2022 -- H 7953

========

LC005149

========

     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

____________

A N   A C T

RELATING TO TOWNS AND CITIES - HEALTH AND EDUCATIONAL BUILDING

CORPORATION

     

     Introduced By: Representative Patricia A. Serpa

     Date Introduced: March 07, 2022

     Referred To: House Municipal Government & Housing

     It is enacted by the General Assembly as follows:

1

     SECTION 1. Sections 45-38.1-1, 45-38.1-3, 45-38.1-4, 45-38.1-5, 45-38.1-6, 45-38.1-7,

2

45-38.1-9 and 45-38.1-20 of the General Laws in Chapter 45-38.1 entitled "Health and Educational

3

Building Corporation" are hereby amended to read as follows:

4

     45-38.1-1. Declaration of policy.

5

     It is declared that for the benefit of the people of the state of Rhode Island, the increase of

6

their commerce, welfare, and prosperity and the improvement of their health and living conditions,

7

it is essential that this and future generations of youth be given the fullest opportunity to learn and

8

to develop their intellectual, physical and mental capacities; that it is essential that institutions for

9

higher education within the state be provided with appropriate additional means to assist youth in

10

achieving the required levels of learning and development of their intellectual, physical and mental

11

capacities; that is essential that municipalities within the state be provided with appropriate

12

additional means to improve the health, living conditions, and welfare of their residents with

13

expanded access to public educational or public recreational facilities; that it is essential that

14

healthcare providers within the state be provided with appropriate additional facilities; and that it

15

is the purpose of this chapter to provide a measure of assistance and an alternative method to enable

16

institutions for higher education in the state, municipalities in the state, child daycare providers

17

within the state and healthcare providers to provide the facilities and structures which are sorely

18

needed to accomplish the purposes of this chapter, and to provide a measure of assistance and an

 

1

alternative method to enable students and the families of students attending institutions for higher

2

education in the state to finance the cost or a portion of the cost of that higher education, all to the

3

public benefit and good, to the extent and manner provided in this chapter. It is further declared

4

that the exercise by the Rhode Island health and educational building corporation, created and

5

established under § 45-38.1-4, of the powers conferred on the corporation, under this chapter, will

6

constitute the performance of an essential governmental function.

7

     45-38.1-3. Definitions.

8

     As used in this chapter, the following words and terms have the following meaning unless

9

the context indicates another or different meaning or intent:

10

     (1) "Bonds" means bonds of the corporation issued under the provisions of this chapter,

11

including refunding bonds, notwithstanding that the bonds may be secured by mortgage or the full

12

faith and credit of the corporation or the full faith and credit of a participating institution for higher

13

education or of a participating municipality or of a participating healthcare provider or any other

14

lawfully pledged security of a participating educational institution or child daycare center or of a

15

participating municipality or of a participating healthcare provider;

16

     (2) "Borrower" means a student or a parent who has received or agreed to pay an education

17

loan;

18

     (3) "Capital note(s)" means a note or notes of the corporation not exceeding twelve (12)

19

months in duration to maturity issued for the benefit of a healthcare provider or educational

20

institution or municipality or child daycare center to purchase capital assets to be used in the

21

operations of the healthcare provider or educational institution or municipality or child daycare

22

center;

23

     (4) "Child daycare center" means a child daycare center as defined in § 23-28.1-5 § 42-

24

12.5-2, which is a not-for-profit organization;

25

     (5) "Cooperative hospital service organization" means a corporation created pursuant to

26

chapter 6 of title 7, which meets the requirements of Section 501(e) of the Internal Revenue Code

27

of 1954, 26 U.S.C. § 501(e), and is exempt from federal taxation of income in accordance with

28

Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3);

29

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

30

created and established as a nonbusiness corporation, under and pursuant to chapter 6 of title 7, as

31

amended, and constituted and established as a public body corporate and agency of the state under

32

§ 45-38.1-4, or any board, body, commission, department, or officer succeeding to the principal

33

functions of the corporation or to whom the powers conferred upon the corporation by this chapter

34

are given by law;

 

LC005149 - Page 2 of 16

1

     (7) "Corporation loans" means loans by the corporation to an educational institution or

2

child daycare center for the purpose of funding education loans;

3

     (8) "Cost" as applied to a project or any portion of it, financed under the provisions of this

4

chapter, embraces all or any part of the cost of construction and acquisition of all lands, structures,

5

real or personal property, rights, rights of way, franchises, easements, and interests acquired or used

6

for a project, the cost of demolishing or removing any buildings or structures on land so acquired,

7

including the cost of acquiring any lands to which the buildings or structures may be moved, the

8

cost of all machinery and equipment, financing charges, interest prior to, during and for a period

9

after completion of the construction, provisions for working capital, reserves for principal and

10

interest and for extensions, enlargements, additions, replacements, renovations and improvements,

11

cost of engineering, financial and legal services, plans, specifications, studies, surveys, estimates

12

of cost and of revenues, administrative expenses, expenses necessary or incident to determining the

13

feasibility or practicability of constructing the project, and other expenses that may be necessary or

14

incident to the construction and acquisition of the project, the financing of the construction and

15

acquisition, and the placing of the project in operation;

16

     (9) "Default insurance" means insurance insuring education loans, corporation loans, or

17

bonds or notes of the corporation against default;

18

     (10) "Default reserve fund" means a fund established pursuant to a resolution of the

19

corporation for the purpose of securing education loans, corporation loans, or bonds or notes of the

20

corporation;

21

     (11) "Education loan" means a loan which is made by or on behalf of an educational

22

institution or child daycare center from the proceeds of a corporation loan, to a student or parents

23

of a student or both, to finance the student's attendance at the institution;

24

     (12) "Education loan series portfolio" means all education loans made by or on behalf of a

25

specific educational institution or child daycare center which are funded from the proceeds of a

26

corporation loan to the institution out of the proceeds of a related specific bond or note issued

27

through the corporation;

28

     (13) "Educational institution" means:

29

     (i) An educational institution or local education authority participating in the school

30

housing aid program as described in chapter 7 of title 16 situated within this state which, by virtue

31

of law or charter, is a public or other nonprofit educational institution empowered to provide a

32

program of education at the primary, secondary or high school level, beyond the high school level,

33

and which is accredited by a nationally recognized educational accrediting agency or association

34

and awards a bachelor's or advance degree or provides a program of not less than two (2) years'

 

LC005149 - Page 3 of 16

1

duration which is accepted for full credit toward a bachelor's degree;

2

     (ii) Any nonprofit corporation, business corporation, limited liability company or

3

partnership or limited partnership the shareholders or members or partners or limited partners of

4

which are limited to those entities described in paragraph (13)(i) hereof; or

5

     (iii) Any nonprofit corporation, business corporation, limited liability company,

6

partnership or limited partnership which is a party to a public-private partnership agreement at least

7

one of the parties of which is described in paragraph 13(i) hereof;

8

     (iv) Any museum in this state as defined by § 34-44.1-1 and which is a not-for-profit

9

organization; or

10

     (v) Any performing arts center or theater that produces live on-stage musical, theatrical or

11

dance performances in this state for members of the public and which is a not-for-profit

12

organization.

13

     (14) "Healthcare provider" means:

14

     (i) Any nonprofit hospital incorporated under the laws of the state, including any nonprofit

15

subsidiary corporations formed by any hospital or formed by the parent corporation of the hospital;

16

     (ii) Any nonprofit corporation, the member or members of which consist solely of one or

17

more hospitals or their parent corporations;

18

     (iii) Any other hospital, which is licensed as a general hospital or maternity hospital

19

pursuant to chapter 17 of title 23, which is exempt from taxation;

20

     (iv) Any nonprofit group health association;

21

     (v) Any cooperative hospital service organization, or any nonprofit corporation that is

22

licensed as a skilled nursing and/or intermediate care facility pursuant to chapter 17 of title 23,

23

including any nonprofit subsidiary corporation formed by any of the foregoing skilled nursing

24

and/or intermediate care facilities, or any nonprofit corporation eligible to receive funding, pursuant

25

to chapter 8.5 of title 40.1, and/or a corporation created pursuant to chapter 6 of title 7; provided,

26

that it is a real estate holding corporation created for the benefit of a nonprofit corporation eligible

27

to receive funding under chapter 8.5 of title 40.1;

28

     (vi) Any nonprofit healthcare corporation whose purpose is to provide home care services

29

or supplies to the citizens of this state including, but not limited to, nonprofit visiting nurse

30

associations and nonprofit home care organizations;

31

     (vii) Any other not-for-profit corporation organized pursuant to chapter 6 of title 7 or

32

pursuant to any special act of the general assembly and which is exempt from federal taxation of

33

income in accordance with Section 501(c)(3), 26 U.S.C. § 501(c)(3), of the Internal Revenue Code

34

and which is licensed as:

 

LC005149 - Page 4 of 16

1

     (A) A healthcare facility pursuant to chapter 17 of title 23;

2

     (B) A "facility" pursuant to chapter 24 of title 40.1;

3

     (C) A "residential care and assisted living facility" pursuant to chapter 17.4 of title 23;

4

     (D) An adult daycare facility; or

5

     (E) A "clinical laboratory" pursuant to chapter 23-16.2 and as a manufacturer of biological

6

products by the United States Department of Health and Human Services Food and Drug

7

Administration that operates in Rhode Island;

8

     (viii) Any not-for-profit corporation which is exempt from federal taxation of income in

9

accordance with Section 501(c)(3) of the Internal Revenue Code, 26 U.S.C. § 501(c)(3), or any

10

successor section of the Internal Revenue Code, which under contract with the state educates,

11

counsels or rehabilitates young people who have come subject to child welfare, juvenile justice or

12

mental health systems in the state; or

13

     (ix) Any network or similar arrangement of those entities listed in subsection (i) through

14

(viii) above;

15

     (x)(A) Any nonprofit corporation, business corporation, limited liability company,

16

partnership or limited partnership, the shareholders or members or partners or limited partners of

17

which are limited to those entities described in paragraph (14)(i) through (ix) hereof; or

18

     (B) Any nonprofit corporation, business corporation, limited liability company, partnership

19

or limited partnership which is a party to a public-private partnership agreement at least one of the

20

parties of which is described in paragraph (14)(i) through (ix) hereof.;

21

     (xii) Any not-for-profit corporation organized pursuant to chapter 6 of title 7 or pursuant

22

to any special act of the general assembly, which is exempt from federal taxation of income in

23

accordance with Section 501(c)(3), 26 U.S.C.§ 501(c)(3), of the Internal Revenue Code, which

24

provides individual or family social or human services within the state and which is accredited by

25

a nationally recognized social or human services accrediting agency; or

26

     (xiii) A not-for-profit corporation organized pursuant to chapter 6 of title 7 or pursuant to

27

any special act of the general assembly, which is exempt from federal taxation of income in

28

accordance with Section 501(c)(3), 26 U.S.C.§ 501(c)(3), of the Internal Revenue Code and which

29

provides temporary housing shelter to people within this state.

30

     (15) "Loan funding deposit" means monies or other property deposited by an educational

31

institution or child daycare center with the corporation, a guarantor, or a trustee for the purpose of:

32

     (i) Providing security for bonds or notes;

33

     (ii) Funding a default reserve fund;

34

     (iii) Acquiring default insurance;

 

LC005149 - Page 5 of 16

1

     (iv) Defraying costs of the corporation, the monies or properties to be in amounts as deemed

2

necessary by the corporation or a guarantor as a condition for the institution's participation in the

3

corporation's programs;

4

     (16) "Municipality" means any city or town located in the state with powers set forth in

5

title 45.

6

     (16)(17) "Nonprofit group health association" means an association or a corporation

7

established by an act of the general assembly, or created pursuant to chapter 6 of title 7, to provide

8

all or any part of a project or property to the citizens of this state;

9

     (17)(18) "Note" means a written promise to pay, including, but not limited to, capital notes

10

and revenue anticipation notes;

11

     (18)(19) "Parent" means any parent, legal guardian, or sponsor of the student at an

12

educational institution or child daycare center;

13

     (19)(20) "Participating hospital health care provider" means a hospital health care provider

14

which, pursuant to the provisions of this chapter, undertakes the financing and construction or

15

acquisition of a project or undertakes the refunding or refinancing of obligations or of a mortgage

16

or of advances as provided in and permitted by this chapter;

17

     (20)(21) "Participating educational institution" means an educational institution or child

18

daycare center which, pursuant to the provisions of this chapter, undertakes the financing and

19

construction or acquisition of a project, or undertakes the refunding or refinancing of obligations

20

or of a mortgage or of advances or undertakes the financing, directly or indirectly, of education

21

loans, all as provided in and permitted by this chapter;

22

     (22) "Participating municipality" means a municipality which, pursuant to the provisions

23

of this chapter, undertakes the financing and construction or acquisition of a project or undertakes

24

the refunding or refinancing of obligations or of a mortgage or of advances as provided in and

25

permitted by this chapter:

26

     (21)(23) "Project," in the case of a participating educational institution or child daycare

27

center means a structure suitable for use as a dormitory or other housing facility, dining hall, student

28

union, administration building, academic building, library, laboratory, research facility, classroom,

29

athletic facility, healthcare facility, and maintenance, storage or utility facility, and other structures

30

or facilities related to the educational institution or child daycare center or required or useful for

31

the instruction of students or the conducting of research or the operation of an educational

32

institution or child daycare center including parking and other facilities or structures essential or

33

convenient for the orderly conduct of the educational institution or child daycare center and also

34

includes equipment and machinery and other similar items necessary or convenient for the

 

LC005149 - Page 6 of 16

1

operation of a particular facility or structure in the manner for which its use is intended, but does

2

not include such items as books, fuel, supplies, or other items which are customarily deemed to

3

result in a current operating charge and in the case of a participating municipality means a structure

4

suitable for use as a public library, gymnasium, recreational facility, park, playground and

5

maintenance, storage or utility facility and other structures required or useful for the operation of

6

the project, including parking and other facilities or structures essential or convenient for the

7

orderly operation of the project, and also includes equipment and machinery and other similar items

8

necessary or convenient for the operation of the project in the manner for which its use is intended,

9

but does not include such items as books, fuel, supplies, or other items which are customarily

10

deemed to result in a current operating charge; and, in the case of a participating healthcare

11

provider, means a structure suitable for use as a hospital, clinic, nursing home, congregate housing

12

for the elderly and/or infirm, mental health service unit, or other healthcare facility, laboratory,

13

laundry, nurses', interns', or clients' residence, administration building, research facility, and

14

maintenance, storage or utility facility, and other structures or facilities related to the healthcare

15

provider or required or useful for the operation of the project, including parking and other facilities

16

or structures essential or convenient for the orderly operation of the project, and also includes

17

equipment and machinery and other similar items necessary or convenient for the operation of the

18

project in the manner for which its use is intended, but does not include such items as fuel, supplies,

19

or other items which are customarily deemed to result in a current operating charge;

20

      (22)(24) "Public-private partnership agreement" means an arrangement or agreement

21

pursuant to which a nonprofit corporation, business corporation, limited liability company,

22

partnership or limited partnership undertakes or develops a project for an educational institution,

23

municipality or a healthcare provider including, but not limited to, a lease arrangement, wherein

24

pursuant to such arrangement or agreement at the conclusion of such arrangement or agreement the

25

ownership of the bond-financed or note-financed project is transferred to the educational institution,

26

municipality or healthcare provider for no additional consideration.

27

     (25) "Recreational facility" means a system of public recreation established by § 32-3-2.

28

     (23)(26) "Revenue anticipation note(s)" means a note or notes of the corporation not

29

exceeding twelve (12) months in duration to maturity issued for the benefit of a healthcare provider

30

or educational institution in anticipation of revenues reasonably expected to be collected by the

31

healthcare provider or educational institution within twelve (12) months from the date of the note

32

or notes;

33

     (24)(27) "School housing project" means an "approved project," as defined in § 16-7-36(2);

34

     (25)(28) "School housing project financing" means bonds issued through the corporation

 

LC005149 - Page 7 of 16

1

to fund school housing projects as provided in and permitted by § 16-7-44;

2

     (26)(29) "State" means the state of Rhode Island; and

3

     (27)(30) "State reimbursement" shall mean the state's share of school housing project cost

4

as determined in accordance with §§ 16-7-35 -- 16-7-47.

5

     45-38.1-4. Corporation established.

6

     (a) There is hereby created a public body corporate and agency of the state to be known as

7

the "Rhode Island health and educational building corporation" as successor to the Rhode Island

8

educational building corporation, previously created as a nonbusiness corporation under and

9

pursuant to chapter 6 of title 7, as amended by chapter 121 of the Public Laws of 1966, and

10

constituted and established as a public body corporate and agency of the state for the exercising of

11

the powers conferred on the corporation under and pursuant to §§ 45-38.1-1 -- 45-38.1-24.

12

     (b) All of the powers of the corporation are vested in the board of directors of the

13

corporation elected at the first meeting of the incorporators of the Rhode Island educational

14

building corporation, and the members of the board shall continue to serve for the duration of the

15

terms for which they were originally elected. Successors to the members of the board of directors

16

shall be appointed by the governor, as follows: prior to the month of June in each year, commencing

17

in the year 1968, the governor shall appoint a member to serve on the board of directors for a term

18

of five (5) years to succeed the member whose term will expire in June of that year. In the event of

19

a vacancy occurring in the membership of the board of directors, the governor shall appoint a new

20

member of the board of directors for the unexpired term. Any member of the board of directors is

21

eligible for reappointment.

22

     (c) Each member of the board of directors, before entering upon his or her duties, shall take

23

an oath to administer the duties of his or her office faithfully and impartially, and the oath shall be

24

filed in the office of the secretary of state.

25

     (d) The board of directors shall elect two (2) of its members as chairperson and vice

26

chairperson, and also elect a secretary, assistant secretary, treasurer, and assistant treasurer, who

27

need not be members of the board. Three (3) members of the board of directors of the corporation

28

shall constitute a quorum, and the affirmative vote of the majority of the directors present and

29

entitled to vote at any regular or special meeting at which a quorum is present, is necessary for any

30

action to be taken by the corporation; except, however, that the affirmative vote of three (3)

31

members of the board of directors is necessary for the election of officers of the corporation and to

32

amend the bylaws of the corporation. No vacancy in the membership of the board of directors of

33

the corporation impairs the right of a quorum to exercise all the powers of and perform the duties

34

of the corporation.

 

LC005149 - Page 8 of 16

1

     (e) Any action taken by the corporation under the provisions of this chapter may be

2

authorized by resolution at any regular or special meeting, and each resolution takes effect

3

immediately and need not be published or posted.

4

     (f) The members of the board of directors shall receive compensation at the rate of fifty

5

dollars ($50.00) per meeting attended; however, the compensation shall not exceed one thousand

6

five hundred dollars ($1,500) per fiscal year per member.

7

     (g) Notwithstanding any other law to the contrary, it shall not be or constitute a conflict of

8

interest for a trustee, director, officer, or employee of an institution for higher education or

9

municipality or child daycare center or a healthcare provider to serve as a member of the board of

10

directors of the corporation; provided, that the trustee, director, officer, or employee abstains from

11

deliberation, action and vote by the board under this chapter in specific respect to the institution for

12

higher education, or municipality or, child daycare center or the healthcare provider of which the

13

member is a trustee, director, officer, or employee.

14

     (h) The board and corporation shall comply with provisions of chapter 155 of title 42, the

15

quasi-public corporations accountability and transparency act.

16

     45-38.1-5. General grant of powers.

17

     The corporation has the following powers, together with all powers incidental or necessary

18

for the performance of the following:

19

     (1) To have perpetual succession as a public body corporate and agency of the state and to

20

adopt bylaws for the regulation of its affairs and the conduct of its business;

21

     (2) To adopt an official seal and alter the seal at pleasure;

22

     (3) To maintain an office at a place or places that it may designate;

23

     (4) To sue and be sued, plead and be impleaded;

24

     (5) To determine the location and character of any project to be financed under the

25

provisions of this chapter, and to construct, reconstruct, renovate, replace, maintain, repair, operate,

26

lease, as lessee or lessor, and regulate the project to pay its costs, to enter into contracts for any or

27

all of those purposes, to enter into contracts for the management and operation of a project, and to

28

designate a participating educational institution or child day care center or a participating

29

municipality, or a participating health care provider as its agent to determine the location and

30

character of a project undertaken by the participating educational institution or child day care

31

center, or a participating municipality or by a participating health care provider under the provisions

32

of this chapter, and as the agent of the corporation, to acquire, construct, reconstruct, renovate,

33

replace, maintain, repair, operate, lease, as lessee or lessor, and regulate the project, and, as the

34

agent of the corporation, to enter into contracts for any or all of those purposes, including contracts

 

LC005149 - Page 9 of 16

1

for the management and operation of the project;

2

     (6) To issue bonds, notes, bond anticipation notes, revenue anticipation notes, capital notes,

3

and other obligations of the corporation including, but not limited to, interest rate exchange

4

agreements and contracts to hedge interest rates, for any of its corporate purposes, and to fund or

5

refund the bonds, all as provided in this chapter;

6

     (7) Generally, to fix and revise from time to time and charge and collect rates, rents, fees,

7

and charges for the use of and for the services furnished or to be furnished by a project or any

8

portion of it, and to contract with any person, partnership, association, or corporation or other body

9

public or private in respect to the project;

10

     (8) To establish rules and regulations for the use of a project or any portion of it and to

11

designate a participating educational institution or child day care center, or a participating health

12

care provider or a participating municipality as its agent to establish rules and regulations for the

13

use of a project undertaken by the participating educational institution or child day care center or

14

by the participating health care provider or by the participating municipality;

15

     (9) Employ consulting engineers, architects, attorneys, accountants, construction and

16

financial experts, superintendents, managers, and other employees and agents as may be necessary

17

in its judgment, and to fix their compensation;

18

     (10) To receive and accept from any public agency, loans or grants for or in aid of the

19

construction of a project or any portion of it, and to receive and accept loans, grants, aid, or

20

contributions from any source of either money, property, labor, or other things of value, to be held,

21

used, and applied only for the purposes for which those loans, grants, aid, and contributions are

22

made;

23

     (11) To mortgage any project, and the site of the project, for the benefit of the holders of

24

bonds issued to finance the project;

25

     (12) To make loans to any participating educational institution or child day care center and

26

to any participating health care provider or to a participating municipality for the cost of a project

27

in accordance with an agreement, and any other security instrument required by the corporation

28

between the corporation and the participating educational institution or child day care center or the

29

participating health care provider; or participating municipality; provided, that, no loan exceeds the

30

total cost of the projects as determined by the participating educational institution or child day care

31

center or the participating hospital, or the participating municipality and approved by the

32

corporation;

33

     (13) To make loans to a participating educational institution or child day care center or to

34

a participating health care provider or to the participating municipality to refund outstanding

 

LC005149 - Page 10 of 16

1

obligations, mortgages, or advances issued, made or given by the participating educational

2

institution or child day care center or the participating health care provider or to a participating

3

municipality for the cost of a project;

4

     (14) To charge to and equitably apportion, among participating educational institution or

5

child day care center and participating health care provider and participating municipality, its

6

administrative costs and expenses incurred in the exercise of the powers and duties conferred by

7

this chapter;

8

     (15) To accept any gifts or grants or loans of funds or property or financial or other aid in

9

any form from the federal government or any agency or instrumentality of the federal government,

10

or from the state or any agency or instrumentality of the state, or from any other source and to

11

comply, subject to the provisions of this chapter, with the terms and conditions of the gifts, grants,

12

or loans;

13

     (16) To do all things necessary or convenient to carry out the purposes of this chapter. In

14

carrying out the purposes of this chapter, the corporation may undertake a project for two (2) or

15

more participating health care providers jointly, or for any combination of providers, and,

16

thereupon, all other provisions of this chapter shall apply to and for the benefit of the corporation

17

and those joint participants;

18

     (17) To enter into contracts for the purpose of guaranteeing or insuring loans to any

19

participating educational institution or child day care center or to any participating health care

20

provider or to any participating municipality to carry out the purposes of the corporation, and to

21

pledge, encumber, or advance funds of the corporation in connection with the loans; and

22

     (18) To make and effectuate gifts or grants of corporation funds for or in aid of the

23

construction of or development of any project or any portion of a project or in furtherance of the

24

policies, purposes, and powers of the corporation set forth in this chapter, and to retain or appoint

25

any agents or consultants deemed necessary or desirable by the corporation to effectuate, make,

26

and administer the gifts or grants.

27

     45-38.1-6. Acquisition of property.

28

     The corporation is authorized and empowered, directly, or by and through a participating

29

institution for higher education or a participating municipality or a participating child daycare

30

center or a participating health care provider, as its agent, to acquire by purchase or by gift or devise

31

any lands, structures, property, real or personal, rights, rights of way, franchises, easements, and

32

other interests in lands, including lands lying under water and riparian rights, which are located

33

within or without the state as it may deem necessary or convenient for the construction or operation

34

of a project, upon terms and at prices that may be considered by it to be reasonable and can be

 

LC005149 - Page 11 of 16

1

agreed upon between it and the owner of the property, and to take title to the property in the name

2

of the corporation or in the name of a participating institution for higher education or a participating

3

municipality or a participating child daycare center or a participating health care provider as its

4

agent.

5

     45-38.1-7. Title to project.

6

     When the principal of and interest on bonds of the corporation issued to finance the cost of

7

a particular project or projects for a participating institution for higher education or for a

8

participating municipality or a participating child daycare center or for a participating health care

9

provider, including any refunding bonds or notes issued to refund and refinance the bonds or notes,

10

have been fully paid and retired, or when adequate provision has been made to fully pay and retire

11

the bonds or notes, and all other conditions of the resolution or trust agreement authorizing and

12

securing the bonds or notes have been satisfied and the lien of the resolution or trust agreement has

13

been released in accordance with its provisions, the corporation shall promptly do things and

14

execute deeds and conveyances that are necessary and required to convey title to the project or

15

projects to the participating institution for higher education or the participating municipality or the

16

participating child daycare center or the participating health care provider, free and clear of all liens

17

and encumbrances, all to the extent that title to the project or projects shall not, at the time, then be

18

vested in the participating institution for higher education or the participating municipality or the

19

participating child daycare center or the participating health care provider.

20

     45-38.1-9. Bonds of the corporation.

21

     (a) The corporation is authorized from time to time to issue its negotiable bonds for any

22

corporate purpose or project. In anticipation of the sale of the bonds the corporation may issue

23

negotiable bond anticipation notes and may renew those notes from time to time, but maximum

24

maturity of the notes, including renewals of those notes, shall not exceed forty (40) years from the

25

date of issue of the original notes. The notes shall be paid from any revenues of the corporation or

26

other moneys available for payment and not otherwise pledged, or from the proceeds of the sale of

27

the bonds of the corporation in anticipation of which they were issued. The notes shall be issued in

28

the same manner as the bonds. The notes and the resolution, or resolutions authorizing the notes,

29

may contain any provisions, conditions, or limitations which a bond resolution of the corporation

30

may contain.

31

     (b) The bonds, notes, or other obligations are payable from any revenues or moneys of the

32

corporation available for payment and not otherwise pledged, subject only to any agreements with

33

the holders of particular bonds, notes, or other obligations pledging any particular revenues or

34

moneys, and subject to any agreements with any participating institution for higher education or

 

LC005149 - Page 12 of 16

1

any participating municipality or participating child daycare center or any participating hospital,

2

notwithstanding that the bonds, notes, or other obligations may be payable from a special fund,

3

they shall be and be deemed to be for all purposes negotiable instruments, subject only to the

4

provisions of the bonds, notes, or other obligations for registration.

5

     (c) The bonds may be issued as serial bonds or as term bonds, or the corporation, in its

6

discretion, may issue bonds of both types. The bonds shall be authorized by resolution of the

7

corporation and bear a date or dates, mature at a time or times, not exceeding sixty-five (65) years

8

from their respective dates, bear interest at rate or rates, be payable at a time or times, be in

9

denominations, be in a form, either coupon or registered, carry registration privileges, be executed

10

in a manner, be payable in lawful money of the United States of America at a place or places, and

11

be subject to terms of redemption, that the resolution or resolutions may provide. In the event term

12

bonds are issued, the resolution authorizing the term bonds may make provisions for the

13

establishment and management of adequate sinking reserve funds for their payment as the

14

corporation may deem necessary. The bonds or notes may be sold at public or private sale for a

15

price or prices as the corporation determines. Pending preparation of the definitive bonds, the

16

corporation may issue interim receipts or certificates which shall be exchanged for the definitive

17

bonds.

18

     (d) Any resolution or resolutions authorizing any bonds or any issue of bonds may contain

19

provisions, which are a part of the contract with the holders of the bonds to be authorized, as to:

20

     (1) Pledging the full faith and credit of a participating institution for higher education or of

21

a participating municipality or participating child daycare center or of a participating health care

22

provider, all or any part of the revenues of a project of any revenue producing contract or contracts

23

made by the corporation with any individual, partnership, corporation, or association or other body,

24

public or private, or pledging all or any part of the revenues derived from corporation loans,

25

education loans, payments by participating institutions for higher education, banks, guarantors,

26

insurers, or others pursuant to letters of credit or purchase agreements, investment earnings,

27

insurance proceeds, loan funding deposits, proceeds from the sale of education loans, proceeds of

28

refunding bonds and fees, charges, and other revenues of the corporation, to secure the payment of

29

the bonds or of any particular issue of bonds, subject to agreements with bondholders as may then

30

exist;

31

     (2) The rentals, revenues, fees and other charges to be charged, and the amounts to be raised

32

in each year, and the use and disposition of the revenues;

33

     (3) The setting aside of reserves or sinking funds, loan funding deposits, and their

34

regulation and disposition;

 

LC005149 - Page 13 of 16

1

     (4) Limitations on the right of the corporation or its agent to restrict and regulate the use of

2

the project or of education loans;

3

     (5) Limitations on the purpose to which the proceeds of the sale of any issue, of bonds then

4

or thereafter to be issued, may be applied and pledging the proceeds to secure the payment of the

5

bonds or any issue of the bonds;

6

     (6) Limitations on the issuance of additional bonds, the terms upon which additional bonds

7

may be issued and secured, and the refunding of outstanding bonds;

8

     (7) The procedure, if any, by which the terms of any contract with bondholders may be

9

amended or abrogated, the amount of bonds the holders of which must consent thereto, and the

10

manner in which the consent may be given;

11

     (8) Limitations on the amount of moneys derived from the project or education loan

12

program to be expended for operating, administrative, or other expenses of the corporation;

13

     (9) Defining the acts or omissions to act which constitute a default in the duties of the

14

corporation to holders of its obligations, and providing the rights and remedies of those holders in

15

the event of a default;

16

     (10) The mortgaging of a project and its site for the purpose of securing the bondholders;

17

     (11) Any other additional covenants, agreements, and provisions that are deemed desirable

18

or necessary by the corporation for the security of the holders of the bonds; and

19

     (12) Providing for guarantees, pledges of endowment, letters of credit, property, or other

20

security for the benefit of the holders of the bonds.

21

     (e) Neither the members of the corporation nor any person executing the bonds or notes

22

are personally liable on the bonds or notes, or are subject to any personal liability or accountability

23

by reason of the issuance of the bonds or notes.

24

     (f) The corporation has power out of any available funds, to purchase its bonds or notes.

25

The corporation may hold, pledge, cancel, or resell the bonds, subject to and in accordance with

26

agreements with bondholders.

27

     45-38.1-20. Procedure before issuance of bonds or notes.

28

     Notwithstanding any other provisions of this chapter, the corporation is not empowered to

29

undertake any project authorized by this chapter unless, prior to the issuance of any bonds or notes

30

under this chapter, it has determined that:

31

     (1) The acquisition, construction, or financing of the cost of the project will:

32

     (i) With respect to an institution for higher education or child daycare center, enable or

33

assist the institution to fulfill its obligations in providing education or child daycare center to the

34

youth of this state; or

 

LC005149 - Page 14 of 16

1

     (ii) With respect to a health care provider, enable the health care provider to improve the

2

health of the people it serves by means of expanded health care, health care provider, and other

3

related services; and or

4

     (iii) With respect to a municipality, enable the municipality to improve the health, or living

5

conditions or welfare of its residents by means of expanded access to public educational or public

6

recreational facilities.

7

     (2) The project is leased to, or owned by, a financially responsible institution for higher

8

education or child daycare center or municipality or health care provider within the state; and

9

     (3) Adequate provision has been, or will be, made for the payment of the cost of the

10

construction and/or acquisition of the project, and, except with regard to those bonds issued through

11

the corporation related to school housing project financing, that under no circumstances will the

12

state be obligated, directly or indirectly, for the payment of the cost of the construction and/or

13

acquisition of the project, or for the payment of the principal of, or interest on, any obligations

14

issued to finance the construction and/or acquisition; and

15

     (4) Adequate provision has been, or will be made in any agreement with respect to or lease

16

of the project for payment of all costs of operation, maintenance, and upkeep of the project by the

17

lessee, sublessee, or occupant so that under no circumstances is the state obligated, directly or

18

indirectly, for the payment of the costs except with regard to state reimbursement for school

19

housing projects; provided, that no findings shall be made and no financing effected under this

20

chapter, with respect to health care providers, unless the proposed health care providers have first

21

been approved by any state agency empowered to approve the construction of any health care

22

providers in the manner provided in its general laws.

23

     SECTION 2. This act shall take effect upon passage.

========

LC005149

========

 

LC005149 - Page 15 of 16

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES - HEALTH AND EDUCATIONAL BUILDING

CORPORATION

***

1

     This act would provide that municipalities within the state be provided with appropriate

2

additional means to improve the health, living conditions, and welfare of their residents with

3

expanded access to public educational, or child daycare centers, or public recreational facilities by

4

utilizing the Rhode Island health and educational building corporation.

5

     This act would take effect upon passage.

========

LC005149

========

 

LC005149 - Page 16 of 16