BILL NUMBER:S3418

TITLE OF BILL:

An act
to amend part C of chapter 57 of the laws of 2004, amending the labor
law and other laws relating to implementation of the state fiscal plan
for the 2004-2005 state fiscal year, in relation to extending certain
provisions of such chapter

PURPOSE OF THE BILL:

To extend, until June 30, 2015, the effectiveness of section 71 of
Part C of Chapter 57 of the Laws of 2004 to continue the authority of
the Commissioner of Education, in conjunction with the Office of the
State Comptroller (OSC), to exempt discretionary grants to school
districts, public schools, boards of cooperative services, public
colleges and universities, public libraries, municipalities and other
public educational entities from the procedures for the award of
State contracts prescribed by paragraph (a) of subdivision 2 of §112
of the State Finance Law.
Such exemption allows these discretionary grants to be paid more
timely through a streamlined competitive request for proposals (RFP)
award process.

SUMMARY OF PROVISIONS OF THE BILL:
              

Section 1 of the bill would amend subdivision 11 of section 94 of
Part C of Chapter 57 of the Laws of 2004 to extend the effectiveness
of §71 of Part C until June 30, 2015.

Section 2 would be the effective date.

STATEMENT IN SUPPORT OF THE BILL:

Paragraph (a) of subdivision 2 of §112 of the State Finance Law, which
requires that state agency contracts in excess of $15,000 be approved
by OSC through the state contract process contains no exception for
discretionary agency grants. In 2004, §71 of Part C of Chapter 57 of
the Laws of 2004 was enacted, which supplied authority for an
exemption from state contracting requirements for school districts
and various other public educational entities, the process for which
was to be developed jointly between the Commissioner of Education and
the Office of the State Comptroller. The result has been a
streamlined competitive RFP award approval process that mimics the
state contracting process except that it allows for payment without a
contract. Similar to requirements stipulated in contracts approved by
OSC under §112 of the State Finance Law, the streamlined process
requires educational entities to submit budgets, program goals and
expenditure reports to the State Education Department (SED). However,
under the provisions of subdivision 11 of §94 of Part C of Chapter 57
of the Laws of 2004, §71 sunsets annually on June 30, which has been
extended each year in the Education, Labor and Family Assistance (ELF
A) budget Article VII legislation.
However, the Governor's veto of the 2010-11 ELFA Article VII
bill (S.6607-B/A.9907C) for reasons having nothing to do with
continuing this exemption, resulted in the expiration of the


provisions of §71 of Part C of Chapter 57 of the Laws of 2004 on June
30, 2010.

The practical effect of the expiration of this exemption on SED, which
administers thousands of grant payments to school districts and other
public educational entities each year, and on these districts and
entities, would be that SED and they would incur additional expense
and staff time to complete the paperwork needed to put these grants
through the state contract process. And, the time for processing
these grants would be greatly lengthened, so that school districts
and other entities that receive them would have to wait many months
longer than previously to receive their funds. Delays in the timely
awards of discretionary grants supported by federal funds are
particularly problematic, as they potentially could result in the
loss or lapse of these funds since the timeframes in which these
funds must be disbursed are dictated by the federal grant awards and
federal law. The consequence for school districts, public schools,
BOCES, public colleges and universities, public libraries,
municipalities and other public educational entities would be
additional costs, delays in the receipt of grant funds and the risk
of loss of these funds should an appropriation lapse or grant expire
prior to completion of the state contracting process.

Should this bill not be enacted into law, SED would be required to
process a minimum of 367 more contracts in 2010-2011 for established
grant programs, plus an estimated 250 discretionary grants from the
federal Race to the Top (RTTT) program for which RFPs have yet to be
issued, in addition to the 1,520 state contracts it processed in
2009-10 (a single contract involves multiple payments. The increases
in contracts set forth above represents an estimated increase of 41
percent over last year in the number of state contracts to be
processed. SED is experiencing staff reductions, similar to other
agencies, while at the same time needing to make a significant number
of additional required procurements and awards related to RTTT. Grant
programs affected by the termination of the contracting exemption, in
additional to complex RTTT grants, exemplified by the Graduate-level
Teacher Prep Pilot program, include: McKinney-Vento Homeless funding;
21st Century Community Learning Center grants; the Literacy Zone
Initiative; Teachers of Tomorrow grants; Extended Day/School Violence
grants; library construction funding; local government records
management incentive grants; and family literacy library grants.
During the current fiscal crisis school
districts and other educational entities are likely to have
reduced their administrative staffs as well and may lack the
resources necessary to administer the additional requirements related
to the state contracting process. The budgets of educational entities
that are expecting these grant funds to be paid timely will be
adversely affected if the statutory exemption is not extended. In
anticipation of continued staffing shortages and fiscal constraint,
the Commissioner's authority to exempt these discretionary contracts
and grants from state contracting requirements should be extended to
at least June 30, 2015, which will help to assure that the budgets of
educational entities will not be adversely affected in the immediate
future as a result of another inadvertent failure to extend this
exemption.


This bill would rectify this situation by extending the effectiveness
of §71 of Part C of Chapter 57 of the Laws of 2004 for one additional
year, as proposed by the Legislature in A.9707-C/S.6607-B and
endorsed by the Governor in his 2010-11 Executive Budget proposal.
Discretionary grants to school districts and other educational
entities do not involve the same considerations as procurement of
goods and services at the best price or value. Unlike procurement
contracts, the goal of discretionary grants is implementation of the
policy embedded in the statute or appropriation
language, not to secure the best price or value for the State. The
authority to exempt discretionary education grants from the state
contracting requirements should be continued for the benefit of
school districts and other public educational entities and to create
efficiency and cost effectiveness for the State.

BUDGETARY IMPLICATIONS OF THE BILL:

This bill would not create any additional cost to the State, school
districts or other educational entities. It would result in cost
savings to the State, school districts, public schools, BOCES, public
colleges and universities, public libraries and other public
educational entities by eliminating unnecessary administrative
expense and preventing significant delays in the payment of grants.

PRIOR LEGISLATIVE HISTORY:

None. This is a new proposal as a separate bill, though identical
language was proposed in §43 of Part A of S.6607-B/A.9707-C and Part A
of S.2/A.2 for the December Extraordinary Session.

EFFECTIVE DATE:

Immediately, and the bill would be deemed to have been in full force
and effect on and after June 30, 2010, when authority for the
exemption expired.