Chapter
370
2007 -- H 6563 SUBSTITUTE A
Enacted 07/05/07
A N A C T
RELATING
TO THE COMPUTATION OF SCHOOL HOUSING AID IN CONNECTION WITH THE ISSUANCE OF REFUNDING
BONDS BY A LOCAL COMMUNITY OR A MUNICIPAL PUBLIC BUILDINGS AUTHORITY FOR THE
BENEFIT OF THE LOCAL COMMUNITY OR BY THE RHODE ISLAND HEALTH AND EDUCATIONAL
BUILDING CORPORATION FOR THE BENEFIT OF THE LOCAL COMMUNITY
Introduced
By: Representatives Slater, Diaz, Williams, Almeida, and DeSimone
Date
Introduced: June 20, 2007
It is enacted by the General Assembly as
follows:
SECTION 1.
Sections 16-7-41 and 16-7-44 of the General Laws in Chapter 16-7 entitled
"Foundation Level School Support" are
hereby amended to read as follows:
16-7-41.
Computation of school housing aid. -- (a) In each fiscal year the state
shall pay
to each community a grant to be applied to the
cost of school housing equal to the following:
The cost of each
new school housing project certified to the commissioner of elementary
and secondary education not later than July 15
of the fiscal year shall be divided by the actual
number of years of the bond issued by the local
community or the Rhode Island Health and
Educational Building Corporation in support of
the specific project, times the school housing aid
ratio; and provided, further, with respect to
costs of new school projects financed with proceeds
of bonds issued by the local community or the
Rhode Island Health and Educational Building
Corporation in support of the specific project,
the amount of the school housing aid payable in
each fiscal year shall not exceed the amount
arrived at by multiplying the principal and interest of
the bonds payable in each fiscal year by the
school housing aid ratio and which principal and
interest amount over the life of the bonds,
shall, in no event, exceed the costs of each new school
housing project certified to the commissioner of
elementary and secondary education. If a
community fails to specify or identify the
appropriate reimbursement schedule, the commissioner
of elementary and secondary education may at his
or her discretion set up to a five (5) year
reimbursement cycle for projects under five
hundred thousand dollars ($500,000); up to ten (10)
years for projects up to three million dollars
($3,000,000); and up to twenty (20) years for
projects over three million dollars
($3,000,000).
(b) Aid shall be
provided for the same period as the life of the bonds issued in support of
the project and at the school housing aid ratio
applicable to the local community at the time of the
bonds issued in support of the project.
(c) Aid shall be
paid either to the community or in the case of projects financed through
the Rhode Island Health and Educational Building
Corporation, to the Rhode Island Health and
Educational Building Corporation or its designee
including, but not limited to, a trustee under a
bond indenture or loan and trust agreement, in
support of bonds issued for specific projects of the
local community in accordance with this section,
section 16-7-40 and section 16-7-44.
Notwithstanding the preceding, in case of
failure of any city, town or district to pay the amount
due in support of bonds issued on behalf of a
city or town school project financed by the Rhode
Island Health and Educational Building
Corporation, upon notification by the Rhode Island
Health and Educational Building Corporation, the
general treasurer shall deduct the amount from
aid provided under this section, section 16-7-40
and section 16-7-44 due the city, town or district
and direct said funding to the Rhode Island
Health and Educational Building Corporation or its
designee.
(d)
Notwithstanding any provisions of law to the contrary, in connection with the
issuance of refunding bonds benefiting any local
community, any net interest savings resulting
from the refunding bonds issued by such community
or a municipal public buildings authority for
the benefit of the community or by the Rhode
Island health and educational building corporation
for the benefit of the community, in each case
in support of school housing projects for the
community, shall be allocated between the
community and the state of Rhode Island, by applying
the applicable school housing aid ratio at the
time of issuance of the refunding bonds, calculated
pursuant to section 16-7-39, that would
otherwise apply in connection with school housing
projects of the community. In connection with
any such refunding of bonds, the finance director
or the chief financial officer of the community
shall certify such net interest savings to the
commissioner of elementary and secondary
education. Notwithstanding section 16-7-44 or any
other provision of law to the contrary, school
housing projects costs in connection with any such
refunding bond issue shall include bond issuance
costs incurred by the community, the municipal
public buildings authority or the Rhode Island
health and educational building corporation, as the
case may be, in connection therewith. In
connection with any refunding bond issue, school
housing project costs shall include the cost of
interest payments on such refunding bonds, if the
cost of interest payments was included as a
school housing cost for the bonds being refunded. A
local community or municipal public buildings
authority shall not be entitled to the benefits of
this subsection (d) unless the net present value
savings resulting from the refunding is at least
three percent (3%) of the refunded bond issue.
(d) (e)
Payments shall be made in accordance with section 16-7-40 and this section.
16-7-44.
School housing project costs. -- School housing project costs, the date
of
completion of school housing projects, and the
applicable amount of school housing project cost
commitments shall be in accordance with the
regulations of the commissioner of elementary and
secondary education and the provisions of
sections 16-7-35 -- 16-7-47; provided, however, that
school housing project costs shall include the
purchase of sites, buildings, and equipment, the
construction of buildings, and additions or
renovations of existing buildings and/or facilities.
School housing project costs shall include the
cost of interest payment on any bond issued after
July 1, 1988, provided that such bond is
approved by the voters on or before June 30, 2003 or
issued by a municipal public building authority or
by the appropriate approving authority on or
before June 30, 2003. For Except as
provided in subsection 16-7-41(d), those projects approved
after June 30, 2003, interest payments may only
be included in project costs provided that the
bonds for these projects are issued through the
Rhode Island Health, Education and Building
Corporation. School housing project costs shall
exclude: (1) any bond issuance costs incurred by
the municipality or regional school district;
(2) demolition costs for buildings, facilities, or sites
deemed surplus by the school committee; and (3)
restrictions pursuant to section 6-7-44.1 below.
A building, facility, or site is declared
surplus by a school committee when the committee no
longer has such building, facility, or site
under its direct care and control and transfers control to
the municipality, section 16-2-15. The board of
regents for elementary and secondary education
will promulgate rules and regulations for the
administration of this section. These rules and
regulations may provide for the use of lease
revenue bonds, capital leases, or capital reserve
funding, to finance school housing provided that
the term of any bond, or capital lease shall not
be longer than the useful life of the project
and these instruments are subject to the public review
and voter approval otherwise required by law for
the issuance of bonds or capital leases. Cities or
towns issuing bonds, or leases issued by
municipal public buildings authority for the benefit of a
local community pursuant to chapter 50 of title
45 shall not require voter approval.
SECTION 2. Section
45-38.1-15 of the General Laws in Chapter 45-38.1 entitled "Health
And Educational Building Corporation" is
hereby amended to read as follows:
45-38.1-15.
Revenue refunding bonds. -- (a) The corporation is authorized to
provide
for the issuance of its revenue bonds for the
purpose of refunding any revenue bonds of the
corporation then outstanding and any bonds or
other obligations issued by or for the benefit of a
participating educational institution for any
school housing project, including the payment of any
redemption premium on them and any interest
accrued or to accrue to the earliest or subsequent
date of redemption, purchase, or maturity of the
revenue bonds, and, if deemed advisable by the
corporation, for the additional purpose of
paying all or any part of the cost of constructing and
acquiring additions, improvements, extensions,
or enlargements of a project, or any portion of it,
or for making additional corporation loans.
(b) The proceeds
of revenue bonds issued for the purpose of refunding outstanding
revenue bonds may, in the discretion of the
corporation, be applied to the purchase or retirement
at maturity or redemption of the outstanding
revenue bonds, either on their earliest or any
subsequent redemption date, and may, pending the
application, be placed in escrow to be applied
to the purchase or retirement at maturity or
redemption on a date that may be determined by the
corporation.
(c) Any escrowed
proceeds, pending use, may be invested and reinvested in obligations
of or guaranteed by the United States of
America, or in certificates of deposit or time deposits
secured by obligations of or guaranteed by the
United States of America, maturing at a time or
times appropriate to assure the prompt payment,
as to principal, interest, and redemption
premium, if any, of the outstanding revenue
bonds being refunded. The interest, income, and
profits, if any, earned or realized on the
investment may also be applied to the payment of the
outstanding revenue bonds being refunded. After
the terms of the escrow have been fully satisfied
and carried out, any balance of the proceeds and
interest, income, and profits, if any, earned or
realized on the investments, may be returned to
the corporation for use by it in any lawful
manner.
(d) The portion
of the proceeds of revenue bonds issued for the additional purpose of
paying all or any part of the cost of constructing
and acquiring additions, improvements,
extensions, or enlargements of a project may be
invested and reinvested in obligations of or
guaranteed by the United States of America, or
in certificates of deposit or time deposits secured
by obligations of or guaranteed by the United
States of America, maturing not later than the time
or times when the proceeds will be needed for
the purpose of paying all or any part of the cost.
The interest, income, and profits, if any,
earned or realized on the investment, may be applied to
the payment of all or any part of the cost or
may be used by the corporation in any lawful manner.
(e) All revenue
bonds shall be issued and secured and shall be subject to the provisions
of this chapter in the same manner and in the
same extent as any other revenue bonds issued
pursuant to this chapter.
SECTION 3. This
act shall take effect upon passage.
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LC03398/SUB A
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