§ 55 — Issuance of tax and revenue anticipation notes and bond anticipation notes

§ 55. Issuance of tax and revenue anticipation notes and bond\nanticipation notes. 1. When used in this section, the following terms\nshall be defined as follows:\n (a) "Tax and revenue anticipation note" shall mean a note issued in\nanticipation of the receipt of taxes and revenues, direct or indirect,\nfor the purposes and within the amounts of appropriations theretofore\nmade.\n (b) "Bond anticipation note" shall mean a note issued in anticipation\nof the receipt of the proceeds of the sale of bonds duly authorized at\nthe time such notes are issued.\n (c) "Flexible note" shall mean a tax and revenue anticipation note or\nbond anticipation note the interest on which is payable at, and on one\nor more dates prior to, maturity.\n (d) "Short-term series note" shall mean a tax and revenue anticipation\nnote or a bond anticipation note which is one of a series of notes\nissued pursuant to a financing program under which it is expected that\neach note will be paid from the proceeds of one or more renewal notes of\nsuch series, and in the case of the final note or notes of such series,\nfrom the taxes and revenues or the proceeds of bonds in anticipation of\nthe receipt of which such note or notes have been issued. The term\n"short-term series note" shall include any note issued pursuant to a\nrevolving credit agreement or other similar liquidity facility for the\npurpose of renewing or paying outstanding short-term series notes on\ntheir stated maturity dates when such short-term series notes are not\nrenewed or paid from the proceeds of one or more other renewal notes of\nsuch series. Such a note issued pursuant to a revolving credit agreement\nor similar liquidity facility shall not be considered a flexible note\nfor the purposes of this section.\n (e) "Financially responsible party or parties" shall mean a person or\npersons determined by the comptroller to have sufficient net worth and\nliquidity to purchase and pay for on a timely basis all of the notes and\nrenewals thereof which may be tendered for repurchase or redemption by\nthe holders thereof.\n 2. (a) (i) The comptroller is authorized to issue tax and revenue\nanticipation notes and renewals thereof including, but not limited to,\nflexible notes and short-term series notes in such form and with such\nterms as the comptroller shall determine. Such notes and renewals\nthereof shall be non-interest bearing or bear interest at such rate or\nrates, which may vary from time to time, as, in the judgment of the\ncomptroller, may be sufficient or necessary to effect the issuance and\nsale or resale thereof in the manner determined by the comptroller.\n (ii) Such notes and renewals thereof may be redeemable from time to\ntime on such date or dates prior to maturity as the comptroller may\ndetermine. Such notes and renewals thereof may provide the holders\nthereof with such rights to require the state or other persons to\npurchase or redeem such notes and renewals thereof from the proceeds of\nthe resale thereof or otherwise from time to time prior to the stated\nmaturity thereof as the comptroller may determine. Notwithstanding the\nforegoing, the holders of such notes and renewals thereof sold pursuant\nto this subparagraph shall not be provided with the right to require the\nstate to repurchase or redeem the notes and renewals thereof prior to\ntheir stated maturity unless the state has entered into one or more\nletter of credit agreements or other liquidity facility agreements\nentered into for the express purposes of such sales and which shall\nrequire a financially responsible party or parties to the agreement or\nagreements, other than the state, to purchase or redeem all or any\nportion of such notes and renewals thereof tendered by the holders\nthereof for repurchase or redemption prior to the stated maturity of\nsuch notes and renewals thereof. Such requirement to purchase or redeem\nsuch notes and renewals thereof shall continue until such time as the\nright of the holders of such notes and renewals thereof to require\nrepurchase or redemption of such notes and renewals thereof prior to the\nstated maturity shall cease. Such notes and renewals thereof shall,\ntogether with the interest thereon, be paid from the taxes and revenues\nin anticipation of which they have been issued within one year from the\ndate of original issue and so much of such taxes and revenues as will be\nsufficient to pay the amount borrowed, with the interest thereon, is\npledged to the payment thereof. The comptroller is authorized to enter\ninto such agreements with other persons as he deems necessary or\nappropriate in connection with the issuance, sale and resale of such\nnotes and, at his discretion, to resell or retire any such notes\npurchased by the state prior to the stated maturity thereof.\n (iii) Whenever the comptroller shall issue tax and revenue\nanticipation notes in the form of an issue of flexible notes or\nshort-term series notes, he shall specify in writing, at the time of\noriginal issuance thereof, the date or dates on which the notes or\nrenewal notes of such issue are to be paid from taxes and revenues and\nnot from the proceeds of resales or renewals thereof, and for purposes\nof paragraph (b) of this subdivision, the maturity date of the notes and\nrenewal notes of such issue shall be the date or dates so specified by\nthe comptroller. The provisions of paragraph (b) of this subdivision\nshall not apply to, and the comptroller shall not be required to set\naside any taxes or revenues in a separate note repayment account\npursuant to such paragraph (b) for, the payment of principal of or\ninterest on flexible notes or short-term series notes or renewals\nthereof if such payment is due on any date other than the date so\nspecified by the comptroller. The date or dates, if any, on which tax\nand revenue anticipation notes or renewals thereof may be redeemable\nprior to maturity, or on which the holders thereof may have the right to\nrequire the state or other persons to purchase or redeem such notes or\nrenewals thereof from the proceeds of the resale thereof or otherwise\nprior to the stated maturity thereof, shall not be deemed the maturity\ndate thereof for purposes of paragraph (b) of this subdivision.\n (b) No later than the tenth business day of each month during any\nfiscal year in which tax and revenue anticipation notes mature, the\ncomptroller shall prepare a schedule of anticipated taxes and revenues\nreceivable by the state as of the date of such schedule during the\nbalance of such fiscal year in such detail as is necessary to carry out\nthe purposes of this paragraph, based upon estimates of such taxes and\nrevenues filed with him by the director of the budget. Except as may be\nrequired to comply with obligations to the holders of bonds of the state\nor the holders of bonds guaranteed by the state, commencing at any time\nthat the outstanding principal amount of any issue of tax and revenue\nanticipation notes, and the interest due thereon, equals ninety-five\npercent of the amount of taxes and revenues shown on such schedule to be\nreceived during the period ending on the maturity date of the notes of\nsuch issue, after deducting from such taxes and revenues the aggregate\nprincipal amount of all outstanding notes of other issues, and the\ninterest due thereon, which mature during such period and against which\ntaxes and revenues have not, at such time, been collected and set aside\nin the note repayment account pursuant to the provisions of this\nsubdivision, the comptroller shall set aside all taxes and revenues as\nreceived in a separate note repayment account until the balance in such\naccount is sufficient to pay the notes of such issue and the interest\nthereon and the principal of and the interest on any other notes with a\nmaturity date on or before such maturity date; provided, however, that\nthe comptroller shall commence to set aside such taxes and revenues no\nlater than the fifteenth day prior to the maturity date of any issue of\nnotes and continue to set aside taxes and revenues until the balance in\nthe note repayment account is sufficient to pay such notes and the\ninterest thereon at maturity and the principal of and interest on any\nother notes maturing on or before such maturity date. The moneys in such\nrepayment account shall be kept separate and apart from all other moneys\nin the custody of the comptroller, shall be deposited in a segregated\nbank account, and held in trust for the holders of notes and the\ninterest in such moneys of holders of notes shall be in the order of\nmaturity of notes, with the holders of notes of an earlier maturity\nhaving a first pledge over the holders of notes maturing later. Such\nmoneys shall be disbursed only for the payment of notes and the interest\nthereon as they mature and may not be disbursed for any other purpose.\nMoneys in the note repayment account shall, at the direction of the\ncomptroller, be invested in obligations of the United States of America\nor in obligations of or guaranteed by agencies of the United States of\nAmerica where the payment of principal and interest is guaranteed by the\nUnited States of America or in certificates of deposit secured by\nobligations of the United States of America deposited by the issuer\nthereof with the bank maintaining such account in an amount equal to the\namount of such certificate of deposit, provided that so much of the\namount of such obligations or certificates as is necessary for the\npayment of any issue of notes is payable on or before the maturity date\nof such notes or, in the case of investments in obligations of the\nUnited States of America or in obligations of or guaranteed by agencies\nof the United States of America where the payment of principal and\ninterest is guaranteed by the United States of America, is covered by\nagreements with primary dealers in obligations of or guaranteed by the\nUnited States of America for the repurchase thereof on or before the\nmaturity date of such notes.\n (c) For purposes of paragraph (b) of this subdivision "taxes and\nrevenues" shall mean all moneys payable into the general fund of the\nstate except the proceeds of the issuance by the state of bonds, bond\nanticipation notes or notes, and "notes" shall mean notes issued in\nanticipation of the receipt of taxes and revenues.\n 3. The comptroller is authorized to issue, whenever he may deem it for\nthe best interests of the state to do so, bond anticipation notes and\nrenewals thereof, including, but not limited to, flexible notes and\nshort-term series notes, in such form and with such terms as he shall\ndetermine. Such notes and renewals thereof shall bear interest at such\nrate or rates of interest, which may vary from time to time, as in the\njudgment of the comptroller may be sufficient or necessary to effect a\nsale thereof and shall mature within a period not to exceed one year.\nSuch notes and renewals thereof may be redeemable from time to time on\nsuch date or dates prior to maturity as the comptroller may determine.\nSuch notes and renewals thereof may provide the holders thereof with\nsuch rights to require the state or other persons to purchase or redeem\nsuch notes or renewal notes from the proceeds of the resale thereof or\notherwise from time to time prior to the stated maturity thereof as the\ncomptroller may determine. The comptroller is authorized to enter into\nsuch agreements with other persons as he deems necessary or appropriate\nin connection with the issuance, sale and resale of such notes and, at\nhis discretion, to resell or retire any such notes purchased by the\nstate prior to the stated maturity thereof. Notwithstanding the\nforegoing, the holders of such notes and renewals thereof sold pursuant\nto this subdivision shall not be provided with the right to require the\nstate to repurchase or redeem the notes and renewals thereof prior to\ntheir stated maturity unless the state has entered into one or more\nletter of credit agreements or other liquidity facility agreements\nentered into for the express purpose of such sales and which shall\nrequire a financially responsible party or parties to the agreement or\nagreements, other than the state, to purchase or redeem all or any\nportion of such notes and renewals thereof tendered by the holders\nthereof for repurchase or redemption prior to the stated maturity of\nsuch notes and renewals thereof. Such requirement to purchase or redeem\nsuch notes and renewals thereof shall continue until such time as the\nright of the holders of such notes and renewals thereof to require\nrepurchase or redemption of such notes and renewals thereof prior to the\nstated maturity shall cease. The proceeds of the sale of such notes\nshall be used only for the purposes for which may be used the proceeds\nof the sale of bonds in anticipation of the sale whereof the notes were\nissued. All of such notes and any renewals thereof shall be payable at a\nfixed time, from the proceeds of the sale of bonds, and no renewal of\nany such note shall be issued after the sale of bonds in anticipation of\nwhich the original note was issued. In the event that a sale of such\nbonds shall not have occurred prior to the maturity of the notes so\nissued in anticipation of such sale the comptroller shall, in order to\nmeet the notes then maturing, issue renewal notes for such purpose.\nEvery such note and any renewals thereof shall, with the interest\nthereon, be payable from the proceeds of the sale of such bonds and not\notherwise from any borrowing within two years from the date of original\nissue, except that notes or obligations payable from the proceeds of the\nsale of bonds issued or to be issued for any of the purposes authorized\nby article eighteen of the constitution, shall, with the interest\nthereon, be payable from the proceeds of the sale of such bonds within\nfive years from the date of original issue. The total amount of such\nnotes or renewals thereof issued and outstanding shall at no time exceed\nthe total amount of bonds authorized to be issued but not yet issued.\nThe comptroller shall include in his annual report, a detailed statement\nof all such loans made and bonds issued during the year and of his\nproceedings in relation thereto.\n 4. The outstanding principal amount of all flexible notes issued by\nthe state pursuant to subdivisions two and three of this section shall\nat no time exceed the sum of five hundred million dollars and the\noutstanding principal amount of all short term series notes issued by\nthe state pursuant to subdivisions two and three of this section shall\nat no time exceed the sum of five hundred million dollars.\n 5. The comptroller shall annually submit a report to the director of\nthe budget, the chairman of the senate finance committee and the\nchairman of the assembly ways and means committee. Such report shall be\nsubmitted no later than the last business day of June and shall provide\na comprehensive analysis of any flexible notes and/or short-term series\nnotes issued or outstanding in the previous fiscal year. Such report\nshall include, but not be limited to:\n (a) An analysis of the effective interest rates associated with such\nflexible notes and short-term series notes;\n (b) An analysis of the expenses associated with the issuance of such\nnotes, including any fees or commissions required pursuant to a note\nrepurchase agreement or line of credit;\n (c) An analysis of the effective interest rates associated with such\nnotes after consideration of the expenses described in paragraph (b) of\nthis subdivision;\n (d) An analysis of any reinvestment opportunities and earnings\nprovided by the issuance of such notes; and\n (e) Any other analyses which the comptroller may deem relevant to\ndetermining the costs and benefits associated with flexible notes and\nshort term series notes.\n