2019 -- S 0557

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LC001068

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2019

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A N   A C T

RELATING TO TOWNS AND CITIES -- SENIOR CENTER BUILDING CAPITAL FUND

     Introduced By: Senators Pearson, Crowley, Lawson, Satchell, and Picard

     Date Introduced: March 14, 2019

     Referred To: Senate Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Chapter 45-38.1 of the General Laws entitled "Health And Educational

Building Corporation" is hereby amended by adding thereto the following section:

     45-38.1-28. Administration of senior center building capital fund.

     Notwithstanding any provisions of this chapter or any general law or special law to the

contrary, it is a corporate purpose of the corporation to administer the financial provisions of the

senior center building capital fund as set forth in chapter 38.3 of this title.

     SECTION 2. Title 45 of the General Laws entitled "TOWNS AND CITIES" is hereby

amended by adding thereto the following chapter:

CHAPTER 38.3

SENIOR CENTER BUILDING CAPITAL FUND

     45-38.3-1. 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 or town to construct, or that would

make capital improvements to, senior center facilities located within said city or town consistent

with project evaluation criteria as set forth in this chapter;

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

department of elderly affairs;

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

set forth in chapter 38.1 of title 45;

     (4) "Department" means the department of elderly affairs;

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

project evaluation criteria and approved by the department of elderly affairs;

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

corporation to a city, or town 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 senior citizen building capital fund;

     (8) "Market rate" means the rate the city or town 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;

     (9) "Project evaluation criteria" means the criteria used by the department of elderly

affairs to evaluate applications and rank eligible projects;

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

of elderly affairs 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 or town.

     45-38.3-2. Senior center building capital fund.

     (a) There is hereby established a senior citizen building 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 elderly affairs. The corporation shall deposit the following

monies into the fund:

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

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

with this chapter;

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

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

extent required by any trust agreement for such bonds;

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

rendered under this chapter less operating expenses;

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

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

     (6) 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 senior center building capital

fund.

     (c) The department of elderly affairs shall establish and maintain internal controls to

ensure that local agencies are providing adequate asset protection plans, all local agencies have

equal access and opportunity to address facility improvements on a priority basis, and to ensure

that funding from the senior citizen building authority fund has the greatest impact on facility

gaps in state priority areas. The senior citizen building authority fund will also manage necessity

of center construction approvals in accordance with the funding levels set forth by the general

assembly.

     45-38.3-3. 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

or towns from amounts on deposit in the fund;

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

and town obligations from amounts on deposit in the fund;

     (4) To levy administrative fees on cities, towns, and senior citizen agencies as necessary

to effectuate the provisions of this chapter; provided that the fee does not exceed one tenth of one

percent (0.001%) of the principal amount;

     (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 this title.

     (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

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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,

for the following purposes:

     (1) To provide financial assistance to cities, and towns and their agencies 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 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 herein;

     (3) To pay or provide for subsidy assistance as determined by the department;

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

on loans and city and town 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 or town for which

the account was established and, on a parity basis with all other accounts, to defaults on any loans

or city or town 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 or notes of the corporation issued under this

chapter.

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

loan agreements established between the corporation and the city or town at a rate not to exceed

three percent (3%) for a term not to exceed thirty (30) years.

     (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 or town 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 or town to

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

     45-38.3-4. Payment of state funds.

     (a) Subject to the provisions of subsection (b) of this section, 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

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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 department, is authorized to grant a municipality its

state share of an approved project cost not to exceed thirty percent (30%). Construction pay-as-

you-go grants received from the fund shall not be considered a form of indebtedness.

     (d)(1) Notwithstanding any city or town charter provisions to the contrary, prior to July 1,

2019, no voter approval shall be required for loans in any amount made to a city's or town’s share

of total project costs.

     (2) Notwithstanding any city or town charter provisions to the contrary, on or after July 1,

2019, up to five hundred thousand dollars ($500,000) may be loaned to a city or town for the

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

     (e)(1) Funds to support the state share of aid in a given year on a pay-as-you-go basis

shall be offered proportionately to senior citizen agencies based on the total state share of aid

awarded to projects in that year.

     (2) Any excess funds may be transferred to the senior citizen building capital fund in an

amount not to exceed five percent (5%) of any amount of bonds issued in a given year.

     (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.

     (g) The auditor general shall give guidance to each city and town on the uniform financial

reporting of construction debt authorized and issued, and on funding received from the state

within ninety (90) days of the effective date of this chapter.

     45-38.3-5. Eligibility.

     (a) Cities and towns may apply for and obtain approval for a project pursuant to

regulations established by the department. Such approval will remain valid until June 30 of the

third fiscal year following the fiscal year in which the approval of the department is granted. Only

those projects undertaken for senior citizen construction and located on city or town property may

qualify for reimbursement. Facilities with combined municipal uses or facilities that are operated

jointly with any other profit or nonprofit agency do not qualify for reimbursement. Projects

completed by June 30 of a fiscal year are eligible for reimbursement in the following fiscal year.

A project for a new senior citizen center shall be deemed to be completed when the work has

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been officially accepted by the department or when a certificate of occupancy is issued or,

whichever is later.

     (b) Notwithstanding the provisions of this section, the department shall not grant final

approval for any project between June 30, 2019, and May 1, 2020, 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) Beginning July 1, 2020, the department shall approve new applications on an annual

basis. The department shall develop an annual application timeline for cities or town seeking new

construction approvals.

     (d) Beginning July 1, 2020, 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

prequalification from the department.

     (e) Beginning July 1, 2020, the necessity of center construction process 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 senior citizen

center.

     (f) Environmental site remediation, as defined by the department, shall be a reimbursable

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

     (g) If, within thirty (30) years of construction, a newly constructed senior citizen center is

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

reimbursement rate at the time of project completion.

     (h) All projects must comply with § 37-13-6, ensuring that prevailing wage laws are

being followed, and § 37-14.1-6, ensuring that minority business enterprises reach a minimum of

ten percent (10%) of the dollar value of the bid.

     SECTION 3. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO TOWNS AND CITIES -- SENIOR CENTER BUILDING CAPITAL FUND

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     This act would establish the senior center building capital fund within the Rhode Island

Health and Educational Building Corporation to provide cities and towns with financial assistance

in the construction of senior centers up to thirty percent (30%) of the cost of the project.

     This act would take effect upon passage.

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