=======

art.013/3/013/2

1-1

ARTICLE 13 AS AMENDED

1-2

RELATING TO EDUCATION AID

1-3

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

1-4

7 entitled "Foundation Level School Support" is are hereby amended to read as follows:

1-5

     16-7-41. Computation of school housing aid. -- (a) In each fiscal year the state shall pay

1-6

to each community a grant to be applied to the cost of school housing equal to the following:

1-7

      The cost of each new school housing project certified to the commissioner of elementary

1-8

and secondary education not later than July 15 of the fiscal year shall be divided by the actual

1-9

number of years of the bond issued by the local community or the Rhode Island Health and

1-10

Educational Building Corporation in support of the specific project, times the school housing aid

1-11

ratio; and provided, further, with respect to costs of new school projects financed with proceeds

1-12

of bonds issued by the local community or the Rhode Island Health and Educational Building

1-13

Corporation in support of the specific project, the amount of the school housing aid payable in

1-14

each fiscal year shall not exceed the amount arrived at by multiplying the principal and interest of

1-15

the bonds payable in each fiscal year by the school housing aid ratio and which principal and

1-16

interest amount over the life of the bonds, shall, in no event, exceed the costs of each new school

1-17

housing project certified to the commissioner of elementary and secondary education. If a

1-18

community fails to specify or identify the appropriate reimbursement schedule, the commissioner

1-19

of elementary and secondary education may at his or her discretion set up to a five (5) year

1-20

reimbursement cycle for projects under five hundred thousand dollars ($500,000); up to ten (10)

1-21

years for projects up to three million dollars ($3,000,000); and up to twenty (20) years for

1-22

projects over three million dollars ($3,000,000).

1-23

      (b) Aid shall be provided for the same period as the life of the bonds issued in support of

1-24

the project and at the school housing aid ratio applicable to the local community at the time of the

1-25

bonds issued in support of the project as set forth in section 16-7-39.

1-26

      (c) Aid shall be paid either to the community or in the case of projects financed through

1-27

the Rhode Island Health and Educational Building Corporation, to the Rhode Island Health and

1-28

Educational Building Corporation or its designee including, but not limited to, a trustee under a

1-29

bond indenture or loan and trust agreement, in support of bonds issued for specific projects of the

1-30

local community in accordance with this section, section 16-7-40 and section 16-7-44.

1-31

Notwithstanding the preceding, in case of failure of any city, town or district to pay the amount

2-1

due in support of bonds issued on behalf of a city or, town, school or district project financed by

2-2

the Rhode Island Health and Educational Building Corporation, upon notification by the Rhode

2-3

Island Health and Educational Building Corporation, the general treasurer shall deduct the

2-4

amount from aid provided under this section, section 16-7-40, section 16-7-44 and section 16-7-

2-5

15 through section 16-7-34.3 due the city, town or district and direct said funding to the Rhode

2-6

Island Health and Educational Building Corporation or its designee.

2-7

      (d) Notwithstanding any provisions of law to the contrary, in connection with the

2-8

issuance of refunding bonds benefiting any local community, any net interest savings resulting

2-9

from the refunding bonds issued by such community or a municipal public buildings authority for

2-10

the benefit of the community or by the Rhode Island health and educational building corporation

2-11

for the benefit of the community, in each case in support of school housing projects for the

2-12

community, shall be allocated between the community and the state of Rhode Island, by applying

2-13

the applicable school housing aid ratio at the time of issuance of the refunding bonds, calculated

2-14

pursuant to section 16-7-39, that would otherwise apply in connection with school housing

2-15

projects of the community; provided however, that for any refundings that occur between July 1,

2-16

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

2-17

savings and the state shall receive twenty percent (20%). In connection with any such refunding

2-18

of bonds, the finance director or the chief financial officer of the community shall certify such net

2-19

interest savings to the commissioner of elementary and secondary education. Notwithstanding

2-20

section 16-7-44 or any other provision of law to the contrary, school housing projects costs in

2-21

connection with any such refunding bond issue shall include bond issuance costs incurred by the

2-22

community, the municipal public buildings authority or the Rhode Island health and educational

2-23

building corporation, as the case may be, in connection therewith. In connection with any

2-24

refunding bond issue, school housing project costs shall include the cost of interest payments on

2-25

such refunding bonds, if the cost of interest payments was included as a school housing cost for

2-26

the bonds being refunded. A local community or municipal public buildings authority shall not be

2-27

entitled to the benefits of this subsection (d) unless the net present value savings resulting from

2-28

the refunding is at least three percent (3%) of the refunded bond issue.

2-29

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

2-30

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

2-31

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

2-32

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

2-33

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

2-34

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

3-1

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

3-2

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

3-3

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

3-4

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

3-5

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

3-6

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

3-7

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

3-8

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

3-9

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

3-10

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

3-11

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

3-12

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

3-13

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

3-14

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

3-15

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

3-16

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

3-17

such directive for the remaining term of the bond.

3-18

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

3-19

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

3-20

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

3-21

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

3-22

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

3-23

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

3-24

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

3-25

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

3-26

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

3-27

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

3-28

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

3-29

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

3-30

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

3-31

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

3-32

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

3-33

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

3-34

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

4-1

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

4-2

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

4-3

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

4-4

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

4-5

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

4-6

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

4-7

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

4-8

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

4-9

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

4-10

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

4-11

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

4-12

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

4-13

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

4-14

department of elementary and secondary education shall develop recommendations for further

4-15

cost containment strategies in the school housing aid program.

4-16

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

4-17

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

4-18

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

4-19

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

4-20

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

4-21

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

4-22

council(s). At or before this meeting:

4-23

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

4-24

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

4-25

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

4-26

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

4-27

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

4-28

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

4-29

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

4-30

operations; and

4-31

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

4-32

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

4-33

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

4-34

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

5-1

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

5-2

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

5-3

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

5-4

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

5-5

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

5-6

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

5-7

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

5-8

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

5-9

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

5-10

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

5-11

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

5-12

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

5-13

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

5-14

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

5-15

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

5-16

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

5-17

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

5-18

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

5-19

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

5-20

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

5-21

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

5-22

and management of the school committee.

5-23

      (c) Only a school budget in which total expenses are less than or equal to appropriations

5-24

and revenues shall be considered an adopted school budget.

5-25

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

5-26

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

5-27

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

5-28

excess of one hundred five and one-quarter percent (105.25%) of the total of municipal funds

5-29

appropriated by the city or town council for school purposes for fiscal year 2007;

5-30

      (ii) the budget adopted and presented by any school committee for the fiscal year 2009

5-31

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

5-32

excess of one hundred five percent (105%) of the total of municipal funds appropriated by the

5-33

city or town council for school purposes for fiscal year 2008;

6-34

      (iii) the budget adopted and presented by any school committee for the fiscal year 2010

6-35

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

6-36

excess of one hundred four and three-quarters percent (104.75%) of the total of municipal funds

6-37

appropriated by the city or town council for school purposes for fiscal year 2009;

6-38

      (iv) the budget adopted and presented by any school committee for the fiscal year 2011

6-39

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

6-40

excess of one hundred four and one-half percent (104.5%) of the total of municipal funds

6-41

appropriated by the city or town council for school purposes for fiscal year 2010;

6-42

      (v) the budget adopted and presented by any school committee for the fiscal year 2012

6-43

shall not propose the appropriation of municipal funds (exclusive of state and federal aid) in

6-44

excess of one hundred four and one-quarter percent (104.25%) of the total of municipal funds

6-45

appropriated by the city or town council for school purposes for fiscal year 2011; and

6-46

      (vi) the budget adopted and presented by any school committee for the fiscal year 2013

6-47

and for each fiscal year thereafter shall not propose the appropriation of municipal funds

6-48

(exclusive of state and federal aid) in excess of one hundred four percent (104%) of the total of

6-49

municipal funds appropriated by the city or town council for school purposes for fiscal year 2012

6-50

the previous fiscal year.

6-51

      (e) Notwithstanding any provision of the general or public laws to the contrary, any

6-52

judgment rendered pursuant to subsection 16-2-21.4(b) shall consider the percentage caps on

6-53

school district budgets set forth in subsection (d) of this section.

6-54

     SECTION 3. This article shall take effect upon passage.