Section 99-C. Withholding of state aid upon failure of municipalities and school districts to repay health insurance reserve receipts when required

1.  In  the  event  a county, city, town, village or school
  district which has elected to receive distribution or distributions from
  the health insurance reserve receipts fund,  pursuant  to  an  agreement
  between such municipality or school district and the state and which has
  elected to terminate its contractual agreement for health insurance with
  the New York state department of civil service, or if called upon by the
  New  York state department of civil service, pursuant to such agreement,
  to return such  distribution  within  the  time  period  and  under  the
  conditions  specified  in  such  agreement,  shall  be in default of its
  obligation to repay such distribution, the allotment, apportionment, and
  payment of local assistance aid, education aid or  other  state  aid  as
  appropriate  and  as  determined by the comptroller shall be withheld by
  the state upon the following terms and conditions.
    2. In the event of the failure or inability  of  the  municipality  or
  school  district  to  repay its distribution pursuant to the contractual
  agreement, the department of civil  service  shall  forthwith  make  and
  deliver  to  the  comptroller  of  the  state  of New York a certificate
  stating the amount due and not paid, and  the  state  comptroller  shall
  thereafter  deduct  and  withhold  from  the next succeeding allotments,
  apportionments  or  payments  of  state  aid  or  assistance  due   such
  municipality or school district such amount or amounts thereof as may be
  required to pay the amount due. The state shall not be obligated to pay,
  by   virtue   of   such   withholdings,   any  additional  or  increased
  apportionment or payment of state aid or assistance.
    2-a. Notwithstanding the provisions of subdivision two of this section
  or any other inconsistent provision of law, a school district  or  board
  of cooperative educational services which is subject to the requirements
  of  this  section  may  repay its distribution pursuant to a contractual
  agreement authorized by this section over a period of ten  state  fiscal
  years,  in  equal  annual installments, payable by March thirty-first of
  each year. For school districts or  boards  of  cooperative  educational
  services  which terminate the contractual agreement prior to July first,
  nineteen hundred eighty-three, the first installment shall be paid prior
  to March thirty-first,  nineteen  hundred  eighty-four.  For  all  other
  school  districts  and  boards  of cooperative educational services, the
  first installment shall  be  paid  prior  to  March  thirty-first  first
  succeeding  the termination of such agreement. The comptroller shall not
  withhold from state aid or other assistance due  a  school  district  or
  board   of   cooperative   educational   services  any  amount  of  such
  distribution due and owing as  certified  by  the  department  of  civil
  service  to the comptroller pursuant to subdivision two of this section,
  until  and  unless  such  school  district  or  board   of   cooperative
  educational  services fails to make an installment payment authorized by
  this subdivision by March thirty-first  of  the  applicable  year.  Upon
  failure  of  a  school  district  or  board  of  cooperative educational
  services to make an installment payment, the withholding  provisions  of
  subdivision  two  of this section shall take effect to the extent of the
  amount of that unpaid installment. The comptroller  shall  within  sixty
  days  of  the date on which this subdivision becomes effective or within
  sixty days of any subsequent termination of  the  contractual  agreement
  notify   the   applicable   school  district  or  board  of  cooperative
  educational services of the  provisions  of  this  subdivision,  of  the
  amount due and owing, and the amount of each installment.
    3. Notwithstanding any inconsistent provisions of law, the comptroller
  shall  establish  a  fund,  to  be  called  the health insurance reserve
  receipts fund, to receive transfers of funds from the  health  insurance

  carriers  of the New York state employee health insurance plan, pursuant
  to contractual agreements between such carriers and the New  York  state
  department  of  civil  service  and/or  from  the health insurance fund.
  Moneys  returned  by the municipalities and school districts or withheld
  from state aid by  the  comptroller  pursuant  to  provisions  governing
  termination  of  the  contractual  agreements shall be deposited in this
  fund. Disbursements from the  health  insurance  reserve  receipts  fund
  shall  be  for the purpose of returning to participating governments and
  school districts the appropriate share of moneys remitted by such health
  insurance carriers and/or for the purpose of remitting to  the  carriers
  any  moneys  due them as a result of termination of the state's contract
  with the carriers or termination of agreements  between  the  state  and
  municipalities   and   school   districts  and/or  for  the  purpose  of
  transferring funds to the health insurance fund. Disbursements from such
  fund shall be made pursuant  to  the  procedures  for  authorization  of
  expenditures  contained  in article XI of the civil service law upon the
  issuance of a certificate of approval of availability by the director of
  the budget and subject to audit and warrant of the comptroller.