§ 123.00 Exclusion of self-liquidating indebtedness in ascertaining
the power of a municipality to contract indebtedness. a. As used in this
section: 1. The term "outstanding indebtedness", shall mean indebtedness
evidenced by bonds and bond anticipation notes.

2. The term "public improvement" shall mean either a single
improvement or a group of improvements, which are maintained for the
same purpose, including improvements used primarily in connection
therewith, and which are producing or are intended to produce revenue.

b. 1. In ascertaining the power of a municipality to contract
indebtedness, there may be excluded, to the extent permitted in
paragraph e of this section, the outstanding indebtedness contracted by
any such municipality for a public improvement or part thereof, or
service, owned or rendered by such municipality if such public
improvement or part thereof, or service, shall have yielded net revenue
to such municipality during the preceding fiscal year in a sum equal to
twenty-five per centum or more of the amount required in such year for
the payment of the interest on and amortization of, or payment of, such
outstanding indebtedness.

2. The outstanding indebtedness of a district corporation, as the term
"district corporation" is defined in paragraph a of section 102.00 of
this chapter, contracted on or after January first, nineteen hundred
thirty-nine, may be excluded, to the extent permitted in paragraph e of
this section, in ascertaining the indebtedness of a city or village
within which, or of a town within the unincorporated area of which, such
district corporation is situated in whole or in part, if such
outstanding indebtedness was contracted for a public improvement or part
thereof, or service, owned or rendered by such district corporation and
if such public improvement or part thereof, or service, shall have
yielded net revenue to such district corporation during the preceding
fiscal year of the district corporation in a sum equal to twenty-five
per centum or more of the amount required in such year for the payment
of the interest on and amortization of, or payment of, such outstanding
indebtedness.

3. In ascertaining the power of a county or town to contract
indebtedness, there may be excluded, to the extent permitted in
paragraph e of this section, the outstanding indebtedness contracted by
any such county or town on behalf of an improvement district for a
public improvement or part thereof, or service, owned or rendered by
such district if such public improvement or part thereof, or service,
shall have yielded net revenue to such district during the preceding
fiscal year in a sum equal to twenty-five per centum or more of the
amount required in such year for the payment of the interest on and
amortization of, or payment of, such outstanding indebtedness.

c. 1. A proportionate exclusion of indebtedness contracted or proposed
to be contracted also may be granted for the period from the date when
such indebtedness is first contracted or to be contracted for a public
improvement or part thereof, or service, owned or rendered or to be
owned or rendered by a municipality, district corporation, or county or
town improvement district through the first year of operation of such
public improvement or part thereof, or service. The amount of such
exclusion shall be computed in the manner provided in this section on
the basis of estimated net revenue for the first year of operation. Such
estimated net revenue shall be determined by deducting from the gross
revenues estimated to be received during the first year of operation of
such public improvement or part thereof, or service, all estimated costs
of operation, maintenance and repairs for such year. The amount of any
such proportionate exclusion shall not exceed seventy-five per centum of
the amount which would be excluded if the computation were made on the
basis of net revenue instead of estimated net revenue. The term
"indebtedness," as used in this subdivision means indebtedness which
would be included in ascertaining the power of a municipality to
contract indebtedness, including indebtedness evidenced or to be
evidenced by bonds or bond anticipation notes.

2. A proportionate exclusion of outstanding indebtedness may be
granted, to the extent permitted in paragraph e of this section, in the
fiscal year in which the first year of operation of a public improvement
or part thereof, or service, is completed if the improvement or part
thereof, or service, shall have yielded net revenue during the first
year of operation in a sum equal to twenty-five per centum or more of
the amount required in such year for the payment of the interest on and
amortization of, or payment of, such indebtedness.

d. The net revenue of a public improvement or part thereof, or
service, shall be determined by deducting from its gross revenues of a
year all costs of operation, maintenance and repairs for such year.
Taxes, assessments, and subsidies by the municipality or district
corporation, shall not be included in computing gross revenues.

e. The maximum amount of any such outstanding indebtedness which may
be so excluded shall be in the same proportion to the total amount of
any such indebtedness as the amount of any such net revenue shall bear
to the amount required in any such year for the payment of the interest
on and amortization of, or payment of, any such indebtedness.

f. Where an exclusion has been granted pursuant to this section, the
revenues of such public improvement or part thereof, or service, for the
period for which the exclusion is granted, shall be applied to and
actually used for payment of all costs of operation, maintenance and
repairs for such period, and payment of the amounts required in such
period for interest on and amortization of or redemption of the
indebtedness excluded, or such revenues shall be deposited in a special
fund to be used solely for such payments. The application and use of
such payments or the deposits required therefor shall not prohibit a
municipality, district corporation or improvement district from using
any such revenues, in excess of such payments or deposits, for any
lawful purpose of the municipality, district corporation or improvement
district.

g. An application may be filed with the state comptroller for the
purpose of obtaining an exclusion of such indebtedness. Such application
shall be made on behalf of any municipality by its chief fiscal officer
in his discretion, or by its chief fiscal officer on the direction of
its finance board, and on behalf of any district corporation by its
finance board. If the finance board of a district corporation shall
refuse or fail to make such application, the application may be made by
the municipality seeking an exclusion of indebtedness. The application
shall be verified by the chief fiscal officer or finance board making
the application. The application shall be in such form and shall contain
such information as shall be prescribed by the state comptroller.

h. Within fifteen days after the filing of such application with the
state comptroller, such chief fiscal officer or such finance board
making the application shall cause a notice to be published that such
application has been filed with the state comptroller. Such notice shall
be published in the official newspaper or newspapers of the municipality
or district corporation, or if there be no such newspaper or newspapers,
then the finance board of the municipality or district corporation shall
designate one or more newspapers having a general circulation in such
municipality or district corporation for the publication of such notice.
The notice also shall contain a statement of the amount of indebtedness
for which a proportionate exclusion is sought and a brief description of
the public improvement or part thereof, or service. Proof of publication
of such notice shall be filed in the office of the state comptroller. A
copy of the application and of all financial statements, documents,
computations and other data and information which will be submitted by
the chief fiscal officer of such municipality or the finance board of
such district corporation to the state comptroller in support of such
application shall be filed in the office of such chief fiscal officer or
finance board and shall be public records.

i. After the filing of such application, the state comptroller shall
review the facts set forth therein. The state comptroller shall have the
power to examine the accounts and records of the municipality, district
corporation or improvement district with respect to such public
improvement or part thereof, or service. He may also require the chief
fiscal officer and other public officers, boards and agencies of such
municipality, district corporation or improvement district to furnish
such additional data and information in their possession as he deems
necessary to enable him to make his determination.

j. In the case of a municipality, the state comptroller shall issue a
written certificate setting forth his determination as to the extent to
which any such indebtedness may be excluded. If an exclusion is allowed
by the state comptroller, such certificate shall constitute the
authorization for the exclusion of such amount of such indebtedness in
ascertaining the power of such municipality to contract indebtedness. In
the case of a district corporation, the state comptroller shall issue a
written certificate setting forth his determination as to the extent to
which any such indebtedness shall be excluded in ascertaining the
indebtedness of a city or village within which, or of a town within the
unincorporated area of which, such district corporation is situated in
whole or in part. If an exclusion is allowed by the state comptroller,
such certificate shall constitute the authorization for the exclusion of
such amount of such indebtedness in ascertaining the power of such city,
village or town to contract indebtedness. If the state comptroller
disallows the application, the certificate shall set forth the reasons
for such disallowance. The determination of the state comptroller shall
be conclusive. The certificate of the state comptroller shall not be
issued until ten days after the filing of such proof of publication in
the office of the state comptroller and shall be issued within
forty-five days after such filing. The certificate of the state
comptroller granting an exclusion shall be effective until the first day
of the fourth month following the close of the fiscal year in which the
application is made, except that where the application is made in
connection with a public improvement or part thereof, or service, which
has not been in operation for one year the certificate shall be
effective until the first day of the fourth month following the close of
the first year of operation. The certificate of the state comptroller
shall be executed under his hand and seal in duplicate. One of such
certificates shall be filed in the department of audit and control and
the other in the office of the chief fiscal officer of such municipality
or in the office of the finance board of the district corporation. Both
of such certificates shall be public records.

k. The provisions of this section shall not affect or impair any
existing exclusions of indebtedness, or the power to exclude
indebtedness granted by any other provision of this chapter or the
constitution.