Recent amendments to NYS Education Law 3602 6.(e)(5)(c) regarding recalibration of interest rates for prospective projects and retro bond amortizations
The enacted budget for 2014-15 includes amendment to NYS Education Law 3602 6.(e)(5)(c) regarding recalibration of interest rates for prospective projects and retro bond amortizations:
- The recalibration will be implemented in the 2015-16 aid year for all retro bond amortizations and for prospective project amortizations that started in 2005-06 or earlier. Amortizations starting after 2005-06 will be reset after ten years (For example, 2006-07 amortizations will be adjusted in 2016-17)
- The State Education Department must notify school districts of projects subject to the interest rate adjustment no later than December 1 in the school year preceding the school year of the implementation; e.g., by December 1, 2014 for projects subject to adjustment in 2015-16.
- Amended statutory language requires the recalibration to occur
at the end of each ten year segment of an assumed amortization,
rather than ‘periodically, but at least at the end of each ten
year segment.’
The new statewide average interest rate to be applied to adjusted amortizations will still be one year behind the start year of the adjusted amortization; e.g., amortizations based on the statewide average rate, for which lowered rates are applied in 2015-16, will be assigned the 2014-15 statewide average when it becomes available. Estimates of 2015-16 aid for these amortizations will temporarily be based on the 2013-14 statewide average rate.
Waivers from Interest Rate Recalibration
Please do not submit any new waiver applications at this time, or any amendments to already submitted applications. Additional guidance regarding waiver applications will be published in the near future.