2023 -- H 6126

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LC002032

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2023

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A N   A C T

AMENDING CHAPTERS 106 AND 107 OF THE LOCAL ACTS OF 2021 BOTH ENTITLED

“AN ACT RELATING TO SCHOOL CONSTRUCTION AND FINANCING IN THE CITY OF

CENTRAL FALLS AND AUTHORIZING THE CITY OF CENTRAL FALLS TO ISSUE NOT

TO EXCEED $5,760,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION,

IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS

AND SCHOOL FACILITIES IN THE CITY”

     Introduced By: Representative Joshua J. Giraldo

     Date Introduced: March 03, 2023

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     WHEREAS, In 2021, the General Assembly passed as companion bills Local Acts

Chapters 106 and 107 relating to school construction and financing in the city of Central Falls (the

“Prior Acts”); and

     WHEREAS, The Prior Acts authorized the State, acting through the general treasurer to

execute a Financing Agreement and any other agreements necessary to effectuate the purposes of

the Prior Acts and the Prior Acts served as the joint resolution required pursuant to Rhode Island

General Laws §35-18-1, et seq (the “Rhode Island Public Corporation Debt Management Act”);

     WHEREAS, The Prior Acts were silent on the use of premium generated from the sale of

bonds or notes issued by the Rhode Island Heath and Educational Building Corporation payable

from annual appropriations by the State; and

     WHEREAS, It is desirable that premium on the sale of bonds and notes be permitted to be

used to pay costs of the Central Falls School Project as defined in the Prior Acts.

     NOW THEREFORE, It is enacted and resolved by the General Assembly as follows:

     SECTION 1. Section 2 of Local Acts of 2021 Chapters 106 and 107 are hereby each

amended as follows:

     SECTION 2. City of Central Falls School Project.

     WHEREAS, The WHEREAS clauses in paragraphs 1 through 5 hereof are hereby

incorporated herein by reference.

     WHEREAS, The City of Central Falls is proposing a project consisting of the construction,

renovation, improvement, alteration, repair, furnishing and equipping of schools and school

facilities in the city; and

     WHEREAS, The Project will be financed through the Rhode Island Health and Educational

Building Corporation (the “Corporation”) under its school financing revenue bond program, with

an expected term of not to exceed thirty (30) years and it is anticipated that the State will be a

signatory to the Financing Agreement with the Rhode Island Health and Educational Building

Corporation; and

     WHEREAS, It is anticipated that the State’s obligations under the Financing Agreement

will be subject to appropriation therefor by the General Assembly in each budget year; and

     WHEREAS, The Rhode Island Public Corporation Debt Management Act requires the

General Assembly to provide its consent to the issuance or incurring by the State of Rhode Island

of certain obligations, including financing guarantees or other agreements; and

     WHEREAS, The principal amount of bonds which will finance the project costs and costs

of financing covered by the Financing Agreement is not expected to exceed $144,000,000. Any

premium received from the sale of any bonds or notes shall be used toward project costs and shall

not reduce the principal amount of bonds or notes. Debt service payments will be supported by

revenues received by the Corporation under the Financing Agreement which include annual

appropriations for debt service made by the State, state school construction aid payments and state

school operations aid payments if any, pursuant to chapter 16-7 of the Rhode Island general laws

and payments from the City of Central Falls under the Financing Agreement. Total debt service on

the bonds in not expected to exceed $9,400,000 annually and $281,000,000 in the aggregate based

on an average interest rate of five percent (5.00%);

     Now therefor be it resolved

     RESOLVED, That this General Assembly hereby approves the issuance of bonds or notes

to finance the Central Falls School Project in a principal amount up to $144,000,000 plus any

original issue premium, such bonds or notes not to be reduced by any premium received on the sale

of any bonds or notes which premium shall be used for project costs for the Central Falls School

Project; and be it further

     RESOLVED, That the State, acting through the general treasurer may execute the

Financing Agreement as contemplated herein and any other agreements necessary to effectuate the

purposes of this act; and be it further

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     RESOLVED, That the bonds will be special obligations of the Corporation payable from

funds received by the Corporation under the Financing Agreement and other revenues received by

the Corporation, in any combination or priority as may be designated in the proceedings of the

Corporation authorizing the issuance of such debt. The total debt service on the bonds is estimated

to average approximately nine million four hundred thousand dollars ($9,400,000) per year or

approximately two hundred eighty-one million dollars ($281,000,000) in the aggregate, at an

average interest rate of approximately five percent (5%) and an approximately thirty (30) year

maturity; and be it further

     RESOLVED, That the bonds will not constitute indebtedness of the State or any of its

subdivisions or a debt for which the full faith and credit of the State or any of its subdivisions is

pledged. This act shall constitute an enabling act of the general assembly that is required pursuant

to § 16-7-44.

     RESOLVED, That the State’s authority to incur the obligations set forth herein will expire

within five (5) years of the date of passage of this act if such financing transaction is not executed

prior to that date.

     SECTION 3. This act shall take effect upon passage.

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LC002032

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EXPLANATION

OF

A N   A C T

AMENDING CHAPTERS 106 AND 107 OF THE LOCAL ACTS OF 2021 BOTH ENTITLED

“AN ACT RELATING TO SCHOOL CONSTRUCTION AND FINANCING IN THE CITY OF

CENTRAL FALLS AND AUTHORIZING THE CITY OF CENTRAL FALLS TO ISSUE NOT

TO EXCEED $5,760,000 GENERAL OBLIGATION BONDS, NOTES AND OTHER

EVIDENCES OF INDEBTEDNESS TO FINANCE THE CONSTRUCTION, RENOVATION,

IMPROVEMENT, ALTERATION, REPAIR, FURNISHING AND EQUIPPING OF SCHOOLS

AND SCHOOL FACILITIES IN THE CITY”

***

     This act would clarify that premium received on the sale of bonds or notes shall be used

for project costs.

     This act would take effect upon passage.

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LC002032

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