N.Y. Education Law § 1726: Lease and lease-purchase of buildings

§ 1726. Lease and lease-purchase of buildings. 1. Notwithstanding any

inconsistent provision of law, the board of education of any union free

school district may enter into agreements pursuant to the provisions of

this section for the lease or lease-purchase of buildings for school

purposes, to be placed or erected on a site owned by the district.

1-a. Notwithstanding any inconsistent provision of law, the board of

education of any union free school district may enter into agreement

with the dormitory authority for the lease or lease-purchase for school

purposes from the dormitory authority of a dormitory (or any part

thereof), as defined in section sixteen hundred seventy-six of the

public authorities law, including, if the agreement so provides, land,

buildings, any attendant facilities, and equipment, provided such

dormitory (a) is owned by or in the possession of the dormitory

authority, and (b) was originally provided or financed by the authority

for an educational institution as defined in subdivision one of section

sixteen hundred eighty of the public authorities law and (c) is no

longer being used by such educational institution. Any such agreement

may provide for the alteration, reconstruction or rehabilitation of any

such dormitory or part thereof by the school district or the authority

as capital items. The provisions of subdivisions three, four, six, eight

and nine of this section shall not apply to any agreement with the

dormitory authority authorized by this subdivision, provided,

nevertheless, that the lease or lease-purchase agreement may not be made

for a period in excess of the applicable period of probable usefulness

for the building or buildings, as so altered, reconstructed or

rehabilitated, and provided, further, that the plans and specifications

for such building or buildings, as so altered, reconstructed or

rehabilitated, shall be subject to approval of the commissioner of

education, before such alteration, reconstruction or rehabilitation may

be authorized by the board of education of such school district.

2. Before executing any such agreement, the board of education shall

adopt a resolution determining that such agreement is in the best

financial interests of the school district and stating the basis of that

determination.

3. Such agreements shall be subject to the bidding requirements of the

general municipal law, except that the provisions of section one hundred

one of the general municipal law shall not apply to lease or

lease-purchase of pre-manufactured items delivered to the site, but

shall apply to installation and other work to be performed on the site.

4. No agreement for the lease of a building or buildings may be made

for a term of more than five years, beginning with the time of

occupancy. No lease-purchase agreement may be made for a period

exceeding the applicable period of probable usefulness pursuant to the

provisions of the local finance law. Nothing herein contained shall be

deemed to prohibit a board of education from entering into a renewal of

such lease agreement of such building or buildings for like periods,

provided, however, that the total lease payments or the total amount of

lease-purchase agreement payments over the period of any such agreement

including all lease renewals, may not exceed the purchase price of such

building or buildings, together with interest of not to exceed six

percent per annum on any unpaid balance.

5. A board of education may not enter into any lease or lease-purchase

agreement authorized by this section without the previous approval of

the voters of the district; provided that a board of education may, with

the approval of the commissioner, lease necessary space in case of an

unforeseeable emergency.

6. Any agreement by which a building is leased to a school district

for installation on land owned by the district must include provision

for the removal of such building by the lessor within ninety days after

termination of the lease, unless such lease is renewed or title to the

building passes to the school district in accordance with the provisions

of this section.

7. The commissioner, with the approval of the director of the budget,

shall establish a uniform procedure for allocation of payments under

lease-purchase agreements for the purpose of determining operating aid

and aid for building purposes, respectively; provided, however, that no

building aid shall be paid unless and until the school district has

legally committed itself to the purchase in accordance with the

provisions of this section.

8. Plans and specifications and the proposed lease, lease renewal or

lease-purchase agreement for buildings to be leased or purchased

pursuant to the provisions of this section must be approved by the

commissioner before a board of education may authorize or execute any

agreement, or renewal thereof, for such purposes.

9. The term "lease", as used in this section, shall include a lease

with an option to purchase; provided, however, that in the case of a

lease with an option to purchase, no part of any lease payments may be

counted against the purchase price, in case the option to purchase is

exercised.

10. The term of no lease agreement including renewals thereof, may

exceed the period of probable usefulness provided for such building or

buildings by the local finance law.

11. No annual installment of lease-purchase payment may exceed any

other such installment under any such agreement by more than fifty per

centum thereof.

12. Any school district entering into any lease-purchase agreement

under this section, shall pledge its full faith and credit for the full

performance of all obligations under such agreement, including all

annual payments required to be made thereunder.

13. The annual payments to be made by the school district under any

such agreement shall commence within two years after the execution of

any such agreement, or within thirty days from the time the board of

education shall have approved such building for occupancy, whichever

shall be later.

14. The total amount of any unpaid annual payments of a lease-purchase

agreement in relation to the principal of any such indebtedness, in case

of a school district in a city as defined in the local finance law shall

be deemed to be indebtedness of the school district for a capital

improvement within the meaning of subparagraph (b) of subdivision three

of paragraph a of section 135.00 of the local finance law.

15. The annual payments by such a school district in a city in

relation to such indebtedness and interest shall be deemed to be

"indebtedness" and "interest" within the meaning of section ten of

article eight of the state constitution.

16. No such agreement shall be renegotiated or amended in such manner

as to constitute a refunding within the meaning of section two of

article eight of the state constitution.