N.Y. Public Authorities Law § 1689: Board of cooperative educational services school facilities

§ 1689. Board of cooperative educational services school facilities.

1. For all the purposes of this section sixteen hundred eighty-nine the

term "board of cooperative educational services school facilities" shall

mean any interest in real property, any building, library, laboratory,

classroom, or other building or structure essential, necessary or useful

in a career education or other program of any board of cooperative

educational services.

2. a. The authority is hereby authorized and empowered upon

application of the board of cooperative educational services concerned

to construct, acquire, reconstruct, rehabilitate and improve, and

furnish and equip or otherwise provide a board of cooperative

educational services school facility. The board for whose students any

such board of cooperative educational services school facility is

intended to be provided shall approve plans and specifications and the

location of such board of cooperative educational services facilities.

The authority shall have the same power and authority in respect to such

board of cooperative educational services school facilities erected

pursuant to this section that it has relative to dormitories.

b. The authority shall have power to acquire, in the name of the

authority, on terms necessary or convenient by purchase, condemnation,

gift or devise, real property, leasehold interest in real property or

rights of easement in relation to the board of cooperative educational

services school facilities erected pursuant to this section.

c. When authorized by the voters of the board of cooperative

educational services, any board of cooperative educational services

shall have power to convey to the authority real property, leasehold

interest in real property or rights of easement, the title of which is

vested in the board, in relation to the board of cooperative educational

services school facilities to be erected pursuant to this section, and,

when so authorized, any board of cooperative educational services shall

have power to enter into any lease or other agreement with the authority

in connection with the provision of a board of cooperative educational

services school facility.

d. The authority shall have power to accept gifts of real and personal

property in the name of the authority for the purposes of this section.

e. The authority may lease any such board of cooperative educational

services school facilities to the board for which such board of

cooperative educational services school facilities are erected. At such

time as the liabilities of the authority incurred for any such board of

cooperative educational services school facilities have been discharged

and the bonds of the authority issued therefor have been paid or such

liabilities and bonds have otherwise been discharged, the authority

shall transfer title to all real and personal property of such board of

cooperative educational services school facilities vested in the

authority to the board to which such board of cooperative educational

services school facilities are then leased, provided, however, that if

at such time the board of cooperative educational services school

facilities are not located in any board or any successor thereto in the

state of New York, then such title shall vest in the people of the state

of New York.

f. Any lease of a board of cooperative educational services school

facility authorized by this section may contain provisions which shall

be a part of the contract with the holder of the bonds of the authority

issued for such board of cooperative educational services school

facility, as to

(1) pledging all or any part of the moneys, income or revenues of the

lessee or other personal property of the lessee, to secure payments

required under the terms of such lease;

(2) the setting aside of reserves and the creation of special funds

and the regulation and disposition thereof;

(3) the procedure, if any, by which the terms of such lease may be

amended, the amount of bonds the holders of which must consent thereto,

and the manner in which such consent may be given;

(4) vesting in a trustee or trustees such specified properties,

rights, powers and duties as shall be deemed necessary or desirable for

the security of the holders of the bonds of the authority issued for

such board of cooperative educational services school facilities;

(5) the obligations of the lessee with respect to the replacement,

reconstruction, maintenance, operations, repairs and insurance of such

board of cooperative educational services school facilities;

(6) defining the acts or omissions to act which shall constitute a

default in the obligations and duties of the lessee, and providing for

the rights and remedies of the authority and of its bondholders in the

event of such default;

(7) any other matters, of like or different character, which may be

deemed necessary or desirable for the security or protection of the

authority or the holders of its bonds.

3. Whenever the authority under the provisions of this section

undertakes to construct or otherwise provide a board of cooperative

educational services school facility and to lease the same to a board of

cooperative educational services, such lease shall be the general

obligation of the board and any successor thereto. Such lessee shall be

responsible for the direct costs of operation, maintenance, repair and

replacement of such board of cooperative educational services school

facility, and in addition shall be responsible for the over-all

supervision of each board of cooperative educational services school

facility, for the overhead and general administrative costs of the

lessee which are incurred because of such board of cooperative

educational services school facility and for the integration of the

operation of each such board of cooperative educational services school

facility into the lessee's educational program.

4. All the provisions of this title four not inconsistent with the

provisions of this section sixteen hundred eighty-nine shall be

applicable with respect to any bonds of the authority issued to obtain

funds for any purpose authorized under this section sixteen hundred

eighty-nine and with respect to the powers of the authority hereunder.

5. To obtain funds for the purposes of this section, the authority

shall have power from time to time to issue negotiable bonds or notes of

the authority. 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.

6. Any pledge of or other security interest in moneys, earnings,

income, revenues, accounts, contract rights, general intangibles or

other personal property made or created by the authority shall be valid,

binding and perfected from the time when such pledge or other security

interest attaches, without any physical delivery of the collateral or

further act. The lien of any such pledge or other security interest

shall be valid, binding and perfected as against all parties having

claims of any kind in tort, contract or otherwise against the authority

irrespective of whether or not such parties have notice thereof. No

instrument by which such a pledge or other security interest is created

nor any financing statement need be recorded or filed. This subdivision

shall apply notwithstanding the provisions of the uniform commercial

code.

7. Whenever the authority undertakes under the provisions of this

section to construct, acquire, reconstruct, rehabilitate and improve,

and furnish and equip or otherwise provide a board of cooperative

educational services school facility, each board of cooperative

educational services in connection with which such board of cooperative

educational services school facility is built is authorized to assign

and pledge to the authority a sufficient portion of any and all public

funds to be apportioned or otherwise to be made payable by the state of

New York to the board of cooperative educational services to cover the

payments required under the lease between the authority and the board of

cooperative educational services. All state and local officials

concerned are hereby authorized to apportion and pay all such funds so

assigned and pledged to the authority. Such assignment and pledge by any

board of cooperative educational services shall be irrevocable and shall

continue until the date on which the liabilities of the authority and

any such board of cooperative educational services school facilities

have been discharged and the bonds of the authority issued therefor have

been paid or such bonds have otherwise been discharged.

8. No board of cooperative educational services school facility shall

be constructed or otherwise provided by the authority under the

provisions of this section unless approved by the voters of the board of

cooperative educational services and unless any and all necessary

approvals of the commissioner of education under section four hundred

eight of the education law have been obtained.

9. Any payment required to be made by a board of cooperative

educational services to the authority shall be deemed an administrative

or capital expense within the meaning of section nineteen hundred fifty

of the education law.

10. a. The total amount payable annually to the authority by a board

shall be certified by the authority to the commissioner of education and

the authority shall annually prepare and certify to the commissioner of

education a statement of the total amount necessary to be paid by all

boards of cooperative educational services for the ensuing school year.

b. The commissioner of education shall include in the certificate

which he files with the state comptroller showing the amount of state

funds apportioned to the board of cooperative educational services a

statement showing the amount to be owed by the board to the authority

for the ensuing school year.

c. The comptroller shall deduct from any state funds to become due to

any such board of cooperative educational services an amount equal to

the amount required to be paid by such board to the authority as shown

by the certificate of the commissioner of education filed with the

comptroller as required by paragraph b of this subdivision.

d. The state of New York hereby covenants with the purchasers, holders

and owners from time to time of the bonds of the authority that it will

not repeal, revoke, rescind, modify or amend the provisions of this

subdivision ten so as to limit, impair or impede the rights and remedies

granted hereby or otherwise diminish the security pledged to such

purchasers, holders and owners or significantly impair the prospect of

payment of any such bond, nor shall any lien or charge on or pledge,

assignment, diversion, withholding, payment or other use of or deduction

from any state funds due or to become due or appropriated to or to be

appropriated to or to be apportioned and paid to any board of

cooperative educational services be created which is prior in time or

superior in right to the deduction required by paragraph c of this

subdivision; provided, however, that nothing herein contained shall be

deemed or construed as requiring the state to continue the payment of

the state aid or assistance to any board of cooperative educational

services or as limiting or prohibiting the state from repealing or

amending any law theretofore or hereafter enacted providing for the

payment or apportionment of state aid to a board of cooperative

educational services or the manner, time or amount thereof.

11. In the event that the amount paid to the authority pursuant to the

provisions of subdivision ten of this section is insufficient to meet

any payment required by the board of cooperative educational services to

the authority any such amount still due and owing shall be paid directly

to the authority by the board.

12. (a) After: (i) a proposition has been approved by the voters of a

board of cooperative educational services for the construction or

providing by the authority of a board of cooperative educational

services school facility or facilities and any and all necessary

approvals of the commissioner of education have been obtained, all as

provided by subdivision eight of this section; (ii) an agreement and a

lease have been executed by and between such board of cooperative

educational services and the dormitory authority relating to the

construction or otherwise providing of such board of cooperative

educational services school facility or facilities, the leasing thereof

by the dormitory authority to such board of cooperative educational

services and the financing thereof by the dormitory authority by the

issuance of its obligations; and (iii) the dormitory authority has

adopted its resolution authorizing obligations of the dormitory

authority for such purpose, the dormitory authority may determine to

provide that the validity of such agreement, lease, resolution of the

authority authorizing the issuance of obligations and the obligations

authorized and issued pursuant thereto may be contested only if:

1. Such agreement, lease, resolution and the obligations to be issued

pursuant to such resolution are authorized for a board of cooperative

educational services school facility or facilities for which the board

of cooperative educational services and the dormitory authority are not

authorized to execute an agreement and a lease or for which the

dormitory authority is not authorized to issue obligations, or

2. The provisions of law which should be complied with at the date of

the publication of the notice hereinafter provided for, are not

substantially complied with, and an action, suit or proceeding

contesting such validity is commenced within twenty days after the date

of such publication, or

3. Such obligations are authorized in violation of the provisions of

the constitution.

(b) If the dormitory authority shall determine to utilize the

provisions of this subdivision, the dormitory authority shall publish or

shall cause a notice to be published in the manner hereinafter provided,

which notice shall be in substantially the following form:

The (here insert the name of the board of cooperative educational

services) and the dormitory authority of the state of New York have

entered into an agreement dated as of the ----- day of -----, 19---, and

a lease dated as of the ----- day of -----, 19---, and the dormitory

authority has adopted a resolution on the ----- day of -----, 19---, and

the validity of such agreement, lease, resolution and the obligations

issued pursuant thereto may be hereafter contested only if such

agreement, lease, resolution and the obligations issued pursuant thereto

were authorized for a board of cooperative educational services school

facility or facilities for which such board of cooperative educational

services and the dormitory authority are not authorized to enter into an

agreement, lease and for which the dormitory authority is not authorized

to issue such obligations or if the provisions of law which should have

been complied with as of the date of publication of this notice were not

substantially complied with, and an action, suit or proceeding

contesting such validity is commenced within twenty days after the date

of publication of this notice, or such obligations were authorized in

violation of the provisions of the constitution.

By such agreement and lease such board of cooperative educational

services and the dormitory authority have agreed that the dormitory

authority shall provide the board of cooperative educational services

school facility or facilities described therein, that the dormitory

authority shall lease the same to such board of cooperative educational

services, which board of cooperative educational services shall pay

annual rentals as agreed upon in such lease sufficient to pay the

principal of and interest on the obligations of the authority issued to

finance such facility or facilities, the amounts required by such

resolution to establish and maintain the reserve funds, if any, required

by such resolution, any expenditures of the authority for insurance,

fees and expenses of auditing and fees and expenses of the trustee, all

as required by the resolution, all other expenditures reasonably and

necessarily incurred by the authority by reason of its ownership,

financing and leasing of the project and the annual administrative fee

payable to the authority. Such resolution authorizes an issue of $-----

obligations of the authority, which amount is equal to the sum of: (i)

the estimated cost of construction and equipment of such board of

cooperative educational services school facility or facilities after

first deducting federal grants-in-aid to be received; (ii) the amount

required by the authority, if any, to be paid to reserve funds created

by the resolution of the authority authorizing the bonds; and (iii) the

amounts required to make payments for legal, financing, administrative

and other costs and expenses of the authority in connection with such

board of cooperative educational services school facilities and the

financing thereof.

Executed counterparts of such agreement and lease and a certified copy

of the resolution of the dormitory authority authorizing such

obligations are on file in the office of the clerk of such board of

cooperative educational services at (here insert the address of the

office of such clerk) and at the office of the dormitory authority (here

insert the address of such office) and such documents may be inspected

at either of said offices during regular business hours.

DORMITORY AUTHORITY OF THE STATE OF

NEW YORK and (here insert the name of the

board of cooperative educational services)

(c) The notice described in subparagraph (b) of this subdivision shall

be published once in each of two newspapers, if there shall be two, or

in one newspaper, if there shall be but one, having general circulation

within the board of cooperative educational services, but if no

newspaper shall then have general circulation therein, such notice shall

be posted in at least twenty of the most public places in said board of

cooperative educational services.

(d) After the publication of such notice, the validity of the

obligations authorized thereby may be contested only if:

1. Such agreement, lease, resolution of the dormitory authority

authorizing the obligations, and the obligations of the dormitory

authority were authorized for a board of cooperative educational

services school facility or facilities for which such board of

cooperative educational services and the dormitory authority were not

authorized to execute an agreement and a lease or for which the

dormitory authority is not authorized to issue obligations, or

2. The provisions of law which should be complied with at the date of

publication of the notice hereinabove provided for, are not

substantially complied with, and an action, suit or proceeding

contesting such validity is commenced within twenty days after the date

of such publication, or

3. Such obligations are authorized in violation of the provisions of

the constitution.

(e) If an action, suit or proceeding contesting the validity of such

agreement, lease, resolution authorizing the obligations or the

obligations authorized thereby is commenced within twenty days from the

date of publication of such notice, the court in which such action, suit

or proceeding is commenced shall determine whether or not such

agreement, lease, resolution and obligations were authorized for a board

of cooperative educational services school facility or facilities for

which the board of cooperative educational services and the dormitory

authority were authorized to enter into an agreement and a lease and for

which the authority was authorized to issue obligations or the

provisions of law which should have been complied with were

substantially complied with. The court may determine that the provisions

of law which should have been complied with were substantially complied

with if:

1. The aggregate amount of obligations authorized does not exceed an

amount equal to the sum of; (i) the estimated cost of construction and

equipment of such a board of cooperative educational services school

facility or facilities after first deducting federal grants-in-aid to be

received; (ii) the amount, if any, required by the authority by the

resolution to be paid to reserve funds created by the resolution of the

authority authorizing the obligations; and (iii) the amounts estimated

by the authority to be required to make payments for legal, financing,

administrative and other costs and expenses of the authority in

connection with the providing of the facilities and the financing

thereof.

2. Such agreement and lease were executed after a proposition

authorizing the same had been submitted to and approved by a majority of

the duly qualified voters of such board of cooperative educational

services.

(f) Such determination of the court as described in subparagraph (e)

hereof may be arrived at notwithstanding any irregularity or failure to

observe a technicality in:

1. The form of such proposition approved by the duly qualified voters

of such board of cooperative educational services.

2. The notice of the meeting at which such proposition was submitted.

3. The time or manner of the publication of such notice.

4. The conduct of the meeting at which such proposition was adopted.

5. Like matters in such proceedings.

(g) If the dormitory authority shall have utilized the provisions of

this subdivision, the obligations of the authority issued pursuant to

the resolution authorizing the same shall contain a recital

substantially to the effect that the procedure for the validation of

such bonds set forth in this section have been complied with and such

recital shall bind the board of cooperative educational services and the

dormitory authority, and twenty days after such notice shall have been

published and after such obligations have been purchased in good faith

and for fair value by any person, the validity of such agreement, lease,

resolution and of the obligations issued pursuant to such resolution

shall not be questioned by such board of cooperative educational

services or by any taxpayer thereof in any court.

(h) If the dormitory authority and such board of cooperative

educational services shall deem it necessary to increase the amount of

obligations of the authority to be issued in connection with the

construction or providing of a board of cooperative educational services

school facility or facilities and shall have authorized the issuance of

such additional obligations by the execution of a supplemental agreement

and a supplemental lease between the dormitory authority and such board

of cooperative educational services and the authority has adopted a

supplemental resolution authorizing such additional obligations, the

provisions of this subdivision also shall be applicable to such

supplemental agreement, supplemental lease, supplemental resolution and

additional obligations authorized and issued pursuant thereto.

13. No authorization given by the voters of a board of cooperative

educational services prior to April first, nineteen hundred seventy-six

of a lease or other agreement with the authority in connection with the

provision of a board of cooperative educational services school facility

shall be held invalid by reason of any irregularity or failure to

observe a technicality in:

a. The form of such proposition approved by the duly qualified voters

of such board of cooperative educational services,

b. The notice of the meeting at which such proposition was submitted,

c. The time or manner of the publication of such notice,

d. The conduct of the meeting at which such proposition was adopted,

e. Like matters in such proceedings, in any action or proceeding

commenced more than two years after the date of approval by such voters

of the proposition authorizing such lease or other agreement. The

foregoing limitation shall not be construed as extending any limitation

period otherwise provided by law or authorizing any action or

proceeding.