(a) The maximum amount of State financial aid for capital costs of community colleges shall be limited to one-half of the amount of capital expenditures approved by the State university trustees. Such expenditures shall be deemed to include the value of any property or services furnished by a local sponsor or sponsors as its or their share of capital costs as fixed by the State University trustees with the approval of the Director of the Budget in accordance with law. Proposed capital expenditures shall be submitted for approval in the form of capital budgets. In their determination on such proposals, the State University trustees will give due consideration to the master plan, the relationship of the proposed expenditures to the facilities to be furnished thereby and the need for such facilities with respect to the potential number of students and the area to be served by the community college concerned. In any case, where a local sponsor has received State financial assistance based on expenditures for capital facilities of a community college and shall thereafter dispose of such facilities either by sale, other than in part payment for a new article, or by discontinuance of their use for community college purposes, State financial assistance for costs of any new capital facilities shall be limited by crediting to such assistance otherwise payable an amount computed as follows: one half, or if the State contributed less than one half, such lesser percentage of original capital costs as may have been paid by the State, of the value of such facilities at the time so disposed of as fixed by the State University trustees with the approval of the Director of the Budget, but in no event shall such value be fixed for such purpose at more than the original cost of such facilities nor less than the amount actually received by the local sponsor upon sale thereof.

(b) Upon approval by the State University trustees, the capital construction budget shall be forwarded to the Governor with a request for inclusion in the Executive Budget request to the Legislature. Where an appropriation is passed for a construction project, the local sponsor may arrange for financing and construction with the Dormitory Authority of the State of New York with the approval of the State University trustees and the Director of the Budget. The State University trustees will not approve any application or agreement for financing unless an appropriation has been made for the project. The capital construction will be financed by the local sponsor with the approval of the Dormitory Authority or pursuant to the terms of an agreement between the local sponsor and the Dormitory Authority with the approval of the Director of the Budget and the State University trustees. The State shall annually thereafter appropriate and pay to the local sponsor 50 percent of the costs of financing, to be disposed of pursuant to the foregoing agreements or approvals.