§ 57 — Issuance of state bonds

New York § 57

• Jurisdiction: New York
• Law STF: State Finance
• Art. 5: Borrowing By the State

Text

§ 57. Issuance of state bonds. 1. Whenever the legislature, after\nauthorization of a bond issue by the people at a general election, as\nprovided by section eleven of article seven of the state constitution,\nor as provided by section three of article eighteen of the state\nconstitution, shall have authorized, by one or more laws, the creation\nof a state debt or debts, bonds of the state, to the amount of the debt\nor debts so authorized, shall be issued and sold by the state\ncomptroller. Any appropriation from the proceeds of the sale of bonds,\npursuant to this section, shall be deemed to be an authorization for the\ncreation of a state debt or debts to the extent of such appropriation.\nThe state comptroller may issue and sell a single series of bonds\npursuant to one or more such authorizations and for one or more duly\nauthorized works or purposes. As part of the proceedings for each such\nissuance and sale of bonds, the state comptroller shall designate the\nworks or purposes for which they are issued. It shall not be necessary\nfor him to designate the works or purposes for which the bonds are\nissued on the face of the bonds. The proceeds from the sale of bonds for\nmore than one work or purpose shall be separately accounted for\naccording to the works or purposes designated for such sale by the\ncomptroller and the proceeds received for each work or purpose shall be\nexpended only for such work or purpose. The bonds shall bear interest at\nsuch rate or rates as in the judgment of the state comptroller may be\nsufficient or necessary to effect a sale of the bonds, and such interest\nshall be payable at least semi-annually, in the case of bonds with a\nfixed interest rate, and at least annually, in the case of bonds with an\ninterest rate that varies periodically, in the city of New York unless\nannual payments of principal and interest result in substantially level\nor declining debt service payments over the life of an issue of bonds\npursuant to paragraph (b) of subdivision two of this section or unless\naccrued interest is contributed to a sinking fund in accordance with\nsubdivision three of section twelve of article seven of the state\nconstitution, in which case interest shall be paid at such times and at\nsuch places as shall be determined by the state comptroller prior to\nissuance of the bonds.\n 2. Such bonds, or the portion thereof at any time issued, shall be\nmade payable (a) in equal annual principal installments or (b) in annual\ninstallments of principal and interest which result in substantially\nlevel or declining debt service payments, over the life of the bonds,\nthe first of which annual installments shall be payable not more than\none year from the date of issue and the last of which shall be payable\nat such time as the comptroller may determine but not more than forty\nyears or state fiscal years after the date of issue, not more than fifty\nyears after the date of issue in the case of housing bonds, and not more\nthan twenty-five years in the case of urban renewal bonds. Where bonds\nare payable pursuant to paragraph (b) of this subdivision, except for\nthe year or state fiscal year of initial issuance if less than a full\nyear of debt service is to become due in that year or state fiscal year,\neither (i) the greatest aggregate amount of debt service payable in any\nyear or state fiscal year shall not differ from the lowest aggregate\namount of debt service payable in any other year or state fiscal year by\nmore than five percent or (ii) the aggregate amount of debt service in\neach year or state fiscal year shall be less than the aggregate amount\nof debt service in the immediately preceding year or state fiscal year.\nFor purposes of this subdivision, debt service shall include all\nprincipal, redemption price, sinking fund installments or contributions,\nand interest scheduled to become due. For purposes of determining\nwhether debt service is level or declining on bonds issued with a\nvariable rate of interest pursuant to paragraph b of subdivision four of\nthis section, the comptroller shall assume a market rate of interest as\nof the date of issuance. Where the comptroller determines that interest\non any bonds shall be compounded and payable at maturity, such bonds\nshall be payable only in accordance with paragraph (b) of this\nsubdivision unless accrued interest is contributed to a sinking fund in\naccordance with subdivision three of section twelve of article seven of\nthe state constitution. In no case shall any bonds or portion thereof be\nissued for a period longer than the probable life of the work or\npurpose, or part thereof, to which the proceeds of the bonds are to be\napplied, or in the alternative, the weighted average period of the\nprobable life of the works or purposes to which the proceeds of the\nbonds are to be applied taking into consideration the respective amounts\nof bonds issued for each work or purpose, as may be determined under\nsection sixty-one of this article and in accordance with the certificate\nof the commissioner of general services, and/or the commissioner of\ntransportation, state architect, state commissioner of housing and urban\nrenewal, or other authority, as the case may be, having charge by law of\nthe acquisition, construction, work or improvement for which the debt\nwas authorized. Such certificate shall be filed in the office of the\nstate comptroller and shall state the group, or, where the probable\nlives of two or more separable parts of the work or purposes are\ndifferent, the groups, specified in such section, for which the amount\nor amounts, shall be provided by the issuance and sale of bonds.\nWeighted average period of probable life shall be determined by\ncomputing the sum of the products derived from multiplying the dollar\nvalue of the portion of the debt contracted for each work or purpose (or\nclass of works or purposes) by the probable life of such work or purpose\n(or class of works or purposes) and dividing the resulting sum by the\ndollar value of the entire debt after taking into consideration any\noriginal issue discount. Any costs of issuance financed with bond\nproceeds shall be prorated among the various works or purposes. Such\nbonds, or the portion thereof at any time sold, shall be of such\ndenominations, subject to the foregoing provisions, as the state\ncomptroller may determine. Notwithstanding the foregoing provisions of\nthis subdivision, the comptroller may issue all or a portion of such\nbonds as serial debt, term debt or a combination thereof, maturing as\nrequired by this subdivision, provided that the comptroller shall have\nprovided for the retirement each year or state fiscal year, or otherwise\nhave provided for the payment of, through sinking fund installment\npayments or otherwise, a portion of such term bonds in an amount meeting\nthe requirements of paragraph (a) or (b) of this subdivision or shall\nhave established a sinking fund and provided for contributions thereto\nas provided in subdivision eight of this section and section twelve of\narticle seven of the state constitution.\n 3. The bonds shall be sold in such lot or lots, from time to time, as\nmay be required for the work or purpose for which the creation of a\nstate debt or debts shall have been authorized and appropriations shall\nhave been made by law, but not in excess of the aggregate amount\nauthorized for such purpose. For the purpose of determining the total\namount of debt sold for a particular work or purpose, only the amount of\nmoney actually received by the state shall be considered when bonds are\nsold at a discount.\n 4. a. Such bonds shall be sold at par, at par plus a premium, or at a\ndiscount to the bidder offering the lowest interest cost to the state,\ntaking into consideration any premium or discount and, in the case of\nrefunding bonds, the bona fide initial public offering price, not less\nthan two business days after the publication of a notice of sale at\nleast once in a definitive trade publication of the municipal bond\nindustry published on each business day in the state of New York which\nis generally available in electronic or physical form to participants in\nthe municipal bond industry, which notice shall state the terms of the\nsale. The comptroller may not change the terms of the sale unless notice\nof such change is sent via a definitive trade wire service of the\nmunicipal bond industry which, in general, makes available information\nregarding activity and sales of municipal bonds and is generally\navailable to participants in the municipal bond industry, at least one\nhour prior to the time of the sale as set forth in the original notice\nof sale. In so changing the terms or conditions of a sale the\ncomptroller may send notice by such wire service that the sale will be\ndelayed by up to thirty days, provided that wire notice of the new sale\ndate will be given at least one business day prior to the new time when\nbids will be accepted. In such event, no new notice of sale shall be\nrequired to be published. Notwithstanding the provisions of section\nthree hundred five of the state technology law or any other law, if the\nnotice of sale contains a provision that bids will only be accepted\nelectronically in the manner provided in such notice of sale, the\ncomptroller shall not be required to accept non-electronic bids in any\nform. Advertisements shall contain a provision to the effect that the\nstate comptroller, in his or her discretion, may reject any or all bids\nmade in pursuance of such advertisements, and in the event of such\nrejection, the state comptroller is authorized to negotiate a private\nsale or readvertise for bids in the form and manner above described as\nmany times as, in his or her judgment, may be necessary to effect a\nsatisfactory sale. Notwithstanding the foregoing provisions of this\nparagraph, whenever in the judgment of the comptroller the interests of\nthe state will be served thereby, he or she may sell state bonds at\nprivate sale at par, at par plus a premium, or at a discount. The\ncomptroller shall promulgate regulations governing the terms and\nconditions of any such private sales, which regulations shall include a\nprovision that he or she give notice to the governor, the temporary\npresident of the senate, and the speaker of the assembly, of his or her\nintention to conduct a private sale of obligations pursuant to this\nsection not less than two business days prior to such sale or the\nexecution of any binding agreement to effect such sale.\n b. Notwithstanding paragraph a of this subdivision, whenever in the\njudgment of the comptroller the interests of the state will be served\nthereby, such bonds may be sold at public or private sale in accordance\nwith the procedures set forth in paragraph a of this subdivision, with\ninterest rates that vary in accordance with a formula or procedure set\nforth or referred to in the bonds and may provide the holders thereof\nwith such rights to require the state or other persons to purchase or\nredeem such bonds or renewals thereof from the proceeds of the resale\nthereof or otherwise from time to time prior to the final maturity of\nsuch bonds as the comptroller may determine and the state may resell, at\nany time prior to final maturity, any such bonds acquired as a result of\nthe exercise of such rights. The holders of bonds sold pursuant to this\nparagraph may be provided with the right to require the state to\nrepurchase or redeem the bonds prior to the final maturity thereof if\nthe state has entered into one or more letter of credit agreements or\nother liquidity facility agreements entered into for the express\npurposes of such sale and which shall require a financially responsible\nparty or parties to the agreement or agreements, which may be the state,\nto purchase or redeem all or any portion of such bonds tendered by the\nholders thereof for repurchase or redemption prior to the final maturity\nof such bonds. Such requirement to purchase or redeem bonds shall\ncontinue until such time as the right of the holders of such bonds to\nrequire repurchase or redemption of such bonds prior to the final\nmaturity thereof shall cease. A financially responsible party or\nparties, for purposes of this paragraph, shall mean a person or persons\ndetermined by the comptroller to have sufficient net worth and liquidity\nto purchase and pay for on a timely basis all of the bonds which may be\ntendered for repurchase or redemption by the holders thereof.\n 5. The proceeds of bonds sold pursuant to this section shall be paid\ninto the treasury, and each portion thereof provided for a given work or\npurpose shall be accounted for separately in one or more capital\nprojects funds in accordance with generally accepted accounting\nprinciples and made available only for such work or purpose, and only to\nthe extent of appropriations.\n 6. Except with respect to bonds issued in the manner provided in\nparagraph (c) of subdivision seven of this section, all bonds of the\nstate of New York which the comptroller of the state of New York is\nauthorized to issue and sell, shall be executed in the name of the state\nof New York by the manual or facsimile signature of the state\ncomptroller and his seal (or a facsimile thereof) shall be thereunto\naffixed, imprinted, engraved or otherwise reproduced. In case the state\ncomptroller who shall have signed and sealed any of the bonds shall\ncease to hold the office of state comptroller before the bonds so signed\nand sealed shall have been actually countersigned and delivered by the\nfiscal agent or trustee, such bonds may, nevertheless, be countersigned\nand delivered as herein provided, and may be issued as if the state\ncomptroller who signed and sealed such bonds had not ceased to hold such\noffice. Any bond of a series may be signed and sealed on behalf of the\nstate of New York by such person as at the actual time of the execution\nof such bond shall hold the office of comptroller of the state of New\nYork, although at the date of the bonds of such series such person may\nnot have held such office. The coupons to be attached to the coupon\nbonds of each series shall be signed by the facsimile signature of the\nstate comptroller of the state of New York or by any person who shall\nhave held the office of state comptroller of the state of New York on or\nafter the date of the bonds of such series, notwithstanding that such\nperson may not have been such state comptroller at the date of any such\nbond or may have ceased to be such state comptroller at the date when\nany such bond shall be actually countersigned and delivered. The bonds\nof each series shall be countersigned with the manual signature of an\nauthorized employee of the fiscal agent or trustee of the state of New\nYork. No bond and no coupon thereunto appertaining shall be valid or\nobligatory for any purpose until such manual countersignature of an\nauthorized employee of the fiscal agent or trustee of the state of New\nYork shall have been duly affixed to such bond.\n 7. (a) The state comptroller is authorized to issue bonds in fully\nregistered form, executed as provided in subdivision six of this\nsection, in such denominations as shall be determined by the state\ncomptroller and exchangeable for fully registered bonds in denominations\nas shall be determined by the state comptroller.\n (b) The state comptroller is authorized to issue bonds as a single\nregistered bond, executed as provided in subdivision six of this\nsection, in an amount equal to the principal amount of the series of\nbonds being issued, or more than one registered bond in amounts equal to\nthe principal amount of the series of bonds maturing in a single year,\nand to deposit the bond or bonds with a securities depository organized\nunder the banking law of the state of New York and qualifying as a\nclearing agency registered under the United States Securities Exchange\nAct of 1934, as amended. Book entries representing beneficial ownership\nof the bonds shall be in denominations determined by the state\ncomptroller.\n (c) The state comptroller is authorized to issue bonds as\nuncertificated securities within the meaning of article eight of the\nuniform commercial code with beneficial ownership in denominations\ndetermined by the state comptroller and exchangeable in book entries in\ndenominations as shall be determined by the state comptroller.\n 8. Any sinking funds created pursuant to this section shall be\nmaintained and managed by the state comptroller or an agent or trustee\ndesignated by the state comptroller and shall be funded in accordance\nwith the requirements of section twelve of article seven of the state\nconstitution. Money in such sinking funds shall be held as cash or shall\nbe invested in direct obligations of the federal government, or\nobligations the interest on which is exempt from federal income taxation\nand which are fully secured by direct obligations of the federal\ngovernment, having such maturities and interest payment dates as\nrequired to make all payments to be made from the sinking fund as they\ncome due. Amounts in such sinking funds shall be used solely for the\npurpose of retiring the bonds secured thereby except that amounts in\nexcess of the required balance on any contribution date and amounts\nremaining in such funds after all of the bonds secured thereby have been\nretired shall be deposited in the general fund. No appropriation shall\nbe required for disbursement of money, or income earned thereon, from\nany sinking fund for the purpose of paying principal of and interest on\nthe bonds for which such fund was created, except that interest shall be\npaid from any such fund only if, and to the extent that, it is not\npayable annually and contributions on account of such interest were made\nto the fund.\n