N.Y. Const. art. XVIII, § 4: Powers of cities, towns and villages to contract indebtedness in aid of low rent housing and slum clearance projects; restrictions thereon

§ 4. To effectuate any of the purposes of this article, the

legislature may authorize any city, town or village to contract

indebtedness to an amount which shall not exceed two per centum of the

average assessed valuation of the real estate of such city, town or

village subject to taxation, as determined by the last completed

assessment roll and the four preceding assessment rolls of such city,

town or village, for city, town or village taxes prior to the

contracting of such indebtedness. In ascertaining the power of a city,

or village having a population of five thousand or more as determined by

the last federal census, to contract indebtedness pursuant to this

article there may be excluded any such indebtedness if the project or

projects aided by guarantees representing such indebtedness or by loans

for which such indebtedness was contracted shall have yielded during the

preceding year net revenue to be determined annually by deducting from

the gross revenues, including periodic subsidies therefor, received from

such project or projects, all costs of operation, maintenance, repairs

and replacements, and the interest on such indebtedness and the amounts

required in such year for the payment of such indebtedness; provided

that in the case of guarantees such interest and such amounts shall have

been paid, and in the case of loans an amount equal to such interest and

such amounts shall have been paid to such city or village. The

legislature shall prescribe the method by which the amount of any such

indebtedness to be excluded shall be determined, and no such

indebtedness shall be excluded except in accordance with such

determination. The legislature may confer appropriate jurisdiction on

the appellate division of the supreme court in the judicial departments

in which such cities or villages are located for the purpose of

determining the amount of any such indebtedness to be so excluded.

The liability of a city, town or village on account of any contract

for capital or periodic subsidies to be paid subsequent to the then

current year shall, for the purpose of ascertaining the power of such

city, town or village to contract indebtedness, be deemed indebtedness

in the amount of the commuted value of the total of such capital or

periodic subsidies remaining unpaid, calculated on the basis of an

annual interest rate of four per centum. Such periodic subsidies shall

not be contracted for a period longer than the life of the projects

assisted thereby, and in no event for more than sixty years.

Indebtedness contracted pursuant to this article shall be excluded in

ascertaining the power of a city or such village otherwise to create

indebtedness under any other section of this constitution.

Notwithstanding the foregoing the legislature shall not authorize any

city or village having a population of five thousand or more to contract

indebtedness hereunder in excess of the limitations prescribed by any

other article of this constitution unless at the same time it shall by

law require such city or village to levy annually a tax or taxes other

than an ad valorem tax on real estate to an extent sufficient to provide

for the payment of the principal of and interest on any such

indebtedness. Nothing herein contained, however, shall be construed to

prevent such city or village from pledging its faith and credit for the

payment of such principal and interest nor shall any such law prevent

recourse to an ad valorem tax on real estate to the extent that revenue

derived from such other tax or taxes in any year, together with revenues

from the project or projects aided by the proceeds of such indebtedness,

shall become insufficient to provide fully for payment of such principal

and interest in that year.