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This entry was published on 2014-09-22
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SECTION 368
Exploration, development and production of natural gas fields by school districts
General Municipal (GMU) CHAPTER 24, ARTICLE 14-AA
§ 368. Exploration, development and production of natural gas fields
by school districts. 1. "Natural gas producing facility" as used in this
article shall mean all real estate, fixtures, and personal property
operated, owned, used or to be used for or in connection with or to
facilitate the production, conveyance, transportation, distribution, or
furnishing of natural gas.

2. Notwithstanding any general or special law to the contrary, any
school district may engage in the exploration and development of natural
gas fields, and further, may construct, lease, purchase, own, acquire,
use and/or operate any natural gas producing facility which is situated
on real property owned by the school district for the purpose of
producing, conveying, transporting and furnishing natural gas for school
district purposes. A school district producing natural gas in excess of
the amount required for school district purposes may convey, transport,
furnish, sell or transfer such excess.

3. No school district, other than a city school district, may perform
any of the acts authorized under the provisions of this section unless
and until the provisions of the education law relating to voter approval
of such acts have been complied with.

4. Any school district may acquire the necessary rights to extend
pipes across public highways or other lands for the purpose of
transporting natural gas from the natural gas producing facility to
other real property owned by the school district.

5. Any school district may finance the cost of exploration,
development and production of natural gas and the cost of the natural
gas producing facility in whole or in part by levying taxes in the
manner authorized by the education law, or the same may be financed in
whole or in part pursuant to the local finance law.

6. The exploration, development and production of such natural gas and
the purchase, acquisition, leasing and construction of such natural gas
producing facility shall be effected by such school district in the same
manner as other contracts, purchases and leases are effected by and for
such school districts and shall be governed by all laws applicable
thereto.

7. All of the provisions of article four of the public service law and
article twenty-three of the environmental conservation law, so far as
the same are applicable, shall apply to a school district which
furnishes to itself natural gas under this section except that a school
district need not apply to or obtain from the public service commission
a certificate of authority.

8. Nothing herein shall be construed to authorize the sale or transfer
of natural gas by a school district to any other person except as
provided in subdivision two hereof.

9. For the purposes of this section, school district shall be defined
to include a board of cooperative educational services, provided
however, that the provisions of subdivision three of this section shall
not apply to such boards of cooperative educational services, and
provided further that:

a. No board of cooperative educational services may perform any of the
acts authorized under the provisions of this section unless and until
(i) a proposition is submitted to the voters of any such board of
cooperative educational services in accordance with the provisions of
subdivision two of section nineteen hundred fifty-one of the education
law and (ii) any such board of cooperative educational services and all
of its component school districts enter into an agreement or agreements
providing for the performance of any such acts.

b. No such component school district shall enter into an agreement or
agreements unless such agreement or agreements have been approved by a
majority vote of the entire voting strength of the board of education of
such a component school district.

c. Any such agreement or agreements shall also provide for the sharing
of the cost of exploring, developing or producing natural gas and the
cost of the natural gas producing facility among each component school
district. Such agreement or agreements in addition to providing for all
other matters deemed necessary and proper shall (i) set forth the cost
of such exploration, development or production of natural gas and the
cost of the natural gas producing facility and costs incidental thereto
and (ii) provide for an allocation and apportionment of such costs among
the component school districts on such equitable basis as the parties
thereto shall determine and agree, and the proportion of the total cost
to be provided by each such district in accordance with such allocation
and apportionment. Such agreement or agreements shall be executed by all
the component school districts of such board of cooperative educational
services and such board of cooperative educational services. Such
agreement or agreements may provide that each component school district
of such a board of cooperative educational services shall issue an
agreed upon amount of its obligations in a total amount sufficient to
acquire or construct such facilities, or that all component districts of
such board shall together issue joint obligations pledging the full
faith and credit for all component districts jointly and that each such
district shall pay a specified share of annual debt service on such
joint obligations in accordance with the provisions of article five-g of
this chapter and applicable provisions of the local finance law.

d. Each such component school district is authorized to finance its
share of the cost of exploring, developing or producing natural gas and
the cost of the natural gas producing facility together with the costs
incidental to such financing, including, but not limited to legal fees,
printing, engraving and publication of notices, either from any current
funds legally available therefor, or by the issuance of obligations
pursuant to the local finance law; provided, however, that (i) no
approval of the voters of such component school district shall be
required, (ii) the voting of a special tax or a tax to be collected in
installments shall not be a condition precedent to the adoption of a
bond resolution for such object or purpose, (iii) a majority vote of the
entire voting strength of the board of education shall be sufficient for
adoption of such a bond resolution, which bond resolution may be adopted
at a regular meeting, or a special meeting of the board of education
called on not less than twelve hours oral or written notice, which may
be held either within or outside of such district, (iv) any such bond
resolution shall be adopted prior to the execution by the board of
cooperative educational services and the component school districts of
such board of cooperative educational services of the agreement required
by paragraph b of this subdivision.

e. Such agreement shall further provide that title to the natural gas
producing facility shall vest in the board of cooperative educational
services which title shall be held by the board of cooperative
educational services for the benefit and on behalf of all the component
school districts of such board executing such agreement.

f. Nothing herein contained shall be construed to permit any school
district in a city as defined in subdivision two-b of section 2.00 of
the local finance law to contract indebtedness for such specific object
or purpose in excess of the limitation prescribed by subdivision b of
section 104.00 of such law, without complying with the provisions of
subdivision c thereof. A school district, other than a school district
in a city, may not issue bonds or bond anticipation notes for such
specific object or purpose in excess of the limitation prescribed by
subdivision d of section 104.00 of such law, without complying with the
requirements of paragraphs one through three of such subdivision.