=======

art.009/3/009/2/009/1

=======

     ARTICLE 9 AS AMENDED

RELATING TO SCHOOL BUILDING AUTHORITY CAPITAL FUND

     SECTION 1. Sections 16-7-41.1 and 16-7-44 of the General Laws in Chapter 16-7

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

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

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

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

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

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

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

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

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

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

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

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

with any other profit or non-profit agency do not qualify for reimbursement under §§ 16-7-35 --

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

following fiscal year. A project for new school housing or additional housing shall be deemed to

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

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

      (b) Notwithstanding the provisions of this section, the board of regents shall not grant

final approval for any project between June 30, 2011 and May 1, 2015 except for projects that are

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

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

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

      (c) Any project approval granted prior to the adoption of the school construction

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

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

or which has not been previously financed, are no longer eligible for reimbursement under this

chapter. The department of elementary and secondary education shall develop recommendations

for further cost containment strategies in the school housing aid program.

     (d) Beginning July 1, 2015, the council on elementary and secondary education shall

approve new necessity of school construction applications on an annual basis. The department of

elementary and secondary education shall develop an annual application timeline for LEAs

seeking new necessity of school construction approvals.

     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 §§ 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, and Education Educational and

Building Corporation. 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 § 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, § 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, borrowing from the school building authority capital fund, 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.

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

by adding thereto the following chapter:

CHAPTER 105

SCHOOL BUILDING AUTHORITY

     16-105-1. Legislative findings. – (a) The state of Rhode Island is committed to providing

high quality educational opportunities for all public school students.

     (b) School facilities provide more than a place for instruction. The physical learning

environment contributes to the successful performance of educational programs designed to meet

students' educational needs.

     (c) Every student needs a safe, healthy, and sanitary learning environment that promotes

student learning and development.

     (d) School construction policies should encourage districts to reduce excess capacity

through means such as partnering with other districts, closing buildings, and altering grade

configurations in certain buildings to maximize the use of square feet.

     (e) In order to maximize limited state resources, the project prioritization process should

focus on projects with the most urgent and immediate need.

     (f) State funded school construction project financing should transition from a system that

largely reimburses local debt service to one that provides a set amount of financing annually, to

provide greater stability from a budgetary perspective while guiding limited resources to best use.

     16-105-2. School building authority established. -- The general assembly hereby

designates the department of elementary and secondary education as the state's school building

authority with the responsibility to implement a system of state funding for school facilities

designed to:

     (1) Promote adequate school housing for all public school children in the state, and

     (2) Prevent the cost of school housing from interfering with the effective operation of the

schools.

     16-105-3. Roles and responsibilities. -- The school building authority roles and

responsibilities shall include:

     (1) Management of a system with the goal of assuring equitable and adequate school

housing for all public school children in the state;

     (2) Prevention of the cost of school housing from interfering with the effective operation

of the schools;

     (3) Management of school housing aid in accordance with statute;

     (4) Reviewing and making recommendations to the council on elementary and secondary

education on necessity of school construction applications for state school housing aid and the

school building authority capital fund, based on the recommendations of the school building

authority advisory board;

     (5) Managing and maintaining school construction regulations, standards, and guidelines

applicable to the school housing program, based on the recommendations of the school building

authority advisory board, created in § 16-105-8;

     (6) Providing technical advice and assistance, training and education to cities, towns,

and/or LEAs and to general contractors, subcontractors, construction or project managers,

designers and others in planning, maintenance and establishment of school facility space;

     (7) Developing a project priority system, based on the recommendations of the school

building authority advisory board, in accordance with school construction regulations for the state

school housing aid set forth in §§ 16-7-35 to 16-7-47 and the school building authority capital

fund, subject to review and if necessary to be revised on intervals not to exceed five (5) years.

Project priorities shall be in accordance with, but not limited to, the following order of priorities:

     (i) Projects to replace or renovate a building which is structurally unsound or otherwise in

a condition seriously jeopardizing the health and safety of school children, where no alternative

exists;

     (ii) Projects needed to prevent loss of accreditation;

     (iii) Projects needed for the replacement, renovation or modernization of the HVAC

system in any schoolhouse to increase energy conservation and decrease energy related costs in

said schoolhouse;

     (iv) Projects needed to replace or add to obsolete buildings in order to provide for a full

range of programs consistent with state and approved local requirements; and

     (v) Projects needed to comply with mandatory instructional programs.

     (8) Maintaining a current list of requested school projects and the priority given them;

     (9) Collecting and maintaining readily available data on all the public school facilities in

the state;

     (10) Recommending policies and procedures designed to reduce borrowing for school

construction programs at both state and local levels;

     (11) At least every five (5) years, conducting a needs survey to ascertain the capital

construction, reconstruction, maintenance and other capital needs for schools in each district of

the state including public charter schools;

     (12) Developing a formal enrollment projection model or using projection models already

available;

     (13) Encouraging local education agencies to investigate opportunities for the maximum

utilization of space in and around the district;

     (14) Collecting and maintaining a clearinghouse of prototypical school plans which may

be consulted by eligible applicants;

     (15) By regulation, offering additional incentive points to the school housing aid ratio

calculation set forth in § 16-7-39, as the authority, based upon the recommendation of the

advisory board, determines will promote the purposes of this chapter. Said regulations may

delineate the type and amounts of any such incentive percentage points; provided, however, that

no individual category of incentive points shall exceed two (2) additional points; and provided

further, that no district shall receive a combined total of more than five (5) incentive percentage

points. Such incentive points may be awarded for a district's use of highly efficient construction

delivery methods; regionalization with other districts; superior maintenance practices of a district;

energy efficient and sustainable design and construction; the use of model schools as adopted by

the authority; and other incentives as recommended by the advisory board and determined by the

authority to encourage the most cost-effective and quality construction. Notwithstanding any

provision of the general laws to the contrary, the reimbursement or aid received under this chapter

or § 45-38.2 shall not exceed one hundred percent (100%) of the sum of the total project costs

plus interest costs.

     16-105-4. Funding mechanisms for school facilities. -- The school building authority,

within the department shall oversee and manage two distinct funding mechanisms for school

facilities: the foundation program for school housing, as set forth in §§ 16-7-35 to 16-7-47, and

the school building authority capital fund, as set forth in chapter 38.2 of title 45. The school

building authority shall determine the necessity of school construction, establish standards for

design and construction of school buildings, ensure that districts have adequate asset protection

plans in place to maintain their school facilities, make recommendations to the council on

elementary and secondary education for approval of projects for school housing aid

reimbursement and establish a project priority list for projects funded by the school building

authority capital fund and school housing aid set forth in §§ 16-7-35 to 16-7-47 that shall apply to

any projects submitted or reviewed on or after May 1, 2015.

     16-105-5. Procedure for school building authority capital fund project approval. –

(a) The department of elementary and secondary education shall promulgate rules and regulations

that establish the process through which a city, town, or LEA may submit an application for

school building authority capital funding. The department may also prescribe, without limitation,

forms for financial assistance applications. All rules and regulations promulgated pursuant to this

chapter shall be promulgated in accordance with the provisions of chapter 42-35, and shall apply

to any projects submitted or reviewed on or after May 1, 2015.

     (b) As part of the budget process, the governor shall specify the amount included in

his/her budget recommendation that the school building authority may commit to new projects in

the ensuing fiscal year, as well as any funding pursuant to § 16-105-7. Subsequently, the general

assembly shall authorize the maximum amount that the school building authority may commit to

new projects in the ensuing fiscal year.

     (c) Each LEA shall develop, implement, and maintain a comprehensive asset protection

plan for every school building, not only buildings for which housing aid or school building

authority capital funds are sought or received. Only LEAs that have adequate asset protection

plans in place to maintain their school facilities are eligible for funding from the school building

authority capital fund. LEAs must annually provide asset protection information to the

department of elementary and secondary education. If an LEA fails to provide asset protection

information in a fiscal year, they are not eligible to receive school building authority capital funds

the next fiscal year.

     (d) Upon issuance of the project priority list, the Rhode Island health and educational

building corporation shall award financial assistance to cities, towns, and LEAs for approved

projects. The corporation may decline to award financial assistance to an approved project which

the corporation determines will have a substantial adverse effect on the interests of holders of

bonds or other indebtedness of the corporation or the interests of other participants in the

financial assistance program, or for good and sufficient cause affecting the finances of the

corporation. All financial assistance shall be made pursuant to a loan or financing agreement

between the corporation and the city, town or LEA, acting by and through the officer or officers,

board, committee, or other body authorized by law, or otherwise its chief executive officer,

according to terms and conditions as determined by the corporation, and each loan shall be

evidenced and secured by the issue to the corporation of city or town obligations in principal

amount, bearing interest at the rate or rates specified in the applicable loan or financing

agreement, and shall otherwise bear such terms and conditions as authorized by this chapter

and/or the loan or financing agreement.

     16-105-6. Inspection of approved projects. -- For any approved project, the school

building authority shall have the authority to inspect the construction and operation thereof to

ensure compliance with the provisions of this chapter.

     16-105-7. Expenses incurred by the department. -- In order to provide for one-time or

limited expenses of the department of elementary and secondary education under this chapter, the

corporation shall provide funding from the school building authority capital fund. The school

building authority shall, by October 1 of each year, report to the governor and the chairs of the

senate and house finance committees, the senate fiscal advisor and the house fiscal advisor the

amount sought for expenses for the next fiscal year.

     16-105-8. School building authority advisory board established. -- (a) There is hereby

established a school building authority advisory board that shall advise the school building

authority regarding the best use of the school building authority capital fund, including the setting

of statewide priorities, criteria for project approval, and recommendations for project approval

and prioritization.

     (b) The school building authority advisory board shall consist of seven (7) members as

follows:

     (1) The general treasurer;

     (2) The director of the department of administration, who shall serve as chair;

     (3) A member of the governor's staff, as designated by the governor; and

     (4) Four (4) members of the public, appointed by the governor, and who serve at the

pleasure of the governor, each of whom shall have expertise in education and/or construction, real

estate, or finance. At least one of these four members shall represent a local education agency.

     (c) In addition to the purposes in subsection (a), the school building authority advisory

board shall advise the school building authority on, including but not limited to, the following:

     (1) The project priorities for the school building authority capital fund;

     (2) Legislation as it may deem desirable or necessary related to the school building

authority capital fund and the school housing aid program set forth in §§ 16-7-35 to 16-7-47;

     (3) Policies and procedures designed to reduce borrowing for school construction

programs at both state and local levels;

     (4) Development of a formal enrollment projection model or consideration of using

projection models already available;

     (5) Processes and procedures necessary to apply for, receive, administer, and comply

with the conditions and requirements respecting any grant, gift or appropriation of property,

services or moneys;

     (6) The collection and maintenance of a clearinghouse of prototypical school plans which

may be consulted by eligible applicants and recommend incentives to utilize these prototypes;

     (7) The determination of eligible cost components of projects for funding or

reimbursement, including partial or full eligibility for project components for which the benefit is

shared between the school and other municipal and community entities;

     (8) Development of a long term capital plan in accordance with needs and projected

funding;

     (9) Collection and maintenance of data on all the public school facilities in the state,

including information on size, usage, enrollment, available facility space and maintenance;

     (10) Advising districts on the conduct of a needs survey to ascertain the capital

construction, reconstruction, maintenance and other capital needs for schools across the state;

     (12) The recommendation of policies, rules and regulations that move the state toward a

pay-as-you-go funding system for school construction programs; and

     (13) Encouraging local education agencies to investigate opportunities for the maximum

utilization of space in and around the district.

     16-105-9. Severability. -- If any provision of this chapter or the application of this

chapter to any person or circumstances is held invalid, the invalidity shall not affect other

provisions or applications of the chapter, which can be given effect without the invalid provision

or application, and to this end the provisions of this chapter are declared to be severable.

     SECTION 3. Sections 45-38.1-4 and 45-38.1-17 of the General Laws in Chapter 45-38.1

entitled "Health and Educational Building Corporation" are hereby amended to read as follows:

     45-38.1-4. Corporation established. – (a) There is hereby created a public body

corporate and corporation of the state to be known as the "Rhode Island health and educational

building corporation" as successor to the Rhode Island educational building corporation,

previously created as a nonbusiness corporation under and pursuant to chapter 6 of title 7, as

amended by chapter 121 of the Public Laws of 1966, and constituted and established as a public

body corporate and corporation of the state for the exercising of the powers conferred on the

corporation under and pursuant to §§ 45-38.1-1 – 45-38.1-24.

     (b) All of the powers of the corporation are vested in the board of directors of the

corporation elected at the first meeting of the incorporators of the Rhode Island educational

building corporation, and the members of the board shall continue to serve for the duration of the

terms for which they were originally elected. Successors to the members of the board of directors

shall be appointed by the governor, as follows: prior to the month of June in each year,

commencing in the year 1968, the governor shall appoint a member to serve on the board of

directors for a term of five (5) years to succeed the member whose term will expire in June of that

year. In the event of a vacancy occurring in the membership of the board of directors, the

governor shall appoint a new member of the board of directors for the unexpired term. Any

member of the board of directors is eligible for reappointment.

      (c) Each member of the board of directors, before entering upon his or her duties, shall

take an oath to administer the duties of his or her office faithfully and impartially, and the oath

shall be filed in the office of the secretary of state.

      (d) The board of directors shall select two (2) of its members as chairperson and vice

chairperson, and also elect a secretary, assistant secretary, treasurer, and assistant treasurer, who

need not be members of the board. Three (3) members of the board of directors of the corporation

shall constitute a quorum, and the affirmative vote of the majority of the directors present and

entitled to vote at any regular or special meeting at which a quorum is present, is necessary for

any action to be taken by the corporation; except, however, that the affirmative vote of three (3)

members of the board of directors is necessary for the election of officers of the corporation and

to amend the bylaws of the corporation. No vacancy in the membership of the board of directors

of the corporation impairs the right of a quorum to exercise all the powers of and perform the

duties of the corporation.

     (e) Any action taken by the corporation under the provisions of this chapter may be

authorized by resolution at any regular or special meeting, and each resolution takes effect

immediately and need not be published or posted.

     (f) The members of the board of directors shall receive compensation at the rate of fifty

dollars ($50.00) per meeting attended; however, the compensation shall not exceed one thousand

five hundred dollars ($1,500) per fiscal year per member.

     (g) Notwithstanding any other law to the contrary, it shall not be or constitute a conflict

of interest for a trustee, director, officer, or employee of an institution for higher education or a

health care provider to serve as a member of the board of directors of the corporation; provided,

that the trustee, director, officer, or employee abstains from deliberation, action and vote by the

board under this chapter in specific respect to the institution for higher education or the health

care provider of which the member is a trustee, director, officer, or employee.

     (h) The board and corporation shall comply with provisions of chapter 155 of title 42, the

quasi-public corporations accountability and transparency act.

     45-38.1-17. Annual report and audit. -- Within four (4) months after the close of each

fiscal year of the corporation, it shall make a report to the governor, the speaker of the house, the

president of the senate and the secretary of state of its activities for the preceding fiscal year, and

the report shall present a complete operating and financial statement covering the corporation's

operations during the preceding fiscal year. In addition the report shall provide a summary of the

applications received and approved loans or aid provided to the communities and a summary of

the status of loans and status of the school building authority capital fund. The corporation shall

cause an audit of its books and accounts to be made at least once each fiscal year by certified

public accountants, and the cost of the audit shall be paid by the corporation from funds available

to it pursuant to this chapter. The report shall be posted as prescribed in § 42-20-8.2. The director

of the department of administration shall be responsible for the enforcement of this provision.

     SECTION 4. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

amended by adding thereto the following chapter:

CHAPTER 45-38.2

SCHOOL BUILDING AUTHORITY CAPITAL FUND

     45-38.2-1. Definitions. – As used in this chapter, the following terms, unless the context

requires a different interpretation, shall have the following meanings:

     (1) "Application" means a project proposed by a city, town, or LEA that would make

capital improvements to public school facilities consistent with project evaluation criteria and

chapter 41.1 of title 16-7;

     (2) "Approved project" means any project approved for financial assistance by the

Council on Elementary and Secondary Education;

     (3) "Corporation" means the Rhode Island health and educational building corporation as

set forth in chapter 38.1 of title 42;

     (4) "Department" means the department of elementary and secondary education as

established under title 16;

     (5) "Eligible project" means an application, or a portion of an application, that meets the

project evaluation criteria and approved by the council on elementary and secondary education;

     (6) "Financial assistance" means any form of financial assistance provided by the

corporation to a city, town, or LEA in accordance with this chapter for all or any part of the cost

of an approved project, including, without limitation, loans, guarantees, insurance, subsidies for

the payment of debt service on loans, lines of credit, and similar forms of financial assistance;

     (7) "Fund" means the school building authority capital fund;

     (8) "LEA" means a local education agency, a public board of education, school

committee or other public authority legally constituted within the state for administrative control

or direction of one or more Rhode Island public elementary or secondary schools;

     (9) "Market rate" means the rate the city, town, or LEA would receive on the open market

at the time of the original loan agreement as determined by the corporation in accordance with its

rules and regulations;

     (10) "Project evaluation criteria" means the criteria used by the school building authority

to evaluate applications and rank eligible projects;

     (11) "Project priority list" means the list of eligible projects approved by the council on

elementary and secondary education ranked in the order in which financial assistance shall be

awarded by the corporation; and

     (12) "Subsidy assistance" means the credit enhancements and other measures to reduce

the borrowing costs for a city, town, or LEA.

     45-38.2-2. School building authority capital fund. -- (a) There is hereby established a

school building authority capital fund. The corporation shall establish and set up on its books the

fund, to be held in trust and to be administered by the corporation as provided in this chapter.

This fund shall be in addition to the annual appropriation for committed expenses related to the

repayment of housing aid commitments. The corporation shall deposit the following monies into

the fund:

     (1) The difference between the annual housing aid appropriation and housing aid

commitment amounts appropriated or designated to the corporation by the state for the purposes

of the foundation program for school housing;

     (2) Loan repayments, bond refinance interest savings, and other payments received by the

corporation pursuant to loan or financing agreements with cities, towns, or LEAs executed in

accordance with this chapter;

     (3) Investment earnings on amounts credited to the fund;

     (4) Proceeds of bonds of the corporation issued in connection with this chapter to the

extent required by any trust agreement for such bonds;

     (5) Administrative fees levied by the corporation, with respect to financial assistance

rendered under this chapter and specified in § 45-38.2-3(a)(4), less operating expenses;

     (6) Other amounts required by provisions of this chapter or agreement, or any other law

or any trust agreement pertaining to bonds to be credited to the fund; and

     (7) Any other funds permitted by law which the corporation in its discretion shall

determine to credit thereto.

     (b) The corporation shall establish and maintain fiscal controls and accounting

procedures conforming to generally accepted government accounting standards sufficient to

ensure proper accounting for receipts in and disbursements from the school building authority

capital fund.

     (c) The school building authority shall establish and maintain internal controls to ensure

that LEAs are providing adequate asset protection plans, all LEAs have equal access and

opportunity to address facility improvements on a priority basis, and to ensure that funding from

the school building authority capital fund has the greatest impact on facility gaps in state priority

areas. The school building authority will also manage necessity of school construction approvals

in accordance with the funding levels set forth by the general assembly.

     45-38.2-3. Administration. -- (a) The corporation shall have all the powers necessary or

incidental to carry out and effectuate the purposes and provisions of this chapter including:

     (1) To receive and disburse such funds from the state as may be available for the purpose

of the fund subject to the provisions of this chapter;

     (2) To make and enter into binding commitments to provide financial assistance to cities,

towns and LEAs from amounts on deposit in the fund;

     (3) To enter into binding commitments to provide subsidy assistance for loans and city,

town, and LEA obligations from amounts on deposit in the fund;

     (4) To levy administrative fees on cities, towns, and LEAs as necessary to effectuate the

provisions of this chapter; provided the fees have been previously authorized by an agreement

between the corporation and the city, town, or LEA;

     (5) To engage the services of third-party vendors to provide professional services;

     (6) To establish one or more accounts within the fund; and

     (7) Such other authority as granted to the corporation under chapter 38.1 of title 45.

     (b) Subject to the provisions of this chapter, and to any agreements with the holders of

any bonds of the corporation or any trustee therefor, amounts held by the corporation for the

account of the fund shall be applied by the corporation, either by direct expenditure,

disbursement, or transfer to one or more other funds and accounts held by the corporation or a

trustee under a trust agreement or trust indenture entered into by the corporation with respect to

bonds or notes issued by the corporation under this chapter or by a holder of bonds or notes

issued by the corporation under this chapter, either alone or with other funds of the corporation, to

the following purposes:

     (1) To provide financial assistance to cities, towns and LEAs to finance costs of approved

projects, and to refinance the costs of the projects, subject to such terms and conditions, if any, as

are determined by the department and/or the corporation;

     (2) To fund reserves for bonds of the corporation and to purchase insurance and pay the

premiums therefor, and pay fees and expenses of letters or lines of credit and costs of

reimbursement to the issuers thereof for any payments made thereon or on any insurance, and to

otherwise provide security for, and a source of payment for obligations of the corporation, by

pledge, lien, assignment, or otherwise as provided in chapter 38.1 of title 45;

     (3) To pay or provide for subsidy assistance as determined by the school building

authority;

     (4) To provide a reserve for, or to otherwise secure, amounts payable by cities, towns,

and LEAs on loans and city, town, and LEA obligations outstanding in the event of default

thereof; amounts in any account in the fund may be applied to defaults on loans outstanding to the

city, town, or LEA for which the account was established and, on a parity basis with all other

accounts, to defaults on any loans or city, town, or LEA obligations outstanding; and

     (5) To provide a reserve for, or to otherwise secure, by pledge, lien, assignment, or

otherwise as provided in chapter 38.1 of title 45, any bonds or notes of the corporation issued

under this chapter.

     (c) The repayment obligations of the city, town, or LEA for loans shall be in accordance

with its eligibility for state aid for school housing as set forth in §§ 16-7-39, 16-77.1-5, and 105-

3(15).

      (d) In addition to other remedies of the corporation under any loan or financing

agreement or otherwise provided by law, the corporation may also recover from a city, town or

LEA, in an action in superior court, any amount due the corporation together with any other

actual damages the corporation shall have sustained from the failure or refusal of the city, town,

or LEA to make the payments or abide by the terms of the loan or financing agreement.

     45-38.2-4. Payment of state funds.-- (a) Subject to the provisions of subsection (b),

upon the written request of the corporation, the general treasurer shall pay to the corporation,

from time to time, from the proceeds of any bonds or notes issued by the state for the purposes of

this chapter or funds otherwise lawfully payable to the corporation for the purposes of this

chapter, such amounts as shall have been appropriated or lawfully designated for the fund. All

amounts so paid shall be credited to the fund in addition to any other amounts credited or

expected to be credited to the fund.

     (b) The corporation and the state may enter into, execute, and deliver one or more

agreements setting forth or otherwise determining the terms, conditions, and procedures for, and

the amount, time, and manner of payment of, all amounts available from the state to the

corporation under this section.

     (c) The corporation, per order of the School Building Authority, is authorized to grant a

district or municipality its state share of an approved project cost, pursuant to § 16-7-39 and 16-

77.1-5. Construction pay-as-you-go grants received from the school building authority capital

fund shall not be considered a form of indebtedness subject to the provisions of § 16-7-44.

     (d) Notwithstanding city charter provisions to the contrary, up to five hundred thousand

dollars ($500,000) may be loaned to a city or town for the LEA's share of total project costs

without the requirement of voter approval.

     (e) Notwithstanding any provision to the contrary, the term of any bond, capital lease or

other financing instrument shall not exceed the useful life of the project being financed.

     SECTION 5. This article shall take effect upon passage.