N.Y. General Municipal Law § 593-a: Pledge of tax revenues for payment of certain bonds of the Niagara Falls urban renewal agency

§ 593-a. Pledge of tax revenues for payment of certain bonds of the

Niagara Falls urban renewal agency. (a) As security for the payment of

any issue of bonds to be issued by the Niagara Falls urban renewal

agency to finance land acquisition and clearance, site improvements and

parking construction in connection with the East Falls Street

Redevelopment Project and/or bond anticipation notes issued in

anticipation thereof, the city council of the city of Niagara Falls is

hereby authorized to enact a local law pledging the total proceeds

consisting of net collections of all sales and compensating use taxes

received by the city of Niagara Falls from taxes authorized pursuant to

section twelve hundred ten of the tax law and proceeds payable to the

city pursuant to section twelve hundred sixty-two of the tax law, or any

successor statutes thereto and directing the state comptroller to pay

over such proceeds to the Niagara Falls sales tax fund pursuant to the

provisions of section ninety-two-t of the state finance law, or to the

trustee for the holders of such bonds pursuant to the certificate issued

by such trustee pursuant to subdivision (d) of this section. The lien of

such pledge shall be valid and binding upon the city and agency and

their respective successors and assigns as against all parties having

claims of any kind in tort, contract or otherwise against the city or

the agency irrespective of whether such parties have notice thereof. The

lien of such pledge shall inure to the benefit of the agency and its

successors and assigns including any owners of such bonds and notes to

whom such proceeds are pledged. The agency shall not issue any bonds or

notes in connection with such project in an amount in excess of

thirty-five million dollars, plus a principal amount of bonds or notes:

(i) to fund any debt service reserve fund,

(ii) to provide capitalized interest,

(iii) to provide for original issue discount, and

(iv) to provide for the payment of fees and other charges and

expenses, including underwriters' discount, related to the issuance of

such bonds or notes, or related to the provision of any applicable bond

or note facilities, excluding refunding bonds.

Provided, however, that upon any refunding or repayment of such bonds

or notes the total aggregate principal amount of outstanding bonds and

notes may be greater than thirty-five million dollars ($35,000,000) only

if the present value of the aggregate debt service of the refunding or

repayment bonds to be issued shall not exceed the present value of the

aggregate debt service of the bonds so to be refunded or repaid. For

purposes hereof, the present values of the aggregate debt service of the

refunding or repayment bonds and of the aggregate debt service of the

bonds so refunded or repaid, shall be calculated by utilizing the

effective interest rate of the refunding or repayment bonds, which shall

be that rate arrived at by doubling the semi-annual interest rate

(compounded semi-annually) necessary to discount the debt service

payments on the refunding or repayment bonds from the payment dates

thereof to the date of issue of the refunding or repayment bonds and to

the price bid including estimated accrued interest or proceeds received

by the agency including estimated accrued interest from the sale

thereof.

Such local law shall be subject to the following limitations and

conditions:

(i) Any such local law shall become effective on the date of issue of

any bonds and/or bond anticipation notes the payment of which is secured

by the proceeds of such sales and compensating use taxes;

(ii) Any such local law shall be made subject to such terms and

conditions, not inconsistent with this section, as may be determined

necessary or appropriate by such city council and agency, subject,

however, to any rights of holders of previously issued bonds and/or bond

anticipation notes secured by such tax proceeds and shall be deemed to

be in effect only while bonds and/or bond anticipation notes which are

so secured are outstanding and may provide that it shall not be

repealed, rescinded or revoked or amended in a manner which is

prejudicial to the interests of said holders while such obligations

shall be outstanding;

(iii) Enactment of such local law shall be conditioned upon the

execution of an agreement between the city of Niagara Falls and the

county of Niagara whereby such county agrees to pay such city's share of

the proceeds of taxes payable to such city pursuant to section twelve

hundred sixty-two of the tax law to the state comptroller for so long as

bonds or notes issued pursuant to this section remain outstanding;

(iv) Any such local law shall not be enacted unless such city council

shall have determined that such local law is necessary and in the public

interest; and

(v) Notwithstanding any of the foregoing to the contrary, the

aforesaid pledge shall be deemed executory only to the extent of moneys

appropriated and made available therefor by the city.

(b) The state does hereby covenant and agree with the owners of each

issue of bonds and/or bond anticipation notes of the agency secured by a

pledge of proceeds of such sales and compensating use taxes that the

state will not repeal, rescind or revoke the provisions of this section

or section ninety-two-t of the state finance law or modify the same as

to limit, impair, or impede the rights hereby vested in the city and/or

the agency or in any way limit, impair, or impede the rights and

remedies of owners of said bonds and/or bond anticipation notes, until

such bonds and/or bond anticipation notes, together with the interest

thereon, and all costs and expenses in connection with any action or

proceeding by or on behalf of such owners, are fully paid or otherwise

discharged or defeased; provided that (i) nothing in this section shall

be deemed or construed as giving or pledging the credit of the state to

the payment of said bonds and/or bond anticipation notes; and (ii) this

pledge shall be subject to the reserved right of the state to alter the

base, rate, method of taxation and exemptions from taxation or the

method of distribution of the taxes which may be imposed pursuant to

section twelve hundred ten and section twelve hundred sixty-two of the

tax law, or any successor law thereto. The city and the agency are

authorized to include this covenant and agreement of the state in any

sale of such bonds and/or bond anticipation notes.

(c) The agency shall provide in any sale of bonds and/or bond

anticipation notes which are secured by proceeds of sales and

compensating use taxes as provided herein that the proceeds of the taxes

which would otherwise be received by the city pursuant to section twelve

hundred ten of the tax law or proceeds payable to the city pursuant to

section twelve hundred sixty-two of the tax law, or any successor

statutes thereto, shall, upon the occurrence of events described in

subdivision two of section ninety-two-t of the state finance law, be

paid by the state comptroller into the Niagara Falls sales tax fund for

disposition as provided in such section. The state comptroller is

hereby authorized and directed to pay such moneys to such fund, and to

make such arrangements as are deemed appropriate to facilitate such

payments, including, but not limited to the electronic transfer thereof.

(d) Upon delivery of any issue of bonds or notes secured by the

proceeds of sales and compensating use taxes as herein authorized, the

chair of the agency shall file with the state comptroller and the county

treasurer a certificate setting forth with respect to such issue the

name and address of the trustee for the holders thereof. Upon the

appointment of a successor trustee with respect to any issue of bonds or

notes secured as provided herein, a supplemental certificate shall be

filed with the state comptroller and the county treasurer prior to the

effective date of such appointment. Such trustee shall on or before

November first annually certify to the state comptroller and to the city

council the amount required for the ensuing city fiscal year for payment

of debt service on bonds or notes issued pursuant to this section and to

restore any deficiencies in any reserve funds established in connection

with the issuance of such bonds or notes.

(e) Pursuant to an appropriation by the city council of the amount

certified pursuant to subdivision (d) of this section, the state

comptroller shall pay such amount to the trustee out of proceeds of the

taxes pledged pursuant to this section. Any such proceeds in excess of

such certified amount shall be paid by the state comptroller to the city

of Niagara Falls. In the event that the amount to be paid by the state

comptroller is less than the amount certified pursuant to subdivision

(d) of this section, the comptroller shall pay such difference to the

trustee for the bondholders out of the first monies available for the

next succeeding payments of (i) state aid apportioned to the city of

Niagara Falls as per capita aid for the support of local government

pursuant to section fifty-four of this chapter or (ii) such other aid or

assistance payable by the state to the city and not otherwise allocated

as shall supersede or supplement such state per capita aid, including

federal monies apportioned to the city by the state, after giving

written notice to the chief fiscal officer of the city of Niagara Falls.

Any amount so paid over shall be deducted from the corresponding

apportionment of such per capita state aid otherwise payable to the city

of Niagara Falls, and shall not obligate the state to make nor entitle

the city to receive any additional apportionment or payment of per

capita state aid. Nothing herein shall affect the reserved right of the

state to amend such section fifty-four or otherwise reduce or eliminate

such per capita aid and such other aid or assistance.

(f) The state comptroller may conclusively rely upon the information

set forth or included by reference in any certificate filed therewith

pursuant to this section or section ninety-two-t of the state finance

law, and shall not be liable to the owner of any bond or note of the

agency on account of any reasonable action taken based upon such

information. The county treasurer may conclusively rely upon the

information set forth in any certificate filed therewith pursuant to

this section or section ninety-two-t of the state finance law, and shall

not be liable to the owner of any bond or note of the agency on account

of any reasonable action taken based upon such information.

(g) During the period that any local law enacted pursuant to this

section shall be in force, the city shall not issue revenue anticipation

notes in anticipation of the receipt of taxes authorized pursuant to

section twelve hundred ten of the tax law, which taxes are described in

subdivisions (b), (d), (e) and/or (f) of section eleven hundred five of

the tax law, and, in the event that the city issues revenue anticipation

notes in anticipation of the collection or receipt of any other

categories of sales taxes used as security to the bondholders pursuant

to the provisions of this section, when determining the total amount of

revenue anticipation notes which may be issued, in addition to the

amounts described in subparagraph (b) of subdivision three of paragraph

(d) of section 25.00 of the local finance law or the amounts described

in the unnumbered paragraph following such subparagraph (b), as the case

may be, there shall also be deducted an amount equal to the debt service

on the bonds or notes of the agency so secured thereafter remaining to

be paid during the fiscal year of the city with respect to which such

revenue anticipation notes are issued.