2023 New York Laws › LFN - Local Finance › Article 2 - Local Indebtedness › Title 9 - Procedures Relating to the Ascertainment of Amounts to Be Included or Excluded in Ascertaining Debt-Contracting Power › 123.00 - Exclusion of Self-Liquidating Indebtedness in Ascertaining the Power of a Municipality to Contract Indebtedness.

§  123.00  Exclusion  of self-liquidating indebtedness in ascertaining
  the power of a municipality to contract indebtedness. a. As used in this
  section: 1. The term "outstanding indebtedness", shall mean indebtedness
  evidenced by bonds and bond anticipation notes.
2.  The  term  "public  improvement"  shall  mean  either   a   single
  improvement  or  a  group  of improvements, which are maintained for the
  same  purpose,  including  improvements  used  primarily  in  connection
  therewith, and which are producing or are intended to produce revenue.
b.  1.  In  ascertaining  the  power  of  a  municipality  to contract
  indebtedness,  there  may  be  excluded,  to  the  extent  permitted  in
  paragraph  e of this section, the outstanding indebtedness contracted by
  any such municipality for a  public  improvement  or  part  thereof,  or
  service,   owned  or  rendered  by  such  municipality  if  such  public
  improvement or part thereof, or service, shall have yielded net  revenue
  to  such municipality during the preceding fiscal year in a sum equal to
  twenty-five per centum or more of the amount required in such  year  for
  the  payment of the interest on and amortization of, or payment of, such
  outstanding indebtedness.
2. The outstanding indebtedness of a district corporation, as the term
  "district corporation" is defined in paragraph a of  section  102.00  of
  this  chapter,  contracted  on  or after January first, nineteen hundred
  thirty-nine, may be excluded, to the extent permitted in paragraph e  of
  this  section,  in  ascertaining  the  indebtedness of a city or village
  within which, or of a town within the unincorporated area of which, such
  district  corporation  is  situated  in  whole  or  in  part,  if   such
  outstanding indebtedness was contracted for a public improvement or part
  thereof,  or service, owned or rendered by such district corporation and
  if such public improvement or  part  thereof,  or  service,  shall  have
  yielded  net  revenue  to such district corporation during the preceding
  fiscal year of the district corporation in a sum  equal  to  twenty-five
  per  centum  or more of the amount required in such year for the payment
  of the interest on and amortization of, or payment of, such  outstanding
  indebtedness.
3.  In  ascertaining  the  power  of  a  county  or  town  to contract
  indebtedness,  there  may  be  excluded,  to  the  extent  permitted  in
  paragraph  e of this section, the outstanding indebtedness contracted by
  any such county or town on behalf  of  an  improvement  district  for  a
  public  improvement  or  part  thereof, or service, owned or rendered by
  such district if such public improvement or part  thereof,  or  service,
  shall  have  yielded  net  revenue to such district during the preceding
  fiscal year in a sum equal to twenty-five per  centum  or  more  of  the
  amount  required  in  such  year  for the payment of the interest on and
  amortization of, or payment of, such outstanding indebtedness.
c. 1. A proportionate exclusion of indebtedness contracted or proposed
  to be contracted also may be granted for the period from the  date  when
  such  indebtedness  is first contracted or to be contracted for a public
  improvement or part thereof, or service, owned  or  rendered  or  to  be
  owned  or rendered by a municipality, district corporation, or county or
  town improvement district through the first year of  operation  of  such
  public  improvement  or  part  thereof,  or  service. The amount of such
  exclusion shall be computed in the manner provided in  this  section  on
  the basis of estimated net revenue for the first year of operation. Such
  estimated  net  revenue  shall be determined by deducting from the gross
  revenues estimated to be received during the first year of operation  of
  such public improvement or part thereof, or service, all estimated costs
  of  operation,  maintenance and repairs for such year. The amount of any
  such proportionate exclusion shall not exceed seventy-five per centum of
  the amount which would be excluded if the computation were made  on  the

  basis  of  net  revenue  instead  of  estimated  net  revenue.  The term
  "indebtedness," as used in this  subdivision  means  indebtedness  which
  would  be  included  in  ascertaining  the  power  of  a municipality to
  contract   indebtedness,  including  indebtedness  evidenced  or  to  be
  evidenced by bonds or bond anticipation notes.
2. A  proportionate  exclusion  of  outstanding  indebtedness  may  be
  granted,  to the extent permitted in paragraph e of this section, in the
  fiscal year in which the first year of operation of a public improvement
  or part thereof, or service, is completed if  the  improvement  or  part
  thereof,  or  service,  shall  have yielded net revenue during the first
  year of operation in a sum equal to twenty-five per centum  or  more  of
  the  amount required in such year for the payment of the interest on and
  amortization of, or payment of, such indebtedness.
d. The net revenue  of  a  public  improvement  or  part  thereof,  or
  service,  shall  be determined by deducting from its gross revenues of a
  year all costs of operation, maintenance  and  repairs  for  such  year.
  Taxes,  assessments,  and  subsidies  by  the  municipality  or district
  corporation, shall not be included in computing gross revenues.
e. The maximum amount of any such outstanding indebtedness  which  may
  be  so  excluded  shall be in the same proportion to the total amount of
  any such indebtedness as the amount of any such net revenue  shall  bear
  to  the amount required in any such year for the payment of the interest
  on and amortization of, or payment of, any such indebtedness.
f. Where an exclusion has been granted pursuant to this  section,  the
  revenues of such public improvement or part thereof, or service, for the
  period  for  which  the  exclusion  is  granted, shall be applied to and
  actually used for payment of all costs  of  operation,  maintenance  and
  repairs  for  such  period,  and payment of the amounts required in such
  period for  interest  on  and  amortization  of  or  redemption  of  the
  indebtedness  excluded, or such revenues shall be deposited in a special
  fund to be used solely for such payments. The  application  and  use  of
  such  payments  or  the  deposits required therefor shall not prohibit a
  municipality, district corporation or improvement  district  from  using
  any  such  revenues,  in  excess  of  such payments or deposits, for any
  lawful purpose of the municipality, district corporation or  improvement
  district.
g.  An  application  may  be  filed with the state comptroller for the
  purpose of obtaining an exclusion of such indebtedness. Such application
  shall be made on behalf of any municipality by its chief fiscal  officer
  in  his  discretion,  or by its chief fiscal officer on the direction of
  its finance board, and on behalf of  any  district  corporation  by  its
  finance  board.  If  the  finance  board of a district corporation shall
  refuse or fail to make such application, the application may be made  by
  the  municipality  seeking an exclusion of indebtedness. The application
  shall be verified by the chief fiscal officer or  finance  board  making
  the application. The application shall be in such form and shall contain
  such information as shall be prescribed by the state comptroller.
h.  Within  fifteen days after the filing of such application with the
  state comptroller, such chief  fiscal  officer  or  such  finance  board
  making  the  application  shall cause a notice to be published that such
  application has been filed with the state comptroller. Such notice shall
  be published in the official newspaper or newspapers of the municipality
  or district corporation, or if there be no such newspaper or newspapers,
  then the finance board of the municipality or district corporation shall
  designate one or more newspapers having a general  circulation  in  such
  municipality or district corporation for the publication of such notice.
  The  notice also shall contain a statement of the amount of indebtedness
  for which a proportionate exclusion is sought and a brief description of

  the public improvement or part thereof, or service. Proof of publication
  of such notice shall be filed in the office of the state comptroller.  A
  copy  of  the  application  and  of all financial statements, documents,
  computations  and  other data and information which will be submitted by
  the chief fiscal officer of such municipality or the  finance  board  of
  such  district  corporation  to the state comptroller in support of such
  application shall be filed in the office of such chief fiscal officer or
  finance board and shall be public records.
i. After the filing of such application, the state  comptroller  shall
  review the facts set forth therein. The state comptroller shall have the
  power  to examine the accounts and records of the municipality, district
  corporation  or  improvement  district  with  respect  to  such   public
  improvement  or  part thereof, or service. He may also require the chief
  fiscal officer and other public officers, boards and  agencies  of  such
  municipality,  district  corporation  or improvement district to furnish
  such additional data and information in their  possession  as  he  deems
  necessary to enable him to make his determination.
j.  In the case of a municipality, the state comptroller shall issue a
  written certificate setting forth his determination as to the extent  to
  which  any such indebtedness may be excluded. If an exclusion is allowed
  by  the  state  comptroller,  such  certificate  shall  constitute   the
  authorization  for  the exclusion of such amount of such indebtedness in
  ascertaining the power of such municipality to contract indebtedness. In
  the case of a district corporation, the state comptroller shall issue  a
  written  certificate setting forth his determination as to the extent to
  which any such  indebtedness  shall  be  excluded  in  ascertaining  the
  indebtedness  of a city or village within which, or of a town within the
  unincorporated area of which, such district corporation is  situated  in
  whole  or  in part. If an exclusion is allowed by the state comptroller,
  such certificate shall constitute the authorization for the exclusion of
  such amount of such indebtedness in ascertaining the power of such city,
  village or town to  contract  indebtedness.  If  the  state  comptroller
  disallows  the  application, the certificate shall set forth the reasons
  for such disallowance. The determination of the state comptroller  shall
  be  conclusive.  The  certificate  of the state comptroller shall not be
  issued until ten days after the filing of such proof of  publication  in
  the  office  of  the  state  comptroller  and  shall  be  issued  within
  forty-five  days  after  such  filing.  The  certificate  of  the  state
  comptroller granting an exclusion shall be effective until the first day
  of  the fourth month following the close of the fiscal year in which the
  application is made, except  that  where  the  application  is  made  in
  connection  with a public improvement or part thereof, or service, which
  has not been  in  operation  for  one  year  the  certificate  shall  be
  effective until the first day of the fourth month following the close of
  the  first  year  of operation. The certificate of the state comptroller
  shall be executed under his hand and seal  in  duplicate.  One  of  such
  certificates  shall  be filed in the department of audit and control and
  the other in the office of the chief fiscal officer of such municipality
  or in the office of the finance board of the district corporation.  Both
  of such certificates shall be public records.
k.  The  provisions  of  this  section  shall not affect or impair any
  existing  exclusions  of  indebtedness,  or   the   power   to   exclude
  indebtedness  granted  by  any  other  provision  of this chapter or the
  constitution.