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A06150 Summary:

BILL NOA06150
 
SAME ASNo Same As
 
SPONSORCunningham
 
COSPNSRAlvarez, Dickens, Gibbs, Ardila
 
MLTSPNSR
 
Add §99-qq, St Fin L; amd §§1678, 1680 & 1676, Pub Auth L
 
Establishes a New York state education equity fund; authorizes the dormitory authority of the state of New York (DASNY) to invest $75 million in a public-private partnership revolving loan fund for loan financing to cover capital costs for the construction and improvements of public charter schools.
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A06150 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6150
 
SPONSOR: Cunningham
  TITLE OF BILL: An act to amend the state finance law and the public authorities law, in relation to establishing the New York state education equity fund and authorizing the dormitory authority of the state of New York to invest to cover capital costs for the construction and improvements of public charter schools   PURPOSE OR GENERAL IDEA OF BILL: To promote equity in financing for public charter school facilities and increase opportunities for members of historically disadvantaged commu- nities who have disproportionately underserved in the public education sector start and operate public charter schools   SUMMARY OF PROVISIONS: Section 1 amends tne state-finance law to add section 59-yy to establish the New York State Education Equity Fund as follows: Definitions are provided. The fund shall consist of monies available pursuant to appro- priation and all other money credited or transferred thereto from any other fund or .source and nothing shall prevent the State from receiving gifts, grants or bequests. Moneys in the fund shall be used for costs incurred by the dormitory authority of the state of New York, making grants to eligible public charter schools and/or investing in a not-for- profit lban fund, a subsidiary of the dormitory authority, or private debt or equity. funds to cover capital costs for public charter school facilities. The state may invest no more than $5 million in private debt or equity or non-profit loan funds and no more than $125 million shall be available for direct arants for.apolicants Repayment of the state's investment shall be deposited in the New York State Education Equity Fund. No fee can be charged for applying for financing by applicant public charter. schools. The dormitory authority of the State of New York, a subsidiary thereof, not-for-profit loan, private debt or equity fund preference minority-led public charter school applicants, encour- ages diverse applicants to apply as well as promote racial and ethnic diversity in its financing dedisions. The financing equity plan shall establish a goal of 60% of the funding awarded or of the awardees selected each year, whichever is greater, to minority-led public charter schools and operators with ten or fewer schools. An investment policy statement, strategic plan and a plan to monitor risk profile, a description of investment activity and perform- ance as well as a description of the maximum amount of promised return on investment, financing and management fees are required. An annual accounting of private funds invested which by the end of the education equity fund grant or loan term must be equal to or greater than the•amount of the grant or loan received. Additional provisions includ- ing quarterly reporting, ensuring geographic diversity, and conflict of interest polcy. The dormitory autherity.of the state of New York, in consultation with the commissioner of education, chancellor of the state university of New York, New York City chancellor of education, the pres- ident of the urban development corporation, the budget director, and the state comptroller to promulgate rules and regulations. The sale or transfer of a financed facility is prohibited for ten years after award and full repayment is required in the event of a sale or transfer while there is an outstanding loan. An annual report on the activities of the fund is due December 30 each year, published to the dormitory authori- ty's website, the governor and the legislature. A copy of grant or loan agreements(s) must be sent to the governor and the legislature no later than fifteen days after execution. Consistent with the state constitu- tion, the comptroller may audit expenditures from the fund and any account holding such monies. Section 2 amends the public authorities law by adding four new subdivi- sions as follows: Section 33 allows the dormitory authority of the state of New York to enter into an agreement with a not-for-profit loan, debt or equity fund pursuant to state finance law. Section 34 allows the dormitory authority of the state of New York to form one or more subsid- iaries in connection with work performed in connection with state finance law. Section 35 allows the dormitory authority to select a not- for-profit, private debt or equity fund formed for the sole purpose of-funding capital costs associated with establishing or operating public charter school facilities pursuant to state finance law. Section 36 authorizes the dormitory of the state of New York to make grants pursuant to state finance law. Sections 3 and 4 amends the public authorities law by adding public charter schools and the private debt or equity fund or not-for-profit loan fund selected pursuant to public authorities law. Section 5 estab- lishes the severability. Section 6 provides for an immediate effective date.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE): N/A   JUSTIFICATION: For generations, communities of color have suffered from inequities in the education system, particularly Black and Brown communities. The Education Equity Fund will offer expanded opportunities to members of these historically underserved communities to open and operate public charter schools. Education is the foundation of the future of our chil- dren's lives and of the communities in which they live and learn. Great schools are important to building great communities. While district schools receive Building Aid from the state, public char- ter schools do not receive Building Aid. (Though some public charter schools in the City of New York are eligible for rental assistance, not all schools are eligible and no schools outside of the City of New York are eligible for any state aid for facilities.) This legislation would provide access to facility financing for public charter schools. In 2022, New York State made clear its equity policy and support for reinvestment in historically underserved and disadvantaged communities with the $200 million Social Equity Cannabis Investment Fund, which provided funding to members of disadvantaged communities to open and operate adult-use cannabis retail shops. The Education Equity Fund will make clear that New York State supports and encourages members of historically disadvantaged communities to open and operate schools.   PRIOR LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: At least $200 million for public chartet school facilities, subject to appropriation   EFFECTIVE DATE: Immediately.
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A06150 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6150
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      April 3, 2023
                                       ___________
 
        Introduced  by  M.  of  A.  CUNNINGHAM  -- read once and referred to the
          Committee on Education
 
        AN ACT to amend the state finance law and the public authorities law, in
          relation to establishing the New York state education equity fund  and
          authorizing the dormitory authority of the state of New York to invest
          to cover capital costs for the construction and improvements of public
          charter schools
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The state finance law is amended by adding section 99-qq to
     2  read as follows:
     3    § 99-qq. New York state education equity  fund.  1.  There  is  hereby
     4  established  in  the  joint  custody  of  the  state comptroller and the
     5  commissioner of taxation and finance a fund to be known as the "New York
     6  state education equity fund". Such fund may be known and  cited  as  the
     7  "education equity fund".
     8    2. As used in this section, the following words and phrases shall have
     9  the  following  meanings, unless a different meaning is plainly required
    10  by the context:
    11    (a) "Applicant" shall mean  an  education  corporation,  applying  for
    12  financing of capital costs pursuant to this section.
    13    (b) "Authority" shall mean the dormitory authority of the state of New
    14  York.
    15    (c)  "Capital  costs" shall mean costs associated with establishing or
    16  operating education corporation facilities including,  but  not  limited
    17  to, all costs, including closely related ancillary costs, related to the
    18  financing,  refinancing, leasing, planning, design, construction, recon-
    19  struction, rehabilitation, improvement, and equipping of  facilities  to
    20  be leased or owned by education corporations.
    21    (d)  "Education  corporation"  shall  mean  a charter school education
    22  corporation formed pursuant to article fifty-six of the  education  law,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10309-01-3

        A. 6150                             2
 
     1  which  is  not in probationary status, does not have an expired charter,
     2  whose charter has not been non-renewed, or whose charter  has  not  been
     3  revoked.
     4    (e)  "Education  equity  fund" shall mean the New York state education
     5  equity fund authorized to be established pursuant to this section.
     6    (f) "Low educational outcomes" shall mean racial disparities in educa-
     7  tional outcomes, low kindergarten through grade twelve academic achieve-
     8  ment, low high school  graduation  rates,  or  low  college  attendance,
     9  persistence, and graduation rates as demonstrated by data available from
    10  the state education department or United States department of education.
    11    (g)  "Minority-led  education  corporation"  shall  mean  an education
    12  corporation:
    13    (i) governed by a board  of  trustees  of  which  at  least  fifty-one
    14  percent of the trustees are minority group members; and
    15    (ii)  the  highest ranking officer or employee of the education corpo-
    16  ration is a minority group member.
    17    (h) "Minority group member" shall mean  a  United  States  citizen  or
    18  permanent resident alien who is and can demonstrate membership in one of
    19  the following groups:
    20    (i)  Black  persons  having origins in any of the Black African racial
    21  groups;
    22    (ii) Hispanic persons of Mexican, Puerto Rican, Dominican,  Caribbean,
    23  Cuban,  Central  or South American of either Native American or Hispanic
    24  origin, regardless of race;
    25    (iii) Native American or Alaskan native persons having origins in  any
    26  of the original peoples of North America; or
    27    (iv)  Asian  and Pacific Islander persons having origins in any of the
    28  far east countries, south east Asia,  the  Indian  subcontinent  or  the
    29  Pacific islands.
    30    (i)  "Private debt or equity fund" shall mean a private debt or equity
    31  fund formed pursuant  to  subdivision  thirty-five  of  section  sixteen
    32  hundred seventy-eight of the public authorities law.
    33    (j)  "Not-for-profit  loan  fund"  shall  mean a not-for-profit entity
    34  exempt from taxation pursuant to section 501(c)(3) of the United  States
    35  Internal  Revenue  Code of 1986, authorized to do business in the state,
    36  and which can demonstrate the ability to provide  private  funds  in  an
    37  amount equal to or greater than the amount of any grant or loan received
    38  from  the education equity fund to be used for the same purposes as such
    39  grant or loan established with a mission  to  support  education  corpo-
    40  rations.
    41    3.  Such  fund  shall consist of all moneys made available pursuant to
    42  appropriation and all other moneys credited or transferred thereto  from
    43  any  other  fund  or  source,  including payments on loans made from the
    44  fund. Nothing contained in this section shall  prevent  the  state  from
    45  receiving  grants,  gifts  or  bequests  for the purposes of the fund as
    46  defined in this section and depositing them into the fund  according  to
    47  law.
    48    4.  (a)  The  moneys  in such fund shall be expended for the following
    49  purposes:
    50    (i) Actual and necessary costs incurred by the dormitory authority  of
    51  the  state  of  New  York  related to implementing and administering the
    52  fund.
    53    (ii) Subject to available appropriations and providing  that  no  more
    54  than  seventy-five  million  dollars in funding shall be made available,
    55  whether directly or indirectly, for investment  in  a  private  debt  or
    56  equity  fund  formed  pursuant  to  subdivision  thirty-five  of section

        A. 6150                             3
 
     1  sixteen hundred seventy-eight of the public  authorities  law  or  in  a
     2  not-for-profit  loan  fund to cover capital costs associated with estab-
     3  lishing or operating public charter school facilities pursuant  to  this
     4  section.  Additionally,  no  more  than  one hundred twenty-five million
     5  dollars shall be made available for direct grants to eligible applicants
     6  to cover capital costs associated with establishing or operating  public
     7  charter  school  facilities pursuant to this section. Such capital costs
     8  shall include all costs,  including  closely  related  ancillary  costs,
     9  related  to  the  financing,  refinancing,  leasing,  planning,  design,
    10  construction, reconstruction, rehabilitation,  improvement,  furnishing,
    11  and  equipping  of  such public charter school facilities, to the extent
    12  such work has been undertaken or costs for such work has been or will be
    13  incurred by:
    14    (A) eligible charter schools or education corporations;
    15    (B) the dormitory authority of the state of New York, or  any  subsid-
    16  iary  thereof,  under  agreement  with  the  private debt or equity fund
    17  formed pursuant to subdivision thirty-five of  section  sixteen  hundred
    18  seventy-eight of the public authorities law or not-for-profit loan fund;
    19  or
    20    (C) the private debt or equity fund or not-for-profit loan fund formed
    21  pursuant  to subdivision thirty-five of section sixteen hundred seventy-
    22  eight of the public authorities law.
    23    (b) Any repayment of the state's investment by the fund, as authorized
    24  in this section shall be deposited in the education equity fund.
    25    5. The organizational structure and investment policy of the dormitory
    26  authority of the state of New York, or any subsidiary thereof,  not-for-
    27  profit  loan  fund,  or  private  debt  or  equity fund of funds and the
    28  provisions of the grant or loan agreement or agreements  shall  satisfy,
    29  but not be limited to, the following parameters and requirements:
    30    (a)  The  dormitory authority of the state of New York, or any subsid-
    31  iary thereof, not-for-profit loan fund, or private debt or  equity  fund
    32  or  funds  shall  not charge an education corporation a fee to apply for
    33  capital cost financing.
    34    (b) A description of how the dormitory authority of the state  of  New
    35  York,  or  any  subsidiary thereof, not-for-profit loan fund, or private
    36  debt or equity fund or  funds  will  preference  minority-led  education
    37  corporation  applicants  and  how  such applicants will be encouraged to
    38  apply for capital cost financing.
    39    (c) A description of how the dormitory authority of the state  of  New
    40  York,  or  any  subsidiary thereof, not-for-profit loan fund, or private
    41  debt or equity fund or funds will actively promote:  (i) applicants from
    42  communities disproportionately impacted by racial disparities in  educa-
    43  tional outcomes, low educational outcomes, or high rates of economically
    44  disadvantaged  students;  and  (ii)  racial  and ethnic diversity in its
    45  financing decisions.
    46    (d) A financing equity plan to promote diversity in commerce,  employ-
    47  ment, and opportunities for education equity in the communities in which
    48  education corporation facilities are located, which plan shall establish
    49  a goal to award sixty percent of the funding awarded or sixty percent of
    50  the  awardees selected each fiscal year, whichever is greater, to appli-
    51  cations that demonstrate that an applicant:
    52    (i) is an education corporation located in, or  serving  predominately
    53  students  who are members of, a community disproportionately impacted by
    54  racial disparities in educational outcomes, low educational outcomes, or
    55  high rates of economically disadvantaged students; and

        A. 6150                             4
 
     1    (ii) is a minority-led education corporation or will directly  benefit
     2  a minority-led education corporation; and
     3    (iii) operates or manages or will operate or manage ten or fewer char-
     4  ter schools, provided however, that applicants that operate or manage or
     5  will  operate  or  manage  more  than three schools are not eligible for
     6  grant funding.
     7    (e) The dormitory authority of the state of New York, or  any  subsid-
     8  iary  thereof,  not-for-profit loan fund, or private debt or equity fund
     9  or funds shall actively encourage  applicants  that  foster  racial  and
    10  ethnic diversity in their workforce.
    11    (f) A general description of the other criteria the dormitory authori-
    12  ty  of  the state of New York, or any subsidiary thereof, not-for-profit
    13  loan fund, or private debt or equity fund or funds will  use  in  making
    14  applicant financing determinations.
    15    (g)  The  dormitory authority of the state of New York, or any subsid-
    16  iary thereof, not-for-profit loan fund, or private debt or  equity  fund
    17  or funds' investment policy statement.
    18    (h)  The  dormitory authority of the state of New York, or any subsid-
    19  iary thereof, not-for-profit loan fund, or private debt or  equity  fund
    20  or  funds  strategic  plan including investor classes and the establish-
    21  ment, management, and liquidation of investments by the fund.
    22    (i) A plan by the dormitory authority of the state of New York to:
    23    (i) monitor the subsidiary of the dormitory authority of the state  of
    24  New  York,  not-for-profit  loan fund, or private debt or equity fund or
    25  funds' risk profile, investment activity,  and  performance,  which  the
    26  subsidiary of the dormitory authority of the state of New York, not-for-
    27  profit  loan fund, or private debt or equity fund or funds shall provide
    28  on an agreed upon schedule; and
    29    (ii) confirm that any real property leases, loan agreements, and other
    30  financing arrangement using educational equity fund proceeds  are  being
    31  provided  to  qualified  education  corporations in accordance with this
    32  subdivision.
    33    (j) A description of the maximum amount of promised return on  invest-
    34  ment, financing, or management fees or charges of the dormitory authori-
    35  ty  of  the state of New York, or any subsidiary thereof, not-for-profit
    36  loan fund, or private debt or equity fund or funds to be paid by  educa-
    37  tion  corporations,  and any other compensation of the subsidiary of the
    38  dormitory authority of the state of New York, not-for-profit loan  fund,
    39  or  private  debt or equity fund or funds, which must be reasonable when
    40  compared to similar school financing fees or charges.
    41    (k) An annual accounting of the private funds invested or expended  by
    42  the  dormitory  authority  of  the  state of New York, or any subsidiary
    43  thereof, not-for-profit loan fund, or private debt  or  equity  fund  or
    44  funds,  which,  by  the  end  of the education equity fund grant or loan
    45  term, shall be equal to or greater than the amount of said grant or loan
    46  received.
    47    (l) The subsidiary of the dormitory authority  of  the  state  of  New
    48  York,  not-for-profit loan fund, or private debt or equity fund or funds
    49  shall report to the dormitory authority of the state of New York changes
    50  to the use and distribution of investment funds, and its  organizational
    51  structure or management on a quarterly basis.
    52    (m)  The  dormitory authority of the state of New York, or any subsid-
    53  iary thereof, not-for-profit loan fund, or private debt or  equity  fund
    54  or  funds  must  take reasonable steps, to provide geographic equity and
    55  representation in financing charter school  facilities,  to  the  extent

        A. 6150                             5
 
     1  practicable,  in support of the public purpose of the educational equity
     2  fund.
     3    (n)  The  subsidiary  of  the  dormitory authority of the state of New
     4  York, not-for-profit loan fund, or private debt or equity fund or funds'
     5  conflict of interest policy with respect to grants, investments or loans
     6  of fund money.
     7    6. The dormitory authority of the state of  New  York,  in  accordance
     8  with the provisions of this section and in consultation with the commis-
     9  sioner of education, chancellor of the state university of New York, New
    10  York  city  chancellor of education, the president of the urban develop-
    11  ment corporation, the budget director, and the state comptroller,  shall
    12  promulgate rules and regulations for the implementation, administration,
    13  and  operation  of  the education equity fund, including but not limited
    14  to:
    15    (a) the eligibility of applicants for  financing  from  the  education
    16  equity  fund,  including excluding applicants with outstanding loans for
    17  which payments are  in  arrears;  provided,  however,  nothing  in  this
    18  section  shall be construed to require the authority to allow applicants
    19  with existing loans to apply for additional loans;
    20    (b) promoting equity and racial and ethnic diversity by, including but
    21  not limited to establishing a goal to award sixty percent of the funding
    22  awarded or sixty percent of the  awardees  selected  each  fiscal  year,
    23  whichever  is  greater,  to applications that demonstrate that an appli-
    24  cant:
    25    (i) is an education corporation located in, or  serving  predominately
    26  students  who are members of, a community disproportionately impacted by
    27  racial disparities in educational outcomes, low educational outcomes, or
    28  high rates of economically disadvantaged students; and
    29    (ii) is a minority-led education corporation or will directly  benefit
    30  a minority-led education corporation; and
    31    (iii) operates or manages or will operate or manage ten or fewer char-
    32  ter schools and encouraging such applicants to apply for financing;
    33    (c) minimum and maximum financing limits; and
    34    (d)  the  procedure  and information necessary for submission, accept-
    35  ance, review, and communication of determinations of applications.
    36    7. In the event an applicant seeks to transfer or sell facilities to a
    37  person or entity that does not qualify as  an  applicant,  the  transfer
    38  agreement  shall  require  the  new owner to pay to the education equity
    39  fund any outstanding amount owed by the transferor to the equity  educa-
    40  tion  fund,  private debt or equity fund, or not-for-profit loan fund as
    41  repayment of any loan issued by the fund as well as  any  other  fee  or
    42  assessment  as determined by the dormitory authority of the state of New
    43  York, or any subsidiary thereof, private debt or equity  fund,  or  not-
    44  for-profit  loan  fund.  Sales or transfers are not permitted within ten
    45  years of the award unless the education corporation's charter  for  such
    46  facility is surrendered, revoked or terminated.
    47    8. Any law, rule, or regulation conflicting with any provision of this
    48  section is, to the extent of said conflict only, deemed to be superseded
    49  by the provisions of this section.
    50    9.  Upon  the  dormitory  authority  of  the state of New York, or any
    51  subsidiary thereof, providing  any  grant  or  loan  to  any  applicant,
    52  subsidiary of the dormitory authority of the state of New York, not-for-
    53  loan  fund,  or  private  debt  or equity fund or funds pursuant to this
    54  section, the authority shall  prepare  an  annual  report  beginning  on
    55  December thirtieth the first year of funding and annually thereafter, as

        A. 6150                             6
 
     1  required by section sixteen hundred seventy-eight of the public authori-
     2  ties law.
     3    10.  Consistent with the state constitution, the comptroller may audit
     4  the expenditure of monies from the fund and  any  account  holding  such
     5  monies.
     6    11.  Nothing  in this section shall be construed to impose any liabil-
     7  ities, obligations, or responsibilities of such private debt  or  equity
     8  fund  upon  the  dormitory  authority  of  the state of New York and the
     9  authority shall have no liability or responsibility therefor unless  the
    10  authority expressly agrees to assume the same.
    11    §  2.  Section 1678 of the public authorities law is amended by adding
    12  four new subdivisions 33, 34, 35 and 36 to read as follows:
    13    33. To enter into one or more agreements  with  the  private  debt  or
    14  equity  fund  or not-for-profit loan fund, selected pursuant to subdivi-
    15  sion thirty-five of this section, in which the state or any state  agen-
    16  cy,  public  authority,  public benefit corporation, or division thereof
    17  has invested and is formed for the limited purpose of funding the  capi-
    18  tal  costs  associated  with  establishing  or  operating public charter
    19  school facilities  pursuant  to  section  ninety-nine-qq  of  the  state
    20  finance law, for the following purposes:
    21    (a)  (i)  To  acquire  by  lease or sublease such real property or any
    22  interest therein as may be necessary or convenient for the construction,
    23  reconstruction, rehabilitation, or improvement of public charter  school
    24  facilities, and
    25    (ii)  To  acquire by purchase or other agreement, personal property or
    26  interest therein as may be necessary for the acquisition,  construction,
    27  reconstruction, rehabilitation, improvement or provision of such dispen-
    28  saries, whether as principal or agent;
    29    (b) To prepare or cause to be prepared, whether as principal or agent,
    30  plans,  specifications,  designs, and estimates of costs for the design,
    31  construction, reconstruction, rehabilitation, improvement, furnishing or
    32  equipping of public charter school facilities;
    33    (c) To design, construct, reconstruct, rehabilitate, or to  cause  the
    34  design, construction, rehabilitation or improvement of, whether as prin-
    35  cipal  or  agent,  public  charter  school  facilities and to enter into
    36  contracts to cause such facilities to be designed,  constructed,  recon-
    37  structed, rehabilitated, improved, furnished, or equipped;
    38    (d)  To  enter,  as  lessor  or  as agent for the lessor, into leases,
    39  subleases, or other agreements with the public charter schools; provided
    40  that the authority shall only enter in lease agreements as agent of  the
    41  private debt or equity fund or not-for-profit loan fund, selected pursu-
    42  ant to subdivision thirty-five of this section; and
    43    (e) To enter, as lender or as agent to the lender, into a non-recourse
    44  loan  or other agreements with public charter schools, provided that the
    45  terms of the non-recourse loan agreement do not include  a  penalty  for
    46  early  termination  but  will  allow  for  the inclusion of a make-whole
    47  provision and shall not, at the time the loan is established, exceed the
    48  prime lending rate plus  one-half  the  interest  rate  specified  under
    49  subdivision  one  of  section fourteen-a of the banking law, nor include
    50  terms or conditions that would entitle a share  in,  or  claim  to,  any
    51  charter  school  tuition pursuant to section twenty-eight hundred fifty-
    52  six of the education law.
    53    34. (a) To form one or more subsidiaries for the purpose  of  limiting
    54  the  potential liability of the authority when exercising the powers and
    55  duties conferred upon the authority by subdivision thirty-three of  this
    56  section  in  connection  with  certain  work  performed on behalf of the

        A. 6150                             7
 
     1  private debt or equity fund or not-for-profit loan fund  as  defined  in
     2  section  ninety-nine-qq  of the state finance law, in which the state or
     3  any state agency, public authority, public benefit corporation, or divi-
     4  sion  thereof has invested and has been selected pursuant to subdivision
     5  thirty-five of this section. Such subsidiary created  pursuant  to  this
     6  subdivision  may  exercise  and  perform  one  or  more of the purposes,
     7  powers, duties, functions, rights and responsibilities of the  authority
     8  other  than  the  issuance  of indebtedness, in connection with real and
     9  personal property with respect to which the authority holds title  or  a
    10  leasehold  interest,  in its own name or as agent for the titleholder or
    11  leaseholder including, but not limited to:
    12    (i) entering into leases, subleases, or other arrangements with regard
    13  to such property and acting in a  manner  consistent  with  the  rights,
    14  obligations or responsibilities of the owner, landlord or tenant of such
    15  property pursuant to such lease or sublease agreements;
    16    (ii) servicing non-recourse loan payments;
    17    (iii) furnishing property management services; and
    18    (iv)   providing   general   operational  and  administrative  support
    19  services.
    20    (b) Such subsidiary authorized by paragraph (a)  of  this  subdivision
    21  shall  be  established  in  the  form of a public benefit corporation by
    22  executing and filing with the secretary of state a certificate of incor-
    23  poration which shall identify the authority  as  the  entity  organizing
    24  such subsidiary and set forth the name of such subsidiary public benefit
    25  corporation,  its duration, the location of its principal office and its
    26  corporate purposes as provided in this subdivision and which certificate
    27  may be amended from time to time by the  filing  of  amendments  thereto
    28  with  the  secretary  of  state. Such subsidiary shall be organized as a
    29  public benefit corporation, shall be a body politic and  corporate,  and
    30  shall  have  all  the  privileges,  immunities, tax exemptions and other
    31  exemptions of the authority. The members of such subsidiary shall be the
    32  same as the members of the authority and the provisions  of  subdivision
    33  two  of  section  sixteen  hundred ninety-one of this title shall in all
    34  respects apply to such members when acting in such capacity.
    35    (c) Nothing in this subdivision  shall  be  construed  to  impose  any
    36  liabilities,  obligations,  or  responsibilities of such subsidiary upon
    37  the authority and the authority shall have no liability or  responsibil-
    38  ity therefor unless the authority expressly agrees to assume the same.
    39    (d)  Such  subsidiary  created  pursuant  to this subdivision shall be
    40  subject to any other provision of this  chapter  pertaining  to  subsid-
    41  iaries of public authorities.
    42    35.  (a) (i) To select a private debt or equity fund or a not-for-pro-
    43  fit loan fund, formed for the sole purpose of funding the capital costs,
    44  including closely related ancillary and administrative costs, associated
    45  with establishing or operating public charter school facilities pursuant
    46  to section ninety-nine-qq of the state finance law deemed to be eligible
    47  by the fund and the authority for financing through such fund or related
    48  costs, provided that any partnership agreement between the fund and  the
    49  authority, shall be subject to the written approval or resolution of the
    50  board  of  the  dormitory authority, and the director of the division of
    51  the budget;
    52    (ii)  The  organizational  structure  and  investment  policy  of  the
    53  selected  fund  and  the  provisions  of the partnership agreement shall
    54  satisfy the following parameters and requirements:
    55    (A) The general partner and the fund shall to the extent allowable  by
    56  section  one  of  article  five of the state constitution, authorize the

        A. 6150                             8
 
     1  comptroller of the state, or the comptroller's legally authorized repre-
     2  sentatives, to access, examine, or audit the accounts and books  of  the
     3  fund  including its receipts, disbursements, contracts, investments, and
     4  any  other items directly relating to its financial standing and cooper-
     5  ate with any such financial examination or financial audit on an  annual
     6  basis.  The  general partner shall agree to cause the key officers to be
     7  available to discuss the fund and the partnership and its activities  at
     8  the time of the audit;
     9    (B)  The  general  partner shall agree to cause the key officers to be
    10  available to discuss the fund and the partnership and its activities  at
    11  the  request  of the board of the dormitory authority or the director of
    12  the budget;
    13    (C) Any real property subleased out by the fund to  a  public  charter
    14  school shall be at the same rate on which the fund has leased such prop-
    15  erty;
    16    (D)  The  fund  shall  not be voluntarily terminated early without the
    17  prior consent of the board of the dormitory authority;
    18    (E) The fund shall have a conflict-of-interest policy approved by  the
    19  board of the dormitory authority;
    20    (F)  Any  loan  agreement  the  fund  enters  into with public charter
    21  schools shall be a non-recourse loan and shall allow prepayment  of  the
    22  debt  without  any  penalty  imposed  by the fund but will allow for the
    23  inclusion of a make-whole provision and shall not, at the time that  the
    24  non-recourse  loan  is  established,  exceed the prime lending rate plus
    25  one-half the maximum interest rate specified under  subdivision  one  of
    26  section fourteen-a of the banking law;
    27    (G) The state's contribution to the fund shall not exceed seventy-five
    28  million dollars;
    29    (H)  The  fund  shall  not  take any equity positions in, issue equity
    30  loans to, or enter into revenue or profit sharing  agreements  with  any
    31  public  charter school or charter management organization or include any
    32  terms and conditions in an agreement with such entities to that  effect;
    33  the  fund shall also not include any excessive penalties within the loan
    34  agreements; and
    35    (I) Any other requirement as the authority may  deem  appropriate,  in
    36  consultation with the commissioner of education, chancellor of the state
    37  university of New York, New York city chancellor of education, the pres-
    38  ident  of  the urban development corporation, the director of the budget
    39  and the state comptroller.
    40    (b) (i) After the funding of the private debt or equity fund  or  not-
    41  for-profit loan, as provided pursuant to this subdivision, the authority
    42  shall  prepare  an  annual  report  beginning on December thirtieth, two
    43  thousand  twenty-three  and  annually  thereafter,  which  report  shall
    44  include, but not be limited to:
    45    (A)  the  number  of  applications  received  and the financing amount
    46  requested by the applicant;
    47    (B) the number of applications approved, denied, or withdrawn;
    48    (C) the amount and type of  financing  awarded  to  each  awardee  and
    49  whether the awardee:
    50    (1)  is  an education corporation located in, or serving predominately
    51  students who are members of, a community disproportionately impacted  by
    52  racial disparities in educational outcomes, low educational outcomes, or
    53  high rates of economically disadvantaged students; and
    54    (2) is a minority-led education corporation or will directly benefit a
    55  minority-led education corporation; and

        A. 6150                             9

     1    (3)  the  number of charter schools the awardee operates or manages or
     2  will operate or manage;
     3    (D)  whether the goal of awarding sixty percent of the funding awarded
     4  or sixty percent of the awardees selected each fiscal year, whichever is
     5  greater, was met and if such goal was not met, a  detailed  analysis  of
     6  the reasons the goal was not met and plans to meet the goal for the next
     7  fiscal year;
     8    (E)  the  geographic  distribution  of charter school facilities sites
     9  established or operated by education corporations assisted by the fund;
    10    (F) any other such data and information as determined by the dormitory
    11  authority of the state of New York; and
    12    (G) for the first report, the authority shall report on  the  procure-
    13  ment and selection of the general partner.
    14    (ii)  Such  report  shall  be published on the authority's website and
    15  presented to the governor, the temporary president of the senate and the
    16  speaker of the assembly, no later than December thirtieth, two  thousand
    17  twenty-three and annually thereafter; and
    18    (iii)  The  authority  shall  further submit a copy of the partnership
    19  agreement between the fund and  the  authority,  to  the  governor,  the
    20  temporary  president  of  the senate, and the speaker of the assembly no
    21  later than fifteen days after such agreement has been fully executed.
    22    36. To make grants pursuant to section  ninety-nine-qq  of  the  state
    23  finance law.
    24    §  3.  Paragraph  (b)  of  subdivision 2 of section 1676 of the public
    25  authorities law is amended by adding two new undesignated paragraphs  to
    26  read as follows:
    27    Public charter schools pursuant to section ninety-nine-qq of the state
    28  finance law.
    29    The  private debt or equity fund or not-for-profit loan fund, in which
    30  the state or any state agency, public authority or public benefit corpo-
    31  ration, or division thereof, has invested and is  selected  pursuant  to
    32  subdivision thirty-five of section sixteen hundred seventy-eight of this
    33  title  to  the  extent  authorized  in  subdivision thirty-three of such
    34  section.
    35    § 4. Subdivision 1 of section 1680 of the public  authorities  law  is
    36  amended by adding two new undesignated paragraphs to read as follows:
    37    Public charter schools pursuant to section ninety-nine-qq of the state
    38  finance law.
    39    The  private  debt or equity fund or not-for-profit loan, in which the
    40  state or any agency, authority or division thereof has invested  and  is
    41  selected  pursuant to subdivision thirty-five of section sixteen hundred
    42  seventy-eight of this title to  the  extent  authorized  in  subdivision
    43  thirty-three of such section.
    44    § 5. Severability. If any provision of this act, or any application of
    45  any  provision of this act, is held to be invalid, that shall not affect
    46  the validity or effectiveness of any other provision of this act, or  of
    47  any  other  application of any provision of this act, which can be given
    48  effect without that provision or  application;  and  to  that  end,  the
    49  provisions and applications of this act are severable.
    50    § 6. This act shall take effect immediately.
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