Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0860 Compare Versions

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

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5	5	2023 -- S 0860
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7	7	LC002592
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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
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14	14	A N A C T
15	15	RELATING TO EDUCATION -- FOUNDATION LEVEL SCHOOL SUPPORT
16	16	Introduced By: Senators Cano, Britto, Acosta, and Kallman
17	17	Date Introduced: March 30, 2023
18	18	Referred To: Senate Finance
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21	21	It is enacted by the General Assembly as follows:
22	22	SECTION 1. WHEREAS, Pursuant to Article XII of the Rhode Island Constitution, it is 1
23	23	the duty of the State of Rhode Island (the “state”) and the Rhode Island general assembly to promote 2
24	24	public schools as the diffusion of knowledge is essential to the preservation of the rights and 3
25	25	liberties of the Rhode Island people; and 4
26	26	WHEREAS, It is the duty of the state and the Rhode Island general assembly to adopt all 5
27	27	means which they deem necessary and proper to secure to the people the advantages and 6
28	28	opportunities of education and guarantee adequate public school housing for all public school 7
29	29	children in the state; and 8
30	30	WHEREAS, School facilities provide more than a place for instruction. The physical 9
31	31	learning environment contributes to the successful performance of educational programs designed 10
32	32	to meet students’ educational needs, and good educational outcomes depend on safe healthy school 11
33	33	buildings. Every student needs a safe, healthy, and sanitary learning environment that promotes 12
34	34	student learning and development; and 13
35	35	WHEREAS, School buildings in various municipalities and school districts in Rhode 14
36	36	Island are in need of major repairs and upgrades, presently interfere with the effective operation of 15
37	37	schools, and negatively affect the health, safety and welfare of the children of such municipalities 16
38	38	and school districts; and 17
39	39	WHEREAS, At the general elections held on November 6, 2018, and November 8, 2022, 18
40	40	the electors of the State of Rhode Island approved a total of $500,000,000 in general obligation 19
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44	44	bonds of the state to provide funding for construction and renovation of public schools; and 1
45	45	WHEREAS, The state currently provides state housing aid reimbursement to 2
46	46	municipalities and districts for school housing construction as a percentage of debt service; and 3
47	47	WHEREAS, The state’s reimbursement costs are directly related to the interest rates the 4
48	48	municipalities and school districts pay on their general obligation school bonds; and 5
49	49	WHEREAS, The state is able to issue appropriation-backed bonds at lower interest rates 6
50	50	than many municipalities and districts are able to obtain on their general obligation bonds; and 7
51	51	WHEREAS, It is less costly for the state to finance its share of a school project at lower 8
52	52	interest rates than for such municipalities and districts to finance the projects at higher interest rates 9
53	53	and seek state housing aid reimbursement from the state. NOW THEREFORE: 10
54	54	SECTION 2. Section 16-7-40 of the General Laws in Chapter 16-7 entitled "Foundation 11
55	55	Level School Support [See Title 16 Chapter 97 — The Rhode Island Board of Education Act]" is 12
56	56	hereby amended to read as follows: 13
57	57	16-7-40. Increased school housing ratio. 14
58	58	(a)(1) In the case of regional school districts, the school housing aid ratio shall be increased 15
59	59	by two percent (2%) for each grade so consolidated. 16
60	60	(2) Regional school districts undertaking renovation project(s) shall receive an increased 17
61	61	share ratio of four percent (4%) for those specific project(s) only, in addition to the combined share 18
62	62	ratio calculated in § 16-7-39 and this subsection. 19
63	63	(b) In the case of projects undertaken by districts specifically for the purposes of school 20
64	64	safety and security, the school housing aid share ratio shall be increased by five percent (5%) for 21
65	65	these specific projects only, in the calculation of school housing aid. The increased share ratio shall 22
66	66	continue to be applied for as long as the project(s) receives state housing aid. In order to qualify for 23
67	67	the increased share ratio, seventy-five percent (75%) of the project costs must be specifically 24
68	68	directed to school safety and security measures. The council on elementary and secondary 25
69	69	education shall promulgate rules and regulations for the administration and operation of this 26
70	70	section. 27
71	71	(c) For purposes of addressing health and safety deficiencies as defined by the school 28
72	72	building authority, including the remediation of hazardous materials, the school housing aid ratio 29
73	73	shall be increased by five percent (5%) so long as the construction of the project commences by 30
74	74	December 30, 2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty 31
75	75	million dollar ($250,000,000) general obligation bond is approved on the November 2018 ballot. 32
76	76	In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a 33
77	77	minimum of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 34
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81	81	(d) For purposes of educational enhancement, including projects devoted to the 1
82	82	enhancement of early childhood education and career and technical education, the school housing 2
83	83	aid ratio shall be increased by five percent (5%) so long as construction of the project commences 3
84	84	by December 30, 2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty 4
85	85	million dollar ($250,000,000) general obligation bond is approved on the November 2018 ballot. 5
86	86	In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a 6
87	87	minimum of five hundred thousand dollars ($500,000) must be specifically directed to these 7
88	88	purposes. 8
89	89	(e) For replacement of a facility that has a facilities condition index of sixty-five percent 9
90	90	(65%) or higher, the school housing ratio shall be increased by five percent (5%) so long as 10
91	91	construction of the project commences by December 30, 2023 2024, is completed by December 30, 11
92	92	2028 2029, does not receive a bonus pursuant to subsection (f) or subsection (g), and a two hundred 12
93	93	fifty million dollar ($250,000,000) general obligation bond is approved on the November 2018 13
94	94	ballot. In order to qualify for the increased share ratio, twenty-five percent (25%) of the project 14
95	95	costs or a minimum of five hundred thousand dollars ($500,000) must be specifically directed to 15
96	96	this purpose. 16
97	97	(f) For any new construction or renovation that increases the functional utilization of any 17
98	98	facility from less than sixty percent (60%) to more than eighty percent (80%), including the 18
99	99	consolidation of school buildings within or across districts, the school housing aid ratio shall be 19
100	100	increased by five percent (5%) so long as construction of the project commences by December 30, 20
101	101	2023 2024, is completed by December 30, 2028 2029, and a two hundred fifty million dollar 21
102	102	($250,000,000) general obligation bond is approved on the November 2018 ballot. In order to 22
103	103	qualify for the increased share ratio, twenty-five percent (25%) of the project costs or a minimum 23
104	104	of five hundred thousand dollars ($500,000) must be specifically directed to this purpose. 24
105	105	(g) For any new construction or renovation that decreases the functional utilization of any 25
106	106	facility from more than one hundred twenty percent (120%) to between eighty-five percent (85%) 26
107	107	to one hundred five percent (105%), the school housing ratio shall be increased by five percent 27
108	108	(5%) so long as construction of the project commences by December 30, 2023 2024, is completed 28
109	109	by December 30, 2028 2029, and a two hundred fifty million dollar ($250,000,000) general 29
110	110	obligation bond is approved on the November 2018 ballot. In order to qualify for the increased 30
111	111	share ratio, twenty-five percent (25%) of the project costs or a minimum of five hundred thousand 31
112	112	dollars ($500,000) must be specifically directed to this purpose. 32
113	113	(h) For consolidation of two (2) or more school buildings, within or across districts into 33
114	114	one school building, the school housing aid ratio shall be increased by five percent (5%) so long as 34
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118	118	construction of the project commences by December 30, 2023 2024, is completed by December 30, 1
119	119	2028 2029, a two hundred fifty million dollar ($250,000,000) general obligation bond is approved 2
120	120	on the November 2018 ballot, and does not receive a bonus pursuant to subsection (f) or subsection 3
121	121	(g). In order to qualify for the increased share ratio, twenty-five percent (25%) of the project costs 4
122	122	or a minimum of five hundred thousand dollars ($500,000) must be specifically directed to this 5
123	123	purpose. 6
124	124	(i) Any regionalized and/or non-regionalized school district receiving an increased share 7
125	125	ratio for a project approved prior to July 1, 2018, shall continue to receive the increased share ratio 8
126	126	for as long as the project receives state housing aid. 9
127	127	(j) For any projects which have received approvals, including passage of an enabling act 10
128	128	by the general assembly, otherwise required by law for the issuance of school bonds or capital 11
129	129	leases, the state may, in lieu of providing state housing aid reimbursement on debt service on a 12
130	130	municipality’s or district’s school bonds enter into a financing agreement (“financing agreement”) 13
131	131	to fund its payment obligation if such financing arrangement will result in a savings to the state 14
132	132	rather than paying state housing aid as a reimbursement on the municipality’s or district’s debt 15
133	133	service, as projected by a municipal advisor registered with the United States Securities and 16
134	134	Exchange Commission. The state, acting through the governor and the general treasurer, may 17
135	135	finance the state’s housing aid contribution directly through bonds issued by the Rhode Island 18
136	136	health and educational building corporation (the “corporation”) and execute financing agreements 19
137	137	with the corporation. The amount financed by the corporation bonds and the state financing 20
138	138	agreement for any project shall not exceed the principal amount, plus original issue premium, if 21
139	139	any, required to finance the state’s contribution to the project including any such additional amount 22
140	140	as is required to finance costs of issuance, funding of debt service reserves, if required, and 23
141	141	capitalized interest on the corporation bonds. The corporation bonds will not constitute 24
142	142	indebtedness of the state or any of its subdivisions or a debt for which the full faith and credit of 25
143	143	the state or any of its subdivisions is pledged. The state’s payment obligations on the corporation’s 26
144	144	bonds pursuant to the financing agreement shall be subject to, and dependent on annual 27
145	145	appropriations made by the general assembly. From and after the date that the governor and the 28
146	146	general treasurer enter into such a financing agreement, the financed project shall not be eligible 29
147	147	for state housing aid reimbursement calculated pursuant to § 16-7-39 but shall be eligible for state 30
148	148	housing aid “bonus” incentives pursuant to § 16-7-40 and foundational aid offered on a pay-as-31
149	149	you-go basis pursuant to § 45-38.2-4. No corporation bonds shall be issued to finance the state’s 32
150	150	housing aid contribution for a project unless the project shall be approved by the Rhode Island 33
151	151	department of education. The corporation bonds and the financing agreements of the state 34
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155	155	authorized by this section shall not be subject to chapter 18 of title 35 (“public corporation debt 1
156	156	management”). The governor and the general treasurer on behalf of the state are hereby authorized 2
157	157	to execute such financing agreements and other papers as they deem necessary or desirable to carry 3
158	158	out the intent of this section and are also authorized to take all actions and execute all documents 4
159	159	or agreements necessary to comply with federal tax and securities laws, which documents or 5
160	160	agreements may have a term coextensive with the maturity of the corporation bonds authorized 6
161	161	hereby, including Rule 15c2-12 of the Securities and Exchange Commission (the “rule”) and to 7
162	162	execute and deliver a continuing disclosure agreement or certificate in connection with the 8
163	163	corporation bonds in the form as shall be deemed advisable by such officers in order to comply 9
164	164	with the rule. 10
165	165	(k) The deadlines for construction and completion set forth in § 16-7-40 are not related to, 11
166	166	or conditioned on, the two hundred fifty million dollar ($250,000,000) general obligation bond 12
167	167	approved by state voters on the November 8, 2022 ballot. Increased housing aid provided for in 13
168	168	this section is funded from state bonds proceeds, annual state appropriations and other sources. 14
169	169	SECTION 3. This act shall take effect upon passage. 15
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176	176	EXPLANATION
177	177	BY THE LEGISLATIVE COUNCIL
178	178	OF
179	179	A N A C T
180	180	RELATING TO EDUCATION -- FOUNDATION LEVEL SCH OOL SUPPORT
181	181	***
182	182	This act would authorize the state to enter into financing agreements with the Rhode Island 1
183	183	health and educational buildings corporation (the “corporation”) in lieu of providing state housing 2
184	184	aid reimbursement if such financing arrangement would result in a savings to the state rather than 3
185	185	paying state housing aid as a reimbursement on the municipality’s or district’s debt service. School 4
186	186	projects funded in this manner would not be eligible for state housing aid reimbursement calculated 5
187	187	pursuant to § 16-7-39 but would be eligible for state housing aid “bonus” incentives pursuant to § 6
188	188	16-7-40 and foundational aid offered on a pay-as-you-go basis pursuant to § 45-38.2-4. No 7
189	189	corporation bonds would be issued unless the school projects had been approved by the Rhode 8
190	190	Island department of education. This act would also amend the commencement and completion 9
191	191	deadlines for increased housing aid bonus points by one year. 10
192	192	This act would take effect upon passage. 11
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