law22228

Chapter 228

2022 -- H 7953
Enacted 06/27/2022

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

It is enacted by the General Assembly as follows:

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,

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

Building Corporation" are hereby amended to read as follows:

45-38.1-1. Declaration of policy.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

constitute the performance of an essential governmental function.

45-38.1-3. Definitions.

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

the context indicates another or different meaning or intent:

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

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

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

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

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

participating municipality or of a participating healthcare provider;.

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

loan;.

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

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

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

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

center;.

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

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

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

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

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

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

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

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

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

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

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

are given by law;.

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

child daycare center for the purpose of funding education loans;.

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

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

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

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

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

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

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

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

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

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

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

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

acquisition, and the placing of the project in operation;.

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

bonds or notes of the corporation against default;.

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

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

corporation;.

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

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

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

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

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

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

through the corporation;.

(13) "Educational institution" means:

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

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

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

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

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

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

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

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

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

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

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

partnership, or limited partnership which that is a party to a public-private partnership agreement

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

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

organization; or

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

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

organization.

(14) "Healthcare provider" means:

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

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

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

more hospitals or their parent corporations;

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

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

(iv) Any nonprofit group health association;

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

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

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

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

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

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

to receive funding under chapter 8.5 of title 40.1;

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

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

associations and nonprofit home care organizations;

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

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

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

Code and which that is licensed as:

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

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

(D) An adult daycare facility; or

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

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

Administration that operates in Rhode Island;

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

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

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

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

mental health systems in the state; or

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

(viii) above subsections 14(i) through (viii) of this section;

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

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

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

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

partnership, or limited partnership which that is a party to a public-private partnership agreement

at least one of the parties of which is described in paragraph subsections (14)(i) through (ix)

hereof.;

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

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

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

which that provides individual or family social or human services within the state and which that

is accredited by a nationally recognized social or human services accrediting agency; or

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

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

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

which that provides temporary housing shelter to people within this state.

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

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

(i) Providing security for bonds or notes;

(ii) Funding a default reserve fund;

(iii) Acquiring default insurance;

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

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

corporation's programs;.

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

this title 45.

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

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

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

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

and revenue anticipation notes;.

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

educational institution or child daycare center;.

(19)(20) (21) "Participating hospital health care healthcare provider" means a hospital

health care healthcare provider which that, pursuant to the provisions of this chapter, undertakes

the financing and construction or acquisition of a project or undertakes the refunding or refinancing

of obligations or of a mortgage or of advances as provided in and permitted by this chapter;.

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

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

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

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

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

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

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

undertakes the refunding or refinancing of obligations or of a mortgage or of advances as provided

in and permitted by this chapter:.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

municipality, or healthcare provider for no additional consideration.

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

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

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

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

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

or notes;.

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

36(2);.

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

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

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

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

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

45-38.1-4. Corporation established.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

eligible for reappointment.

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

filed in the office of the secretary of state.

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

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

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

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

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

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

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

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

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

of the corporation.

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

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

immediately and need not be published or posted.

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

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

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

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

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

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

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

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

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

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

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

quasi-public corporations accountability and transparency act.

45-38.1-5. General grant of powers.

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

for the performance of the following:

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

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

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

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

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

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

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

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

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

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

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

location and character of a project undertaken by the participating educational institution or child

day care daycare center, or a participating municipality or by a participating health care healthcare

provider under the provisions of this chapter, and as the agent of the corporation, to acquire,

construct, reconstruct, renovate, replace, maintain, repair, operate, lease, as lessee or lessor, and

regulate the project, and, as the agent of the corporation, to enter into contracts for any or all of

those purposes, including contracts for the management and operation of the project;

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

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

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

refund the bonds, all as provided in this chapter;

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

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

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

public or private in respect to the project;

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

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

health care healthcare provider or a participating municipality as its agent to establish rules and

regulations for the use of a project undertaken by the participating educational institution or child

day care daycare center or by the participating health care healthcare provider or by the

participating municipality;

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

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

in its judgment, and to fix their compensation;

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

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

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

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

made;

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

bonds issued to finance the project;

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

center and to any participating health care healthcare provider or to a participating municipality

for the cost of a project in accordance with an agreement, and any other security instrument required

by the corporation between the corporation and the participating educational institution or child

day care daycare center or the participating health care healthcare provider; or participating

municipality; provided, that, no loan exceeds the total cost of the projects as determined by the

participating educational institution or child day care daycare center or the participating hospital,

healthcare provider or the participating municipality and approved by the corporation;

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

center or to a participating health care healthcare provider or to the participating municipality to

refund outstanding obligations, mortgages, or advances issued, made or given by the participating

educational institution or child day care daycare center or the participating health care healthcare

provider or to a participating municipality for the cost of a project;

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

child day care daycare center and participating health care healthcare provider and participating

municipality, its administrative costs and expenses incurred in the exercise of the powers and duties

conferred by this chapter;

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

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

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

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

or loans;

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

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

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

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

corporation and those joint participants;

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

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

care healthcare provider or to any participating municipality to carry out the purposes of the

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

loans; and

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

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

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

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

and administer the gifts or grants.

45-38.1-6. Acquisition of property.

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

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

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

gift or devise any lands, structures, property, real or personal, rights, rights of way, franchises,

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

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

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

and can be agreed upon between it and the owner of the property, and to take title to the property

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

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

healthcare provider as its agent.

45-38.1-7. Title to project.

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

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

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

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

bonds or notes, have been fully paid and retired, or when adequate provision has been made to fully

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

authorizing and securing the bonds or notes have been satisfied and the lien of the resolution or

trust agreement has been released in accordance with its provisions, the corporation shall promptly

do things and execute deeds and conveyances that are necessary and required to convey title to the

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

municipality or the participating child daycare center or the participating health care healthcare

provider, free and clear of all liens and encumbrances, all to the extent that title to the project or

projects shall not, at the time, then be vested in the participating institution for higher education or

the participating municipality or the participating child daycare center or the participating health

care healthcare provider.

45-38.1-9. Bonds of the corporation.

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

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

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

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

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

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

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

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

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

may contain.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

bonds.

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

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

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

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

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

or contracts made by the corporation with any individual, partnership, corporation, or association

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

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

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

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

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

payment of the bonds or of any particular issue of bonds, subject to agreements with bondholders

as may then exist;

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

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

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

regulation and disposition;

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

the project or of education loans;

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

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

bonds or any issue of the bonds;

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

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

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

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

manner in which the consent may be given;

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

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

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

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

the event of a default;

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

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

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

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

security for the benefit of the holders of the bonds.

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

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

by reason of the issuance of the bonds or notes.

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

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

agreements with bondholders.

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

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

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

under this chapter, it has determined that:

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

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

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

youth of this state; or

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

provider to improve the health of the people it serves by means of expanded health care, health care

healthcare provider, and other related services; and or

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

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

recreational facilities.;

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

education or child daycare center or municipality or health care healthcare provider within the

state; and

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

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

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

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

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

issued to finance the construction and/or acquisition; and

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

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

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

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

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

chapter, with respect to health care healthcare providers, unless the proposed health care

healthcare providers have first been approved by any state agency empowered to approve the

construction of any health care healthcare providers in the manner provided in its general laws.

SECTION 2. This act shall take effect upon passage.

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LC005149

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