Except where the approval of the electors is obtained to incur indebtedness to finance the construction of a school project, the board of school directors of any school district of the second, third or fourth classes, shall not construct, enter into a contract to construct or enter into a contract to lease a new school building or substantial addition to an existing school building without the consent of the electors obtained by referendum or without holding a public hearing as hereinafter provided. In the event that a new school building or a substantial addition to an existing building is to be constructed or leased, the school board shall, by a majority vote of all its members, authorize a maximum project cost and a maximum building construction cost to be financed by the district or amortized by lease rentals to be paid by the district. Building construction cost shall consist of the cost of all building construction including general construction costs, plumbing, heating, electrical, ventilating and other structural costs, equipment and fixtures and architectural and engineering fees relating thereto, but not including costs for site acquisition and development, rough grading to receive the building, sewage treatment facilities or equivalent capital contributions, and architectural and engineering fees relating thereto. In all cases, a public hearing shall be held not later than thirty (30) days before the school district submits the initial building construction cost estimates to the Department of Education for approval. Notice of the hearing shall be given not later than twenty (20) days before the date of the scheduled hearing. In the event that the maximum building construction cost authorization exceeds the aggregate building expenditure standard hereinafter specified, the aforesaid authorization of the school board shall be submitted to the electors of the school district for their approval within six (6) months prior to submission of the final building construction cost bids to the Department of Education for approval. Such referendum shall be held in the same manner as provided by law for the approval of the incurring of indebtedness by referendum. The question as submitted shall specify the maximum project cost, the maximum building construction cost and the annual sinking fund charge or lease rental to be incurred by the school district and the portion of such charge or rental expected to be reimbursed by the Commonwealth. If the final building construction cost bids to be submitted to the Department of Education for approval are less than the aggregate building expenditure standard hereafter specified but exceed by eight (8) per cent or more the initial building construction cost estimates submitted to the Department for approval, a second public hearing shall be held before the Department shall give its final approval.

The applicable aggregate building expenditure standard shall be a total amount calculated for each building or substantial addition by multiplying the rated pupil capacity under the approved room schedule by the following: two thousand eight hundred dollars ($2,800) for each pupil of rated elementary capacity; four thousand two hundred dollars ($4,200) for each pupil of rated secondary capacity in grades seven, eight and nine and five thousand two hundred dollars ($5,200) for each pupil of rated secondary capacity in grades ten, eleven and twelve and five thousand two hundred dollars ($5,200) for each pupil of rated career and technical capacity in grades ten, eleven and twelve to not include the cost of equipment and fixtures in such career and technical schools: Provided, however, That each of the preceding per pupil amounts shall be adjusted by the Department of Education on July 1, 1974; and annually thereafter through July 1, 2003, by multiplying said amounts by the ratio of the composite construction cost index compiled and published by the United States Department of Commerce for the preceding calendar year to such index for the next preceding calendar year; and Further Provided, however, That each of the preceding per pupil amounts shall be adjusted by the Department of Education on July 1, 2004; and annually thereafter by multiplying said amounts by the ratio of the Building Cost Index published by the McGraw-Hill Companies for the preceding calendar year to such index for the next preceding calendar year. Rated elementary pupil capacity or rated secondary pupil capacity for any school building shall be the rated pupil capacity determined on the basis of the method used by the Department for school building reimbursement purposes during the school year 1971-1972.

For purposes of this section: