2023 New York Laws › LFN - Local Finance › Article 2 - Local Indebtedness › Title 2 - Local Obligations: Types Thereof › 29.20 - Deficiency Notes.

§  29.20  Deficiency  notes.  a.  Any municipality, school district or
  district corporation may issue deficiency notes during any  fiscal  year
  to finance a deficiency in any fund or funds arising from revenues being
  less  than  the  amount  estimated in the budget for such current fiscal
  year. Such notes may be issued in such amount as the finance board shall
  determine to be necessary, but not to exceed  five  per  centum  of  the
  amount  of  the  annual  budget of such municipality, school district or
  district corporation.
b. Deficiency notes may be renewed from time to time, but such  notes,
  including the renewals thereof, shall mature not later than the close of
  the  fiscal  year  succeeding  the  fiscal  year in which such notes are
  issued. However, such notes, including the renewals thereof, may  mature
  not later than the close of the second fiscal year succeeding the fiscal
  year in which such notes are issued, when authorized and issued during a
  fiscal  year  at  a  time  subsequent to the date of the adoption of the
  annual budget for the next succeeding fiscal year,  by  a  municipality,
  school  district  or  district  corporation in which the total amount of
  taxes or assessments levied for a fiscal year is determined pursuant  to
  an  annual  budget  adopted during the fiscal year preceding such fiscal
  year.
c. Deficiency notes shall be redeemed out of the taxes or  assessments
  levied  or  to be levied for the fiscal year in which they mature or out
  of other revenues  of  that  fiscal  year  legally  available  for  that
  purpose.
d.  Notwithstanding  the  provisions  of any general, special or local
  law, any municipality, school district or  district  corporation,  which
  has the power to issue deficiency notes under this section, shall to the
  same extent have the power to appropriate and expend money received from
  the  proceeds  of  the  sale of deficiency notes for the purposes of the
  fund or funds for which such notes are issued.
e. The proceeds of  such  notes  shall  be  used  only  to  finance  a
  deficiency  in  any  fund or funds arising from revenues being less than
  the amount estimated in the budget for the current fiscal  year  or,  in
  the  event  all  or  a portion of the proceeds are not expended for that
  purpose, the amount not so expended shall be used only for  the  payment
  of  principal  of and interest on such notes. In determining whether all
  or any portion of the proceeds of deficiency notes  remained  unexpended
  at  the  close  of a fiscal year, the moneys in such fund or funds other
  than the proceeds of such notes shall be deemed to be expended prior  to
  the proceeds of such notes.
f.  Any  municipality,  school  district or district corporation which
  shall renew deficiency notes pursuant to the provisions of  paragraph  b
  of  this  section,  or which shall issue deficiency notes in two or more
  successive fiscal  years,  shall  be  subject  to  the  requirements  of
  paragraphs  c,  d,  e  and  f of section 10.10 of this article for three
  years commencing with the fiscal year in which such notes  were  renewed
  or each second successive fiscal year in which such notes were issued.