§ 1132. Infrastructure development contracts. 1. The agency is hereby authorized, within the amounts appropriated, to enter into contracts with eligible applicants to provide funds for infrastructure improvements which are necessary for and will reduce the cost of the new construction or rehabilitation of affordable housing projects. Such contracts shall provide for grants by the agency to the eligible applicant for infrastructure improvements carried out under the contract. Grants shall be used to advance to or reimburse the eligible applicant for the actual and necessary cost of providing such infrastructure improvements, provided however that grants shall not be used to pay the administrative costs incurred by an eligible applicant for such improvements. Such payments, including payments to a municipality, shall be made in accordance with the agency's prompt payment statement adopted pursuant to section twenty-eight hundred eighty of the public authorities law. Payment to the eligible applicant shall not be conditioned on pre-payment for such improvements by the eligible applicant. No such grants shall exceed an amount equal to five thousand dollars for each unit of affordable housing to be constructed or rehabilitated in conjunction with such infrastructure improvements.

2. The agency shall not enter into a contract under this article except with an eligible applicant which has submitted an application to a state, federal or local entity to receive funds for the construction or rehabilitation of an affordable housing project and submits proof of such application to the agency. Such contract shall contain provisions that infrastructure development funds are dependent upon such application being approved. Any contract for infrastructure development funds shall contain such other information which the agency deems appropriate, and a plan acceptable to the agency which demonstrates that the infrastructure improvements shall be undertaken in conjunction with the new construction or rehabilitation of an affordable housing project, shall be completed in a timely fashion and will result in a corresponding reduction in the cost of such affordable housing to the occupants therein.

3. Moneys expended by the agency for the purposes of this article shall not substitute for locally funded operating or capital expenditures which the municipality would have allocated through its normal budgetary process to programs that provide infrastructure improvement in the absence of the funds provided for this program. All such moneys shall be used to increase locally funded operating or capital expenditures for this program to a level which is greater than the level which would have existed if such moneys had not been provided by the state. Nothing in this subdivision shall require the municipality to allocate funds for this program if in the municipality's judgment such allocation would require an increase in taxation or a reduction in other municipal services.

4. Notwithstanding the provisions of article one-A of the public authorities law, contracts entered into by the agency pursuant to this article shall not be subject to the provisions of article one-A of the public authorities law.