2023 New York Laws › STF - State Finance › Article 5 - Borrowing by the State › 55 - Issuance of Tax and Revenue Anticipation Notes and Bond Anticipation Notes.

§  55.  Issuance  of  tax  and  revenue  anticipation  notes  and bond
anticipation notes. 1. When used in this section,  the  following  terms
shall be defined as follows:
(a)  "Tax  and  revenue anticipation note" shall mean a note issued in
anticipation of the receipt of taxes and revenues, direct  or  indirect,
for  the  purposes  and within the amounts of appropriations theretofore
made.
(b) "Bond anticipation note" shall mean a note issued in  anticipation
of  the  receipt of the proceeds of the sale of bonds duly authorized at
the time such notes are issued.
(c) "Flexible note" shall mean a tax and revenue anticipation note  or
bond  anticipation  note the interest on which is payable at, and on one
or more dates prior to, maturity.
(d) "Short-term series note" shall mean a tax and revenue anticipation
note or a bond anticipation note which is  one  of  a  series  of  notes
issued  pursuant  to a financing program under which it is expected that
each note will be paid from the proceeds of one or more renewal notes of
such series, and in the case of the final note or notes of such  series,
from  the taxes and revenues or the proceeds of bonds in anticipation of
the receipt of which such note or  notes  have  been  issued.  The  term
"short-term  series  note"  shall  include any note issued pursuant to a
revolving credit agreement or other similar liquidity facility  for  the
purpose  of  renewing  or  paying outstanding short-term series notes on
their stated maturity dates when such short-term series  notes  are  not
renewed  or paid from the proceeds of one or more other renewal notes of
such series. Such a note issued pursuant to a revolving credit agreement
or similar liquidity facility shall not be considered  a  flexible  note
for the purposes of this section.
(e)  "Financially responsible party or parties" shall mean a person or
persons determined by the comptroller to have sufficient net  worth  and
liquidity to purchase and pay for on a timely basis all of the notes and
renewals  thereof  which may be tendered for repurchase or redemption by
the holders thereof.
2. (a) (i) The comptroller is authorized  to  issue  tax  and  revenue
anticipation  notes  and renewals thereof including, but not limited to,
flexible notes and short-term series notes in such form  and  with  such
terms  as  the  comptroller  shall  determine.  Such  notes and renewals
thereof shall be non-interest bearing or bear interest at such  rate  or
rates,  which  may  vary  from  time to time, as, in the judgment of the
comptroller, may be sufficient or necessary to effect the  issuance  and
sale or resale thereof in the manner determined by the comptroller.
(ii)  Such  notes  and renewals thereof may be redeemable from time to
time on such date or dates prior to  maturity  as  the  comptroller  may
determine.  Such  notes  and  renewals  thereof  may provide the holders
thereof with such rights to  require  the  state  or  other  persons  to
purchase  or redeem such notes and renewals thereof from the proceeds of
the resale thereof or otherwise from time to time prior  to  the  stated
maturity  thereof  as the comptroller may determine. Notwithstanding the
foregoing, the holders of such notes and renewals thereof sold  pursuant
to this subparagraph shall not be provided with the right to require the
state  to  repurchase  or redeem the notes and renewals thereof prior to
their stated maturity unless the state has  entered  into  one  or  more
letter  of  credit  agreements  or  other  liquidity facility agreements
entered into for the express purposes of  such  sales  and  which  shall
require  a  financially responsible party or parties to the agreement or
agreements, other than the state, to  purchase  or  redeem  all  or  any
portion  of  such  notes  and  renewals  thereof tendered by the holders
thereof for repurchase or redemption prior to  the  stated  maturity  of

such  notes and renewals thereof. Such requirement to purchase or redeem
such notes and renewals thereof shall continue until such  time  as  the
right  of  the  holders  of  such  notes and renewals thereof to require
repurchase or redemption of such notes and renewals thereof prior to the
stated  maturity  shall  cease.  Such  notes and renewals thereof shall,
together with the interest thereon, be paid from the taxes and  revenues
in  anticipation of which they have been issued within one year from the
date of original issue and so much of such taxes and revenues as will be
sufficient to pay the amount borrowed, with  the  interest  thereon,  is
pledged  to  the payment thereof. The comptroller is authorized to enter
into such agreements  with  other  persons  as  he  deems  necessary  or
appropriate  in  connection  with  the issuance, sale and resale of such
notes and, at his  discretion,  to  resell  or  retire  any  such  notes
purchased by the state prior to the stated maturity thereof.
(iii)   Whenever   the   comptroller   shall  issue  tax  and  revenue
anticipation notes in  the  form  of  an  issue  of  flexible  notes  or
short-term  series  notes,  he  shall specify in writing, at the time of
original issuance thereof, the date or  dates  on  which  the  notes  or
renewal  notes  of such issue are to be paid from taxes and revenues and
not from the proceeds of resales or renewals thereof, and  for  purposes
of paragraph (b) of this subdivision, the maturity date of the notes and
renewal  notes  of such issue shall be the date or dates so specified by
the comptroller.  The provisions of paragraph (b)  of  this  subdivision
shall  not  apply  to,  and the comptroller shall not be required to set
aside any taxes  or  revenues  in  a  separate  note  repayment  account
pursuant  to  such  paragraph  (b)  for,  the payment of principal of or
interest on flexible  notes  or  short-term  series  notes  or  renewals
thereof  if  such  payment  is  due  on  any date other than the date so
specified by the comptroller. The date or dates, if any,  on  which  tax
and  revenue  anticipation  notes  or renewals thereof may be redeemable
prior to maturity, or on which the holders thereof may have the right to
require the state or other persons to purchase or redeem such  notes  or
renewals  thereof  from  the proceeds of the resale thereof or otherwise
prior to the stated maturity thereof, shall not be deemed  the  maturity
date thereof for purposes of paragraph (b) of this subdivision.
(b)  No  later  than  the  tenth business day of each month during any
fiscal year in which tax and  revenue  anticipation  notes  mature,  the
comptroller  shall  prepare a schedule of anticipated taxes and revenues
receivable by the state as of the  date  of  such  schedule  during  the
balance  of such fiscal year in such detail as is necessary to carry out
the purposes of this paragraph, based upon estimates of such  taxes  and
revenues  filed with him by the director of the budget. Except as may be
required to comply with obligations to the holders of bonds of the state
or the holders of bonds guaranteed by the state, commencing at any  time
that  the  outstanding  principal amount of any issue of tax and revenue
anticipation notes, and the interest  due  thereon,  equals  ninety-five
percent of the amount of taxes and revenues shown on such schedule to be
received  during  the period ending on the maturity date of the notes of
such issue, after deducting from such taxes and revenues  the  aggregate
principal  amount  of  all  outstanding  notes  of other issues, and the
interest due thereon, which mature during such period and against  which
taxes  and revenues have not, at such time, been collected and set aside
in the note  repayment  account  pursuant  to  the  provisions  of  this
subdivision,  the  comptroller shall set aside all taxes and revenues as
received in a separate note repayment account until the balance in  such
account  is  sufficient  to pay the notes of such issue and the interest
thereon and the principal of and the interest on any other notes with  a
maturity  date  on or before such maturity date; provided, however, that

the comptroller shall commence to set aside such taxes and  revenues  no
later  than the fifteenth day prior to the maturity date of any issue of
notes and continue to set aside taxes and revenues until the balance  in
the  note  repayment  account  is  sufficient  to pay such notes and the
interest thereon at maturity and the principal of and  interest  on  any
other notes maturing on or before such maturity date. The moneys in such
repayment account shall be kept separate and apart from all other moneys
in  the  custody  of the comptroller, shall be deposited in a segregated
bank account, and held in  trust  for  the  holders  of  notes  and  the
interest  in  such  moneys  of holders of notes shall be in the order of
maturity of notes, with the holders of  notes  of  an  earlier  maturity
having  a  first  pledge  over the holders of notes maturing later. Such
moneys shall be disbursed only for the payment of notes and the interest
thereon as they mature and may not be disbursed for any  other  purpose.
Moneys  in  the  note  repayment  account shall, at the direction of the
comptroller, be invested in obligations of the United States of  America
or  in  obligations of or guaranteed by agencies of the United States of
America where the payment of principal and interest is guaranteed by the
United States of America  or  in  certificates  of  deposit  secured  by
obligations  of  the  United  States  of America deposited by the issuer
thereof with the bank maintaining such account in an amount equal to the
amount of such certificate of deposit, provided  that  so  much  of  the
amount  of  such  obligations  or  certificates  as is necessary for the
payment of any issue of notes is payable on or before the maturity  date
of  such  notes  or,  in  the  case of investments in obligations of the
United States of America or in obligations of or guaranteed by  agencies
of  the  United  States  of  America  where the payment of principal and
interest is guaranteed by the United States of America,  is  covered  by
agreements  with  primary dealers in obligations of or guaranteed by the
United States of America for the repurchase thereof  on  or  before  the
maturity date of such notes.
(c)  For  purposes  of  paragraph  (b)  of this subdivision "taxes and
revenues" shall mean all moneys payable into the  general  fund  of  the
state  except  the  proceeds of the issuance by the state of bonds, bond
anticipation notes or notes, and "notes"  shall  mean  notes  issued  in
anticipation of the receipt of taxes and revenues.
3. The comptroller is authorized to issue, whenever he may deem it for
the  best  interests  of the state to do so, bond anticipation notes and
renewals thereof, including, but not  limited  to,  flexible  notes  and
short-term  series  notes,  in such form and with such terms as he shall
determine. Such notes and renewals thereof shall bear interest  at  such
rate  or  rates of interest, which may vary from time to time, as in the
judgment of the comptroller may be sufficient or necessary to  effect  a
sale  thereof  and  shall mature within a period not to exceed one year.
Such notes and renewals thereof may be redeemable from time to  time  on
such  date  or dates prior to maturity as the comptroller may determine.
Such notes and renewals thereof may provide  the  holders  thereof  with
such  rights to require the state or other persons to purchase or redeem
such notes or renewal notes from the proceeds of the resale  thereof  or
otherwise  from time to time prior to the stated maturity thereof as the
comptroller may determine. The comptroller is authorized to  enter  into
such  agreements with other persons as he deems necessary or appropriate
in connection with the issuance, sale and resale of such notes  and,  at
his  discretion,  to  resell  or  retire any such notes purchased by the
state  prior  to  the  stated  maturity  thereof.  Notwithstanding   the
foregoing,  the holders of such notes and renewals thereof sold pursuant
to this subdivision shall not be provided with the right to require  the
state  to  repurchase  or redeem the notes and renewals thereof prior to

their stated maturity unless the state has  entered  into  one  or  more
letter  of  credit  agreements  or  other  liquidity facility agreements
entered into for the express purpose  of  such  sales  and  which  shall
require  a  financially responsible party or parties to the agreement or
agreements, other than the state, to  purchase  or  redeem  all  or  any
portion  of  such  notes  and  renewals  thereof tendered by the holders
thereof for repurchase or redemption prior to  the  stated  maturity  of
such  notes and renewals thereof. Such requirement to purchase or redeem
such notes and renewals thereof shall continue until such  time  as  the
right  of  the  holders  of  such  notes and renewals thereof to require
repurchase or redemption of such notes and renewals thereof prior to the
stated maturity shall cease. The proceeds of  the  sale  of  such  notes
shall  be  used only for the purposes for which may be used the proceeds
of the sale of bonds in anticipation of the sale whereof the notes  were
issued. All of such notes and any renewals thereof shall be payable at a
fixed  time,  from  the proceeds of the sale of bonds, and no renewal of
any such note shall be issued after the sale of bonds in anticipation of
which the original note was issued. In the event that  a  sale  of  such
bonds  shall  not  have  occurred  prior to the maturity of the notes so
issued in anticipation of such sale the comptroller shall, in  order  to
meet  the  notes  then  maturing,  issue renewal notes for such purpose.
Every such note and  any  renewals  thereof  shall,  with  the  interest
thereon,  be payable from the proceeds of the sale of such bonds and not
otherwise from any borrowing within two years from the date of  original
issue, except that notes or obligations payable from the proceeds of the
sale  of bonds issued or to be issued for any of the purposes authorized
by article eighteen  of  the  constitution,  shall,  with  the  interest
thereon,  be  payable from the proceeds of the sale of such bonds within
five years from the date of original issue. The  total  amount  of  such
notes or renewals thereof issued and outstanding shall at no time exceed
the  total  amount  of bonds authorized to be issued but not yet issued.
The comptroller shall include in his annual report, a detailed statement
of all such loans made and bonds issued  during  the  year  and  of  his
proceedings in relation thereto.
4.  The  outstanding  principal amount of all flexible notes issued by
the state pursuant to subdivisions two and three of this  section  shall
at  no  time  exceed  the  sum  of  five hundred million dollars and the
outstanding principal amount of all short term series  notes  issued  by
the  state  pursuant to subdivisions two and three of this section shall
at no time exceed the sum of five hundred million dollars.
5. The comptroller shall annually submit a report to the  director  of
the  budget,  the  chairman  of  the  senate  finance  committee and the
chairman of the assembly ways and means committee. Such report shall  be
submitted  no later than the last business day of June and shall provide
a comprehensive analysis of any flexible notes and/or short-term  series
notes  issued  or  outstanding  in the previous fiscal year. Such report
shall include, but not be limited to:
(a) An analysis of the effective interest rates associated  with  such
flexible notes and short-term series notes;
(b)  An  analysis of the expenses associated with the issuance of such
notes, including any fees or commissions required  pursuant  to  a  note
repurchase agreement or line of credit;
(c)  An  analysis of the effective interest rates associated with such
notes after consideration of the expenses described in paragraph (b)  of
this subdivision;
(d)  An  analysis  of  any  reinvestment  opportunities  and  earnings
provided by the issuance of such notes; and
(e) Any other analyses which the  comptroller  may  deem  relevant  to
determining  the  costs  and benefits associated with flexible notes and
short term series notes.