Chapter 13-144-13

ARTICLE 13 AS AMENDED

RELATING TO EDUCATION AID

SECTION 1. ~~Section~~ Sections 16-7-41 and 16-7-41.1 of the General Laws in Chapter 16-

7 entitled "Foundation Level School Support" is 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 as set forth in section 16-7-39.

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 or district 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, section 16-7-44 and section 16-7-

15 through section 16-7-34.3 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; provided however, that for any refundings that occur between July 1,

2013 and December 31, 2015, the community shall receive eighty percent (80%) of the total

savings and the state shall receive twenty percent (20%). 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.

(e) Any provision of law to the contrary notwithstanding, the commissioner of

elementary and secondary education shall cause to be monitored the potential for refunding

outstanding bonds of local communities or municipal public building authorities or of the Rhode

Island Health and Educational Building Corporation issued for the benefit of local communities

or municipal public building authorities and benefiting from any aid referenced in this section. In

the event it is determined by said monitoring that the net present value savings which could be

achieved by refunding such bonds of the type referenced in the prior sentence including any

direct costs normally associated with such refundings is equal to (i) at least one hundred thousand

dollars ($100,000) and (ii) for the state and the communities or public building authorities at least

three percent (3%) of the bond issue to be refunded including associated costs then, in such event,

the commissioner (or his or her designee) may direct the local community or municipal public

building authority for the benefit of which the bonds were issued, to refund such bonds. Failure of

the local community or municipal public buildings authority to timely refund such bonds, except

due to causes beyond the reasonable control of such local community or municipal public

building authority, shall result in the reduction by the state of the aid referenced in this section 16-

7-4.1 associated with the bonds directed to be refunded in an amount equal to ninety percent

(90%) of the net present value savings reasonably estimated by the commissioner of elementary

and secondary education (or his or her designee) which would have been achieved had the bonds

directed to be refunded been refunded by the ninetieth (90th) day (or if such day is not a business

day in the state of Rhode Island, the next succeeding business day) following the date of issuance

of the directive of the commissioner (or his or her designee) to refund such bonds. Such reduction

in the aid shall begin in the fiscal year following the fiscal year in which the commissioner issued

such directive for the remaining term of the bond.

(f) Payments shall be made in accordance with section 16-7-40 and this section.

(g) For purposes of financing or refinancing school facilities in the city of Central Falls

through the issuance bonds through the Rhode Island Health and Educational Building

Corporation, the city of Central Falls shall be considered an "educational institution" within the

meaning of subdivision 45-38.1-3(13) of the general laws.

16-7-41.1. Eligibility for reimbursement. -- School districts, not municipalities, may

apply for and obtain approval for a project under the necessity of school construction process set

forth in the regulations of the board of regents for elementary and secondary education, provided,

however, in the case of municipality which issues bonds through the Rhode Island Health and

Educational Building Corporation to finance or refinance school facilities for a school district

which is not part of the municipality, the municipality may apply for and obtain approval for a

project. Such approval will remain valid until June 30 of the third fiscal year following the fiscal

year in which the board of regents for elementary and secondary education's approval is granted.

Only those projects undertaken at school facilities under the care and control of the school

committee and located on school property may qualify for reimbursement under sections 16-7-35

-- 16-7-47. Facilities with combined school and municipal uses or facilities that are operated

jointly with any other profit or non-profit agency do not qualify for reimbursement under sections

16-7-35 -- 16-7-47. Projects completed by June 30 of a fiscal year are eligible for reimbursement

in the following fiscal year. A project for new school housing or additional housing shall be

deemed to be completed when the work has been officially accepted by the school committee or

when the housing is occupied for its intended use by the school committee, whichever is earlier.

Notwithstanding the provisions of this section, the board of regents shall not grant final

approval for any project between June 30, 2011 and June 30, 2014 except for projects that are

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

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

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

Any project approval granted prior to the adoption of the school construction regulations

in 2007, and which are currently inactive; and any project approval granted prior to the adoption

of the school construction regulations in 2007 which did not receive voter approval or which has

not been previously financed, are no longer eligible for reimbursement under this chapter. The

department of elementary and secondary education shall develop recommendations for further

cost containment strategies in the school housing aid program.

SECTION 2. Section 16-2-21 of the General Laws in Chapter 16-2 entitled "School

Committees and Superintendents" is hereby amended to read as follows:

16-2-21. Pre-budget consultation -- Annual reports -- Appropriation requests --

Budgets. -- (a) At least sixty (60) days but not more than ninety (90) days prior to the formal

submission of the school budget to the appropriate city or town officials by the school committee,

there shall be a joint pre-budget meeting between the school committee and the city or town

council(s). At or before this meeting:

(1) The highest elected official of the city or town shall submit to the school committee

an estimate, prepared in a manner approved by the department of administration, of projected

revenues for the next fiscal year. In the case of the property tax, the projections shall include only

changes in the property tax base, not property tax rates;

(2) The school committee shall submit to the city or town council a statement for the

next ensuing fiscal year of anticipated total expenditures, projected enrollments with resultant

staff and facility requirements, and any necessary or mandated changes in school programs or

operations; and

(3) The school committee shall prepare and submit, annually, to the department of

elementary and secondary education, on or before the first day of August, a report in the manner

and form prescribed by the state board of regents for elementary and secondary education; the

committee shall also prepare not less than thirty (30) days before the date of the annual financial

town meeting, or the date of the meeting of the city council at which annual appropriations are

made, on forms prescribed and furnished by the department of elementary and secondary

education, the estimates and recommendations of the amounts necessary to be appropriated for

the support of public schools for the fiscal year ensuing; provided, that a copy of these estimates

and recommendations shall be sent to the department of elementary and secondary education, and

until the report is made, and if the estimates and recommendations are not presented to the

department, it may refuse to draw its orders for the money in the state treasury apportioned to the

city or town; provided, that the necessary blank for the report has been furnished by the

department on or before the first day of June, next preceding, and the necessary forms for the

estimates and recommendations shall have been furnished by the department not less than sixty

(60) days before the date of the annual appropriations meeting of the city council; the committee

shall also prepare and submit annually to the department of elementary and secondary education

and at the annual financial town meeting a report to the city or town, setting forth its doings, the

state and condition of the schools, and plans for their improvement, which report, unless printed,

shall be read in open meeting; and if printed, at least three (3) copies shall be transmitted to the

department on or before the day of the annual financial town meeting in each year.

(b) If the amount appropriated by the town meeting, the city or town council, or budget

referendum is either more or less than the amount recommended and requested by the school

committee, the school committee shall, within thirty (30) days after the appropriation is made,

amend its estimates and recommendations so that expenses are no greater than the total of all

revenue appropriated by the state or town or provided for public schools under the care, control,

and management of the school committee.

and revenues shall be considered an adopted school budget.

(d) Notwithstanding any provision of the general or public laws to the contrary:

(i) the budget adopted and presented by any school committee for the fiscal year 2008