July 2002

Superintendents of Public School Districts (or Official Designee)
District Superintendents (For Information)
New York City Board of Education

Andrea Hyary, Chief
Bureau of State Aid

2002-03 Capital Outlay Transition Grants



Following is an explanation of 2002-03 reimbursement for 2001-02 expenditures for capital outlay based on statutory changes included in Sections 55 and 64 of Chapter 83 of the Laws of 2002. Please note: These changes have a significant impact on the claim process for reimbursement of 2001-02 capital outlay expenditures, especially with regard to the deadline for the claim, which is September 3rd 2002.

The information included herein concerns reimbursement for base year approved expenditures for capital outlay for school building purposes from the general fund, capital fund or from a reserve fund (not borrowed monies). As in past years, school districts will be reimbursed for a portion of these expenditures; however, beginning with the 2003-04 aid year, capital outlay expenditures incurred after June 30, 2002 will be amortized.

In lieu of a 2002-03 apportionment of Building Aid on capital outlay expenditures pursuant to Section 3602 (6) of the Education Law, districts that would have received such an apportionment will instead receive a 2002-03 Capital Outlay Transition Grant. The transition grant amount will be calculated pursuant to Section 3602 (6) of the Education Law and provisions of the new subdivision 12 of Section 3641 of the Education Law. While the formula for calculation of the 2002-03 transition grants is the same as 3602 (6) Building Aid for capital outlay in previous years, there are significant changes in:

  1. how and when the claim will be submitted to SED and

  2. how, when and by whom the claim will be paid.

Questions and Answers

  1. How will 2002-03 Capital Outlay Transition Grants (2002-03 aid on 2001-02 capital expenditures) be calculated and paid?

    In the past, Building Aid on capital outlay was paid as part of general aid, based on the 3609-a payment schedule for each district, over the course of the aid year.

    In 2002-03, the Dormitory Authority of the State of New York (DASNY) will pay Capital Outlay Transition Grants directly to school districts in lieu of Building Aid on capital outlay calculated pursuant to Education Law 3602 (6). Each district’s 2002-03 transition grant will be an amount certified to DASNY by the State Education Department. The amount certified to DASNY for each district will be the lesser of:

    1. 2001-02 capital expenditures on file with the State Education Department on or before 9/3/02, multiplied by the aid ratio computed for such expenditures (including the incentive decimal, if applicable) or

    2. The projected 2002-03 aid on capital outlay expenditures that appears on the SA0203 computer run dated 5/15/02 and produced in support of the 2002-03 State budget. (The capital outlay portion of the SA0203 computer run is reproduced for your reference at It appears on your district page under the heading "2002-2003 Enacted Budget.")

    (Note: Districts’ filing of 2001-02 capital expenditures with the State Education Department on or before 9/3/02 will constitute their application for a 2002-03 Capital Outlay Transition Grant.)

    Prior to certifying to DASNY the amount of the transition grant for each district, the statewide sum of all grants will be calculated. If the statewide total of the grants is less than $140 million, districts will be eligible for an additional 2002-03 grant which will be equal to the positive difference between the grant amount calculated prior to comparison to the SA0203 projected aid and the SA0203 projected aid amount. The additional grant amounts will be approved by SED in the order in which SED received the district’s application, up to a total of $140 million.

  2. When will 2002-03 Capital Outlay Transition Grants be paid to school districts?

    The grants will be paid during the 2002-03 State Fiscal year.

  3. How will the application for a Capital Outlay Transition Grant be made?

    Due to the short time frame involved, districts will be required to complete a web-based form similar to the Schedule M1 that was previously included with State Aid claim software. However, unlike the Schedule M1, districts will be required to report expenditures of RESCUE funds separately from other as a subset of their total capital outlay expenses.

    The form will be available on the State Aid web site ( during the last week of July. A completed form must be received by SED by 9/3/02 in order to receive a transition grant in 2002-03. Actual capital expenditures (including RESCUE) claimed for building projects on this form should also be entered on the ST-3 at Account Code H522 in the ST-3 Capital Fund Schedule G-3. Districts should check the SA-130 for each project to make sure there is a Capital Outlay Allowance before claiming the capital outlay expense, and to ensure that the expense being claimed does not exceed that allowance. Districts’ reporting of 2001-02 capital expenditures to SED by September 3, 2002 will constitute an application for a 2002-03 Capital Outlay Transition Grant.

  4. When will the application be submitted?

    The application for a 2002-03 Capital Outlay Transition Grant must be received by SED by September 3, 2002 in order for the district to receive a grant in 2002-03. Subsequent submission of or revisions to 2001-02 capital expenditures will not affect eligibility for or the amount of a district’s 2002-03 Capital Outlay Transition Grant.

  5. Will there be an opportunity to receive additional reimbursement for 2001-02 capital expenditures if no or incorrect data was on file with SED on 9/3/02?

    Yes. 2003-04 Excess Capital Outlay Transition Grants will be made as part of 2003-04 general aid payments, within the amounts appropriated for capital outlay grants in the 2003-04 State Budget. Districts may submit revisions to the 2001-02 capital expenditure data after September 3, 2002, and until the first business day of September 2003. At that time, the reimbursement for 2001-02 capital outlay expenditures will be recalculated using data on file as of the first business day of September 2003. The 2003-04 excess transition grants will be based on any excess of the recalculated reimbursement over the 2002-03 Capital Outlay Transition grant already received by the district.

  6. What is the time frame for overpayments of transition grants being deducted from districts’ subsequent aid payments?

    Section 55 of Chapter 83 of the Laws of 2002 provides that "… whenever a school district has been apportioned more money pursuant to this paragraph than that to which it is entitled, the commissioner may deduct such amount from the next apportionment to be made to such school district."

  7. Will reorganization incentive building aid be paid to eligible districts on 2001-02 capital outlay expenses?

    Yes. Reorganization Incentive Building Aid will be calculated pursuant to Section 3602 (6) of the Education Law using the 2001-02 capital outlay expenses reported on the data submission form described above. However, the aid will be paid as part of regular 2002-03 Building Aid, and will not be included in the grant amounts certified to DASNY.

  8. How will State Aid be apportioned for capital outlay expenditures made in the 2002-03 school year and thereafter?

    Except for the limited cases set forth below, capital outlay expenditures incurred after June 30, 2002 will be amortized and paid out over the life of the project according to an assumed schedule that will begin with the 2003-04 aid year.

    Aid will, however, be apportioned for base year capital outlay expenditures for projects that are wholly funded through capital outlay and which fall into one of the following three categories:

    1. A project with a total cost of no more than $100,000. A district may receive aid for a maximum of one such project in any school year.

    2. A construction emergency project. A construction emergency project is a project that is necessary to provide immediate repairs in order to eliminate or mitigate hazards that threaten the health and/or safety of the building’s occupants as a result of either the unanticipated discovery of hazardous substances such as asbestos, or significant damage caused by a fire, snow storm, ice storm, excessive rain, high winds, flood or a similar catastrophic event. Please note that while an emergency project may be carried out prior to receipt of Commissioner’s approval, it must receive approval from the Office of Facilities Planning in order for expenditures to be eligible for State Aid.

    3. A project that, if bonded, would cause a small city school district to exceed 95% of its constitutional debt limit.

Last Updated: April 20, 2018