§ 55. Issuance of tax and revenue anticipation notes and bond
anticipation notes. 1. When used in this section, the following terms
shall be defined as follows:

(a) "Tax and revenue anticipation note" shall mean a note issued in
anticipation of the receipt of taxes and revenues, direct or indirect,
for the purposes and within the amounts of appropriations theretofore
made.

(b) "Bond anticipation note" shall mean a note issued in anticipation
of the receipt of the proceeds of the sale of bonds duly authorized at
the time such notes are issued.

(c) "Flexible note" shall mean a tax and revenue anticipation note or
bond anticipation note the interest on which is payable at, and on one
or more dates prior to, maturity.

(d) "Short-term series note" shall mean a tax and revenue anticipation
note or a bond anticipation note which is one of a series of notes
issued pursuant to a financing program under which it is expected that
each note will be paid from the proceeds of one or more renewal notes of
such series, and in the case of the final note or notes of such series,
from the taxes and revenues or the proceeds of bonds in anticipation of
the receipt of which such note or notes have been issued. The term
"short-term series note" shall include any note issued pursuant to a
revolving credit agreement or other similar liquidity facility for the
purpose of renewing or paying outstanding short-term series notes on
their stated maturity dates when such short-term series notes are not
renewed or paid from the proceeds of one or more other renewal notes of
such series. Such a note issued pursuant to a revolving credit agreement
or similar liquidity facility shall not be considered a flexible note
for the purposes of this section.

(e) "Financially responsible party or parties" shall mean a person or
persons determined by the comptroller to have sufficient net worth and
liquidity to purchase and pay for on a timely basis all of the notes and
renewals thereof which may be tendered for repurchase or redemption by
the holders thereof.

2. (a) (i) The comptroller is authorized to issue tax and revenue
anticipation notes and renewals thereof including, but not limited to,
flexible notes and short-term series notes in such form and with such
terms as the comptroller shall determine. Such notes and renewals
thereof shall be non-interest bearing or bear interest at such rate or
rates, which may vary from time to time, as, in the judgment of the
comptroller, may be sufficient or necessary to effect the issuance and
sale or resale thereof in the manner determined by the comptroller.

(ii) Such notes and renewals thereof may be redeemable from time to
time on such date or dates prior to maturity as the comptroller may
determine. Such notes and renewals thereof may provide the holders
thereof with such rights to require the state or other persons to
purchase or redeem such notes and renewals thereof from the proceeds of
the resale thereof or otherwise from time to time prior to the stated
maturity thereof as the comptroller may determine. Notwithstanding the
foregoing, the holders of such notes and renewals thereof sold pursuant
to this subparagraph shall not be provided with the right to require the
state to repurchase or redeem the notes and renewals thereof prior to
their stated maturity unless the state has entered into one or more
letter of credit agreements or other liquidity facility agreements
entered into for the express purposes of such sales and which shall
require a financially responsible party or parties to the agreement or
agreements, other than the state, to purchase or redeem all or any
portion of such notes and renewals thereof tendered by the holders
thereof for repurchase or redemption prior to the stated maturity of
such notes and renewals thereof. Such requirement to purchase or redeem
such notes and renewals thereof shall continue until such time as the
right of the holders of such notes and renewals thereof to require
repurchase or redemption of such notes and renewals thereof prior to the
stated maturity shall cease. Such notes and renewals thereof shall,
together with the interest thereon, be paid from the taxes and revenues
in anticipation of which they have been issued within one year from the
date of original issue and so much of such taxes and revenues as will be
sufficient to pay the amount borrowed, with the interest thereon, is
pledged to the payment thereof. The comptroller is authorized to enter
into such agreements with other persons as he deems necessary or
appropriate in connection with the issuance, sale and resale of such
notes and, at his discretion, to resell or retire any such notes
purchased by the state prior to the stated maturity thereof.

(iii) Whenever the comptroller shall issue tax and revenue
anticipation notes in the form of an issue of flexible notes or
short-term series notes, he shall specify in writing, at the time of
original issuance thereof, the date or dates on which the notes or
renewal notes of such issue are to be paid from taxes and revenues and
not from the proceeds of resales or renewals thereof, and for purposes
of paragraph (b) of this subdivision, the maturity date of the notes and
renewal notes of such issue shall be the date or dates so specified by
the comptroller. The provisions of paragraph (b) of this subdivision
shall not apply to, and the comptroller shall not be required to set
aside any taxes or revenues in a separate note repayment account
pursuant to such paragraph (b) for, the payment of principal of or
interest on flexible notes or short-term series notes or renewals
thereof if such payment is due on any date other than the date so
specified by the comptroller. The date or dates, if any, on which tax
and revenue anticipation notes or renewals thereof may be redeemable
prior to maturity, or on which the holders thereof may have the right to
require the state or other persons to purchase or redeem such notes or
renewals thereof from the proceeds of the resale thereof or otherwise
prior to the stated maturity thereof, shall not be deemed the maturity
date thereof for purposes of paragraph (b) of this subdivision.

(b) No later than the tenth business day of each month during any
fiscal year in which tax and revenue anticipation notes mature, the
comptroller shall prepare a schedule of anticipated taxes and revenues
receivable by the state as of the date of such schedule during the
balance of such fiscal year in such detail as is necessary to carry out
the purposes of this paragraph, based upon estimates of such taxes and
revenues filed with him by the director of the budget. Except as may be
required to comply with obligations to the holders of bonds of the state
or the holders of bonds guaranteed by the state, commencing at any time
that the outstanding principal amount of any issue of tax and revenue
anticipation notes, and the interest due thereon, equals ninety-five
percent of the amount of taxes and revenues shown on such schedule to be
received during the period ending on the maturity date of the notes of
such issue, after deducting from such taxes and revenues the aggregate
principal amount of all outstanding notes of other issues, and the
interest due thereon, which mature during such period and against which
taxes and revenues have not, at such time, been collected and set aside
in the note repayment account pursuant to the provisions of this
subdivision, the comptroller shall set aside all taxes and revenues as
received in a separate note repayment account until the balance in such
account is sufficient to pay the notes of such issue and the interest
thereon and the principal of and the interest on any other notes with a
maturity date on or before such maturity date; provided, however, that
the comptroller shall commence to set aside such taxes and revenues no
later than the fifteenth day prior to the maturity date of any issue of
notes and continue to set aside taxes and revenues until the balance in
the note repayment account is sufficient to pay such notes and the
interest thereon at maturity and the principal of and interest on any
other notes maturing on or before such maturity date. The moneys in such
repayment account shall be kept separate and apart from all other moneys
in the custody of the comptroller, shall be deposited in a segregated
bank account, and held in trust for the holders of notes and the
interest in such moneys of holders of notes shall be in the order of
maturity of notes, with the holders of notes of an earlier maturity
having a first pledge over the holders of notes maturing later. Such
moneys shall be disbursed only for the payment of notes and the interest
thereon as they mature and may not be disbursed for any other purpose.
Moneys in the note repayment account shall, at the direction of the
comptroller, be invested in obligations of the United States of America
or in obligations of or guaranteed by agencies of the United States of
America where the payment of principal and interest is guaranteed by the
United States of America or in certificates of deposit secured by
obligations of the United States of America deposited by the issuer
thereof with the bank maintaining such account in an amount equal to the
amount of such certificate of deposit, provided that so much of the
amount of such obligations or certificates as is necessary for the
payment of any issue of notes is payable on or before the maturity date
of such notes or, in the case of investments in obligations of the
United States of America or in obligations of or guaranteed by agencies
of the United States of America where the payment of principal and
interest is guaranteed by the United States of America, is covered by
agreements with primary dealers in obligations of or guaranteed by the
United States of America for the repurchase thereof on or before the
maturity date of such notes.

(c) For purposes of paragraph (b) of this subdivision "taxes and
revenues" shall mean all moneys payable into the general fund of the
state except the proceeds of the issuance by the state of bonds, bond
anticipation notes or notes, and "notes" shall mean notes issued in
anticipation of the receipt of taxes and revenues.

3. The comptroller is authorized to issue, whenever he may deem it for
the best interests of the state to do so, bond anticipation notes and
renewals thereof, including, but not limited to, flexible notes and
short-term series notes, in such form and with such terms as he shall
determine. Such notes and renewals thereof shall bear interest at such
rate or rates of interest, which may vary from time to time, as in the
judgment of the comptroller may be sufficient or necessary to effect a
sale thereof and shall mature within a period not to exceed one year.
Such notes and renewals thereof may be redeemable from time to time on
such date or dates prior to maturity as the comptroller may determine.
Such notes and renewals thereof may provide the holders thereof with
such rights to require the state or other persons to purchase or redeem
such notes or renewal notes from the proceeds of the resale thereof or
otherwise from time to time prior to the stated maturity thereof as the
comptroller may determine. The comptroller is authorized to enter into
such agreements with other persons as he deems necessary or appropriate
in connection with the issuance, sale and resale of such notes and, at
his discretion, to resell or retire any such notes purchased by the
state prior to the stated maturity thereof. Notwithstanding the
foregoing, the holders of such notes and renewals thereof sold pursuant
to this subdivision shall not be provided with the right to require the
state to repurchase or redeem the notes and renewals thereof prior to
their stated maturity unless the state has entered into one or more
letter of credit agreements or other liquidity facility agreements
entered into for the express purpose of such sales and which shall
require a financially responsible party or parties to the agreement or
agreements, other than the state, to purchase or redeem all or any
portion of such notes and renewals thereof tendered by the holders
thereof for repurchase or redemption prior to the stated maturity of
such notes and renewals thereof. Such requirement to purchase or redeem
such notes and renewals thereof shall continue until such time as the
right of the holders of such notes and renewals thereof to require
repurchase or redemption of such notes and renewals thereof prior to the
stated maturity shall cease. The proceeds of the sale of such notes
shall be used only for the purposes for which may be used the proceeds
of the sale of bonds in anticipation of the sale whereof the notes were
issued. All of such notes and any renewals thereof shall be payable at a
fixed time, from the proceeds of the sale of bonds, and no renewal of
any such note shall be issued after the sale of bonds in anticipation of
which the original note was issued. In the event that a sale of such
bonds shall not have occurred prior to the maturity of the notes so
issued in anticipation of such sale the comptroller shall, in order to
meet the notes then maturing, issue renewal notes for such purpose.
Every such note and any renewals thereof shall, with the interest
thereon, be payable from the proceeds of the sale of such bonds and not
otherwise from any borrowing within two years from the date of original
issue, except that notes or obligations payable from the proceeds of the
sale of bonds issued or to be issued for any of the purposes authorized
by article eighteen of the constitution, shall, with the interest
thereon, be payable from the proceeds of the sale of such bonds within
five years from the date of original issue. The total amount of such
notes or renewals thereof issued and outstanding shall at no time exceed
the total amount of bonds authorized to be issued but not yet issued.
The comptroller shall include in his annual report, a detailed statement
of all such loans made and bonds issued during the year and of his
proceedings in relation thereto.

4. The outstanding principal amount of all flexible notes issued by
the state pursuant to subdivisions two and three of this section shall
at no time exceed the sum of five hundred million dollars and the
outstanding principal amount of all short term series notes issued by
the state pursuant to subdivisions two and three of this section shall
at no time exceed the sum of five hundred million dollars.

5. The comptroller shall annually submit a report to the director of
the budget, the chairman of the senate finance committee and the
chairman of the assembly ways and means committee. Such report shall be
submitted no later than the last business day of June and shall provide
a comprehensive analysis of any flexible notes and/or short-term series
notes issued or outstanding in the previous fiscal year. Such report
shall include, but not be limited to:

(a) An analysis of the effective interest rates associated with such
flexible notes and short-term series notes;

(b) An analysis of the expenses associated with the issuance of such
notes, including any fees or commissions required pursuant to a note
repurchase agreement or line of credit;

(c) An analysis of the effective interest rates associated with such
notes after consideration of the expenses described in paragraph (b) of
this subdivision;

(d) An analysis of any reinvestment opportunities and earnings
provided by the issuance of such notes; and

(e) Any other analyses which the comptroller may deem relevant to
determining the costs and benefits associated with flexible notes and
short term series notes.