(a) Monies received from the chargeback to the counties of residence of nonresident students of amounts on account of capital costs of the local sponsor shall be deposited in the community college fund in accordance with subdivision 5-b of section 6304 of the Education Law and shall be separately accounted for within said fund, and be used:

1. (1) to meet the sponsor's share of the costs of acquisition of land and the acquisition, construction or rehabilitation of buildings;
2. (2) to reduce indebtedness of the sponsor incurred for capital costs of a community college;
3. (3) to pay the sponsor's costs of financing such indebtedness; and
4. (4) for the sponsor's share of such other purposes as are normally permitted within an approved capital construction budget.

(b) Capital chargeback monies may be expended to pay for up to one-half the purchase price of equipment. Such purchases shall be limited to those items of equipment which require significant expenditure of funds. For purposes of this section, equipment shall include only those articles that:

1. (1) are a tangible asset;
2. (2) possess a useful life of at least two years;
3. (3) have a unit cost of $1,000 or more; or

4. (4) are purchased in quantity for a single educational or administrative purpose, have a unit cost of $500 or more, and an aggregate value for all units purchased for such single purpose of $10,000 or more.

   In no event shall expenditures for equipment, made with capital chargeback monies, qualify for State operating aid.

(e) Effective with the academic terms commencing on or before January 1, 1976, the annual charge to the counties by the college, up to a maximum of $300, shall be apportioned according to the following schedule:

1. (1) for full-time students—one half of the approved charge per term for those colleges operating on the semester system up to the approved amount, and one third per term for those colleges on the quarter system up to the approved amount; and
2. (2) for part-time students where the approved rate is $300—$10 per semester credit hour or $6.67 per quarter hour; where the approved rate is $200—$6.67 per semester credit hour or $4.43 per quarter credit hour.

(f) Each community college with the submission of its annual budget shall request a capital chargeback rate. Such application shall include justification for approval of the charge, which shall indicate the amount of the approved capital expenses of the college and the chargeback reserves on hand. Determination of chargeback amount shall be based on the following guidelines:

1. (1) any community college which has received State University trustee authorization for a capital project as included in the capital construction budget request for purposes set forth in subdivision (a) of this section, may charge $300 annually until the fund equals the local share and the State's share if the local sponsor is authorized to finance the State's share of any such approved project. Such college may deduct the amount of the local share and the State's share of such approved project from the accumulated fund prior to calculating the additional capital charge referred to in paragraph (2) of this subdivision; and
2. (2) any college which is using at least 50 percent of the capital charge monies collected in the current year for the sponsor's share of expenditures as set forth in subdivision (a) of this section may charge $300 during such year; provided that if the fund exceeds $500,000 but is less than $1,000,000 the college may charge $200 annually, and if the fund is equal to or greater than $1,000,000 no charge may be collected. Any college using less than 50 percent of the monies currently collected may not collect a capital charge.