NY Educ L § 3651 (2021)
2021 New York Laws EDN - Education Title 5 - Taxation and Financial Administration Article 74 - Reserve Funds 3651 - Reserve Fund.

§  3651.  Reserve  fund.  1.  A reserve fund may be established by the   school authorities of any school district, provided,  however,  that  no   such  fund shall be established (a) until approved by a majority vote of   the qualified voters of the district voting on  a  proposition  therefor   submitted  at a regular or special school district meeting, or in school   districts which do not have such meetings, at  an  election  called  for   such  purpose,  and  (b)  unless  the notice of such meeting or election   shall have stated that a proposition to establish a reserve  fund  would   be  so  submitted, the purpose of the fund, the ultimate amount thereof,   its probable term and the source from which the funds would be obtained.   Such reserve fund may be established for financing, in whole or in part,   the cost of any object or purpose for which bonds may be issued  by,  or   for  the  objects  or  purposes  of, the school district pursuant to the   local finance law. The proposition shall specify the purpose  for  which   the  fund is established, the ultimate amount, the probable term and the   source from which the funds are to be obtained. There shall be paid into   any such fund an annual amount sufficient to meet  the  requirements  of   the  proposition.  In  addition, the voters may from time to time direct   the school authorities to pay into such fund  moneys  derived  from  any   other source.1-a.  Notwithstanding  the  provisions  of  subdivision  one  of  this   section, any school district  may  establish  a  reserve  fund  for  the   payment  of  judgments  and  claims  in  tax  certiorari  proceedings in   accordance with article seven of the  real  property  tax  law,  without   approval  by  the  qualified  voters of the district, provided, however,   that the total of the monies held in such reserve fund shall not  exceed   that   amount  which  might  reasonably  be  deemed  necessary  to  meet   anticipated judgments and claims arising  out  of  such  tax  certiorari   proceedings.  Any  monies  deposited  to such reserve fund which are not   expended for the payment of judgments or claims arising out of such  tax   certiorari  proceedings  for  the  tax  roll in the year such monies are   deposited to the said fund and/or which will not reasonably be  required   to  pay any such judgment or claim shall be returned to the general fund   on or before the first day of  the  fourth  fiscal  year  following  the   deposit  of  such  monies  to  said  reserve  fund. For purposes of this   subdivision, such monies shall be deemed reasonably required to pay  any   such  judgment  or claim if the proceeding or claim has not been finally   determined or otherwise terminated or disposed of after  the  exhaustion   of all appeals.1-b.  Notwithstanding  the  provisions  of  subdivision  one  of  this   section, where the city  or  county  is  not  required  to  pay  to  the   treasurer  of a city school district unpaid taxes during the fiscal year   for which such real property taxes are levied, the board of education of   such city school district may establish a reserve for uncollected  taxes   without  approval  of  the  qualified  voters  of  the  school district,   provided that the ratio of the amount  of  such  reserve  to  the  total   principal  amount  of the district's tax levy for such fiscal year shall   not be less than the  ratio  of  the  principal  amount  of  the  school   district  taxes  as levied by the school district for the last completed   fiscal year but not received by the district  before  the  end  of  such   fiscal  year to the total principal amount of the tax levy for such last   completed fiscal year. If the city or county is not required to  pay  to   the treasurer of a city school district unpaid taxes pursuant to section   thirteen  hundred  thirty-two of the real property tax law, the board of   education of the city school district shall establish a reserve pursuant   to this subdivision, provided that such reserve shall not be  less  than   the  amount  of taxes for the fiscal year for which such budget is being    prepared which are estimated to be unpaid during such fiscal year  under   the aforesaid provisions of the real property tax law.2.  The  moneys in each such fund shall be deposited in one or more of   the banks or trust companies designated as depositories of the funds  of   such school district and shall be known as the "________reserve fund" of   such  district.  The school authorities may direct the treasurer of such   school district to invest the moneys in each such  fund  in  the  manner   provided  in  section  thirty-six hundred fifty-two of this article. Any   interest earned or capital gains realized on the money so  deposited  or   so  invested  shall  accrue  to and become a part of each such fund. The   separate identity of each such fund  shall  be  maintained  whether  its   assets consist of cash or investments or both.3.  An  expenditure  shall  be  made  from  a  reserve  fund  only  by   authorization of the voters and for the specific  purpose  specified  in   the proposition.3-a.  Notwithstanding  the  provisions  of  subdivision  three of this   section, any  school  district  which  establishes  a  reserve  fund  in   accordance  with subdivision one-a of this section may make expenditures   from such fund for the purposes specified in  such  subdivision  without   authorization of the voters.4.  The  voters  may  authorize the transfer of all or any part of any   reserve fund to any other reserve  fund  established  pursuant  to  this   section.5.  Whenever  the voters shall determine that the original purpose for   which a reserve fund has been established is no  longer  desirable,  the   school authorities may liquidate the fund by first applying its proceeds   to any outstanding bonded indebtedness and applying the balance, if any,   to the annual tax levy, provided, however, that the amount so applied in   any  one year shall not be greater than the amount which will reduce the   tax rate for school purposes  below  five  mills  on  actual  valuation;   provided,  however,  that  the school authorities in any school district   having no outstanding bonded indebtedness may, in any year in  which  no   state  aid  is  payable  thereto  under  the provisions of this chapter,   liquidate such fund by applying the balance thereof to  the  annual  tax   levy,  regardless  of  the  tax rate for school purposes, subject to the   approval of a majority of the qualified electors of the district  voting   on  a  proposition  therefor  submitted  at  a regular or special school   district meeting,  or  in  school  districts  which  do  not  have  such   meetings, at an election called for such purpose.6. The school authorities shall cause a separate account to be kept of   each fund established. Such account shall show:a. The date and amount of each sum paid into the fund.b. The interest earned by such fund.c.  The capital gains or losses resulting from the sale of investments   of the fund.d. The interest or capital gains which have accrued to the fund.e. The amount and date of each withdrawal from the fund.f. The assets of the fund indicating the cash balance  therein  and  a   schedule of the amounts invested in federal or state obligations.7.  The  school authorities shall render annually a detailed report of   the operation and conditions of each of such funds. Copy of such  report   shall be filed with the commissioner of education.8.  a. Notwithstanding the foregoing provisions of this section, if in   any city any taxes raised on real estate for the purposes of the  school   district  must  be  included  in computing the amount which the city may   raise by tax on real estate for city purposes pursuant to the provisions   of section ten of article eight of the constitution,  the  establishment    of a reserve fund by the school authorities of the school district shall   be subject to the consent of the legislative body of the city.b.  Notwithstanding  the  foregoing provisions of this section, in any   school district which is wholly or partly in the Adirondack park and has   within its boundaries state lands subject to taxation assessed  at  more   than  thirty  per  centum of the aggregate taxable assessed valuation of   the real property within the bounds of such school district, the  school   district   shall   not   establish   a   reserve  fund  unless,  on  the   recommendation of the commissioner of education, the state  comptroller,   on  behalf  of  the state, shall consent thereto. Upon the expiration of   fifteen days  from  the  date  of  the  filing  in  his  office  of  the   application  for  such  consent, together with the recommendation of the   commissioner of education, and upon reaching a determination, the  state   comptroller shall make an order, in triplicate, granting or denying such   consent.  One  copy  of  such  order shall be filed in the office of the   state department of audit and control at Albany, New  York,  another  in   the  state department of education at Albany, New York, and the third in   the office of the clerk of such school district.9. Notwithstanding the foregoing provisions of this section, in a city   school district in a city having a population of one hundred twenty-five   thousand inhabitants or more, such a reserve fund  may  be  established,   expenditures  may  be made therefrom, moneys may be paid into such fund,   all or any part of such fund may be transferred  to  any  other  reserve   fund  established  under  this  section,  and  such  reserve fund may be   liquidated, all pursuant to the provisions of this section, except  that   any  such action may be authorized or taken by the board of education of   such city school district, without  approval  or  authorization  of  the   qualified voters of such district.