§ 17-1907. Contracts for construction of sewer systems.

1. As used in this section:

a. "Construction" means and includes the building, installation, or
extension of a sewer system; the inspection and supervision thereof; the
engineering, legal, fiscal and economic investigations; studies,
surveys, designs, plans, contract drawings, specifications, procedures;
and other actions necessary thereto.

b. "Sewer system" means and includes pipe lines or conduits, pumping
stations, force mains, and all other constructions, devices, and
appliances appurtenant thereto, used for conducting sewage (the
water-carried human, animal or other treatable wastes from residences,
buildings, industrial and commercial establishments or other places) to
a point of connection to the sewage treatment works as defined in
section 17-1903.

c. "Sewer connection" means and includes a point of connection between
a building, residence or other structure and a public sewer.

d. "Residence" means and includes a building or structure which is
occupied principally as the home of one or more persons; provided,
however, that such building or structure contain not more than two
dwelling units.

e. "Municipality" means and includes any county, town, village,
district corporation, county or town improvement district, or any two or
more of the foregoing which are acting jointly in connection with an
eligible project. For purposes of this section only, an Indian
reservation located partly or wholly within New York State shall be
construed as a "municipality".

f. "Local governing body" means and includes (1) in a county, the
county legislative body (2) in a town, the town board; (3) in a village,
the board of trustees; (4) in a district corporation or an improvement
district, the governing board; (5) in an Indian reservation, the proper
tribal officials.

g. "Federal assistance" means and includes funds available, other than
by loan, from the federal government to a municipality, either directly
or through allocation by the state, for construction of a sewer system
or which are used for such construction, pursuant to any other federal
law or program.

i. "Project" means the construction of the whole or connected portion
of a sewage collection system. Where the construction of a sewage
collection system is phased over a period of years, each phase may be
considered as a project.

j. "Eligible project" means a project which in the judgment of the
commissioner meets all of the following requirements:

(1) It is in accord with applicable comprehensive studies and reports
made pursuant to section 17-1901 of this article;

(2) It conforms with applicable rules and regulations of the
commissioner and, in his opinion, reflects a reasonable effort to
develop maximum economy in planning, design and construction, with an
acceptable ratio between costs and benefits;

(3) It is necessary for the accomplishment of the state water
pollution control program;

(4) It is under construction in the period between April 1, 1965 and
March 31, 1977;

(5) No portion of the project aided herein is eligible to receive
assistance pursuant to section 17-1903;

(6) It serves inhabited residences in existence prior to the effective
date of this law;

(7) It serves the public by providing for the collection of sewage
(house connections and pipes collecting exclusively industrial,
commercial and other nonresidential waste are ineligible);

(8) The project or major part thereof is, at the time of construction,
located in: (a) a town which has a total population of seventeen
thousand or less persons, or (b) a town outside of village area which
has a population density per square mile of less than one hundred
persons.

k. "Capital cost" means the actual cost of construction of an eligible
project, not to include the cost of securing financing or interest on
funds borrowed to finance such construction, and representing that part
of the cost of the eligible project that is not paid by the federal
government.

l. "Annual debt service" means such amounts as shall be required to be
paid annually to amortize obligations (both principal and interest)
issued in order to finance the capital cost of an eligible project;
provided, however, that for the purposes of state aid, such annual debt
service shall be computed on a debt amortization schedule of not less
than thirty years nor more than forty years, as the commissioner shall
determine, and shall not include any other debt service (whether
principal or interest) on obligations of or on behalf of a municipality,
other capital costs, or expenditures for the purpose as to which state
reimbursement is claimed under any provision of law other than this
section. Where the eligible portion of the sewage collection system
serves non-residential users as well as residences, the amount of annual
debt service to be used in computing state aid shall be reduced as
determined by the commissioner, to compensate for the benefits received
by the nonresidential users from such system.

m. "State aid" means financial support made available to a
municipality by way of state participation in annual debt service,
through contracts entered into between the commissioner and the
municipality, upon such terms and conditions as the commissioner shall
deem appropriate, which shall be based on the number of residences
served by the eligible project and computed as follows:

(1) The amount of annual debt service, as defined above, minus the
municipality's share of the expense for construction of the sewage
collection system.

(2) The municipality's share shall be the product of the number of
residential sewer connections served by the project multiplied by an
adjusted rate. The adjusted rate shall be determined by applying a
valuation correction from the sum of one hundred twenty-five dollars.

(3) Valuation correction shall consist of minus one dollar for each
one thousand dollars or part thereof that the project area per capita
full value is less than the average per capita full value for the state
excluding all cities. For projects wholly located within a village or
town the project area per capita full value shall be the per capita full
value for the village, or for the town outside of village area,
respectively. For other projects, per capita full value shall be per
capita full value of the town or village within which the major portion
of the project is located. Per capita full value shall mean the full
value of such municipality or area divided by the population thereof.

The amount of such state aid shall be recomputed each year, on the
basis of data reported by the local governing body as accepted by the
commissioner. State aid shall commence in the state fiscal year
beginning April 1, l971. No state-aid payments shall be made on the
basis of any portion of the debt service of eligible projects which was
due and payable prior to April 1, 1971.

2. For the purpose of meeting the state responsibility as provided
herein, with respect to the protection and promotion of the health of
the inhabitants of the state by the provision of sewer systems, the
commissioner, in the name of the state, may enter into contracts with
municipalities having power to construct, operate and maintain sewer
systems, and any such municipality may enter into a contract with the
commissioner concerning eligible projects. Any such contract may include
such provisions as may be agreed upon by the parties thereto, and shall
include, in substance, the following provisions:

a. The cost of the eligible project as determined by the commissioner.

b. The method by which the eligible project shall be financed.

c. An agreement between the commissioner and the municipality to
provide state aid to the municipality each year, during the progress of
construction or following completion of construction as may be agreed
upon by the parties.

d. An agreement by the municipality

(1) To proceed expeditiously with, and complete, the project in
accordance with plans approved pursuant to section 17-0701 of this
article;

(2) To commence operation of the sewer system on completion of the
project, and not to discontinue operation of the sewer system without
the approval of the commissioner,

(3) To operate and maintain the sewer system in accordance with
applicable provisions of this article, the state sanitary code and rules
and regulations of the commissioner,

(4) To apply for and make reasonable efforts to secure federal
assistance for the project,

(5) To secure the approval of the commissioner before applying for
federal assistance, in order to maximize the amounts of such assistance
received or to be received for all projects in New York state,

(6) To provide for the payment of the municipality's share of the cost
of the project,

(7) To execute a contract or agreement with the owner of the sewage
treatment plant, if other than the municipality itself, to accept sewage
from the sewage collection system aided under this section, and

(8) To promulgate a municipal sewage use ordinance acceptable to the
commissioner.

e. A provision that, in the event that federal assistance which was
not included in the calculation of the capital cost becomes available to
the municipality, the amount of the state payment shall be recalculated
by deducting the amount of such federal assistance from the eligible
capital cost, and adjustment shall be made either (1) by the
municipality paying to the state the amount by which the state payments
actually made exceed the state payments determined by the recalculation
or, (2) by deducting the excess paid from subsequent payments to be made
by the state.

3. The commissioner may adopt rules and regulations pursuant to
subdivision 3 of section 17-0303 of this article governing the making
and enforcing of contracts pursuant to this section.

4. All contracts entered into pursuant to this section shall be
subject to approval by the state comptroller, and by the attorney
general as to form. All payments by the state pursuant to such contracts
shall be made after audit by and upon the warrant of the comptroller on
vouchers approved by the commissioner.

5. In connection with each contract concerning an eligible project the
commissioner shall keep adequate records of the amount of the payment by
the state pursuant to subparagraph c of subdivision two of this section,
and of the amount of federal assistance received by the municipality.