BILL NUMBER:  S6779

 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 :

Legalizes, validates, ratifies and confirms the actions of the Panama
central school district regardless of the failure of such district to
timely file 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 for approved building projects completed prior to December
31, 2012 recognizing that the failure to submit the report in a timely
manner was an inadvertent administrative or ministerial oversight.

Section 2. Provides that the Commissioner of the State Education
Department shall not recover from the Panama Central School District
any penalty arising from the late filing of a final cost report
pursuant to section 31 of part A of chapter 57 of the laws of 2012,
provided that any amounts already so recovered shall be deemed a
              

payment for money due for prior years pursuant to paragraph c of
subdivision 5 of section 3604 of the education law and shall be paid
to the Panama Central School District pursuant to such provision.

Section 3. Establishes that the act shall take effect immediately.

 JUSTIFICATION :

The Panama Central School District was assessed a $4.9 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, and the 2016-17 State Budget. This bill would forgive
the remaining amount, $2.9 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.
Panama and Clymer Central School Districts have laid plans to merge
but the community has voiced tremendous concern over inheriting
Panama's final cost report penalties. Locally, many individuals view
this overwhelming obstacle as a key factor in determining whether the
merger should go forward. To have merger plans abandoned because of
these outstanding penalties would be devastating to Panama Central
School District.

 PRIOR LEGISLATIVE HISTORY :

New Bill

 FISCAL IMPLICATIONS :

$2.9 million in remaining final cost report penalty

 EFFECTIVE DATE :
This act shall take effect immediately.