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2004-2005 NEW YORK STATE EXECUTIVE BUDGET
EDUCATION, LABOR and FAMILY ASSISTANCE
ARTICLE VII LEGISLATION
MEMORANDUM IN SUPPORT

CONTENTS

Article VII Memo Content
PART DESCRIPTION STARTING PAGE NUMBER FOR:
SUMMARY, HISTORY & STATEMENT IN SUPPORT BUDGET IMPLICATION EFFECTIVE DATE
A Establish a block grant to reimburse counties for secure and non-secure detention costs. 3 (Part A) 20 (Part A) 23 (Part A)
B Authorize the entire welfare grant to be withheld if the head of the household does not fulfill his or her employment obligation. 4 (Part B) 20 (Part B) 23 (Part B)
C Reduce the non-shelter component of the public assistance grant by 10 percent for families on welfare for more than 5 years and by 10 percent for single adults and childless couples on welfare for more than 1 year. 5 (Part C) 20 (Part C) 23 (Part C)
D Step-down the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare. 6 (Part D) 20 (Part D) 23 (Part D)
E Increase various worker protection and labor standards fees. 7 (Part E) 21 (Part E) 23 (Part E)
F Exempt CUNY Capital Projects from Wicks Law requirements. 9 (Part F) 21 (Part F) 23 (Part F)
G Restructure TAP awards to provide incentives for college graduation and create a Tuition Assistance Loan Program. 9 (Part G) 21 (Part G) 23 (Part G)
H Authorize the SUNY Trustees to transfer the operations of the SUNY teaching hospitals to private not-for-profit corporations. 10 (Part H) 21 (Part H) 24 (Part H)
I Protect taxpayers’ STAR savings by placing limitations on school budget increases. 11 (Part I) 21 (Part I) 24 (Part I)
J Increase the real property transfer recording fee. 12 (Part J) 22 (Part J) 24 (Part J)
K Restructure the Board of Regents and establish a New York Institute for Cultural Education (NYICE) that would be responsible for administration of the State Museum, the State Library, the State Archives and other cultural education programs that are currently administered by the State Education Department. 13 (Part K) 22 (Part K) 24 (Part K)
L Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local district initiating such hearings. 16 (Part L) 22 (Part L) 24 (Part L)
M Establish a New York State Higher Education Capital Investment Review Board to guide the awarding of capital matching grants for higher education facilities. 17 (Part M) 22 (Part M) 24 (Part M)
N Implement school aid reforms. 17 (Part N) 22 (Part N) 24 (Part N)

MEMORANDUM IN SUPPORT

A BUDGET BILL submitted by the Governor in
Accordance with Article VII of the Constitution

AN ACT to amend the executive law, the family court act and the social services law, in relation to juvenile detention; to repeal certain provisions of the executive law relating to reimbursement for detention; and providing for the repeal of certain provisions upon expiration thereof (Part A); to amend the social services law, in relation to penalties imposed for noncompliance with public assistance work requirements (Part B); to amend the social services law, in relation to reducing the standards of payment for persons in receipt of public assistance (Part C); to amend the social services law, in relation to reducing the earned income disregard percentage for public assistance recipients (Part D); to amend the labor law, the general business law and the New York state defense emergency act, in relation to worker protection and labor standards fees (Part E); to amend the education law, in relation to exempting certain contracts from separate bidding or letting by trade requirements (Part F); to amend the education law, in relation to the eligibility requirements for the tuition assistance program and the creation of a tuition assistance loan program (Part G); to amend the education law, in relation to the powers of the boards of trustees of the state university of New York to establish and contract with not-for-profit corporations (Part H); to amend the education law, in relation to school district budgets for certain school years (Part I); to amend the real property law, in relation to the fee on real property transfers (Part J); to amend the education law, in relation to the appointment of members of the board of regents; to amend the arts and cultural affairs law, the state finance law, the parks, recreation and historic preservation law and the not-for-profit corporation law, in relation to establishing the New York institute for cultural education and to transfer certain programs located in the state education department to the New York institute for cultural education; and repealing certain provisions of the education law relating thereto (Part K); to amend the state finance law, in relation to establishing a tenured teacher hearing account; and to amend the education law, in relation to the administration of disciplinary hearings for tenured teachers (Part L); to amend the public authorities law, in relation to establishing a New York state higher education capital investment review board which shall receive applications for, and award, capital matching grants for higher education facilities (Part M); and to amend the education law, in relation to the calculation and payment of state aid to school districts and boards of cooperative educational services, in relation to the powers of the regents of the state of New York, in relation to the creation of regulations; to amend the general municipal law, in relation to the contracting of school district construction projects; to amend the public authorities law, in relation to entering into agreements with school districts; to amend chapter 756 of the laws of 1992 relating to funding a program for workforce education conducted by the consortium for worker education in New York City, in relation to the effectiveness thereof; to amend chapter 169 of the laws of 1994 relating to certain provisions related to the 1994-95 state operations, aid to localities, capital projects and debt service budgets, in relation to certain expiration and repeal dates contained therein; to amend chapter 552 of the laws of 1995, amending the education law relating to contracts for the transportation of school children, in relation to the effectiveness thereof; and to amend chapter 93 of the laws of 2002 amending the education law relating to aid for teachers of tomorrow recruitment and retention program, in relation to the effectiveness thereof; to repeal certain provisions of the education law relating to letting of construction contracts; to repeal certain provisions of the public authorities law relating to contracts of the New York City school construction authority; to repeal subdivision (c) of section 93 of part A of chapter 60 of the laws of 2000, amending the education law and other laws relating to the payment of funds for education, relating to the effectiveness thereof; and to repeal section 11 of chapter 795 of the laws of 1967 amending the education law, the public authorities law and the real property tax law relating to authorizing boards of cooperative educational services to own and construct buildings, relating thereto (Part N)

PURPOSE:

This bill contains provisions needed to implement the Education, Labor and Family Assistance portion of the 2004-05 Executive Budget.

SUMMARY OF PROVISIONS, EXISTING LAW, PRIOR LEGISLATIVE HISTORY AND STATEMENT IN SUPPORT:

Part A – Establish a block grant to reimburse counties for secure and non-secure detention costs.

This bill discourages excessive lengths of stay in detention by establishing a block grant for reimbursing institutional care in secure and non-secure detention facilities. The bill also encourages the creation of a new county-based mechanism for monitoring lengths of stay in detention and the use of appropriate community-based alternatives to institutional care.

Section 530 of the Executive Law provides for 50 percent State reimbursement of secure and non-secure detention costs.

Major provisions of this bill:

This bill represents an extension of State child welfare financing reforms enacted in 2002-03 which have successfully reduced the placement of children in foster care by block granting local foster care reimbursement while providing 65 percent open-ended State reimbursement for preventive services. Similar to the 2002-03 child welfare reforms, this bill is intended to reduce excessive lengths of stay in detention by block granting State reimbursement for institutional detention care and encouraging counties to access 65 percent State child welfare reimbursement to expand community-based preventive services. The 2004-05 Executive Budget also provides nearly $6 million in Temporary Assistance for Needy Families (TANF) funding for local efforts to prevent the placement of Persons in Need of Supervision (PINS) in detention and to support the creation of alternatives to detention.

Part B – Authorize the entire welfare grant to be withheld if the head of the household does not fulfill his or her employment obligation.

This bill further encourages public assistance recipients to engage in work. It assists the State in meeting increasing Federal work participation rate requirements and reduces State public assistance costs by withholding the entire household’s welfare grant if the head of the household does not come into compliance with employment requirements.

Section 342 of the Social Services Law currently establishes authority for pro-rata durational sanctions for applicants and for recipients of public assistance who fail to comply with work requirements without good cause. As a result, if the head of a four-person household is not in compliance with work requirements, the household still receives three-quarters of the amount of the welfare grant.

This bill amends section 342 of the Social Services Law to:

If enacted, New York would join 35 other states that have full-family sanction policies. Currently, approximately 10 percent of New York’s adult-headed Temporary Assistance for Needy Families (TANF) households receive a pro-rata reduced benefit due to noncompliance with work requirements. Imposition of full-family sanctions will help the State meet Federal work participation rate requirements, which are anticipated to be increased from the current 50 to 70 percent by Federal Fiscal Year 2008. Currently, both houses of Congress have proposed TANF reauthorization bills with these increased rate requirements.

Encouraging individuals to participate in work programs will also increase the likelihood that the family or individual will become self-sufficient. Additionally, eliminating welfare benefits to individuals who are able-bodied but unwilling to work will reduce long-term reliance on welfare and reduce State public assistance costs.

Part C – Reduce the non-shelter component of the public assistance grant by 10 percent for families on welfare for more than 5 years and by 10 percent for single adults and childless couples on welfare for more than 1 year.

This bill promotes individual self-sufficiency and reduces public assistance costs by discouraging long-term reliance on welfare.

This bill enacts a 10 percent reduction in the basic-needs and energy grant components of the welfare benefit for families who have been on assistance for more than 60 months and by 10 percent for single adults and childless couples who have been on assistance for more than 12 months.

Section 131-a of the Social Services Law establishes maximum monthly grants and allowances for welfare recipients. The welfare grant comprises a basic needs allowance, an energy grant allowance, and a shelter allowance, which vary in amount by household size. The amount of the shelter allowance varies by local social services district, and is provided based on the actual amount of rent paid up to the shelter allowance maximum. Under current law, the maximum total monthly benefit for a family of three in New York City is $691. The corresponding maximum monthly benefit for a single individual is $352.

Provisions of this bill continue to build on the success of welfare reform by promoting individual self-sufficiency, while reducing public assistance costs. Reductions for long-term cases underscore the important message that welfare provides only temporary assistance and that recipients are to move to employment and self-sufficiency as rapidly as possible. Accordingly, this bill reduces the $291 monthly basic needs allowance for a family of three remaining on welfare for more than five years by $29.10 and the $137.10 monthly benefit for a single adult on welfare for more than one year by $13.71.

This bill does not reduce the shelter allowance portion of the grant. In New York City, the shelter allowance ceiling is $400 per month for a family of three and $215 per month for a single individual. As a result, the current monthly maximum grant for a family of three, who have remained on welfare for more than five years, would decrease from $691 to $661.90; while the monthly maximum benefit for a single individual remaining on welfare for more than one year would decrease from $352.10 to $338.39. Because the shelter allowance component of the grant for family cases was increased by $114 per month in November, 2003, for family cases the total welfare grant will still have increased close to 15 percent in the past year.

In addition, even with the proposed decrease in benefits, New York State will remain one of the most generous states in providing assistance to the poor. New York now provides the fourth highest family welfare benefit nationwide. It would remain in fourth place for shorter-term cases if this bill were enacted. For long-term family cases, New York would provide the sixth highest grant nationwide. Of the states that offer general assistance programs, New York would continue to provide the fifth highest general assistance benefit for cases on welfare less than one year. For longer-term single adult cases, New York would provide the sixth highest grant nationwide.

Part D – Step-down the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

This bill discourages long-term reliance on welfare and reduces public assistance costs by phasing-out the amount of an individual’s earned income that may be ignored in determining welfare benefit eligibility as recipients remain on welfare over time.

Section 131-a of the Social Services Law currently requires the first $90 of a family’s earned income to be disregarded for purposes of determining welfare benefit eligibility and the amount of the individual’s monthly welfare grant. The remainder of the family’s earned income is disregarded at a percentage that is recalculated each June to reflect changes in poverty and welfare benefit levels. The current disregard percentage is 51 percent of earnings, but is expected to decrease to 43 percent in June 2004 to reflect increases in the shelter allowance ceilings effective November 1, 2003.

This bill retains the $90 monthly disregard, but:

Provisions of this bill continue to build on the success of welfare reform by promoting individual self-sufficiency, while reducing public assistance costs. Phasing-out the EID based on length of stay on welfare underscores the important message that welfare provides only temporary assistance and that recipients are to move from welfare as rapidly as possible.

The average working family on public assistance earns $7,560 per year, of which $3,855 is disregarded for welfare eligibility and benefit level determination purposes. This average working family is also entitled to $3,800 in State and Federal earned income tax credits. When combined, these incentives are exceedingly generous. As a result, for many long-term family cases, the EID discount actually keeps these families from leaving welfare.

This bill retains the $90 monthly disregard to assist employed recipients with work-related expenses. In addition, enactment of this bill conforms long-term family cases to single adult/childless couple cases, which only receive the $90 monthly disregard and do not receive an additional discount on remaining earnings.

Part E – Increase various worker protection and labor standards fees.

This bill increases various worker protection and labor standards fees to generate $1.6 million in additional revenue needed to maintain Department of Labor worker protection and labor standards programs at current levels.

Section 1 amends subdivision 5 of section 161 of the Labor Law to increase the fee for a variance from the day of rest provision from $25 to $40.

Section 2 amends subdivision 3 of section 204 of the Labor Law to increase boiler inspection fees as follows:

Section 3 amends paragraph a of subdivision 8 of section 204 of the Labor Law to increase fees for insurance companies to file boiler inspection reports with the Department of Labor from $30 to $50.

Section 4 amends paragraph b subdivision 2 of section 212-a of the Labor Law to increase the fee for farm labor contractor registration from $100 to $200.

Section 5 amends subdivision 4 of section 212-a of the Labor Law to increase the fee for registration of food growers and processors from $25 to $40.

Section 6 amends subdivision 1 of section 212-b of the Labor Law to increase the fee for licensing farm labor camp commissaries from $25 to $40.

Section 7 amends subdivision 1 of section 341 of the Labor Law to increase the registration fees for apparel manufacturers and contractors to the following: initial registration — $200; annual renewal — $150.

Section 8 amends subdivision 1 of section 870-d of the Labor Law to increase fees for operating amusement devices, viewing stands or tents to $100, and eliminates the differentiation between fees for children and adult rides.

Section 9 amends subdivisions 2 and 5 of section 903 of the Labor Law to increase fees and to create two new types of certifications: Operation and Maintenance, and Restricted Handler, both set at a fee of $50. Asbestos Handling Certificate application fees are increased as follows:

Asbestos handling license, from $300 to $500;

Air monitor certification, from $50 to $75;

Supervisor certification, from $50 to $75; and,

Asbestos handler certification, from $30 to $50.

Section 10 amends subdivision 3 of section 458 of the Labor Law to set a minimum fee of not less than $50 for an explosive magazine certificate.

Section 11 amends section 177 of the General Business Law to increase the fees for licensing employment agencies from $300 to $500 for agencies with four or fewer placement employees and from $500 to $700 for agencies with more than four placement employees.

Section 12 amends subdivision 1 of section 74 of Chapter 784 of the Laws of 1951, constituting the New York State Defense Emergency Act, to increase the fee for defense contractors to apply for a dispensation from day of rest provisions from $25 to $40.

These fee increases are based on a recent Department review of the actual costs of program administration, on-site inspections and issuance of certificates and licenses.

These fees have not been increased since either 1989 or 1990.

Part F – Exempt CUNY Capital Projects from Wicks Law requirements.

This bill permits the Dormitory Authority (DA) and/or the City University Construction Fund (CUCF) to let contracts for capital projects of the City University of New York (CUNY) without separate bidding and awarding of contracts by trade on the work to be performed.

This bill amends section 6281(b) of the Education Law to exempt the DA and/or CUCF from the requirement to award contracts for CUNY capital projects by trade, commonly referred to as the “Wicks Law.”

Section 6281(b) of the Education Law specifies that contracts let by the DA and/or CUCF for CUNY Capital projects must conform to the General Municipal Law’s “Wicks Law” requirement.

Several similar bills exempting the DA and/or CUCF from the “Wicks Law” for CUNY capital projects have been introduced but not enacted.

CUNY’s bonded capital projects are currently subject to the “Wicks Law”, whereas the State University of New York’s (SUNY) bonded capital projects are not. Current statute permits a single award for SUNY capital contracts administered by the State University Construction Fund, but there is no similar exemption for CUNY capital projects, which are managed by the DA and/or CUCF. This inconsistency has adversely affected CUNY’s capital program by extending construction time frames and increasing the overall costs of projects (estimated at about ten percent for major construction projects).

Part G – Restructure TAP awards to provide incentives for college graduation and create a Tuition Assistance Loan Program.

This bill modifies the award parameters for the Tuition Assistance Program (TAP) to provide incentives for graduation and to create a Tuition Assistance Loan Program.

Effective April 1, 2004, this bill restructures the TAP program to:

This restructuring will encourage students to stay in school and earn their degrees by:

This restructuring also protects students financially by:

Awards made under the TAP program are currently authorized in Articles 13 and 14 of the Education Law under sections 601,604,661-665, 667, and 667-a. Existing law authorizes, for full-time undergraduate students, maximum awards of up to the lesser of tuition or $5,000 (for students receiving first-time awards in 2000-01 or thereafter) and minimum awards of $500.

Similar proposals were advanced in the 2002-03 and 2003-04 Executive Budgets. A proposal for providing incentives for improving student graduation rates was advanced in the 1999-00 Executive Budget.

Part H – Authorize the SUNY Trustees to transfer the operations of the SUNY teaching hospitals to private not-for-profit corporations.

The bill authorizes the State University Trustees to transfer the operations of the SUNY hospitals to one or more private not-for-profit corporations and directs the Trustees to develop a plan for such transfer.

This bill:

Section 355 of the Education Law establishes the administrative and fiscal powers and duties of the State University Trustees.

A similar proposal was advanced in the 2003-04 Executive Budget.

Recent developments in the health care marketplace, including Medicare budget cuts, deregulation of hospital reimbursement rates and expansion of managed care have made the delivery of health care in New York State increasingly more competitive. Because of the various legal constraints imposed on them as State institutions, SUNY’s hospitals are currently unable to compete effectively in this environment. Transferring the operations of the SUNY hospitals to not-for-profit corporations will better position the SUNY hospitals to enter into networking relationships with other health care providers to develop high quality, cost-effective and integrated delivery systems. In addition, not-for-profit status will promote more effective long-term planning, expedite short-term decision-making and help ensure the future competitive and financial stability of the SUNY hospitals.

Part I – Protect taxpayers’ STAR savings by placing limitations on school budget increases.

This bill protects taxpayers’ STAR savings by placing limitations on school budget increases.

Effective immediately for school years beginning with 2004-05, this bill adds a new subdivision 6 to section 2022 of the Education Law to require that a school district’s total annual spending increase cannot exceed 4 percent, or 120 percent of the increase in the Consumer Price Index for the prior year, whichever is less, without a two-thirds majority vote. Spending increases attributable to enrollment growth, voter approved capital projects, court orders, and certain other purposes allowed for contingency budgets would be excluded from the increase limitations. When less than two-thirds of the voters approve the budget, the school district may present a proposition to override the cap on one additional occasion.

The requirements for limiting spending increases would not apply in the fiscally dependent school districts of the Big Five cities, which have their own constitutional tax limits and in which residents do not vote directly on school budgets.

Under sections 2022 and 2023 of the Education Law, school boards must adopt a contingency budget if voters fail to approve a school budget after the second submission. A school district’s contingency budget may not result in a percentage increase over the prior year that exceeds 120 percent of the increase in the Consumer Price Index for the prior year, or 4 percent, whichever is less. Certain types of expenditures such as emergency expenditures and enrollment driven cost increases are excluded from the contingency budget limit.

The 2001-02 and 2003-04 Executive Budgets included a similar STAR proposal to limit school district spending increases.

The Governor’s STAR program was enacted to provide homeowners with relief from the heavy and growing burdens of school taxes. STAR has successfully provided citizens throughout the State with dramatic reductions in their school tax bills. This bill will ensure that the benefits intended by STAR are not diminished by excessive increases in local school spending and taxes. By capping school budget increases without a two-thirds majority vote, this bill will ensure that the intended benefits of STAR are not diminished without careful consideration by voters.

Part J – Increase the real property transfer recording fee.

This bill adjusts the existing fee for recording real property transfers to support State costs for real property tax administration.

Sections 1 and 2 amend the Real Property Law to increase the fee for recording changes in the ownership of real property (caused by sales, gifts, marriages, inheritances, etc.) from $50 to $75 for residential and agricultural properties, and from $50 to $165 for all other properties.

Subdivision 3 of section 333 of the Real Property Law requires recording officers in counties and New York City to collect a $50 fee for each transfer of property ownership. From that fee (which was increased from $25 to $50 by Chapter 62 of the Laws of 2003), the collecting county or city may retain $9 for its own use, and send $41 to the State in support of the programs of the Office of Real Property Services (ORPS).

The Improvement of Real Property Tax Administration Account of the State’s Miscellaneous Special Revenue Fund authorized in section 97-ll of the State Finance Law receives revenues from the real property transfer recording fee. Money from this Account may be used only for expenses of ORPS relating to real property tax administration.

The fee increase will be used to defray the State’s cost of its oversight of local property tax administration. Nearly 75 percent of the General Fund spending of the Office of Real Property Services will be offset in 2004-05 with the fee increase, and agency operations in 2005-06 will be fully funded by the increase.

Part K – Restructure the Board of Regents and establish a New York Institute for Cultural Education (NYICE) that would be responsible for administration of the State Museum, the State Library, the State Archives and other cultural education programs that are currently administered by the State Education Department.

This bill reforms the governance of New York’s educational system by changing the manner in which members of the Board of Regents are appointed. It also establishes a new public benefit corporation — the New York Institute for Cultural Education (NYICE) — that will assume responsibility for the cultural education programs that are currently administered by the State Education Department (SED).

This bill restructures the Board of Regents as follows:

This bill also creates a new public benefit corporation — NYICE — to administer programs for the preservation, development and promotion of New York’s cultural resources, including the State Museum, the State Library and the State Archives. It provides for:

The State Constitution establishes the Board of Regents as the head of the Education Department, and requires a minimum of nine Regents. Section 202 of the Education Law, which governs the selection of the Regents:

Section 205 of the Education Law provides for a quorum of seven for the meetings of the Board of Regents.

The Education Law assigns to SED the responsibility to administer the State Museum (§§ 232, 233-a, 234-235-b), the State Library (§§ 232 and 245-252), Library Aid (§§ 271-285), Public Broadcasting Aid (§ 236) and grants for historic documents and records (§ 140).

The Arts and Cultural Affairs Law assigns SED the responsibility to administer the State Archives (§ 57.05) and the Local Government Records Management program (§§ 57.07-57.11).

An Article VII proposal in 2003 to change the size and composition of the Board of Regents (Part E, S.1407-A/A.2107-A) was not adopted by the Legislature.

Bills introduced in 2002 proposed constitutional amendments to abolish the Board of Regents and designate the Commissioner of Education as the head of the Education Department. Several similar proposals had been introduced in prior years.

The 2002-03 and 2003-04 Executive Budgets included a similar Article VII proposal to transfer the administration and staffing for the State’s cultural education programs to a public benefit corporation termed NYICE, and to establish a new revenue source outside the State’s General Fund by increasing an existing fee for the filing, recording and certifying of records by county clerks from $5 to $20. The Legislature did not authorize the creation of NYICE but did approve the fee increase (Part B of S.6258-B/A.9760-B of 2002) and the transfer of the State’s cultural education programs from the General Fund to a Special Revenue Fund.

Proposals to establish a separate agency for the State’s cultural resources (the Office of Cultural Resources), and effect the transfer of various cultural education programs from SED to the new agency were introduced as Article VII bills accompanying the Executive Budgets in 2000-01 and 2001-02.

Currently, while the 16 members of the Board of Regents are elected by a joint session of the Legislature, the majority party in the Assembly effectively selects the Regents, because members of the Assembly greatly outnumber members of the Senate in a joint session. By affording the Governor and the leaders of the majority and minority parties in both houses of the Legislature a significant role in the appointment of Regents, this bill promotes greater accountability of the Regents to the State’s chief executive and a more representative group of elected officials of the State Legislature.

This bill increases the prominence and visibility of the State’s cultural institutions by establishing NYICE as a separate public benefit corporation with the sole purpose of developing and promoting cultural resources. The new public benefit corporation would:

Part L – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local district initiating such hearings.

This bill authorizes the Commissioner of Education to establish a chargeback whereby individual school districts will be responsible for funding the costs of disciplinary hearings involving tenured teachers.

Section 3020-A of the Education Law establishes procedures for the conduct of disciplinary hearings for tenured teachers and requires that the State Education Department (SED) coordinate the administration of such hearings and pay for associated costs. This bill authorizes SED to recover the actual cost of such hearings from the school districts, Boards of Cooperative Educational Services (BOCES) and County Vocational Education and Extension Boards (CVEEBs) that initiate such hearings. A Tenured Teacher Hearing Account is established within the Miscellaneous Special Revenue Fund for this purpose.

A previous bill to transfer the administration and funding of tenured teacher hearings to local educational entities (S.814/A.1604 of 1997) was not adopted by the Legislature. The bill being advanced for 2004 preserves the State’s role in coordinating and overseeing the teacher hearings, but assigns responsibility for the costs to the local school district that initiates such hearings.

By aligning the fiscal responsibility for hearing costs with the local district that initiates such hearing, this bill is likely to generate efficiencies including a reduction in the cost of hearing officers and a compression in the duration of hearings. Continued SED oversight ensures fairness and consistency in the administration of this program.

Part M – Establish a New York State Higher Education Capital Investment Review Board to guide the awarding of capital matching grants for higher education facilities.

This bill establishes a New York State Higher Education Capital Investment Review Board to guide in the allocation of funds from the $350 million Higher Education Facilities Capital Matching Grants Program included in the 2004-05 Executive Budget.

Effective immediately, this bill amends the Public Authorities Law to authorize the establishment of the New York State Higher Education Capital Investment Review Board, which shall receive applications for, and award, capital matching grants for higher education facilities.

The Board will comprise seven members appointed by the Governor, with the majority and minority leaders of the Senate and Assembly each authorized to recommend one member. Members will serve one-year terms, and appointments made upon the recommendations of the minority leaders of the Senate and Assembly will be non-voting members. A majority vote of the five voting members will be required for the Board to act.

Grants will require a 75 percent non-State funding match to qualify for a State grant of 25 percent, and may only be used for new capital projects. Project priorities will include economic development/high technology (including wet labs), critical academic facilities and urban renewal/historic preservation. No more than $250 million in State funding may be provided to any one sector from the capital matching grants appropriation enacted in any State fiscal year.

This bill will supplement the capital programs of the independent colleges and universities as well as those of the public sector, thereby encouraging fund-raising activities and providing access to capital for projects which might not otherwise be affordable to the institutions.

Part N – Implement school aid reforms.

This bill contains various provisions necessary for implementation of the education portion of the 2004-05 Executive Budget. This bill includes reforms to existing law to: target building aid reimbursement more effectively; create a transitional bonding program to assist in modifying the reimbursement of transportation-related capital expenses based on assumed amortization; advance mandate relief measures and refocus Boards of Cooperative Educational Services on their core mission of providing cost-effective educational services.

School Facilities/Building Aid: This bill amends the Education Law to modify the basis for calculating allowable costs for building projects approved by the Commissioner of Education after February 1, 2004. It also encourages cost efficiency by providing school districts with an exemption from the Wicks Law requirements that mandate the use of multiple contractors for school construction projects. Additionally, this bill provides school districts access to a State clearinghouse for efficient and effective school construction design. This bill also establishes a temporary moratorium on approval of building aid for projects approved after February 1, 2004 pending the creation of a new prioritized building aid system. Finally, this bill makes permanent payment reforms similar to those first enacted in 2003-04.

Section 3602(6) of the Education Law provides for the payment of building aid to school districts for capital costs of school facilities. Section 101 of the General Municipal Law, sections 407-a, 458, 482 of the Education Law, and sections 1734 and 1735 of the Public Authorities Law pertain to the requirements for bidding contracts for public construction projects.

Building aid is an open-ended entitlement that reimburses school districts based on local decision-making. Because the State reimburses school districts on average nearly 70 percent of all approved construction costs, the creation of a more rational formula, that is reflective of student based space needs and a prioritized aid allocation system, will allow school districts to continue to construct necessary facilities while targeting limited State resources to vital educational services.

Currently, the Wicks Law requires school districts to issue multiple bids for school construction projects. Elimination of this mandate will save school districts and the State an average of more than 10 percent of the cost of building schools.

Transportation Aid: This bill amends the Education Law to modify the manner in which school districts are reimbursed for capital expenses (school buses and equipment) under transportation aid.

Section 3602(7) of the Education Law provides for the payment of transportation aid to school districts for approved transportation expenses, including certain capital costs.

Currently, school districts are reimbursed on a one year lag for transportation-related capital expenses. The bill would modify transportation aid provisions for school districts so that, beginning in 2005-06, school districts will receive aid based on assumed amortization, similar to the manner in which school districts are reimbursed for school construction projects.

BOCES: Effective with expenditures made July 1, 2004, the purchase of administrative and general office services from Boards of Cooperative Educational Services (BOCES) will no longer be eligible for BOCES aid. In addition, those services eligible for BOCES aid will be compared to the State contract price for the same services and commodities to ensure cost efficiencies.

This bill amends subdivisions 4 and 5 of section 1950 of the Education Law pertaining to the apportionment for services provided by BOCES.

Much of the growth in BOCES aid in recent years has been due to increases in non-instructional services. These reforms will refocus BOCES on their core mission of providing cost-effective educational services to school districts. The comparison with the State contract will ensure that aidable BOCES are truly cost-effective.

Special Education: Effective July 1, 2003, the restriction on the creation or expansion of programs that serve only children with disabilities will be continued through June 30, 2006. The bill also provides for the establishment of maximum reimbursement rates for appeals process costs for the Preschool Special Education Program.

Effective July 1, 2004, the existing SED-administered program, serving children under age three with hearing impairments, will come under the oversight of the Department of Health-administered Early Intervention Program.

This bill amends sections 4204-a, 4404, 4357 and 4410 of the Education Law. Sections 4204-a and 4357 of the Education Law govern programs serving deaf children below the age of three. Section 4404 of the Education Law pertains to procedures for children with disabilities, including the qualifications of independent hearing officers. Section 4410 of the Education Law governs the provision of preschool special education services to children, including the limitations on establishing new preschool programs.

The provisions of this bill that place the deaf infant program under the oversight of the Department of Health are intended to ensure appropriate service delivery and administration of this program by including it in the Early Intervention Program — a program that serves disabled infants and toddlers until they are three years old.

Provisions of this bill related to preschool special education are intended to ensure that the development of new preschool special education programs is targeted toward creating settings that educate children in the most inclusive setting possible. This is consistent with State and Federal policy, which requires that disabled children should be educated, and share as many experiences as possible, with their non-disabled peers. However, in recognition of instances when specialized classrooms which serve only disabled children are necessary, the State Education Department would continue to have the flexibility to approve new restrictive programs when there is a demonstrated need for such programs.

School Property Tax Report Card: This bill provides taxpayers with an expanded Property Tax Report Card to ensure that school district tax levy increases are displayed over a three year time period. Sections 1608, 1716 and 2022 of the Education Law pertain to the School Property Tax Report Card.

Providing expanded information to taxpayers will ensure that they are fully aware of the school district spending patterns.

Other Miscellaneous Provisions: Section 3609 of the Education Law governing the payment schedule for school aid is changed to provide consistency in State aid payment dates. Other changes to various sections of Education Law include:

BUDGET IMPLICATIONS:

Part A – Establish a block grant to reimburse counties for secure and non-secure detention costs.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget and would result in an estimated $7 million savings.

Part B – Authorize the entire welfare grant to be withheld if the head of the household does not fulfill his or her employment obligation.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget, which assumes a $16.8 million savings in SFY 2004-05. This savings will grow to $41.0 million per year starting in SFY 2005-06.

Part C – Reduce the non-shelter component of the public assistance grant by 10 percent for families on welfare for more than 5 years and by 10 percent for single adults and childless couples on welfare for more than 1 year.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget, which assumes $16.2 million in related General Fund savings.

Part D – Step-down the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget, which assumes $16.9 million in related General Fund savings.

Part E – Increase various worker protection and labor standards fees.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget because current fee revenue does not adequately cover the costs of worker protection and labor standards programs. The $1.6 million in annual revenue generated by this proposal is necessary to continue those programs at their current levels.

Part F – Exempt CUNY Capital Projects from Wicks Law requirements.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget because a new five-year capital plan for CUNY begins in 2004-05. Elimination of the “Wicks Law” requirement, which increases project costs an estimated 10-15 percent for major construction projects, will free up additional funds (from $100 million to $164 million more) to address critical health and safety and preservation capital projects which cannot be funded without this action.

Part G – Restructure TAP awards to provide incentives for college graduation and create a Tuition Assistance Loan Program.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget since the amount appropriated for TAP reflects the enactment of this legislation.

Part H – Authorize the SUNY Trustees to transfer the operations of the SUNY teaching hospitals to private not-for-profit corporations.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget because, although no immediate savings would accrue to the State, a transfer of the SUNY hospitals to new not-for-profit corporations could reduce and/or eliminate the State subsidy to the SUNY hospitals ($92.6 million in the 2004-05 Executive Budget). In addition, upon the completion of such transfer, the State’s All Funds Budget would be reduced by $1.0 billion, the State workforce would be reduced by 9,300 full-time equivalent employees and SUNY hospital debt could eventually be removed from the State debt cap.

Part I – Protect taxpayers’ STAR savings by placing limitations on school budget increases.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget. Capping school districts’ spending should moderate the rate of increase in school taxes, thus also moderating the rate of increase in future State costs for STAR exemption reimbursements ($20 million in 2004-05).

Part J – Increase the real property transfer recording fee.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget, which anticipates additional revenue of $14.2 million from the proposed fee increase, and $18.9 million annualized thereafter. General Fund support for ORPS has been reduced accordingly in 2004-05, and will be eliminated completely in 2005-06.

Part K – Restructure the Board of Regents and establish a New York Institute for Cultural Education (NYICE) that would be responsible for administration of the State Museum, the State Library, the State Archives and other cultural education programs that are currently administered by the State Education Department.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget since the transfer of staff, functions and funds relating to cultural education programs from SED to NYICE is reflected in the appropriation bill.

Part L – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local district initiating such hearings.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget which does not include General Fund support for the Tenured Teacher Hearings Program, projected to cost $2.1 million.

Part M – Establish a New York State Higher Education Capital Investment Review Board to guide the awarding of capital matching grants for higher education facilities.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget by creating the New York State Higher Education Capital Investment Review Board that would guide the allocation of funds from the new $350 million Higher Education Facilities Capital Matching Grants Program included in the 2004-05 Executive Budget.

Part N – Implement school aid reforms.

Enactment of this bill is necessary to implement the 2004-05 Executive Budget by establishing a framework for certain school aid formulas and out-year reforms.

EFFECTIVE DATE:

Part A – Establish a block grant to reimburse counties for secure and non-secure detention costs.

This bill takes effect April 1, 2004.

Part B – Authorize the entire welfare grant to be withheld if the head of the household does not fulfill his or her employment obligation.

This bill takes effect September 1, 2004.

Part C – Reduce the non-shelter component of the public assistance grant by 10 percent for families on welfare for more than 5 years and by 10 percent for single adults and childless couples on welfare for more than 1 year.

This bill takes effect immediately, and affects grants paid on and after September 1, 2004.

Part D – Step-down the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

This bill takes effect immediately and affects grants paid on and after September 1, 2004.

Part E – Increase various worker protection and labor standards fees.

This bill takes effect immediately.

Part F – Exempt CUNY Capital Projects from Wicks Law requirements.

This bill takes effect April 1, 2004.

Part G – Restructure TAP awards to provide incentives for college graduation and create a Tuition Assistance Loan Program.

This bill takes effect April 1, 2004 to ensure sufficient lead time for the Higher Education Services Corporation to prepare for the implementation of the TAP restructuring that would begin with the 2004-05 academic year.

Part H – Authorize the SUNY Trustees to transfer the operations of the SUNY teaching hospitals to private not-for-profit corporations.

This bill takes effect April 1, 2004.

Part I – Protect taxpayers’ STAR savings by placing limitations on school budget increases.

This bill takes effect April 1, 2004.

Part J – Increase the real property transfer recording fee.

This bill takes effect April 1, 2004, provided however, that section 2 shall take effect on and after July 1, 2004.

Part K – Restructure the Board of Regents and establish a New York Institute for Cultural Education (NYICE) that would be responsible for administration of the State Museum, the State Library, the State Archives and other cultural education programs that are currently administered by the State Education Department.

This bill takes effect on April 1, 2004, while the transfer of functions from SED to NYICE takes effect on October 1, 2004.

Part L – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local district initiating such hearings.

This bill takes effect April 1, 2004.

Part M – Establish a New York State Higher Education Capital Investment Review Board to guide the awarding of capital matching grants for higher education facilities.

This bill takes effect immediately.

Part N – Implement school aid reforms.

This bill takes effect April 1, 2004, except that selected provisions will take effect immediately or on other specified dates.

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