State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_115C > GS_115C-531

§ 115C‑531.  (Repealedeffective July 1, 2011) Capital leases of school buildings and schoolfacilities.

(a)        Definitions. – Thefollowing definitions apply in this section:

(1)        Capital lease. – Acapital lease as defined by generally accepted accounting principles,regardless of how the parties describe the agreement.

(2)        Private developer. –The entity with which the school board enters into a capital lease or build‑to‑suitlease under the provisions of this section.

(b)        Authorization. – Localboards of education may enter into capital leases of real or personal propertyfor use as school buildings or school facilities. The capital lease may relateto an existing building or a new school building to be constructed. The term ofany capital lease, including any renewal periods, shall not exceed 40 yearsfrom the expected date that the local board of education will take occupancy ofthe property that is the subject of a capital lease. Subdivisions (c) and (d)of G.S. 115C‑521 do not apply to a capital lease entered into under thissection.

(c)        Construction,Repairs, and Renovation. – The provisions of G.S. 115C‑530(b) apply to acapital lease under this section. A capital lease entered into under thissection may provide that the private developer is responsible for providing, orcontracting for, construction, repair, or renovation work. Construction,repair, or renovation work undertaken or contracted by a private developer isnot subject to the requirements of Article 8 of Chapter 143 of the GeneralStatutes. Construction, repair, or renovation work undertaken or contracted bythe private developer involving the estimated expenditure of three hundredthousand dollars ($300,000) or more is subject to the provisions of G.S. 115C‑532.

(d)        NonsubstitutionClause. – A capital lease may not contain a nonsubstitution clause thatrestricts the right of a local board to continue to provide a service oractivity or to replace or provide a substitute for any property financed orpurchased by the capital lease.

(e)        No DeficiencyJudgment; No Pledge of Taxing Power. – No deficiency judgment may be renderedagainst any local board of education or any unit of local government, asdefined in G.S. 160A‑20(h), in any action for breach of a contractualobligation authorized by this section, and the taxing power of a unit is notand may not be pledged directly or indirectly to secure any moneys due under acontract authorized by this section. A capital lease shall state that it doesnot constitute a pledge of the taxing power or full faith and credit of thelocal board of education or board of county commissioners.

(f)         BudgetaryAccounting. – A capital lease entered into under this section shall beconsidered a continuing contract for capital outlay and is subject to G.S. 115C‑441(c1);provided, however, notwithstanding any provision of G.S. 115C‑441(c1) orG.S. 115C‑426, in each fiscal year the appropriation of funds by thecounty for the payment of amounts due under the capital lease shall be at thediscretion of the board of county commissioners.

(g)        Local GovernmentCommission Approval. – Capital leases entered into under this section aresubject to approval by the Local Government Commission under Article 8 ofChapter 159 of the General Statutes if they meet the standards set out in G.S.159‑148(a)(1), 159‑148(a)(2), and 159‑148(a)(3). For purposesof determining whether the standards set out in G.S. 159‑148(a)(3) havebeen met, only the five‑hundred‑thousand‑dollar ($500,000)threshold applies.

(h)        No Agreements onStudent Assignment. – A capital lease may not contain any provision withrespect to the assignment of specific students or students from a specific areato any specific school.

(i)         Lien Laws NotAffected. – All laws relating to liens on private property apply to private propertyinterests in a capital lease project undertaken under this section. (2006‑232, s. 1; 2006‑259,s. 54(a).)