Provides for the financing and construction of capital facilities for certain not-for-profit corporations affiliated with the state university of New York

Summary of provisions

Sections 1 and 2 of the bill would amend the definition of "dormitory" and "educational institution", respectively, to include any not-for-pro- fit corporation organized by officers, employees, alumni or students of SUNY qualified as tax-exempt under the Internal Revenue Code for the purpose of providing housing or other facilities, including academic and administration buildings, libraries, laboratories, classrooms or any other facility, building or structure essential, necessary or useful in furthering the academic, cultural, health or research programs of SUNY. DASNY, however, would not be permitted to undertake any project pursuant to this authorization unless SUNY consents to the project. The bill also would provide that any work undertaken by DASNY pursuant to this author- ization would be public work under the Labor Law and subject to Minority and Women-owned business provisions under Article 15-A of the Executive Law.

These sections further authorize the not-for-profit corporation, SUNY and the State University Construction Fund to enter into agreements with DASNY and take such actions as are necessary to: (a) undertake the financing of any facility for such not-for-profit corporation, includ- ing, but not limited to, providing for the sale, lease, transfer or conveyance of state-owned property under the jurisdiction of the State University to the not-for-profit entity; and (b) grant DASNY a lien on any revenues, property or moneys pledged by the not-for-profit corpo- ration to DASNY to secure the payment of all amounts owed to DASNY. It further authorizes and requires state officers to pay any funds that are so assigned and pledged to DASNY or, upon the direction of DASNY, to any trustee of any dormitory authority bond or note issue.

Section 3 of the bill provides for an immediate effective date.

Existing law

DASNY is currently able to provide construction and financing services to SUNY but not to not - for-profit corporations organized for the bene- fit of SUNY.

Prior legislative history

A similar bill (S.5188) was introduced at the request of SUNY during the 2005-2006 Session.

Statement in support

Although DASNY is currently able to provide construction and financing services directly to SUNY through DASNY's existing programs, some SUNY colleges and universities have identified situations when it would be in their best interests to undertake certain projects through legally sepa- rate not-for-profit entities established for these purposes. Among the benefits of financing through these separate entities would be the abil- ity to utilize revenues and assets of the not-for-profit corporation to secure any debt issued to finance the cost of the project. This bill would provide DASNY with the flexibility to meet these needs.

The New York State Commission on Higher Education's Final Report recog- nized the need to upgrade and enhance SUNY facilities. As stated in the Report: "For New York State's public universities to remain competitive with those in other key states, additional capital investment is required. Compared to public systems in peer states, New York ranks fifth in overall capital investment for the most recent five-year period available (2001-01 through 2005-06), and sixth on a per FTE basis...It is important to identify innovative financing structures...or otherwise provide financial support for investment in priority needs and initi- atives (e.g., public-private partnerships)."

Budget implications

No adverse impact.

Effective date

This act shall take effect immediately.