ASSEMBLY EDUCATION COMMITTEE
STATEMENT TO
ASSEMBLY, No. 5038
STATE OF NEW JERSEY
DATED: MARCH 10, 2025
The Assembly Education 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.