127	for as long as the project receives state housing aid. 9
128	128	(j) For any projects which have received approvals, including passage of an enabling act 10
129	129	by the general assembly, otherwise required by law for the issuance of school bonds or capital 11
130	130	leases, the state may, in lieu of providing state housing aid reimbursement on debt service on a 12
131	131	municipality’s or district’s school bonds enter into a financing agreement (“financing agreement”) 13
132	132	to fund its payment obligation if such financing arrangement will result in a savings to the state 14
133	133	rather than paying state housing aid as a reimbursement on the municipality’s or district’s debt 15
134	134	service, as projected by a municipal advisor registered with the United States Securities and 16
135	135	Exchange Commission. The state, acting through the governor and the general treasurer, may 17
136	136	finance the state’s housing aid contribution directly through bonds issued by the Rhode Island 18
137	137	health and educational building corporation (the “corporation”) and execute financing agreements 19
138	138	with the corporation. The amount financed by the corporation bonds and the state financing 20
139	139	agreement for any project shall not exceed the principal amount, plus original issue premium, if 21
140	140	any, required to finance the state’s contribution to the project including any such additional amount 22
141	141	as is required to finance costs of issuance, funding of debt service reserves, if required, and 23
142	142	capitalized interest on the corporation bonds. The corporation bonds will not constitute 24
143	143	indebtedness of the state or any of its subdivisions or a debt for which the full faith and credit of 25
144	144	the state or any of its subdivisions is pledged. The state’s payment obligations on the corporation’s 26
145	145	bonds pursuant to the financing agreement shall be subject to, and dependent on annual 27
146	146	appropriations made by the general assembly. From and after the date that the governor and the 28
147	147	general treasurer enter into such a financing agreement, the financed project shall not be eligible 29
148	148	for state housing aid reimbursement calculated pursuant to § 16-7-39 but shall be eligible for state 30
149	149	housing aid “bonus” incentives pursuant to § 16-7-40 and foundational aid offered on a pay-as-31
150	150	you-go basis pursuant to § 45-38.2-4. No corporation bonds shall be issued to finance the state’s 32
151	151	housing aid contribution for a project unless the project shall be approved by the Rhode Island 33
152	152	department of education. The corporation bonds and the financing agreements of the state 34
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156	156	authorized by this section shall not be subject to chapter 18 of title 35 (“public corporation debt 1
157	157	management”). The governor and the general treasurer on behalf of the state are hereby authorized 2
158	158	to execute such financing agreements and other papers as they deem necessary or desirable to carry 3
159	159	out the intent of this section and are also authorized to take all actions and execute all documents 4
160	160	or agreements necessary to comply with federal tax and securities laws, which documents or 5
161	161	agreements may have a term coextensive with the maturity of the corporation bonds authorized 6
162	162	hereby, including Rule 15c2-12 of the Securities and Exchange Commission (the “rule”) and to 7
163	163	execute and deliver a continuing disclosure agreement or certificate in connection with the 8
164	164	corporation bonds in the form as shall be deemed advisable by such officers in order to comply 9
165	165	with the rule. 10
166	166	(k) The deadlines for construction and completion set forth in § 16-7-40 are not related to, 11
167	167	or conditioned on, the two hundred fifty million dollar ($250,000,000) general obligation bond 12
168	168	approved by state voters on the November 8, 2022 ballot. Increased housing aid provided for in 13
169	169	this section is funded from state bonds proceeds, annual state appropriations and other sources. 14
170	170	SECTION 3. This act shall take effect upon passage. 15
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177	177	EXPLANATION
178	178	BY THE LEGISLATIVE COUNCIL
179	179	OF
180	180	A N A C T
181	181	RELATING TO EDUCATION -- FOUNDATION LEVEL SCH OOL SUPPORT
182	182	***
183	183	This act would authorize the state to enter into financing agreements with the Rhode Island 1
184	184	health and educational buildings corporation (the “corporation”) in lieu of providing state housing 2
185	185	aid reimbursement if such financing arrangement would result in a savings to the state rather than 3
186	186	paying state housing aid as a reimbursement on the municipality’s or district’s debt service. School 4
187	187	projects funded in this manner would not be eligible for state housing aid reimbursement calculated 5
188	188	pursuant to § 16-7-39 but would be eligible for state housing aid “bonus” incentives pursuant to § 6
189	189	16-7-40 and foundational aid offered on a pay-as-you-go basis pursuant to § 45-38.2-4. No 7
190	190	corporation bonds would be issued unless the school projects had been approved by the Rhode 8
191	191	Island department of education. This act would also amend the commencement and completion 9
192	192	deadlines for increased housing aid bonus points by one year. 10
193	193	This act would take effect upon passage. 11
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