N.Y. Const. art. VIII, § 7-a: Debt-incurring power of New York city; certain indebtedness for railroads and transit purposes to be excluded

§ 7-a. In ascertaining the power of the city of New York to contract

indebtedness, in addition to the indebtedness excluded under any other

section of this constitution, there shall be excluded:

A. The aggregate of indebtedness initially contracted from time to

time by the city for the acquisition of railroads and facilities or

properties used in connection therewith or rights therein or securities

of corporations owning such railroads, facilities or rights, not

exceeding the sum of three hundred fifteen million dollars. Provision

for the amortization of such indebtedness shall be made either by the

establishment and maintenance of a sinking fund therefor or by annual

payment of part thereof, or by both such methods. Any indebtedness

thereafter contracted in excess of such sum for such purposes shall not

be so excluded, but this provision shall not be construed to prevent the

refunding of any such indebtedness.

Notwithstanding any other provision of the constitution, the city is

hereby authorized to contract indebtedness for such purposes and to

deliver its obligations evidencing such indebtedness to the corporations

owning the railroads, facilities, properties or rights acquired, to the

holders of securities of such owning corporations, to the holders of

securities of corporations holding the securities of such owning

corporations, or to the holders of securities to which such acquired

railroads, facilities, properties or rights are now subject.

B. Indebtedness contracted by the city for transit purposes, and not

otherwise excluded, proportionately to the extent to which the current

net revenue received by the city from all railroads and facilities and

properties used in connection therewith and rights therein owned by the

city and securities of corporations owning such railroads, facilities,

properties or rights, owned by the city, shall meet the interest and the

annual requirements for the amortization and payment of such

non-excluded indebtedness.

In determining whether indebtedness for transit purposes may be

excluded under this paragraph of this section, there shall first be

deducted from the current net revenue received by the city from such

railroads and facilities and properties used in connection therewith and

rights therein and securities owned by the city: (a) an amount equal to

the interest and amortization requirements on indebtedness for rapid

transit purposes heretofore excluded by order of the appellate division,

which exclusion shall not be terminated by or under any provision of

this section; (b) an amount equal to the interest on indebtedness

contracted pursuant to this section and of the annual requirements for

amortization on any sinking fund bonds and for redemption of any serial

bonds evidencing such indebtedness; (c) an amount equal to the sum of

all taxes and bridge tolls accruing to the city in the fiscal year of

the city preceding the acquisition of the railroads or facilities or

properties or rights therein or securities acquired by the city

hereunder, from such railroads, facilities and properties; and (d) the

amount of net operating revenue derived by the city from the independent

subway system during such fiscal year. The legislature shall prescribe

the method by which and the terms and conditions under which the amount

of any indebtedness to be excluded hereunder shall be determined, and no

indebtedness shall be excluded except in accordance with the

determination so prescribed. The legislature may confer appropriate

jurisdiction on the appellate division of the supreme court in the first

judicial department for the purpose of determining the amount of any

debt to be so excluded.