§ 2436-B — Local ARRA bonds

§ 2436-b. Local ARRA bonds. (1) The agency may purchase local ARRA\nbonds using the proceeds of recovery act bonds, subject to the\nprovisions of this section and to any other provision of law applicable\nto the municipality and bonds it issues, including any debt limitation\napplicable to the municipality that issued the local ARRA bond, as well\nas to the other provisions of this title. To the extent that any such\nother provision of law conflicts with a provision of this section, the\nprovision of this section shall control, except as otherwise stated.\n (2) Subject to the provisions of this section:\n (a) Local ARRA bonds issued by a county, except a county wholly within\na city, may be additionally secured by a pledge to the agency of its\navailable county sales tax revenues subject to the provisions of\nsubdivision five of this section.\n (b) Local ARRA bonds issued by a city may be additionally secured by a\npledge to the agency of its available city sales tax revenues or its\navailable mortgage recording tax revenues, or both subject to the\nprovisions of subdivision five of this section.\n (c) Local ARRA bonds issued by a town may be additionally secured by a\npledge to the agency of its available mortgage recording tax revenues\nsubject to the provisions of subdivision five of this section.\n (d) Local ARRA bonds issued by a village may be additionally secured\nby a pledge to the agency of its available mortgage recording tax\nrevenues subject to the provisions of subdivision five of this section.\n (3) (a) Nothing contained in this title shall limit the right and\nobligations of a municipality to comply with the provisions of any\nexisting contract with or for the benefit of the holders of any of its\nother bonds, notes or other obligations.\n (b) Nothing contained in this title shall be construed to limit the\npower of a municipality to determine, from time to time, within\navailable funds for the municipality, the purposes for which\nexpenditures are to be made by the municipality and the amounts of such\nexpenditures.\n (c) Nothing contained in this title shall alter, limit, modify or\nimpair the right of any school district or of any city, town, or village\nwithin a county to receive from the county net collections, as\nauthorized by section twelve hundred sixty-two of the tax law or other\napplicable provision of part four of article twenty-nine of the tax law\nor by an unconsolidated state law that notwithstands such provision of\nthe tax law, from the county's sales and compensating use taxes imposed\npursuant to the authority of subpart B of part one of article\ntwenty-nine of the tax law. Further, nothing contained in this title\nshall alter, limit, modify or impair the right of any city or town\nwithin a county to receive from the county the net amount of mortgage\nrecording tax revenues imposed by subdivision one of section two hundred\nfifty-three of the tax law, as authorized by subdivision three of\nsection two hundred sixty-one of the tax law.\n (d) The agency's recovery act bonds secured by payments of principal\nand interest due with respect to local ARRA bonds shall not be a debt of\neither the state or any municipality, and neither the state nor any\nmunicipality shall be liable thereon, nor shall they be payable out of\nany funds other than those of the agency; and such recovery act bonds\nshall contain on the face thereof a statement to such effect.\n (e) Subject to the provisions of any contract with holders of bonds,\nnotes or other obligations, proceeds of recovery act bonds to be paid to\na municipality to purchase its local ARRA bonds shall be paid to the\nmunicipality and shall not be commingled with any other money of the\nagency.\n (f) Nothing contained in this title shall be construed to create a\ndebt of the state within the meaning of any constitutional or statutory\nprovisions. Any provision with respect to state aid shall be deemed\nexecutory only to the extent of moneys available, and no liability shall\nbe incurred by the state beyond the moneys available for that purpose,\nand any payment to be made by the comptroller of state aid is subject to\nannual appropriation of state aid by the state legislature.\n (g) Nothing contained in this title shall be deemed to restrict the\nright of the state to amend, repeal, modify, or otherwise alter any\nprovision of law relating to state aid to municipalities. The agency\nshall include in any resolution, contract, or agreement with holders of\nits bonds, notes or other obligations a provision which states that no\ndefault occurs as a result of the state's exercising its right to amend,\nrepeal, modify, or otherwise alter any provision of law relating to\nstate aid to municipalities.\n (4) (a) A municipality may covenant and agree that the municipality\nwill not limit, alter or impair the rights hereby vested in the agency\nto fulfill the terms of any agreements made with holders of the agency's\nrecovery act bonds, the proceeds of which were used to purchase the\nmunicipality's local ARRA bonds, such holders pursuant to this title, or\nin any way impair the rights and remedies of such holders or the\nsecurity for such bonds, until such bonds, together with the interest\nthereon and all costs and expenses in connection with any action or\nproceeding by or on behalf of such holders, are fully paid and\ndischarged. Nothing contained in this title shall be deemed to restrict\nany right of the municipality to amend, modify, repeal or otherwise\nalter any local laws, ordinances or resolutions imposing or relating to\ntaxes or fees, or appropriations relating to such taxes or fees, or\nsetting aside or allocating and applying, paying or using net\ncollections pursuant to the authority of part four of article\ntwenty-nine of the tax law or pursuant to the authority of any other\nprovision of state law that notwithstands a provision of such part, so\nlong as, after giving effect to such amendment, modification or other\nalteration, the aggregate amount as then projected by the municipality\nof (i) sales and compensating use taxes imposed by the municipality\npursuant to the authority of subpart B of part one of article\ntwenty-nine of the tax law (to the extent that the municipality is\nauthorized to impose such taxes and is imposing them at the time it\nissues its local ARRA bonds); and (ii) all such net collections to be\nset aside or to be allocated and applied, paid or used by the\nmunicipality pursuant to the authority of part four of article\ntwenty-nine of the tax law or pursuant to any other provision of state\nlaw that notwithstands a provision of such part four during each of the\nagency's fiscal years following the effective date of such amendment,\nmodification or other alteration shall be not less than two hundred\npercent of maximum annual debt service on the municipality's local ARRA\nbonds then outstanding. Notwithstanding anything to the contrary in this\nsection, a municipality that imposes sales and compensating use taxes at\nthe time it issues local ARRA bonds further agrees that it shall\ncontinue to impose such taxes during the time such bonds are outstanding\nat the maximum rate authorized therefor, without regard to any\nadditional rate, provided that any increase in the rate of such taxes to\nsatisfy this obligation shall comply with the applicable provisions of\nsubpart B of part one of article twenty-nine of the tax law.\n (b) Any such agreement with a municipality may be pledged by the\nagency to secure its recovery act bonds used to purchase local ARRA\nbonds issued by that municipality and may not be modified thereafter\nexcept as provided by the terms of the pledge or subsequent agreements\nwith the holders of such recovery act bonds.\n (c) The agency shall not include within any resolution, contract or\nagreement with holders of recovery act bonds any provision which\nprovides that a default occurs as a result of a municipality exercising\nits right to amend, modify, repeal or otherwise alter such taxes, fees\nor appropriations or such net collections. Nothing in this title shall\nbe deemed to obligate a municipality to make any payments or impose any\ntaxes or set aside or allocate and apply, pay or use net collections\npursuant to the authority of part four of article twenty-nine of the tax\nlaw or pursuant to the authority of an unconsolidated state law that\nnotwithstands a provision of such part; except that a municipality shall\nimpose taxes pursuant to the authority of subpart B of part one of\narticle twenty-nine of the tax law at the maximum rate authorized\ntherefor, without regard to any additional rate, provided that any\nincrease in the rate of such taxes to satisfy this obligation shall\ncomply with the applicable provisions of subpart B of part one of\narticle twenty-nine of the tax law.\n (5) (a) If a municipality fails to pay to the agency any principal or\ninterest due on its local ARRA bonds secured by a pledge of its\navailable local sales and use tax revenues or its available mortgage\nrecording tax revenues, or both, as described in subdivision two of this\nsection, the chairman of the agency shall notify the comptroller in\nwriting that such municipality has failed to meet its obligations. Such\nnotice shall set forth in detail the term, amount, interest rate, and\npayment schedule of the local ARRA bonds in default, and the exact\namounts of principal and interest due from such municipality in default.\nThe agency shall provide a copy of such notice to the chief fiscal\nofficer of such municipality in default and, in the case of a default by\na city, town, or village with respect to local ARRA bonds secured by\nmortgage recording tax revenues, also to the chief fiscal officer of the\ncounty in which the city, town, or village is located. The agency shall\nprovide such notice to the comptroller at least thirty days prior to the\ndate that the comptroller is expected to withhold and pay over local\nsales and use tax revenues to the agency.\n (b) Upon the comptroller receiving such complete, certified written\nnotice from the agency, the comptroller shall, notwithstanding any\nprovision of section twelve hundred sixty-one of the tax law to the\ncontrary, pay to the agency, on or before the fifteenth day of each\nmonth, all or a portion of the local sales and use tax revenues due the\nmunicipality in default, until the amount certified in default has been\nextinguished. The comptroller shall make such payments to the agency\nonly out of net collections not otherwise pledged, required to be\nintercepted or otherwise encumbered by provisions of law in effect\nimmediately prior to the date the municipality's local ARRA bonds\nsecured by a pledge authorized by this section shall have been issued.\n (c) Upon receiving such complete, certified written notice from the\nagency, the chief fiscal officer of a county, notwithstanding the\nprovisions of section two hundred sixty-one of the tax law, shall pay\nover to the comptroller, the net amount of mortgage recording tax\nrevenues imposed by subdivision one of section two hundred fifty-three\nof the tax law due to the city, town, or village in default. The chief\nfiscal officer of the county shall continue to make those payments to\nthe comptroller until the agency sends certified notice to the officer\nand to the comptroller that the city or town is no longer in default.\nThe comptroller shall pay to the agency, on or before the fifteenth day\nof each month, all or a portion of the mortgage recording tax revenues\nreceived from the chief fiscal officer of the county, until the amount\ncertified in default has been extinguished.\n (d) Such payments by the comptroller to the agency shall be made on\naccount of, and for the benefit of, the municipality in default. If so\nrequested by the agency, as indicated in its certified notice to the\ncomptroller, the comptroller shall make such payments to a trustee\npursuant to an indenture for holders of the recovery act bonds issued by\nthe agency that were used to purchase the municipality's local ARRA\nbonds in default. Such payments by the comptroller on behalf of such\nmunicipality shall be applied by the agency or, if paid directly to the\ntrustee, by such trustee, to cure that municipality's default. To the\nextent the comptroller makes any such payment to the agency or to such a\ntrustee, the municipality's default shall be cured.\n (e) The comptroller shall not be responsible for any inaccuracy in the\namount of such payments based upon the notice furnished by the agency.\nThe comptroller shall not be required to make payments under this\nsubdivision which are greater than the amounts of local sales and use\ntax revenues due the municipality, as certified to the comptroller by\nthe commissioner of taxation and finance as provided in subdivision (c)\nof section twelve hundred sixty-one of the tax law (subject to the\nlimitation in paragraph (b) of this subdivision), or which are greater\nthan the amount of net mortgage recording tax revenues paid to the\ncomptroller by the chief fiscal officer of the county. After the\ncomptroller makes any payments of net collections required under this\nsection, the comptroller shall pay any balance of net collections due\nsuch municipality to such municipality in the manner provided in\nsubdivision (c) of section twelve hundred sixty-one of the tax law or\nother applicable law. The comptroller shall be required to make payments\nunder this section for only so long as the municipality is in default as\ncertified in the agency's notice to the comptroller.\n (f) The authority in this section to withhold local sales and use tax\nrevenues and mortgage recording tax revenues and pay them over to the\nagency shall be in addition to the state aid guaranty set forth in\nsection twenty four hundred thirty-six of this title; and the agency may\ncertify that either or both revenue sources may be withheld to the\nextent necessary to satisfy the municipality's unmet obligations to the\nagency.\n (g) Any withholding of revenues pursuant to this subdivision or state\naid pursuant to section twenty-four hundred thirty-six of this title\nwith respect to local ARRA bonds shall be made in consultation with the\ndirector of the budget of the state; provided, however, such\nconsultation shall not delay or otherwise adversely affect the agency's\nright to receive timely payment of such revenues and/or state aid.\n (6) When used in this section, the following terms shall have the\nfollowing meanings unless the context clearly indicates otherwise:\n (a) "Sales and compensating use taxes" means taxes imposed by a county\nor city pursuant to the authority of subpart B of part one of article\ntwenty-nine of the tax law.\n (b) "Net collections" shall have the same meaning as in subdivision\n(f) of section twelve hundred sixty-two of the tax law.\n (c) "County sales tax revenues" means net collections set aside for\ncounty purposes pursuant to subdivision (a) of section twelve hundred\nsixty-two of the tax law or other applicable provision of part four of\narticle twenty-nine of the tax law, from a county's sales and\ncompensating use taxes.\n (d) "City sales tax revenues" means net collections from a city's\nsales and compensating use taxes.\n (e) "Municipality" means municipality as defined in paragraph one of\nsection 2.00 of the local finance law.\n (f) "Local sales and use tax revenues" means any of the tax revenues\ndefined in paragraph (c) or (d) of this subdivision, or any combination\nof them, as the case may be.\n (g) "Secure" means a pledge of sales and compensating use taxes or\nmortgage recording taxes for the purposes of default by a municipality\nas a result of a failure to pay debt service on its local ARRA bonds.\n