PRINTER'S NO. 4045
No. 2702 Session of 2004
INTRODUCED BY NICKOL, BUNT, CAPPELLI, CORRIGAN, DALLY,
DENLINGER, GINGRICH, HESS, KOTIK, LAUGHLIN, LEWIS, MACKERETH,
MAITLAND, MANN, McILHATTAN, MICOZZIE, R. MILLER, O'NEILL,
PALLONE, PETRI, ROHRER, ROSS, RUBLEY, SATHER, SAYLOR,
SCAVELLO, STEIL, R. STEVENSON, E. Z. TAYLOR, THOMAS, VANCE,
WALKO, WATSON AND YOUNGBLOOD, JUNE 14, 2004
REFERRED TO COMMITTEE ON EDUCATION, JUNE 14, 2004
AN ACT
1 Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2 act relating to the public school system, including certain
3 provisions applicable as well to private and parochial
4 schools; amending, revising, consolidating and changing the
5 laws relating thereto;" defining "qualified interest rate
6 management agreement for interest on indebtedness" for
7 purposes of provisions relating to reimbursements by
8 Commonwealth and between school districts; further providing
9 for approved reimbursable rental for certain approved leases,
10 sinking fund charges on indebtedness and approved
11 reimbursable payments, for payments on account of certain
12 approved leases and sinking fund charges on indebtedness for
13 certain school buildings, for approval of Department of
14 Public Instruction and for payments to school districts
15 because of density factor; and making an editorial change.
16 The General Assembly of the Commonwealth of Pennsylvania
17 hereby enacts as follows:
18 Section 1. Section 2501(9.4) of the act of March 10, 1949
19 (P.L.30, No.14), known as the Public School Code of 1949, added
20 July 8, 1989 (P.L.253, No.43), is amended and the section is
21 amended by adding a clause to read:
22 Section 2501. Definitions.--For the purposes of this article
1 the following terms shall have the following meanings:
2 * * *
3 (9.4) "Municipal Equalized Millage." A city of the first
4 through third class tax effort to be used for reimbursement
5 under subsections (d) and (e) of section 2502 and section
6 2502.11 shall be the amount of municipal taxes collected and
7 reported to the Department of Community [Affairs] and Economic
8 Development divided by the real property valuation of the
9 municipality for the most recent year for which both
10 municipality tax and real property valuation are available.
11 * * *
12 (24) "Qualified Interest Rate Management Agreement for
13 Interest on Indebtedness." A qualified interest rate management
14 agreement consistent with the requirements of 53 Pa.C.S. § 8281
15 (relating to qualified interest rate management agreements).
16 Section 2. Section 2574(a) and (e) of the act, amended
17 September 29, 1959 (P.L.992, No.407) and July 10, 1987 (P.L.286,
18 No.50), are amended to read:
19 Section 2574. Approved Reimbursable Rental for Leases
20 Hereafter Approved [and], Approved Reimbursable Sinking Fund
21 Charges on Indebtedness and Approved Reimbursable Payments.--
22 (a) For school building projects for which the general
23 construction contract is awarded subsequent to March 22, 1956,
24 and for approved school building projects for which the general
25 construction contract was awarded but for which a lease was not
26 approved by the Department of Public Instruction prior to March
27 22, 1956, the Department of Public Instruction shall calculate
28 an approved reimbursable rental [or], approved reimbursable
29 sinking fund charges[.] or approved reimbursable payment
30 pursuant to a qualified interest rate management agreement for
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1 interest on indebtedness. Reimbursable sinking fund charges may
2 include charges for temporary indebtedness within constitutional
3 limitations, if the indebtedness is incurred for approved
4 permanent improvements to the school plant including the cost of
5 acquiring a suitable site for a school building, the cost of
6 constructing a new school building, or the cost of providing
7 needed additions or alterations to existing buildings for which
8 no bond issue is provided and for which an approved obligation
9 or obligations other than bonds have been issued and the
10 obligation or obligations are payable within five (5) years from
11 the date of issue of the obligation in equal annual
12 installments.
13 Approved reimbursable rental or sinking fund charge or
14 approved reimbursable payment pursuant to a qualified interest
15 rate management agreement for interest on indebtedness shall
16 consist of that part of the annual rental or sinking fund charge
17 or payment pursuant to a qualified interest rate management
18 agreement for interest on indebtedness attributable to--
19 (1) The cost of acquiring the land upon which the school
20 buildings are situate, the cost of necessary rough grading to
21 permit proper placement of the building upon said land and the
22 cost of sewage treatment plants, as required by the Department
23 of Health, to the extent that such costs are deemed reasonable
24 by the Department of Public Instruction and the interest on such
25 costs of acquisition, grading and sewage treatment plants earned
26 subsequent to date the construction contract is awarded, and
27 (2) The approved building construction cost and the interest
28 on such construction cost.
29 * * *
30 (e) For area vocational-technical school and technical
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1 institute projects leased subsequent to July 1, 1964, by or for
2 lease to a board of school directors authorized to operate such
3 a school, the Department of Education shall calculate an
4 approved reimbursable rental charge.
5 For area vocational-technical school and technical institute
6 projects constructed or purchased subsequent to July 1, 1964, by
7 a board of school directors authorized to operate such a school,
8 the Department of Education may calculate an approved
9 reimbursable sinking fund charge or payment pursuant to a
10 qualified interest rate management agreement for interest on
11 indebtedness.
12 Approved reimbursable rental or sinking fund charge or
13 payment pursuant to a qualified interest rate management
14 agreement for interest on indebtedness shall consist of that
15 part of the annual rental or sinking fund attributable to:
16 (1) Cost of acquiring land and preparing it for use to the
17 extent that such costs are deemed reasonable by the Department
18 of Education and the interest on such cost of acquisition, cost
19 of preparation and the cost of sewage treatment and the interest
20 on such cost.
21 (2) Machinery, apparatus, furniture and equipment and all
22 other necessary expenses and interest charges, but excluding
23 architects' fees in excess of six percent of the construction
24 cost.
25 The approved building construction cost and the interest on
26 such construction cost shall not exceed the product of the rated
27 full-time pupil capacity, as determined by the Department of
28 Education at the time the project is approved and two thousand
29 two hundred dollars ($2,200).
30 The provisions of the foregoing paragraph shall apply to all
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1 school building projects for which the general construction
2 contract is awarded prior to July 1, 1966, and for approved
3 school building projects for which a lease was approved by the
4 Department of Education prior to July 1, 1966. For school
5 buildings for which the general construction contract is awarded
6 subsequent to July 1, 1966, and for approved school building
7 projects for which the general construction contract was awarded
8 but for which a lease was not approved by the Department of
9 Education prior to July 1, 1966, the approved building
10 construction cost and the interest on such construction cost
11 shall not exceed the product of the rated full-time pupil
12 capacity, as determined by the Department of Education at the
13 time the project is approved, and three thousand seven hundred
14 dollars ($3700).
15 For school buildings for which the general construction
16 contract is awarded subsequent to July 1, 1984, and for approved
17 school building projects for which the general construction
18 contract was awarded but for which a lease or general obligation
19 bond resolution was not approved by the Department of Education
20 prior to July 1, 1984, the approved building construction cost
21 and the interest and payments pursuant to qualified interest
22 rate management agreements for interest on indebtedness on such
23 construction cost shall not exceed the product of the rated
24 full-time pupil capacity, as determined by the Department of
25 Education at the time the project is approved, and six thousand
26 three hundred dollars ($6,300).
27 The Department of Education shall not approve the expenditure
28 of any funds borrowed or obtained by the sale of bonds by any
29 authority, nonprofit corporation, profit corporation, company or
30 individual for construction of area vocational-technical schools
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1 or technical institutes for bleachers, athletic field, lighting
2 equipment or apparatus used to promote and conduct
3 interscholastic athletics.
4 * * *
5 Section 3. Section 2575 of the act, amended June 12, 1968
6 (P.L.192, No.96), is amended to read:
7 Section 2575. Payments on Account of Leases Hereafter
8 Approved and on Account of Sinking Fund Charges on Indebtedness
9 for School Buildings Hereafter Constructed.--(a) The
10 Commonwealth shall pay annually to each school district erecting
11 or sharing in the erection of a building or buildings under the
12 provisions of the Public School Building Authority Act, the
13 Municipality Authority Act, section 758 of the Public School
14 Code of 1949, or section 791 of the Public School Code of 1949,
15 on account of buildings for which the lease is approved on or
16 after March 22, 1956, or through the incurring of indebtedness
17 by the issuance of general obligation bonds on account of
18 buildings for which the general construction contract is awarded
19 on or after March 22, 1956, an amount to be determined by
20 multiplying the district's capital account reimbursement
21 fraction computed for the year 1967 or aid ratio whichever is
22 larger by the approved reimbursable rental [or], approved
23 reimbursable sinking fund charge[.] or approved reimbursable
24 payment pursuant to a qualified interest rate management
25 agreement for interest on indebtedness.
26 (b) The Commonwealth shall pay, annually, to each school
27 district which constructs, purchases or leases with the approval
28 of the Department of Public Instruction an area vocational-
29 technical school building or technical institute building or
30 which shares in the construction, purchase or lease of such
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1 building or buildings under provisions of the Public School
2 Building Authority Act, the Municipality Authority Act, section
3 758 of the Public School Code of 1949, or section 791 of the
4 Public School Code of 1949, or other agency, or through the
5 incurring of indebtedness by the issuance of general obligation
6 bonds, an amount to be determined by multiplying the district's
7 aid ratio or fifty per cent, whichever is more, by the approved
8 reimbursable rental approved reimbursable sinking fund charge or
9 approved reimbursable payment pursuant to qualified interest
10 rate management agreement for interest on indebtedness
11 multiplied by the district's proportionate share of such rental
12 sinking fund charge or payment pursuant to a qualified interest
13 rate management agreement for interest on indebtedness.
14 Section 4. Section 2576(a) of the act, amended October 25,
15 1965 (P.L.601, No.312), is amended to read:
16 Section 2576. Approval of Department of Public
17 Instruction.--(a) No payment shall be made to any school
18 district on account of any lease entered into with the State
19 Public School Building Authority or any municipality authority
20 or nonprofit corporation under section 758 of this act or any
21 profit or nonprofit corporation, partnership, association or
22 person under section 791 of this act or on account of sinking
23 fund charges or payment pursuant to a qualified interest rate
24 management agreement for interest on indebtedness for school
25 buildings unless such lease or sinking fund charge or payment
26 pursuant to a qualified interest rate management agreement for
27 interest on indebtedness is approved by the Department of Public
28 Instruction. Except as hereinafter provided, the Department of
29 Public Instruction may give its approval to any lease heretofore
30 or hereafter entered into and to any payments on account of
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1 sinking fund charges or payment pursuant to qualified interest
2 rate management agreements for interest on indebtedness for
3 school buildings if it shall find in the case of all school
4 districts, except school districts of the first class, first
5 class A and second class which are not part of a county-wide
6 plan, that the leased project or the project for which the
7 indebtedness is incurred, is in conformance with county-wide
8 plans prepared by the county board of school directors and
9 approved pursuant to the standards of the State Board of
10 Education for the orderly development of improved attendance
11 areas and administrative units and for the improved housing of
12 public schools in the Commonwealth, and in the case of all
13 school districts, that the school building will conform with
14 standards and regulations prescribed by the department with
15 respect to educational and architectural design, building
16 materials, fixtures and equipment, location, usefulness for
17 community activities, safety, comfort and convenience, and that
18 the school district or school districts which incur the
19 indebtedness or to which the project is to be leased will have
20 the ability to meet from current revenues the rental or sinking
21 fund charge or payment pursuant to qualified interest rate
22 management agreement for interest on indebtedness or their
23 respective shares of rental or sinking fund charge or payment
24 pursuant to qualified interest rate management agreement for
25 interest on indebtedness and to defray the cost of their
26 respective shares of the cost of operation and maintenance of
27 the project.
28 * * *
29 Section 5. Section 2578.1 of the act, amended June 12, 1968
30 (P.L.192, No.96), is amended to read:
20040H2702B4045 - 8 -
1 Section 2578.1. Payments to School Districts Because of
2 Density Factor.--Beginning with the school year 1965-1966 and in
3 each school year thereafter, to districts eligible under the
4 density factor, payments on leases [or], sinking fund charges or
5 payments pursuant to qualified interest rate management
6 agreements for interest on indebtedness shall be no less than
7 fifty percent (50%) of the approved reimbursable rental [or],
8 sinking fund charge or payment pursuant to qualified interest
9 rate management agreement for interest on indebtedness for a
10 school building project. Such payments shall be made annually,
11 semi-annually or as may otherwise be required by the terms of
12 any agreement entered into by the school district with the
13 approval of the Superintendent of Public Instruction.
14 Section 6. This act shall take effect in 60 days.
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