Directs the out-of-state placement committee to develop a residential bed plan and authorizes the dormitory authority to finance new facilities

Purpose

To provide low cost financing for the development or rehabilitation of in-state residential schools and facilities to serve the current and future needs of New York State's children with complex needs.

Summary of provisions

Section 1 adds a new subdivision 7-a to section 483-d of the Social Services law (Council on Children and Families), requiring the out-of-state placement committee to develop a residential bed plan for the renovation of existing or the development of new residential schools and facilities. This plan will include recommendations to address current and future programmatic and physical plant needs. Section 1 also authorizes the Dormitory Authority to provide financing for the costs related to the construction and rehabilitation of residential schools and facilities.

Section 2 amends Public Authorities Law section 1676(2)(b) by adding a new undesignated paragraph adding "residential school or residential facility" as defined in this bill to the list of buildings within the meaning of the term "dormitory."

Section 3 defines "residential facility" or "residential school" as a not-for-profit corporation licensed to operate a residential school or facility for children placed by state and local agencies.

Section 4 adds a new undesignated paragraph to Public Authorities Law section 1680(1), which adds residential school or facility, as defined in section 3 of this bill, to the list of organizations within the meaning of "educational institution."

Section 5 adds a new subdivision 41 to Public Authorities Law section 1680, establishing mandatory clauses for leases between the Dormitory Authority and a not-for-profit operating a residential school or facility. These clauses relate to various security interests the Dormitory Authority shall have in the not-for-profit corporation. This section also establishes certain qualifications for the Authority's bond-issuing authority in connection with the financing of the not-for-profit. In particular, the Dormitory is limited to issuing bonds not in excess of 30 million dollars.

Section 6 of the bill adds a new section 462-c to the Social Services Law, requiring the Office of Children and Family Services (OCFS) to establish standards of payment for the capital costs of approved projects for residential schools and facilities that enter into

leasing agreements with the Dormitory Authority pursuant to Public Authorities Law section 1680(41), as created in section 5 of this bill. In addition, section 7 adds a new paragraph (g) to Social Services Law section 462, which establishes preconditions for the ability of the residential schools or facilities to enter into leases with the Dormitory Authority, including the issuance by OCFS of operating certificates.

Section 8 provides that this bill shall take effect immediately.

Existing law

Current law does not contain the directives to the out-of-state placement committee or the financing authority provided in this bill.

Justification

A 2005 Council on Children and Families' Interagency Out-of-State Residential Placement Work Group report found that New York State is spending $200 million annually to out-of-state residential schools and facilities that house and educate our special needs children and foster children. This is because the State lacks the in-state capacity to serve this population and that the in-state facilities that do exist are in need of extensive renovation and repair. The work group found that for every 100 children who could be served in-state rather than being placed out-of-state, the State would save $7.8 million.

While the Governor vetoed this legislation 2007, he did so based on a curable technical error, expressing strong support for the concept of the bill. According to the Governor's veto message, the 2007 bill would have forced the Dormitory Authority to eliminate then existing bonding projects for residential facilities for children, The 2007 bill would have done so because it allowed the Authority to issue $30 million in additional bonds to finance construction of residential facilities for children on top of the $30 million originally granted in the 2004 legislation. In 2006, however, this bonding cap was increased to $60 million; the 2007 bill did not reflect the 2006 increase, referring to the outdated 2004 chapter instead of the 2006 one. Accordingly, the Dormitory Authority would have had to finance the $30 million in residential facility projects specified in the 2007 bill despite having already incurred $60 million in obligations pursuant to the 2006 cap increase. This bill cures that defect by providing for an additional $30 million in bonding authority in a newly created section of law, Public Authorities Law section 1680(41), which provides that the financing shall go towards the construction of the specific residential facilities described in this bill-as distinct from the separate facilities described in Public Authorities Law section 1680(40).

Legislative history

S.1996 of 2011 - Referred to Children and Families both years S.1288B of 2007 - Vetoed

Fiscal implications

It is unlikely that there will be any State fiscal implications resulting from this measure, as the cost of debt service will be reimbursed from facility rates, and will be fully offset by the savings achieved by bringing children back from out-of-state placements.

Effective date

This act shall take effect immediately.