It is enacted by the General Assembly as follows:

SECTION 1. Section 16-7-44 of the General Laws in Chapter 16-7 entitled 'Foundation Level School Support' is hereby amended to read as follows:

16-7-44. School housing project costs. -- School housing project costs, the date of completion of school housing projects, and the applicable amount of school housing project cost commitments shall be in accordance with the regulations of the commissioner of elementary and secondary education and the provisions of sections 16-7-35 to 16-7-47, inclusive; provided, however, that school housing project costs shall include the purchase of sites, buildings and equipment, the construction of buildings, additions or renovations of existing buildings and/or facilities. Commencing with fiscal year 1990-1991, school housing project costs shall include the cost of interest payment on any bond issued after July 1, 1988. The board of regents will promulgate rules and regulations for the administration of this section. {ADD These rules and regulations may provide for the use of lease revenue bonds, financial leases, capital reserve funding, and similar financial instruments to finance school housing provided that the net interest cost shall be less than what a general obligation bond would be, and further provided that the term of any bond, lease or similar instrument shall not be longer than the useful life of the project and such instruments are subject to the public review and voter approval otherwise required by law for the issuance of bonds, leases or similar instruments. Cities or towns issuing bonds, notes, leases or other evidences of indebtedness issued by municipal public buildings authority for the benefit of a local community pursuant to chapter 45-50 of the general laws shall not require voter approval. For purposes of this section and section 16-7-41, "bonds issued by a local community" shall include bonds, notes, leases, or other evidences of indebtedness issued by municipal public buildings authority for the benefit of a local community pursuant to chapter 45-50 of the general laws, provided, however, that such bonds, notes, leases or other evidences of indebtedness shall not be subject to the interest rate limitation of this section. ADD}

SECTION 2. This act shall take effect upon passage.