§ 115C-528. Lease purchase and installment purchase contracts for certain equipment. - North Carolina Statutes

§ 115C‑528.  Leasepurchase and installment purchase contracts for certain equipment.

(a)        Local boards ofeducation may purchase or finance the purchase of automobiles; school buses;mobile classroom units; food service equipment, photocopiers; and computers,computer hardware, computer software, and related support services by leasepurchase contracts and installment purchase contracts as provided in thissection. Computers, computer hardware, computer software, and related supportservices purchased under this section shall meet the technical standardsspecified in the North Carolina Instructional Technology Plan as developed andapproved under G.S. 115C‑102.6A and G.S. 115C‑102.6B.

(b)        A lease purchasecontract under this section creates in the local board the right to possess anduse the property for a specified period of time in exchange for periodicpayments and shall include either an obligation or an option to purchase theproperty during the term of the contract. The contract may include an option toupgrade the property during the term. A local board may exercise an option toupgrade without rebidding the contract.

(c)        An installmentpurchase contract under this section creates in the property purchased asecurity interest to secure payment of the purchase price to the seller or toan individual or entity advancing moneys or supplying financing for thepurchase transaction.

(d)        The term of acontract entered into under this section shall not exceed the useful life ofthe property purchased. An option to upgrade shall be considered in determiningthe useful life of the property.

(e)        A contract enteredinto under this section shall be considered a continuing contract for capitaloutlay and subject to G.S. 115C‑441(c1).

(f)         A contract enteredinto under this section is subject to Article 8 of Chapter 159 of the GeneralStatutes, except for G.S. 159‑148(a)(4) and (b)(2). For purposes ofdetermining whether the standards set out in G.S. 159‑148(a)(3) have beenmet, only the five hundred thousand dollar ($500,000) threshold shall apply.

(g)        Subsections (e) and(f) of this section shall not apply to contracts entered into under thissection so long as the term of each contract does not exceed three years andthe total amount financed during any three‑year period is no greater thantwo hundred fifty thousand dollars ($250,000) or is no greater than three timesthe local board's annual State allocation for classroom materials, equipment,and instructional supplies, whichever is less. The local board shall submit information,including the principal and interest paid and the amount of outstandingobligation, concerning these contracts as part of the annual budget it submitsto its board of county commissioners under Article 31 of this Chapter.

(h)        No contract enteredinto under this section may contain a nonsubstitution clause that restricts theright of a local board to:

(1)        Continue to providea service or activity; or

(2)        Replace or provide asubstitute for any property financed or purchased by the contract.

(i)         No deficiencyjudgment may be rendered against any local board of education or any unit oflocal government, as defined in G.S. 160A‑20(h), in any action for breachof a contractual obligation authorized by this section, and the taxing power ofa unit of local government is not and may not be pledged directly or indirectlyto secure any moneys due under a contract authorized by this section. (1995 (Reg. Sess., 1996), c.716, s. 14; 1997‑236, s. 4; 2007‑519, s. 1.)