§ 9-A — Establishment and application of a general debt service fund

* § 9-a. Establishment and application of a general debt service fund.\n1. Commencing on the first day of the first full fiscal quarter\nsubsequent to the first sale of a federally guaranteed city obligation,\nthe city shall establish a general debt service fund for the purpose of\npaying debt service due or becoming due in the then current fiscal year\nand in subsequent fiscal years. All monies in the fund shall be held by\nthe comptroller, who shall administer and maintain the fund in\naccordance with the provisions of this section.\n 2. All payments of or on account of real estate taxes or assessments,\nother than the proceeds of tax anticipation notes, shall be immediately\nupon receipt deposited in such fund. The comptroller shall retain,\ndisburse and apply monies in the fund during each month as follows:\n a. During the first month of each fiscal quarter, there shall be\nretained in the fund, subject to the provisions of subdivision three of\nthis section, all real estate tax payments deposited in the fund until\nthere shall have been retained from monies so deposited during such\nmonth an amount equal to the total monthly debt service, computed as of\nthe date of any disbursement of money from the fund, for the second and\nthird months of such fiscal quarter; provided that such amount shall be\nreduced by any amount already on deposit in the fund which may be used\nto pay the monthly debt service for such months.\n For purposes of this section, fiscal quarter shall mean the\nthree-month period beginning July first, October first, January first or\nApril first, and monthly debt service shall mean, as of any date of\ncomputation, the amount of monies equal to the aggregate of (i) all\ninterest payable during such month on bonds and notes of the city, plus\n(ii) the amount of principal (including payments into sinking funds)\nmaturing or otherwise coming due during such month on all bonds of the\ncity (excluding principal payments made from sinking funds required by\nthe terms of certain city bonds), plus (iii) the amount of principal to\nbe paid on notes of the city during such month from sources other than\nthe proceeds of bonds or renewal notes (exclusive of revenue\nanticipation notes and tax anticipation notes or renewals thereof issued\nless than two years prior to the date of computation).\n b. During the second and third months of each fiscal quarter, there\nshall be retained in the fund, subject to the provisions of subdivision\nthree of this section, all real estate tax payments deposited in the\nfund until there shall have been retained from monies so deposited\nduring such month an amount equal to the total monthly debt service,\ncomputed as of the date of any disbursement of monies from the fund, for\nthe first month of the next succeeding fiscal quarter; provided that\nsuch amount shall be reduced by any amount already on deposit in the\nfund which may be used to pay the monthly debt service for such month.\n c. During any month of a fiscal quarter, after the retentions required\nby paragraphs a and b of this subdivision have been made for such month,\nthe comptroller shall deposit any remaining balance of real estate taxes\nreceived during such month, first into the TAN debt service account to\nthe extent required under subdivision six of this section, and second\ninto the board fund to be applied in accordance with procedures of the\nboard.\n d. The city may at any time pay into the fund any monies required by\nlaw to be used to pay monthly debt service and any other monies\navailable for such purpose.\n 3. The board may approve, subject to agreements made with the holders\nor guarantors of outstanding notes or bonds issued by or for the benefit\nof the city after the effective date of this act, criteria for\ncalculating a proportion of real estate tax receipts to be retained in\nthe fund in order to provide for the retention of amounts required by\nthe provisions of subdivision two of this section in lieu of the\nretention of all initial receipts as required by such subdivision;\nprovided, that if the board at any time determines that retentions in\nthe fund pursuant to the provisions of such subdivision are or are\nlikely to be insufficient to provide for the payment of monthly debt\nservice when due, in order to ensure that the amounts on deposit in the\nfund will be sufficient to pay monthly debt service when due, the board\nshall require (i) that real estate tax receipts be retained in the fund\nin greater amounts or at earlier dates than the provisions of such\nsubdivision require, or (ii) that other revenues or cash resources of\nthe city be paid into the fund. The board shall consider the impact of\nearlier or larger retention of real estate tax receipts on the city's\nseasonal borrowing requirements when determining whether it shall\nrequire such additional retention or that other revenues or cash\nresources of the city be paid into the fund. Prior to the issuance by\nthe city of any bonds or notes, the board shall review any criteria then\nin effect which determine the proportion of real estate tax receipts to\nbe retained in the fund to determine whether the proposed debt service\nschedule for such bonds or notes is consistent with the monies which\nwill be available therefor or whether such criteria should be revised.\nThe board shall from time to time take such action as it determines is\nnecessary, including disapproval of a proposed issue pursuant to\nparagraph f of subdivision one of section seven, so that the monies in\nthe fund shall be adequate to meet debt service requirements.\n 4. Commencing on the first day of the second month of the first full\nfiscal quarter subsequent to the first sale of a federally guaranteed\ncity obligation, the payment of monthly debt service shall be made,\nfirst, from amounts retained in the fund. Amounts retained in the fund\nshall be used only to pay debt service of the city.\n 5. Upon the issuance of any tax anticipation notes following the\neffective date of this act, the comptroller shall establish and, so long\nas any tax anticipation notes shall be outstanding, shall maintain a tax\nanticipation note debt service account within the fund for the purpose\nof paying the principal of tax anticipation notes.\n 6. The city shall determine the date on which the principal due or to\nbecome due on an outstanding issue of tax anticipation notes shall equal\nninety percent of the available tax levy with respect to such issue, and\nupon reasonable notice thereof the comptroller shall commence on such\ndate to pay into the TAN debt service account from collections of such\ntaxes and assessments, after retaining amounts required to be deposited\nin the fund, amounts sufficient to pay when due, the principal of such\nissue of tax anticipation notes. The payments of the principal of tax\nanticipation notes shall be made, first, from amounts retained in the\nTAN debt service account.\n 7. Upon the issuance of any revenue anticipation notes following the\neffective date of this act, the comptroller shall establish and, so long\nas any revenue anticipation notes shall be outstanding, shall maintain a\nrevenue anticipation note debt service account within the fund for the\npurpose of paying the principal of revenue anticipation notes. Each\nspecific type of revenue in anticipation of which such notes are issued\nand available for such purpose shall be deposited in such account\nimmediately upon receipt by the city. Where such revenue consists of\nstate aid or other revenue to be paid to the city by the comptroller, on\nthe date such revenue is payable to the city, the comptroller shall\ndeposit such revenue directly into such account in lieu of payment to\nthe city. All revenues deposited in the RAN debt service account shall\nbe paid immediately into the board fund except as otherwise provided in\nsubdivision eight of this section.\n 8. The city shall determine the date on which the principal due or to\nbecome due on an outstanding issue of revenue anticipation notes shall\nequal ninety percent of the total amount of revenue against which such\nnotes were issued remaining to be paid to the city on or before the\nfifth day prior to the maturity date of such notes and upon reasonable\nnotice thereof the comptroller shall commence on such date to retain in\nthe RAN debt service account from amounts deposited or to be deposited\ntherein of each specific type of revenue in anticipation of which\nrevenue such anticipation notes were issued, an amount sufficient to\npay, when due, the principal of such revenue anticipation notes. Monies\nretained in such account shall vest immediately in the comptroller in\ntrust for the benefit of the holders of the revenue anticipation notes\nin anticipation of which such notes were issued. No person having any\nclaim of any kind in tort, contract or otherwise against such city shall\nhave any right to or claim against any monies of the state appropriated\nby the state and in anticipation of which such notes have been issued,\nother than a claim for payment by the holders of such notes, and such\nmonies shall not be subject to any order, judgment, lien, execution,\nattachment, setoff or counter-claim by any such person; provided,\nhowever, that nothing contained in this paragraph shall be construed to\nlimit, impair, impede or otherwise adversely affect in any manner the\nrights or remedies of the purchasers and holders and owners of any bonds\nor notes of the state or any agency, instrumentality, public benefit\ncorporation or political subdivision thereof, including the city of New\nYork, under which such purchasers and holders and owners have any right\nof payment of such bonds or notes by recourse to state aid or local\nassistance monies held by the state or for the payment of which bonds or\nnotes state aid or local assistance monies are a designated source. The\npayment of the principal of revenue anticipation notes shall be made\nfirst from amounts retained in the RAN debt service account.\n 9. Whenever the amount contained in the TAN debt service account or\nthe RAN debt service account exceeds the amount required to be retained\nin such account such excess monies, including earnings on investments of\nmonies in the fund, shall be withdrawn from such account and paid into\nthe board fund.\n 10. Subject to agreements made with holders or guarantors of\noutstanding notes or bonds issued by or for the benefit of the city\nafter the effective date of this act, the comptroller shall invest the\nmonies retained in the fund in accordance with law.\n 11. The limitations imposed upon the city by this section shall be in\naddition to any limitations imposed upon the city under the local\nfinance law. In the event any provisions of the local finance law shall\nbe inconsistent with the provisions of this section, the provisions of\nthis section shall prevail. The requirements of this section shall not\napply to any note of the city held by the municipal assistance\ncorporation for the city of New York to the extent that such corporation\nhas evidenced its intention not to present such notes for payment during\nthe fiscal year in which the determination is made provided that such\nnotes were held by such corporation on June thirtieth, nineteen hundred\nseventy-eight or were issued in exchange for or in refunding or renewal\nof notes held by such corporation on such date.\n 12. Notwithstanding any other provision of this section, the city may,\nat any time, subject to approval by the comptroller, designate a trust\ncompany or bank having its principal place of business in the state of\nNew York and having the powers of a trust company in the state of New\nYork to hold all or any part of the monies in the fund and to administer\nand maintain the monies so held in accordance with the applicable\nprovisions of this section and any agreements made pursuant thereto.\n * Terminates July 1, 2035 or ... see § 13\n