ASSEMBLY STATE AND LOCAL GOVERNMENT
COMMITTEE
STATEMENT TO
ASSEMBLY, No. 5038
STATE OF NEW JERSEY
DATED: JANUARY 23, 2025
The Assembly State and Local Government Committee reports
favorably Assembly Bill No. 5038.
This bill extends the period of time in which a board of
education may execute certain: (1) leases with the federal
government, the State, a political subdivision of the State, or any
other individual or entity authorized to do business in the State; and
(2) lease purchase agreements for improvements or additions to
school buildings.
Pursuant to current law, a board of education may lease a
building from the federal government, the State, a political
subdivision of the State, or any other individual or entity authorized
to do business in the State. To execute the lease, certain conditions
are required to be met, including a condition that any lease in
excess of five years is to be approved by the Commissioner of
Education and the Local Finance Board in the Department of
Community Affairs. This bill instead requires commissioner and
finance board approval only when the lease exceeds 20 years.
Current law also requires commissioner approval in cases in
which a board of education seeks to acquire improvements or
additions to school buildings through lease purchase agreements.
The agreements, however, are prohibited from exceeding five years
and are to only be approved by the commissioner if any operating
expenses related to the agreement can be included within the
district's tax levy growth limitation and will not result in the need
for approval of additional spending proposals to maintain existing
instructional programs and extracurricular activities. This bill
extends the current time limitation on these lease-purchase
agreements to 20 years. All other existing statutory requirements in
regard to these lease purchase agreements are maintained under the
bill.