2014 -- H 7291

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO EDUCATION - FOUNDATION LEVEL SCHOOL SUPPORT

     Introduced By: Representatives Keable, and Newberry

     Date Introduced: January 30, 2014

     Referred To: House Finance

     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. – (a) 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 -- 16-7-47; provided, however, that

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

     (b) Effective July 1, 2014, as to any municipality or local educational agency (LEA) that

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

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

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

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

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

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

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

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

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

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

or the bond.

     SECTION 2. 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 - FOUNDATION LEVEL SCHOOL SUPPORT

***

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

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

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

Island health and educational building corporation.

     This act would take effect upon passage.

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