
    Grace L. Dubendorf et al., Doing Business as Gra-Mar Hall and Gra-Mar-on-the-Lake, Respondents-Appellants, v New York State Education Department et al., Appellants-Respondents.
   Judgment unanimously modified and, as modified, affirmed, without costs, in accordance with the following memorandum: We agree with Special Term’s holdings that article 89 of the Education Law is constitutional and that the complaint should not be dismissed. Special Term erred, however, in directing an administrative hearing. The claims of plaintiffs involve alleged rights under a contract in which the State Education Department agreed to reimburse them for tuition and for maintenance costs in return for plaintiffs’ agreement to operate two not-for-profit facilities for the education and care of handicapped children. There is no authority for an administrative hearing. Disputed factual questions including the reasonableness of determinations made by the Department of Audit and Control may be resolved in the instant action. (Appeals from judgment of Monroe Supreme Court—declaratory judgment.) Present—Hancock, Jr., J. P., Schnepp, Callahan, Doerr and Witmer, JJ. [97 Misc 2d 382.]  