2021 -- S 0350

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LC000829

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX

RELIEF ACT

     Introduced By: Senators Pearson, DiPalma, Cano, Gallo, Murray, Seveney, and Rogers

     Date Introduced: February 25, 2021

     Referred To: Senate Education

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 16-7.2-3, 16-7.2-4, 16-7.2-5, 16-7.2-6 and 16-7.2-8 of the General

Laws in Chapter 16-7.2 entitled "The Education Equity and Property Tax Relief Act" are hereby

amended to read as follows:

     16-7.2-3. Permanent foundation education aid established.

     (a) Beginning in the 2012 fiscal year, the following foundation education-aid formula shall

take effect. The foundation education aid for each district shall be the sum of the core instruction

amount in subdivision (a)(1) and the amount to support high-need students in subdivision (a)(2),

which shall be multiplied by the district state-share ratio calculated pursuant to § 16-7.2-4 to

determine the foundation aid.

     (1) The core-instruction amount shall be an amount equal to a statewide, per-pupil core-

instruction amount as established by the department of elementary and secondary education,

derived from the average of northeast regional expenditure data for the states of Rhode Island,

Massachusetts, Connecticut, and New Hampshire from the National Center for Education Statistics

(NCES) that will adequately fund the student instructional needs as described in the basic education

program and multiplied by the district average daily membership as defined in § 16-7-22.

Expenditure data in the following categories: instruction and support services for students,

instruction, general administration, school administration, and other support services from the

National Public Education Financial Survey, as published by NCES, and enrollment data from the

Common Core of Data, also published by NCES, will be used when determining the core-

instruction amount. The core-instruction amount will be updated annually. For the purpose of

calculating this formula, school districts' resident average daily membership shall exclude charter

school and state-operated school students.

     (2) The amount to support high-need students beyond the core-instruction amount shall be

determined by multiplying a student success factor of forty percent (40%) by the core instruction

per-pupil amount described in subdivision (a)(1) and applying that amount for each resident child

either: whose

     (i) Whose family income is at or below one hundred eighty-five percent (185%) of federal

poverty guidelines,; or hereinafter referred to as "poverty status."

     (ii) Identified as an English language learner, as defined in the Rhode Island department of

elementary and secondary education (department) regulations.

     (b) The department of elementary and secondary education shall provide the following as

part of its budget submission pursuant to § 35-3-4;

     (1) An an estimate of the foundation education aid cost as part of its budget submission

pursuant to § 35-3-4. The estimate shall include the most recent data available as well as an

adjustment for average daily membership growth or decline based on the prior year experience.;

and

     (2) The amount of the state and local share of education funding calculated for each local

education agency (LEA) receiving state education aid in the budget. This information shall also be

provided to each LEA and published on the department’s website.

     (c) In addition, the department shall report updated figures based on the average daily

membership as of October 1 by December 1. The general assembly shall hereby establish an

education aid fund to be administered by the department of education for the purposes of addressing

increases in LEA enrollment of at least twenty-five (25) students that is realized on the October 1

data update, but was not included in the enacted budget; provided however, that if the general

assembly’s appropriation to this fund is not sufficient to compensate for all increases in enrollment

described in this subsection, the disbursements shall be prorated to LEAs.

     (d) Cities and towns shall be required to appropriate sufficient funds to meet their local

share of education funding, calculated pursuant to subsection (b)(2) of this section, by FY 2023, or

by the timeline contained in the education funding plan that is approved by the director of revenue,

whichever is later. If a municipality will not be able to appropriate such funds, the chief executive

of the city or town shall notify the department and director of revenue (director) by November 1 of

the preceding fiscal year. The chief executive, in consultation with the department and the director,

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shall develop an education-funding plan for the municipality to meet its local share within five (5)

years. The plan shall be approved by the director. In extraordinary circumstances, the director may

approve a period greater than five (5) years, provided that the director notifies the governor,

president of the senate, and speaker of the house of the extraordinary circumstances that prevent

the municipality from meeting their local share within a five (5) year period.

     (d)(e) Local education agencies may set aside a portion of funds received under subsection

(a) to expand learning opportunities such as after school and summer programs, full-day

kindergarten and/or multiple pathway programs, provided that the basic education program and all

other approved programs required in law are funded.

     (e)(f) The department of elementary and secondary education shall promulgate such

regulations as are necessary to implement fully the purposes of this chapter.

     (g) The department shall review the student success factor of forty percent (40%) provided

in subsection (a)(2) of this section to determine whether that weight ensures local education

agencies receive the funding necessary to meet students’ instructional needs. The department shall

complete its review and report its findings to the governor, the president of the senate, and the

speaker of the house by October 1, 2021.

     16-7.2-4. Determination of state's share.

     (a) For each district, the state's share of the foundation education aid calculated pursuant

to § 16-7.2-3(a) shall use a calculation that considers a district's revenue-generating capacity and

concentration of high-need students. The calculation is the square root of the sum of the state-share

ratio for the community calculation, pursuant to § 16-7-20, squared plus the district's percentage of

students in grades PK-6 in poverty status squared, divided by two.

     (b) For purposes of determining the state's share, school district student data used in this

calculation shall include charter school and state school students. These ratios are used in the

permanent foundation education aid formula calculation described in § 16-7.2-5.

     (c) In any given fiscal year, the total education aid paid to a local education agency,

including distributed categorical funds, may not be reduced by more than one percent (1%) of the

municipal education appropriation to the local education agency in the previous fiscal year.

     16-7.2-5. Charter public schools, the William M. Davies, Jr. Career and Technical

High School, and the Metropolitan Regional Career and Technical Center.

     (a) Charter public schools, as defined in chapter 77 of this title, the William M. Davies, Jr.

Career and Technical High School (Davies), and the Metropolitan Regional Career and Technical

Center (the Met Center) shall be funded pursuant to § 16-7.2-3. If the October 1 actual enrollment

data for any charter public school shows a ten percent (10%) or greater change from the prior year

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enrollment which is used as the reference year average daily membership, the last six (6) monthly

payments to the charter public school will be adjusted to reflect actual enrollment. The state share

of the permanent foundation education aid shall be paid by the state directly to the charter public

schools, Davies, and the Met Center pursuant to § 16-7.2-9 and shall be calculated using the state-

share ratio of the district of residence of the student as set forth in § 16-7.2-4. The department of

elementary and secondary education shall provide the general assembly with the calculation of the

state share of permanent foundation education aid for charter public schools delineated by school

district.

     (b) The local share of education funding shall be paid to the charter public school, Davies,

and the Met Center by the district of residence of the student and shall be the local, per-pupil cost

calculated by dividing the local appropriation to education from property taxes, net of debt service,

and capital projects, as defined in the uniform chart of accounts by the average daily membership

for each city and town, pursuant to § 16-7-22, for the reference year.

     (c) Beginning with new enrollments for the 2022-2023 academic year, the local share of

education funding shall be paid to charter public schools based upon a comparison of performance

data between the specific school from which the student is coming and the specific charter school

that will be receiving the student. For purposes of this subsection, performance shall be defined

pursuant to § 16-97.1-1.

     (1) If the receiving charter school has outperformed the student’s specific school in each

of the prior two (2) academic years, the local share of education funding paid to the receiving

charter school shall be one hundred percent (100%) of the local, per-pupil cost described in

subsection (b) of this section.

     (2) If the student’s specific school has outperformed the receiving charter in each of the

prior two (2) academic years, the local share of education funding paid to the receiving charter

school shall be fifty percent (50%) of the local, per-pupil cost described in subsection (b) of this

section.

     (3) In any fiscal year, no school district's total charter school expenses, defined as the sum

of tuition and state education aid paid to charter schools for students from that district, shall exceed

nine percent (9%) of the district's adopted budget; however, if the council on elementary and

secondary education determines that the school district is in the lowest ten percent (10%) of all

statewide student performance scores released in each of the two (2) consecutive academic years

prior to the date the student submits the charter school application, the school district's total charter

school expense may exceed nine percent (9%) of the district’s adopted budget, provided that it shall

not exceed eighteen percent (18%); provided further, if, in FY 2022, any district’s total charter

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school expenses exceed the nine percent (9%) or eighteen percent (18%) caps prescribed in this

subsection, no new enrollments shall be allowed from that district to charter schools until the

district’s charter school expenses are in compliance with the caps in this subsection.

     (c)(d) Beginning in FY 2017, there shall be a reduction to the local per pupil funding paid

by the district of residence to charter public schools, Davies, and the Met Center. This reduction

shall be equal to the greater (i) Of seven percent (7%) of the local, per-pupil funding of the district

of residence pursuant to subsection (b) or (ii) The per-pupil value of the district's costs for non-

public textbooks, transportation for non-public students, retiree health benefits, out-of-district

special-education tuition and transportation, services for students age eighteen (18) to twenty-one

(21) years old, pre-school screening and intervention, and career and technical education, tuition

and transportation costs, debt service and rental costs minus the average expenses incurred by

charter schools for those same categories of expenses as reported in the uniform chart of accounts

for the prior preceding fiscal year pursuant to § 16-7-16(11) and verified by the department of

elementary and secondary education. In the case where audited financials result in a change in the

calculation after the first tuition payment is made, the remaining payments shall be based on the

most recent audited data. For those districts whose greater reduction occurs under the calculation

of (ii), there shall be an additional reduction to payments to mayoral academies with teachers who

do not participate in the state teacher's retirement system under chapter 8 of title 36 equal to the

per-pupil value of teacher retirement costs attributable to unfunded liability as calculated by the

state's actuary for the prior preceding fiscal year.

     (d)(e) Local district payments to charter public schools, Davies, and the Met Center for

each district's students enrolled in these schools shall be made on a quarterly basis in July, October,

January, and April; however, the first local-district payment shall be made by August 15, instead

of July. Failure of the community to make the local-district payment for its student(s) enrolled in a

charter public school, Davies, and/or the Met Center may result in the withholding of state

education aid pursuant to § 16-7-31.

     (e) Beginning in FY 2017, school districts with charter public school, Davies, and the Met

Center enrollment, that, combined, comprise five percent (5%) or more of the average daily

membership as defined in § 16-7-22, shall receive additional aid for a period of three (3) years. Aid

in FY 2017 shall be equal to the number of charter public school, open-enrollment schools, Davies,

or the Met Center students as of the reference year as defined in § 16-7-16 times a per-pupil amount

of one hundred seventy-five dollars ($175). Aid in FY 2018 shall be equal to the number of charter

public school, open-enrollment schools, Davies, or the Met Center students as of the reference year

as defined in § 16-7-16 times a per-pupil amount of one hundred dollars ($100). Aid in FY 2019

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shall be equal to the number of charter public school, open-enrollment schools, Davies, or the Met

Center students as of the reference year as defined in § 16-7-16 times a per-pupil amount of fifty

dollars ($50.00). The additional aid shall be used to offset the adjusted fixed costs retained by the

districts of residence.

     16-7.2-6. Categorical programs, state funded expenses.

     In addition to the foundation education aid provided pursuant to § 16-7.2-3, the permanent

foundation education-aid program shall provide direct state funding for:

     (a) Excess costs associated with special education students. Excess costs are defined when

an individual special education student's cost shall be deemed to be "extraordinary." Extraordinary

costs are those educational costs that exceed the state-approved threshold based on an amount

above five times the core foundation amount (total of core-instruction amount plus student success

amount). The department of elementary and secondary education shall prorate the funds available

for distribution among those eligible school districts if the total approved costs for which school

districts are seeking reimbursement exceed the amount of funding appropriated in any fiscal year;

and the department of elementary and secondary education shall also collect data on those

educational costs that exceed the state-approved threshold based on an amount above two (2), three

(3), and four (4) times the core-foundation amount;

     (b) Career and technical education costs to help meet initial investment requirements

needed to transform existing, or create new, comprehensive, career and technical education

programs and career pathways in critical and emerging industries and to help offset the higher-

than-average costs associated with facilities, equipment maintenance and repair, and supplies

necessary for maintaining the quality of highly specialized programs that are a priority for the state.

The department shall develop criteria for the purpose of allocating any and all career and technical

education funds as may be determined by the general assembly on an annual basis. The department

of elementary and secondary education shall prorate the funds available for distribution among

those eligible school districts if the total approved costs for which school districts are seeking

reimbursement exceed the amount of funding available in any fiscal year;

     (c) Programs to increase access to voluntary, free, high-quality pre-kindergarten programs.

The department shall recommend criteria for the purpose of allocating any and all early childhood

program funds as may be determined by the general assembly;

     (d) Central Falls, Davies, and the Met Center Stabilization Fund is established to ensure

that appropriate funding is available to support their students. Additional support for Central Falls

is needed due to concerns regarding the city's capacity to meet the local share of education costs.

This fund requires that education aid calculated pursuant to § 16-7.2-3 and funding for costs outside

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the permanent foundation education-aid formula, including, but not limited to, transportation,

facility maintenance, and retiree health benefits shall be shared between the state and the city of

Central Falls. The fund shall be annually reviewed to determine the amount of the state and city

appropriation. The state's share of this fund may be supported through a reallocation of current state

appropriations to the Central Falls school district. At the end of the transition period defined in §

16-7.2-7, the municipality will continue its contribution pursuant to § 16-7-24. Additional support

for the Davies and the Met Center is needed due to the costs associated with running a stand-alone

high school offering both academic and career and technical coursework. The department shall

recommend criteria for the purpose of allocating any and all stabilization funds as may be

determined by the general assembly;

     (e) Excess costs associated with transporting students to out-of-district non-public schools.

This fund will provide state funding for the costs associated with transporting students to out-of-

district non-public schools, pursuant to chapter 21.1 of this title. The state will assume the costs of

non-public out-of-district transportation for those districts participating in the statewide system.

The department of elementary and secondary education shall prorate the funds available for

distribution among those eligible school districts if the total approved costs for which school

districts are seeking reimbursement exceed the amount of funding available in any fiscal year;

     (f) Excess costs associated with transporting students within regional school districts. This

fund will provide direct state funding for the excess costs associated with transporting students

within regional school districts, established pursuant to chapter 3 of this title. This fund requires

that the state and regional school district share equally the student transportation costs net any

federal sources of revenue for these expenditures. The department of elementary and secondary

education shall prorate the funds available for distribution among those eligible school districts if

the total approved costs for which school districts are seeking reimbursement exceed the amount

of funding available in any fiscal year;

     (g) Public school districts that are regionalized shall be eligible for a regionalization bonus

as set forth below:

     (1) As used herein, the term "regionalized" shall be deemed to refer to a regional school

district established under the provisions of chapter 3 of this title, including the Chariho Regional

School district;

     (2) For those districts that are regionalized as of July 1, 2010, the regionalization bonus

shall commence in FY 2012. For those districts that regionalize after July 1, 2010, the

regionalization bonus shall commence in the first fiscal year following the establishment of a

regionalized school district as set forth in chapter 3 of this title, including the Chariho Regional

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School District;

     (3) The regionalization bonus in the first fiscal year shall be two percent (2.0%) of the

state's share of the foundation education aid for the regionalized district as calculated pursuant to

§§ 16-7.2-3 and 16-7.2-4 in that fiscal year;

     (4) The regionalization bonus in the second fiscal year shall be one percent (1.0%) of the

state's share of the foundation education aid for the regionalized district as calculated pursuant to

§§ 16-7.2-3 and 16-7.2-4 in that fiscal year;

     (5) The regionalization bonus shall cease in the third fiscal year;

     (6) The regionalization bonus for the Chariho regional school district shall be applied to

the state share of the permanent foundation education aid for the member towns; and

     (7) The department of elementary and secondary education shall prorate the funds available

for distribution among those eligible regionalized school districts if the total, approved costs for

which regionalized school districts are seeking a regionalization bonus exceed the amount of

funding appropriated in any fiscal year;

     (h) Additional state support for English learners (EL). The amount to support EL students

shall be determined by multiplying an EL factor of ten percent (10%) by the core-instruction per-

pupil amount defined in § 16-7.2-3(a)(1) and applying that amount of additional state support to

EL students identified using widely adopted, independent standards and assessments identified by

the commissioner. All categorical funds distributed pursuant to this subsection must be used to

provide high-quality, research-based services to EL students and managed in accordance with

requirements set forth by the commissioner of elementary and secondary education. The

department of elementary and secondary education shall collect performance reports from districts

and approve the use of funds prior to expenditure. The department of elementary and secondary

education shall ensure the funds are aligned to activities that are innovative and expansive and not

utilized for activities the district is currently funding. The department of elementary and secondary

education shall prorate the funds available for distribution among eligible recipients if the total

calculated costs exceed the amount of funding available in any fiscal year;

     (i) State support for school resource officers. For purposes of this subsection, a school

resource officer (SRO) shall be defined as a career law enforcement officer with sworn authority

who is deployed by an employing police department or agency in a community-oriented policing

assignment to work in collaboration with one or more schools. School resource officers should have

completed at least forty (40) hours of specialized training in school policing, administered by an

accredited agency, before being assigned. Beginning in FY 2019, for a period of three (3) years,

school districts or municipalities that choose to employ school resource officers shall receive direct

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state support for costs associated with employing such officers at public middle and high schools.

Districts or municipalities shall be reimbursed an amount equal to one-half (1/2) of the cost of

salaries and benefits for the qualifying positions. Funding will be provided for school resource

officer positions established on or after July 1, 2018, provided that:

     (1) Each school resource officer shall be assigned to one school:

     (i) Schools with enrollments below one thousand twelve hundred (1,200) students shall

require one school resource officer;

     (ii) Schools with enrollments of one thousand twelve hundred (1,200) or more students

shall require two school resource officers;

     (2) School resource officers hired in excess of the requirement noted above shall not be

eligible for reimbursement; and

     (3) Schools that eliminate existing school resource officer positions and create new

positions under this provision shall not be eligible for reimbursement. ; and

     (j) Categorical programs defined in subsections (a) through (g) shall be funded pursuant to

the transition plan in § 16-7.2-7.

     16-7.2-8. Accountability.

     (a) Pursuant to §§ 16-7.1-3 and 16-7.1-5, the department of elementary and secondary

education (department) shall use the uniform chart of accounts to maintain fiscal accountability for

education expenditures that comply with applicable laws and regulations, including but not limited

to the basic education program. This data shall be used to develop criteria, and priorities, and

benchmarks specific to each local education agency (LEA) to improve for cost controls,

efficiencies, and program effectiveness. The department of elementary and secondary education

shall present this the LEA-specific information in the form of an annual report to the LEA to which

it applies and provide a summary of all LEA reports to the governor and the general assembly,

annually, beginning on August 1, 2022.

     (b) The department of elementary and secondary education shall establish and/or

implement program programs standards to be used in the oversight of the use of foundation aid

calculated pursuant to § 16-7.2-3. The department shall propose an incentive fund structure to the

general assembly by December 1, 2022 that provides for the state to share in an LEA’s non-core

costs provided that the LEA meets benchmarks developed by the department pursuant to subsection

(a) of this section. Such oversight Oversight will be carried out for all LEA's including those

receiving in accordance with the progressive support and intervention protocols established in

chapter 7.1 of this title.

     SECTION 2. Title 16 of the General Laws entitled "EDUCATION" is hereby amended by

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adding thereto the following chapter:

CHAPTER 22.3

THE BASIC EDUCATION PROGRAM

     16-22.3-1. Definitions.

     For the purposes of this chapter:

     (1) The “basic education program” means a set of regulations promulgated by the council

on elementary and secondary education that establishes minimum standards for the Rhode Island

public education system.

     (2) The "council" means the council on elementary and secondary education.

     (3) The "department" means the department of elementary and secondary education.

     16-22.3-2. Elements of the basic education program.

     (a) The basic education program (BEP) shall include, but is not limited to, the following:

     (1) A standard for students who are English language learners;

     (2) The requirements set forth in §§ 16-22-17 and 16-22-24; and

     (3) Any other requirements set forth in the Rhode Island general laws.

     (b) By October 1, 2021, and by October 1 in all even-numbered years thereafter, the

department shall review the BEP and identify areas to update, if appropriate. Updates to the BEP

shall be proposed to the council by no later than November 1 of a review year, and the council shall

vote on the adoption of the updates by December 1 of a review year.

     (c) By October 1, 2021, and by October 1 in all even-numbered years thereafter, the

department shall complete a fiscal analysis that identifies the expected costs associated with the

requirements of the BEP. The department shall provide the fiscal analysis to the council by no later

than November 1 of a review year.

     SECTION 3. Section 45-13-14 of the General Laws in Chapter 45-13 entitled "State Aid"

is hereby amended to read as follows:

     45-13-14. Adjustments to tax levy, assessed value, and full value when computing state

aid.

     (a) Whenever the director of revenue computes the relative wealth of municipalities for the

purpose of distributing state aid in accordance with title 16 and the provisions of § 45-13-12, he or

she shall base it on the full value of all property except:

     (1) That exempted from taxation by acts of the general assembly and reimbursed under §

45-13-5.1 of the general laws, which shall have its value calculated as if the payment in lieu of tax

revenues received pursuant to § 45-13-5.1, has resulted from a tax levy;

     (2) That whose tax levy or assessed value is based on a tax treaty agreement authorized by

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a special public law or by reason of agreements between a municipality and the economic

development corporation in accordance with § 42-64-20 prior to May 15, 2005, which shall not

have its value included;

     (3) That whose tax levy or assessed value is based on tax treaty agreements or tax

stabilization agreements in force prior to May 15, 2005, which shall not have its value included;

     (4) That which is subject to a payment in lieu of tax agreement in force prior to May 15,

2005;

     (5) Any other property exempt from taxation under state law; or

     (6) Any property subject to chapter 27 of title 44, taxation of Farm, Forest, and Open Space

Land.

     (b) The tax levy of each municipality and fire district shall be adjusted for any real estate

and personal property exempt from taxation by act of the general assembly by the amount of

payment in lieu of property tax revenue anticipated to be received pursuant to § 45-13-5.1 relating

to property tax from certain exempt private and state properties, and for any property subject to any

payment in lieu of tax agreements, any tax treaty agreements or tax stabilization agreements in

force after May 15, 2005, by the amount of the payment in lieu of taxes pursuant to such

agreements.

     (c) Fire district tax levies within a city or town shall be included as part of the total levy

attributable to that city or town.

     (d) The changes as required by subsections (a) through (c) of this section shall be

incorporated into the computation of entitlements effective for distribution in fiscal year 2007-2008

and thereafter.

     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO EDUCATION -- THE EDUCATION EQUITY AND PROPERTY TAX

RELIEF ACT

***

     This act would modify the amount of education aid determined for each school district with

respect to high-need students.

     This act would take effect upon passage.

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