Rhode IslandH59612025 Regular SessionHouse

AN ACT RELATING TO TOWNS AND CITIES -- HEALTH AND EDUCATIONAL BUILDING CORPORATION .

Sponsored By: Patricia A. Serpa (Democratic)

Signed by Governor

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Bill Overview

Analyzed Economic Effects

10 provisions identified: 4 benefits, 1 costs, 5 mixed.

Education loans carry limits and charges

Participating schools can borrow from the corporation to make education loans to students and parents who meet corporation eligibility standards. Schools must use that money only for education loans. Each loan is capped at corporation-defined attendance costs, minus other assistance it counts; borrowers must certify education-related use. Loans can carry interest, including rates that change under set terms, and origination, servicing, or administrative fees. The corporation sets fees to cover program administration, debt payments, and required reserves; the law sets no specific rates or amounts.

Schools and providers recover financed assets

The corporation must promptly return leftover education-loan funding deposits to the schools that supplied them, in proportion to their contributions. It must also transfer project title to the participating school, municipality, or healthcare provider that does not already own it. Both transfers require related debt to be paid or adequately funded, all governing financing conditions satisfied, and liens released. Deposit returns also require payment or funding of any bond premium; project titles must be free of liens and other claims. These transfers go to participating entities, not directly to households.

More health nonprofits qualify for financing

More Rhode Island nonprofits qualify for the corporation’s healthcare financing programs. This includes groups providing individual or family behavioral health, physical health, social, or human services. These groups must be organized under Rhode Island nonprofit law or a special legislative act, with applicable nationally recognized accreditation. Nonprofits educating, counseling, or rehabilitating people involved with state child welfare, justice, or behavioral health systems qualify without state contracts. Both groups need federal 501(c)(3) tax-exempt status; financing is not guaranteed.

Housing nonprofits gain access to financing

Qualifying nonprofits can use the corporation’s healthcare-provider financing programs for temporary, emergency, or permanent housing in Rhode Island. Joint ventures involving a qualifying nonprofit are also eligible. The nonprofit must be organized under Rhode Island nonprofit law or a special legislative act and have 501(c)(3) tax-exempt status. The law does not guarantee financing or provide residents a direct housing payment.

More schools qualify for building financing

More public and nonprofit schools qualify for Rhode Island Health and Educational Building Corporation financing. Covered schools include primary, secondary, high-school, and higher-education institutions, with applicable accreditation and program requirements. Qualifying regional school districts can participate as municipalities. Districts must operate a local education authority, qualify for school housing aid, and meet education and applicable accreditation requirements. Eligibility does not guarantee financing, and child daycare centers are excluded.

Daycare centers lose this financing option

Child daycare centers are excluded from the corporation’s project-financing program. This removes a financing channel for daycare facilities. It does not directly change families’ childcare eligibility or prices.

Board members must avoid related decisions

School, municipal, and healthcare trustees, directors, officers, and employees can serve on the corporation’s board despite those roles. Their outside role alone does not create a conflict of interest. They must not discuss, act on, or vote on matters specifically involving their organization. The exception no longer names child daycare centers.

More project financing with cost limits

Effective upon passage, the law establishes the Rhode Island Health and Educational Building Corporation as the former educational corporation’s successor. It expands financing, construction, leasing, refinancing, and joint projects for participating schools, municipalities, and healthcare providers. Eligible facilities include school housing, municipal education and administrative buildings, assisted living, behavioral health facilities, and healthcare offices. Facilities and equipment must serve the participant’s operations; regular operating expenses are excluded, and project loans cannot exceed approved total costs. The corporation can also give grants from its own funds for project development and the law’s purposes, without set amounts.

Project bonds gain tools and safeguards

The corporation’s bond repayment funds can cover municipal projects generally or one designated project, as the bond agreement provides. Bonds can run up to 65 years; bond anticipation notes up to 40 years; capital and revenue anticipation notes up to 12 months. Covered education-program revenues must secure that program’s bonds or notes; the pledge binds without separate delivery, action, or outside public filing. Pooling or pledging schools’ education loans or funding deposits requires express consent from every school whose assets are affected. Financing can use guarantees, mortgages, reserves, and participant credit pledges; project rents, rates, and fees can fund operations and debt payments.

Project checks limit public debt exposure

Before issuing project debt, the corporation must confirm an eligible purpose and a financially responsible Rhode Island owner or lessee. It must confirm plans to cover construction or acquisition, operations, maintenance, and upkeep; healthcare construction financing also needs authorized state-agency approval. The state is not liable for corporation debt, except for separate school housing reimbursement obligations. Issuing corporation debt alone does not require state or municipal taxes or appropriations, and bonds must state the public-credit limits. Participants, including municipalities, can separately choose to pledge their own credit, creating financial exposure.

Sponsors & Cosponsors

Sponsor

Patricia A. Serpa
Democratic • House

Cosponsors

Samuel A. Azzinaro
Democratic • House
Jacquelyn M. Baginski
Democratic • House
Arthur J. Corvese
Democratic • House
Gregory J. Costantino
Democratic • House
Susan R. Donovan
Democratic • House
Raymond A. Hull
Democratic • House
Charlene Lima
Democratic • House
Joseph M. McNamara
Democratic • House
Mary Ann Shallcross Smith
Democratic • House

Roll Call Votes

All Roll Calls

Yes: 66 • No: 2

House vote • 5/29/2025

HEALTH EDUCATIONAL BUILDING CORP PASSAGE