Section 552. Special fund

1.  Source.  There  is hereby established the
  special fund. It shall consist of all moneys credited  thereto  pursuant
  to  the provisions of sections five hundred thirty-nine and five hundred
  fifty-three of this article, of property and securities acquired by  and
  through the use of moneys belonging to such fund, and of interest earned
  upon  moneys  belonging  to  such  fund  and  deposited or invested. The
  commissioner of taxation and finance shall be the custodian of such fund
  and the moneys therein shall be deposited by him in the same  manner  as
  other  state  moneys.  Moneys  in such fund may be invested by the state
  comptroller in accordance with the provisions of section ninety-eight of
  the state finance law, and shall be  used  for  the  purposes  specified
  herein.  Any  balance in such fund shall not lapse at any time but shall
  remain continuously available for such purposes.
    2. Use of fund. The moneys in this fund may be used to
    (a) Finance operations deemed necessary by  the  commissioner  in  the
  administration  of  this  article  and  approved  by the director of the
  budget,  including  expenditures  pursuant  to  section   five   hundred
  thirty-nine of this article;
    (1)  for  which  no  appropriations  or inadequate appropriations from
  federal funds are made; or
    (2) for which a grant is made from appropriated federal funds but  not
  yet  received,  provided  the special fund is reimbursed upon receipt of
  such federal grant;
    (b) Replace moneys in the unemployment administration fund pursuant to
  the provisions of subdivision two of section five hundred  fifty-one  of
  this article;
    (c) Make refunds of interest and penalties erroneously collected;
    (d)  Defray  the  cost  of vocational and related training courses and
  make payments to persons  enrolled  in  such  courses,  as  provided  in
  article  twenty-three-A of this chapter, and such expenditures shall not
  be subject  to  the  conditions  are  set  forth  in  paragraph  (b)  of
  subdivision three of this section.
    (e)  Pay interest on contributions, interest and penalties erroneously
  collected.
    3. Notwithstanding any provision of subdivision two of this section
    (a) The special fund shall not be used in whole or  in  part  for  any
  purpose or in any manner which (1) would permit its substitution for, or
  a  corresponding  reduction in, federal funds that would be available in
  its absence to finance  expenditures  for  the  administration  of  this
  article;  or (2) would cause the appropriate agency of the United States
  government to withhold any part of an administrative grant  which  would
  otherwise be made; and
    (b)   No   expenditure  from  such  fund  shall  be  made  unless  the
  commissioner and the director of the budget find that no other funds are
  available or can properly be used to finance such expenditure.
    4. The commissioner of taxation and finance shall, upon the  direction
  of  the industrial commissioner and with the approval of the director of
  the budget, transfer from the special fund to the unemployment insurance
  fund such moneys available in the special fund which are  in  excess  of
  reasonable  needs  for the purposes set forth in subdivision two of this
  section. Such moneys shall thereupon be credited to the general account.