BILL NUMBER:  S512

 TITLE OF BILL :  An act in relation to requiring the BNP Paribas
settlement to pay off any gap elimination adjustment

 PURPOSE :

This legislation requires any settlement between the state and BNP
Paribas to be applied to the gap elimination adjustment.

 SUMMARY OF PROVISIONS :

Section 1: Notwithstanding any other provision of law, rule or
regulation to the contrary, any money received by the state from any
settlement with BNP Paribas shall be used to offset any gap
elimination adjustment referred to in section 3602 of the education
law.

Section 2: Provides for an immediate effective date.

 JUSTIFICATION :

The Gap Elimination Adjustment (GEA) was introduced in 2010 as a
purported temporary solution to closing New York State's $10 billion
budget deficit. Effectively, it spreads out some of the state's fiscal
shortfall among all school districts by reducing the amount of
              

Foundation Aid that the state pays to the districts. In short, this
means reductions in jobs and programs for public schools.  While this
year's budget saw the GEA reduced by $3 billion, there is still a
hefty $1 billion to go. The question now arises of how New York State
can pay off any GEA while minimizing the burden on the districts.

With the French bank BNP Paribas' $8.9 billion settlement for
breaching US laws and sanctions recently announced, New York State
will receive over $3 billion. The settlement money will go directly
into the State's general fund, but its allocation going forward
remains unknown. This legislation would invest the $3 billion
settlement back into New York State's local schools. Under the
proposal, the $1 billion remaining in the GEA would be eliminated for
good.

Paying off the onerous and ill-conceived GEA with the BNP Paribas
settlement money could save public schools from another year of
funding reductions and unnecessary job cuts. The undue burden not only
rests on the shoulders of school districts but also on the students
who suffer in the aftermath of faculty and program reductions. The
temporary solution that was the GEA has run its course and should be
paid off once and for all.

 PRIOR LEGISLATIVE HISTORY :

2014: S.7939

 FISCAL IMPLICATIONS :

To be determined

 EFFECTIVE DATE :
This act shall take effect immediately.