Authorizes Greenburgh North Castle Union free school district to lease certain real property

Summary of specific provisions

Section 1 of the bill, subject to the approval of the State Education Department, authorizes the board of education to lease properties located at 623 Blooming Grove Turnpike, in the town of New Windsor, county of Orange for the purposes of providing instruction to students enrolled in the school district.

Section 2(a) of the bill provides that the Institutions shall constitute a "private not-for-profit school" within the meaning of title 4 of arti- cle eight of the public authorities law, Chapter 698 of the Laws of 1991 and Chapter 294 of the Laws of 1998 solely for purposes of assuming the obligations of McQuade in connection with the Bonds but not for the purpose of any other law, rule, regulation or statute. Section 2(a) further provides that, notwithstanding the assumption of the Bond obli- gations by the Institutions, they shall be permitted to operate the Bond-financed facilities as a "special act school district," providing services pursuant to contracts with other public school districts or social services districts for the education of children with handicap- ping conditions pursuant to article eighty-one or eighty-nine of the education law.

Section 2(b) of the bill authorizes the Authority and the Institutions to enter into such agreements as the Authority deems reasonable or necessary to provide for the assumption of the obligations relating to the Bonds by the Institutions in accordance with applicable law and the Authority's contract with its bondholders. Those agreements would provide for, among other things, (i) the payment of debt service on the

Bonds and other amounts due to the Authority, and (ii) the pledge to the Authority of certain tuition payments payable by public school districts and social service providers for services rendered by the Institutions as determined by the Commissioner of Education pursuant to section 4004 of the Education Law.

Section 2(c) of the bill provides that upon the assumption of the obli- gations by the Institutions, all amounts currently or hereafter held by the State Comptroller in the private not-for-profit school capital facilities financing reserve account established for McQuade will continue to be held and applied for the payment of the Bonds in accord- ance with applicable law. In addition, every public school district and social services district that receives certain services from the Insti- tutions in connection with that assumption shall make tuition payments to the Comptroller for deposit into the financing reserve fund account.

Section 2(d) requires that the Institutions obtain all governmental approvals, consents, licenses, permits and accreditation otherwise required under law, including the programmatic approval of the commis- sioner of education prior to assuming the McQuade obligations.

Section 2(e) provides that nothing in the proposed bill shall be construed to impair the validity of Bonds, which will, in all respects, continue to be valid and binding obligations of the Authority authorized under and governed by the provisions of law under which they were issued as described below.

Justification

The Authority issued $9,620,000 of tax-exempt Bonds on behalf of McQuade to finance the cost of renovating and constructing an addition to McQuade's Kaplan School. By letter dated December 8, 2009, McQuade was informed by the State Education Department that McQuade would be removed from the State's list of approved private schools due to clear and pres- ent dangers to the health and safety of students attending the Kaplan School. Subsequent to such letter, all students were removed from McQuade and McQuade is currently closed.

Following the closure of the McQuade Kaplan School in December 2009, the Authority was advised that the Institutions were interested in acquiring substantially all of McQuade's capital facilities located at 623 Bloom- ing Grove Turnpike in the town of New Windsor, county of Orange (the "New Windsor Campus"), which includes those capital facilities financed with the proceeds of the Bonds. S.7129A. A.10272-A would allow Green- burgh-North Castle to lease the New Windsor Campus for the purpose of providing instruction to students enrolled in the school district.

This legislation is also necessary to allow the Institutions to under- take activities at the New Windsor Campus on which the Authority currently holds a mortgage to secure the obligations of McQuade with respect to outstanding Bonds. Specifically, this legislation would authorize the Institutions' assumption of McQuade's obligations relating

to the Bonds and would authorize the Institutions and the Authority to take other actions as are necessary to keep the Bonds outstanding and to preserve the tax exempt status of the Bonds.

Legislative history

New Bill- 2010

Effective date

This act shall take effect immediately.