2019 -- S 0557

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LC001068

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TOWNS AND CITIES -- SENIOR CENTER BUILDING CAPITAL FUND

     

     Introduced By: Senators Pearson, Crowley, Lawson, Satchell, and Picard

     Date Introduced: March 14, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

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     SECTION 1. Chapter 45-38.1 of the General Laws entitled "Health And Educational

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Building Corporation" is hereby amended by adding thereto the following section:

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     45-38.1-28. Administration of senior center building capital fund.

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     Notwithstanding any provisions of this chapter or any general law or special law to the

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contrary, it is a corporate purpose of the corporation to administer the financial provisions of the

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senior center building capital fund as set forth in chapter 38.3 of this title.

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     SECTION 2. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

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amended by adding thereto the following chapter:

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CHAPTER 38.3

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SENIOR CENTER BUILDING CAPITAL FUND

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     45-38.3-1. Definitions.

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     As used in this chapter, the following terms, unless the context requires a different

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interpretation, shall have the following meanings:

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     (1) "Application" means a project proposed by a city or town to construct, or that would

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make capital improvements to, senior center facilities located within said city or town consistent

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with project evaluation criteria as set forth in this chapter;

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     (2) "Approved project" means any project approved for financial assistance by the

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department of elderly affairs;

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     (3) "Corporation" means the Rhode Island health and educational building corporation as

 

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set forth in chapter 38.1 of title 45;

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     (4) "Department" means the department of elderly affairs;

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     (5) "Eligible project" means an application, or a portion of an application, that meets the

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project evaluation criteria and approved by the department of elderly affairs;

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     (6) "Financial assistance" means any form of financial assistance provided by the

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corporation to a city, or town in accordance with this chapter for all or any part of the cost of an

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approved project, including, without limitation, loans, guarantees, insurance, subsidies for the

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payment of debt service on loans, lines of credit, and similar forms of financial assistance;

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     (7) "Fund" means the senior citizen building capital fund;

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     (8) "Market rate" means the rate the city or town would receive on the open market at the

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time of the original loan agreement as determined by the corporation in accordance with its rules

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and regulations;

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     (9) "Project evaluation criteria" means the criteria used by the department of elderly

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affairs to evaluate applications and rank eligible projects;

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     (11) "Project priority list" means the list of eligible projects approved by the department

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of elderly affairs ranked in the order in which financial assistance shall be awarded by the

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corporation; and

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     (12) "Subsidy assistance" means the credit enhancements and other measures to reduce

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the borrowing costs for a city or town.

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     45-38.3-2. Senior center building capital fund.

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     (a) There is hereby established a senior citizen building capital fund. The corporation

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shall establish and set up on its books the fund, to be held in trust and to be administered by the

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corporation as provided in this chapter. This fund shall be in addition to the annual appropriation

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for committed expenses related to elderly affairs. The corporation shall deposit the following

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monies into the fund:

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     (1) Loan repayments, bond refinance interest savings, and other payments received by the

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corporation pursuant to loan or financing agreements with cities or towns, executed in accordance

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with this chapter;

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     (2) Investment earnings on amounts credited to the fund;

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     (3) Proceeds of bonds of the corporation issued in connection with this chapter to the

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extent required by any trust agreement for such bonds;

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     (4) Administrative fees levied by the corporation, with respect to financial assistance

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rendered under this chapter less operating expenses;

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     (5) Other amounts required by provisions of this chapter or agreement, or any other law

 

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or any trust agreement pertaining to bonds to be credited to the fund; and

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     (6) Any other funds permitted by law which the corporation in its discretion shall

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determine to credit thereto.

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     (b) The corporation shall establish and maintain fiscal controls and accounting

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procedures conforming to generally accepted government accounting standards sufficient to

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ensure proper accounting for receipts in and disbursements from the senior center building capital

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fund.

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     (c) The department of elderly affairs shall establish and maintain internal controls to

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ensure that local agencies are providing adequate asset protection plans, all local agencies have

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equal access and opportunity to address facility improvements on a priority basis, and to ensure

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that funding from the senior citizen building authority fund has the greatest impact on facility

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gaps in state priority areas. The senior citizen building authority fund will also manage necessity

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of center construction approvals in accordance with the funding levels set forth by the general

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assembly.

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     45-38.3-3. Administration.

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     (a) The corporation shall have all the powers necessary or incidental to carry out and

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effectuate the purposes and provisions of this chapter including:

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     (1) To receive and disburse such funds from the state as may be available for the purpose

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of the fund subject to the provisions of this chapter;

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     (2) To make and enter into binding commitments to provide financial assistance to cities

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or towns from amounts on deposit in the fund;

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     (3) To enter into binding commitments to provide subsidy assistance for loans and city

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and town obligations from amounts on deposit in the fund;

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     (4) To levy administrative fees on cities, towns, and senior citizen agencies as necessary

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to effectuate the provisions of this chapter; provided that the fee does not exceed one tenth of one

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percent (0.001%) of the principal amount;

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     (5) To engage the services of third-party vendors to provide professional services;

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     (6) To establish one or more accounts within the fund; and

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     (7) Such other authority as granted to the corporation under chapter 38.1 of this title.

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     (b) Subject to the provisions of this chapter, and to any agreements with the holders of

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any bonds of the corporation or any trustee therefor, amounts held by the corporation for the

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account of the fund shall be applied by the corporation, either by direct expenditure,

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disbursement, or transfer to one or more other funds and accounts held by the corporation or a

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trustee under a trust agreement or trust indenture entered into by the corporation with respect to

 

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bonds or notes issued by the corporation under this chapter or by a holder of bonds or notes

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issued by the corporation under this chapter, either alone or with other funds of the corporation,

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for the following purposes:

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     (1) To provide financial assistance to cities, and towns and their agencies to finance costs

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of approved projects, and to refinance the costs of the projects, subject to such terms and

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conditions, if any, as are determined by the department or the corporation;

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     (2) To fund reserves for bonds of the corporation and to purchase insurance and pay the

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premiums therefor, and pay fees and expenses of letters or lines of credit and costs of

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reimbursement to the issuers thereof for any payments made thereon or on any insurance, and to

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otherwise provide security for, and a source of payment for obligations of the corporation, by

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pledge, lien, assignment, or otherwise herein;

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     (3) To pay or provide for subsidy assistance as determined by the department;

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     (4) To provide a reserve for, or to otherwise secure, amounts payable by cities or towns

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on loans and city and town obligations outstanding in the event of default thereof; amounts in any

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account in the fund may be applied to defaults on loans outstanding to the city or town for which

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the account was established and, on a parity basis with all other accounts, to defaults on any loans

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or city or town obligations outstanding; and

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     (5) To provide a reserve for, or to otherwise secure, by pledge, lien, assignment, or

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otherwise as provided in this chapter, any bonds or notes of the corporation issued under this

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chapter.

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     (c) The repayment obligations of the city or town for loans shall be in accordance with

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loan agreements established between the corporation and the city or town at a rate not to exceed

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three percent (3%) for a term not to exceed thirty (30) years.

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     (d) In addition to other remedies of the corporation under any loan or financing

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agreement or otherwise provided by law, the corporation may also recover from a city or town in

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an action in superior court, any amount due the corporation together with any other actual

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damages the corporation shall have sustained from the failure or refusal of the city or town to

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make the payments or abide by the terms of the loan or financing agreement.

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     45-38.3-4. Payment of state funds.

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     (a) Subject to the provisions of subsection (b) of this section, upon the written request of

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the corporation, the general treasurer shall pay to the corporation, from time to time, from the

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proceeds of any bonds or notes issued by the state for the purposes of this chapter or funds

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otherwise lawfully payable to the corporation for the purposes of this chapter, such amounts as

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shall have been appropriated or lawfully designated for the fund. All amounts so paid shall be

 

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credited to the fund in addition to any other amounts credited or expected to be credited to the

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fund.

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     (b) The corporation and the state may enter into, execute, and deliver one or more

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agreements setting forth or otherwise determining the terms, conditions, and procedures for, and

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the amount, time, and manner of payment of, all amounts available from the state to the

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corporation under this section.

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     (c) The corporation, per order of the department, is authorized to grant a municipality its

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state share of an approved project cost not to exceed thirty percent (30%). Construction pay-as-

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you-go grants received from the fund shall not be considered a form of indebtedness.

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     (d)(1) Notwithstanding any city or town charter provisions to the contrary, prior to July 1,

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2019, no voter approval shall be required for loans in any amount made to a city's or town’s share

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of total project costs.

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     (2) Notwithstanding any city or town charter provisions to the contrary, on or after July 1,

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2019, up to five hundred thousand dollars ($500,000) may be loaned to a city or town for the

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share of total project costs without the requirement of voter approval.

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     (e)(1) Funds to support the state share of aid in a given year on a pay-as-you-go basis

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shall be offered proportionately to senior citizen agencies based on the total state share of aid

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awarded to projects in that year.

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     (2) Any excess funds may be transferred to the senior citizen building capital fund in an

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amount not to exceed five percent (5%) of any amount of bonds issued in a given year.

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     (f) Notwithstanding any provision to the contrary, the term of any bond, capital lease, or

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other financing instrument shall not exceed the useful life of the project being financed.

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     (g) The auditor general shall give guidance to each city and town on the uniform financial

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reporting of construction debt authorized and issued, and on funding received from the state

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within ninety (90) days of the effective date of this chapter.

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     45-38.3-5. Eligibility.

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     (a) Cities and towns may apply for and obtain approval for a project pursuant to

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regulations established by the department. Such approval will remain valid until June 30 of the

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third fiscal year following the fiscal year in which the approval of the department is granted. Only

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those projects undertaken for senior citizen construction and located on city or town property may

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qualify for reimbursement. Facilities with combined municipal uses or facilities that are operated

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jointly with any other profit or nonprofit agency do not qualify for reimbursement. Projects

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completed by June 30 of a fiscal year are eligible for reimbursement in the following fiscal year.

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A project for a new senior citizen center shall be deemed to be completed when the work has

 

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been officially accepted by the department or when a certificate of occupancy is issued or,

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whichever is later.

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     (b) Notwithstanding the provisions of this section, the department shall not grant final

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approval for any project between June 30, 2019, and May 1, 2020, except for projects that are

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necessitated by immediate health and safety reasons. In the event that a project is requested

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during the moratorium because of immediate health and safety reasons, those proposals shall be

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reported to the chairs of the house and senate finance committees.

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     (c) Beginning July 1, 2020, the department shall approve new applications on an annual

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basis. The department shall develop an annual application timeline for cities or town seeking new

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construction approvals.

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     (d) Beginning July 1, 2020, no state funding shall be provided for projects in excess of

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ten million dollars ($10,000,000) unless the prime contractor for the project has received

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prequalification from the department.

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     (e) Beginning July 1, 2020, the necessity of center construction process shall include a

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single statewide process, developed with the consultation of the department of environmental

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management that will ensure community involvement throughout the investigation and

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remediation of contaminated building sites for possible reuse as the location of a senior citizen

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center.

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     (f) Environmental site remediation, as defined by the department, shall be a reimbursable

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expense up to one million dollars ($1,000,000) per project.

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     (g) If, within thirty (30) years of construction, a newly constructed senior citizen center is

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sold to a private entity, the state shall receive a portion of the sale proceeds equal to that project's

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reimbursement rate at the time of project completion.

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     (h) All projects must comply with § 37-13-6, ensuring that prevailing wage laws are

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being followed, and § 37-14.1-6, ensuring that minority business enterprises reach a minimum of

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ten percent (10%) of the dollar value of the bid.

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     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- SENIOR CENTER BUILDING CAPITAL FUND

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     This act would establish the senior center building capital fund within the Rhode Island

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Health and Educational Building Corporation to provide cities and towns with financial assistance

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in the construction of senior centers up to thirty percent (30%) of the cost of the project.

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     This act would take effect upon passage.

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