§ 378. Lease agreements. 1. Any agreement entered into between the
fund and a state retirement system pursuant to section three hundred
seventy-six of this chapter shall provide for (i) the construction,
acquisition, reconstruction, rehabilitation or improvement of one or
more facilities, (ii) the leasing thereof and of the land upon which the
same is erected to the fund upon completion of construction,
acquisition, reconstruction, rehabilitation or improvement for a term
not exceeding thirty years and upon such terms and conditions including
annual rental as may be agreed upon, and (iii) the conveyance to the
state of title to any such facility at the expiration of the term of the
lease or upon the earlier payment in full of the total amount specified
therein, without additional charge therefor. The state university shall
approve any such agreement and shall be a party thereto. Any
construction contract entered into by a state retirement system in
connection with such lease agreement shall be let, or otherwise entered
into, by the retirement system or its agent pursuant to the provisions
of section three hundred seventy-six of this chapter. If so designated
by a state retirement system, the fund may act as the agent of such
retirement system in connection with the construction, acquisition,
reconstruction, rehabilitation or improvement which the lease agreement
requires.

2. Any agreement entered into between the fund and the dormitory
authority pursuant to section three hundred seventy-six of this chapter
shall provide for (i) the construction, acquisition, reconstruction,
rehabilitation or improvement of one or more dormitories, and (ii) the
leasing thereof to the state university for a term not exceeding forty
years and upon such terms and conditions including annual rental as may
be agreed upon. The state university shall approve any such contract and
shall be a party to any lease made pursuant to its terms.

3. Any agreement entered into between the fund and a state agency
(other than the dormitory authority) which is a public benefit
corporation shall provide for (i) the construction, acquisition,
reconstruction, rehabilitation or improvement of one or more facilities,
and (ii) the leasing thereof to the fund upon completion of
construction, acquisition, reconstruction, rehabilitation or improvement
for a term not exceeding thirty years and upon such terms and conditions
including annual rental as may be agreed upon. The state university
shall approve any such agreement and shall be a party thereto.

4. To secure the payment of rentals due or to become due in any year
under any lease agreement entered into pursuant to subdivision one or
subdivision three of this section, the fund may pledge or assign any or
all moneys in the state university construction fund income account and
in any rental reserve account established pursuant to subdivision five
of this section, and any or all moneys which may be in either or both
such accounts in the future, whether equal to or in excess of the amount
of such rentals due or becoming due in any year, and any or all right,
title and interest of the fund in and to the moneys in or to be
deposited in such accounts.

5. The fund may create and establish one or more separate accounts to
be known as "rental reserve accounts" and may pay into such reserve
accounts (i) any moneys apportioned and paid by the state for the
purposes of such reserve accounts pursuant to this subdivision, (ii) any
moneys in the state university construction fund income account directed
to be transferred by the fund to such reserve accounts, and (iii) any
other moneys which may be made available to the fund from any source or
sources specifically for the purposes of such reserve accounts.

The moneys credited to any rental reserve account established under
this subdivision shall be used, except as hereinafter provided, solely
for the payment of rentals as they become due under one or more of the
lease agreements referred to in subdivision one or subdivision three of
this section, provided, however, that the moneys in such account shall
not be withdrawn therefrom at any time in such amount as would reduce
the amount thereof to less than the maximum amount of rental becoming
due in any succeeding calendar year under such lease agreements, except
for the purpose of paying such rentals becoming due for the payment of
which other moneys of the fund are not available.

Moneys in a rental reserve account not required for immediate use or
disbursement may be invested in obligations of the United States or the
state or obligations the principal and interest of which are guaranteed
by the United States or the state. In computing the amount of a rental
reserve account for the purposes of this subdivision, securities in
which all or a portion of the account are invested shall be valued at
their market value on a date within seven days of the computation or at
their cost to the fund, whichever is less.

Any excess in a rental reserve account at the end of any fiscal year
of the fund over the maximum amount of rental becoming due in any
succeeding calendar year under such lease agreements shall be withdrawn
by the fund from such account and transferred to the state university
construction fund income account to be used for the corporate purposes
of the fund.

In order further to secure the maintenance in all rental reserve
accounts established pursuant to this subdivision of an amount equal to
the maximum amount of rental becoming due in any succeeding calendar
year under the lease agreements to which the reserve account relates,
there shall be annually apportioned and paid to the fund for deposit in
such rental reserve accounts such sum, if any, as shall be certified by
the chairman of the fund to the governor and director of the budget as
necessary to restore such accounts to an amount equal to the maximum
amount of rental becoming due in any succeeding calendar year under such
lease agreements. The chairman of the fund shall annually, on or before
December first, make and deliver to the governor and director of the
budget his certificate stating the amount, if any, required to restore
such rental reserve accounts to the amount aforesaid and the amount so
stated in said certificate, if any, shall be apportioned and paid to the
fund during the then current state fiscal year.

No lease agreement which contains a provision for the establishment or
maintenance of a rental reserve account shall be entered into pursuant
to this section unless the governor, or where so designated by the
governor for such purpose, the director of the budget, shall have
approved the terms thereof.

6. The attorney general shall pass upon the form and sufficiency and
manner of execution of any lease agreement entered into pursuant to this
section and the same shall not be effective unless so approved by him.

7. The state shall not be liable for any rentals payable by the fund
pursuant to the terms of a lease agreement entered into pursuant to this
section and such agreement shall contain among its terms a statement to
such effect.