§ 21.00 — Serial bonds

New York § 21.00

• Jurisdiction: New York
• Law LFN: Local Finance
• Title 2: Local Obligations: Types Thereof
• Art. 2: Local Indebtedness

Text

§ 21.00 Serial bonds. a. Any municipality, school district or district\ncorporation may issue serial bonds for any object or purpose having a\nperiod of probable usefulness set forth in paragraph a of section 11.00\nof this chapter and for which object or purpose it may contract\nindebtedness pursuant to section 10.00 of this chapter; provided,\nhowever, that serial bonds shall not be issued by such municipality,\nschool district or district corporation (1) in those cases in which\nprovision is made in sections 24.00 and 25.00 of this chapter for the\nissuance of tax anticipation notes and revenue anticipation notes to be\nissued in anticipation of the collection or receipt of taxes, revenues\nor assessments, as the case may be, or (2) in those cases in which\nprovision is made in section 29.00 of this chapter for the issuance of\nbudget notes other than paragraph n of such section, or (3) in those\ncases in which budget notes have been issued under such paragraph n; and\nfurther provided, however, that nothing contained herein shall prohibit\nthe issuance of serial bonds by such municipality, school district or\ndistrict corporation for the object or purpose specified in subdivision\nsixty of paragraph a of section 11.00 of this chapter.\n b. Serial bonds shall mature in annual installments. The first\ninstallment shall mature not later than eighteen months after the date\nof such bonds or two years after the date of the first bond anticipation\nnote or notes issued in anticipation of such bonds, whichever is the\nearlier, provided, however, that until July fifteenth, two thousand\ntwenty-seven, the first installment shall mature not later than two\nyears after the date of such bonds or two years after the date of the\nfirst bond anticipation note or notes issued in anticipation of such\nbonds, whichever is the earlier. However, if bond anticipation notes are\nissued in anticipation of bonds and if a portion of such notes or the\nrenewals thereof are redeemed from a source other than the proceeds of\nsuch bonds within two years from the date of the first such note or\nnotes and a further portion thereof shall be so redeemed prior to the\ntermination of each twelve months' period succeeding the date such\noriginal portion was so redeemed, the first installment of such bonds\nmay, in the alternative, be made to mature not later than five years\nfrom the date of the first such note or notes.\n b-1. Notwithstanding the provisions of paragraph b of this section, if\nbond anticipation notes are issued in anticipation of bonds for\nassessable improvements and if a portion of such notes or the renewals\nthereof are redeemed from a source other than the proceeds of such bonds\nwithin two years from the date of the first such note or notes and a\nfurther portion thereof shall be so redeemed prior to the termination of\neach twelve months' period succeeding the date such original portion was\nso redeemed, the first installment of such bonds shall mature not later\nthan twelve months from the last preceding date such portion is so\nredeemed.\n c. The last installment of serial bonds shall mature not later than\nthe expiration of the period of probable usefulness of the object or\npurpose for which such bonds are issued, as computed from the date of\nsuch bonds or, if bond anticipation notes shall have been issued in\nanticipation thereof, as computed from the date of the earliest note or\nnotes so issued.\n d. No annual installment of serial bonds shall be more than fifty per\ncentum in excess of the smallest prior installment. For the purpose of\nthe preceding sentence, bond anticipation notes, which are redeemed from\na source other than the proceeds of bonds, shall be deemed to be serial\nbonds. Notwithstanding the foregoing, the finance board of any\nmunicipality, school district or district corporation may determine to\nissue bonds and provide for substantially level or declining annual debt\nservice. The determination of whether annual debt service is\nsubstantially level or declining shall not take into account the first\ntwelve months after issuance to the extent that no provision is to be\nmade for the payment of principal during such period. If a municipality,\nschool district or district corporation determines to issue bonds with a\nsubstantially level or declining annual debt service schedule, then the\naggregate amount of debt service payable in each year shall not exceed\nthe lowest aggregate amount of debt service payable in any prior year by\nmore than the greater of five percent or ten thousand dollars. For\npurposes of this paragraph, debt service shall include all of the\nfollowing scheduled to become due: principal, redemption price, sinking\nfund installments or contributions, and interest. For purposes of\ndetermining whether debt service is substantially level or declining on\nbonds issued with a variable rate of interest pursuant to section 54.90\nof this article, the finance board shall estimate the average rate of\ninterest at which fixed interest rate bonds of the same maturities would\nbe sold and amortize principal based upon such interest rate assumption.\nThe estimate by the finance board of such interest rate shall be deemed\nfinal and conclusive. If the finance board of the municipality, school\ndistrict or district corporation determines that interest on such bonds\nshall be compounded and payable at maturity or prior redemption, such\nbonds may be issued only where such finance board has determined to\nissue the bonds pursuant to a substantially level or declining annual\ndebt service schedule unless accrued interest is contributed at least\nannually to a sinking fund in accordance with section two of article\nVIII of the constitution and the procedures of section 22.10 of this\ntitle. A municipality, school district or district corporation providing\nfor substantially level or declining debt service may provide for\ncontracting such indebtedness as serial bonds, as sinking fund bonds, as\nterm bonds, or as any combination thereof. Term bonds may be issued\nunder the authority of this paragraph with a stated maturity and a\nschedule of mandatory redemptions prior thereto, providing (with other\nbonds of the same issue, if any) for substantially level or declining\ndebt service.\n e. Serial bonds shall be redeemed by an annual appropriation.\n f. Notwithstanding the provisions of paragraphs b and d of this\nsection:\n 1. The first installment of serial bonds issued for the purpose of\nproviding moneys out of which to make loans to or in aid of\nlimited-profit housing companies pursuant to article two of the private\nhousing finance law, or loans to owners of existing multiple dwellings\npursuant to article eight of the private housing finance law, or issued\nfor the purpose of providing moneys for the effectuating of any urban\nrenewal program or part thereof pursuant to the general municipal law,\nmay mature not later than five years after the date of issuance of such\nbonds or six years after the date of issuance of the first bond\nanticipation note or notes issued in anticipation of such bonds,\nwhichever is earlier; provided, however, that if the bond anticipation\nnotes or renewals thereof issued in anticipation of such serial bonds\nextend more than five years beyond the original date of such issue,\npursuant to the provisions of paragraph b of section 23.00 of this\nchapter, the first installment of such serial bonds may mature not later\nthan such number of years after the date of issuance of such bonds or\nsuch number of years plus one after the original date of issuance of\nsuch notes, whichever is earlier; and\n 2. The annual installments of serial bonds issued for such purpose and\nfor the purpose of providing moneys out of which to make loans to owners\nof existing multiple dwellings pursuant to article eight of the private\nhousing finance law may be computed in such manner that the total of\nprincipal and interest required to be paid in each year beginning with\nthe year in which the first installment is due, will be approximately\nequal to the total of principal and interest required to be paid in each\nsucceeding year of the period for which such bonds were issued.\n