15-2004

15-2004. School facilities board lease-to-own;
fund; expiration

A. In order to fulfill the requirements of section 15-2041, the school facilities
board may acquire school facilities for the use of one or more school districts by
entering into one or more lease-to-own transactions in accordance with this section. For
purposes of this section, providing school facilities includes land acquisition, related
infrastructure, fixtures, furnishings, equipment and costs of the lease-to-own
transaction. The school facilities board may provide monies to provide school facilities
in part pursuant to section 15-2041 and in part through a lease-to-own transaction.

B. A lease-to-own transaction may provide for:

1. The ground lease of the land for the facilities to a private entity for the term
of the lease-to-own transaction or for a term of up to one and one-half times the term of
the lease-to-own transaction, subject to earlier termination on completion of performance
of the lease-to-own agreement. The ground lessor may either be the school district or the
school facilities board, whichever holds title to the land.

2. The lease of the completed school facilities by a private entity to the school
facilities board for an extended term of years pursuant to a lease-to-own agreement.

3. The sublease of the completed school facilities by the school facilities board
to the school district during the term of the lease-to-own agreement. The sublease shall
provide for the use, maintenance and operation of the school facilities by the school
district and for the transfer of ownership of the school facilities to the school
district on completion of performance of the lease-to-own agreement.

4. The option for the school facilities board's purchase of the school facilities
and transfer of ownership of the school facilities to the school district before the
expiration of the lease-to-own agreement.

5. The services of trustees, financial advisors, paying agents, transfer agents,
underwriters, lawyers and other professional service providers, credit enhancements or
liquidity facilities and all other services considered necessary by the school facilities
board in connection with the lease-to-own transaction, and related agreements and
arrangements including arrangements for the creation and sale of certificates of
participation evidencing proportionate interests in the lease payments to be made by the
school facilities board pursuant to the lease-to-own agreement.

C. The sublease of the school facilities to the school district is subject to this
section and to the provisions of the lease-to-own agreement. Neither a ground lease by
the school district as lessor nor a sublease of the school facilities to the school
district is required to be authorized by a vote of the school district electors. A ground
lease is not subject to any limitations or requirements applicable to leases or
lease-purchase agreements pursuant to section 15-342 or any other section of this title.

D. Any school facility that is constructed through a lease-to-own agreement shall
meet the minimum building adequacy standards set forth in section 15-2011.

E. School districts may use local monies to exceed the minimum adequacy standards
and to build athletic fields and any other capital project for leased-to-own facilities.

F. The school facilities board shall include any square footage of new school
facilities constructed through lease-to-own agreements in the computations prescribed in
section 15-2011.

G. Pursuant to section 15-2031, a school district is eligible to receive building
renewal monies for any facility constructed through a lease-to-own agreement. If a
facility's building maintenance renewal is included in the lease-to-own agreement, the
facility shall not be included in the district's building renewal calculation.

H. A lease-to-own fund is established consisting of monies appropriated by the
legislature. The school facilities board shall administer the fund and distribute monies
in the fund to make payments pursuant to lease-to-own agreements entered into by the
school facilities board pursuant to this section, to make payments to or for the benefit
of school districts pursuant to local lease-to-own agreements entered into by school
districts pursuant to section 15-2005 and to pay costs considered necessary by the school
facilities board in connection with lease-to-own transactions and local lease-to-own
transactions. Payments by the school facilities board pursuant to a lease-to-own
agreement or local lease-to-own agreement shall be made only from the lease-to-own fund.
On notice from the school facilities board, the state treasurer shall invest and divest
monies in the fund as provided by section 35-313, and monies earned from investment shall
be credited to the lease-to-own fund.

I. A lease-to-own agreement entered into by the school facilities board pursuant to
this section shall provide that:

1. At the completion of the lease-to-own agreement, ownership of the school
facilities and land associated with the lease-to-own agreement shall be transferred to
the school district as specified in the agreement.

2. The obligation of the school facilities board to make any payment under the
lease-to-own agreement is a current expense, payable exclusively from appropriated
monies, and is not a general obligation indebtedness of this state or the school
facilities board. The obligation of a school district to make expenditures under a
sublease pursuant to subsection B, paragraph 3 of this section is a current expense,
payable exclusively from budgeted monies, and is not a general obligation indebtedness of
the school district.

3. If the legislature fails to appropriate monies or the school facilities board
fails to allocate such monies for any periodic payment or renewal term of the
lease-to-own agreement, the lease-to-own agreement terminates at the end of the current
term and this state and the school facilities board are relieved of any subsequent
obligation under the agreement and the school district is relieved of any subsequent
obligation under the sublease.

4. The lease-to-own agreement shall be reviewed and approved by the attorney
general before the agreement may take effect.

5. Before the agreement takes effect and after review by the attorney general, the
project or projects related to the agreement shall be submitted for review by the joint
committee on capital review.

J. The school facilities board may covenant to use its best efforts to budget,
obtain, allocate and maintain sufficient appropriated monies to make payments under a
lease-to-own agreement, but the lease-to-own agreement shall acknowledge that
appropriating state monies is a legislative act and is beyond the control of the school
facilities board or of any other party to the lease-to-own agreement.

K. The land and the school facilities on the land are exempt from taxation during
the term of the lease-to-own agreement and during construction and subsequent occupancy
by the school district pursuant to the sublease.

L. The powers prescribed in this section are in addition to the powers conferred by
any other law. Without reference to any other provision of this title or to any other
law, this section is authority for the completion of the purposes prescribed in this
section for the school facilities board to provide school facilities for use by school
districts through lease-to-own transactions pursuant to this section without regard to
the procedure required by any other law. Except as otherwise provided in this section,
the provisions of this title that relate to the matters contained in this section are
superseded because this section is the exclusive law on these matters.

M. The school facilities board shall not enter into lease-to-own transactions,
including any refinancings or refundings, pursuant to this section from and after May 15,
2006.