(1) (a) Whenever the term of an installment purchase agreement or a lease agreement with an option to purchase, including but not limited to any sublease-purchase agreement entered into by a school district pursuant to section 22-43.7-110 (2)(c), under which a school district becomes entitled to the use of undeveloped or improved real property or equipment for a school site, building, or structure is greater than one year, the obligation to make payments under the agreement shall constitute an indebtedness of the district. (b) Under any installment purchase agreement or under any lease or rental agreement, with or without the option to purchase, or similar agreement pursuant to which the subject real or personal property is used by the school district for school district purposes, title shall be considered to have passed to the school district at the time of execution of the agreement for purposes of determining liability for or exemption from property taxation. (2) No board of education shall enter into an installment purchase agreement of the type which constitutes an indebtedness unless such agreement shall be first approved as provided in this section by a majority of the registered electors of the district voting at an election held pursuant to this section. The board of education may submit to the registered electors of the district the question of entering into such an agreement at any general election, regular biennial school election, or special election called for the purpose. The secretary of the board of education shall give notice of an election to be held pursuant to this section in essentially the same manner and for the same length of time as is required by law for a notice of election of school directors. Such notice shall contain, to the extent applicable, the information required for a notice of election of school directors and in addition shall contain a statement of the maximum term of the proposed agreement, the maximum and periodic amounts of payments for which the district would be obligated, and the purpose of the agreement. (3) The manner and place of conducting elections held pursuant to this section, and all other election procedures relating thereto, shall be as provided by law for the approval of contracting a bonded indebtedness of the district. (4) The principal amount of any indebtedness incurred by a school district by means of installment purchase, financed purchase of an asset, or certificate of participation, or sub- financed purchase of an asset or certificate of participation agreements having terms of more than one year shall be subject to the limitation imposed by law on the amount of bonded indebtedness that may be incurred by a school district. (5) The question of entering into an agreement of the type which constitutes an indebtedness of the district beyond a term of one year may be submitted or resubmitted after the same or any other such question has previously been rejected at an election held pursuant to this section; but no such question shall be submitted or resubmitted at any election held less than one hundred twenty days after a previous submission of such question, and the board of education of any school district shall not submit any question of entering into such an agreement at more than two elections within any twelve-month period. (6) The provisions of this section shall have no application to any installment purchase agreement or lease agreement with option to purchase, even though the term thereof may be greater than one year, where the school district's obligation to make payments under such installment purchase agreement or lease agreement with option to purchase is limited to its capital reserve fund, its general fund, or both and is expressly subject to the making of annual appropriations therefor in accordance with law. (7) The provisions of this section shall have no application to any installment purchase agreement or lease agreement with an option to purchase in which such payments are made from the capital reserve fund following approval in an election as provided for in section 22-45-103 (1)(c).
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