§ 16-7-41 - Computation of school housing aid. - Rhode Island Statutes

SECTION 16-7-41

   § 16-7-41  Computation of school housingaid. – (a) In each fiscal year the state shall pay to each community a grant to beapplied to the cost of school housing equal to the following:

   The cost of each new school housing project certified to thecommissioner of elementary and secondary education not later than July 15 ofthe fiscal year shall be divided by the actual number of years of the bondissued by the local community or the Rhode Island Health and EducationalBuilding Corporation in support of the specific project, times the schoolhousing aid ratio; and provided, further, with respect to costs of new schoolprojects financed with proceeds of bonds issued by the local community or theRhode Island Health and Educational Building Corporation in support of thespecific project, the amount of the school housing aid payable in each fiscalyear shall not exceed the amount arrived at by multiplying the principal andinterest of the bonds payable in each fiscal year by the school housing aidratio and which principal and interest amount over the life of the bonds,shall, in no event, exceed the costs of each new school housing projectcertified to the commissioner of elementary and secondary education. If acommunity fails to specify or identify the appropriate reimbursement schedule,the commissioner of elementary and secondary education may at his or herdiscretion set up to a five (5) year reimbursement cycle for projects underfive hundred thousand dollars ($500,000); up to ten (10) years for projects upto three million dollars ($3,000,000); and up to twenty (20) years for projectsover three million dollars ($3,000,000).

   (b) Aid shall be provided for the same period as the life ofthe bonds issued in support of the project and at the school housing aid ratioapplicable to the local community at the time of the bonds issued in support ofthe project.

   (c) Aid shall be paid either to the community or in the caseof projects financed through the Rhode Island Health and Educational BuildingCorporation, to the Rhode Island Health and Educational Building Corporation orits designee including, but not limited to, a trustee under a bond indenture orloan and trust agreement, in support of bonds issued for specific projects ofthe 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 ordistrict to pay the amount due in support of bonds issued on behalf of a cityor town school project financed by the Rhode Island Health and EducationalBuilding Corporation, upon notification by the Rhode Island Health andEducational Building Corporation, the general treasurer shall deduct the amountfrom aid provided under this section, § 16-7-40 and § 16-7-44 due thecity, town or district and direct said funding to the Rhode Island Health andEducational Building Corporation or its designee.

   (d) Notwithstanding any provisions of law to the contrary, inconnection with the issuance of refunding bonds benefiting any local community,any net interest savings resulting from the refunding bonds issued by suchcommunity or a municipal public buildings authority for the benefit of thecommunity or by the Rhode Island health and educational building corporationfor the benefit of the community, in each case in support of school housingprojects for the community, shall be allocated between the community and thestate of Rhode Island, by applying the applicable school housing aid ratio atthe time of issuance of the refunding bonds, calculated pursuant to §16-7-39, that would otherwise apply in connection with school housing projectsof the community. In connection with any such refunding of bonds, the financedirector or the chief financial officer of the community shall certify such netinterest 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 issueshall include bond issuance costs incurred by the community, the municipalpublic buildings authority or the Rhode Island health and educational buildingcorporation, as the case may be, in connection therewith. In connection withany refunding bond issue, school housing project costs shall include the costof interest payments on such refunding bonds, if the cost of interest paymentswas included as a school housing cost for the bonds being refunded. A localcommunity or municipal public buildings authority shall not be entitled to thebenefits of this subsection (d) unless the net present value savings resultingfrom the refunding is at least three percent (3%) of the refunded bond issue.

   (e) Any provision of law to the contrary notwithstanding, thecommissioner of elementary and secondary education shall cause to be monitoredthe potential for refunding outstanding bonds of local communities or municipalpublic building authorities or of the Rhode Island Health and EducationalBuilding Corporation issued for the benefit of local communities or municipalpublic building authorities and benefiting from any aid referenced in thissection. In the event it is determined by said monitoring that the net presentvalue savings which could be achieved by refunding such bonds of the typereferenced in the prior sentence including any direct costs normally associatedwith such refundings is equal to (i) at least one hundred thousand dollars($100,000) and (ii) for the state and the communities or public buildingauthorities at least three percent (3%) of the bond issue to be refundedincluding associated costs then, in such event, the commissioner (or his or herdesignee) may direct the local community or municipal public building authorityfor the benefit of which the bonds were issued, to refund such bonds. Failureof the local community or municipal public buildings authority to timely refundsuch bonds, except due to causes beyond the reasonable control of such localcommunity or municipal public building authority, shall result in the reductionby the state of the aid referenced in this § 16-7-4.1 associated with thebonds directed to be refunded in an amount equal to ninety percent (90%) of thenet present value savings reasonably estimated by the commissioner ofelementary and secondary education (or his or her designee) which would havebeen achieved had the bonds directed to be refunded been refunded by theninetieth (90th) day (or if such day is not a business day in the state ofRhode Island, the next succeeding business day) following the date of issuanceof the directive of the commissioner (or his or her designee) to refund suchbonds. Such reduction in the aid shall begin in the fiscal year following thefiscal year in which the commissioner issued such directive for the remainingterm of the bond.

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