1Amending the act of March 10, 1949 (P.L.30, No.14), entitled "An
2act relating to the public school system, including certain
3provisions applicable as well to private and parochial
4schools; amending, revising, consolidating and changing the
5laws relating thereto," further providing for referendum or
6public hearing required prior to construction or lease and 
7for approved reimbursable rental for certain leases and 
8approved reimbursable sinking fund charges on indebtedness.

9The General Assembly of the Commonwealth of Pennsylvania
10hereby enacts as follows:

11Section 1. Section 701.1 of the act of March 10, 1949 
12(P.L.30, No.14), known as the Public School Code of 1949,
13amended July 4, 2004 (P.L.536, No.70), is amended to read:

14Section 701.1. Referendum or Public Hearing Required Prior
15to Construction or Lease.--Except where the approval of the
16electors is obtained to incur indebtedness to finance the
17construction of a school project, the board of school directors
18of any school district of the second, third or fourth classes,
19shall not construct, enter into a contract to construct or enter
20into a contract to lease a new school building or substantial
21addition to an existing school building without the consent of

1the electors obtained by referendum or without holding a public
2hearing as hereinafter provided. In the event that a new school
3building or a substantial addition to an existing building is to
4be constructed or leased, the school board shall, by a majority
5vote of all its members, authorize a maximum project cost and a
6maximum building construction cost to be financed by the
7district or amortized by lease rentals to be paid by the
8district. Building construction cost shall consist of the cost
9of all building construction including general construction
10costs, plumbing, heating, electrical, ventilating and other
11structural costs, equipment and fixtures and architectural and
12engineering fees relating thereto, but not including costs for
13site acquisition and development, rough grading to receive the
14building, sewage treatment facilities or equivalent capital
15contributions, and architectural and engineering fees relating
16thereto. Building construction cost shall not include any 
17additional LEED costs. In all cases, a public hearing shall be
18held not later than thirty (30) days before the school district
19submits the initial building construction cost and LEED cost
20estimates to the Department of Education for approval. Notice of
21the hearing shall be given not later than twenty (20) days
22before the date of the scheduled hearing. In the event that the
23maximum building construction cost authorization exceeds the
24aggregate building expenditure standard hereinafter specified,
25the aforesaid authorization of the school board shall be
26submitted to the electors of the school district for their
27approval within six (6) months prior to submission of the final
28building construction cost bids to the Department of Education
29for approval. Such referendum shall be held in the same manner
30as provided by law for the approval of the incurring of

1indebtedness by referendum. The question as submitted shall
2specify the maximum project cost, the maximum building
3construction cost and the annual sinking fund charge or lease
4rental to be incurred by the school district and the portion of
5such charge or rental expected to be reimbursed by the
6Commonwealth. If the final building construction cost bids to be
7submitted to the Department of Education for approval are less
8than the aggregate building expenditure standard hereafter
9specified but exceed by eight (8) per cent or more the initial
10building construction cost estimates submitted to the Department
11for approval, a second public hearing shall be held before the
12Department shall give its final approval.

13The applicable aggregate building expenditure standard shall
14be a total amount calculated for each building or substantial
15addition by multiplying the rated pupil capacity under the
16approved room schedule by the following: two thousand eight
17hundred dollars ($2,800) for each pupil of rated elementary
18capacity; four thousand two hundred dollars ($4,200) for each
19pupil of rated secondary capacity in grades seven, eight and
20nine and five thousand two hundred dollars ($5,200) for each
21pupil of rated secondary capacity in grades ten, eleven and
22twelve and five thousand two hundred dollars ($5,200) for each
23pupil of rated vocational-technical capacity in grades ten,
24eleven and twelve to not include the cost of equipment and
25fixtures in such vocational-technical schools: Provided,
26however, That each of the preceding per pupil amounts shall be
27adjusted by the Department of Education on July 1, 1974; and
28annually thereafter through July 1, 2003, by multiplying said
29amounts by the ratio of the composite construction cost index
30compiled and published by the United States Department of

1Commerce for the preceding calendar year to such index for the
2next preceding calendar year; and Further Provided, however,
3That each of the preceding per pupil amounts shall be adjusted
4by the Department of Education on July 1, 2004; and annually
5thereafter by multiplying said amounts by the ratio of the
6Building Cost Index published by the McGraw-Hill Companies for
7the preceding calendar year to such index for the next preceding
8calendar year. Rated elementary pupil capacity or rated
9secondary pupil capacity for any school building shall be the
10rated pupil capacity determined on the basis of the method used
11by the Department for school building reimbursement purposes
12during the school year 1971-1972.

13For purposes of this section:

14(1) "Site acquisition" includes the cost of land and mineral
15rights, demolition and clearing, rights-of-way and related
16utility relocations, surveys and soils analysis, and the cost of
17all fees relating thereto.

18(2) "Site development" includes excavation, grouting or
19shoring, special foundations for buildings, access roads to
20site, utilities on site, extension of utilities to site.

21(3) "Equipment and fixtures" means property fixed or movable
22which is incidental and necessary to conduct the educational
23program, and includes, but is not limited to movable equipment
24such as desks, chairs, tables, portable physical education
25equipment, audio-visual equipment and science, homemaking,
26industrial art and business equipment and instructional
27materials and fixtures such as casework, laboratory equipment,
28kitchen equipment, auditorium seating and any other special
29fixtures or equipment required to conduct a particular
30educational program.

1(4) "Substantial addition" means more than twenty (20) per
2centum of the area and replacement value of the structure to
3which the improvement is to be added.

4(5) "LEED" means the Leadership in Energy and Environmental 
5Design, a program designed by the United States Green Building 
6Council and committed to designing buildings in an energy-
7efficient and environmentally conservative manner.

8(6) "LEED for schools rating system" means the most current 
9version of the Leadership in Energy and Environmental Design 
10(LEED) program designed by the United States Green Building 
11Council (USGBC) to measure the energy and environmental 
12performance of K-12 schools.

13(7) "LEED cost" means the design, construction and 
14registration costs directly attributable to achieving points 
15under the Leadership in Energy and Environmental Design (LEED) 
16for schools rating system, including, but not limited to, energy 
17performance benchmarking, life-cycle cost assessments, low-
18impact development stormwater management technologies, energy 
19and lighting modeling, alternative energy technology, building 
20commissioning, and registration with the United States Green 
21Building Council (USGBC).

22Section 2. Section 2574(a) of the act, amended June 30, 2012
23(P.L.684, No.82), is amended to read:

24Section 2574. Approved Reimbursable Rental for Leases 
25Hereafter Approved and Approved Reimbursable Sinking Fund 
26Charges on Indebtedness.--(a) For school building projects for 
27which the general construction contract is awarded subsequent to 
28March 22, 1956, and for approved school building projects for 
29which the general construction contract was awarded but for 
30which a lease was not approved by the Department of Education 

1prior to March 22, 1956, the Department of Education shall 
2calculate an approved reimbursable rental or approved 
3reimbursable sinking fund charges. Reimbursable sinking fund 
4charges may include charges for temporary indebtedness within 
5constitutional limitations, if the indebtedness is incurred for 
6approved permanent improvements to the school plant including 
7the cost of acquiring a suitable site for a school building, the 
8cost of constructing a new school building, or the cost of 
9providing needed additions or alterations to existing buildings 
10for which no bond issue is provided and for which an approved 
11obligation or obligations other than bonds have been issued and 
12the obligation or obligations are payable within five (5) years 
13from the date of issue of the obligation in equal annual 
14installments. As used in this section, "building" shall include 
15a permanent structure that contains or is attached to 
16relocatable or modular classrooms. The term "relocatable or 
17modular classroom" shall mean a classroom not of a permanent 
18nature which meets the criteria and specifications of the 
19Department of Education.

20Nothing in this section or in the Department of Education 
21guidelines shall prohibit a school district from receiving 
22reimbursement for approved building improvements, including the 
23cost of acquiring a suitable site for a school building, the 
24cost of constructing a new school building or the cost of 
25providing needed additions or alterations to existing buildings, 
26if a school district elects not to remove any relocatable or 
27modular classroom utilized after the completion of a building 
28project. The term "relocatable or modular classroom" shall mean 
29a classroom not of a permanent nature which meets the criteria 
30and specifications of the Department of Education.

1Approved reimbursable rental or sinking fund charge shall
2consist of that part of the annual rental or sinking fund charge
3attributable to--

4(1) The cost of acquiring the land upon which the school
5buildings are situate, the cost of necessary rough grading to
6permit proper placement of the building upon said land and the
7cost of sewage treatment plants, as required by the Department
8of Health, to the extent that such costs are deemed reasonable
9by the Department of Education and the interest on such costs of
10acquisition, grading and sewage treatment plants earned
11subsequent to date the construction contract is awarded, and

12(2) The approved building construction cost and the interest
13on such construction cost.

14* * *

15Section 3. This act shall take effect in 60 days.