2023 -- S 0537 SUBSTITUTE A
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S TATE OF RHODE IS LAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2023
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A N A C T
RELATING TO EDUCATION -- SCHOOL FUNDS AND PRO PERTY
Introduced By: Senators Pearson, Gallo, Acosta, Cano, Murray, DiPalma, Ruggerio,
Valverde, LaMountain, and DiMario
Date Introduced: March 07, 2023
Referred To: Senate Finance
It is enacted by the General Assembly as follows:
SECTION 1. Chapter 16-9 of the General Laws entitled "School Funds and Property" is 1
hereby amended by adding thereto the following section: 2
16-9-11. New school construction and renovations. 3
Not later than June 30, 2024, the department of education and the office of energy resources 4
are hereby authorized and directed to develop and adopt regulations requiring all school buildings 5
to meet the latest Northeast Collaborative for High Performance Schools (NE-CHPS) standard of 6
zero energy capable, as defined in § 16-7-36, by December 31, 2035. 7
(1) The regulations shall allow flexibility to the furthest extent possible for local education 8
agencies to pursue state and federal funding sources that assist in financing energy efficiency or 9
renewable energy systems without any penalties or reduction in state housing aid provided by the 10
department of education. 11
(2) Furthermore, for local education agencies that pursue federal funding for renewable 12
energy systems, the department’s regulations shall direct and provide further guidance to local 13
education agencies to build, own, and operate solar panels utilizing federal guidance established in 14
I.R.C. § 6417. 15
SECTION 2. Sections 16-7-36, 16-7-39 16-7-40 and 16-7-41.1 of the General Laws in 16
Chapter 16-7 entitled "Foundation Level School Support [See Title 16 Chapter 97 — The Rhode 17
Island Board of Education Act]" are hereby amended to read as follows: 18
16-7-36. Definitions. 19
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The following words and phrases used in §§ 16-7-35 to 16-7-47 and in §16-9-11 have the 1
following meanings: 2
(1) “Adjusted equalized weighted assessed valuation” means the equalized weighted 3
assessed valuation for a community as determined by the division of property valuation within the 4
department of revenue in accordance with § 16-7-21; provided, however, that in the case of a 5
regional school district the commissioner of elementary and secondary education shall apportion 6
the adjusted equalized weighted assessed valuation of the member cities or towns among the 7
regional school district and the member cities or towns according to the proportion that the number 8
of pupils of the regional school district bears to the number of pupils of the member cities or towns. 9
(2) “Approved project” means a project which has complied with the administrative 10
regulations governing §§ 16-7-35 through 16-7-47, and which has been authorized to receive state 11
school housing reimbursement by the commissioner of elementary and secondary education. 12
(3) “Commissioning agent” means a person or entity who ensures that systems are 13
designed, installed, functionally tested, and capable of being operated and maintained to perform 14
in conformity with the design intent of a project. 15
(4) “Community” means any city, town, or regional school district established pursuant to 16
law; provided, however, that the member towns of the Chariho regional high school district, created 17
by P.L. 1958, ch. 55, as amended, shall constitute separate and individual communities for the 18
purposes of distributing the foundation level school support for school housing for all grades 19
financed in whole or in part by the towns irrespective of any regionalization. 20
(5) “Facilities condition index” means the cost to fully repair the building divided by the 21
cost to replace the building as determined by the school building authority. 22
(6) “Functional utilization” means the ratio of the student population within a school 23
facility to the capacity of the school facility to adequately serve students as defined by the school 24
building authority. 25
(7) “Maintenance expenditures” means amounts spent for repairs or replacements for the 26
purpose of keeping a school facility open and safe for use, including repairs, maintenance, and 27
replacements to a school facility’s heating, lighting, ventilation, security, and other fixtures to keep 28
the facility or fixtures in effective working condition. Maintenance shall not include contracted or 29
direct custodial or janitorial services, expenditures for the cleaning of a school facility or its 30
fixtures, the care and upkeep of grounds, recreational facilities, or parking lots, or the cleaning of 31
or repairs and replacements to movable furnishings or equipment. 32
(8) “Owner’s program manager” means owner’s program manager as defined in § 37-2-7. 33
(9) “Prime contractor” means the construction contractor who is responsible for the 34
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completion of a project. 1
(10) “Reference year” means the year next prior to the school year immediately preceding 2
that in which aid is to be paid. 3
(11) “Subject to inflation” means the base amount multiplied by the percentage of increase 4
in the Producer Price Index (PPI) Data for Nonresidential Building Construction (NAICS 236222) 5
as published by the United States Department of Labor, Bureau of Labor Statistics determined as 6
of September 30 of the prior calendar year. 7
(12) “Zero energy capable” means the building: 8
(i) Meets the latest Northeast Collaborative for High Performance Schools (NE-CHPS) 9
standard of a zero energy capable school building whereby the actual annual energy delivered other 10
than as described in subsection (12)(ii) of this section, must be less than or equal to the renewable 11
energy generated onsite; or 12
(ii) The actual annual energy delivered must be less than or equal to the sum of: 13
(A) The renewable energy generated onsite; 14
(B) The renewable energy generated offsite through a power purchase agreement; and 15
(C) The value of purchased NE-GIS certificates that meet the standard for a new renewable 16
energy resources as defined in § 39-26-2. 17
16-7-39. Computation of school housing-aid ratio. 18
For each community, the percent of state aid for school housing costs shall be computed in 19
the following manner: 20
(1) The adjusted equalized weighted assessed valuation for the district is divided by the 21
resident average daily membership for the district (grades twelve (12) and below); (2) The adjusted 22
equalized weighted assessed valuation for the state is divided by the resident average daily 23
membership for the state (grades twelve (12) and below); (1) is then divided by (2) and the resultant 24
ratio is multiplied by a factor currently set at sixty-two percent (62%) which represents the 25
approximate average district share of school support; the resulting product is then subtracted from 26
one hundred percent (100%) to yield the housing aid share ratio, provided that in no case shall the 27
ratio be less than thirty percent (30%). Provided, that effective July 1, 2010, and annually at the 28
start of each fiscal year thereafter, the thirty percent (30%) floor on said housing-aid share shall be 29
increased by five percent (5%) increments each year until said floor on the housing-aid share ratio 30
reaches a minimum of not less than forty percent (40%). This provision shall apply only to school 31
housing projects completed after June 30, 2010, that received approval from the board of regents 32
prior to June 30, 2012. Provided further, for the fiscal year beginning July 1, 2012, and for 33
subsequent fiscal years, the minimum housing aid share shall be thirty-five percent (35%) for all 34
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projects receiving council on elementary and secondary education approval after June 30, 2012. 1
The resident average daily membership shall be determined in accordance with § 16-7-22(1). 2
(2) No district shall receive a combined total of more than twenty (20) incentive percentage 3
points for projects that commence construction by December 30, 2023, and five (5) incentive points 4
for projects that commence construction thereafter; provided further, these caps shall be in addition 5
to amounts received under §§ 16-7-40(a)(1), and 16-7-40(a)(2), 16-7-40(j)(1) and 16-7-40(j)(2). 6
Furthermore, a district’s share shall not be decreased by more than half of its regular share 7
irrespective of the number of incentive points received nor shall a district’s state share increase by 8
more than half of its regular share, including amounts received under §§ 16-7-40(a)(1) and 16-7-9
40(a)(2), irrespective of the number of incentive points received. 10
16-7-40. Increased school housing ratio. 11
(a)(1) In the case of regional school districts, the school housing aid ratio shall be increased 12
by two percent (2%) for each grade so consolidated. 13
(2) Regional school districts undertaking renovation project(s) shall receive an increased 14
share ratio of four percent (4%) for those specific project(s) only, in addition to the combined share 15
ratio calculated in § 16-7-39 and this subsection. 16
(b) In the case of projects undertaken by districts specifically for the purposes of school 17
safety and security, the school housing aid share ratio shall be increased by five percent (5%) for 18
these specific projects only, in the calculation of school housing aid. The increased share ratio shall 19
continue to be applied for as long as the project(s) receives state housing aid. In order to qualify for 20
the increased share ratio, seventy-five percent (75%) of the project costs must be specifically 21
directed to school safety and security measures. The council on elementary and secondary 22
education shall promulgate rules and regulations for the administration and operation of this 23
section. 24
(c) For purposes of addressing health and safety deficiencies as defined by the school 25
building authority, including the remediation of hazardous materials, the school housing aid ratio 26
shall be increased by five percent (5%) so long as the construction of the project commences by 27
December 30, 2023, is completed by December 30, 2028, and a two hundred fifty million dollar 28
($250,000,000) general obligation bond is approved on the November 2018 ballot. In order to 29
qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a minimum 30
of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 31
(d) For purposes of educational enhancement, including projects devoted to the 32
enhancement of early childhood education and career and technical education, the school housing 33
aid ratio shall be increased by five percent (5%) so long as construction of the project commences 34
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by December 30, 2023, is completed by December 30, 2028, and a two hundred fifty million dollar 1
($250,000,000) general obligation bond is approved on the November 2018 ballot. In order to 2
qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a minimum 3
of five hundred thousand dollars ($500,000) must be specifically directed to these purposes. 4
(e) For replacement of a facility that has a facilities condition index of sixty-five percent 5
(65%) or higher, the school housing ratio shall be increased by five percent (5%) so long as 6
construction of the project commences by December 30, 2023, is completed by December 30, 2028, 7
does not receive a bonus pursuant to subsection (f) or subsection (g), and a two hundred fifty million 8
dollar ($250,000,000) general obligation bond is approved on the November 2018 ballot. In order 9
to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a minimum 10
of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 11
(f) For any new construction or renovation that increases the functional utilization of any 12
facility from less than sixty percent (60%) to more than eighty percent (80%), including the 13
consolidation of school buildings within or across districts, the school housing aid ratio shall be 14
increased by five percent (5%) so long as construction of the project commences by December 30, 15
2023, is completed by December 30, 2028, and a two hundred fifty million dollar ($250,000,000) 16
general obligation bond is approved on the November 2018 ballot. In order to qualify for the 17
increased share ratio, twenty-five percent (25%) of the project costs or a minimum of five hundred 18
thousand dollars ($500,000) must be specifically directed to this purpose. 19
(g) For any new construction or renovation that decreases the functional utilization of any 20
facility from more than one hundred twenty percent (120%) to between eighty-five percent (85%) 21
to one hundred five percent (105%), the school housing ratio shall be increased by five percent 22
(5%) so long as construction of the project commences by December 30, 2023, is completed by 23
December 30, 2028, and a two hundred fifty million dollar ($250,000,000) general obligation bond 24
is approved on the November 2018 ballot. In order to qualify for the increased share ratio, twenty-25
five percent (25%) of the project costs or a minimum of five hundred thousand dollars ($500,000) 26
must be specifically directed to this purpose. 27
(h) For consolidation of two (2) or more school buildings, within or across districts into 28
one school building, the school housing aid ratio shall be increased by five percent (5%) so long as 29
construction of the project commences by December 30, 2023, is completed by December 30, 2028, 30
a two hundred fifty million dollar ($250,000,000) general obligation bond is approved on the 31
November 2018 ballot, and does not receive a bonus pursuant to subsection (f) or subsection (g). 32
In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a 33
minimum of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 34
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(i) Any regionalized and/or non-regionalized school district receiving an increased share 1
ratio for a project approved prior to July 1, 2018, shall continue to receive the increased share ratio 2
for as long as the project receives state housing aid. 3
(j)(1) In the case of projects undertaken by districts specifically for the purposes of high-4
performance school design, the school housing aid share ratio shall be increased by five percent 5
(5%) for these specific projects only, in the calculation of school housing aid. The increased share 6
ratio shall continue to be applied for as long as the project(s) receives state housing aid. In order to 7
qualify for the increased share ratio, seventy-five percent (75%) of the project costs must be 8
specifically directed to this purpose. The council on elementary and secondary education shall 9
promulgate rules and regulations for the administration and operation of this section. 10
(2) For any new construction or renovation that includes energy efficiency and renewable 11
energy upgrades for the building to meet the standard of Zero Energy Capable school building 12
pursuant to § 16-7-36(12), the school housing aid ratio shall be increased by ten percent (10%). 13
16-7-41.1. Eligibility for reimbursement. 14
(a) School districts, not municipalities, may apply for and obtain approval for a project 15
under the necessity of school construction process set forth in the regulations of the council on 16
elementary and secondary education, provided, however, in the case of a municipality that issues 17
bonds through the Rhode Island health and educational building corporation to finance or refinance 18
school facilities for a school district that is not part of the municipality, the municipality may apply 19
for and obtain approval for a project. Such approval will remain valid until June 30 of the third 20
fiscal year following the fiscal year in which the council on elementary and secondary education’s 21
approval is granted. Only those projects undertaken at school facilities under the care and control 22
of the school committee and located on school property may qualify for reimbursement under §§ 23
16-7-35 — 16-7-47. Facilities with combined school and municipal uses or facilities that are 24
operated jointly with any other profit or nonprofit agency do not qualify for reimbursement under 25
§§ 16-7-35 — 16-7-47. Projects completed by June 30 of a fiscal year are eligible for 26
reimbursement in the following fiscal year. A project for new school housing or additional housing 27
shall be deemed to be completed when the work has been officially accepted by the school 28
committee or when the housing is occupied for its intended use by the school committee, whichever 29
is earlier. 30
(b) Notwithstanding the provisions of this section, the board of regents shall not grant final 31
approval for any project between June 30, 2011, and May 1, 2015, except for projects that are 32
necessitated by immediate health and safety reasons. In the event that a project is requested during 33
the moratorium because of immediate health and safety reasons, those proposals shall be reported 34
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to the chairs of the house and senate finance committees. 1
(c) Any project approval granted prior to the adoption of the school construction 2
regulations in 2007, and which are currently inactive; and any project approval granted prior to the 3
adoption of the school construction regulations in 2007 which did not receive voter approval or 4
which has not been previously financed, are no longer eligible for reimbursement under this 5
chapter. The department of elementary and secondary education shall develop recommendations 6
for further cost containment strategies in the school housing aid program. 7
(d) Beginning July 1, 2015, the council on elementary and secondary education shall 8
approve new necessity of school construction applications on an annual basis. The department of 9
elementary and secondary education shall develop an annual application timeline for local 10
education agencies seeking new necessity of school construction approvals. 11
(e) Beginning July 1, 2019, no state funding shall be provided for projects in excess of ten 12
million dollars ($10,000,000) unless the prime contractor for the project has received 13
prequalification from the school building authority. 14
(f) Beginning July 1, 2019, the necessity of school construction process set forth in the 15
regulations of the council on elementary and secondary education shall include a single statewide 16
process, developed with the consultation of the department of environmental management, that will 17
ensure community involvement throughout the investigation and remediation of contaminated 18
building sites for possible reuse as the location of a school. That process will fulfill all provisions 19
of § 23-19.14-5 related to the investigation of reuse of such sites for schools. 20
(g) Beginning July 1, 2019, school housing projects exceeding one million five hundred 21
thousand dollars ($1,500,000) subject to inflation shall include an owner’s program manager and a 22
commissioning agent. The cost of the program manager and commissioning agent shall be 23
considered a project cost eligible for aid pursuant to §§ 16-7-41 and 16-105-5. 24
(h) Temporary housing, or swing space, for students shall be a reimbursable expense so 25
long as a district can demonstrate that no other viable option to temporarily house students exists 26
and provided that use of the temporary space is time limited for a period not to exceed twenty-four 27
(24) months and tied to a specific construction project. 28
(i) Environmental site remediation, as defined by the school building authority, shall be a 29
reimbursable expense up to one million dollars ($1,000,000) per project. 30
(j) If, within thirty (30) years of construction, a newly constructed school is sold to a private 31
entity, the state shall receive a portion of the sale proceeds equal to that project’s housing aid 32
reimbursement rate at the time of project completion. 33
(k) All projects must comply with § 37-13-6, ensuring that prevailing wage laws are being 34
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followed, and § 37-14.1-6, ensuring that minority business enterprises reach a minimum of ten 1
percent (10%) of the dollar value of the bid, and § 37-13-3.1, ensuring apprenticeship program 2
utilization. 3
(l) Using reviewable criteria, all projects seeking school housing aid shall complete an 4
independent, objective, reasoned study on all projects over ten million dollars ($10,000,000) to 5
determine whether adoption of a project labor agreement on the proposed project or projects will 6
help achieve the goals of the state purchases act. 7
SECTION 3. Section 16-105-3 of the General Laws in Chapter 16-105 entitled "School 8
Building Authority" is hereby amended to read as follows: 9
16-105-3. Roles and responsibilities. 10
The school building authority roles and responsibilities shall include: 11
(1) Management of a system with the goal of ensuring equitable and adequate school 12
housing for all public school children in the state; 13
(2) Prevention of the cost of school housing from interfering with the effective operation 14
of the schools; 15
(3) Management of school housing aid in accordance with statute; 16
(4) Reviewing and making recommendations to the council on elementary and secondary 17
education on necessity of school construction applications for state school housing aid and the 18
school building authority capital fund, based on the recommendations of the school building 19
authority advisory board; 20
(5) Promulgating, managing, and maintaining school construction regulations, standards, 21
and guidelines applicable to the school housing program, based on the recommendations of the 22
school building authority advisory board, created in § 16-105-8. Said regulations shall require 23
conformance with the minority business enterprise requirements set forth in § 37-14.1-6 and with 24
the latest Northeast Collaborative for High Performance Schools (NE-CHPS) standards or 25
equivalent, contingent on approval from the council on elementary and secondary education; 26
(6) Developing a prequalification and review process for prime contractors, architects, and 27
engineers seeking to bid on projects in excess of ten million dollars ($10,000,000) in total costs 28
subject to inflation. Notwithstanding any general laws to the contrary, a prequalification shall be 29
valid for a maximum of two (2) years from the date of issuance. Factors to be considered by the 30
school building authority in granting a prequalification to prime contractors shall include, but not 31
be limited to, the contractor’s history of completing complex projects on time and on budget, track 32
record of compliance with applicable environmental and safety regulations, evidence that 33
completed prior projects prioritized the facility’s future maintainability, and compliance with 34
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applicable requirements for the use of women and minority owned subcontractors; 1
(i) At least annually, a list of prequalified contractors, architects, and engineers shall be 2
publicly posted with all other program information; 3
(7) Providing technical assistance and guidance to school districts on the necessity of 4
school construction application process; 5
(8) Providing technical advice and assistance, training, and education to cities, towns, 6
and/or local education agencies and to general contractors, subcontractors, construction or project 7
managers, designers and others in planning, maintenance, and establishment of school facility 8
space; 9
(9) Developing a project priority system, based on the recommendations of the school 10
building authority advisory board, in accordance with school construction regulations for the school 11
building authority capital fund, subject to review and, if necessary, to be revised on intervals not to 12
exceed five (5) years. Project priorities shall include, but not be limited to, the following order of 13
priorities: 14
(i) Projects to replace or renovate a building that is structurally unsound or otherwise in a 15
condition seriously jeopardizing the health and safety of school children where no alternative exists; 16
(ii) Projects needed to prevent loss of accreditation; 17
(iii) Projects needed for the replacement, renovation, or modernization of the HVAC 18
system in any schoolhouse to increase energy conservation and decrease energy-related costs in 19
said schoolhouse; 20
(iv) Projects needed to replace or add to obsolete buildings in order to provide for a full 21
range of programs consistent with state and approved local requirements; and 22
(v) Projects needed to comply with mandatory, instructional programs; 23
(10) Maintaining a current list of requested school projects and the priority given them; 24
(11) Collecting and maintaining readily available data on all the public school facilities in 25
the state; 26
(12) Collecting, maintaining, and making publicly available quarterly progress reports of 27
all ongoing school construction projects that shall include, at a minimum, the costs of the project 28
and the time schedule of the project; 29
(13) Recommending policies and procedures designed to reduce borrowing for school 30
construction programs at both state and local levels; 31
(14) At least every five (5) years, conducting a needs survey to ascertain the capital 32
construction, reconstruction, maintenance, and other capital needs for schools in each district of the 33
state, including public charter schools. Beginning in 2023, this needs survey shall include progress 34
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towards and recommendations for energy efficiency and renewable energy upgrades to bring all 1
state school buildings to the definition of a zero energy capable school building pursuant to § 16-2
7-36; 3
(15) Developing a formal enrollment projection model or using projection models already 4
available; 5
(16) Encouraging local education agencies to investigate opportunities for the maximum 6
utilization of space in and around the district; 7
(17) Collecting and maintaining a clearinghouse of prototypical school plans that may be 8
consulted by eligible applicants; 9
(18) Retaining the services of consultants, as necessary, to effectuate the roles and 10
responsibilities listed within this section; 11
(19) Hiring an appropriate staff member who shall create and implement a plan to bring all 12
Rhode Island school buildings in compliance with the standard of a zero energy capable school 13
building pursuant to § 16-7-36 and who shall provide technical advice and assistance, training, and 14
education to cities, towns, and/or local education agencies, and to general contractors, 15
subcontractors, construction or project managers, designers and others on the latest NE-CHPS 16
standards; 17
(19)(20) No district shall receive a combined total of more than twenty (20) incentive 18
percentage points for projects that commence construction by December 30, 2023, and five (5) 19
incentive points for projects that commence construction thereafter; provided further, these caps 20
shall be in addition to amounts received under §§ 16-7-40(a)(1), and 16-7-40(a)(2), 16-7-40(j)(1), 21
and 16-7-40(j)(2). Furthermore, a district’s share shall not be decreased by more than half of its 22
regular share irrespective of the number of incentive points received, nor shall a district’s state 23
share increase by more than half of its regular share, including amounts received under §§ 16-7-24
40(a)(1) and 16-7-40(a)(2), irrespective of the number of incentive points received. 25
Notwithstanding any provision of the general laws to the contrary, the reimbursement or aid 26
received under this chapter or chapter 38.2 of title 45 shall not exceed one hundred percent (100%) 27
of the sum of the total project costs plus interest costs. If a two hundred and fifty million dollar 28
($250,000,000) general obligation bond is approved on the November 2018 ballot, projects 29
approved between May 1, 2015, and January 1, 2018, are eligible to receive incentive points (above 30
and beyond what the project was awarded at the time of approval) pursuant to § 16-7-39 and § 16-31
7-40. Provided, however, any project approved during this time period with a project cost in excess 32
of one million five hundred thousand dollars ($1,500,000), which does not include an owner’s 33
program manager and a commissioning agent, shall only be eligible to receive five (5) incentive 34
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points. Incentive points awarded pursuant to the provisions of this subsection shall only be applied 1
to reimbursements occurring on or after July 1, 2018. Any project approved between May 1, 2015, 2
and January 1, 2018, that is withdrawn and/or resubmitted for approval shall not be eligible for any 3
incentive points. 4
SECTION 4. This act shall take effect upon passage. 5
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EXPLANATION
BY THE LEGISLATIVE COUNCIL
OF
A N A C T
RELATING TO EDUCATION -- SCHOOL FUNDS AND PRO PERTY
***
This act would provide that not later than June 30, 2024, the department of education would 1
develop and adopt, in consultation with the office of energy resources, regulations requiring all 2
school buildings to meet the standard of zero energy capable, as defined in § 16-7-36, by December 3
31, 2035. 4
This act would take effect upon passage. 5
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