Bill Text - SB127 (2005)

Relative to the regional community-technical college system's acquisition of the building currently leased from the Pease development authority.


Revision: Jan. 21, 2010, midnight

SB 127-FN – AS AMENDED BY THE HOUSE

03/17/05 0695s

01Jun2005… 1570h

2005 SESSION

05-0999

05/04

SENATE BILL 127-FN

AN ACT relative to the department of regional community-technical colleges acquisition of the building currently leased from the Pease development authority and relative to transferring the Stratham campus of the regional community-technical colleges to Pease.

SPONSORS: Sen. Odell, Dist 8; Sen. Johnson, Dist 2; Sen. Clegg, Dist 14; Sen. D’Allesandro, Dist 20; Sen. Fuller Clark, Dist 24; Rep. O’Neil, Rock 15; Rep. S. Scamman, Rock 13; Rep. Thomas, Belk 5; Rep. S. L’Heureux, Merr 9; Rep. Norelli, Rock 16

COMMITTEE: Capital Budget

AMENDED ANALYSIS

This bill directs the department of regional community-technical colleges to acquire a building from the Pease development authority and to transfer the Stratham campus of the college to Pease. The bill also permits the department of regional community-technical colleges to use certain funds previously appropriated to Stratham at Pease.

- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -

Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/17/05 0695s

01Jun2005… 1570h

05-0999

05/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to the department of regional community-technical colleges acquisition of the building currently leased from the Pease development authority and relative to transferring the Stratham campus of the regional community-technical colleges to Pease.

Be it Enacted by the Senate and House of Representatives in General Court convened:

1 Acquisition of Property by the Department of Regional Community-Technical Colleges.

I. Notwithstanding RSA 12-G:8, V or any other provision of law, the Pease development authority shall transfer the building located on the premises at 320 Corporate Drive, Portsmouth, New Hampshire, to the department of regional community-technical colleges and the department of regional community-technical colleges shall acquire the building located on the premises at 320 Corporate Drive, Portsmouth, New Hampshire, from the Pease development authority for fair market appraised value, not to exceed $3,800,000. In exchange, the state shall reduce by $3,800,000 the Pease development authority’s debt owed to the state relative to start-up funding costs under RSA 12-G:34; and 1991, 355:110, as amended by 1992, 260:11; 1992, 260:12, as amended by 1993, 358:3; 1994, 415:1; and 1995, 307:10. Prior to acquisition by the department of regional community-technical colleges, the Pease development authority shall obtain required federal approval for the sale proceeds to be used to reduce the Pease development authority’s outstanding debt to the state.

II. Prior to acquisition by the department of regional community-technical colleges under paragraph I, and notwithstanding RSA 4:39-b or any other provision of law, the department of regional community-technical colleges and the Pease development authority shall negotiate and execute a ground lease for a term of not less than 50 years with an option to extend the term of the lease, for the 12.79 acres on which the building known as 320 Corporate Drive is located. In exchange, the state shall reduce by the amount of the lease payments the Pease development authority’s debt owed to the state relative to start-up funding costs under RSA 12-G:34; and 1991, 355:110, as amended by 1992, 260:11; 1992, 260:12, as amended by 1993, 358:3; 1994, 415:1; and 1995, 307:10. Ground lease payments shall be calculated as follows:

(a) For years 1 through 10, the annual lease payment amount shall be $13,000 per acre, which also shall be the “base rate” for years 11 through 15 under subparagraph (b).

(b) For years 11 through 15, and for each 5-year period thereafter, the lease payment shall be a fixed annual payment equal to the base rate for the immediately preceding 5-year period, plus a CPI adjustment for the preceding 5-year period, provided that in no event shall the CPI adjustment be calculated based upon a CPI increase of more than 3 percent for any single year, and the aggregate CPI adjustment shall not exceed 12 percent for any 5-year period. The lease payment shall be adjusted as provided under this subparagraph in years 11, 16, and every 5 years thereafter for the duration of the lease term.

(c) In this paragraph, “CPI” means the Consumer Price Index for All Urban Consumers applicable to the Boston area (all items 1982-1984=100), published by the Bureau of Labor Statistics, Department of Labor.

III. If the department of regional community-technical colleges cannot acquire the building known as 320 Corporate Drive on or before July 1, 2005, then notwithstanding RSA 4:39-b or any other provision of law, and in lieu of the ground lease under paragraph II, the department of regional community-technical colleges and the Pease development authority shall enter into a lease agreement for the entirety of the building and 12.79 acres known as 320 Corporate Drive for the sum of $675,000 per year. The lease term shall be until such time as the acquisition by the department of regional community-technical colleges is complete. In exchange, the state shall reduce by $675,000 per year, starting with the commencement of the lease on July 1, 2005, the Pease development authority’s outstanding debt to the state relative to start-up funding costs under RSA 12-G:34; and 1991, 355:110, as amended by 1992, 260:11; 1992, 260:12, as amended by 1993, 358:3; 1994, 415:1; and 1995, 307:10. If the department of regional community-technical colleges acquires the building known as 320 Corporate Drive after July 1 but before June 30 in any fiscal year, the debt reduction due to the authority for the sale of the building shall be reduced by prorating the lease payments made in advance during the fiscal year.

2 Transfer of Regional Community-Technical College Campus from Stratham to Pease. On or before July 1, 2009, the department of regional community-technical colleges shall close the Stratham campus and transfer all educational and administrative functions to either the Pease campus, located at 320 Corporate Drive, Portsmouth or other regional community-technical college campuses. The commissioner of the department of regional community-technical colleges and president of the regional community-technical college at Stratham, or their designees, shall meet with the capital budget overview committee within 6 months of the effective date of this act to review and secure preliminary approval of the exit strategy for the Stratham campus. Officials from the department of regional community-technical colleges shall provide the capital budget overview committee with a progress report on the transfer from Stratham to Pease every 6 months, until the transfer is complete. As part of the relocation process, the Stratham campus shall be sold for not less than its fair market appraised value, subject to the approval of the long range capital planning and utilization committee. Proceeds from the sale shall be used, subject to the approval of the capital budget overview committee, to reduce outstanding state bond obligations for capital projects located on the campuses of the regional community-technical colleges.

3 Department of Regional Community-Technical Colleges to Explore Aviation Programs Meeting Approval of the Federal Aviation Administration. The department of regional community-technical colleges shall explore the possible establishment of a Federal Aviation Administration (FAA)-approved aviation related career program or curriculum at 320 Corporate Drive, Portsmouth, New Hampshire that would assist the FAA in accomplishing its mission and enhance the possibility that such program would yield a favorable decision by the FAA to eliminate or reduce the state’s lease obligation at that location.

4 Regional Community-Technical Colleges; Reference Change. Amend RSA 188-F:2 to read as follows:

188-F:2 Department Established. There shall be a department of regional community-technical colleges which shall be governed by a board of trustees. The department shall be a state agency and shall consist of the office of the commissioner; the New Hampshire regional community-technical institute and colleges including, but not limited to, campuses in Berlin, Claremont, Concord, Laconia, Manchester, Nashua, Stratham, Pease, and associated off-campus programs; and the police standards and training council.

5 Purpose Amended; Library Construction Funds Transferred to Pease Campus from Stratham Campus. Amend 2003, 240:1, III, A to read as follows:

A. Library Expansion - Academic Program Support and Critical Maintenance – [Stratham] Pease $ 2,373,000

6 Lapses Extension; Regional Community-Technical Colleges; Library Expansion and Critical Maintenance Funds. The following capital appropriations are hereby extended to June 30, 2007:

I. The appropriation made to the community-technical college system in 2003, 240:1, III, A, as amended by section 5 of this act, for library expansion, academic program support and critical maintenance, Pease.

II. The appropriation made to the community-technical college system in 1999, 226:1, IV, C, as extended by 2001, 202:28, XLVIII, and 2003, 240:34, XXI, for maintenance/critical repairs.

III. The appropriation made to the community-technical college system in 2003, 240:1, III, G for critical repairs.

7 Pease and Stratham Campuses; Funding Allocation. Notwithstanding any other provision of law, any prior capital appropriation to the community-technical college system for maintenance or critical repairs at the Stratham campus may be used, at the discretion of the community-technical college system, at the Pease campus, subject to approval of the capital budget overview committee, provided that such funds have not lapsed and are otherwise available to the department for expenditure.

8 Repeal. 2001, 158:67, relative to lease agreement between the Pease development authority and the department of regional community-technical colleges, is repealed.

9 Effective Date.

I. Section 6 of this act shall take effect June 30, 2005.

II. The remainder of this act shall take effect July 1, 2005.

LBAO

05-0999

Revised 2/24/05

SB 127 FISCAL NOTE

AN ACT relative to the regional community-technical college system’s acquisition of the building currently leased from the Pease development authority.

FISCAL IMPACT:

The Pease Development Authority and the Department of Regional-Community Technical Colleges indicate this bill will have an indeterminable fiscal impact on state revenue and expenditures. There will be no fiscal impact on county and local revenue or expenditures.

METHODOLOGY:

The Department of Regional-Community Technical Colleges currently leases the first floor of a 3 story building located at 320 Corporate Drive, Portsmouth, NH from the Pease Development Authority. The lease is budgeted by the Department and costs $1,068,644 per year. The same amount is paid by the Pease Development Authority to the State Treasurer and is applied to the Authority’s debt to the state. The lease expires on June 30, 2005.

The Pease Development Authority states this bill will allow the Department of Regional-Community Technical Colleges to purchase the building it currently leases from the Pease Development Authority. The sales price is estimated to be $3,800,000 and the transaction will be structured as a non-cash transaction, in that the sales price will not be paid but instead shown as a reduction in the Authority’s debt, estimated to be approximately $21 million.

In addition to purchasing the building, the Department of Regional-Community Technical Colleges will also enter into a ground lease in order to access the building. The amount of the annual payment on this lease is unknown.

The Department indicates it will pay for maintenance and repairs out of current operations.

This transaction cannot take place without the approval of the Federal Aviation Administration.

None