N.Y. Const. art. VII, § 13: Refund of state debts

§ 13. The legislature may provide means and authority whereby any

state debt or debts, or any portion or combination thereof, may be

refunded in accordance with the following provisions:

1. State debts may be refunded at any time after they are incurred

provided that the state will achieve a debt service savings on a present

value basis as a result of the refunding transaction, and further

provided that no maturity shall be called for redemption unless the

privilege to pay prior to the maturity date was reserved to the state.

The legislature may provide for the method of computation of present

value for such purpose.

2. In no event shall refunding obligations be issued in an amount

exceeding that necessary to provide sufficient funds to accomplish the

refunding of the obligations to be refunded including paying all costs

and expenses related to the refunding transaction and, in no event,

shall the proceeds of refunding obligations be applied to any purpose

other than accomplishing the refunding of the debt to be refunded and

paying costs and expenses related to the refunding.

3. Proceeds of refunding obligations shall be deposited in escrow

funds which shall be maintained and managed by the state comptroller or

by an agent or trustee designated by the state comptroller and no

legislative appropriation shall be required for disbursement of money,

or income earned thereon, from such escrow funds for the purposes

enumerated in this section.

4. Refunding obligations may be refunded pursuant to this section.

5. Refunding obligations shall either be paid in annual installments

or annual contributions shall be made to a sinking fund in amounts

sufficient to retire the refunding obligations at their maturity. No

annual installments or contributions of principal need be made with

respect to all or any portion of an issue of refunding obligations in

years when debt service on such refunding obligations or portion thereof

is paid or contributed entirely from an escrow fund created pursuant to

subdivision 3 of this section or in years when no installments or

contributions would have been due on the obligations to be refunded. So

long as any of the refunding obligations remain outstanding,

installments or contributions shall be made in any years that

installments or contributions would have been due on the obligations to

be refunded.

6. In no event shall the last annual installment or contribution on

any portion of refunding debt, including refunding obligations issued to

refund other refunding obligations, be made after the termination of the

period of probable life of the projects financed with the proceeds of

the relevant portion of the debt to be refunded, or any debt previously

refunded with the refunding obligations to be refunded, determined as of

the date of issuance of the original obligations pursuant to section 12

of this article to finance such projects, or forty years from such date,

if earlier; provided, however, that in lieu of the foregoing, an entire

refunding issue or portion thereof may be structured to mature over the

remaining weighted average useful life of all projects financed with the

obligations being refunded.

7. Subject to the provisions of subdivision 5 of this section, each

annual installment or contribution of principal of refunding obligations

shall be equal to the amount that would be required by subdivision 1 of

section 12 of this article if such installments or contributions were

required to be made from the year that the next installment or

contribution would have been due on the obligations to be refunded, if

they had not been refunded, until the final maturity of the refunding

obligations but excluding any year in which no installment or

contribution would have been due on the obligations to be refunded or,

in the alternative, the total payments of principal and interest on the

refunding bonds shall be less in each year to their final maturity than

the total payments of principal and interest on the bonds to be refunded

in each such year.

8. The provisions of subdivision 3 and subdivisions 7 through 9 of

section 12 of this article shall apply to sinking funds created pursuant

to this section for the payment at maturity of refunding obligations.