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    ​​​Basic Education Circulars (BECs)

    ​Sale or Lease of Unused and Unnecessary Lands and Buildings

    24 P.S. §7-707 - Amended for Act 70

    Date of Issue: March 31, 2020
    Previous reviews:  July 1, 2018, July 1, 2013, 2013, and July 1, 2001

    Purpose:

    The purpose of this Basic Education Circular concerns the sale or lease of school facilities that are receiving Commonwealth reimbursement for debt service or authority rental payments.

    1. When a building is sold by a school district, Commonwealth reimbursement ceases on the building's previous construction project.  The school district must notify the Department of any sale of school facilities.

    2. §349.309(a) addresses replaced buildings.  The proceeds from the sale or lease of any school building or buildings which are replaced by a reimbursable school project shall be placed into a bond redemption fund or otherwise used to reduce the reimbursable amortization of the new project.  The established 20-year payment plan cannot be adjusted, but the LEA shall use proceeds to reduce the principal amount of the project costs to be amortized.

    3. When a building is leased by the school district as lessor, the proceeds from the lease must be used to reduce the reimbursable amortization of the building.

    4. §349.30(b) addresses leases for public school purposes.  Any closed school building which is leased by a school district to another entity for a public school program or programs shall not be subject to reimbursement cancellation as indicated in §349.28(c) (relating to closing of school buildings).  The proceeds of such lease shall be used to reduce any reimbursable amortization of the building.  The established 20-year payment plan cannot be adjusted, but the LEA shall use proceeds to reduce the principal amount of the project costs to be amortized.

    5. §349.30(c) addresses leases for other purposes.  Any lease for a building which has been closed to public school use, but which has been approved for continuing reimbursement by the Department, must receive preapproval from the Department.  The proceeds from any such approved lease shall be placed in a bond redemption fund, or otherwise used to reduce the reimbursable amortization of the building.  The established 20-year payment plan cannot be adjusted, but the LEA shall use proceeds to reduce the principal amount of the project costs to be amortized.

    6. §349.31 addresses insurance recovery on school buildings.  The proceeds of any insurance recovery against any school building being replaced or repaired by a project shall be used to reduce the principal amount of the project costs to be amortized.  The established 20-year payment plan cannot be adjusted, but the LEA shall use proceeds to reduce the principal amount of the project costs to be amortized.

    References

    Purdon's Statutes

    24 P.S. §7-707
    24 P.S. §7-709

    State Board of Education Regulations

    22 Pa. Code §349.30
    22 Pa. Code §349.31

    Bureau/Office Contact

    Division of School Facilities
    Bureau of Budget and Fiscal Management
    Pennsylvania Department of Education
    Forum Building
    607 South Drive
    Harrisburg, PA  17120​
    Phone: 717-787-5993
    Email: RA-SchoolFacilities@pa.gov