Recalculation of Building Aid for Assumed Amortization Projects and Retro Bonds
Section 3602.6(e)(5)(c), as added by Chapter 383 of the Laws of 2001, requires that SED review and revise the interest rate used for a Building Aid project at least once during each ten year period of assumed amortization. The provision was designed to adjust for bond refundings. The first 10 year period ended in 2011-12 for assumed amortizations that began in 2002-03.
Based on the provisions of the Statute, which apply to all districts in the State, the new interest rate is the interest rate that would be applicable at the time of the adjustment. Except for the Big 5 City school districts, for most prospective project and retro bond amortizations that began in 2002-03, the interest rate will be based on the statewide average interest rate for the 2011-12 school year. The revised interest rate will be applied only to remaining assumed semi-annual payments.
Assumed amortizations that began in 2002-03 based on an interest rate that reflected Dormitory Authority (DASNY) funding will be assigned:
- A new DASNY rate if the district refunds with DASNY
- A new DASNY rate if the district does not refund at all
- The 2011-12 statewide average rate if the district refunds but not through DASNY
The statute also provides for a waiver if state or federal law, rule or regulation precludes refinancing. SED will provide further guidance on the interest rate recalculation implementation and waiver process this fall.
Contact: State Aid Office (518)474-2977