S. 4601--A 2
requirements of article eight of the state constitution and section
21.00 of this [chapter] TITLE. If the finance board has determined to
provide for substantially level or declining debt service on the bonds
in anticipation of which such notes are authorized to be issued, such
notes shall be redeemed in an amount at least equal in each year to the
annual installment which would be paid in such year if such notes were
serial bonds issued at a five percent rate of interest for the remaining
period of probable usefulness of the object or purpose for which issued,
or, if less, the remaining portion of the maximum authorized maturity of
such bonds, and all annual debt service payments were equal over the
life of such bonds. In any event, bond anticipation notes shall not be
renewed after the receipt of the proceeds from the sale of the bonds in
anticipation of which such notes were issued. Notwithstanding the
provisions of this paragraph[,]: 1. bond anticipation notes issued in
anticipation of the receipt of the proceeds of the sale of bonds for the
purpose of providing moneys out of which to make loans to limited profit
housing companies pursuant to article two of the private housing finance
law, or loans to owners of existing multiple dwellings pursuant to arti-
cle eight of the private housing finance law, or for the purpose of
providing moneys for the effectuating of any urban renewal program or
part thereof pursuant to the general municipal law, or the renewals of
such notes, may extend not more than five years beyond the original date
of issue of such notes; AND 2. RENEWALS OF BOND ANTICIPATION NOTES
ISSUED ORIGINALLY DURING CALENDAR YEAR TWO THOUSAND FOUR OR TWO THOUSAND
FIVE MAY NOT EXTEND MORE THAN SEVEN YEARS BEYOND THE ORIGINAL DATE OF
ISSUE OF SUCH BOND ANTICIPATION NOTES.
S 2. Subdivision 5 of paragraph d of section 57.00 of the local
finance law, as amended by chapter 413 of the laws of 1991, is amended
to read as follows:
5. Prescribing the requirements for the alternative and permissive
publication or circularization of notices for the sale of bonds of an
issue not exceeding [one] FIVE million dollars, as permitted in section
63.00 of this chapter.
S 3. Paragraphs a and b of section 62.10 of the local finance law,
paragraph a as amended by chapter 413 of the laws of 1991 and paragraph
b as amended by chapter 179 of the laws of 1996, are amended to read as
follows:
a. Notwithstanding any other provisions of this chapter, if the prin-
cipal amount for an object or purpose, or objects or purposes, or class
or classes thereof, to be financed by the issuance of bonds does not
exceed [one] FIVE million dollars in the aggregate, a single bond, to be
known as a statutory installment bond, may be issued for the full prin-
cipal amount, if the issue is to be sold at private sale. Any such bond
shall provide for the payment of both the principal and interest upon
presentation of the bond for notation of such payments thereon, except
that such a statutory installment bond may be issued and sold to the
United States of America or any agency thereof in any amount and that
such principal and interest shall be payable without such presentation.
b. A statutory installment bond, in bearer, if authorized by federal
law, or registered form, shall be in terms, form and contents, substan-
tially as follows:
Statutory United States of America $ (Here insert full
Installment State of New York amount of bond
Bond County of issue)
S. 4601--A 3
(Here insert name of the issuer)
(Here insert type of bond and year, such as "Highway Machinery Serial
Bond--1976")
The (Here insert name of the issuer), in the County of ___________, a
(Here insert whether a municipality, school district, fire district or
other district corporation) of the State of New York, hereby acknowl-
edges itself indebted and for value received promises to pay to (Here
insert "bearer" or the name of registered owner if the bond is issued in
registered form) the principal sum of __________________ Dollars
($________) (in (_____) equal annual installments of __________ Dollars
($________) on the ________ day of ____ in the years [19] 20__ __, to
[19] 20 __, inclusive)
or
(in________(___) annual installments (Here state the amounts, the annual
principal payment date, and the years in which the principal payments
will be made. No annual installment shall be more than fifty per centum
in excess of the smallest prior installment unless the finance board has
determined to provide for substantially level or declining annual debt
service, in which case the aggregate amount of debt service payable in
any year shall not exceed the lowest aggregate amount of debt service
payable in any prior year by more than five percent))
and to pay interest on the unpaid balance of such principal sum at the
rate of ______ per centum (______%) per annum, semi-annually on the
_________ days of ________ and ______ in each year from the date of this
bond until it matures. Interest will not be paid on any installment of
principal, or of interest, after the due date thereof. Both the install-
ments of principal of and the interest on this bond will be paid to the
(Here insert "bearer" or "registered owner" if the bond is issued in
registered form) of this bond in lawful money of the United States* only
upon presentation of this bond for notation of any such payment thereon*
(omit language enclosed within asterisks when the bond is sold to the
United States of America or an agency thereof) at the office of ________
(Here insert place or places of payment)
This bond is a statutory installment bond, the principal sum of which
cannot exceed [One Million Dollars ($1,000,000)] FIVE MILLION DOLLARS
($5,000,000) unless it is issued and sold to the United States of Ameri-
ca or any agency thereof, and is issued pursuant to section 62.10 of the
Local Finance Law and pursuant to a bond resolution entitled "(Here
insert title)", duly adopted by the (Here insert name of the finance
board) of such (Here insert name of the issuer) on the ________ day of
___, [19] 20 __. This bond may not be converted into a coupon bond.
The faith and credit of such (Here insert name of the issuer) are
hereby irrevocably pledged for the punctual payment of the installments
of principal of and the interest on this bond according to its terms.
It is hereby certified and recited that all conditions, acts and
things required by the Constitution and statutes of the State of New
York to exist, to have happened and to have been performed precedent to
and in the issuance of this bond, exist, have happened and have been
performed, and that this bond, together with all other indebtedness of
such (Here insert name of the issuer) is within every debt and other
limit prescribed by the Constitution and laws of such State.
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In Witness Whereof, the (Here insert name of the issuer) has caused
this bond to be signed by its (Here insert title of officer) and its
(Here insert title of officer), and its corporate seal to be hereunto
affixed and attested by its (Here insert title of attesting officer) and
to be dated as of the ________ day of _______, [19] 20 __.
(Name of municipality, school
district, fire district or
(Corporate Seal) other district corporation)
By: (Signature and title of officer)
and (Signature and title of officer)
Attest:
(Signature and title of attesting officer)
*PRINCIPAL PAYMENTS
Amount Date Received Received by
$________ __________, [19] 20 __ _____________________
(Signature of person
receiving payment)
$________ __________, [19] 20 __ _____________________
(continue as necessary)
INTEREST PAYMENTS
Amount Interest to Received by
$_______ ___________, [19] 20 __ _____________________
(Signature of person
receiving payment)
$_______ ___________, [19] 20 __ _____________________
(continue as necessary)
The notations of principal and interest payments may be made on the
face of the bond, on the reverse side, or on a sheet attached thereto*
(omit language enclosed within asterisks when the bond is sold to the
United States of America or an agency thereof).
S 4. The section heading and paragraph a of section 63.00 of the local
finance law, as amended by chapter 413 of the laws of 1991, are amended
to read as follows:
Bond issues of [one million dollars or less] CERTAIN AMOUNTS. a. When
sold at public sale, bonds of an issue not exceeding [one] FIVE million
dollars, whether of a single issue or sold as a single issue pursuant to
paragraph c of section 57.00 of this chapter, having a maximum maturity
of not more than five years measured from the date of the bonds, need
not be sold in accordance with the requirements of section 58.00 of this
chapter for publication of the notice of sale but may be sold upon such
publication or circularization of such notice as shall be prescribed by
the state comptroller in the rule or order referred to in paragraph d of
section 57.00 of this chapter.
S 5. Paragraph b of section 63.00 of the local finance law, as amended
by chapter 413 of the laws of 1991, is amended to read as follows:
b. Bonds of an issue not exceeding [one] FIVE million dollars, whether
of a single issue or sold as a single issue pursuant to paragraph c of
section 57.00 of this chapter, may be sold at private sale without limi-
tation as to rate of interest, provided, however, that the total amount
of bonds which may be sold at private sale in any fiscal year of the
S. 4601--A 5
municipality, school district or district corporation shall not exceed
[one] FIVE million dollars, and provided further that if such bonds have
a maximum maturity of more than ten years measured from the date of the
bonds, the issuer shall furnish the purchaser a written opinion, signed
by any person regularly admitted to practice as an attorney and counse-
lor in the courts of record of this state, that such bonds have been
duly authorized and issued in accordance with the constitution and laws
of this state and are valid and legally binding obligations of the
issuer. Such legal opinion shall be furnished at the expense of the
issuer and a duplicate original thereof shall be filed with the officer
of the issuer who is required to keep a record of such bonds pursuant to
section 163.00 of this chapter.
S 6. On or before December 31, 2011, the comptroller shall deliver to
the governor, the chair of the senate finance committee and the chair of
the assembly ways and means committee a report on the private sales of
bonds conducted pursuant to paragraph b of section 63.00 of the local
finance law from the effective date of this act through June 30, 2011.
Such report may include recommendations with respect to such private
sales of bonds as the comptroller deems appropriate. Every municipality,
school district and district corporation which conducts such a private
sale of bonds shall file a report of such sale with the comptroller at
such time, in such manner, and containing such information as may be
required by the comptroller.
S 7. Subparagraphs (b) and (d) of subdivision 2 of paragraph b of
section 58.00 of the local finance law, as amended by chapter 179 of the
laws of 1996, are amended to read as follows:
(b) In lieu of the statement of the time and date for the opening of
bids required by subparagraph (a) of this subdivision, a statement (i)
that the time and date for the opening of bids will be provided on not
less than twenty-four hours prior notice by means of a supplemental
notice of sale and indicating the manner in which such supplemental
notice will be provided, or (ii) setting a time and date for the opening
of bids, stating that notice of a change in the time or date for the
opening of bids may be provided not less than [twenty-four hours] ONE
HOUR prior to the time originally scheduled for the opening of bids by
means of a supplemental notice of sale and indicating the manner in
which such supplemental notice will be provided. Where notice is given
that the time or date of a sale will be changed without specifying the
new time or date, notice of the new time or date of sale must be
provided by means of a second supplemental notice of sale at least
[twenty-four hours] ONE HOUR prior to the new time for the opening of
bids.
(d) The supplemental notice of sale shall be provided by transmittal
over a definitive trade wire service of the municipal bond industry
which, in general, makes available information regarding activity and
sales of municipal bonds and is generally available to participants in
the municipal bond industry, or by publication in the financial newspa-
per published and circulated in the city of New York which the state
comptroller, in the rule or order referred to in paragraph d of section
57.00 of this article, shall designate for such publication. In addi-
tion, WHEN THE TIME AND DATE FOR THE OPENING OF BIDS IS DELAYED BY MORE
THAN TWENTY-FOUR HOURS, public notice of the time and date set for the
opening of bids in the supplemental notice of sale shall be given to the
news media and shall be posted in one or more designated public
locations within the issuing municipality, school district or district
corporation at least twenty-four hours prior to the time and date set
S. 4601--A 6
for the opening of bids; provided however, that such public notice shall
not be construed to require publication as a legal notice.
S 8. Subdivision 3 of paragraph c of section 58.00 of the local
finance law, as amended by chapter 469 of the laws of 1998, is amended
to read as follows:
3. A requirement that as a condition precedent to the consideration of
his OR HER bid, each bidder shall deposit with such official as the
agency in charge of the sale may designate, a certified or cashier's
check drawn upon an incorporated bank or trust company to the order of
the municipality, school district or district corporation or such offi-
cial, for [not] THE AMOUNT SPECIFIED IN THE NOTICE, BUT IN NO EVENT less
than ONE-HALF OF one per centum of the amount of bonds to be bid
for. Such notice may also provide that, in lieu of a certified or cash-
ier's check, bidders may furnish as security CASH IN SUCH AMOUNT REMIT-
TED BY WIRE TRANSFER TO AN ACCOUNT SPECIFIED IN THE NOTICE OR an eligi-
ble surety bond or an eligible letter of credit, approved by such
official as to form, sufficiency, and manner of execution. For purposes
of this section, "eligible surety bond" shall mean a bond executed by
[a] AN insurance company authorized to do business in this state, the
claims-paying ability of which is rated in the highest rating category
by at least two nationally recognized statistical rating organizations;
and "eligible letter of credit" shall mean an irrevocable letter of
credit issued in favor of the municipality, school district or district
corporation, for a term not to exceed ninety days by a bank, as that
term is defined in section two of the banking law, whose commercial
paper and other unsecured short-term debt obligations (or, in the case
of a bank which is the principal subsidiary of a holding company, whose
holding company's commercial paper and other unsecured short-term debt
obligations) are rated in one of the three highest rating categories
(based on the credit of such bank or holding company) by at least one
nationally recognized statistical rating organization or by a bank that
is in compliance with applicable federal minimum risk-based capital
requirements.
S 9. Paragraph c of section 59.00 of the local finance law, as amended
by chapter 469 of the laws of 1998, is amended to read as follows:
c. When the bidder to whom the bonds are to be awarded has been ascer-
tained, the municipality, school district or district corporation shall
promptly return all security to the persons furnishing the same, except
the security furnished by such bidder. Such bidder shall be promptly
notified of the award to him OR HER, and if he OR SHE refuses or
neglects to pay either the agreed price for the bonds less the amount of
any certified [or] CHECK, cashier's check OR CASH furnished as security,
or the agreed price in full for the bonds if an eligible surety bond or
eligible letter of credit was furnished as security as provided in
subdivision three of paragraph c of section 58.00 of this [article]
TITLE, the security furnished by him OR HER, in whatever form, shall be
forfeited to and retained by or claimed against or drawn upon by, the
municipality, school district or district corporation as liquidated
damages for such neglect or refusal. However, if the notice of sale
shall contain the statement set forth in paragraph e of section 58.00 of
this [chapter] TITLE and if prior to the delivery of the bonds any
income tax law of the United States of America shall provide that the
interest on such bonds is taxable, or shall be taxable at a future date,
for federal income tax purposes, then, at the request of such bidder the
security accompanying his OR HER bid shall be returned to him OR HER and
S. 4601--A 7
he OR SHE shall be relieved of his OR HER contractual obligations aris-
ing from the acceptance of his OR HER bid.
S 10. Section 10.00 of the local finance law, as amended by chapter
341 of the laws of 2007, is amended to read as follows:
S 10.00 Power of municipalities, school districts and district corpo-
rations to contract indebtedness. In addition to the power to contract
indebtedness pursuant to sections 24.00, 25.00, 25.10 [and], 29.00 AND
29.20 of this article, a municipality, school district or district
corporation shall have the power to contract indebtedness respectively
for any municipal, school district or district corporation object or
purpose set forth in paragraph a of section 11.00 of this title, or for
a class of such objects or purposes when authorized under the provisions
of section 31.00 of this article, if it is authorized by law to expend
money for or to accomplish such object or purpose; provided, however,
that it shall not be able to contract indebtedness to a greater extent
than it is authorized by law to spend money for such object or purpose
or class of such objects or purposes and provided also that this section
shall not relieve any such unit of government of any duty imposed by law
to include in its annual budget or tax levy or otherwise to pay from
current funds all or part of any expenditure that it may make for such
object or purpose or class of such objects or purposes.
S 11. Subdivision 40 of paragraph a of section 11.00 of the local
finance law, as amended by chapter 837 of the laws of 1945, is amended
to read as follows:
40. Miscellaneous expenditures. Any object or purpose set forth in
section 29.00 OR 29.20 of this [chapter] ARTICLE, if such object or
purpose is to be financed by the issuance of budget notes OR DEFICIENCY
NOTES, three years.
S 12. The local finance law is amended by adding a new section 29.20
to read as follows:
S 29.20 DEFICIENCY NOTES. A. ANY MUNICIPALITY, SCHOOL DISTRICT OR
DISTRICT CORPORATION MAY ISSUE DEFICIENCY NOTES DURING ANY FISCAL YEAR
TO FINANCE A DEFICIENCY IN ANY FUND OR FUNDS ARISING FROM REVENUES BEING
LESS THAN THE AMOUNT ESTIMATED IN THE BUDGET FOR SUCH CURRENT FISCAL
YEAR. SUCH NOTES MAY BE ISSUED IN SUCH AMOUNT AS THE FINANCE BOARD SHALL
DETERMINE TO BE NECESSARY, BUT NOT TO EXCEED FIVE PER CENTUM OF THE
AMOUNT OF THE ANNUAL BUDGET OF SUCH MUNICIPALITY, SCHOOL DISTRICT OR
DISTRICT CORPORATION.
B. DEFICIENCY NOTES MAY BE RENEWED FROM TIME TO TIME, BUT SUCH NOTES,
INCLUDING THE RENEWALS THEREOF, SHALL MATURE NOT LATER THAN THE CLOSE OF
THE FISCAL YEAR SUCCEEDING THE FISCAL YEAR IN WHICH SUCH NOTES ARE
ISSUED. HOWEVER, SUCH NOTES, INCLUDING THE RENEWALS THEREOF, MAY MATURE
NOT LATER THAN THE CLOSE OF THE SECOND FISCAL YEAR SUCCEEDING THE FISCAL
YEAR IN WHICH SUCH NOTES ARE ISSUED, WHEN AUTHORIZED AND ISSUED DURING A
FISCAL YEAR AT A TIME SUBSEQUENT TO THE DATE OF THE ADOPTION OF THE
ANNUAL BUDGET FOR THE NEXT SUCCEEDING FISCAL YEAR, BY A MUNICIPALITY,
SCHOOL DISTRICT OR DISTRICT CORPORATION IN WHICH THE TOTAL AMOUNT OF
TAXES OR ASSESSMENTS LEVIED FOR A FISCAL YEAR IS DETERMINED PURSUANT TO
AN ANNUAL BUDGET ADOPTED DURING THE FISCAL YEAR PRECEDING SUCH FISCAL
YEAR.
C. DEFICIENCY NOTES SHALL BE REDEEMED OUT OF THE TAXES OR ASSESSMENTS
LEVIED OR TO BE LEVIED FOR THE FISCAL YEAR IN WHICH THEY MATURE OR OUT
OF OTHER REVENUES OF THAT FISCAL YEAR LEGALLY AVAILABLE FOR THAT
PURPOSE.
D. NOTWITHSTANDING THE PROVISIONS OF ANY GENERAL, SPECIAL OR LOCAL
LAW, ANY MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION, WHICH
S. 4601--A 8
HAS THE POWER TO ISSUE DEFICIENCY NOTES UNDER THIS SECTION, SHALL TO THE
SAME EXTENT HAVE THE POWER TO APPROPRIATE AND EXPEND MONEY RECEIVED FROM
THE PROCEEDS OF THE SALE OF DEFICIENCY NOTES FOR THE PURPOSES OF THE
FUND OR FUNDS FOR WHICH SUCH NOTES ARE ISSUED.
E. THE PROCEEDS OF SUCH NOTES SHALL BE USED ONLY TO FINANCE A DEFI-
CIENCY IN ANY FUND OR FUNDS ARISING FROM REVENUES BEING LESS THAN THE
AMOUNT ESTIMATED IN THE BUDGET FOR THE CURRENT FISCAL YEAR OR, IN THE
EVENT ALL OR A PORTION OF THE PROCEEDS ARE NOT EXPENDED FOR THAT
PURPOSE, THE AMOUNT NOT SO EXPENDED SHALL BE USED ONLY FOR THE PAYMENT
OF PRINCIPAL OF AND INTEREST ON SUCH NOTES. IN DETERMINING WHETHER ALL
OR ANY PORTION OF THE PROCEEDS OF DEFICIENCY NOTES REMAINED UNEXPENDED
AT THE CLOSE OF A FISCAL YEAR, THE MONEYS IN SUCH FUND OR FUNDS OTHER
THAN THE PROCEEDS OF SUCH NOTES SHALL BE DEEMED TO BE EXPENDED PRIOR TO
THE PROCEEDS OF SUCH NOTES.
F. ANY MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION WHICH
SHALL RENEW DEFICIENCY NOTES PURSUANT TO THE PROVISIONS OF PARAGRAPH B
OF THIS SECTION, OR WHICH SHALL ISSUE DEFICIENCY NOTES IN TWO OR MORE
SUCCESSIVE FISCAL YEARS, SHALL BE SUBJECT TO THE REQUIREMENTS OF PARA-
GRAPHS C, D, E AND F OF SECTION 10.10 OF THIS ARTICLE FOR THREE YEARS
COMMENCING WITH THE FISCAL YEAR IN WHICH SUCH NOTES WERE RENEWED OR EACH
SECOND SUCCESSIVE FISCAL YEAR IN WHICH SUCH NOTES WERE ISSUED.
S 13. The local finance law is amended by adding a new section 40.10
to read as follows:
S 40.10 DEFICIENCY NOTE RESOLUTION; FORM AND CONTENTS; AUTHORIZATION
THEREOF. A. THE ISSUANCE OF DEFICIENCY NOTES OR RENEWALS THEREOF SHALL
BE AUTHORIZED BY A "DEFICIENCY NOTE RESOLUTION". EACH SUCH RESOLUTION
SHALL BE PROPERLY DATED AND SHALL BEAR A TITLE WHICH WILL INDICATE THAT
IT RELATES TO A DEFICIENCY NOTE.
B. ANY MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION MAY ADOPT
ONE OR MORE DEFICIENCY NOTE RESOLUTIONS AUTHORIZING THE ISSUANCE OF
DEFICIENCY NOTES FOR THE SPECIFIC OBJECT OR PURPOSE OF COVERING A DEFI-
CIENCY IN ANY FUND OR FUNDS ARISING FROM REVENUES BEING LESS THAN THE
AMOUNT ESTIMATED IN THE BUDGET FOR THE CURRENT FISCAL YEAR OF THE MUNI-
CIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION.
C. A DEFICIENCY NOTE RESOLUTION SHALL CONTAIN, IN SUBSTANCE, AT LEAST
THE FOLLOWING PROVISIONS:
1. A STATEMENT OF THE SPECIFIC OBJECT OR PURPOSE FOR WHICH THE DEFI-
CIENCY NOTES TO BE AUTHORIZED BY SUCH RESOLUTION ARE TO BE ISSUED;
2. A STATEMENT OF THE AMOUNT OF DEFICIENCY NOTES TO BE ISSUED, THE
AMOUNT AND THE CAUSE OF THE DEFICIENCY IN REVENUES, AND THAT NO OTHER
SOURCE OF FINANCING IS AVAILABLE;
3. A STATEMENT OF THE PERIOD OF MATURITY OF SUCH NOTES; AND
4. IF SUCH NOTES ARE TO BE ISSUED IN RENEWAL OF OTHER NOTES, A STATE-
MENT THAT THE DATE OF MATURITY OF SUCH NOTES SHALL NOT EXTEND BEYOND THE
APPLICABLE PERIOD PROVIDED IN SECTION 29.20 OF THIS ARTICLE FOR THE
MATURITY OF SUCH NOTES.
D. EVERY DEFICIENCY NOTE RESOLUTION SHALL BE ADOPTED BY AT LEAST A
MAJORITY VOTE OF THE VOTING STRENGTH OF THE FINANCE BOARD. A TWO-THIRDS
VOTE OF THE VOTING STRENGTH OF THE FINANCE BOARD SHALL BE REQUIRED TO
ADOPT A DEFICIENCY NOTE RESOLUTION AUTHORIZING THE ISSUANCE OF RENEWAL
NOTES OR AUTHORIZING THE ISSUANCE OF DEFICIENCY NOTES IN A YEAR NEXT
SUCCEEDING A YEAR IN WHICH DEFICIENCY NOTES WERE ISSUED.
S 14. This act shall take effect immediately; provided, however, that
the provisions of sections two, three, four and five of this act shall
expire June 1, 2012 when upon such date the provisions of such sections
shall be deemed repealed.
