N.Y. General Municipal Law § 368: Exploration, development and production of natural gas fields by school districts

§ 368. Exploration, development and production of natural gas fields

by school districts. 1. "Natural gas producing facility" as used in this

article shall mean all real estate, fixtures, and personal property

operated, owned, used or to be used for or in connection with or to

facilitate the production, conveyance, transportation, distribution, or

furnishing of natural gas.

2. Notwithstanding any general or special law to the contrary, any

school district may engage in the exploration and development of natural

gas fields, and further, may construct, lease, purchase, own, acquire,

use and/or operate any natural gas producing facility which is situated

on real property owned by the school district for the purpose of

producing, conveying, transporting and furnishing natural gas for school

district purposes. A school district producing natural gas in excess of

the amount required for school district purposes may convey, transport,

furnish, sell or transfer such excess.

3. No school district, other than a city school district, may perform

any of the acts authorized under the provisions of this section unless

and until the provisions of the education law relating to voter approval

of such acts have been complied with.

4. Any school district may acquire the necessary rights to extend

pipes across public highways or other lands for the purpose of

transporting natural gas from the natural gas producing facility to

other real property owned by the school district.

5. Any school district may finance the cost of exploration,

development and production of natural gas and the cost of the natural

gas producing facility in whole or in part by levying taxes in the

manner authorized by the education law, or the same may be financed in

whole or in part pursuant to the local finance law.

6. The exploration, development and production of such natural gas and

the purchase, acquisition, leasing and construction of such natural gas

producing facility shall be effected by such school district in the same

manner as other contracts, purchases and leases are effected by and for

such school districts and shall be governed by all laws applicable

thereto.

7. All of the provisions of article four of the public service law and

article twenty-three of the environmental conservation law, so far as

the same are applicable, shall apply to a school district which

furnishes to itself natural gas under this section except that a school

district need not apply to or obtain from the public service commission

a certificate of authority.

8. Nothing herein shall be construed to authorize the sale or transfer

of natural gas by a school district to any other person except as

provided in subdivision two hereof.

9. For the purposes of this section, school district shall be defined

to include a board of cooperative educational services, provided

however, that the provisions of subdivision three of this section shall

not apply to such boards of cooperative educational services, and

provided further that:

a. No board of cooperative educational services may perform any of the

acts authorized under the provisions of this section unless and until

(i) a proposition is submitted to the voters of any such board of

cooperative educational services in accordance with the provisions of

subdivision two of section nineteen hundred fifty-one of the education

law and (ii) any such board of cooperative educational services and all

of its component school districts enter into an agreement or agreements

providing for the performance of any such acts.

b. No such component school district shall enter into an agreement or

agreements unless such agreement or agreements have been approved by a

majority vote of the entire voting strength of the board of education of

such a component school district.

c. Any such agreement or agreements shall also provide for the sharing

of the cost of exploring, developing or producing natural gas and the

cost of the natural gas producing facility among each component school

district. Such agreement or agreements in addition to providing for all

other matters deemed necessary and proper shall (i) set forth the cost

of such exploration, development or production of natural gas and the

cost of the natural gas producing facility and costs incidental thereto

and (ii) provide for an allocation and apportionment of such costs among

the component school districts on such equitable basis as the parties

thereto shall determine and agree, and the proportion of the total cost

to be provided by each such district in accordance with such allocation

and apportionment. Such agreement or agreements shall be executed by all

the component school districts of such board of cooperative educational

services and such board of cooperative educational services. Such

agreement or agreements may provide that each component school district

of such a board of cooperative educational services shall issue an

agreed upon amount of its obligations in a total amount sufficient to

acquire or construct such facilities, or that all component districts of

such board shall together issue joint obligations pledging the full

faith and credit for all component districts jointly and that each such

district shall pay a specified share of annual debt service on such

joint obligations in accordance with the provisions of article five-g of

this chapter and applicable provisions of the local finance law.

d. Each such component school district is authorized to finance its

share of the cost of exploring, developing or producing natural gas and

the cost of the natural gas producing facility together with the costs

incidental to such financing, including, but not limited to legal fees,

printing, engraving and publication of notices, either from any current

funds legally available therefor, or by the issuance of obligations

pursuant to the local finance law; provided, however, that (i) no

approval of the voters of such component school district shall be

required, (ii) the voting of a special tax or a tax to be collected in

installments shall not be a condition precedent to the adoption of a

bond resolution for such object or purpose, (iii) a majority vote of the

entire voting strength of the board of education shall be sufficient for

adoption of such a bond resolution, which bond resolution may be adopted

at a regular meeting, or a special meeting of the board of education

called on not less than twelve hours oral or written notice, which may

be held either within or outside of such district, (iv) any such bond

resolution shall be adopted prior to the execution by the board of

cooperative educational services and the component school districts of

such board of cooperative educational services of the agreement required

by paragraph b of this subdivision.

e. Such agreement shall further provide that title to the natural gas

producing facility shall vest in the board of cooperative educational

services which title shall be held by the board of cooperative

educational services for the benefit and on behalf of all the component

school districts of such board executing such agreement.

f. Nothing herein contained shall be construed to permit any school

district in a city as defined in subdivision two-b of section 2.00 of

the local finance law to contract indebtedness for such specific object

or purpose in excess of the limitation prescribed by subdivision b of

section 104.00 of such law, without complying with the provisions of

subdivision c thereof. A school district, other than a school district

in a city, may not issue bonds or bond anticipation notes for such

specific object or purpose in excess of the limitation prescribed by

subdivision d of section 104.00 of such law, without complying with the

requirements of paragraphs one through three of such subdivision.