§ 1689-f. Public school districts; dormitory authority financing of
payments made or to be made by the state on account of certain approved
expenditures for capital outlays.

1. (a) "Eligible school district projects" shall mean capital projects
eligible for a capital outlay transition grant aid apportionment
pursuant to subdivision twelve of section thirty-six hundred forty-one
of the education law for which payments are made, as reimbursement of
approved expenditures, from a school district's general fund, capital
fund, or reserved funds for capital outlays as defined in subdivision
six of section thirty-six hundred two of the education law, that are
incurred by the school district on or after July first, two thousand one
and on or before June thirtieth, two thousand two, and are not otherwise
reimbursable in the two thousand two--two thousand three school year
pursuant to subdivision six of section thirty-six hundred two of the
education law.

(b) Notwithstanding the provisions of any general or special law to
the contrary, for purposes of this section, the term "school district"
shall mean a common school district, a consolidated school district, a
union free school district, a central school district, a central high
school district, or a city school district.

2. (a) Subject to chapter fifty-nine of the laws of two thousand, but
notwithstanding any other provisions of any general or special law to
the contrary, and subject to the making of annual appropriations
therefor by the legislature, the dormitory authority is authorized to
enter into one or more service contracts, none of which shall exceed ten
years in duration, with the director of the budget, upon such terms as
the director of the budget and the dormitory authority agree, for the
purpose of financing eligible school district projects.

(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; and may contain such other items and
conditions as may be agreed upon by the parties thereto, including, but
not limited to, the establishment of reserve funds and indemnities.

(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 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 related expenses required for any bonds, notes,
or other obligations, including bonds issued to fund any required debt
service reserve fund for bonds, of the dormitory authority issued
pursuant to paragraph (b) of subdivision four of this section.

3. (a) The commissioner of education shall certify, by September
thirtieth, two thousand two, to the dormitory authority, and the
director of the budget, each school district for which he has approved a
capital outlay transition grant pursuant to subdivision twelve of
section thirty-six hundred forty-one of the education law for an
eligible school district project as reimbursement of approved
expenditures for capital outlays in lieu of aid previously payable
pursuant to subdivision six of section thirty-six hundred two of the
education law, (1) a description of the eligible school district
projects for which such aid is granted for each school district,
including the cost of each project, and such other information regarding
the expenditures for capital outlays requested by the dormitory
authority as is necessary for the issuance of bonds, notes, or other
obligations, pursuant to this section and (2) the amount of that grant.

(b) On or before October first of each year, the dormitory authority
shall submit, and thereafter may resubmit, to the director of the budget
a report setting forth the amounts, if any, of all annual payments
required in the next state fiscal year and for the four state fiscal
years following such fiscal year estimated to be appropriated to the
dormitory authority pursuant to such service contract agreements between
the dormitory authority and the director of the budget pursuant to this
section. Such report may be incorporated into other reports required to
be given by the dormitory authority to the director of the budget on or
before those dates.

4. (a) To obtain funds for the purposes of this section, the authority
shall have power from time to time 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. All the provisions
of this title not inconsistent with the provisions of this section shall
be applicable with respect to any bonds of the authority issued to
obtain funds for the purposes authorized under this section.

(b) The dormitory authority shall not issue any bonds or notes in an
amount in excess of one hundred forty million dollars for the purposes
of this section, plus a principal amount of bonds or notes:

(1) to fund any debt service reserve fund, and

(2) to provide for the payment of fees and other charges and expenses,
including underwriters' discount, related to the issuance of such bonds
or notes, or related to the provision of any applicable bond or note
facilities.

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 title, 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 the 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 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 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.