Section 1689-A. Public school districts; authority financing of eligible school construction projects; rebuilding schools to uphold education (RESCUE)

1. The dormitory authority is authorized to finance eligible  school construction projects for those public school districts which are
  approved by the commissioner of education to receive  aid  apportionment
  for   rebuilding  schools  to  uphold  education  (RESCUE)  pursuant  to
  subdivision ten of section thirty-six hundred forty-one of the education
  law.
    2.  (a) Notwithstanding the provisions of any general or  special  law
  to  the  contrary,  and  subject  to the making of annual appropriations
  therefor by the legislature, in order to assist the dormitory  authority
  in  the  financing  and refinancing of such eligible school construction
  projects, the director of the budget is authorized in any  state  fiscal
  year  commencing  April  first, nineteen hundred ninety-nine through and
  inclusive of the state fiscal year commencing April first, two  thousand
  five  to  enter  into one or more service contracts, none of which shall
  exceed thirty years in duration, with the dormitory authority, upon such
  terms as the director of the budget and the dormitory authority agree;
    (b) Any service contract entered into pursuant  to  paragraph  (a)  of
  this  subdivision  or  any payments made or to be made thereunder may be
  assigned and pledged by the dormitory  authority  as  security  for  its
  bonds, notes, or other obligations;
    (c) Any such service contract shall provide that the obligation of the
  director  of  the  budget  or of the state to fund or to pay the amounts
  therein provided for shall not constitute a debt of the state within the
  meaning of any constitutional or statutory provision in  the  event  the
  dormitory  authority assigns or pledges the service contract payments as
  security for its bonds, notes, or other obligations and shall be  deemed
  executory  only to the extent moneys are available and that no liability
  shall be incurred by the state  beyond  the  moneys  available  for  the
  purpose,  and that such obligation is subject to annual appropriation by
  the legislature;
    (d) Any service contract or contracts entered into  pursuant  to  this
  subdivision  shall  provide for state commitments to provide annually to
  the dormitory authority a sum or sums, upon such terms and conditions as
  shall be deemed appropriate by the director of the budget, to  fund  the
  principal,  interest,  or other related expenses required for any bonds,
  notes, or other obligations.
    3. (a) The commissioner of education shall certify, from time to time,
  to the  dormitory  authority,  the  comptroller,  the  director  of  the
  division of the budget, the chairman of the senate finance committee and
  the  chairman  of  the  assembly  ways  and  means committee each school
  district for which he has approved an aid  apportionment  for  authority
  financing  of  an  eligible  school  construction  project  pursuant  to
  subdivision ten of section thirty-six hundred forty-one of the education
  law. Such certification, which shall be made within  thirty  days  after
  such  approval  or  as soon thereafter as is practicable, shall identify
  the amount of aid apportionment which has been approved for such  school
  district  and shall estimate the date or dates when such project will be
  undertaken to assist  the  authority  in  establishing  a  schedule  for
  financing  such  project. The commissioner shall notify the authority if
  there is a change in such date.
    (b) On or before November fifteenth of each year and again on or after
  February fifteenth of each year, the dormitory authority  shall  submit,
  and  thereafter  may  resubmit, to the director of the budget, the state
  comptroller, the commissioner of education, 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  annual

  payments  estimated  to  be  appropriated  to  the  dormitory  authority
  pursuant to such service contracts between the dormitory  authority  and
  the  director of the division of the budget pursuant to this section. An
  eligible  school  construction project shall not be financed pursuant to
  this section prior to the state  fiscal  year  commencing  April  first,
  nineteen  hundred ninety-nine, provided that application for approval of
  any such project by the commissioner of education may be processed prior
  to such date.
    4. (a) To obtain funds for the purposes of this section, the authority
  shall have power from time  to  time,  in  accordance  with  a  schedule
  certified  to the authority by the commissioner of education identifying
  eligible school construction projects approved for the  payment  of  aid
  apportionments pursuant to subdivision ten of section thirty-six hundred
  forty-one  of  the  education law, to issue negotiable bonds or notes of
  the authority. Unless the  context  shall  clearly  indicate  otherwise,
  whenever  the  words  "bond"  or  "bonds" are used in this section, such
  words shall include a note or notes of the authority.
    (b) The dormitory authority shall not issue any bonds or notes  in  an
  amount  in  excess  of  one  hundred ninety-five million dollars for the
  purposes of this section, excluding a principal amount of bonds or notes
  issued to fund one or more debt service reserve funds, to  pay  for  the
  costs  of issuance of such bonds, and bonds or notes issued to refund or
  otherwise repay such bonds, and bonds or notes previously issued. Except
  for the purposes of  complying  with  the  internal  revenue  code,  any
  interest  income  earned on bond proceeds shall only be used to pay debt
  service on such bonds or notes.
    In computing for the purposes of this paragraph, the aggregate  amount
  of  indebtedness evidenced by bonds and notes of the dormitory authority
  issued pursuant to this section, there shall be excluded the  amount  of
  such indebtedness represented by such bonds or notes issued to refund or
  otherwise  repay  bonds  or  notes, provided that the amount so excluded
  under this clause may exceed the principal amount of such bonds or notes
  that were issued to refund or otherwise repay only if the present  value
  of  the  aggregate  debt  service on the refunding or repayment bonds or
  notes shall not have at the time of their issuance exceeded the  present
  value  of  the  aggregate  debt  service of the bonds or notes they were
  issued to refund or  repay,  such  present  value  in  each  case  being
  calculated  by  using  the  effective  interest rate of the refunding or
  repayment bonds or notes,  which  shall  be  that  rate  arrived  at  by
  doubling   the  semi-annual  interest  rate  (compounded  semi-annually)
  necessary to discount the debt service  payments  on  the  refunding  or
  repayment  bonds  or  notes from the payment date thereof to the date of
  issue of the refunding or repayment bonds or notes and to the price  bid
  therefor,  or  to  the proceeds received by the dormitory authority from
  the sale thereof, in each case including estimated accrued interest.
    5. The state of New York hereby covenants with the purchasers, holders
  and owners from time to time  of  the  bonds  of  the  authority  issued
  pursuant  to  this  section  that  it  will not repeal, revoke, rescind,
  modify or amend the provisions of  this  section  which  relate  to  the
  making of annual service contract payments to the authority with respect
  to  such  bonds  as  to  limit, impair or impede the rights and remedies
  granted to bondholders  under  this  title  or  otherwise  diminish  the
  security pledged to such purchasers, holders and owners or significantly
  impair the prospect of payment of any such bond.