Rhode Island 2023 Regular Session

Rhode Island Senate Bill S0868 Compare Versions

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

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5	5	2023 -- S 0868
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7	7	LC002591
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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	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: Senators Cano, Kallman, Acosta, and Britto
19	19	Date Introduced: March 30, 2023
20	20	Referred To: Senate Finance
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23	23	WHEREAS, Pursuant to Article XII of the Rhode Island Constitution, it is the duty of the 1
24	24	State of Rhode Island (the "state") and the Rhode Island general assembly to promote public 2
25	25	schools as the diffusion of knowledge is essential to the preservation of the rights and liberties of 3
26	26	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 11
34	34	school buildings. Every student needs a safe, healthy, and sanitary learning environment that 12
35	35	promotes student learning and development; and 13
36	36	WHEREAS, School buildings in the city of Pawtucket (the "city"), Rhode Island are in 14
37	37	need of major repairs and upgrades, presently interfere with the effective operation of schools, 15
38	38	and negatively affect the health, safety, and welfare of the children of Pawtucket; and 16
39	39	WHEREAS, At the general election held on November 8, 2022, the electors of the city 17
40	40	approved a project consisting of the acquisition, construction, improvement, furnishing 18
41	41	and equipping of a new high school and school facilities and all expenses incident 19
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45	45	thereto including, but not limited to, costs of design, demolition, athletic fields, landscaping and 1
46	46	parking and costs of financing (the "project"); and 2
47	47	WHEREAS, Due to financial hardships of the city of Pawtucket, increases in interest 3
48	48	rates, and post-supply chain issues, the city is not currently able to finance the construction, 4
49	49	renovation, improvement, alteration, repair, furnishing and equipping of schools and school 5
50	50	facilities [without certain legislative changes and support from the state]; and 6
51	51	WHEREAS, The state currently provides state housing aid reimbursement to the city of 7
52	52	Pawtucket at a rate of approximately 83.7%; and 8
53	53	WHEREAS, The state's reimbursement costs are directly related to the interest rates the 9
54	54	city pays on its general obligation school bonds; and 10
55	55	WHEREAS, The state is able to issue appropriation-backed bonds at lower interest rates 11
56	56	than the city is able to obtain on its general obligation bonds; and 12
57	57	WHEREAS, It is less costly for the state to finance its share of the project at lower 13
58	58	interest rates than for the city to finance the project at higher interest rates and seek state housing 14
59	59	aid reimbursement from the state; and 15
60	60	WHEREAS, The project will be financed through bonds issued by the Rhode Island 16
61	61	Health and Educational Building Corporation (the "corporation") under its school financing 17
62	62	revenue bond program, with an expected term of not to exceed thirty (30) years and it is 18
63	63	anticipated that the state will be a signatory to the financing agreement with the corporation (the 19
64	64	"financing agreement"); and 20
65	65	WHEREAS, It is anticipated that the state's payment obligations to the corporation under 21
66	66	the financing agreement will be subject to appropriation therefor by the general assembly in each 22
67	67	budget year; and 23
68	68	WHEREAS, The Rhode Island public corporation debt management act (defined below) 24
69	69	requires the general assembly to provide its consent to the issuance or incurring by the State of 25
70	70	Rhode Island of certain obligations, including financing guarantees or other payment agreements; 26
71	71	and 27
72	72	WHEREAS, The total project costs covered by the financing agreement are expected to 28
73	73	be $330,000,000 plus original issue premium, if any, and such additional amount as is required to 29
74	74	finance costs of issuance, funding of debt service reserves, if required, and capitalized interest. 30
75	75	Debt service payments will be supported by revenues received by the corporation under the 31
76	76	financing agreement which include annual appropriations for debt service made by the state and 32
77	77	payments from the city of Pawtucket under the financing agreement. Total debt service on the 33
78	78	bonds issued by the corporation (the "corporation bonds") in not expected to exceed $22,201,000 34
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82	82	annually and $435,652,875 in the aggregate based on an average interest rate of five percent 1
83	83	(5.00%). 2
84	84	SECTION 1. NOW THEREFORE, be it resolved and enacted by the general assembly as 3
85	85	follows: 4
86	86	RESOLVED AND ENACTED, That this act shall serve as the joint resolution required 5
87	87	pursuant to chapter 18 of title 35 of the Rhode Island General Laws ("Rhode Island public 6
88	88	corporation debt management act"); and be it further 7
89	89	RESOLVED AND ENACTED, That this general assembly hereby approves the 8
90	90	financing for the project in an amount up to $330,000,000, plus original issue premium, if any, 9
91	91	and such additional amount as is required to finance costs of issuance, funding of debt service 10
92	92	reserves, if required, and capitalized interest thereon; and be it further 11
93	93	RESOLVED AND ENACTED, That the state, acting through the governor and the 12
94	94	general treasurer, may execute the financing agreement as contemplated herein and any other 13
95	95	agreements necessary to effectuate the purposes of this act; and be it further 14
96	96	RESOLVED AND ENACTED, That the corporation bonds will be special obligations of 15
97	97	the corporation payable from funds received by the corporation under the financing agreement 16
98	98	and other revenues received by the corporation, in any combination or priority as may be 17
99	99	designated in the proceedings of the corporation authorizing the issuance of such debt. The total 18
100	100	debt service on the corporation bonds is estimated to average approximately twenty-two million, 19
101	101	two hundred one thousand dollars ($22,201,000) per year or approximately four hundred thirty-20
102	102	five million six hundred fifty-two thousand and eight hundred seventy-five dollars 21
103	103	($435,652,875) in the aggregate, at an average interest rate of approximately five percent (5%) 22
104	104	and an approximately thirty (30) year maturity; and be it further 23
105	105	RESOLVED AND ENACTED, That the corporation bonds will not constitute 24
106	106	indebtedness of the state or any of its subdivisions or a debt for which the full faith and credit of 25
107	107	the state or any of its subdivisions is pledged; and be it further 26
108	108	RESOLVED AND ENACTED, That the state's authority to incur the obligations set forth 27
109	109	herein will expire within five (5) years of the date of passage of this act if such financing 28
110	110	transaction is not executed prior to that date; and be it further 29
111	111	RESOLVED AND ENACTED, That from and after the date that the governor and the 30
112	112	general treasurer enter into such financing agreement, that the project shall not be eligible for 31
113	113	state housing aid reimbursement calculated pursuant to § 16-7-39 but shall be eligible for state 32
114	114	housing aid "bonus" incentives pursuant to § 16-7-40 and foundational aid offered on a pay-as-33
115	115	you-go basis pursuant to § 45-38.2-4; and be it further 34
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119	119	RESOLVED AND ENACTED, That no corporation bonds shall be issued unless the 1
120	120	project shall be approved by the Rhode Island department of education; and be it further 2
121	121	RESOLVED AND ENACTED, that the governor, the general treasurer, on behalf of the 3
122	122	state are hereby authorized to execute such documents or other papers as either of them deem 4
123	123	necessary or desirable to carry out the intent of this act and are also authorized to take all actions 5
124	124	and execute all documents or agreements necessary to comply with federal tax and securities 6
125	125	laws, which documents or agreements may have a term coextensive with the maturity of the 7
126	126	corporation bonds authorized hereby, including Rule 15c2-12 of the Securities and Exchange 8
127	127	Commission (the "rule") and to execute and deliver a continuing disclosure agreement or 9
128	128	certificate in connection with the corporation bonds in the form as shall be deemed advisable by 10
129	129	such officers in order to comply with the rule. 11
130	130	SECTION 2. This act shall take effect upon passage. 12
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137	137	EXPLANATION
138	138	BY THE LEGISLATIVE COUNCIL
139	139	OF
140	140	J O I N T R E S O L U T I O N
141	141	A N D A N A C T
142	142	AUTHORIZING THE STATE TO ENTER INTO A FINANCING AGREEMENT RELATIN G
143	143	TO SCHOOL CONSTRUCTI ON IN THE CITY OF PAWTUCKET
144	144	***
145	145	This act would serve as the joint resolution required pursuant to chapter 18 of title 35 of 1
146	146	the Rhode Island general laws ("Rhode Island public corporation debt management act") 2
147	147	authorizing the State of Rhode Island to finance the acquisition, construction, improvement, 3
148	148	furnishing and equipping of a new high school and school facilities and all expenses incident 4
149	149	thereto, including but not limited to costs of design, demolition, athletic fields, landscaping and 5
150	150	parking. 6
151	151	The project would not be eligible for state housing aid reimbursement calculated pursuant 7
152	152	to § 16-7-39 but would be eligible for state housing aid "bonus" incentives pursuant to § 16-7-40 8
153	153	and foundational aid offered on a pay-as-you-go basis pursuant to § 45-38.2-4. No bonds would 9
154	154	be issued under the act unless the school projects have been approved by the Rhode Island 10
155	155	Department of Education. 11
156	156	This act would take effect upon passage 12
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