Senate Bill S8845

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8845
 
                             I N  S E N A T E
 
                              January 8, 2026
                                ___________
 
 Introduced  by Sen. MARTINEZ -- read twice and ordered printed, and when
   printed to be committed to the Committee 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-
 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

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13063-01-5
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 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
 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
 S. 8845                             3
 
 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.