Implementation of NYS Education Law 3602 6.(e)(5)(c) regarding reduction of interest rates for prospective projects and retro bond amortizations

Pursuant to NYS Education Law 3602 6.(e)(5)(c) regarding the reduction of interest rates for prospective projects and retro bond amortizations, the provision will be implemented in the 2017-18 aid year.  Following is a summary of the provision:

    1. The recalibration will be implemented in the 2017-18 aid year for all retro bond amortizations and for prospective project amortizations that started in 2007-08 or earlier. Amortizations starting after 2007-08 will be reset after ten years (For example, 2008-09 amortizations will be adjusted in 2018-19)
    2. 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, 2017 for prospective projects subject to adjustment in 2018-19. (SED notification will occur in summer 2017 via 2017-18 SAMS Form FB Interest Rate Reduction Waiver Application Form, where all projects subject to reduction in 2018-19 will be listed)
    3. Subsequent reductions will occur at the end of each ten year segment of an assumed amortization.

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 2017-18, will be assigned the 2016-17 statewide average when it becomes available in fall 2017.

Waivers from Interest Rate Recalibration
Please review the Form FB Interest Rate Reduction Waiver Application form included in 2016-17 SAMS, and submit any new waiver applications or any amendments to already submitted applications on this form.  Projects and retro bonds listed on this form that do not have preliminary waiver approval will be amortized using a reduced interest rate starting with 2017-18 Building Aid.

Please note that 2017-18 building aid displayed on the SA1718 enacted budget run does not reflect any reductions associated with this provision.

Last Updated: April 20, 2018