N.Y. Public Authorities Law § 1689-a: Public school districts; authority financing of eligible school construction projects; rebuilding schools to uphold education (RESCUE)

§ 1689-a. Public school districts; authority financing of eligible

school construction projects; rebuilding schools to uphold education

(RESCUE). 1. The dormitory authority is authorized to finance eligible

school construction projects for those public school districts which are

approved by the commissioner of education to receive aid apportionment

for rebuilding schools to uphold education (RESCUE) pursuant to

subdivision ten of section thirty-six hundred forty-one of the education

law.

2. (a) Notwithstanding the provisions of any general or special law

to the contrary, and subject to the making of annual appropriations

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

in the financing and refinancing of such eligible school construction

projects, the director of the budget is authorized in any state fiscal

year commencing April first, nineteen hundred ninety-nine through and

inclusive of the state fiscal year commencing April first, two thousand

five 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 paragraph (a) of

this subdivision 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 contract 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 moneys are available and that no liability

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

purpose, and that such obligation is subject to annual appropriation 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 expenses required for any bonds,

notes, or other obligations.

3. (a) The commissioner of education shall certify, from time to time,

to the dormitory authority, the comptroller, the director of the

division of the budget, the chairman of the senate finance committee and

the chairman of the assembly ways and means committee each school

district for which he has approved an aid apportionment for authority

financing of an eligible school construction project pursuant to

subdivision ten of section thirty-six hundred forty-one of the education

law. Such certification, which shall be made within thirty days after

such approval or as soon thereafter as is practicable, shall identify

the amount of aid apportionment which has been approved for such school

district and shall estimate the date or dates when such project will be

undertaken to assist the authority in establishing a schedule for

financing such project. The commissioner shall notify the authority if

there is a change in such date.

(b) On or before November fifteenth of each year and again on or after

February fifteenth of each year, the dormitory authority shall submit,

and thereafter may resubmit, to the director of the budget, the state

comptroller, the commissioner of education, 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

payments estimated to be appropriated to the dormitory authority

pursuant to such service contracts between the dormitory authority and

the director of the division of the budget pursuant to this section. An

eligible school construction project shall not be financed pursuant to

this section prior to the state fiscal year commencing April first,

nineteen hundred ninety-nine, provided that application for approval of

any such project by the commissioner of education may be processed prior

to such date.

4. (a) To obtain funds for the purposes of this section, the authority

shall have power from time to time, in accordance with a schedule

certified to the authority by the commissioner of education identifying

eligible school construction projects approved for the payment of aid

apportionments pursuant to subdivision ten of section thirty-six hundred

forty-one of the education law, 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.

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

amount in excess of one hundred ninety-five million dollars for the

purposes of this section, excluding a principal amount of bonds or notes

issued to fund one or more debt service reserve funds, to pay for the

costs of issuance of such bonds, and bonds or notes issued to refund or

otherwise repay such bonds, and bonds or notes previously issued. Except

for the purposes of complying with the internal revenue code, any

interest income earned on bond proceeds shall only be used to pay debt

service on such bonds or notes.

In computing for the purposes of this paragraph, the aggregate amount

of indebtedness evidenced by bonds and notes of the dormitory authority

issued pursuant to this section, 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.

5. 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 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.