Section 304. Project grant procedure

State moneys may be expended for any
  municipal  project  pursuant  to  a  contract  entered   into   by   the
  commissioner,  in  the  name of the state, and the municipal corporation
  undertaking such project. Any such contract may include such  provisions
  as  may  be  agreed  upon  by the parties thereto, and shall include, in
  substance, the following provisions:
    a. An estimate of the reasonable cost of the project as determined  by
  the commissioner.
    b.  An  agreement  by  the  commissioner to pay to or on behalf of the
  municipal corporation, following completion of the  project,  or  during
  the  undertaking  thereof,  in  the form of progress payments, as may be
  agreed upon by the parties and subject to the rules and  regulations  of
  the  commissioner,  the  state  share  of  the  project  cost  as he may
  determine in accordance with section three hundred of this article.
    c. An agreement by the municipal corporation:
    (1) To proceed  expeditiously  with,  and  complete,  the  project  in
  accordance with plans approved by the commissioner;
    (2) To commence and continue operation of the project on completion of
  the  project, and not to discontinue operation or dispose of the project
  without the approval of the commissioner;
    (3) To provide for the payment of the municipal corporation's share of
  the cost of the project, and
    (4) To include in its planning for the project, to the extent mutually
  deemed appropriate, consideration and planning for joint development  as
  defined  in section fourteen-d of the transportation law relating to the
  environment of the area in which the project is to be constructed.
    d. A provision that, in the event that federal  assistance  which  was
  not included in the calculation of the state payment pursuant to section
  three  hundred  of  this  article  becomes  available  to  the municipal
  corporation, the amount of the state payment shall be recalculated  with
  the  inclusion  of  such additional federal assistance and the municipal
  corporation shall either (1) pay to the state the amount  by  which  the
  state  payment actually made exceeds the state payment determined by the
  recalculation or, (2) if such additional federal assistance has not been
  received by the municipal corporation, authorize the  state  to  receive
  such  amount  from  the  federal government and to retain an appropriate
  amount  thereof.  The  commissioner  may  adopt  rules  and  regulations
  governing  the  making  and  enforcing  of  contracts  pursuant  to this
  subdivision. Contracts entered into pursuant to this  subdivision  shall
  be  subject  to  approval  by the state comptroller, the director of the
  budget and by the attorney general as to form. All payments by the state
  pursuant to such contracts shall be made after audit  by  and  upon  the
  warrant of the comptroller on vouchers approved by the commissioner.