N.Y. Local Finance Law § 21.00: Serial bonds

§ 21.00 Serial bonds. a. Any municipality, school district or district

corporation may issue serial bonds for any object or purpose having a

period of probable usefulness set forth in paragraph a of section 11.00

of this chapter and for which object or purpose it may contract

indebtedness pursuant to section 10.00 of this chapter; provided,

however, that serial bonds shall not be issued by such municipality,

school district or district corporation (1) in those cases in which

provision is made in sections 24.00 and 25.00 of this chapter for the

issuance of tax anticipation notes and revenue anticipation notes to be

issued in anticipation of the collection or receipt of taxes, revenues

or assessments, as the case may be, or (2) in those cases in which

provision is made in section 29.00 of this chapter for the issuance of

budget notes other than paragraph n of such section, or (3) in those

cases in which budget notes have been issued under such paragraph n; and

further provided, however, that nothing contained herein shall prohibit

the issuance of serial bonds by such municipality, school district or

district corporation for the object or purpose specified in subdivision

sixty of paragraph a of section 11.00 of this chapter.

b. Serial bonds shall mature in annual installments. The first

installment shall mature not later than eighteen months after the date

of such bonds or two years after the date of the first bond anticipation

note or notes issued in anticipation of such bonds, whichever is the

earlier, provided, however, that until July fifteenth, two thousand

twenty-seven, the first installment shall mature not later than two

years after the date of such bonds or two years after the date of the

first bond anticipation note or notes issued in anticipation of such

bonds, whichever is the earlier. However, if bond anticipation notes are

issued in anticipation of bonds and if a portion of such notes or the

renewals thereof are redeemed from a source other than the proceeds of

such bonds within two years from the date of the first such note or

notes and a further portion thereof shall be so redeemed prior to the

termination of each twelve months' period succeeding the date such

original portion was so redeemed, the first installment of such bonds

may, in the alternative, be made to mature not later than five years

from the date of the first such note or notes.

b-1. Notwithstanding the provisions of paragraph b of this section, if

bond anticipation notes are issued in anticipation of bonds for

assessable improvements and if a portion of such notes or the renewals

thereof are redeemed from a source other than the proceeds of such bonds

within two years from the date of the first such note or notes and a

further portion thereof shall be so redeemed prior to the termination of

each twelve months' period succeeding the date such original portion was

so redeemed, the first installment of such bonds shall mature not later

than twelve months from the last preceding date such portion is so

redeemed.

c. The last installment of serial bonds shall mature not later than

the expiration of the period of probable usefulness of the object or

purpose for which such bonds are issued, as computed from the date of

such bonds or, if bond anticipation notes shall have been issued in

anticipation thereof, as computed from the date of the earliest note or

notes so issued.

d. No annual installment of serial bonds shall be more than fifty per

centum in excess of the smallest prior installment. For the purpose of

the preceding sentence, bond anticipation notes, which are redeemed from

a source other than the proceeds of bonds, shall be deemed to be serial

bonds. Notwithstanding the foregoing, the finance board of any

municipality, school district or district corporation may determine to

issue bonds and provide for substantially level or declining annual debt

service. The determination of whether annual debt service is

substantially level or declining shall not take into account the first

twelve months after issuance to the extent that no provision is to be

made for the payment of principal during such period. If a municipality,

school district or district corporation determines to issue bonds with a

substantially level or declining annual debt service schedule, then the

aggregate amount of debt service payable in each year shall not exceed

the lowest aggregate amount of debt service payable in any prior year by

more than the greater of five percent or ten thousand dollars. For

purposes of this paragraph, debt service shall include all of the

following scheduled to become due: principal, redemption price, sinking

fund installments or contributions, and interest. For purposes of

determining whether debt service is substantially level or declining on

bonds issued with a variable rate of interest pursuant to section 54.90

of this article, the finance board shall estimate the average rate of

interest at which fixed interest rate bonds of the same maturities would

be sold and amortize principal based upon such interest rate assumption.

The estimate by the finance board of such interest rate shall be deemed

final and conclusive. If the finance board of the municipality, school

district or district corporation determines that interest on such bonds

shall be compounded and payable at maturity or prior redemption, such

bonds may be issued only where such finance board has determined to

issue the bonds pursuant to a substantially level or declining annual

debt service schedule unless accrued interest is contributed at least

annually to a sinking fund in accordance with section two of article

VIII of the constitution and the procedures of section 22.10 of this

title. A municipality, school district or district corporation providing

for substantially level or declining debt service may provide for

contracting such indebtedness as serial bonds, as sinking fund bonds, as

term bonds, or as any combination thereof. Term bonds may be issued

under the authority of this paragraph with a stated maturity and a

schedule of mandatory redemptions prior thereto, providing (with other

bonds of the same issue, if any) for substantially level or declining

debt service.

e. Serial bonds shall be redeemed by an annual appropriation.

f. Notwithstanding the provisions of paragraphs b and d of this

section:

1. The first installment of serial bonds issued for the purpose of

providing moneys out of which to make loans to or in aid of

limited-profit housing companies pursuant to article two of the private

housing finance law, or loans to owners of existing multiple dwellings

pursuant to article eight of the private housing finance law, or issued

for the purpose of providing moneys for the effectuating of any urban

renewal program or part thereof pursuant to the general municipal law,

may mature not later than five years after the date of issuance of such

bonds or six years after the date of issuance of the first bond

anticipation note or notes issued in anticipation of such bonds,

whichever is earlier; provided, however, that if the bond anticipation

notes or renewals thereof issued in anticipation of such serial bonds

extend more than five years beyond the original date of such issue,

pursuant to the provisions of paragraph b of section 23.00 of this

chapter, the first installment of such serial bonds may mature not later

than such number of years after the date of issuance of such bonds or

such number of years plus one after the original date of issuance of

such notes, whichever is earlier; and

2. The annual installments of serial bonds issued for such purpose and

for the purpose of providing moneys out of which to make loans to owners

of existing multiple dwellings pursuant to article eight of the private

housing finance law may be computed in such manner that the total of

principal and interest required to be paid in each year beginning with

the year in which the first installment is due, will be approximately

equal to the total of principal and interest required to be paid in each

succeeding year of the period for which such bonds were issued.