§ 2435 — Loans to municipalities

§ 2435. Loans to municipalities. 1. The agency may purchase, and\ncontract to purchase, municipal bonds from municipalities at such price\nor prices, upon such terms and conditions and in such manner, not\ninconsistent with the provisions of the local finance law, as the agency\nshall deem advisable; provided, however, that the average interest rate\npayable on all municipal bonds (taken as a group) purchased with the\nproceeds of an issue of bonds shall equal or exceed the interest rate on\nsuch issue of bonds. The agency shall not purchase the municipal bonds\nof any municipality if (i) the aggregate principal amount thereof,\ntogether with the aggregate principal balances of the municipal bonds of\nsuch municipality then outstanding and held by the agency, exceed an\namount equal to ten percent of the aggregate principal amount of the\nstatutory authorization at the time for the issuance of bonds and notes,\nas provided in section twenty-four hundred thirty-eight of this title,\nand (ii) the aggregate principal amount thereof exceeds an amount equal\nto fifty percent of the aggregate principal amount of all municipal\nbonds proposed to be so purchased at the time; provided, however, that\nthis sentence shall not apply to local ARRA bonds or local public safety\ncommunications bonds.\n 2. The agency shall require as a condition of purchase of municipal\nbonds from municipalities that each such municipality shall agree (i) to\npledge its full faith and credit for the payment of the principal of and\ninterest on such municipal bonds, (ii) to make annual appropriations for\namounts required for the payment of such principal and interest, and\n(iii) if at any time the municipality fails to make the required\nappropriation to pay such principal and interest, or fails to make the\npayment of the required principal and interest, the provisions of\nsection twenty-four hundred thirty-six and/or twenty-four hundred\nthirty-six-b of this title shall take effect. All municipalities selling\nmunicipal bonds to the agency are hereby authorized to make and carry\nout the agreements with the agency required in this subdivision.\n 3. In connection with the sale or proposed sale of municipal bonds to\nthe agency, any municipality may, notwithstanding the provisions of any\ngeneral or special law to the contrary, pay (i) such fixed or annual\ncharges as may be prescribed from time to time by the agency for or with\nrespect to the purchase by the agency of the municipal bonds of such\nmunicipality, and (ii) all charges or expenses necessary for the\nconversion or reconversion of any of its municipal bonds from or into\ncoupon form or registered form as may be required by the agency in\nconnection with any sale or other disposition of such municipal bonds.\n