S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5403
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 8, 2017
                                ___________
 
 Introduced by M. of A. BRINDISI -- read once and referred to the Commit-
   tee on Education
 
 AN  ACT  to  amend  the education law, in relation to the computation of
   foundation aid and addition of credit  recovery  aid  for  the  Maisto
   Districts;  to amend the local finance law, in relation to calculation
   of the period of probable  usefulness  regarding  payment  for  Maisto
   Districts credit recovery aid; to amend the public authorities law, in
   relation  to  contracts between the dormitory authority and the Maisto
   Districts or the New York  state  association  of  small  city  school
   districts;  and  to amend the state finance law, in relation to estab-
   lishing the credit recovery financing reserve fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Legislative intent: It is the responsibility of the legis-
 lature under article XI of the constitution of the state of New York  to
 establish and maintain a system that will provide all children an oppor-
 tunity  to  receive  a  meaningful high school education. As a result of
 trial in State Supreme Court of MAISTO, ET AL. V STATE OF NEW YORK it is
 clear that resources sufficient to offer that education in  eight  small
 city  school  districts,  known  as  the Maisto Districts, are not being
 provided to those districts under current education law.  Therefore,  it
 is  the  intention of the legislature to amend certain provisions of the
 education law to ensure that the necessary funding is available in those
 districts to help them provide all  their  children  an  opportunity  to
 receive  a  meaningful  high  school  education  and to maintain healthy
 vibrant educational communities that underpin a thriving state economy.
   § 2. This legislation shall be known and may be cited as  "the  Maisto
 District successful schools act".
   §  3.  Paragraph  ff of subdivision 1 of section 3602 of the education
 law, as added by section 25 of part A of chapter 58 of the laws of 2011,
 is amended to read as follows:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05724-01-7

 A. 5403                             2
 
   ff. "Preliminary growth amount" shall mean the difference between  the
 statewide  total,  excluding  the  apportionments  computed  pursuant to
 subdivisions four, OTHER THAN SUCH APPORTIONMENTS FOR MAISTO  DISTRICTS,
 and seventeen of section thirty-six hundred two of the education law, of
 the  apportionments  due  and  owing  during  the  current  school year,
 commencing with the two thousand twelve--two  thousand  thirteen  school
 year, to school districts and boards of cooperative educational services
 from  the  general  support  for  public schools as computed based on an
 electronic data file used to produce the  school  aid  computer  listing
 produced  by  the  commissioner in support of the enacted budget for the
 current year, less the statewide total of such apportionments, excluding
 the apportionments computed pursuant to subdivisions  four,  OTHER  THAN
 SUCH APPORTIONMENTS FOR MAISTO DISTRICTS, and seventeen of section thir-
 ty-six  hundred  two of the education law, due and owing during the base
 school year to school districts and boards  of  cooperative  educational
 services  from  the general support for public schools as computed based
 on an electronic data file used to produce the school aid computer list-
 ing produced by the commissioner in support of the  enacted  budget  for
 the current year.
   §  4. Subdivision 1 of section 3602 of the education law is amended by
 adding two new paragraphs hh and ii to read as follows:
   HH. "NEW YORK STATE ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS"  SHALL
 MEAN  THE ASSOCIATION OF DISTRICTS IN CITIES WITH POPULATIONS FEWER THAN
 ONE HUNDRED TWENTY-FIVE THOUSAND PERSONS IN THE MOST RECENT CENSUS.
   II. "MAISTO DISTRICTS" SHALL MEAN THE SMALL CITY SCHOOL  DISTRICTS  OF
 JAMESTOWN, KINGSTON, MOUNT VERNON, NEWBURGH, NIAGARA FALLS, PORT JERVIS,
 POUGHKEEPSIE AND UTICA.
   §  5. Subdivision 18 of section 3602 of the education law, as added by
 section 37 of part A of chapter 58 of the laws of 2011,  is  amended  to
 read as follows:
   18. Allocable growth amount apportionment. Such amount shall be appor-
 tioned  for  a school year pursuant to a chapter of the laws of New York
 enacted for the state fiscal year in which such school  year  commences,
 and  shall be allocated to purposes including but not limited to compet-
 itive grant awards made pursuant to subdivisions five and six of section
 thirty-six hundred forty-one of this article, the foundation aid  phase-
 in  amount or other foundation aid increase allocated pursuant to subdi-
 vision four of this section and the gap elimination adjustment  restora-
 tion  amount  apportioned  pursuant  to  subdivision  seventeen  of this
 section. In the event that a chapter of the laws of New York enacted for
 the state fiscal year  in  which  such  school  year  commences  is  not
 enacted,  the  allocations  in  support  of subdivisions five and six of
 section thirty-six hundred forty-one of this  article  shall  equal  the
 allocations  in  support of such awards in the base year, and the appor-
 tionments pursuant to subdivisions four and seventeen  of  this  section
 for  the  current  year shall equal the apportionments for such subdivi-
 sions four and seventeen for the base year EXCEPT  THAT  THE  APPORTION-
 MENTS OF THE FOUNDATION AID PHASE-IN AMOUNT FOR THE MAISTO DISTRICTS AND
 MAISTO  DISTRICT CREDIT RECOVERY AID SHALL BE THE AMOUNT COMPUTED IN THE
 CURRENT YEAR.
   § 6. The opening paragraph, subparagraph 1 of paragraph a, and  clause
 (ii)  of  subparagraph 2 of paragraph b of subdivision 4 of section 3602
 of the education law, as amended by section 7 of part A of chapter 54 of
 the laws of 2016, are amended to read as follows:
   In addition to any other apportionment pursuant  to  this  chapter,  a
 school  district, other than a special act school district as defined in

 A. 5403                             3
 
 subdivision eight of section four thousand one of this chapter, shall be
 eligible for total foundation aid equal to the product of total  aidable
 foundation  pupil units multiplied by the district's selected foundation
 aid,  which shall be the greater of five hundred dollars ($500) or foun-
 dation formula aid, provided, however that for the two thousand  seven--
 two  thousand eight through two thousand eight--two thousand nine school
 years, no school district shall receive total foundation aid  in  excess
 of  the  sum of the total foundation aid base for aid payable in the two
 thousand seven--two thousand eight  school  year  computed  pursuant  to
 subparagraph (i) of paragraph j of subdivision one of this section, plus
 the  phase-in  foundation  increase  computed pursuant to paragraph b of
 this subdivision, and provided further that for the two thousand twelve-
 -two thousand thirteen school year, no  school  district  shall  receive
 total  foundation  aid  in excess of the sum of the total foundation aid
 base for aid payable in the two  thousand  eleven--two  thousand  twelve
 school  year  computed  pursuant  to subparagraph (ii) of paragraph j of
 subdivision one of this section, plus the phase-in  foundation  increase
 computed  pursuant  to  paragraph  b  of  this subdivision, and provided
 further that for the two thousand thirteen--two thousand fourteen school
 year and thereafter, no school district shall receive  total  foundation
 aid  in  excess  of  the  sum  of the total foundation aid base computed
 pursuant to subparagraph (ii) of paragraph j of subdivision one of  this
 section,  plus  the  phase-in  foundation  increase computed pursuant to
 paragraph b of this subdivision, and provided further that for  the  two
 thousand sixteen--two thousand seventeen school year, no eligible school
 districts shall receive total foundation aid in excess of the sum of the
 total  foundation  aid  base  computed  pursuant to subparagraph (ii) of
 paragraph j of subdivision one of this section plus the sum of  (A)  the
 phase-in foundation increase, (B) the executive foundation increase with
 a  minimum  increase  pursuant to paragraph b-2 of this subdivision, and
 (C) an amount equal to "COMMUNITY SCHOOLS AID" in the  computer  listing
 produced  by the commissioner in support of the executive budget request
 for the two thousand sixteen--two thousand  seventeen  school  year  and
 entitled  "BT161-7",  where  (1)  "eligible  school  district"  shall be
 defined as a district with (a) an unrestricted aid increase of less than
 seven percent (0.07) and (b) a three year average free and reduced price
 lunch percent greater than fifteen percent (0.15), and (2) "unrestricted
 aid increase" shall mean the quotient arrived at when dividing  (a)  the
 sum  of  the  executive foundation aid increase plus the gap elimination
 adjustment for the base year, by (b) the difference  of  foundation  aid
 for the base year less the gap elimination adjustment for the base year,
 and (3) "executive foundation increase" shall mean the difference of (a)
 the amounts set forth for each school district as "FOUNDATION AID" under
 the  heading "2016-17 ESTIMATED AIDS" in the school aid computer listing
 produced by the commissioner in support of the executive budget  request
 for  the  two  thousand  sixteen--two thousand seventeen school year and
 entitled "BT161-7" less (b)  the  amounts  set  forth  for  each  school
 district  as "FOUNDATION AID" under the heading "2015-16 BASE YEAR AIDS"
 in such computer listing and provided further that total foundation  aid
 shall  not  be  less  than  the product of the total foundation aid base
 computed pursuant to paragraph j of subdivision one of this section  and
 the due-minimum percent which shall be, for the two thousand twelve--two
 thousand  thirteen  school  year,  one  hundred  and  six-tenths percent
 (1.006) and for the two thousand thirteen--two thousand fourteen  school
 year  for  city  school  districts of those cities having populations in
 excess of one hundred twenty-five thousand and  less  than  one  million

 A. 5403                             4
 
 inhabitants  one  hundred  and one and one hundred and seventy-six thou-
 sandths percent (1.01176), and for all other districts one  hundred  and
 three-tenths  percent  (1.003),  and  for the two thousand fourteen--two
 thousand  fifteen  school  year  one  hundred and eighty-five hundredths
 percent (1.0085), and for the two thousand fifteen--two thousand sixteen
 school year,  one  hundred  thirty-seven  hundredths  percent  (1.0037),
 subject to allocation pursuant to the provisions of subdivision eighteen
 of  this section and any provisions of a chapter of the laws of New York
 as described therein, nor more than the product of such total foundation
 aid base and one hundred fifteen percent, provided,  however,  that  for
 the  two thousand sixteen--two thousand seventeen school year such maxi-
 mum shall be no more than the sum of (i) the product of such total foun-
 dation aid base and one hundred fifteen percent plus (ii) the  executive
 foundation  increase  and  plus  (iii)  "COMMUNITY  SCHOOLS  AID" in the
 computer listing produced by the commissioner in support of  the  execu-
 tive budget request for the two thousand sixteen--two thousand seventeen
 school  year  and  entitled "BT161-7", EXCEPT FOR MAISTO DISTRICTS WHICH
 SHALL BE ONE HUNDRED TWENTY-FIVE PERCENT, and provided further that  for
 the two thousand nine--two thousand ten through two thousand eleven--two
 thousand  twelve  school years, each school district shall receive total
 foundation aid in an amount equal to  the  amount  apportioned  to  such
 school  district  for  the  two thousand eight--two thousand nine school
 year pursuant to this subdivision. Total aidable foundation pupil  units
 shall  be  calculated pursuant to paragraph g of subdivision two of this
 section. For the purposes of calculating aid pursuant to  this  subdivi-
 sion,  aid for the city school district of the city of New York shall be
 calculated on a citywide basis.
   (1) The foundation amount shall reflect the average per pupil cost  of
 general  education instruction in successful school districts, as deter-
 mined by a statistical analysis of the costs of  special  education  and
 general  education  in  successful  school  districts, provided that the
 foundation amount shall be adjusted annually to reflect  the  percentage
 increase in the consumer price index as computed pursuant to section two
 thousand  twenty-two of this chapter, provided that for the two thousand
 eight--two thousand nine school year, for the purpose  of  such  adjust-
 ment,  the  percentage  increase  in  the  consumer price index shall be
 deemed to be two and nine-tenths percent (0.029), and  provided  further
 that  the  foundation  amount  for  the two thousand seven--two thousand
 eight school  year  shall  be  five  thousand  two  hundred  fifty-eight
 dollars, and provided further that for the two thousand seven--two thou-
 sand  eight  through two thousand sixteen--two thousand seventeen school
 years, AND FOR THE MAISTO DISTRICTS FOR THE TWO  THOUSAND  EIGHTEEN--TWO
 THOUSAND  NINETEEN THROUGH TWO THOUSAND TWENTY-ONE--TWO THOUSAND TWENTY-
 TWO SCHOOL YEARS, the foundation amount shall be further adjusted by the
 phase-in foundation percent established pursuant to paragraph b of  this
 subdivision.
   (ii)  Phase-in  foundation  increase  factor.  For  the  two  thousand
 eleven--two  thousand  twelve  school  year,  the  phase-in   foundation
 increase  factor  shall  equal thirty-seven and one-half percent (0.375)
 and the phase-in due minimum percent shall equal nineteen and  forty-one
 hundredths  percent  (0.1941), for the two thousand twelve--two thousand
 thirteen school year the phase-in foundation increase factor shall equal
 one and seven-tenths percent (0.017), for the two thousand thirteen--two
 thousand fourteen school year the phase-in  foundation  increase  factor
 shall equal (1) for a city school district in a city having a population
 of  one  million  or  more,  five  and  twenty-three  hundredths percent

 A. 5403                             5
 
 (0.0523) or (2) for all other school districts zero percent, for the two
 thousand fourteen--two thousand fifteen school year the phase-in founda-
 tion increase factor shall equal (1) for a city  school  district  of  a
 city  having  a  population  of one million or more, four and thirty-two
 hundredths percent (0.0432) or (2) for a school district  other  than  a
 city  school  district  having  a  population of one million or more for
 which (A) the quotient of the  positive  difference  of  the  foundation
 formula aid minus the foundation aid base computed pursuant to paragraph
 j  of  subdivision one of this section divided by the foundation formula
 aid is greater than twenty-two percent (0.22) and (B) a combined  wealth
 ratio  less  than thirty-five hundredths (0.35), seven percent (0.07) or
 (3) for all other  school  districts,  four  and  thirty-one  hundredths
 percent (0.0431), and for the two thousand fifteen--two thousand sixteen
 school year the phase-in foundation increase factor shall equal: (1) for
 a  city  school district of a city having a population of one million or
 more,  thirteen  and  two  hundred  seventy-four   thousandths   percent
 (0.13274);  or  (2)  for  districts  where  the quotient arrived at when
 dividing (A) the product of the total  aidable  foundation  pupil  units
 multiplied  by  the  district's  selected  foundation aid less the total
 foundation aid base computed pursuant to paragraph j of subdivision  one
 of  this section divided by (B) the product of the total aidable founda-
 tion pupil units multiplied by the district's selected foundation aid is
 greater than nineteen percent (0.19), and where the district's  combined
 wealth  ratio is less than thirty-three hundredths PERCENT (0.33), seven
 and seventy-five hundredths percent  (0.0775);  or  (3)  for  any  other
 district  designated as high need pursuant to clause (c) of subparagraph
 two of paragraph c of subdivision six of this section for the school aid
 computer listing produced by the commissioner in support of the  enacted
 budget  for  the  two thousand seven--two thousand eight school year and
 entitled "SA0708", four  percent  (0.04);  or  (4)  for  a  city  school
 district  in a city having a population of one hundred twenty-five thou-
 sand or more but less than one million, fourteen percent (0.14); or  (5)
 for school districts that were designated as small city school districts
 or  central  school  districts  whose  boundaries include a portion of a
 small city for the school aid computer listing produced by  the  commis-
 sioner  in support of the enacted budget for the two thousand fourteen--
 two thousand fifteen school year and entitled "SA1415", four  and  seven
 hundred  fifty-one  thousandths  percent (0.04751); or (6) for all other
 districts one percent (0.01), and  for  the  two  thousand  sixteen--two
 thousand  seventeen  school  year  shall  equal  for  an eligible school
 district the greater of: (1) for a city school district in a city with a
 population of one million or more, seven and seven hundred  eighty  four
 thousandths  percent  (0.07784);  or (2) for a city school district in a
 city with a population of more than two hundred fifty thousand but  less
 than  one  million as of the most recent federal decennial census, seven
 and three hundredths percent (0.0703); or (3) for a city school district
 in a city with a population of more than two hundred thousand  but  less
 than  two hundred fifty thousand as of the most recent federal decennial
 census, six and seventy-two hundredths percent (0.0672); or  (4)  for  a
 city  school  district  in  a  city  with  a population of more than one
 hundred fifty thousand but less than two hundred thousand as of the most
 recent federal decennial census, six and seventy-four hundredths percent
 (0.0674); or (5) for a city school district in a city with a  population
 of  more than one hundred twenty-five thousand but less than one hundred
 fifty thousand as of the most recent federal decennial census, nine  and
 fifty-five hundredths percent (0.0955); or (6) for school districts that

 A. 5403                             6
 
 were  designated  as  small  city  school  districts  or  central school
 districts whose boundaries include a portion of a  small  city  for  the
 school  aid  computer listing produced by the commissioner in support of
 the  enacted  budget for the two thousand fourteen--two thousand fifteen
 school year and entitled "SA141-5" with a  combined  wealth  ratio  less
 than  one and four tenths (1.4), nine percent (0.09), provided, however,
 that for such districts that are also districts designated as high  need
 urban-suburban pursuant to clause (c) of subparagraph two of paragraph c
 of  subdivision  six of this section for the school aid computer listing
 produced by the commissioner in support of the enacted  budget  for  the
 two   thousand  seven--two  thousand  eight  school  year  and  entitled
 "SA0708", nine  and  seven  hundred  and  nineteen  thousandths  percent
 (0.09719);  or  (7)  for  school districts designated as high need rural
 pursuant to clause (c) of subparagraph two of paragraph c of subdivision
 six of this section for the school aid computer listing produced by  the
 commissioner  in  support  of  the  enacted  budget for the two thousand
 seven--two thousand eight school year and  entitled  "SA0708",  thirteen
 and  six  tenths percent (0.136); or (8) for school districts designated
 as high need urban-suburban pursuant to clause (c) of  subparagraph  two
 of  paragraph  c  of  subdivision six of this section for the school aid
 computer listing produced by the commissioner in support of the  enacted
 budget  for  the  two thousand seven--two thousand eight school year and
 entitled "SA0708", seven hundred nineteen thousandths percent (0.00719);
 or (9) for all other eligible school districts,  forty-seven  hundredths
 percent  (0.0047) and for the two thousand seventeen--two thousand eigh-
 teen school year and thereafter the commissioner shall  annually  deter-
 mine  the  phase-in  foundation  increase  factor  subject to allocation
 pursuant to the provisions of subdivision eighteen of this  section  and
 any  provisions  of  a  chapter  of  the  laws  of New York as described
 therein, EXCEPT THAT FOR MAISTO DISTRICTS IN  THE  TWO  THOUSAND  SEVEN-
 TEEN--TWO  THOUSAND  EIGHTEEN SCHOOL YEAR TWENTY-FIVE HUNDREDTHS PERCENT
 (0.0025), IN THE TWO THOUSAND  EIGHTEEN--TWO  THOUSAND  NINETEEN  SCHOOL
 YEAR FIVE HUNDREDTHS PERCENT (0.0050), IN THE TWO THOUSAND NINETEEN--TWO
 THOUSAND TWENTY SCHOOL YEAR SEVENTY-FIVE HUNDREDTHS PERCENT (0.0075) AND
 IN  THE  TWO  THOUSAND  TWENTY--TWO  THOUSAND TWENTY-ONE SCHOOL YEAR AND
 THEREAFTER ONE HUNDRED HUNDREDTHS PERCENT (0.0100).
   § 7. Section 3602 of the education law is  amended  by  adding  a  new
 subdivision 42 to read as follows:
   42.  MAISTO  DISTRICT CREDIT RECOVERY AID. COMMENCING WITH AID PAYABLE
 IN THE TWO THOUSAND EIGHTEEN--TWO THOUSAND NINETEEN SCHOOL YEAR  THROUGH
 THE  TWO THOUSAND TWENTY-ONE--TWO THOUSAND TWENTY-TWO SCHOOL YEAR MAISTO
 DISTRICTS SHALL BE ELIGIBLE FOR AN ADDITIONAL APPORTIONMENT AS  PROVIDED
 FOR  IN  THIS SUBDIVISION. SUCH DISTRICTS SHALL BE ELIGIBLE FOR AN ADDI-
 TIONAL APPORTIONMENT IN AN AMOUNT EQUAL TO  THE  PRODUCT  OF  THE  TOTAL
 NUMBER  OF STUDENTS IN THE TWO THOUSAND THIRTEEN, TWO THOUSAND FOURTEEN,
 TWO THOUSAND FIFTEEN, TWO THOUSAND SIXTEEN AND  TWO  THOUSAND  SEVENTEEN
 COHORTS  MULTIPLIED  BY  ONE MINUS THE FOUR YEAR GRADUATION RATE FOR THE
 YEAR PRIOR TO THE BASE YEAR  AND  TWO  THOUSAND  FIVE  HUNDRED  ($2,500)
 DOLLARS  TO  BE USED FOR PROGRAMS WITH RESPECT TO SUCH STUDENTS APPROVED
 BY THE COMMISSIONER FOR THE FOLLOWING PURPOSES:
   A. CREDIT RECOVERY PROGRAMS;
   B. ACADEMIC INTERVENTION SERVICES;
   C. RESPONSE TO INTERVENTION SERVICES;
   D. DROP OUT PREVENTION;
   E. INCARCERATED YOUTH SERVICES;
   F. PARENT INVOLVEMENT PROGRAMS;

 A. 5403                             7
 
   G. EXTENDED DAY AND EXTENDED YEAR PROGRAMS; AND
   H. PSYCHO-SOCIAL TESTING.
   §  8.  Section 2530 of the education law, as amended by chapter 171 of
 the laws of 1996, is amended to read as follows:
   § 2530. Power to contract indebtedness.   Each  city  school  district
 shall  be  authorized to expend money for any of the objects or purposes
 which it is authorized to accomplish by law  and  may  contract  indebt-
 edness  in its name pursuant to the local finance law, INCLUDING BUT NOT
 LIMITED TO THE ISSUANCE OF BONDS OF THE DISTRICT  OR  OF  THE  NEW  YORK
 STATE  ASSOCIATION  OF  SMALL  CITY  SCHOOL  DISTRICTS,  ITS AFFILIATES,
 SUBSIDIARIES OR SUBDIVISIONS THEREOF TO BE REPAID BY REVENUES FROM MAIS-
 TO DISTRICT CREDIT RECOVERY AID PURSUANT  TO  SUBDIVISION  FORTY-TWO  OF
 SECTION  THIRTY-SIX  HUNDRED  TWO  OF  THIS CHAPTER. NOTWITHSTANDING ANY
 OTHER PROVISION OF LAW TO THE CONTRARY,  EACH  DISTRICT,  THE  NEW  YORK
 STATE  ASSOCIATION  OF  SMALL  CITY  SCHOOL  DISTRICTS,  AND AFFILIATES,
 SUBSIDIARIES OR SUBDIVISIONS THEREOF SHALL HAVE  THE  POWER  TO  PLEDGE,
 ASSIGN  OR  OTHERWISE  MAKE  AVAILABLE AS SECURITY FOR SUCH INDEBTEDNESS
 WITHOUT CONSIDERATION, REVENUES FROM STATE AID UNDER SUBDIVISION  FORTY-
 TWO OF SECTION THIRTY-SIX HUNDRED TWO OF THIS CHAPTER AND BONDS OR OTHER
 INDEBTEDNESS  IN  CONNECTION  WITH  SUCH SUBDIVISION FORTY-TWO SHALL NOT
 REQUIRE VOTER APPROVAL.  The provisions of section four hundred  sixteen
 of this chapter shall be applicable to such districts.
   §  9. Paragraph a of section 11.00 of the local finance law is amended
 by adding a new subparagraph 109 to read as follows:
   109. PAYMENT BY SMALL CITY SCHOOL DISTRICTS FOR OBJECTS  AND  PURPOSES
 SET  FORTH IN SUBDIVISION FORTY-TWO OF SECTION THIRTY-SIX HUNDRED TWO OF
 THE EDUCATION LAW AND AUTHORIZED UNDER SECTION TWENTY-FIVE HUNDRED THIR-
 TY OF THE EDUCATION LAW, TEN YEARS.
   § 10. Paragraph (b) of subdivision 2 of section  1676  of  the  public
 authorities  law  is  amended  by adding a new undesignated paragraph to
 read as follows:
   MAISTO DISTRICTS AS DEFINED BY PARAGRAPH  II  OF  SUBDIVISION  ONE  OF
 SECTION  THIRTY-SIX  HUNDRED  TWO  OF THE EDUCATION LAW AND THE NEW YORK
 STATE ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS AS DEFINED BY PARAGRAPH
 HH OF SUBDIVISION ONE OF SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION
 LAW, AND AFFILIATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF.
   § 11. Subdivision 1 of section 1680 of the public authorities  law  is
 amended by adding a new undesignated paragraph to read as follows:
   MAISTO  DISTRICTS  AS  DEFINED  BY  PARAGRAPH II OF SUBDIVISION ONE OF
 SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW  AND  THE  NEW  YORK
 STATE ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS AS DEFINED BY PARAGRAPH
 HH OF SUBDIVISION ONE OF SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION
 LAW, AND AFFILIATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF.
   §  12. Section 1680 of the public authorities law is amended by adding
 a new subdivision 41 to read as follows:
   41. A. THE DORMITORY AUTHORITY MAY ENTER CONTRACTS TO LOAN TO OR OTHER
 AGREEMENTS WITH THE MAISTO DISTRICTS, THE NEW YORK STATE ASSOCIATION  OF
 SMALL  CITY  SCHOOL  DISTRICTS, AND AFFILIATES, SUBSIDIARIES OR SUBDIVI-
 SIONS THEREOF FOR THE FINANCING OF PROGRAMS AS SPECIFIED IN  SUBDIVISION
 FORTY-TWO OF SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW INCLUD-
 ING:
   (1) CREDIT RECOVERY PROGRAMS;
   (2) ACADEMIC INTERVENTION SERVICES;
   (3) RESPONSE TO INTERVENTION SERVICES;
   (4) DROP OUT PREVENTION;
   (5) INCARCERATED YOUTH SERVICES;

 A. 5403                             8
 
   (6) PARENT INVOLVEMENT PROGRAMS;
   (7) EXTENDED DAY AND EXTENDED YEAR PROGRAMS; AND
   (8) PSYCHO-SOCIAL TESTING.
 SUCH  PROGRAMS  SHALL  BE SUBJECT TO THE APPROVAL OF THE COMMISSIONER OF
 EDUCATION.
   B. EACH MAISTO DISTRICT, THE NEW YORK STATE ASSOCIATION OF SMALL  CITY
 SCHOOL  DISTRICTS,  AND AFFILIATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF
 SHALL, NOTWITHSTANDING ANY OTHER PROVISION OF LAW,  HAVE  THE  POWER  TO
 PLEDGE,  ASSIGN  OR  OTHERWISE MAKE AVAILABLE TO THE DORMITORY AUTHORITY
 WITHOUT CONSIDERATION, REVENUES FROM STATE AID UNDER SUBDIVISION  FORTY-
 TWO  OF SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW SATISFACTORY
 TO THE DORMITORY AUTHORITY.
   C. IN ADDITION TO PROVIDING FOR ALL OTHER MATTERS DEEMED NECESSARY AND
 PROPER, SUCH CONTRACTS TO LOAN OR OTHER AGREEMENTS  SHALL:  (1)  REQUIRE
 PAYMENT  TO THE DORMITORY AUTHORITY THE AMOUNT REQUIRED TO PAY THE PRIN-
 CIPAL OF AND INTEREST ON OBLIGATIONS OF THE DORMITORY  AUTHORITY  ISSUED
 IN  RELATION  TO PROVIDING SUCH FINANCING AND ALL INCIDENTAL EXPENSES OF
 THE DORMITORY  AUTHORITY  INCURRED  IN  RELATION  THERETO;  (2)  REQUIRE
 PAYMENT  SUFFICIENT  TO MEET OBLIGATIONS UNDER SUCH CONTRACTS TO LOAN OR
 OTHER AGREEMENTS; (3) PROVIDE THAT THE  AID  PAYABLE  UNDER  SUBDIVISION
 FORTY-TWO  OF  SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW SHALL
 BE THE SOLE SECURITY FOR SUCH FINANCING AND ALL INCIDENTAL EXPENSES; AND
 (4) NOT BE EXECUTED UNTIL SUCH PROGRAMS ARE APPROVED BY THE COMMISSIONER
 OF EDUCATION.
   D. (1) IN THE EVENT THAT THE MAISTO  DISTRICTS,  THE  NEW  YORK  STATE
 ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS, AND AFFILIATES, SUBSIDIARIES
 OR  SUBDIVISIONS THEREOF FAIL TO MAKE ANY PAYMENT OF PRINCIPAL OR INTER-
 EST ON ITS OBLIGATIONS, THE DORMITORY AUTHORITY  SHALL  CERTIFY  TO  THE
 COMPTROLLER  OF  SUCH FAILURE. SUCH CERTIFICATE SHALL BE IN SUCH FORM AS
 THE AUTHORITY DEEMS DESIRABLE, BUT SHALL INCLUDE  THE  EXACT  AMOUNT  OF
 INTEREST  AND  PRINCIPAL  REQUIRED  TO  SATISFY  THE  OBLIGATIONS TO THE
 AUTHORITY.
   (2) THE COMPTROLLER, UPON RECEIPT OF SUCH CERTIFICATE FROM THE AUTHOR-
 ITY, SHALL WITHHOLD FROM THE MAISTO DISTRICTS, THE NEW YORK STATE  ASSO-
 CIATION  OF SMALL CITY SCHOOL DISTRICTS, AND AFFILIATES, SUBSIDIARIES OR
 SUBDIVISIONS THEREOF ANY STATE AID PAYABLE TO SUCH ENTITY TO THE  EXTENT
 NECESSARY  TO  MEET  THE  CERTIFIED  AMOUNT OF INTEREST OR PRINCIPAL AND
 SHALL IMMEDIATELY PAY OVER TO THE CREDIT RECOVERY FINANCING RESERVE FUND
 THE AMOUNT SO WITHHELD.
   (3) PENDING PAYMENT TO THE AUTHORITY FROM THE COMPTROLLER OF ANY  SUCH
 STATE  AID  WITHHELD,  THE  AUTHORITY  SHALL, IF PAYMENTS OF INTEREST OR
 PRINCIPAL ARE DUE ON THE AUTHORITY'S BONDS, WITHDRAW  AN  AMOUNT  SUFFI-
 CIENT  TO  MEET SUCH AMOUNTS WITHHELD FROM THE DEBT SERVICE RESERVE FUND
 SECURING SUCH BONDS. ANY SUCH AMOUNT WITHDRAWN FROM  SUCH  DEBT  SERVICE
 RESERVE  FUND  SHALL  BE  PAID  INTO SUCH DEBT SERVICE RESERVE FUND UPON
 RECEIPT BY THE AGENCY FROM THE COMPTROLLER OF ANY  STATE  AID  WITHHELD.
 ANY  AMOUNT SO PAID TO THE AUTHORITY FROM SUCH STATE AID SHALL NOT OBLI-
 GATE THE STATE TO MAKE, NOR ENTITLE THE MAISTO DISTRICTS, THE  NEW  YORK
 STATE  ASSOCIATION  OF  SMALL  CITY  SCHOOL  DISTRICTS,  AND AFFILIATES,
 SUBSIDIARIES OR SUBDIVISIONS THEREOF TO RECEIVE, ANY ADDITIONAL  AMOUNTS
 OF STATE AID.
   E. ON OR BEFORE NOVEMBER FIFTEENTH OF EACH YEAR, THE DORMITORY AUTHOR-
 ITY  SHALL  SUBMIT,  AND THEREAFTER MAY RESUBMIT, TO THE DIRECTOR OF THE
 BUDGET, THE STATE  COMPTROLLER,  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  AMOUNTS  ESTIMATED  TO

 A. 5403                             9
 
 BECOME DUE IN THE SUCCEEDING STATE FISCAL YEAR TO THE DORMITORY AUTHORI-
 TY  FROM  EACH  MAISTO DISTRICT, THE NEW YORK STATE ASSOCIATION OF SMALL
 CITY SCHOOL DISTRICTS,  AND  AFFILIATES,  SUBSIDIARIES  OR  SUBDIVISIONS
 THEREOF  PURSUANT  TO  SUCH  CONTRACTS  TO LOAN OR OTHER AGREEMENTS. THE
 STATE COMPTROLLER SHALL PAY OVER TO THE DORMITORY AUTHORITY, PURSUANT TO
 APPROPRIATIONS THEREFOR AND SOLELY FROM MONEYS AVAILABLE IN  THE  CREDIT
 RECOVERY  FINANCING RESERVE FUND ESTABLISHED BY SECTION NINETY-NINE-G OF
 THE STATE FINANCE LAW, THE AMOUNT SET FORTH IN SUCH REPORT AT THE  TIMES
 AND  IN  THE  AMOUNTS  SET FORTH IN THE CERTIFICATE FILED WITH THE COMP-
 TROLLER BY THE DORMITORY AUTHORITY.
   F. EACH MAISTO DISTRICT, THE NEW YORK STATE ASSOCIATION OF SMALL  CITY
 SCHOOL  DISTRICTS,  AND AFFILIATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF
 WHICH ELECTS TO AVAIL ITSELF OF THE PROVISIONS  OF  THIS  SECTION  SHALL
 HAVE  ESTABLISHED WITH THE STATE COMPTROLLER A CREDIT RECOVERY FINANCING
 RESERVE ACCOUNT WHICH SHALL BE USED TO PAY TO  THE  DORMITORY  AUTHORITY
 THE  ANNUAL  AMOUNTS  PAYABLE  TO  THE  DORMITORY  AUTHORITY  UNDER SUCH
 CONTRACTS TO LOAN OR OTHER AGREEMENTS PURSUANT TO THE PROVISIONS OF THIS
 SECTION AND SECTION NINETY-NINE-G OF THE STATE FINANCE LAW. THE DORMITO-
 RY AUTHORITY SHALL IDENTIFY TO THE STATE COMPTROLLER AND TO THE  COMMIS-
 SIONER  OF  EDUCATION  WITH  RESPECT  TO  SUCH  FINANCING,  EACH  MAISTO
 DISTRICT, THE NEW YORK STATE ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS,
 AND AFFILIATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF WITH WHICH  IT  HAS
 SUCH  CONTRACTS TO LOAN OR OTHER AGREEMENTS PURSUANT TO THIS SECTION AND
 SHALL ANNUALLY CERTIFY THE AMOUNTS REQUIRED TO BE PAID PURSUANT TO  SUCH
 CONTRACTS TO LOAN OR OTHER AGREEMENTS.
   G.  ALL  STATE AND LOCAL OFFICIALS ARE AUTHORIZED AND REQUIRED TO TAKE
 WHATEVER ACTIONS ARE NECESSARY TO  CARRY  OUT  THE  PROVISIONS  OF  THIS
 SECTION  AND  THE PROVISIONS OF ANY CONTRACT TO LOAN OR OTHER AGREEMENTS
 ENTERED INTO PURSUANT TO THIS SECTION,  INCLUDING  MAKING  THE  REQUIRED
 PAYMENTS TO THE DORMITORY AUTHORITY.
   § 13. The state finance law is amended by adding a new section 99-g to
 read as follows:
   §  99-G.  CREDIT  RECOVERY  FINANCING RESERVE FUND. 1. THERE IS HEREBY
 ESTABLISHED IN THE CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO BE
 KNOWN AS THE CREDIT RECOVERY FINANCING RESERVE FUND. WITHIN  SUCH  FUND,
 THERE  IS HEREBY ESTABLISHED A SPECIAL ACCOUNT FOR EACH MAISTO DISTRICT,
 THE NEW YORK STATE ASSOCIATION OF SMALL CITY SCHOOL DISTRICTS, AND  EACH
 AFFILIATE,  SUBSIDIARY  OR  SUBDIVISION  THEREOF  WHICH  ENTERS  INTO  A
 CONTRACT TO LOAN OR OTHER AGREEMENT WITH THE DORMITORY AUTHORITY  PURSU-
 ANT TO THIS SECTION.
   2.  NOTWITHSTANDING  THE  PROVISIONS OF ANY OTHER LAW, SUCH FUND SHALL
 CONSIST OF AID PAYABLE UNDER SUBDIVISION FORTY-TWO OF SECTION THIRTY-SIX
 HUNDRED TWO OF THE EDUCATION LAW.  THE COMPTROLLER SHALL MAINTAIN SUFFI-
 CIENT AMOUNTS IN THE FUND IN ORDER TO PAY WHEN DUE AMOUNTS  DUE  TO  THE
 DORMITORY  AUTHORITY PURSUANT TO ANY CONTRACT TO LOAN OR OTHER AGREEMENT
 ENTERED INTO PURSUANT TO THE PROVISIONS OF THIS SECTION.  THE  DORMITORY
 AUTHORITY SHALL CERTIFY TO THE STATE COMPTROLLER THE DATES AND AMOUNT OF
 SUCH  ANNUAL  PAYMENTS  AS  SCHEDULED  IN ITS CONTRACTS TO LOAN OR OTHER
 AGREEMENTS.  THE COMMISSIONER OF EDUCATION SHALL CERTIFY THE  AMOUNT  OF
 PAYMENTS  DUE  THE  FUND FROM AID PAYABLE UNDER SUBDIVISION FORTY-TWO OF
 SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW.
   3. REVENUES IN ANY SPECIAL ACCOUNT IN THE  CREDIT  RECOVERY  FINANCING
 RESERVE  FUND  MAY BE COMMINGLED WITH ANY OTHER MONIES IN SUCH FUND. ALL
 DEPOSITS OF SUCH REVENUES  WITH  BANKS  AND  TRUST  COMPANIES  SHALL  BE
 SECURED  BY OBLIGATIONS OF THE UNITED STATES OR OF THE STATE OF NEW YORK
 OR ITS POLITICAL SUBDIVISIONS. SUCH  OBLIGATIONS  SHALL  HAVE  A  MARKET

 A. 5403                            10
 
 VALUE  AT  LEAST  EQUAL  AT ALL TIMES TO, BUT NOT LESS THAN, ONE HUNDRED
 FIVE PERCENT OF THE AMOUNT OF SUCH DEPOSITS. ALL BANKS AND TRUST  COMPA-
 NIES  ARE AUTHORIZED TO GIVE SECURITY FOR SUCH DEPOSITS. ANY SUCH REVEN-
 UES  IN SUCH FUND MAY, IN THE DISCRETION OF THE COMPTROLLER, BE INVESTED
 IN OBLIGATIONS OF THE UNITED STATES OR  THE  STATE  OR  OBLIGATIONS  THE
 PRINCIPAL  OF  AND INTEREST ON WHICH ARE GUARANTEED BY THE UNITED STATES
 OR BY THE STATE.  ANY INTEREST EARNED SHALL BE CREDITED TO SUCH FUND.
   4. UPON RECEIPT BY THE COMPTROLLER OF A  CERTIFICATE  OR  CERTIFICATES
 FROM THE DORMITORY AUTHORITY THAT IT REQUIRES A PAYMENT OR PAYMENTS FROM
 THE  APPROPRIATE  SPECIAL  ACCOUNT IN ORDER FOR ANY MAISTO DISTRICT, THE
 NEW YORK STATE ASSOCIATION OF SMALL CITY SCHOOL  DISTRICTS,  AND  AFFIL-
 IATES, SUBSIDIARIES OR SUBDIVISIONS THEREOF TO COMPLY WITH SUCH CONTRACT
 TO  LOAN  OR  OTHER  AGREEMENT  PURSUANT  TO THIS SECTION, EACH OF WHICH
 CERTIFICATES SHALL SPECIFY THE REQUIRED PAYMENT OR PAYMENTS AND THE DATE
 WHEN THE PAYMENT OR PAYMENTS IS REQUIRED, THE COMPTROLLER SHALL PAY FROM
 SUCH SPECIAL ACCOUNT ON OR BEFORE THE SPECIFIED DATE  OR  WITHIN  THIRTY
 DAYS  AFTER  RECEIPT  OF  SUCH CERTIFICATE OR CERTIFICATES, WHICHEVER IS
 LATER, TO THE PAYING AGENT DESIGNATED BY THE DORMITORY AUTHORITY IN  ANY
 SUCH CERTIFICATE, THE AMOUNT OR AMOUNTS SO CERTIFIED.
   5.  ALL  PAYMENTS  OF MONEY FROM THE CREDIT RECOVERY FINANCING RESERVE
 FUND SHALL BE MADE ON THE AUDIT AND WARRANT OF THE STATE COMPTROLLER.
   § 14. This act shall take effect July 1, 2017.