2021 -- S 0587

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LC002270

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX

RELIEF ACT--LOCAL EDUCATION AID READJUSTING NEEDS AMENDMENT

("LEARN" AMENDMENT)

     Introduced By: Senators Pearson, and Seveney

     Date Introduced: March 11, 2021

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 16-7.2-5 of the General Laws in Chapter 16-7.2 entitled "The

Education Equity and Property Tax Relief Act" is hereby amended to read as follows:

     16-7.2-5. Charter public schools, the William M. Davies, Jr. Career and Technical

High School, and the Metropolitan Regional Career and Technical Center.

     (a) Charter public schools, as defined in chapter 77 of this title, the William M. Davies, Jr.

Career and Technical High School (Davies), and the Metropolitan Regional Career and Technical

Center (the Met Center) shall be funded pursuant to § 16-7.2-3. If the October 1 actual enrollment

data for any charter public school shows a ten percent (10%) or greater change from the prior year

enrollment which is used as the reference year average daily membership, the last six (6) monthly

payments to the charter public school will be adjusted to reflect actual enrollment. The state share

of the permanent foundation education aid shall be paid by the state directly to the charter public

schools, Davies, and the Met Center pursuant to § 16-7.2-9 and shall be calculated using the state-

share ratio of the district of residence of the student as set forth in § 16-7.2-4. The department of

elementary and secondary education shall provide the general assembly with the calculation of the

state share of permanent foundation education aid for charter public schools delineated by school

district.

     (b) The local share of education funding shall be paid to the charter public school, Davies,

and the Met Center by the district of residence of the student and shall be the local, per-pupil cost

calculated by dividing the local appropriation to education from property taxes, net of debt service,

and capital projects, as defined in the uniform chart of accounts by the average daily membership

for each city and town, pursuant to § 16-7-22, for the reference year.

     (c) Beginning in FY 2017, there shall be a reduction to the local per pupil funding paid by

the district of residence to charter public schools, Davies, and the Met Center. This reduction shall

be equal to the greater (i) Of seven percent (7%) of the local, per-pupil funding of the district of

residence pursuant to subsection (b) or (ii) The per-pupil value of the district's costs for non-public

textbooks, transportation for non-public students, retiree health benefits, out-of-district special-

education tuition and transportation, services for students age eighteen (18) to twenty-one (21)

years old, pre-school screening and intervention, and career and technical education, tuition and

transportation costs, debt service and rental costs minus the average expenses incurred by charter

schools for those same categories of expenses as reported in the uniform chart of accounts for the

prior preceding fiscal year pursuant to § 16-7-16(11) and verified by the department of elementary

and secondary education. In the case where audited financials result in a change in the calculation

after the first tuition payment is made, the remaining payments shall be based on the most recent

audited data. For those districts whose greater reduction occurs under the calculation of (ii), there

shall be an additional reduction to payments to mayoral academies with teachers who do not

participate in the state teacher's retirement system under chapter 8 of title 36 equal to the per-pupil

value of teacher retirement costs attributable to unfunded liability as calculated by the state's

actuary for the prior preceding fiscal year.

     (d) Local district payments to charter public schools, Davies, and the Met Center for each

district's students enrolled in these schools shall be made on a quarterly basis in July, October,

January, and April; however, the first local-district payment shall be made by August 15, instead

of July. Failure of the community to make the local-district payment for its student(s) enrolled in a

charter public school, Davies, and/or the Met Center may result in the withholding of state

education aid pursuant to § 16-7-31.

     (e) Beginning in FY 2017, school districts with charter public school, Davies, and the Met

Center enrollment, that, combined, comprise five percent (5%) or more of the average daily

membership as defined in § 16-7-22, shall receive additional aid for a period of three (3) years. Aid

in FY 2017 shall be equal to the number of charter public school, open-enrollment schools, Davies,

or the Met Center students as of the reference year as defined in § 16-7-16 times a per-pupil amount

of one hundred seventy-five dollars ($175). Aid in FY 2018 shall be equal to the number of charter

public school, open-enrollment schools, Davies, or the Met Center students as of the reference year

as defined in § 16-7-16 times a per-pupil amount of one hundred dollars ($100). Aid in FY 2019

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shall be equal to the number of charter public school, open-enrollment schools, Davies, or the Met

Center students as of the reference year as defined in § 16-7-16 times a per-pupil amount of fifty

dollars ($50.00). The additional aid shall be used to offset the adjusted fixed costs retained by the

districts of residence.

     Paycheck Protection Program funds adjustment:

     (1) Definitions.

     (i) The Paycheck Protection Program ("PPP") means that federal program initially created

by the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"), as amended and/or

supplemented by the Consolidated Appropriations Act of 2021 and any subsequent legislation, and

codified under Chapter 14A and/or Chapter 116 of Title 15 of the United States Code.

     (ii) "PPP funds" shall constitute the amount of funds received in connection with any

application or loan made pursuant to the PPP.

     (iii) The amount considered as PPP funds shall be reduced by:

     (A) The amount equal to any and all taxes due in connection with proceeds received

through a PPP loan;

     (B) Amounts which are subject to an irrevocable obligation for repayment without

forgiveness of the debt under federal law;

     (C) Amounts that were subject to any reappropriation, allocation, or other action taken by

the state including the FY2020 revised education aid distribution that results in a lesser amount of

funds being available from the PPP loan.

     (D) For the purposes of this section "charter public schools" means district charter schools,

independent charter schools, or mayoral academies.

     (2) Within thirty (30) days of receipt of the PPP funds, any charter public school that

receives any PPP funds shall make a report to the department and to each sending school district,

as defined in § 16-77-2.1, which have made or are due to make any local direct payments during

FY2021 or FY2022. Such report shall include:

     (i) The amount of the funds received;

     (ii) The date the funds were received;

     (iii) Any projected reductions as defined in subsection (e)(1)(C) of this section;

     (iv) The total number of students the PPP funds per student quotient calculated pursuant to

subsection (e)(3) of this section;

     (v) The total amount of each local district payment reduction calculated pursuant to

subsection (e)(3) of this section; and

     (vi) The per-payment reduction for the remaining period of FY2021 and FY2022 as

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calculated pursuant to subsections (e)(3) and (e)(4) of this section.

     (3) Readjustment of local aid.

     In FY2021 and FY2022, the amount of the local district payment due to a charter public

school shall be reduced by the amount of PPP funds received by the charter public school. In

determining the amount of the local district payment reduction, the total amount of the PPP funds

shall be multiplied by the ratio of funds paid by the sending district divided by the total funds

received from all sending school districts.

     (i) The reduction calculated in subsection (e)(3) of this section shall be allocated equally

against the payments due from the sending district to the charter public school during the remainder

of FY2021 and for each payment due in FY2022.

     (ii) Any charter public school that should fail to make a timely report required under

subsection (e)(2) of this section shall also have aid reduced by the amount of statutory interest

applicable to civil actions calculated based on the period between when the report was due and

when the first payment reduction is made. In the event the failure to disclose is not discovered until

after the final local district payment for FY2022 is due, then the entire amount shall be reduced by

the local district in the next payment due after discovery of the failure by the public charter school.

     (iii) The reduction required under this subsection (e) of this section shall supersede and

take precedence over all other statutes, rules or regulations or other laws to the contrary.

     SECTION 2. Section 16-77.1-2 of the General Laws in Chapter 16-77.1 entitled "Funding

of Charter Public Schools [See Title 16 Chapter 97 - The Rhode Island Board of Education Act]"

is hereby amended to read as follows:

     16-77.1-2. Operating costs.

     (a) Operating costs of a charter public school shall be the total of the per pupil payments

for each student attending the charter public school. The per pupil payment for each student shall

be determined based on the per pupil cost for the district of residence of each student. The state's

share of the per pupil amount for each student attending the charter public school shall be paid by

the state directly to the charter public school and shall be the percent, or share ratio, previously

calculated under chapter 7 of this title; provided, that in no case shall the ratio be less than thirty

percent (30%), minus the five percent (5%) of per pupil cost designated for indirect cost support to

the student's school district as defined in subsection (b). The five percent (5%) indirect cost amount

shall be deducted from the district per pupil cost before the state share is derived by applying the

share ratio to the district per pupil cost. The local share of the per pupil amount for each student

attending the charter public school shall be paid to the charter public school by the district of

residence of the student and shall be the per pupil cost for the district of residence of the student

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minus the state share of that per pupil cost as designated in this section.

     (b) In addition to all state aid to education paid to a local district pursuant to chapter 7.1 of

this title, the state will pay an additional amount to the district for each student from this district

who is attending a charter public school. The additional amount of state aid per pupil shall be five

percent (5%) of the districts per pupil cost. The additional state aid shall be for the purpose of

assisting local school districts to undertake the indirect costs borne by a district when its student

attends a charter public school.

     (c) The state department of elementary and secondary education shall annually determine

both the state and local share of each charter public school's operating costs by deriving the

respective shares associated with each student reported as a member of the charter public school as

of June 30 of the reference year as defined in § 16-7-16(11) (or the enrollment as of October 1 of

the current school year in the first year of operation of a charter school). All other data used in this

determination shall be based upon the reference year as defined in § 16-7-16(11).

     (d) The state shall make payments of its share of operating costs to each charter public

school on a quarterly basis in July, October, January, and April. The July and October payments

will be based upon the reported student membership of the charter public school as of June 30 of

the reference year as defined in § 16-7-16(11) (or the enrollment as of October 1 of the current

school year in the first year of operation of a charter school). Charter public schools will report

current student enrollment, including district of residence for school purposes of each student

enrolled, and each district will report current total district operating expenses and total district

enrollments (including district students enrolled in charter public schools) annually by October 1.

If the October 1 data on a charter public school's student enrollment show a ten percent (10%) or

greater increase or decrease in students from the June membership count, the third and fourth

quarter payments to the charter public school will be adjusted to reflect actual student enrollment

in the charter public school.

     (e) Local district payments to charter public schools for each district's students enrolled in

the charter public school shall also be made quarterly as designated in subsection (d); the first local

district payment shall be made by August 15 instead of July. Any local school district more than

thirty (30) days in arrears on a quarterly payment for its student(s) enrolled in a charter public

school shall have the amount of the arrearage deducted from state aid to that district and the

withheld arrearage shall be paid by the state directly to the charter public school.

     (f) Local school districts with student(s) enrolled in a charter public school shall continue

to report these students in the total census of district public school students and will receive state

aid for all these students pursuant to the provisions of chapter 7.1 of this title.

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     (g) All entitlements except those provided for in § 16-24-6.2 shall be ratably reduced if less

than one hundred percent (100%) of the expenditures is appropriated.

     (h) For fiscal year 2007, the indirect aid paid to districts pursuant to this section shall equal

the amount received in the fiscal year 2006 enacted budget by the 2005 general assembly.

     For fiscal years 2021 and 2022 local direct payments due to charter public schools shall be

reduced for funds received under the federal Paycheck Protection Program in accordance with §

16-7.2-5(e).

     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 EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX

RELIEF ACT--LOCAL EDUCATION AID READJUSTING NEEDS AMENDMENT

("LEARN" AMENDMENT)

***

     This act would readjust local aid to charter schools that received any Paycheck Protection

Program funds created by the Coronavirus Aid, Relief and Economic Security Act by multiplying

the ratio of funds paid to the sending district divided by the total funds received from all sending

school districts. The reduction calculated shall be allocated equally against the payments due from

the sending district to the charter public school during the remainder of FY2021 and for each

payment due in FY2022.

     This act would take effect upon passage.

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