§ 1726 — Lease and lease-purchase of buildings

§ 1726. Lease and lease-purchase of buildings. 1. Notwithstanding any\ninconsistent provision of law, the board of education of any union free\nschool district may enter into agreements pursuant to the provisions of\nthis section for the lease or lease-purchase of buildings for school\npurposes, to be placed or erected on a site owned by the district.\n 1-a. Notwithstanding any inconsistent provision of law, the board of\neducation of any union free school district may enter into agreement\nwith the dormitory authority for the lease or lease-purchase for school\npurposes from the dormitory authority of a dormitory (or any part\nthereof), as defined in section sixteen hundred seventy-six of the\npublic authorities law, including, if the agreement so provides, land,\nbuildings, any attendant facilities, and equipment, provided such\ndormitory (a) is owned by or in the possession of the dormitory\nauthority, and (b) was originally provided or financed by the authority\nfor an educational institution as defined in subdivision one of section\nsixteen hundred eighty of the public authorities law and (c) is no\nlonger being used by such educational institution. Any such agreement\nmay provide for the alteration, reconstruction or rehabilitation of any\nsuch dormitory or part thereof by the school district or the authority\nas capital items. The provisions of subdivisions three, four, six, eight\nand nine of this section shall not apply to any agreement with the\ndormitory authority authorized by this subdivision, provided,\nnevertheless, that the lease or lease-purchase agreement may not be made\nfor a period in excess of the applicable period of probable usefulness\nfor the building or buildings, as so altered, reconstructed or\nrehabilitated, and provided, further, that the plans and specifications\nfor such building or buildings, as so altered, reconstructed or\nrehabilitated, shall be subject to approval of the commissioner of\neducation, before such alteration, reconstruction or rehabilitation may\nbe authorized by the board of education of such school district.\n 2. Before executing any such agreement, the board of education shall\nadopt a resolution determining that such agreement is in the best\nfinancial interests of the school district and stating the basis of that\ndetermination.\n 3. Such agreements shall be subject to the bidding requirements of the\ngeneral municipal law, except that the provisions of section one hundred\none of the general municipal law shall not apply to lease or\nlease-purchase of pre-manufactured items delivered to the site, but\nshall apply to installation and other work to be performed on the site.\n 4. No agreement for the lease of a building or buildings may be made\nfor a term of more than five years, beginning with the time of\noccupancy. No lease-purchase agreement may be made for a period\nexceeding the applicable period of probable usefulness pursuant to the\nprovisions of the local finance law. Nothing herein contained shall be\ndeemed to prohibit a board of education from entering into a renewal of\nsuch lease agreement of such building or buildings for like periods,\nprovided, however, that the total lease payments or the total amount of\nlease-purchase agreement payments over the period of any such agreement\nincluding all lease renewals, may not exceed the purchase price of such\nbuilding or buildings, together with interest of not to exceed six\npercent per annum on any unpaid balance.\n 5. A board of education may not enter into any lease or lease-purchase\nagreement authorized by this section without the previous approval of\nthe voters of the district; provided that a board of education may, with\nthe approval of the commissioner, lease necessary space in case of an\nunforeseeable emergency.\n 6. Any agreement by which a building is leased to a school district\nfor installation on land owned by the district must include provision\nfor the removal of such building by the lessor within ninety days after\ntermination of the lease, unless such lease is renewed or title to the\nbuilding passes to the school district in accordance with the provisions\nof this section.\n 7. The commissioner, with the approval of the director of the budget,\nshall establish a uniform procedure for allocation of payments under\nlease-purchase agreements for the purpose of determining operating aid\nand aid for building purposes, respectively; provided, however, that no\nbuilding aid shall be paid unless and until the school district has\nlegally committed itself to the purchase in accordance with the\nprovisions of this section.\n 8. Plans and specifications and the proposed lease, lease renewal or\nlease-purchase agreement for buildings to be leased or purchased\npursuant to the provisions of this section must be approved by the\ncommissioner before a board of education may authorize or execute any\nagreement, or renewal thereof, for such purposes.\n 9. The term "lease", as used in this section, shall include a lease\nwith an option to purchase; provided, however, that in the case of a\nlease with an option to purchase, no part of any lease payments may be\ncounted against the purchase price, in case the option to purchase is\nexercised.\n 10. The term of no lease agreement including renewals thereof, may\nexceed the period of probable usefulness provided for such building or\nbuildings by the local finance law.\n 11. No annual installment of lease-purchase payment may exceed any\nother such installment under any such agreement by more than fifty per\ncentum thereof.\n 12. Any school district entering into any lease-purchase agreement\nunder this section, shall pledge its full faith and credit for the full\nperformance of all obligations under such agreement, including all\nannual payments required to be made thereunder.\n 13. The annual payments to be made by the school district under any\nsuch agreement shall commence within two years after the execution of\nany such agreement, or within thirty days from the time the board of\neducation shall have approved such building for occupancy, whichever\nshall be later.\n 14. The total amount of any unpaid annual payments of a lease-purchase\nagreement in relation to the principal of any such indebtedness, in case\nof a school district in a city as defined in the local finance law shall\nbe deemed to be indebtedness of the school district for a capital\nimprovement within the meaning of subparagraph (b) of subdivision three\nof paragraph a of section 135.00 of the local finance law.\n 15. The annual payments by such a school district in a city in\nrelation to such indebtedness and interest shall be deemed to be\n"indebtedness" and "interest" within the meaning of section ten of\narticle eight of the state constitution.\n 16. No such agreement shall be renegotiated or amended in such manner\nas to constitute a refunding within the meaning of section two of\narticle eight of the state constitution.\n