2018 -- S 2855

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LC005486

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

____________

A N   A C T

     RELATING TO EDUCATION - SCHOOL CONSTRUCTION AND FUNDING

     Introduced By: Senators Gallo, Pearson, Cano, Ruggerio, and Goodwin

     Date Introduced: May 03, 2018

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 16-7-36, 16-7-39, 16-7-40, 16-7-41, 16-7-41.1, and 16-7-44 of the

General Laws in Chapter 16-7 entitled "Foundation Level School Support [See Title 16 Chapter

97 – The Rhode Island Board of Education Act]" are hereby amended to read as follows:

     16-7-36. Definitions. 

     The following words and phrases used in §§ 16-7-35 to 16-7-47 have the following

meanings:

     (1) "Adjusted equalized weighted assessed valuation" means the equalized weighted

assessed valuation for a community as determined by the division of property valuation within the

department of revenue in accordance with § 16-7-21; provided, however, that in the case of a

regional school district the commissioner of elementary and secondary education shall apportion

the adjusted equalized weighted assessed valuation of the member cities or towns among the

regional school district and the member cities or towns according to the proportion that the

number of pupils of the regional school district bears to the number of pupils of the member cities

or towns.

     (2) "Approved project" means a project which has complied with the administrative

regulations governing §§ 16-7-35 through 16-7-47, and which has been authorized to receive state

school housing reimbursement by the commissioner of elementary and secondary education.

     (3) "Commissioning agent" means a person or entity who ensures the proper installation

and operation of technical building systems.

     (3)(4) "Community" means any city, town, or regional school district established

pursuant to law; provided, however, that the member towns of the Chariho regional high school

district, created by P.L. 1958, ch. 55, as amended, shall constitute separate and individual

communities for the purposes of distributing the foundation level school support for school

housing for all grades financed in whole or in part by the towns irrespective of any

regionalization.

     (5) "Facilities condition index" means the cost to fully repair the building divided by the

cost to replace the building as defined by the school building authority.

     (6) "Functional utilization" means the ratio of the student population within a school

facility to the capacity of the school facility to adequately serve students, as defined by the school

building authority.

     (7) "Owner's program manager" means owner's program manager as defined in § 37-2-

7(32).

     (8) "Prime contractor" means the contractor who is responsible for the completion of a

project.

     (4)(9) "Reference year" means the year next prior to the school year immediately

preceding that in which aid is to be paid. 

     (10) "Subject to inflation" means the base rate multiplied by the percentage of increase in

the Producer Price Index (PPI) Data for Nonresidential Building Construction (NAICS 236222)

as published by the United States Department of Labor, Bureau of Labor Statistics determined as

of September 30 of the prior calendar year.

     16-7-39 Computation of school housing aid ratio. 

     For each community, the percent of state aid for school housing costs shall be computed

in the following manner:

     (1) The adjusted equalized weighted assessed valuation for the district is divided by the

resident average daily membership for the district (grades twelve (12) and below); (2) the

adjusted equalized weighted assessed valuation for the state is divided by the resident average

daily membership for the state (grades twelve (12) and below); (1) is then divided by (2) and the

resultant ratio is multiplied by a factor currently set at sixty-two percent (62%) which represents

the approximate average district share of school support; the resulting product is then subtracted

from one hundred percent (100%) to yield the housing aid share ratio. provided that in no case

shall the ratio be less than thirty percent (30%). Provided, that effective July 1, 2010, and

annually at the start of each fiscal year thereafter, the thirty percent (30%) floor on said housing

aid share shall be increased by five percent (5%) increments each year until said floor on the

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housing aid share ratio reaches a minimum of not less than forty percent (40%). This provision

shall apply only to school housing projects completed after June 30, 2010 that received approval

from the board of regents prior to June 30, 2012. Provided further, for the fiscal year beginning

July 1, 2012 and for subsequent fiscal years, the minimum housing aid share shall be thirty-five

percent (35%) for all projects receiving board of regents approval after June 30, 2012.

Notwithstanding any other law to the contrary, for the fiscal year beginning July 1, 2012 and for

subsequent fiscal years, the minimum housing aid share for all local education agency (LEA)

public school construction projects receiving council of elementary and secondary education

approval, the minimum housing aid share shall be thirty-five percent (35%) and in no case shall

the ratio be less than thirty-five percent (35%). The resident average daily membership shall be

determined in accordance with § 16-7-22(1). 

     16-7-40. Increased school housing ratio for regional schools -- Energy conservation -

- Access for people with disabilities -- Asbestos removal projects. Increased school housing

ratio – Energy conservation – Access for people with disabilities – Health and safety –

Remediation – Technology enabled – Space utilization.

     (a)(1) In the case of regional school districts, the school housing aid ratio shall be

increased by two percent (2%) for each grade so consolidated.

     (2) Regional school districts undertaking renovation project(s) shall receive an increased

share ratio of four percent (4%) for those specific project(s) only, in addition to the combined

share ratio calculated in § 16-7-39 and this subsection.

     (b) In the case of projects undertaken by regionalized and/or non-regionalized school

districts:

     (1) specifically f For the purposes of energy conservation, access for people with

disabilities, and/or asbestos removal, the school housing aid share ratio shall be increased by four

percent (4%) for these specific projects only, in the calculation of school housing aid. The

increased share ratio shall continue to be applied for as log long as the project(s) receive state

housing aid. In order to qualify for the increased share ratio, seventy-five percent (75%) of the

project costs must be specifically directed to either energy conservation, access for people with

disabilities, and/or asbestos removal or any combination of these projects. The board of regents

for council on elementary and secondary education shall promulgate rules and regulations for the

administration and operation of this section.

     (2) For purposes of addressing health and safety deficiencies as defined by the school

building authority, including the remediation of hazardous materials, the school housing aid ratio

shall be increased by five percent (5%) so long as the construction of the project commences by

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December 30, 2022. In order to qualify for the increased share ratio, twenty-five percent (25%) of

the project costs or a minimum of two hundred fifty thousand dollars ($250,000) must be

specifically directed to this purpose.

     (3) For purposes of educational enhancement, including projects devoted to the

enhancement of teaching science, technology, engineering, arts, and math (STEAM), early

childhood education, career and technical education and technology enabled facilities, the school

housing aid ratio shall be increased by five percent (5%) so long as construction of the project

commences by December 30, 2022. In order to qualify for the increased share ratio, twenty-five

percent (25%) of the project costs or a minimum of two hundred fifty thousand dollars ($250,000)

must be specifically directed to this purpose.

     (4) For replacement of a facility that has a facilities condition index of sixty-five percent

(65%) or higher, the school housing ratio shall be increased by five percent (5%) so long as

construction of the project commences by December 30, 2023. In order to qualify for the

increased share ratio, twenty-five percent (25%) of the project costs or a minimum of two

hundred fifty thousand dollars ($250,000) must be specifically directed to this purpose.

     (5) For any new construction or renovation that increases the functional utilization of any

facility from less than sixty percent (60%) to more than eight percent (80%), including the

consolidation of buildings within or across districts, the school housing aid ratio shall be

increased by five percent (5%) so long as construction of the project commences by December

30, 2023. In order to qualify for the increased share ratio, twenty-five percent (25%) of the

project costs or a minimum of two hundred fifty thousand dollars ($250,000) must be specifically

direct to this purpose.

     (6) For any new construction or renovation that decreases the functional utilization of any

facility from more than one hundred twenty percent (120%) to between eight-five percent (85%)

to one hundred five percent (105%), the school housing ratio shall be increased by five percent

(5%) so long as construction of the project commences by December 30, 2023. In order to qualify

for the increased share ratio, twenty-five (25%) of the project costs or a minimum of two hundred

fifty thousand dollars ($250,000) must be specifically directed to this purpose.

     (7) For consolidation of two (2) or more buildings, within or across districts into one

building, the school housing aid ratio shall be increased by five percent (5%) so long as

construction of the project commences by December 30, 2023. In order to qualify for the

increased share ratio, twenty-five percent (25%) of the project costs or a minimum of two

hundred fifty thousand dollars ($250,000) must be specifically directed to this purpose.

     (c) Upon the transfer of ownership from the state to the respective cities and towns of the

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The regional career and technical center buildings located in Coventry, Cranston, East

Providence, Newport, Providence, Warwick, Woonsocket and the Chariho regional school

district, the school housing aid share ratio shall be increased by four percent (4%) for the

renovation and/or repair of these buildings. To qualify for the increased share ratio, as defined in

§ 16-7-39, renovation and repair projects must be submitted for approval through the necessity of

school construction process prior to the end of the second full fiscal year following the transfer of

ownership and assumption of local care and control of the building. Only projects at regional

career and technical centers that have full program approval from the department of elementary

and secondary education shall be eligible for the increased share ratio. The increased share ratio

shall continue to be applied for as long as the renovation and/or repair project receives school

housing aid. 

     16-7-41 Computation of school housing aid. 

     (a) In each fiscal year the state shall pay to each community a grant to be applied to the

cost of school housing equal to the following:

     The cost of each new school housing project certified to the commissioner of elementary

and secondary education not later than July 15 of the fiscal year shall be divided by the actual

number of years of the bond issued by the local community, or the Rhode Island Health and

Educational Building Corporation, or the Rhode Island Infrastructure Bank in support of the

specific project, times the school housing aid ratio; and provided, further, with respect to costs of

new school projects financed with proceeds of bonds issued by the local community, or the

Rhode Island Health and Educational Building Corporation, or the Rhode Island infrastructure

bank in support of the specific project, the amount of the school housing aid payable in each

fiscal year shall not exceed the amount arrived at by multiplying the principal and interest of the

bonds payable in each fiscal year by the school housing aid ratio and which principal and interest

amount over the life of the bonds, shall, in no event, exceed the costs of each new school housing

project certified to the commissioner of elementary and secondary education. If a community fails

to specify or identify the appropriate reimbursement schedule, the commissioner of elementary

and secondary education may at his or her discretion set up to a five (5) year reimbursement cycle

for projects under five hundred thousand dollars ($500,000); up to ten (10) years for projects up

to three million dollars ($3,000,000); and up to twenty (20) years for projects over three million

dollars ($3,000,000).

     (b) Aid shall be provided for the same period as the life of the bonds issued in support of

the project and at the school housing aid ratio applicable to the local community at the time of the

bonds issued in support of the project as set forth in § 16-7-39.

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     (c) Aid shall be paid either to the community or in the case of projects financed through

the Rhode Island Health and Educational Building Corporation or the Rhode Island infrastructure

bank, to the Rhode Island Health and Educational Building Corporation or the Rhode Island

infrastructure bank or its designee including, but not limited to, a trustee under a bond indenture

or loan and trust agreement, in support of bonds issued for specific projects of the local

community in accordance with this section, § 16-7-40 and § 16-7-44. Notwithstanding the

preceding, in case of failure of any city, town or district to pay the amount due in support of

bonds issued on behalf of a city, town, school or district project financed by the Rhode Island

Health and Educational Building Corporation or the Rhode Island infrastructure bank, upon

notification by the Rhode Island Health and Educational Building Corporation or the Rhode

Island infrastructure bank, the general treasurer shall deduct the amount from aid provided under

this section, § 16-7-40, § 16-7-44 and § 16-7-15 through § 16-7-34.3 due the city, town or district

and direct said funding to the Rhode Island Health and Educational Building Corporation or the

Rhode Island infrastructure bank or its designee.

     (d) Notwithstanding any provisions of law to the contrary, in connection with the

issuance of refunding bonds benefiting any local community, any net interest savings resulting

from the refunding bonds issued by such community or a municipal public buildings authority for

the benefit of the community or by the Rhode Island health and educational building corporation

or the Rhode Island infrastructure bank for the benefit of the community, in each case in support

of school housing projects for the community, shall be allocated between the community and the

state of Rhode Island, by applying the applicable school housing aid ratio at the time of issuance

of the refunding bonds, calculated pursuant to § 16-7-39, that would otherwise apply in

connection with school housing projects of the community; provided however, that for any

refundings that occur between July 1, 2013 and December 31, 2015, the community shall receive

eighty percent (80%) of the total savings and the state shall receive twenty percent (20%). In

connection with any such refunding of bonds, the finance director or the chief financial officer of

the community shall certify such net interest savings to the commissioner of elementary and

secondary education. Notwithstanding § 16-7-44 or any other provision of law to the contrary,

school housing projects costs in connection with any such refunding bond issue shall include

bond issuance costs incurred by the community, the municipal public buildings authority or the

Rhode Island health and educational building corporation or the Rhode Island infrastructure bank,

as the case may be, in connection therewith. In connection with any refunding bond issue, school

housing project costs shall include the cost of interest payments on such refunding bonds, if the

cost of interest payments was included as a school housing cost for the bonds being refunded. A

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local community or municipal public buildings authority shall not be entitled to the benefits of

this subsection (d) unless the net present value savings resulting from the refunding is at least

three percent (3%) of the refunded bond issue.

     (e) Any provision of law to the contrary notwithstanding, the commissioner of

elementary and secondary education shall cause to be monitored the potential for refunding

outstanding bonds of local communities or municipal public building authorities or of the Rhode

Island Health and Educational Building Corporation or the Rhode Island infrastructure bank

issued for the benefit of local communities or municipal public building authorities and benefiting

from any aid referenced in this section. In the event it is determined by said monitoring that the

net present value savings which could be achieved by refunding such bonds of the type

referenced in the prior sentence including any direct costs normally associated with such

refundings is equal to (i) at least one hundred thousand dollars ($100,000) and (ii) for the state

and the communities or public building authorities at least three percent (3%) of the bond issue to

be refunded including associated costs then, in such event, the commissioner (or his or her

designee) may direct the local community or municipal public building authority for the benefit

of which the bonds were issued, to refund such bonds. Failure of the local community or

municipal public buildings authority to timely refund such bonds, except due to causes beyond

the reasonable control of such local community or municipal public building authority, shall

result in the reduction by the state of the aid referenced in this § 16-7-4.1 associated with the

bonds directed to be refunded in an amount equal to ninety percent (90%) of the net present value

savings reasonably estimated by the commissioner of elementary and secondary education (or his

or her designee) which would have been achieved had the bonds directed to be refunded been

refunded by the ninetieth (90th) day (or if such day is not a business day in the state of Rhode

Island, the next succeeding business day) following the date of issuance of the directive of the

commissioner (or his or her designee) to refund such bonds. Such reduction in the aid shall begin

in the fiscal year following the fiscal year in which the commissioner issued such directive for the

remaining term of the bond.

     (f) Payments shall be made in accordance with § 16-7-40 and this section.

     (g) For purposes of financing or refinancing school facilities in the city of Central Falls

through the issuance bonds through the Rhode Island Health and Educational Building

Corporation or the Rhode Island infrastructure bank, the city of Central Falls shall be considered

an "educational institution" within the meaning of subdivision 45-38.1-3(13) of the general laws.

     16-7-41.1 Eligibility for reimbursement. 

     (a) School districts, not municipalities, may apply for and obtain approval for a project

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under the necessity of school construction process set forth in the regulations of the board of

regents for council on elementary and secondary education, provided, however, in the case of

municipality which issues bonds through the Rhode Island Health and Educational Building

Corporation or the Rhode Island infrastructure bank 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 council on 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 that are not

primarily used for public elementary or secondary education 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.

     (e) Beginning June 30, 2019, no state funding shall be provided for projects in excess of

ten million dollars ($10,000,000) unless the prime contractor for the project has received

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certification from the school building authority.

     (f) Beginning July 1, 2019, the necessity of school construction process set forth in the

regulations of the council on elementary and secondary education shall include a single statewide

process, developed with the consultation of the department of environmental management, that

will ensure community involvement throughout the investigation and remediation of

contaminated building sites for possible reuse as the location of a school. That process will fulfill

all provisions of § 23-19.14-5 related to the investigation of reuse of such sites for schools. 

     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

§§ 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 § 16-7-41(d) and § 46-12.2-4.2(g), 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 Educational Building Corporation or the Rhode

Island infrastructure bank. 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 council on 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,

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refunding bonds, borrowing from the school building authority capital fund, and bonds issued by

the Rhode Island Health and Educational Building Corporation or the Rhode Island infrastructure

bank 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) Beginning July 1, 2019, school housing projects exceeding one million five hundred

thousand dollars ($1,500,000) subject to inflation shall be assigned an owners program manager

and a commissioning agent by the school building authority. The cost of the program manager

and commission agent shall be borne by the school building authority.

     (c) Temporary housing, or swing space, for student shall be a reimbursable expense so

long as a district can demonstrate that no other viable option to temporarily house students exists. 

     (d) Environmental site remediation, as defined by the school building authority, shall be a

reimbursable expense up to one million dollars ($1,000,000) per project.

     (e) If, within thirty (30) years of construction, a newly constructed school is sold to a

private entity, the state shall receive a portion of a sale proceeds equal to that project's housing

aid reimbursement rate at the time of construction.

     SECTION 2. Sections 16-26-7 and 16-26-12 of the General Laws in Chapter 16-26

entitled "School for the Deaf" are hereby amended to read as follows:

     16-26-7. Persons admissible.

     (a) All children of parents, or under the control of guardians or other persons, legal

residents of this state, between the ages from birth to twenty-one (21) years, whose hearing or

speech, or both, are impaired as to make it impracticable for this student to make progress toward

his or her educational goals by attending the public schools may attend the Rhode Island School

for the Deaf, without charge, under any rules and regulations as the board of regents for

elementary and secondary education may establish.

     (b) Deaf persons from birth to twenty-one (21) years, who are legal residents of the state,

shall be entitled to the privilege of the school without charge, and for any period of time in each

individual case as may be deemed appropriate by the board of regents for elementary and

secondary education; residents of other states may be admitted upon the payment of any rates of

board and tuition as may be fixed by the board.

     (c) Students who are not deaf or hard-of-hearing may be admitted to the Rhode Island

school for the deaf, in accordance with rules and regulations promulgated by the commissioner of

elementary and secondary education.

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     16-26-12. Other sources of funding.

     (a) The 2009 general assembly, through the FY 2010 appropriation act, established a fee

for a service program, also known as a tuition program, for the Rhode Island school for the deaf

effective July 1, 2009 in accordance with the fee structure developed and implemented by the

department of elementary and secondary education. Under this fee for service program, and the

provisions of Rhode Island general law § 16-26-7.1 notwithstanding, districts shall be assessed

tuition to cover the costs of educational services that are additional to the core deaf and hard-of-

hearing education program that is provided to resident students at the Rhode Island school for the

deaf.

     (b) Tuition assessed at the school for the deaf to cover costs of educational services that

are additional to the core deaf and hard-of-hearing education program shall be based on a

graduated tuition schedule correlating to the varying needs of students. Districts shall receive

three (3) times each school year, invoices summarizing the basis for the tuition charged. There

shall be deducted from the final aid payment to each school district at the end of the fiscal year

any amounts owed to the state for these additional educational services. All tuition paid by

districts and any aid deducted for non-payment shall be deposited in a restricted receipt account

and shall be exempt from the indirect cost recovery provisions of § 35-4-7.

     (c) The school for the deaf is hereby authorized to rent or lease space in its school

building. The school shall deposit any revenues from such agreements into a restricted receipt

account, to be known as the school for the deaf rental income account, to be used for the same

educational purposes that its state appropriation is used. Any such rental agreements must receive

prior approval from the school's board of trustees and by the state properties committee.

     (d) Effective July 1, 2018, costs for students attending the Rhode Island school for the

deaf, in accordance with § 16-26-7(c), costs for those students shall be funded pursuant to the

provisions of § 16-7.2-3. The state share of the permanent foundation education aid shall be paid

directly to the Rhode Island school for the deaf pursuant to the provisions of § 16-7.2-7. The local

school district shall transfer the difference between the calculated state share of the permanent

foundation education aid and the amount calculated pursuant to § 16-7.2-7 to the Rhode Island

school for the deaf, until the transition of the state share is complete. In addition, the local school

district shall also pay the local share of education funding to the Rhode Island school for the deaf

as outlined in § 16-7.2-5.

     SECTION 3. Sections 16-105-3, 16-105-7, and 16-105-8 of the General Laws in Chapter

16-105 entitled "School Building Authority" are hereby amended to read as follows:

     16-105-3 Roles and responsibilities. 

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     The school building authority roles and responsibilities shall include:

     (1) Management of a system with the goal of ensuring 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 Promulgating, 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. The

regulations shall require conformance with the minority business enterprise criteria and

guidelines as set forth in § 37-14.1-6;

     (6) Developing a certification and review process for prime contractors seeking to bid on

projects in excess of ten million dollars ($10,000,000) in total costs, subject to inflation.

Notwithstanding any general laws to the contrary, certifications shall be valid for a maximum of

two (2) years from the date of issuance. Factors to be considered by the school building authority

in granting certification to prime contractors shall include, but not be limited to, the contractor's

history of completing complex projects on time and on budget, track record of compliance with

applicable environmental and safety regulations, evidence that completed prior projects

prioritized the facility's future maintainability, and compliance with applicable requirements for

the use of women and minority owned subcontractors.

     (7) Developing a mandatory statewide maintenance checklist and facilities standards for

all school buildings, that includes a minimum annual spending requirement for maintenance

and/or a requirement for capital reserve funds dedicated exclusively for annual maintenance in

accordance with national best practices. Districts shall adhere to the maintenance spending

requirements beginning June 30, 2019 and facilities standards beginning June 30, 2021.

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

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

managers, designers and others in planning, maintenance, and establishment of school facility

space;

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

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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 include, but not be limited to, the following order of

priorities:

     (i) Projects to replace or renovate a building that 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)(10) Maintaining a current list of requested school projects and the priority given

them;

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

facilities in the state;

     (12) Collecting, maintaining, and making publicly available monthly progress reports of

ongoing school construction projects, that shall include, at a minimum, the costs of the project

and the time schedule of each project;

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

school construction programs at both state and local levels;

     (11)(14) 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)(15) Developing a formal enrollment projection model or using projection models

already available;

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

maximum utilization of space in and around the district;

     (14)(17) Collecting and maintaining a clearinghouse of prototypical school plans that

may be consulted by eligible applicants;

     (18) Retaining the services of consultants, construction managers, program managers,

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architects, engineers and experts, as necessary, to effectuate the roles and responsibilities set forth

in this section;

     (15)(19) 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) five (5) additional points; and

provided further, that no district shall receive a combined total of more than five (5) twenty (20)

incentive percentage points for projects that commence construction by December 30, 2023, and

five (5) incentive points for projects that commence construction thereafter. Such incentive points

may be awarded for a district's use of highly efficient construction delivery methods; remediation

of hazardous substances; 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 chapter 38.2 of title 45 shall not exceed one hundred percent

(100%) of the sum of the total project costs plus interest costs nor shall a district's share be

decreased by more than half of its regular share irrespective of the number of incentive points

received. 

     Projects that were approved prior to July 1, 2017, but have not commenced construction

as of January 1, 2018, are eligible to receive a total of five (5) combined incentive points so long

as an owner's program manager and commissioning agent of the school building authority's

choosing, has been employed. Any project approved prior to July 1, 2017, that is withdrawn

and/or resubmitted for approval, shall not be eligible for any incentive points.

     16-105-7 Expenses incurred by the department school building authority. 

     In order to provide for one-time or limited the expenses of the department of elementary

and secondary education school building authority under this chapter, the Rhode Island health and

education building corporation shall provide funding from the school building authority capital

fund, fees generated from the origination of municipal bonds and other financing vehicles used

for school construction, and its own reserves. 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. 

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     There is also hereby established a restricted receipt account, within the budget of the

department of elementary and secondary education entitled "school construction services", to be

financed by the Rhode Island health and education building corporation's sub-allotments of fees

generated from the origination of municipal bonds and other financing vehicles used for school

construction and its own reserves. Effective July 1, 2018, this account shall be utilized for the

express purpose of supporting any departmental expenditures incurred in the administration of the

school construction aid program.

     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) nine (9)

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;

     (4) The commissioner of elementary and secondary education, or their designee;

     (5) The chair of the Rhode Island health and educational building corporation; and

     (4) (6) 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 monies;

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     (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;

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

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

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

utilization of space in and around the district.

     SECTION 4. Section 45-38.2-4 of the General Laws in Chapter 45-38.2 entitled "School

Building Authority Capital Fund" are hereby amended to read as follows:

     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 capital fund, 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)(1) Notwithstanding the provisions of §§ 45-12-19 and 45-12-20, and notwithstanding

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city or town charter provisions to the contrary, prior to July 1, 2016, no voter approval shall be

required for loans in any amount made to a city or town for the local education agency's share of

total project costs.

     (2) Notwithstanding the provisions of §§ 45-12-19 and 45-12-20, and notwithstanding

city or town charter provisions to the contrary, on or after July 1, 2016, up to five hundred

thousand dollars ($500,000) may be loaned to a city or town for the local education agency 's

share of total project costs without the requirement of voter approval.

     (e)(1) If the school building authority deems the amount of funding in the capital fund to

be in excess of what is necessary to meet the state obligation for projects receiving support from

the capital fund in a given year, the school building authority may direct excess funds to support

the state share of foundational housing aid.

     (2) Funds transferred from the capital fund to support the state share of foundational

housing aid shall be offered to LEAs on a pay-as-you-go basis and not as a reimbursement of debt

service for previously completed projects.

     (3) Funds transferred from the capital fund to support the state share of foundational

housing aid in a given year on a pay-as-you-go basis shall be offered proportionately to LEAs

based on the total state share of foundational housing aid awarded to projects in that year.

     (e)(f) 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. Section 46-12.2-4.2 of the General Laws in Chapter 46-12.2 entitled

"Rhode Island Infrastructure Bank" is hereby amended to read as follows:

     46-12.2-4.2. Establishment of the efficient buildings fund. 

     (a) There is hereby authorized and created within the Rhode Island infrastructure bank an

efficient buildings fund for the purpose of providing technical, administrative and financial

assistance to local governmental units for energy efficient and renewable energy upgrades to

public buildings and infrastructure, including, but not limited to, streetlights. The Rhode Island

infrastructure bank shall review and approve all applications for projects to be financed through

the efficient buildings fund.

     The office of energy resources shall promulgate rules and regulations establishing a

project priority list for efficient buildings fund and the process through which a local

governmental unit may submit an application for inclusion of a project on the project priority list.

Upon issuance of the project priority list by the office of energy resources, the project priority list

shall be used by the Rhode Island infrastructure bank to determine the order in which financial

assistance shall be awarded. The Rhode Island infrastructure bank shall promulgate rules and

LC005486 - Page 17 of 21

regulations to effectuate the provisions of this section which may include, without limitation,

forms for financial assistance applications, loan agreements, and other instruments. All rules and

regulations promulgated pursuant to this chapter shall be promulgated in accordance with the

provisions of chapter 35 of title 42. Eligibility for receipt of this financial assistance by a local

governmental unit shall be conditioned upon that local governmental unit reallocating their

remaining proportional QECB allocation to the state of Rhode Island.

     (b) The Rhode Island infrastructure bank shall have all the powers necessary and

convenient to carry out and effectuate the purposes and provisions of this section including,

without limiting the generality of the preceding statement, the authority:

     (1) To receive and disburse such funds from the state and federal government as may be

available for the purpose of the fund subject to the provisions of this section;

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

eligible borrowers from amounts on deposit in the fund;

     (3) To levy administrative fees on eligible borrowers as necessary to effectuate the

provisions of this section, provided the fees have been previously authorized by an agreement

between the Rhode Island infrastructure bank and the eligible borrower;

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

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

     (6) Such other authority as granted to the Rhode Island infrastructure bank under this

chapter.

     (c) Subject to the provisions of this section and to any agreements with the holders of any

bonds of the Rhode Island infrastructure bank or any trustee therefor, amounts held by the Rhode

Island infrastructure bank for the account of the fund shall be applied by the Rhode Island

infrastructure bank, either by direct expenditure, disbursement, or transfer to one or more other

funds and accounts held by the Rhode Island infrastructure bank or maintained under any trust

agreement pertaining to bonds, either alone or with other funds of the Rhode Island infrastructure

bank, to the following purposes:

     (1) To provide financial assistance to local governmental units to finance costs of

approved projects, as set forth in subsection (a), and to refinance the costs of the projects, subject

to such terms and conditions, if any, as are determined by the Rhode Island infrastructure bank;

     (2) To fund reserves for bonds of the Rhode Island infrastructure bank 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

LC005486 - Page 18 of 21

Rhode Island infrastructure bank, by pledge, lien, assignment, or otherwise as provided in this

chapter;

     (3) To pay expenses of the Rhode Island infrastructure bank in administering the fund;

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

loans and 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 borrower for which the account was

established and, on a parity basis with all other accounts, to defaults on any loans or obligations

outstanding; and

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

otherwise as provided in this chapter, any bonds of the Rhode Island infrastructure bank.

     (d) In addition to other remedies of the Rhode Island infrastructure bank under any loan

agreement or otherwise provided by law, the Rhode Island infrastructure bank may also recover

from a borrower, in an action in superior court, any amount due the Rhode Island infrastructure

bank together with any other actual damages the Rhode Island infrastructure bank shall have

sustained from the failure or refusal of the borrower to make the payments or abide by the terms

of the loan agreement.

     (e) The Rhode Island infrastructure bank may create one or more loan loss reserve funds

to serve as further security for any loans made by the Rhode Island infrastructure bank or any

bonds of the Rhode Island infrastructure bank issued to fund energy efficiency improvements in

public buildings in accordance with this section.

     (f) To the extent possible, and in accordance with law, the infrastructure bank shall

encourage the use of project labor agreements for projects over ten million dollars ($10,000,000)

and local hiring on projects funded under this section.

     (g) Any financial assistance provided by the Rhode Island infrastructure bank to a public

entity for the purpose of retrofitting a school building shall not be subject to the match established

by Rhode Island general laws §§ 16-7-35 to 16-7-47, and shall be made subject to coordination

with the Rhode Island department of education. Notwithstanding any provisions to the contrary in

chapter 7 of title 16, but subject to § 16-7-41(c), any approved project, as set forth in subsection

(a) of this section, that is also an "approved project" as defined in § 16-7-36 and predominately

energy or environmental in nature, shall be eligible for school housing assistance under §§ 16-7-

35 through 16-7-47, and shall include the payment of interest on bonds, lease revenue bonds,

capital leases, or capital reserve funding issued by a local governmental unit.

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     SECTION 6. 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 - SCHOOL CONSTRUCTION AND FUNDING

***

     This act would temporarily expand incentives to enhance the school housing aid ratio to

encourage new school and renovation projects. School districts would be eligible for share ratio

increases for projects that address health and safety deficiencies, specific high-demand subject

areas, replacing and consolidating facilities. Charter schools would also be eligible to receive

these new incentives and would receive an increase in their minimum share.

     This act would take effect upon passage.

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