N.Y. State Finance Law § 99-c: Withholding of state aid upon failure of municipalities and school districts to repay health insurance reserve receipts when required

§ 99-c. Withholding of state aid upon failure of municipalities and

school districts to repay health insurance reserve receipts when

required. 1. In the event a county, city, town, village or school

district which has elected to receive distribution or distributions from

the health insurance reserve receipts fund, pursuant to an agreement

between such municipality or school district and the state and which has

elected to terminate its contractual agreement for health benefits with

the New York state department of civil service, or if called upon by the

New York state department of civil service, pursuant to such agreement,

to return such distribution within the time period and under the

conditions specified in such agreement, shall be in default of its

obligation to repay such distribution, the allotment, apportionment, and

payment of local assistance aid, education aid or other state aid as

appropriate and as determined by the comptroller shall be withheld by

the state upon the following terms and conditions.

2. In the event of the failure or inability of the municipality or

school district to repay its distribution pursuant to the contractual

agreement, the department of civil service shall forthwith make and

deliver to the comptroller of the state of New York a certificate

stating the amount due and not paid, and the state comptroller shall

thereafter deduct and withhold from the next succeeding allotments,

apportionments or payments of state aid or assistance due such

municipality or school district such amount or amounts thereof as may be

required to pay the amount due. The state shall not be obligated to pay,

by virtue of such withholdings, any additional or increased

apportionment or payment of state aid or assistance.

2-a. Notwithstanding the provisions of subdivision two of this section

or any other inconsistent provision of law, a school district or board

of cooperative educational services which is subject to the requirements

of this section may repay its distribution pursuant to a contractual

agreement authorized by this section over a period of ten state fiscal

years, in equal annual installments, payable by March thirty-first of

each year. For school districts or boards of cooperative educational

services which terminate the contractual agreement prior to July first,

nineteen hundred eighty-three, the first installment shall be paid prior

to March thirty-first, nineteen hundred eighty-four. For all other

school districts and boards of cooperative educational services, the

first installment shall be paid prior to March thirty-first first

succeeding the termination of such agreement. The comptroller shall not

withhold from state aid or other assistance due a school district or

board of cooperative educational services any amount of such

distribution due and owing as certified by the department of civil

service to the comptroller pursuant to subdivision two of this section,

until and unless such school district or board of cooperative

educational services fails to make an installment payment authorized by

this subdivision by March thirty-first of the applicable year. Upon

failure of a school district or board of cooperative educational

services to make an installment payment, the withholding provisions of

subdivision two of this section shall take effect to the extent of the

amount of that unpaid installment. The comptroller shall within sixty

days of the date on which this subdivision becomes effective or within

sixty days of any subsequent termination of the contractual agreement

notify the applicable school district or board of cooperative

educational services of the provisions of this subdivision, of the

amount due and owing, and the amount of each installment.

3. Notwithstanding any inconsistent provisions of law, the comptroller

shall establish a fund, to be called the health insurance reserve

receipts fund, to receive transfers of funds from the health insurance

carriers or the plan administrator or administrators of the New York

state employee health benefit plan, pursuant to contractual agreements

between such carriers and the New York state department of civil service

and/or from the health insurance fund. Moneys returned by the

municipalities and school districts or withheld from state aid by the

comptroller pursuant to provisions governing termination of the

contractual agreements shall be deposited in this fund. Disbursements

from the health insurance reserve receipts fund shall be for the purpose

of remitting to the carriers any moneys due them as a result of

termination of the state's contract with the carriers or termination of

agreements between the state and municipalities and school districts

and/or for the purpose of transferring funds to the health insurance

fund. Disbursements from such fund shall be made pursuant to the

procedures for authorization of expenditures contained in article eleven

of the civil service law upon the issuance of a certificate of approval

of availability by the director of the budget and subject to audit and

warrant of the comptroller.