§ 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.