§ 304. Project grant procedure. State moneys may be expended for any
municipal project pursuant to a contract entered into by the
commissioner, in the name of the state, and the municipal corporation
undertaking such project. 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. An estimate of the reasonable cost of the project as determined by
the commissioner.

b. An agreement by the commissioner to pay to or on behalf of the
municipal corporation, following completion of the project, or during
the undertaking thereof, in the form of progress payments, as may be
agreed upon by the parties and subject to the rules and regulations of
the commissioner, the state share of the project cost as he may
determine in accordance with section three hundred of this article.

c. An agreement by the municipal corporation:

(1) To proceed expeditiously with, and complete, the project in
accordance with plans approved by the commissioner;

(2) To commence and continue operation of the project on completion of
the project, and not to discontinue operation or dispose of the project
without the approval of the commissioner;

(3) To provide for the payment of the municipal corporation's share of
the cost of the project, and

(4) To include in its planning for the project, to the extent mutually
deemed appropriate, consideration and planning for joint development as
defined in section fourteen-d of the transportation law relating to the
environment of the area in which the project is to be constructed.

d. A provision that, in the event that federal assistance which was
not included in the calculation of the state payment pursuant to section
three hundred of this article becomes available to the municipal
corporation, the amount of the state payment shall be recalculated with
the inclusion of such additional federal assistance and the municipal
corporation shall either (1) pay to the state the amount by which the
state payment actually made exceeds the state payment determined by the
recalculation or, (2) if such additional federal assistance has not been
received by the municipal corporation, authorize the state to receive
such amount from the federal government and to retain an appropriate
amount thereof. The commissioner may adopt rules and regulations
governing the making and enforcing of contracts pursuant to this
subdivision. Contracts entered into pursuant to this subdivision shall
be subject to approval by the state comptroller, the director of the
budget 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.