§ 1689-c. Capital facility program, authority financing of eligible
projects. 1. The authority is authorized to finance eligible capital
facility program projects pursuant to the Jobs two thousand for New York
State (J2K) Act.

2. (a) Notwithstanding the provisions of any general or special law to
the contrary, and subject to the making of annual appropriations
therefor by the legislature, in order to assist the authority in the
financing and refinancing of such eligible capital facility program
projects, the director of the budget is authorized to enter into one or
more service contracts, none of which shall exceed thirty years in
duration, with the authority, upon such terms as the director of the
budget and the dormitory authority agree;

(b) Any service contract entered into pursuant to paragraph (a) of
this subdivision or any payments made or to be made thereunder may be
assigned and pledged by the authority as security for its bonds, notes,
or other obligations;

(c) Any such service contract shall provide that the obligation of the
director of the budget or of the state to fund or to pay the amounts
therein provided for shall not constitute a debt of the state within the
meaning of any constitutional or statutory provision in the event the
authority assigns or pledges the service contract payments as security
for its bonds, notes, or other obligations and shall be deemed executory
only to the extent moneys are available and that no liability shall be
incurred by the state beyond the moneys available for the purpose, and
that such obligation is subject to annual appropriation by the
legislature;

(d) Any service contract or contracts entered into pursuant to this
subdivision shall provide for state commitments to provide annually to
the authority a sum or sums, upon such terms and conditions as shall be
deemed appropriate by the director of the budget, to fund the principal,
interest, or other related expenses required for any such bonds, notes,
or other obligations.

(e) On or before November fifteenth of each year and again on or after
February fifteenth of each year, the authority shall submit, and
thereafter may resubmit, to the director of the budget, the state
comptroller, the executive director of the New York state office of
science, technology and academic research, the chair of the senate
finance committee and the chair of the assembly ways and means committee
a report setting forth the amounts, if any, of all annual payments
estimated to be appropriated to the authority pursuant to such service
contracts between the authority and the director of the division of the
budget pursuant to this subdivision.

3. (a) To obtain funds for the purposes of this subdivision, the
authority shall have power from time to time, in accordance with a
schedule certified to the authority by the executive director of the New
York state office of science, technology and academic research
identifying eligible capital facility program projects approved for
payment pursuant to the Jobs two thousand for New York State (J2K) Act,
to issue negotiable bonds or notes of the authority. Unless the context
shall clearly indicate otherwise, whenever the words "bond" or "bonds"
are used in this section, such words shall include a note or notes of
the authority.

(b) The authority shall not issue any bonds or notes in an amount in
excess of forty-seven million five hundred thousand dollars for the
purposes of this subdivision, excluding a principal amount of bonds or
notes issued to fund one or more debt service reserve funds, to pay for
the costs of issuance of such bonds, and bonds or notes issued to refund
or otherwise repay such bonds, and bonds or notes previously issued.
Except for the purposes of complying with the internal revenue code, any
interest income earned on bond proceeds shall only be used to pay debt
service on such bonds or notes.

In computing for the purposes of this subdivision, the aggregate
amount of indebtedness evidenced by bonds and notes of the authority
issued pursuant to this subdivision, there shall be excluded the amount
of such indebtedness represented by such bonds or notes issued to refund
or otherwise repay bonds or notes, provided that the amount so excluded
under this paragraph may exceed the principal amount of such bonds or
notes that were issued to refund or otherwise repay only if the present
value of the aggregate debt service on the refunding or repayment bonds
or notes shall not have at the time of their issuance exceeded the
present value of the aggregate debt service of the bonds or notes they
were issued to refund or repay, such present value in each case being
calculated by using the effective interest rate of the refunding or
repayment bonds or notes, which shall be that rate arrived at by
doubling the semi-annual interest rate (compounded semi-annually)
necessary to discount the debt service payments on the refunding or
repayment bonds or notes from the payment date thereof to the date of
issue of the refunding or repayment bonds or notes and to the price bid
therefor, or to the proceeds received by the dormitory authority from
the sale thereof, in each case including estimated accrued interest.