TITLE 16
Education
CHAPTER 16-7
Foundation Level School Support [See Title 16 Chapter 97 The Rhode
Island Board Of Education Act]
SECTION 16-7-41
§ 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 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 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.
(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, to the Rhode Island Health and Educational Building Corporation 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, upon notification by the Rhode Island Health
and Educational Building Corporation, 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 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
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, 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 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 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, 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.
History of Section.
(P.L. 1960, ch. 26, § 7; P.L. 1981, ch. 252, § 1; P.L. 1989, ch. 471,
§ 1; P.L. 2003, ch. 376, art. 9, § 1; P.L. 2005, ch. 117, art. 13,
§ 8; P.L. 2007, ch. 370, § 1; P.L. 2008, ch. 9, art. 5, § 1;
P.L. 2010, ch. 124, § 1; P.L. 2010, ch. 125, § 1; P.L. 2012, ch. 241,
art. 12, § 5; P.L. 2013, ch. 144, art. 13, § 1.)
