New York Laws
Article 6 - Funds of the State
99-C - Withholding of State Aid Upon Failure of Municipalities and School Districts to Repay Health Insurance Reserve Receipts When Required.

§ 99-c. Withholding of state aid upon failure of municipalities and
school districts to repay health insurance reserve receipts when
required. 1. In the event a county, city, town, village or school
district which has elected to receive distribution or distributions from
the health insurance reserve receipts fund, pursuant to an agreement
between such municipality or school district and the state and which has
elected to terminate its contractual agreement for health benefits with
the New York state department of civil service, or if called upon by the
New York state department of civil service, pursuant to such agreement,
to return such distribution within the time period and under the
conditions specified in such agreement, shall be in default of its
obligation to repay such distribution, the allotment, apportionment, and
payment of local assistance aid, education aid or other state aid as
appropriate and as determined by the comptroller shall be withheld by
the state upon the following terms and conditions.

2. In the event of the failure or inability of the municipality or
school district to repay its distribution pursuant to the contractual
agreement, the department of civil service shall forthwith make and
deliver to the comptroller of the state of New York a certificate
stating the amount due and not paid, and the state comptroller shall
thereafter deduct and withhold from the next succeeding allotments,
apportionments or payments of state aid or assistance due such
municipality or school district such amount or amounts thereof as may be
required to pay the amount due. The state shall not be obligated to pay,
by virtue of such withholdings, any additional or increased
apportionment or payment of state aid or assistance.

2-a. Notwithstanding the provisions of subdivision two of this section
or any other inconsistent provision of law, a school district or board
of cooperative educational services which is subject to the requirements
of this section may repay its distribution pursuant to a contractual
agreement authorized by this section over a period of ten state fiscal
years, in equal annual installments, payable by March thirty-first of
each year. For school districts or boards of cooperative educational
services which terminate the contractual agreement prior to July first,
nineteen hundred eighty-three, the first installment shall be paid prior
to March thirty-first, nineteen hundred eighty-four. For all other
school districts and boards of cooperative educational services, the
first installment shall be paid prior to March thirty-first first
succeeding the termination of such agreement. The comptroller shall not
withhold from state aid or other assistance due a school district or
board of cooperative educational services any amount of such
distribution due and owing as certified by the department of civil
service to the comptroller pursuant to subdivision two of this section,
until and unless such school district or board of cooperative
educational services fails to make an installment payment authorized by
this subdivision by March thirty-first of the applicable year. Upon
failure of a school district or board of cooperative educational
services to make an installment payment, the withholding provisions of
subdivision two of this section shall take effect to the extent of the
amount of that unpaid installment. The comptroller shall within sixty
days of the date on which this subdivision becomes effective or within
sixty days of any subsequent termination of the contractual agreement
notify the applicable school district or board of cooperative
educational services of the provisions of this subdivision, of the
amount due and owing, and the amount of each installment.

3. Notwithstanding any inconsistent provisions of law, the comptroller
shall establish a fund, to be called the health insurance reserve
receipts fund, to receive transfers of funds from the health insurance

carriers or the plan administrator or administrators of the New York
state employee health benefit plan, pursuant to contractual agreements
between such carriers and the New York state department of civil service
and/or from the health insurance fund. Moneys returned by the
municipalities and school districts or withheld from state aid by the
comptroller pursuant to provisions governing termination of the
contractual agreements shall be deposited in this fund. Disbursements
from the health insurance reserve receipts fund shall be for the purpose
of remitting to the carriers any moneys due them as a result of
termination of the state's contract with the carriers or termination of
agreements between the state and municipalities and school districts
and/or for the purpose of transferring funds to the health insurance
fund. Disbursements from such fund shall be made pursuant to the
procedures for authorization of expenditures contained in article eleven
of the civil service law upon the issuance of a certificate of approval
of availability by the director of the budget and subject to audit and
warrant of the comptroller.

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