2016 New York Laws
STF - State Finance
Article 6 - (State Finance) 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.