Any school district or districts within the Commonwealth shall have power and authority, with the approval of the Superintendent of Public Instruction,¹ to enter into contracts with the Authority to lease as lessee from the Authority any school building, and the furnishings and equipment thereof constructed or improved by the Authority, for a term, with respect to each not exceeding forty (40) years, at such rental or rentals as may be determined by the Authority, and upon the execution of a contract or contracts for the construction of, or during the period of construction of, or upon the completion of said school building and the furnishings and equipment thereof, the school district or districts shall have power and authority, with the approval of the Superintendent of Public Instruction, to lease as lessee any school building and the furnishings and equipment thereof, for a term, with respect to each not exceeding forty (40) years, at such rental or rentals as may be determined by the Authority.

The board of trustees of a community college, with the approval of the department, and the department, with the approval of the Governor, each shall have the power and authority to enter into contracts with the Authority to lease, as lessee, from the Authority any community college building constructed, improved, maintained and operated by the Authority, for a term, with respect to each, not exceeding thirty (30) years, at such rental or rentals as may be determined by the Authority, and upon execution of a contract or contracts for the construction of or during the period of construction of, or upon the completion of said community college building, the board of trustees or the department shall have power and authority, with further approval of the department in the case of the board of trustees, or the Governor, in the case of the department, to lease, as lessee, from the Authority any such community college building for a term with respect to each not exceeding thirty (30) years, at such rental or rentals as may be determined by the Authority.

When any community college building is leased by the Authority to the department, the department shall have power and authority, with the approval of the Governor, to sublease such community college building to the board of trustees of the community college for which said community college building was constructed or improved, upon such terms and conditions as shall be agreed to, and² the board of trustees of a community college, with the approval of the department, shall have the power and authority to sublease, as sublessee, from the department, any community college building leased by the Authority to the department.

There shall be included in the annual budget of a community college as prepared by each board of trustees which has entered into such a lease or sublease an amount equal to the annual amount of such rentals. Rentals payable by the department shall be payable out of current revenues of the Commonwealth of Pennsylvania; in pursuance thereof, the subleases from the department shall provide that rental payments thereunder shall be paid directly to the Authority or its assigns. Rentals payable to the department or its assigns pursuant to subleases, as provided above, shall be considered capital expenses for the purpose of reimbursement or payment by the Commonwealth as provided in the act of August 24, 1963 (P.L. 1132), known as the “Community College Act of 1963.”³

In all cases where the board of trustees of a community college fails to pay or provide for the payment of any rental or rentals due the department or its assigns for any period in accordance with the terms of any sublease of a community college building entered into between the department, as sublessor, and the board of trustees, as sublessee, the State Superintendent of Public Instruction shall notify such board of trustees and local sponsor of its obligation and shall withhold out of any State appropriation that may be due to such community college on behalf of the local sponsor an amount equal to the amount of rental or rentals owing by such board of trustees to the department or its assigns, and shall apply such amount toward such rental or rentals due the department or its assigns.

Any lessee or sublessee of a community college building, as provided herein, shall have the power and authority to pay for operation and maintenance of such community college building.