S T A T E O F N E W Y O R K
________________________________________________________________________
8708
2025-2026 Regular Sessions
I N A S S E M B L Y
June 2, 2025
___________
Introduced by M. of A. McDONALD -- read once and referred to the Commit-
tee on Education
AN ACT to amend the education law, in relation to prior year state aid
adjustments
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Subdivision 5 of section 3604 of the education law, as
amended by chapter 82 of the laws of 1995, paragraph a as amended by
chapter 161 of the laws of 2005, and paragraph b as amended by section
59 of part A of chapter 436 of the laws of 1997, is amended to read as
follows:
5. a. (I) State aid adjustments. All errors or omissions in the appor-
tionment shall be corrected by the commissioner. Whenever a school
district has been apportioned less money than that to which it is enti-
tled, the commissioner may allot to such district the balance to which
it is entitled. Whenever a school district has been apportioned more
money than that to which it is entitled, the commissioner may, by an
order, direct such moneys to be paid back to the state to be credited to
the general fund local assistance account for state aid to the schools,
or may deduct such amount from the [next] FIRST apportionment to be made
IN THE SUBSEQUENT SCHOOL YEAR to said district[, provided].
(II) PROVIDED, however, that, upon notification of excess payments of
aid for which a recovery must be made by the state through deduction of
future aid payments, WHERE THE TOTAL AMOUNT TO BE RECOVERED IS IN
EXCESS OF ONE PERCENT OF THE DISTRICT'S TOTAL GENERAL FUND EXPENDITURES
FOR THE PRECEDING SCHOOL YEAR, a school district may request that such
excess payments be recovered by deducting such excess payments from the
payments due to such school district and payable in the [month of June
in (i)] FIRST AVAILABLE APPORTIONMENT OF THE SCHOOL YEAR FOLLOWING the
school year in which such notification was received and [(ii)] the two
succeeding school years, provided further that there shall be no inter-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13063-01-5
A. 8708 2
est penalty assessed against such district or collected by the state.
Such request shall be made to the commissioner in such form as the
commissioner shall prescribe[, and shall be based on documentation that
the total amount to be recovered is in excess of one percent of the
district's total general fund expenditures for the preceding school
year]. The amount to be deducted in the first year shall be the greater
of [(i)] (A) the sum of the amount of such excess payments that is
recognized as a liability due to other governments by the district for
the preceding school year and the positive remainder of the district's
unreserved fund balance at the close of the preceding school year less
the product of the district's total general fund expenditures for the
preceding school year multiplied by five percent, or [(ii)] (B) one-
third of such excess payments. The amount to be recovered in the second
year shall equal the lesser of the remaining amount of such excess
payments to be recovered or one-third of such excess payments, and the
remaining amount of such excess payments shall be recovered in the third
year. [Provided further that, notwithstanding any other provisions of
this subdivision, any pending payment of moneys due to such district as
a prior year adjustment payable pursuant to paragraph c of this subdivi-
sion for aid claims that had been previously paid as current year aid
payments in excess of the amount to which the district is entitled and
for which recovery of excess payments is to be made pursuant to this
paragraph, shall be reduced at the time of actual payment by any remain-
ing unrecovered balance of such excess payments, and the remaining sche-
duled deductions of such excess payments pursuant to this paragraph
shall be reduced by the commissioner to reflect the amount so recov-
ered.]
(III) The commissioner shall certify no payment to a school district
based on a claim submitted later than three years after the close of the
school year in which such payment was first to be made. For claims for
which payment is first to be made in the nineteen hundred ninety-six--
ninety-seven school year, the commissioner shall certify no payment to a
school district based on a claim submitted later than two years after
the close of such school year. For claims for which payment is first to
be made in the nineteen hundred ninety-seven--ninety-eight school year
and thereafter, the commissioner shall certify no payment to a school
district based on a claim submitted later than one year after the close
of such school year. Provided, however, no payments shall be barred or
reduced where such payment is required as a result of a final audit of
the state. It is further provided that, until June thirtieth, nineteen
hundred ninety-six, the commissioner may grant a waiver from the
provisions of this section for any school district if it is in the best
educational interests of the district pursuant to guidelines developed
by the commissioner and approved by the director of the budget.
b. Claims resulting from court orders or judgments. Any payment which
would be due as the result of a court order or judgment shall not be
barred, provided that, commencing January first, nineteen hundred nine-
ty-six, such court order or judgment and any other data required shall
be filed with the comptroller within one year from the date of the court
order or judgment, and provided further that the commissioner shall
certify no payment to a school district for a specific school year that
is based on a claim that results from a court order or judgement so
filed with the comptroller unless the total value of such claim, as
determined by the commissioner, is greater than one percent of the
school district's total revenues from state sources as previously
A. 8708 3
recorded in the general fund and reported to the comptroller in the
annual financial report of the school district for such school year.
c. Payment of moneys due for prior years. State aid payments due for
prior years in accordance with the provisions of this subdivision shall
be paid [within the limit of the appropriation designated therefor
provided, however, that each eligible claim shall be payable in the
order that it has been approved for payment by the commissioner, but in
no case shall a single claim draw down more than forty percent of the
appropriation so designated for a single year, and provided further that
no claim shall be set aside for insufficiency of funds to make a
complete payment, but shall be eligible for a partial payment in one
year and shall retain its priority date status for appropriations desig-
nated for such purposes in future years] TO THE SCHOOL DISTRICT IN THE
FIRST APPORTIONMENT OF THE SCHOOL YEAR FOLLOWING THE NOTIFICATION OF
SUCH PAYMENTS. FOR PAYMENT OF ELIGIBLE CLAIMS APPROVED BY THE COMMIS-
SIONER AS OF JUNE THIRTIETH, TWO THOUSAND TWENTY-FIVE, THE STATE SHALL
ANNUALLY APPROPRIATE AND PAY THE LESSER OF FIFTY MILLION DOLLARS OR THE
TOTAL SUM THEN DUE AND OWING TO SCHOOL DISTRICTS AS ELIGIBLE CLAIMS,
WHENEVER APPROVED BY THE COMMISSIONER.
§ 2. This act shall take effect immediately and shall apply to school
years commencing on and after July 1, 2026.