§ 90.00 — Refunding of bonds

New York § 90.00

• Jurisdiction: New York
• Law LFN: Local Finance
• Title 7: Refunding of Bonds and Capital Notes
• Art. 2: Local Indebtedness

Text

§ 90.00 Refunding of bonds. a. 1. A municipality, school district or\ndistrict corporation may issue serial bonds to refund bonds issued on or\nafter January first, nineteen hundred thirty-nine, other than bonds\nissued to redeem notes, certificates or other evidences of indebtedness\nissued prior to January first, nineteen hundred thirty-nine, in\nanticipation of such bonds. The last installment of such refunding bonds\nissued to refund bonds issued pursuant to the social services law, or\nthe former social welfare law, or the former public welfare law, for the\npurpose of safety net assistance, as defined in such laws, shall mature\nwithin ten years after the date of issue of the bonds to be refunded. In\nall other cases the last installment of such refunding bonds shall\nmature not later than the expiration of the maximum period of probable\nusefulness permitted by law at the time of the issuance of the bonds to\nbe refunded or the refunding bonds for the object or purpose for which\nthe bonds to be refunded were issued. Such period shall be computed from\nthe date of issuance of the bonds to be refunded or from the date of\nissuance of the first bond anticipation note issued in anticipation of\nsuch bonds, whichever date is the earlier.\n 2. Notwithstanding the provisions of subdivision one of this\nparagraph, bonds issued by a school district prior to December first two\nthousand one, or prior to thirty days after the effective date of this\nsubdivision, whichever is later, for the purpose of financing facilities\nwhich were eligible for building aid pursuant to section thirty-six\nhundred two of the education law, and for which the aid apportionments\npayable in two thousand two--two thousand three and/or two thousand\nthree--two thousand four school years for approved expenditures for debt\nservice are subsequently reduced as a result of the application of\nassumed amortization to unpaid principal outstanding as of July first,\ntwo thousand two, may be refunded and the refunding bonds may be sold at\neither public or private sale in accordance with the provisions of\nsection 90.10 of this title; provided, however, the school district need\nnot comply with: (i) subparagraph (a) of subdivision two of paragraph b\nof section 90.10 of this title; and (ii) if the bonds to be refunded are\nto be redeemed or paid on the same date as the refunding bonds are\nissued, the school district need not comply with the provisions of\nsection 90.10 of this title relating to the escrow of the proceeds of\nthe sale of the refunding bonds.\n 3. Refunding bonds shall not be issued to refund bonds issued to\nfinance an object or purpose which, at the time of the issuance of such\nbonds, had a period of probable usefulness of five years or less.\n 4. If a budgetary appropriation has been made for the payment of the\nprincipal on bonds, such maturity shall not be included in a refunding\nbond issue.\n b. The maturities and amount of such refunding bonds shall be so\narranged that the combined amount of:\n 1. The bonds of the original issue, and\n 2. Refunding bonds previously issued to refund bonds of the original\nissue, if any,\nto be redeemed by an appropriation other than from the proceeds of\nrefunding bonds during the year of refunding and the combined amount of:\n 1. The bonds of the original issue,\n 2. Such refunding bonds, and\n 3. Refunding bonds previously issued to refund bonds of the original\nissue, if any,\nto be redeemed by an appropriation other than from the proceeds of\nrefunding bonds in each succeeding year thereafter is not more than\nfifty per centum in excess of the combined amount of:\n 1. The bonds of the original issue,\n 2. Such refunding bonds, and\n 3. Refunding bonds previously issued to refund bonds of the original\nissue, if any,\nredeemed or to be redeemed during any preceding year by an appropriation\nother than from the proceeds of refunding bonds.\n b-1. Refunding bonds need not comply with paragraph b of this section\nprovided that no annual installment of each separate series of refunding\nbonds shall be more than fifty per centum in excess of the smallest\nprior installment or the finance board of the municipality, school\ndistrict or district corporation issuing the bonds shall have determined\nto use a substantially level or declining annual debt service schedule\nfor the refunding bonds. The amount of annual installments of the\nrefunding bonds may be determined without reference to the stated\nmaturities of the bonds to be refunded.\n c. 1. Bonds issued on or after January first, nineteen hundred\nthirty-nine, shall not be refunded within five years after the date of\noriginal issue. This restriction shall not apply to bonds issued by the\ncity of New York, bonds issued by the county of Nassau for the objects\nor purposes described in subdivision thirty-three-a of paragraph a of\nsection 11.00 of this chapter or to bonds issued to refund:\n (i) Bonds issued, or\n (ii) Bonds issued to redeem notes, certificates or other evidences of\ntemporary indebtedness issued prior to January first, nineteen hundred\nthirty-nine.\n * 2. Notwithstanding the provisions of subdivision one of this\nparagraph and subdivision three of paragraph a of this section, bonds\nmay be refunded and the refunding bonds may be sold at either public or\nprivate sale where the present value of the refunding bonds is less than\nthe present value of the bonds to be refunded computed in accordance\nwith subparagraph (a) of subdivision two of paragraph b of section 90.10\nof this title and where the issuer complies with all other requirements\nof such section; provided, however, that if such bonds are being sold to\nthe New York state environmental facilities corporation in connection\nwith a hardship state revolving fund financing at a rate equal to zero\npercent, compliance with subparagraph (a) of subdivision two of\nparagraph b of section 90.10 of this title shall not be required;\nprovided further, however, that if the bonds to be refunded are to be\nredeemed or paid on the same date as the refunding bonds are issued, the\nissuer need not comply with the provisions of section 90.10 of this\ntitle relating to the escrow of the proceeds of the sale of the\nrefunding bonds.\n * NB Effective until September 30, 2026\n * 2. Notwithstanding the provisions of subdivision one of this\nparagraph and subdivision three of paragraph a of this section, bonds\nmay be refunded and the refunding bonds may be sold at either public or\nprivate sale where the present value of the refunding bonds is less than\nthe present value of the bonds to be refunded computed in accordance\nwith subparagraph (a) of subdivision two of paragraph b of section 90.10\nof this title and where the issuer complies with all other requirements\nof such section; provided, however, that if the bonds to be refunded are\nto be redeemed or paid on the same date as the refunding bonds are\nissued, the issuer need not comply with the provisions of section 90.10\nof this title relating to the escrow of the proceeds of the sale of the\nrefunding bonds.\n * NB Effective September 30, 2026\n d. With the approval of and on terms and conditions prescribed by the\nstate comptroller, a municipality, school district or district\ncorporation may issue bonds to refund:\n 1. Bonds issued,\n 2. Bonds issued to redeem notes, certificates or other evidences of\ntemporary indebtedness issued, or\n 3. Bonds issued to refund bonds issued\nprior to January first, nineteen hundred thirty-nine, but in no event\nshall such refunding bonds mature later than twenty years after the date\nthereof. The provisions of section 21.00 of this chapter shall not apply\nto this paragraph.\n e. The issuance of refunding bonds shall be authorized by a "refunding\nbond resolution". The title of such resolution shall state that the\nbonds to be authorized thereby are "refunding bonds".\n f. Such a resolution shall contain, in substance, the following\nprovisions:\n 1. The amount of refunding bonds to be issued.\n 2. A description and the date of the bonds to be refunded.\n 3. If the bonds to be refunded are bonds which were issued on or after\nJanuary first, nineteen hundred thirty-nine, other than bonds issued to\nredeem notes, certificates or other evidences of temporary indebtedness\nissued prior to January first, nineteen hundred thirty-nine, in\nanticipation of such bonds, a statement of the maximum period of\nprobable usefulness, at the time of the issuance of the bonds to be\nrefunded, of the object or purpose for which such bonds were issued.\n 4. A statement of the proposed maturities of such refunding bonds.\n g. The provisions of this chapter relating to the authorization, form\nand contents, sale, execution and issuance of bonds other than refunding\nbonds, shall apply to the authorization, form and contents, sale,\nexecution and issuance of refunding bonds, except that:\n 1. The provisions of section 107.00 of this chapter shall not apply to\nthe issuance of refunding bonds.\n 2. The authorization of the issuance of refunding bonds shall not be\nsubject to a mandatory or permissive referendum.\n 3. Outstanding bonds may, pursuant to a power to recall and redeem or\nwith the consent of the holders thereof, be exchanged for refunding\nbonds (i) if the refunding bonds are to bear interest at a rate equal to\nor lower than that borne by the bonds to be refunded or (ii) if, in the\ncase of the city of New York prior to July first, two thousand\ntwenty-six, the annual payment required for principal and interest on\nthe refunding bond is less than the annual payment required for\nprincipal and interest on the bond to be refunded, in each case such\nannual payments to be determined by dividing the total principal and\ninterest payments due over the remaining life of the bond by the number\nof years to maturity of the bond or (iii) if the bonds to be refunded\nwere issued by the city of New York after June thirtieth, nineteen\nhundred seventy-eight and prior to July first, two thousand twenty-six\nand contain covenants referring to the existence of the New York state\nfinancial control board for the city of New York or any other covenants\nrelating to matters other than the prompt payment of principal and\ninterest on the obligations when due and the refunding bond omits or\nmodifies any such covenant.\n 4. All refunding bonds shall contain a recital that they are issued\npursuant to this chapter, which recital shall be conclusive evidence of\ntheir validity and of the regularity of their issuance.\n h. The authority herein granted to authorize the issuance of refunding\nbonds shall in no way be affected by the invalidity of or any\nirregularity in any proceedings authorizing the issuance of the bonds to\nbe refunded, except that refunding bonds shall not be issued to refund\nbonds adjudged invalid by the final judgment of a court of competent\njurisdiction.\n i. 1. Refunding bonds issued subsequent to January first, nineteen\nhundred thirty-nine to refund:\n (a) Bonds issued, or\n (b) Bonds issued to redeem notes, certificates or other evidences of\ntemporary indebtedness issued\nprior to January first, nineteen hundred thirty-nine, may be refunded by\nthe issuance of refunding bonds, but such refunding bonds shall mature\nnot later than twenty years from the date of the original refunding\nbonds. Such refunding bonds shall be issued only with the approval of\nand on terms and conditions prescribed by the state comptroller.\n 2. All other refunding bonds issued on or after January first,\nnineteen hundred thirty-nine, shall not be refunded.\n j. Bond anticipation notes shall not be issued in anticipation of the\nsale of refunding bonds.\n k. The premium, if any, resulting from the public sale of refunding\nbonds may be expended for (1) the payment of the costs of the issuance\nof such refunding bonds, including, but not limited to, legal fees,\nprinting or engraving and publication of notices, and (2) the payment of\nthe principal of and interest on such refunding bonds.\n