24 Pa. Stat. § 25-2574

Current through Pa Acts 2024-53, 2024-56 through 2024-92

Section 25-2574 - Approved Reimbursable Rental for Leases Hereafter Approved and Approved Reimbursable Sinking Fund Charges on Indebtedness

(a) For school building projects for which the general construction contract is awarded subsequent to March 22, 1956, and for approved school building projects for which the general construction contract was awarded but for which a lease was not approved by the Department of Education prior to March 22, 1956, the Department of Education shall calculate an approved reimbursable rental or approved reimbursable sinking fund charges. Reimbursable sinking fund charges may include charges for temporary indebtedness within constitutional limitations, if the indebtedness is incurred for approved permanent improvements to the school plant including the cost of acquiring a suitable site for a school building, the cost of constructing a new school building, or the cost of providing needed additions or alterations to existing buildings for which no bond issue is provided and for which an approved obligation or obligations other than bonds have been issued and the obligation or obligations are payable within five (5) years from the date of issue of the obligation in equal annual installments.

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

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

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

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

(b) For new school buildings the approved building construction cost shall be the lesser of

(1) The cost of constructing the school buildings including the cost of essential fixtures and equipment but excluding architect's fees in excess of six per cent (6%) of the contract price, or

(2) The product of the rated pupil capacity as determined by the Department of Public Instruction at the time the project is approved and (i) one thousand one hundred dollars ($1100) in the case of elementary schools, (ii) one thousand seven hundred dollars ($1700) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by one thousand one hundred dollars ($1100) and the rated secondary pupil capacity by one thousand seven hundred dollars ($1700) and dividing the sum by the total rated pupil capacity.

(3) The provisions of clause (2) of subsection (b) hereof shall apply to all school building projects for which the general construction contract is awarded prior to July 1, 1966, and for approved school building projects for which a lease was approved by the Department of Public Instruction prior to July 1, 1966. For school buildings for which the general construction contract is awarded subsequent to July 1, 1966, and for approved school building projects for which the general construction contract was awarded but for which a lease was not approved by the Department of Public Instruction prior to July 1, 1966, the product of the rated pupil capacity as determined by the Department of Public Instruction at the time the project is approved and (i) two thousand three hundred dollars ($2300) in the case of elementary schools, (ii) three thousand dollars ($3000) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by two thousand three hundred dollars ($2300) and the rated secondary pupil capacity by three thousand dollars ($3000) and dividing the sum by the total rated pupil capacity.

(3.1) For school buildings for which the general construction contract is awarded subsequent to July 1, 1984, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to July 1, 1984, the product of the rated pupil capacity as determined by the Department of Education at the time the project is approved and (i) three thousand nine hundred dollars ($3,900) in the case of elementary schools, (ii) five thousand one hundred dollars ($5,100) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by three thousand nine hundred dollars ($3,900) and the rated secondary pupil capacity by five thousand one hundred dollars ($5,100) and dividing the sum by the total rated pupil capacity.

(4) For school buildings for which the general construction contract is awarded subsequent to January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, the product of the rated pupil capacity as determined by the Department of Education at the time the project is approved and (i) four thousand seven hundred dollars ($4,700) in the case of elementary schools, (ii) six thousand two hundred dollars ($6,200) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by four thousand seven hundred dollars ($4,700) and the rated secondary pupil capacity by six thousand two hundred dollars ($6,200) and dividing the sum by the total rated pupil capacity.

(b.1) For school buildings constructed and based on an approved school facility design received from the Department of Education's school facility design clearinghouse, for which the general construction contract is awarded subsequent to January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, the approved building construction cost shall additionally include the product of the rated pupil capacity as determined by the Department of Education at the time the project is approved and (i) four hundred seventy dollars ($470) in the case of elementary schools, (ii) six hundred twenty dollars ($620) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by four hundred seventy dollars ($470) and the rated secondary pupil capacity by six hundred twenty dollars ($620) and dividing the sum by the total rated pupil capacity.

(c) For additions or alterations to existing buildings approved building construction cost shall be the lesser of

(1) The cost of constructing the additions or alterations including the cost of essential fixtures and equipment by excluding architect's fees in excess of six per cent (6%) of the contract price, or

(2) The difference obtained by subtracting the appraisal value of the existing building from the product of rated pupil capacity of the altered or expanded building as determined by the Department of Public Instruction at the time the project is approved and (i) one thousand one hundred dollars ($1100) in the case of elementary schools, (ii) one thousand seven hundred dollars ($1700) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity of the altered or expanded building by one thousand one hundred dollars ($1100) and the rated secondary pupil capacity of the altered or expanded building by one thousand seven hundred dollars ($1700) and dividing the sum by the total rated pupil capacity of the altered or expanded building.

(3) The provisions of clause (2) of subsection (c) hereof shall apply to all school building projects for which the general construction contract is awarded prior to July 1, 1966, and for approved school building projects for which a lease was approved by the Department of Public Instruction prior to July 1, 1966. For school buildings for which the general construction contract is awarded subsequent to July 1, 1966, and for approved school building projects for which the general construction contract was awarded but for which a lease was not approved by the Department of Public Instruction prior to July 1, 1966, the difference obtained by subtracting the appraisal value of the existing building from the product of rated pupil capacity of the altered or expanded building as determined by the Department of Public Instruction at the time the project is approved and (i) two thousand three hundred dollars ($2300) in the case of elementary schools (ii) three thousand dollars ($3000) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity of the altered or expanded building by two thousand three hundred dollars ($2300) and the rated secondary pupil capacity of the altered or expanded building by three thousand dollars ($3000) and dividing the sum by the total rated pupil capacity of the altered or expanded building.

Appraisal value shall be the valuation made immediately before the additions or alterations are begun by three competent appraisers, one appointed by the school authorities, one by the Superintendent of Public Instruction, and the third by the other two.

(3.1) For school buildings for which the general construction contract is awarded subsequent to July 1, 1984, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to July 1, 1984, the difference obtained by subtracting the appraisal value of the existing building from the product of the rated pupil capacity of the altered or expanded building as determined by the Department of Education at the time the project is approved and (i) three thousand nine hundred dollars ($3,900) in the case of elementary schools, (ii) five thousand one hundred dollars ($5,100) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by three thousand nine hundred dollars ($3,900) and the rated secondary pupil capacity by five thousand one hundred dollars ($5,100) and dividing the sum by the total rated pupil capacity of the altered or expanded building.

(4) For school buildings for which the general construction contract is awarded subsequent to January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, the difference obtained by subtracting the appraisal value of the existing building from the product of the rated pupil capacity of the altered or expanded building as determined by the Department of Education at the time the project is approved and (i) four thousand seven hundred dollars ($4,700) in the case of elementary schools, (ii) six thousand two hundred dollars ($6,200) in the case of secondary schools, (iii) an amount in the case of combined elementary- secondary schools obtained by multiplying the rated elementary pupil capacity by four thousand seven hundred dollars ($4,700) and the rated secondary pupil capacity by six thousand two hundred dollars ($6,200) and dividing the sum by the total rated pupil capacity of the altered or expanded building.

(c.1) If the Commonwealth makes any payment under section 2575.1 of this act on account of a preliminary payment by a school district on the approved building construction cost, the amount of the preliminary payments by the school district shall be subtracted from the amount of the approved building construction cost for the purpose of calculating the approved reimbursable rental on projects undertaken pursuant to sections 783, 790 or 791 of this act.

(c.2) If the Commonwealth makes a payment of fifty per cent (50%) under section 2574.1 of this act on account of the approved cost of the acquisition of a site for a school building, the amount payable under this section on account of the approved cost of site acquisition shall be reduced by fifty per cent (50%).

(c.3) For school buildings for which the general construction contract is awarded on or after January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, and where the general construction contract alters or adds to an existing school building, the approved building construction cost shall additionally include the difference obtained by subtracting the appraisal value of the existing building from the product of the rated pupil capacity of the altered or expanded building as determined by the Department of Education at the time the project is approved and (i) four hundred seventy dollars ($470) in the case of elementary schools, (ii) six hundred twenty dollars ($620) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by four hundred seventy dollars ($470) and the rated secondary pupil capacity by six hundred twenty dollars ($620) and dividing the sum by the total rated pupil capacity.

(c.4) For school buildings for which the general construction contract is awarded on or after January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, and where the school building receives a silver, gold or platinum certification from the United States Green Building Council's Leadership in Energy and Environmental Design Green Building Rating System or two, three or four Globes under the Green Building Initiative's Green Globes Green Building Rating System on or after January 1, 2005, the Department of Education shall adjust the approved building construction cost to additionally include the product of the rated pupil capacity as determined by the Department of Education at the time the project is approved and (i) four hundred seventy dollars ($470) in the case of elementary schools, (ii) six hundred twenty dollars ($620) in the case of secondary schools, (iii) an amount in the case of combined elementary-secondary schools obtained by multiplying the rated elementary pupil capacity by four hundred seventy dollars ($470) and the rated secondary pupil capacity by six hundred twenty dollars ($620) and dividing the sum by the total rated pupil capacity. The Department of Education in consultation with the Governor's Green Government Council shall issue guidelines to carry out this section.

(c.5) Reimbursement for an approved school construction project shall not exceed total project costs.

(c.6) If a school district receives reimbursement for a school construction project under this section, the school district, upon request by the Department of Education, shall do all of the following:

(i) Provide information required by the department to determine whether the school construction project meets criteria established by the department for certification as an approved school facility design for purposes of the department's school facility design clearinghouse.

(ii) Authorize the department, in its discretion, to certify the school construction project as an approved school facility design and to include information about the certified project in the department's school facility design clearinghouse.

(d) For purposes of calculating the amount of rental reimbursement the approved reimbursable rental for a school project constructed for two or more school districts shall annually be apportioned among the participating districts on the basis of the proportion which the valuation of each district as certified by the state tax equalization board during the preceding school year bears to the total valuation of all participating districts. In special cases where the best interests of the Commonwealth and of the school districts will be better served by permitting the districts to establish for themselves some method other than market valuation as the basis for determining their respective shares of the annual lease rental, the Superintendent of Public Instruction may issue a special order approving such method of sharing the rental and authorizing that the rental reimbursement for that particular project shall be calculated on the basis of the proportionate share of rental actually paid by each district.

(e) For area career and technical school and technical institute projects leased subsequent to July 1, 1964, by or for lease to a board of school directors authorized to operate such a school, the Department of Education shall calculate an approved reimbursable rental charge.

For area career and technical school and technical institute projects constructed or purchased subsequent to July 1, 1964, by a board of school directors authorized to operate such a school, the Department of Education may calculate an approved reimbursable sinking fund charge.

Approved reimbursable rental or sinking fund charge shall consist of that part of the annual rental or sinking fund attributable to:

(1) Cost of acquiring land and preparing it for use to the extent that such costs are deemed reasonable by the Department of Education and the interest on such cost of acquisition, cost of preparation and the cost of sewage treatment and the interest on such cost.

(2) Machinery, apparatus, furniture and equipment and all other necessary expenses and interest charges, but excluding architects' fees in excess of six percent of the construction cost.

The approved building construction cost and the interest on such construction cost shall not exceed the product of the rated full-time pupil capacity, as determined by the Department of Education at the time the project is approved and two thousand two hundred dollars ($2,200).

The provisions of the foregoing paragraph shall apply to all school building projects for which the general construction contract is awarded prior to July 1, 1966, and for approved school building projects for which a lease was approved by the Department of Education prior to July 1, 1966. For school buildings for which the general construction contract is awarded subsequent to July 1, 1966, and for approved school building projects for which the general construction contract was awarded but for which a lease was not approved by the Department of Education prior to July 1, 1966, the approved building construction cost and the interest on such construction cost shall not exceed the product of the rated full-time pupil capacity, as determined by the Department of Education at the time the project is approved, and three thousand seven hundred dollars ($3700).

For school buildings for which the general construction contract is awarded subsequent to July 1, 1984, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to July 1, 1984, the approved building construction cost and the interest on such construction cost shall not exceed the product of the rated full-time pupil capacity, as determined by the Department of Education at the time the project is approved, and six thousand three hundred dollars ($6,300).

For school buildings for which the general construction contract is awarded subsequent to January 1, 2005, and for approved school building projects for which the general construction contract was awarded but for which a lease or general obligation bond resolution was not approved by the Department of Education prior to January 1, 2005, the approved building construction cost shall not exceed the product of the rated full-time pupil capacity, as determined by the Department of Education at the time the project is approved, and seven thousand six hundred dollars ($7,600).

The Department of Education shall not approve the expenditure of any funds borrowed or obtained by the sale of bonds by any authority, nonprofit corporation, profit corporation, company or individual for construction of area career and technical schools or technical institutes for bleachers, athletic field, lighting equipment or apparatus used to promote and conduct interscholastic athletics.

(f) For the purchase of any building, reimbursement shall be computed in the same manner as for constructed school buildings.

(g)

(1) Reimbursement documentation for an approved school building project that has unclaimed prior year reimbursements for payments made prior to July 1, 2017, must be submitted, in a complete and approvable form, to the department by December 31, 2023. A claim for reimbursement that is not submitted or remains incomplete or unapproved by the department as of December 31, 2023, shall expire.

(2) The department shall send to applicants a notice that details the unclaimed prior year reimbursements for which documentation must be submitted no later than 60 days after the effective date of this subsection. The department shall send a subsequent notice no later than January 1, 2023.

24 P.S. § 25-2574

Amended by P.L. TBD 2022 No. 55, § 59, eff. 7/8/2022.

Amended by P.L. TBD 2019 No. 76, § 61, eff. 12/30/2019.

Amended by P.L. 684 2012 No. 82, § 30, eff. 7/1/2012.

1949, March 10, P.L. 30, art. XXV, § 2574, added 1956, March 22, P.L. (1955) 1315, § 2. Amended 1957, July 11, P.L. 775, § 4; 1959, Sept. 29, P.L. 992, No. 407, § 1; 1959, Nov. 30, P.L. 1601, § 1; 1961, Sept. 12, P.L. 1268, §§ 1, 2; 1963, Aug. 14, P.L. 1065, No. 463, § 16; 1966, Feb. 1, P.L. (1965) 1642, § 13; 1968, June 12, P.L. 192, No. 96, § 8; 1972, June 1, P.L. 325, No. 89, § 4, imd. effective; 1987 , July 10, P.L. 286, No. 50, § 5, imd. effective; 1992, July 9, P.L. 403, No. 88, § 4, retroactive effective Jan. 1, 1991; 2005 , July 13, P.L. 226, No. 46, § 26, imd. effective; 2006, July 11, P.L. 1092, No. 114, § 14.3, imd. effective.