BILL NUMBER:  S7416

 TITLE OF BILL :

An act to legalize, validate, ratify and confirm the actions of the
Panama central school district notwithstanding the failure to timely
file final building cost reports with the education department

 PURPOSE OR GENERAL IDEA OF BILL :

This bill would legalize, validate, ratify and confirm the actions of
the Panama central school district regardless of the failure of the
district to timely fine final building cost reports.

 SUMMARY OF SPECIFIC PROVISIONS :

Section 1. allows the Education Department to consider the final cost
report for Panama Central School as legalized, validated, ratified and
confirmed so long as it was submitted before December 21, 2012, the
commissioner approved the cost report, all state funds were properly
expended for such building project, and the failure to submit the
report in a timely manner was an inadvertent administrative or
ministerial oversight.

Section 2. Effective Date

              

 JUSTIFICATION :

The Panama Central School District was assessed a $4 million penalty
as a result of a late final cost report from a 2005 capital project.
In 2005, the Panama Central School District completed a small
maintenance project that was closed out. In 2009, Panama Central
School District verified that this project was complete as shown on
the state website. Panama then started a new project in 2008.

In 2012, Panama Central School reviewed the state's website to find
that they had an "open" project with a substantial completion
certificate filed on August 28, 2002 and December 12, 2005. This
information was not previously made available to Panama Central School
when they were closing out their 2005 building project. This meant
that Panama Central School neglected to file a Final Cost Report for a
building project with the Office of Facility Planning of the State
Education Department (SED) within the established time frame.

In the 2013-14 State Budget, a plan was negotiated that allowed for a
10-year repayment plan to help the school manage what remained a
tremendous penalty for a small rural school district. Also provided in
the 2013-14 State Budget was a $500,000 Supplemental Valuation Impact
Grant through the Education Department/Aid to Localities budget bill,
which was provided for again in the 2014-15 State Budget, the 2015-16
State Budget. This bill would forgive the remaining amount, $2.5
million, of the assessed penalty. Without full forgiveness of this
penalty, the 516 students who attend Panama Central School and the
District's taxpayers will be left holding the bag for administrative
oversights from nearly a decade ago.

With our small, rural schools already facing the heavy burdens of
limited state aid, tax revenues and loss of enrollment and tax base,
Panama Central School faces particularly significant cash flow
problems that threaten its very operations if not addressed.

 PRIOR LEGISLATIVE HISTORY :

New Bill.

 FISCAL IMPLICATIONS :
$2.5 million in remaining final cost report penalty

 EFFECTIVE DATE :
This act shall take effect immediately.