2013 -- S 0605

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LC01740

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO EDUCATION - FOUNDATION LEVEL SCHOOL SUPPORT

     Introduced By: Senator P Fogarty

     Date Introduced: March 06, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 16-7-44 of the General Laws in Chapter 16-7 entitled "Foundation

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Level School Support" is hereby amended to read as follows:

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     16-7-44. School housing project costs. – (a) School housing project costs, the date of

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completion of school housing projects, and the applicable amount of school housing project cost

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commitments shall be in accordance with the regulations of the commissioner of elementary and

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secondary education and the provisions of sections 16-7-35 -- 16-7-47; provided, however, that

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school housing project costs shall include the purchase of sites, buildings, and equipment, the

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construction of buildings, and additions or renovations of existing buildings and/or facilities.

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School housing project costs shall include the cost of interest payment on any bond issued after

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July 1, 1988, provided that such bond is approved by the voters on or before June 30, 2003 or

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issued by a municipal public building authority or by the appropriate approving authority on or

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before June 30, 2003. Except as provided in subsection 16-7-41(d), those projects approved after

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June 30, 2003, interest payments may only be included in project costs provided that the bonds

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for these projects are issued through the Rhode Island Health, Education and Building

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Corporation, except as provided for in subsection (b) herein. School housing project costs shall

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exclude: (1) any bond issuance costs incurred by the municipality or regional school district; (2)

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demolition costs for buildings, facilities, or sites deemed surplus by the school committee; and (3)

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restrictions pursuant to section 16-7-44.1 below. A building, facility, or site is declared surplus by

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a school committee when the committee no longer has such building, facility, or site under its

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direct care and control and transfers control to the municipality, section 16-2-15. The board of

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regents for elementary and secondary education will promulgate rules and regulations for the

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administration of this section. These rules and regulations may provide for the use of lease

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revenue bonds, capital leases, or capital reserve funding, to finance school housing provided that

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the term of any bond, or capital lease shall not be longer than the useful life of the project and

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these instruments are subject to the public review and voter approval otherwise required by law

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for the issuance of bonds or capital leases. Cities or towns issuing bonds, or leases issued by

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municipal public buildings authority for the benefit of a local community pursuant to chapter 50

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of title 45 shall not require voter approval. Effective January 1, 2008, and except for interim

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finance mechanisms, refunding bonds, and bonds issued by the Rhode Island Health and

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Educational Building Corporation to finance school housing projects for towns, cities, or regional

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school districts borrowing for which has previously been authorized by an enabling act of the

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general assembly, all bonds, notes and other forms of indebtedness issued in support of school

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housing projects shall require passage of an enabling act by the general assembly.

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     (b) Effective July 1, 2013, as to any municipality or local educational agency (LEA) that

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is rated A or better with any of the primary rating agencies, said municipality or LEA shall be

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able to elect to pursue issuing and selling their bonds on the open market, without approval from

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the general assembly and without having said bonds issued by the Rhode Island health and

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educational building corporation. So long as said municipalities or LEAs maintain said A rating

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or better, said communities shall remain eligible for the bond’s interest reimbursement from the

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state and for any other state reimbursement provided for school housing costs. For any regional

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school districts, all communities comprising the district shall need to maintain said A rating or

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better in order continue to receive these reimbursements. In the event the community is eligible

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to issue bonds pursuant to this subsection (b) but subsequently loses its A rating or better, then

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such community shall no longer be eligible for any state reimbursement pursuant to this section

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or the bond.

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     SECTION 2. This act shall take effect upon passage.

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LC01740

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO EDUCATION - FOUNDATION LEVEL SCHOOL SUPPORT

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     This act would provide that if a municipality or LEA has an A rating or better with any of

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the primary rating agencies, the municipality or LEA will be able to issue and sell their bonds on

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the open market, without the need for general assembly approval or to go through the Rhode

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Island health and educational building corporation.

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     This act would take effect upon passage.

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LC01740

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