Section 20-2-506. Definitions; authority to enter into multiyear lease, purchase, or lease purchase contracts

   (a) As used in this Code section, the term:

   (1) "Energy cost savings measure" means a facility alteration designed to reduce energy consumption or operating costs and may include one or more of the following:

      (A) Insulating the building structure or structures within the building, including caulking or weather-stripping;

      (B) Installing storm windows or doors, multiglazed windows or doors, heat absorbing or heat reflective glazed and coated window or door systems, or other window or door systems designed to reduce energy consumption;

      (C) Installing automated or computerized energy control systems;

      (D) Modifying or replacing heating, ventilating, or air-conditioning systems;

      (E) Replacing or modifying lighting fixtures to increase the energy efficiency of the lighting system;

      (F) Improving indoor air quality to conform to the applicable state or local building code requirements;

      (G) Installing energy recovery systems;

      (H) Installing cogeneration systems that produce steam or forms of energy such as heat and electricity for use primarily within a building or complex of buildings; and

      (I) Life safety measures that provide long-term operating cost reductions and are in compliance with state and local codes, and building operation programs that reduce operating costs.

   (2) "Guaranteed energy saving contract" means a contract for the implementation of one or more energy cost savings measures providing that all payments except obligations on termination of the contract before its expiration are to be made over time and the energy cost savings are guaranteed to the extent necessary to make payments for the contract.

(b) Except as otherwise provided in this Code section, each county, independent, or area school system in this state shall be authorized to enter into multiyear lease, purchase, or lease purchase contracts of all kinds for the acquisition of goods, materials, real and personal property, services, and supplies, provided that any such contract shall contain provisions for the following:

   (1) The contract shall terminate absolutely and without further obligation on the part of the school system at the close of the calendar year in which it was executed and at the close of each succeeding calendar year for which it may be renewed as provided in this Code section;

   (2) The contract may provide for automatic renewal unless positive action is taken by the school system to terminate such contract, and the nature of such action shall be determined by the school system and specified in the contract;

   (3) The contract shall state the total obligation of the school system for the calendar year of execution and shall further state the total obligation which will be incurred in each calendar year renewal term, if renewed;

   (4) The total combined annual payments for contracts under this Code section and contracts of such school system under Article IX, Section III, Paragraph I of the Constitution in any calendar year, excluding guaranteed energy savings contracts, shall not exceed an amount equal to 7.5 percent of the total local revenue collected for maintenance and operation of the school system in the most recently completed fiscal year; provided, however, that the foregoing limitation shall not apply to contracts with other public educational entities, including school systems in this state, for the education of students; and

   (5) For each guaranteed energy savings contract, a school system shall document the historical energy cost of each structure affected for a period of at least one year prior to the date of the contract and shall document the monthly energy cost and monthly energy savings of each affected structure for the life of the contract.

(c) In addition to the provisions enumerated in subsection (b) of this Code section, any contract authorized by this Code section may include:

   (1) A provision which requires that the contract will terminate immediately and absolutely at such time as appropriated and otherwise unobligated funds are no longer available to satisfy the obligations of the school system under the contract; or

   (2) Any other provision reasonably necessary to protect the interests of the school system.

(d) Any contract developed under this Code section containing the provisions enumerated in subsection (b) of this Code section shall be deemed to obligate the school system only for those sums payable during the calendar year of execution or, in the event of a renewal by the school system, for those sums payable in the individual calendar year renewal term.

(e) No contract developed and executed pursuant to this Code section shall be deemed to create a debt of the school system for the payment of any sum beyond the calendar year of execution or, in the event of a renewal, beyond the calendar year of such renewal.

(f) Any such contract may provide for the payment by the school system of interest or the allocation of a portion of the contract payment to interest, provided that the contract is in compliance with this Code section.

(g) When any local board of education on or after July 1, 1990, submits to the electors of its local school district the proposed issuance of any bonded debt and such proposal is defeated by the electors, that school system shall be prohibited for a period of four calendar years immediately following such election from entering into any multiyear contract for the lease, purchase, or lease purchase of any goods, materials, real or personal property, services, or supplies which are the same as or substantially similar to items which were proposed to be funded through such proposed issuance of bonded debt.

(h) Nothing in this Code section shall restrict school systems from executing reasonable contracts arising out of their proprietary functions.

(i) Each school system in this state is authorized to accept the title to property subject to a contract for lease purchase or installment purchase and is authorized to transfer title back to the vendor in the name of the school district in the event that the contract is not fully consummated.

(j) Any contract developed under this Code section shall comply with the applicable provisions of the Official Code of Georgia Annotated, and regulations thereunder, relating to state allocated capital outlay funds and entitlements.

Code 1981, § 20-2-506, enacted by Ga. L. 1990, p. 1035, § 2; Ga. L. 1996, p. 1075, § 1; Ga. L. 1997, p. 919, § 1; Ga. L. 1998, p. 128, § 20.