N.Y. Public Authorities Law § 1680-j: New York state higher education capital matching grant board; creation; procedure

* § 1680-j. New York state higher education capital matching grant

board; creation; procedure. 1. Creation. (a) The New York state higher

education capital matching grant board is hereby created to have and

exercise the powers, duties and prerogatives provided by the provisions

of this section and any other provision of law. The board shall remain

in existence during the period of the New York state higher education

capital matching grant program from the effective date of this section

through March thirty-first, two thousand nine, or the date on which the

last of the funds available for grants under this section shall have

been disbursed, whichever is earlier; provided, however, that the

termination of the existence of the board shall not effect the power and

authority of the dormitory authority to perform its obligations with

respect to any bonds, notes, or other indebtedness issued or incurred

pursuant to authority granted in this section.

(b) The membership of the board shall consist of three persons

appointed by the governor, of which one shall be upon the recommendation

of the temporary president of the senate and one upon the recommendation

of the speaker of the assembly. The term of the members first appointed

shall continue until March thirty-first, two thousand five, and

thereafter their successors shall serve for a term of one year ending on

March thirty-first in each year. Upon recommendation of the nominating

party, the governor shall replace any member in accordance with the

provision contained in this subdivision for the appointment of members.

The members of the board shall vote among themselves to determine who

shall serve as chair. The board shall act by unanimous vote of the

members of the board. Any determination of the board shall be evidenced

by a certification thereof executed by all the members. Each member of

the board shall be entitled to designate a representative to attend

meetings of the board on the designating member's behalf, and to vote or

otherwise act on the designating member's behalf in the designating

member's absence. Notice of such designation shall be furnished in

writing to the board by the designating member. A representative shall

serve at the pleasure of the designating member during the member's term

of office. A representative shall not be authorized to delegate any of

his or her duties or functions to any other person.

(c) Every officer, employee, or member of a governing board or other

board of any college or group or association of colleges, and every New

York state regent, every officer or employee of the board of regents or

the department of education and every trustee, officer or employee of

the state university of New York or the city university of New York

shall be ineligible for appointment as a member, representative,

officer, employee or agent of the board.

(d) The members of the board shall serve without salary or per diem

allowance but shall be entitled to reimbursement for actual and

necessary expenses incurred in the performance of official duties

pursuant to this section or other provision of law, provided however

that such members and representatives are not, at the time such expenses

are incurred, public officers or employees otherwise entitled to such

reimbursement.

(e) The members, their representatives, officers and staff to the

board shall be deemed employees within the meaning of section seventeen

of the public officers law.

2. Definitions. For the purposes of this section, the following terms

shall have the respective meanings:

(a) "Base grant amount" shall mean a grant equal to $17.5 million

distributed equally among independent colleges, provided however that

for an eligible independent college with a final fall full-time

equivalent enrollment for the two thousand three--two thousand four

academic year as published by the state education department of less

than one hundred final full-time equivalent students the base grant

amount shall be one hundred thousand dollars.

(b) "Board" shall mean the New York state higher education capital

matching grant board created by paragraph (a) of subdivision one of this

section.

(c) "College" shall mean a public or independent college.

(d) "Endowment" shall mean the total unrestricted assets whose

principal is nonexpendable and is held to the benefit of the college and

invested to provide earnings for institutional use as reported within a

college's independently audited financial statements as submitted to the

dormitory authority. Such total shall exclude assets whose principal

supports employee annuity or pension costs, or assets whose purpose is

restricted to the support of the current operations of the college.

(e) "Full-time equivalent students" shall mean a college's final fall

full-time equivalent enrollment for the two thousand three-two thousand

four academic year as published by the state education department.

(f) "Independent college" shall mean each independent not-for-profit

institution of higher education, as defined in subdivision two of

section sixty-four hundred one of the education law.

(g) "Non-state funds" shall mean any funds received no earlier than

one hundred eighty days before the effective date of this section,

except state funds, accessible by the college for the project including,

but not limited to, federal funds, local funds, private funds, and

in-kind contributions provided, however that public colleges may not use

funds resulting from the imposition of student tuition or fees as

non-state funds.

(h) "Project" shall mean the design, acquisition, reconstruction,

rehabilitation, or equipping of a facility on or near a college campus

within the state of New York, including critical academic facilities,

economic development and/or high technology projects, and urban renewal

and/or historical preservation projects that would enhance the

programmatic offerings or the student life at the college or provide

economic development benefits to the area surrounding such college

campus.

(i) "Public college" shall mean each component of the state

university, as defined in subdivision three of section three hundred

fifty-two of the education law and in subdivision two of section

sixty-three hundred one of the education law and each senior college and

community college of the city university of New York, as defined in

subdivisions four and five of section sixty-two hundred two of the

education law.

(j) "Total academic square footage amount" shall mean an amount equal

to the product of (i) 26.25 million dollars for the state university of

New York or 17.5 million dollars for the city university of New York,

multiplied by (ii) the eligible college's proportion of the total square

footage of academic facilities operated by all components of the state

university of New York, as defined in subdivision three of section three

hundred fifty-two and in subdivision two of section sixty-three hundred

one of the education law or all senior colleges and community colleges

of the city university of New York, as defined in subdivisions four and

five of section sixty-two hundred two of the education law,

respectively.

(k) "Total full-time equivalent amount" shall mean an amount equal to

the product of (i) 78.75 million dollars for independent colleges or

52.5 million dollars for colleges of the state university of New York or

thirty-five million dollars for colleges of the city university of New

York, multiplied by (ii) the eligible college's proportion of the total

full-time equivalent students for all eligible independent colleges, all

components of the state university of New York, as defined in

subdivision three of section three hundred fifty-two and in subdivision

two of section sixty-three hundred one of the education law, or all

senior colleges and community colleges of the city university of New

York, as defined in subdivisions four and five of section sixty-two

hundred two of the education law, respectively, and calculated from an

eligible college's final fall full-time equivalent enrollment for the

two thousand three--two thousand four academic year as published by the

state education department.

(l) "Total TAP expenditure amount" shall mean an amount equal to the

product of (i) the product of forty-five percent of one hundred

seventy-five million dollars for independent colleges or the product of

twenty-five percent of one hundred five million dollars for colleges of

the state university of New York or the product of twenty-five percent

of seventy million dollars for colleges of the city university of New

York, multiplied by (ii) an eligible college's proportion of the total

funding received under section six hundred sixty-seven of the education

law by all eligible independent colleges, all components of the state

university of New York, as defined in subdivision three of section three

hundred fifty-two and in subdivision two of section sixty-three hundred

one of the education law, or all senior colleges and community colleges

of the city university of New York, as defined in subdivisions four and

five of section sixty-two hundred two of the education law,

respectively, as estimated by the higher education services corporation

for the two thousand three-two thousand four academic year.

3. Powers, functions and duties of the New York state higher education

capital grant board; limitations. (a) The New York state higher

education capital grant board shall have the power and it shall be its

duty to approve or deny applications received from colleges for higher

education capital matching grants. In making such determination, the

board shall verify that the criteria set forth in paragraph (e) of

subdivision four of this section have been met. If necessary, the board

may request additional information from the college when making such

determination.

(b) Within amounts appropriated therefor, the board is hereby

authorized and directed to award matching capital grants totaling three

hundred fifty million dollars. The public college sector and the

independent college sector shall each be eligible to receive grants

totaling not more than one hundred seventy-five million dollars. Each

public college and independent college shall be eligible for a grant

award amount as determined by the calculations pursuant to subdivision

five of this section. In addition, such public colleges and independent

colleges shall be eligible to compete for additional funds pursuant to

paragraph (h) of subdivision four of this section.

(c) The board shall approve or disapprove the methodology and the

resulting matching ratios developed by the dormitory authority pursuant

to paragraph (c) of subdivision four of this section.

(d) The board shall approve or deny applications for waivers of the

standard matching requirement under paragraph (d) of subdivision four of

this section.

4. New York state higher education capital matching grant program

administration and financing.

(a) The dormitory authority is hereby authorized and directed to

administer the New York state higher education capital matching grant

program.

(b) The dormitory authority shall serve as staff to the New York state

higher education capital matching grant board, including, with the

cooperation of any other state agency, the preparation of information

which would assist the board in carrying out its duties.

(c) The dormitory authority of the state of New York shall develop a

methodology to determine the required non-state funds contribution for

colleges. Such methodology shall consider endowment per full-time

equivalent student and tuition and fees. Such methodology shall require

a greater contribution from those colleges with greater fiscal resources

as measured by endowment per full-time equivalent student and tuition

and fees. For public colleges the numerator in the matching ratio of

non-state funds to grant award amount shall not be greater than two or

less than 0.5 and the denominator shall be equal to one for public

community colleges, the numerator in the matching ratio of non-state

funds to grant award amount shall not be greater than one or less than

0.5 and the denominator shall be equal to one; and for independent

colleges the numerator in the matching ratio of non-state funds to grant

award amount shall not be greater than three or less than 0.5 and the

denominator shall be equal to one. Such methodology and the resulting

matching ratios shall be submitted to the board for approval within

thirty days after the effective date of this section and shall be made

available to potential applicants once approved.

(d) The standard matching requirement for the purposes of determining

a college's required non-state funds contribution shall be as provided

in this paragraph. For public colleges the numerator in the standard

matching requirement of non-state funds to grant award amount shall be

equal to two and the denominator shall be equal to one for public

community colleges the numerator in the standard matching requirement of

non-state funds to grant award amount shall be equal to one and the

denominator shall be equal to one; and for independent colleges the

numerator in the standard matching requirement of non-state funds to

grant award amount shall be equal to three and the denominator shall be

equal to one. Colleges may apply for a waiver of such standard matching

requirement. If such waiver is approved by the board, the required

non-state funds contribution shall be determined by the methodology set

forth in paragraph (c) of subdivision four of this section.

(e) The dormitory authority shall develop a standard application for

such grants. Such application shall require colleges to provide, at a

minimum, the following:

(i) The amount of grant request, such request not to exceed the

eligible grant award amount, as provided for in subdivision five of this

section. No more than three and one-half of one percent of any capital

matching grant issued under this program may be allocated to any college

or to any subsidiary or organization associated therewith for purposes

which may include, but not be limited to, any direct or indirect costs

of administering the program not contained in the application requesting

such capital matching grant, provided however, that no monies granted

under the program shall be used to supplant any direct or indirect costs

of the grant recipient;

(ii) A statement that the proposed project would enhance the

programmatic offerings or the student life at the college or provide

economic development benefits to the surrounding area;

(iii) Whether the project is eligible for funding under the state

university or city university capital plan;

(iv) Whether the project has the participation and financial support

of a consortium of colleges and/or public or private partnerships;

(v) A detailed description of the project, including projected costs

including the sources and uses of funds, completion timeline, and funds

necessary at each stage of project completion;

(vi) A description of the type or types of non-state funds to be

utilized and the source of such funds;

(vii) Information to demonstrate the ability to access sufficient

non-state funds to meet the matching ratio requirement, as provided for

in paragraph (c) of this subdivision or the standard matching

requirement as provided for in paragraph (d) of this subdivision;

(viii) A statement that as of the effective date of this section,

construction had not begun and equipment had not been purchased for such

project;

(ix) A statement whether a recurring source of revenue shall be

available to support facility operations and maintenance for the project

that the capital matching grant is funding; and

(x) A statement whether, the project has received all necessary

regulatory approvals or can demonstrate a reasonable expectation that

such approvals will be secured.

(f) Upon receipt of a matching grant application, the dormitory

authority shall review such grant application for technical sufficiency

and compliance with the application criteria as provided for in

paragraph (e) of this subdivision. If necessary, the dormitory authority

may request additional information from the applicant. When the

application is complete, the dormitory authority shall submit such

application with an analysis to the capital grant board for its approval

or denial.

(g) In order to be eligible for such grants, colleges must provide

notification to the dormitory authority of an intent to apply for a

grant no later than March thirty-first, two thousand seven and must

apply for such grant no later than March thirty-first, two thousand

eight.

(h) If a college does not apply for a grant by March thirty-first, two

thousand eight, funds associated with such potential grant shall be

awarded, on a competitive basis, to other colleges. Public colleges

shall be eligible to apply for unutilized public college grants within

their respective systems and independent colleges shall be eligible to

apply for unutilized independent college grants. The dormitory authority

shall develop a request for proposals and application process, in

consultation with the board, for such grants and shall develop criteria,

subject to review by the board, for the awarding of such grants. Such

criteria shall incorporate the matching criteria contained in paragraph

(c) of this subdivision, and the application criteria set forth in

paragraph (e) of this subdivision. The dormitory authority shall require

all applications in response to the request for proposals to be

submitted by September first, two thousand eight, and the board shall

act on each application for such matching grants by November first, two

thousand eight.

(i) The dormitory authority shall develop a model contract provision

to be used in any contract which involves a project for which a college

has received a matching grant. Such provision shall indemnify and hold

the state of New York harmless from any and all claims for loss or

liability alleged to have been caused or resulting from any work

involving such project.

(j) (i) The dormitory authority is hereby authorized and directed to

assist in financing higher education projects by providing to eligible

colleges higher education capital matching grants that have been

approved by the New York state higher education capital matching grant

board.

(ii)(A) Notwithstanding the provision of any general or special law to

the contrary, and subject to the provisions of chapter fifty-nine of the

laws of two thousand and to the making of annual appropriations therefor

by the legislature, in order to assist the dormitory authority in

providing such higher education capital matching grants, the director of

the budget is authorized in any state fiscal year commencing April

first, two thousand four or any state fiscal year thereafter for a

period ending on March thirty-first, two thousand nine, to enter into

one or more service contracts, none of which shall exceed thirty years

in duration, with the dormitory authority, upon such terms as the

director of the budget and the dormitory authority agree.

(B) Any service contract entered into pursuant to clause (A) of this

subparagraph or any payments made or to be made thereunder may be

assigned and pledged by the dormitory authority as security for its

bonds, notes, or other obligations.

(C) Any such service contracts shall provide that the obligation of

the director of the budget or of the state to fund or to pay the amounts

therein provided for shall not constitute a debt of the state within the

meaning of any constitutional or statutory provision in the event the

dormitory authority assigns or pledges the service contract payments as

security for its bonds, notes, or other obligations and shall be deemed

executory only to the extent monies are available and that no liability

shall be incurred by the state beyond the monies available for the

purpose, and that such obligation is subject to annual appropriations by

the legislature.

(D) Any service contract or contracts entered into pursuant to this

subdivision shall provide for state commitments to provide annually to

the dormitory authority a sum or sums, upon such terms and conditions as

shall be deemed appropriate by the director of the budget, to fund the

principal, interest, or other related payments required for any bonds,

notes, or other obligations of the dormitory authority issued pursuant

to this section.

(iii)(A) To obtain funds for the purposes of this section, the

authority shall have power from time to time to issue negotiable bonds

or notes. Unless the context shall clearly indicate otherwise, whenever

the words "bond" or "bonds" are used in this section, such words shall

include a note or notes of the authority.

(B) The dormitory authority shall not issue any bonds or notes in an

amount in excess of three hundred fifty million dollars for the purposes

of this section; excluding bonds or notes issued to fund one or more

debt service reserve funds, to pay costs of issuance of such bonds, and

bonds or notes issued to refund or otherwise repay such bonds or notes

previously issued. Except for purposes of complying with the internal

revenue code, any interest on bond proceeds shall only be used to pay

debt service on such bonds.

(C) In computing for the purposes of clause (B) of this subparagraph,

the aggregate amount of indebtedness evidenced by bonds and notes of the

dormitory authority issued pursuant to this title, there shall be

excluded the amount of such indebtedness represented by such bonds or

notes issued to refund or otherwise repay bonds or notes; provided that

the amount so excluded under this clause may exceed the principal amount

of such bonds or notes that were issued to refund or otherwise repay

only if the present value of the aggregate debt service on the refunding

or repayment bonds or notes shall not have at the time of their issuance

exceeded the present value of the aggregate debt service of the bonds or

notes they were issued to refund or repay, such present value in each

case being calculated by using the effective interest rate of the

refunding or repayment bonds or notes, which shall be that rate arrived

at by doubling the semi-annual interest rate (compounded semi-annually)

necessary to discount the debt service payments on the refunding or

repayment bonds or notes from the payment date thereof to the date of

issue of the refunding or repayment bonds or notes and to the price bid

therefor, or to the proceeds received by the dormitory authority from

the sale thereof, in each case including estimated accrued interest.

(D) The state of New York hereby covenants with the purchasers,

holders, and owners from time to time of the bonds of the authority

issued pursuant to this section that it will not, subject to the

provisions of clause (C) of subparagraph (ii) of this paragraph, repeal,

revoke, rescind, modify, or amend the provisions of this section which

relate to the making of annual service contract payments to the

authority with respect to such bonds as to limit, impair, or impede the

rights and remedies granted to bondholders under this title or otherwise

diminish the security pledged to such purchasers, holders, and owners or

significantly impair the prospect of payment of any such bond.

(iv) In addition to the authority with respect to financing higher

education projects provided to the dormitory authority in subparagraph

(iii) of this paragraph, the dormitory authority is hereby authorized to

finance that portion of any higher education project approved to receive

a higher education capital matching grant that is in excess of the

amount of such grant and which shall be the non-state funds portion of

the cost of such project to the same extent and under the same powers

and procedures as if such project were named in paragraph (b) of

subdivision two of section sixteen hundred seventy-six of this title and

in subdivision one of section sixteen hundred eighty of this title.

5. Limitation on awards. Colleges eligible for participation in the

higher education capital matching grants program pursuant to this

section shall be eligible to receive a higher education capital matching

grant pursuant to the following calculations:

(a) Each independent college shall be eligible to receive a grant

equal to the sum of its total full-time equivalent amount, its total TAP

expenditure amount and its base grant amount; and

(b) Each public college shall be eligible to receive a grant equal to

the sum of its total full-time equivalent amount, its total TAP

expenditure amount and its total academic square footage amount.

Provided, however, that an Independent non-profit comprehensive,

non-traditional, non-instructional assessment institution whose external

degree programs only validated a candidate's education experience and

granted over four thousand degrees in the two thousand one--two thousand

two academic year shall be eligible to receive a base grant equal to the

product of (i) $17.5 million dollars; and (ii) its proportion of the

total number of non-associate degrees conferred by all colleges and

universities statewide for the two thousand one--two thousand two

academic year as reported by the state education department.

The dormitory authority shall calculate the amount of the grants that

each independent college and each public college shall be eligible to

receive in accordance with the limitations set forth in this subdivision

as soon as practicable but no more than forty-five days after the

effective date of this section and shall make such information

conveniently available to the colleges including by the use of

electronic dissemination methods.

6. Contracts. (a) Each contract entered into by a college, which

involves a project for which the college has received a capital grant

award, shall be subject to the approval of the comptroller and, as to

form and manner of execution, by the attorney general of the state of

New York.

(b) Each contract entered into by a college shall include the

provision as provided for in paragraph (i) of subdivision four of this

section, which shall indemnify and hold the state of New York harmless

from any and all claims for loss or liability alleged to have been

caused or resulting from any work involving such project.

(c) Each contract entered into by a public college or made in

connection with a capital matching grant made to a consortium of

colleges that includes a public college regardless of which member of

the consortium shall be the contracting party shall be awarded by a

competitive process and shall be deemed a state contract for the

purposes of article nine of the state finance law, provided, however,

that any contract which would not be a state contract except for the

application of this paragraph shall not be subject to section one

hundred thirty-five of the state finance law.

(d) Each contract entered into by a public college or made in

connection with a capital matching grant made to a consortium of

colleges that includes a public college regardless of which member of

the consortium shall be the contracting party shall require that the

work covered by such contract shall be deemed "public work" and subject

to and performed in accordance with articles eight, nine and ten of the

labor law and, for the purposes of article fifteen-A of the executive

law, the contracting party under such contracts shall be deemed a state

agency as that term is defined in such article and such contracts shall

be deemed state contracts within the meaning of that term as set forth

in such article.

(e) Independent colleges whose contracts are not state contracts for

the purposes of article nine of the state finance law and article

fifteen-A of the executive law and whose projects under such contracts

do not involve public work so as to be subject to articles eight, nine,

and ten of the labor law, shall execute an undertaking, as a condition

of receiving any capital matching grant, to voluntarily comply with

article nine of the state finance law, except section one hundred

thirty-five of such law, article fifteen-A of the executive law, and

articles eight, nine, and ten of the labor law so far as the same would

be applicable to the contracts of a public college, and to be subject to

the enforcement provisions of said articles to the same extent.

7. Reporting. (a) The New York state higher education capital matching

grant board shall, annually on or before December first, prepare and

submit an annual report to the governor and the chair of the assembly

ways and means committee and the chair of the senate finance committee.

Such report shall contain at a minimum the following information: (i) a

list of all applications filed by any college for a grant under the

higher education capital grant program including the name of the

applying college, a brief description of the project, and the amount of

the grant requested; (ii) a list of the applications granted by the

board specifying the amount of the grant approved if such amount is

different from the amount applied for; and (iii) a statement showing the

dollar amount of all grants approved by the board and the dollar amount

of the remaining capacity for future grants.

(b) Any eligible institution receiving a grant pursuant to this

article shall report to the dormitory authority no later than June

first, two thousand seven, on the use of funding received and its

programmatic and economic impact. The dormitory authority shall submit a

report no later than November first, two thousand seven to the board,

the governor, the director of the budget, the temporary president of the

senate, and the speaker of the assembly on the aggregate impact of the

higher education capital matching grant program. Such report shall

provide information on the progress and economic impact of each project.

* NB There are 2 § 1680-j's