§ 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 as set forth in § 16-7-39 at the time the project is approved by the council on elementary and secondary education.

(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 § 16-7-41 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 of 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 § 45-38.1-3(13).

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; P.L. 2018, ch. 47, art. 9, § 1.)