NY Loc Fin L § 90.00 (2021)
2021 New York Laws LFN - Local Finance Article 2 - Local Indebtedness Title 7 - Refunding of Bonds and Capital Notes 90.00 - Refunding of Bonds.

§  90.00  Refunding of bonds. a. 1. A municipality, school district or district corporation may issue serial bonds to refund bonds issued on or after January first, nineteen  hundred  thirty-nine,  other  than  bonds issued  to redeem notes, certificates or other evidences of indebtedness issued  prior  to  January  first,  nineteen  hundred  thirty-nine,   in anticipation of such bonds. The last installment of such refunding bonds issued  to  refund  bonds issued pursuant to the social services law, or the former social welfare law, or the former public welfare law, for the purpose of safety net assistance, as defined in such laws, shall  mature within ten years after the date of issue of the bonds to be refunded. In all  other  cases  the  last  installment  of such refunding bonds shall mature not later than the expiration of the maximum period  of  probable usefulness  permitted by law at the time of the issuance of the bonds to be refunded or the refunding bonds for the object or purpose  for  which the bonds to be refunded were issued. Such period shall be computed from the  date  of  issuance  of the bonds to be refunded or from the date of issuance of the first bond anticipation note issued in  anticipation  of such bonds, whichever date is the earlier.   2.   Notwithstanding   the  provisions  of  subdivision  one  of  this paragraph, bonds issued by a school district prior to December first two thousand one, or prior to thirty days after the effective date  of  this subdivision, whichever is later, for the purpose of financing facilities which  were  eligible  for  building  aid pursuant to section thirty-six hundred two of the education law, and for which the  aid  apportionments payable  in  two  thousand  two--two  thousand three and/or two thousand three--two thousand four school years for approved expenditures for debt service are subsequently reduced as  a  result  of  the  application  of assumed  amortization  to unpaid principal outstanding as of July first, two thousand two, may be refunded and the refunding bonds may be sold at either public or private sale  in  accordance  with  the  provisions  of section 90.10 of this title; provided, however, the school district need not  comply with: (i) subparagraph (a) of subdivision two of paragraph b of section 90.10 of this title; and (ii) if the bonds to be refunded are to be redeemed or paid on the same  date  as  the  refunding  bonds  are issued,  the  school  district  need  not  comply with the provisions of section 90.10 of this title relating to the escrow of  the  proceeds  of the sale of the refunding bonds.   3.  Refunding  bonds  shall  not  be  issued to refund bonds issued to finance an object or purpose which, at the time of the issuance of  such bonds, had a period of probable usefulness of five years or less.   4.  If  a budgetary appropriation has been made for the payment of the principal on bonds, such maturity shall not be included in  a  refunding bond issue.   b.  The  maturities  and  amount  of  such refunding bonds shall be so arranged that the combined amount of:   1. The bonds of the original issue, and   2. Refunding bonds previously issued to refund bonds of  the  original issue, if any, to  be  redeemed  by  an  appropriation  other than from the proceeds of refunding bonds during the year of refunding and the combined amount of:   1. The bonds of the original issue,   2. Such refunding bonds, and   3. Refunding bonds previously issued to refund bonds of  the  original issue, if any, to  be  redeemed  by  an  appropriation  other than from the proceeds of refunding bonds in each succeeding year  thereafter  is  not  more  than fifty per centum in excess of the combined amount of:   1. The bonds of the original issue,    2. Such refunding bonds, and   3.  Refunding  bonds previously issued to refund bonds of the original issue, if any, redeemed or to be redeemed during any preceding year by an appropriation other than from the proceeds of refunding bonds.   b-1. Refunding bonds need not comply with paragraph b of this  section provided that no annual installment of each separate series of refunding bonds  shall  be  more  than  fifty per centum in excess of the smallest prior installment or the  finance  board  of  the  municipality,  school district or district corporation issuing the bonds shall have determined to  use  a substantially level or declining annual debt service schedule for the refunding bonds.  The  amount  of  annual  installments  of  the refunding  bonds  may  be  determined  without  reference  to the stated maturities of the bonds to be refunded.   c. 1. Bonds  issued  on  or  after  January  first,  nineteen  hundred thirty-nine,  shall  not be refunded within five years after the date of original issue. This restriction shall not apply to bonds issued by  the city  of  New York, bonds issued by the county of Nassau for the objects or purposes described in subdivision thirty-three-a of  paragraph  a  of section 11.00 of this chapter or to bonds issued to refund:  (i) Bonds issued, or  (ii)  Bonds issued to redeem notes, certificates or other evidences of temporary indebtedness issued prior to January first,  nineteen  hundred thirty-nine.   * 2.  Notwithstanding  the  provisions  of  subdivision  one  of  this paragraph and subdivision three of paragraph a of  this  section,  bonds may  be refunded and the refunding bonds may be sold at either public or private sale where the present value of the refunding bonds is less than the present value of the bonds to be  refunded  computed  in  accordance with subparagraph (a) of subdivision two of paragraph b of section 90.10 of  this title and where the issuer complies with all other requirements of such section; provided, however, that if such bonds are being sold to the New York state environmental facilities  corporation  in  connection with  a  hardship state revolving fund financing at a rate equal to zero percent,  compliance  with  subparagraph  (a)  of  subdivision  two   of paragraph  b  of  section  90.10  of  this  title shall not be required; provided further, however, that if the bonds to be refunded  are  to  be redeemed or paid on the same date as the refunding bonds are issued, the issuer  need  not  comply  with  the provisions of section 90.10 of this title relating to the  escrow  of  the  proceeds  of  the  sale  of  the refunding bonds.   * NB Effective until September 30, 2023   * 2.  Notwithstanding  the  provisions  of  subdivision  one  of  this paragraph and subdivision three of paragraph a of  this  section,  bonds may  be refunded and the refunding bonds may be sold at either public or private sale where the present value of the refunding bonds is less than the present value of the bonds to be  refunded  computed  in  accordance with subparagraph (a) of subdivision two of paragraph b of section 90.10 of  this title and where the issuer complies with all other requirements of such section; provided, however, that if the bonds to be refunded are to be redeemed or paid on the same  date  as  the  refunding  bonds  are issued,  the issuer need not comply with the provisions of section 90.10 of this title relating to the escrow of the proceeds of the sale of  the refunding bonds.   * NB Effective September 30, 2023   d.  With the approval of and on terms and conditions prescribed by the state  comptroller,  a  municipality,  school   district   or   district corporation may issue bonds to refund:    1. Bonds issued,   2.  Bonds  issued  to redeem notes, certificates or other evidences of temporary indebtedness issued, or   3. Bonds issued to refund bonds issued prior to January first, nineteen hundred thirty-nine, but  in  no  event shall such refunding bonds mature later than twenty years after the date thereof. The provisions of section 21.00 of this chapter shall not apply to this paragraph.   e. The issuance of refunding bonds shall be authorized by a "refunding bond  resolution".  The  title  of  such resolution shall state that the bonds to be authorized thereby are "refunding bonds".   f. Such a  resolution  shall  contain,  in  substance,  the  following provisions:   1. The amount of refunding bonds to be issued.   2. A description and the date of the bonds to be refunded.   3. If the bonds to be refunded are bonds which were issued on or after January  first, nineteen hundred thirty-nine, other than bonds issued to redeem notes, certificates or other evidences of temporary  indebtedness issued   prior  to  January  first,  nineteen  hundred  thirty-nine,  in anticipation of such  bonds,  a  statement  of  the  maximum  period  of probable  usefulness,  at  the  time  of the issuance of the bonds to be refunded, of the object or purpose for which such bonds were issued.   4. A statement of the proposed maturities of such refunding bonds.   g. The provisions of this chapter relating to the authorization,  form and contents, sale, execution and issuance of bonds other than refunding bonds,  shall  apply  to  the  authorization,  form  and contents, sale, execution and issuance of refunding bonds, except that:   1. The provisions of section 107.00 of this chapter shall not apply to the issuance of refunding bonds.   2. The authorization of the issuance of refunding bonds shall  not  be subject to a mandatory or permissive referendum.   3.  Outstanding bonds may, pursuant to a power to recall and redeem or with the consent of the holders  thereof,  be  exchanged  for  refunding bonds (i) if the refunding bonds are to bear interest at a rate equal to or  lower than that borne by the bonds to be refunded or (ii) if, in the case of the  city  of  New  York  prior  to  July  first,  two  thousand twenty-two,  the  annual  payment required for principal and interest on the refunding  bond  is  less  than  the  annual  payment  required  for principal  and  interest  on  the bond to be refunded, in each case such annual payments to be determined by dividing  the  total  principal  and interest  payments due over the remaining life of the bond by the number of years to maturity of the bond or (iii) if the bonds  to  be  refunded were  issued  by  the  city  of  New York after June thirtieth, nineteen hundred seventy-eight and prior to July first, two  thousand  twenty-two and  contain  covenants referring to the existence of the New York state financial control board for the city of New York or any other  covenants relating  to  matters  other  than  the  prompt payment of principal and interest on the obligations when due and the  refunding  bond  omits  or modifies any such covenant.   4.  All  refunding  bonds shall contain a recital that they are issued pursuant to this chapter, which recital shall be conclusive evidence  of their validity and of the regularity of their issuance.   h. The authority herein granted to authorize the issuance of refunding bonds  shall  in  no  way  be  affected  by  the  invalidity  of  or any irregularity in any proceedings authorizing the issuance of the bonds to be refunded, except that refunding bonds shall not be issued  to  refund bonds  adjudged  invalid  by  the final judgment of a court of competent jurisdiction.    i. 1. Refunding bonds issued subsequent  to  January  first,  nineteen hundred thirty-nine to refund:  (a) Bonds issued, or  (b)  Bonds  issued to redeem notes, certificates or other evidences of temporary indebtedness issued prior to January first, nineteen hundred thirty-nine, may be refunded by the issuance of refunding bonds, but such refunding bonds  shall  mature not  later  than  twenty  years  from the date of the original refunding bonds. Such refunding bonds shall be issued only with  the  approval  of and on terms and conditions prescribed by the state comptroller.   2.  All  other  refunding  bonds  issued  on  or  after January first, nineteen hundred thirty-nine, shall not be refunded.   j. Bond anticipation notes shall not be issued in anticipation of  the sale of refunding bonds.   k.  The  premium,  if any, resulting from the public sale of refunding bonds may be expended for (1) the payment of the costs of  the  issuance of  such  refunding  bonds,  including,  but not limited to, legal fees, printing or engraving and publication of notices, and (2) the payment of the principal of and interest on such refunding bonds.