N.Y. Education Law § 407-a: Authorization for dormitory authority financing of capital facilities for special act school districts

§ 407-a. Authorization for dormitory authority financing of capital

facilities for special act school districts. 1. The legislature

declares that it is in the interest of the state, the school districts

and the children of the state to assure that special act school

districts educating children with handicapping conditions pursuant to

contracts with public school districts or social services districts have

sufficient facilities related to the education of such children. The

legislature finds that special act school districts providing such

education are in need of improved and additional facilities related to

the education of such children, and the means to finance the

construction of such improvements and additional facilities. The

legislature, therefore, enacts the following provisions.

2. This section shall apply to special act school districts listed in

chapter five hundred sixty-six of the laws of nineteen hundred

sixty-seven, as amended, which contract with public school districts or

social services districts for the education of children with

handicapping conditions pursuant to article eighty-one or eighty-nine of

this chapter.

3. Such special act school districts may enter into leases, subleases

or other agreements with the dormitory authority pursuant to title four

of article eight of the public authorities law for the financing of the

design, construction, reconstruction, rehabilitation, improvement,

renovation or otherwise providing for, furnishing or equipping of

capital facilities which are educational facilities where the total

estimated cost of such facilities exceeds ten thousand dollars. The

plans and specifications of such capital facilities shall be subject to

the approval of the commissioner with respect to educational facilities.

Such capital facilities may be constructed only on land owned by such

special act school district or, if the land is leased, where the lease

is for a period at least equal to the appropriate period of probable

usefulness for such facilities as listed in section 11.00 of the local

finance law, or the length of the lease, sublease or other agreement

with the dormitory authority, whichever is longer.

4. Each such special act school district shall, notwithstanding any

other provision of law, have the power to convey, lease, sublease or

otherwise make available to the dormitory authority without

consideration, title or any other rights in real property satisfactory

to the dormitory authority.

5. In addition to providing for all other matters deemed necessary and

proper, such leases, subleases and other agreements shall (a) require

such special act school district to pay to the dormitory authority

annual rentals which shall include the amount required to pay the

principal of and interest on obligations of the dormitory authority

issued in relation to providing such facilities and all incidental

expenses of the dormitory authority incurred in relation thereto, (b)

require the special act school district to include an amount sufficient

to meet its obligations under the lease, sublease or other agreement in

each proposed budget submitted during the term of the lease, sublease or

other agreement and (c) include a provision that such agreement shall

not be effective unless and until it is approved by the commissioner

with respect to educational facilities.

6. Title or other real property rights to the capital facilities

financed pursuant to this section shall remain with the dormitory

authority until the dormitory authority certifies to the commissioner

with respect to educational facilities and the comptroller the receipt

by it of the amount necessary to pay the total aggregate amount of

annual rentals to the dormitory authority. At such time, title or other

real property rights thereto shall be transferred by the dormitory

authority to such special act school district for use for educational

purposes. In order to avail itself of the provisions of this section,

each such special act school district must also agree to continue to

operate a program for the education of children pursuant to contract

with public school districts or social services districts, and such

lease, sublease or other agreement with the dormitory authority shall

provide that, if the special act school district shall cease to operate

such a program at any time during the term of the agreement, the state

will have the option to take title or other real property rights in

land, buildings, equipment and other properties which the special act

school district uses for its program upon, subject to appropriations,

payment by the state to the dormitory authority of the amount required

to pay the total aggregate amount of annual rentals to the dormitory

authority.

7. On or before November fifteenth of each year, the dormitory

authority shall submit, and thereafter may resubmit, to the director of

the budget, the state comptroller, the chairman of the senate finance

committee and the chairman of the assembly ways and means committee a

report setting forth the amounts, if any, of all annual rentals

estimated to become due in the succeeding state fiscal year to the

dormitory authority from the special act school districts pursuant to

any leases, subleases or other agreements between the dormitory

authority and such special act school districts to provide educational

facilities for such special act school district. The state comptroller

shall pay over to the dormitory authority pursuant to appropriations

therefor solely from moneys available in the school capital facilities

financing reserve fund the amount set forth in such report at the times

and in the amounts set forth in the certificate filed with the

comptroller by the dormitory authority pursuant to subparagraph (iv) of

paragraph (b) of subdivision eight of this section.

8. Method of payment; reserve fund. (a) Each special act school

district which elects to avail itself of the provisions of this section

shall have established with the state comptroller a school capital

facilities financing reserve account which shall be used to pay to the

dormitory authority the annual rentals payable to the dormitory

authority by special act school districts which have entered into

leases, subleases or other agreements with the dormitory authority to

provide educational facilities pursuant to the provisions of this

section. The dormitory authority shall identify to the state comptroller

and to the commissioner with respect to educational facilities, the

special act school districts with which it has leases, subleases or

other agreements pursuant to this section and shall annually certify the

amount of annual rentals required to be paid pursuant to such leases,

subleases or other agreements.

(b) (i) There is hereby established in the custody of the state

comptroller a special fund to be known as the school capital facilities

financing reserve fund. Within such fund, there is hereby established a

special account for each special act school district which enters into a

lease, sublease or other agreement with the dormitory authority pursuant

to this section.

(ii) Notwithstanding the provisions of any other law, such fund shall

consist of part of the tuition payments from public school districts and

social services districts as determined by the commissioner, and state

aid to special act school districts pursuant to subdivision six of

section thirty-six hundred two of this chapter as determined by the

commissioner. The comptroller shall maintain sufficient amounts in the

fund in order to pay when due the annual rentals due to the dormitory

authority from each such special act school district pursuant to any

lease, sublease or other agreement entered into pursuant to the

provisions of this section. The dormitory authority shall certify to

the state comptroller the dates and amount of such annual payments as

scheduled in its leases, subleases or other agreements with such special

act school districts. The commissioner with respect to educational

facilities shall certify the amount of payments due the fund from public

school districts and social services districts, respectively and such

public school districts and social services districts shall make such

payments to the fund at such times as shall be prescribed by the

commissioner with respect to educational facilities, subject to the

approval of the director of the budget, and after consultation with the

dormitory authority.

(iii) Revenues in any special account in the school capital facilities

financing reserve fund may be commingled with any other moneys in such

fund. All deposits of such revenues with banks and trust companies shall

be secured by obligations of the United States or of the state of New

York or its political subdivisions. Such obligations shall have a

market value at least equal at all times to, but not less than, one

hundred five percent of the amount of such deposits. All banks and trust

companies are authorized to give security for such deposits. Any such

revenues in such fund may, in the discretion of the comptroller, be

invested in obligations of the United States or the state or obligations

the principal of and interest on which are guaranteed by the United

States or by the state. Any interest earned shall be credited to such

fund.

(iv) Upon receipt by the comptroller of a certificate or certificates

from the dormitory authority that it requires a payment or payments from

the appropriate special account established for a special act school

district in order for such special act school district to comply with

any lease, sublease or other agreement pursuant to this section, each of

which certificates shall specify the required payment or payments and

the date when the payment or payments is required, the comptroller shall

pay from such special account on or before the specified date or within

thirty days after receipt of such certificate or certificates, whichever

is later, to the paying agent designated by the dormitory authority in

any such certificate, the amount or amounts so certified.

(v) All payments of money from the school capital facilities financing

reserve fund shall be made on the audit and warrant of the state

comptroller.

9. Notwithstanding the provisions of any contract pursuant to article

eighty-one or eighty-nine of this chapter between a social services

district or a public school district and a special act school district,

if the special act school district enters into a lease, sublease or

other agreement with the dormitory authority pursuant to this section,

payments due from the public school district or social services district

shall be made in accordance with the provisions of this section.

10. All state and local officials are authorized and required to take

whatever actions are necessary to carry out the provisions of this

section and the provisions of any leases, subleases or other agreements

entered into pursuant to this section, including making the required

payments to the dormitory authority.

11. Any contract undertaken or financed by the dormitory authority for

any construction, reconstruction, rehabilitation or improvement for any

special act school district shall comply with the provisions of sections

one hundred one and one hundred three of the general municipal law.

12. Notwithstanding any other provision of law to the contrary, the

dormitory authority may execute leases, subleases, or other agreements

with special act school districts for financing of the design,

construction, rehabilitation, improvement, renovation, acquisition or

provision, furnishing or equipping of capital facilities; provided,

however, that during the two year period commencing July first, nineteen

hundred ninety-five, the amount of bonds inclusive of principal,

interest and issuance costs to be issued for each individual lease,

sublease, or other agreement shall not exceed fifteen million dollars

annually; and provided further that the total amount of such bonds for

all such leases, subleases, or agreements with special act school

districts during such period shall not exceed twenty million dollars.

On or before September first of each year, the commissioner shall submit

to the chairs of the assembly ways and means committee, the senate

finance committee and the director of the budget, a capital plan for

those projects expected to be bonded for special act school districts

pursuant to this section, within such twenty million dollar allowance.

After application of the principles of the capital assets preservation

program, such plan shall accord priority to health and safety

considerations and shall specify the name, location, estimated total

cost of the project at the time the project is to be bid, the

anticipated bid date and the anticipated completion date and may contain

any further recommendations the commissioner may deem appropriate.