N.Y. Local Finance Law § 24.00: Tax anticipation notes

§ 24.00 Tax anticipation notes.

a. 1. Tax anticipation notes may be issued by any municipality, school

district or district corporation, other than a fire district,

(a) During a fiscal year in anticipation of the collection of taxes or

assessments levied for such fiscal year,

(b) Within ten days prior to the commencement of a fiscal year or,

where the fiscal year of the issuer is a calendar year, within thirty

days prior to the commencement of a fiscal year, in anticipation of the

collection of taxes or assessments levied for such fiscal year,

(c) During a fiscal year in anticipation of the collection of taxes or

assessments to be levied in such fiscal year,

(d) Within ten days prior to the commencement of a fiscal year or,

where the fiscal year of the issuer is a calendar year, within thirty

days prior to the commencement of a fiscal year, in anticipation of the

collection of taxes or assessments to be levied in such fiscal year, or

(e) During any fiscal year in anticipation of the collection of taxes

or assessments levied for any of the four preceding fiscal years.

The term "assessments" as used in this paragraph means assessments

levied or to be levied for operation, maintenance or debt service.

2. Prior to the adoption of its annual budget any municipality, school

district or district corporation which adopts an annual budget after the

commencement of its fiscal year shall not issue such notes pursuant to

items (c) or (d) of subdivision one of this paragraph in excess of the

combined amounts of:

(a) The amount necessary for the payment of the principal of and

interest on any indebtedness to become due during the first four months

of its current fiscal year, and

(b) Thirty-five per centum of the difference between the amount of its

annual budget for the preceding fiscal year and the amount provided

therein for the payment of the principal of and interest on

indebtedness.

3. In no event shall any municipality, school district or district

corporation reduce the amount to be raised by taxes or assessments in

its annual budget or other determination of taxes or assessments to be

raised to an amount less than the amount of the outstanding notes which

have been issued pursuant to items (c) and (d) of subdivision one of

this paragraph.

4. In the case of such notes issued pursuant to items (a), (b) and (e)

of subdivision one of this paragraph, such notes shall not be issued in

an amount in excess of the amount of the taxes or assessments levied for

a fiscal year which is uncollected at the time of such borrowing less:

(a) The amount of the outstanding tax anticipation notes issued in

anticipation of the collection of such taxes or assessments, and

(b) The amount, if any, included in the annual budget for such fiscal

year or in the levy of taxes or assessments for such fiscal year to

offset, in whole or in part, an anticipated deficiency in the collection

before the end of such fiscal year of the taxes or assessments levied

for such fiscal year.

5. The proceeds of notes issued pursuant to items (c) and (d) of

subdivision one of this paragraph shall be used only for the purposes

for which the taxes or assessments are to be levied or for the

redemption of notes in renewal of which they were issued. The proceeds

of notes issued pursuant to items (a), (b) and (e) of subdivision one of

this paragraph shall be used only for the purposes for which the taxes

or assessments were levied or for the redemption of notes in renewal of

which they were issued, provided, however, that the proceeds of such

notes may be used for other lawful purposes if the purposes for which

the taxes or assessments were levied have been satisfied and there are

no unpaid claims arising therefrom or appropriate provision has already

been made for the payment of such unpaid claims.

6. Tax anticipation notes issued pursuant to this paragraph shall

mature within one year from the date of their issuance and may be

renewed from time to time, but each renewal shall be for a period not to

exceed one year. Such notes or the renewals thereof shall be retired

within five years after their date of original issue and in any event

not later than five years after the close of the fiscal year for which

were levied the taxes or assessments in anticipation of the collection

of which such notes were issued; provided, however, that such notes

issued pursuant to items (b) and (d) of subdivision one of this

paragraph, or the renewals thereof, shall not extend beyond the close of

the fourth fiscal year succeeding that in which the original notes were

issued.

b. A municipality may issue tax anticipation notes in anticipation of

the collection of the unpaid taxes or assessments of another

municipality, a school district or a district corporation provided (1)

such unpaid taxes or assessments are returned or certified to it,

pursuant to law, and (2) such unpaid taxes or assessments are to be

collected by or on behalf of the municipality to which such return or

certification is made, and (3) such return or certification be accepted

by such municipality. If a municipality is required by law to pay over

to another municipality, a school district or district corporation all

or part of the taxes or assessments of such other municipality, school

district or district corporation, such municipality may issue tax

anticipation notes in anticipation of the collection of such unpaid

taxes or assessments in order to make such payment. Notes issued

pursuant to this paragraph shall mature within a period not to exceed

one year from the date of their issuance and may be renewed from time to

time, but each renewal shall be for a period not to exceed one year and

in no event shall such notes or the renewals thereof extend beyond the

close of the fourth fiscal year succeeding the fiscal year for which

such taxes or assessments were levied. The proceeds of such notes shall

be used as required by law, or for the redemption of notes in renewal of

which they were issued.

c. If any tax district which is required by law to pay over to the

county treasurer on or before October fifteenth of any calendar year the

full amount of county or county district taxes or assessments due for

such calendar year fails or neglects to pay to the treasurer of such

county on or before such date the full amount of such taxes or

assessments due for such calendar year, the county may issue tax

anticipation notes in its own name to the amount of such deficiency.

Such notes shall mature on or before June first of the next calendar

year after such default and may be renewed from time to time but no

renewal shall extend beyond eighteen months from the date of issue of

the original note. Provision shall be made for the payment of the

principal of and interest on said tax anticipation notes in the manner

provided by section ninety-six of the tax law. The proceeds of such

notes shall be used only for the purposes for which such taxes or

assessments were levied or for the redemption of notes in renewal of

which they were issued.

c-1. Any fire district in a town in the county of Westchester in which

real estate taxes and assessments become payable on April first in each

year may issue tax anticipation notes during any fiscal year prior to

June first in such year in anticipation of the collection of taxes or

assessments levied for such fire district for such year. Notes issued

pursuant to the provisions of this paragraph shall mature on or before

June first next following the date of their issuance and shall be

redeemed from the taxes or assessments in anticipation of the collection

of which such notes were issued. Such notes shall not be issued in an

amount in excess of the difference between the amount of the fire

district taxes or assessments remaining uncollected at the time of such

borrowing and the amount of tax anticipation notes issued in

anticipation of the collection of such taxes or assessments. Whenever

the amount of tax anticipation notes issued pursuant to this paragraph

shall equal the amount of such taxes or assessments remaining

uncollected, all of such taxes or assessments, as thereafter collected,

shall be set aside in a special bank account to be used only for the

payment of such notes as they become due. The proceeds of such notes

shall be used only for the purposes for which such taxes or assessment

were levied.

c-2. Any fire district in any town other than a town in the county of

Westchester may issue tax anticipation notes at any time during the

first three months of its fiscal year in anticipation of the collection

of real estate taxes levied for such fire district for such fiscal year.

Notes issued pursuant to the provisions of this paragraph shall mature

on or before the fifteenth day of April next following the date of their

issuance and shall be redeemed from the taxes in anticipation of the

collection of which such notes were issued. Such notes shall not be

issued in an amount in excess of the difference between the amount of

the fire district taxes remaining uncollected at the time of such

borrowing and the amount of tax anticipation notes issued in

anticipation of the collection of such taxes. Whenever the amount of tax

anticipation notes issued pursuant to this paragraph shall equal the

amount of such taxes remaining uncollected, all of such taxes, as

thereafter collected, shall be set aside in a special bank account to be

used only for the payment of such notes as they become due. The proceeds

of such notes shall be used only for the purposes for which such taxes

were levied. For the purpose of this paragraph such real estate taxes

shall be deemed to be uncollected until the fire district receives cash

therefor from the public officer required to pay such taxes to the fire

district.

d. 1. In the case of a newly created municipality, school district or

district corporation, or in the case of any such unit of government

which has elected a finance board for the first time, tax anticipation

notes may be issued, prior to the first levy of taxes or assessments,

for the necessary expenses incidental to its incorporation or creation

and the other necessary expenses incurred or to be incurred prior to

such levy. In the case of a municipality or school district, such notes

shall not be issued in an amount in excess of two per centum of the

assessed valuation of the taxable property therein as shown upon the

last preceding assessment roll of any unit of government in which such

property was evaluated. If, however, any part of such property was

evaluated in the assessment roll of more than one unit of government its

value, for the purposes of this section, shall be the lowest value

assigned to it by any such assessment roll. In the case of a fire

district, such notes shall not be issued in an amount exceeding

one-twelfth of the amount of taxes which the fire district may raise

annually without adopting a proposition pursuant to the provisions of

the town law for each calendar month intervening between the date of the

creation of the district and the first day of the fiscal year of the

district for which an annual budget can be adopted, plus an amount not

exceeding the actual and necessary expenses incidental to its creation.

The phrase "the amount of taxes which the fire district may raise

annually without adopting a proposition pursuant to the provisions of

the town law," as used herein, shall mean two thousand dollars, except

that in fire districts having a full valuation in excess of one million

dollars it shall mean two thousand dollars plus one mill for each dollar

of full valuation of the taxable real property of the fire district in

excess of the first million dollars of full valuation of such taxable

real property. In the case of any district corporation, other than a

fire district, such notes shall not be issued in an amount in excess of

one mill of the assessed valuation of the taxable property therein as

shown upon the last preceding assessment roll of any unit of government

in which such property was evaluated in addition to the necessary

expenses incidental to incorporation. If, however, any part of such

property was evaluated in the assessment roll of more than one unit of

government, its value for the purpose of this section shall be the

lowest value assigned to it by any such assessment roll.

2. In the case of the establishment of any improvement district of a

county or of a town, which is to be financed by taxes or assessments

levied upon an ad valorem or benefit basis, or in the case of the

consolidation of special improvement districts, prior to the first levy

in which such taxes or assessments are to be levied for such district or

consolidated district the county or town, as the case may be, may issue

tax anticipation notes for the necessary expenses incidental to the

creation of such district or consolidation of such districts, and the

other necessary expenses incurred or to be incurred for such district or

consolidated district prior to such levy.

3. An appropriation for the redemption of notes issued pursuant to

this paragraph shall be included in the first levy of taxes or

assessments of or for such municipality, school district, district

corporation or improvement district. Such notes shall mature within one

year from their date of issue and may be renewed from time to time, but

each renewal shall be for a period not to exceed one year and in no

event shall such notes or the renewals thereof extend beyond the close

of the second fiscal year succeeding the fiscal year in which such notes

were issued. The proceeds of such notes shall be used only to pay such

necessary expenses incidental to such incorporation or creation and such

other necessary expenses incurred or to be incurred prior to any such

levy or for the redemption of notes in renewal of which they were

issued.

e. Whenever the amount of tax anticipation notes issued pursuant to

paragraphs a, b and d of this section in anticipation of the collection

of the taxes or assessments levied or to be levied for a fiscal year

shall equal the amount of such taxes or assessments remaining

uncollected less the amount, if any, included in the annual budget for

such fiscal year or in the levy of taxes or assessments for such fiscal

year to offset, in whole or in part, an anticipated deficiency in the

collection before the end of such fiscal year of the taxes or

assessments levied for such fiscal year, all of such uncollected taxes

or assessments, as thereafter collected, shall be set aside in a special

bank account to be used only for the payment of such notes as they

become due, unless other provision is made pursuant to law for the

redemption of such notes. Any municipality, school district or district

corporation may make budgetary appropriations for the redemption of such

notes whether or not required or otherwise authorized by law to do so.

In the event such an appropriation is made, such municipality, school

district or district corporation shall not be required to pay into the

special account the proceeds of the taxes or assessments against which

such notes were issued but such proceeds may be used in the manner

provided by law or if there is no provision of law pertaining to the use

of such proceeds, such proceeds shall be treated as surplus moneys for

the fiscal year in which they are collected. This paragraph shall not

apply to notes issued pursuant to paragraph c of this section.

f. 1. Where a tax anticipation note issued pursuant to paragraphs a, b

or d of this section is to be renewed by the issuance of a renewal note,

and the taxes or assessments in anticipation of which it was issued have

been levied for a fiscal year, but remain uncollected, such renewal note

shall not be issued for an amount in excess of the amount of such taxes

or assessments remaining uncollected at the time of such renewal, less:

(a) The amount of any other outstanding tax anticipation notes issued

in anticipation of the collection of such taxes or assessments, and

(b) The amount, if any, included in the annual budget for such fiscal

year or in the levy of taxes or assessments for such fiscal year to

offset, in whole or in part, an anticipated deficiency in the collection

before the end of such fiscal year of the taxes or assessments levied

for such fiscal year.

In no event shall such a renewal note be issued for an amount in excess

of the original amount of the note in renewal of which it is to be

issued.

2. Where a tax anticipation note issued pursuant to paragraphs a or d

of this section is to be renewed, and the taxes or assessments in

anticipation of which it was issued have not been levied, such renewal

note shall not be issued for an amount in excess of the original amount

of the note in renewal of which it is to be issued.

3. Where a tax anticipation note issued pursuant to paragraph c of

this section is to be renewed, such renewal note shall not be issued in

an amount in excess of the difference between the original amount of

such note to be renewed, less the amount of moneys received and applied

or to be applied to the payment of such note.

g. Tax anticipation notes may be issued by any municipality during any

fiscal year thereof:

1. In anticipation of the collection of assessments levied for such

fiscal year, or to be levied in such fiscal year, to pay the cost of

capital improvements, if such assessments are to be collected in one

installment; provided, however, that if such assessments have been

levied, such notes shall not be issued in an amount in excess of the

difference between the amount of such assessments remaining uncollected

at the time of such borrowing and the amount of outstanding tax

anticipation notes issued in anticipation of the collection of such

assessments.

2. In anticipation of the collection of an installment of assessments

levied for a capital improvement, if such assessments are to be

collected in several annual installments and such installment becomes

due and payable during such fiscal year; provided, however, that such

notes shall not be issued in an amount in excess of the difference

between the amount of such installment remaining uncollected at the time

of such borrowing and the amount of outstanding tax anticipation notes

issued in anticipation of the collection of such installment.

3. The proceeds of tax anticipation notes issued pursuant to this

paragraph shall be used only for the purposes for which such assessments

were levied or are to be levied or for the redemption of notes in

renewal of which they were issued.

4. Tax anticipation notes issued pursuant to this paragraph shall

mature within one year from the date of their issuance and may be

renewed from time to time but each renewal shall be for a period not to

exceed one year and in no event shall such notes or the renewals thereof

extend beyond the close of the second fiscal year succeeding the fiscal

year in which such notes were issued.

5. Whenever the amount of tax anticipation notes issued pursuant to

this paragraph in anticipation of the collection of assessments or an

installment thereof levied for a capital improvement equals the amount

of such assessments or such installment remaining uncollected, all of

such assessments or such installment, as thereafter collected, shall be

set aside in a special bank account to be used only for the payment of

such notes as they become due, unless other provision is made, pursuant

to law, for the redemption of such notes. Any municipality may make

budgetary appropriations for the redemption of such notes whether or not

required or otherwise authorized by law to do so. In the event such an

appropriation is made, such municipality shall not be required to pay

into the special account the proceeds of the assessments, or the

installment thereof, against which such notes were issued but such

proceeds may be used in the manner provided by law or if there is no

provision of law pertaining to the use of such proceeds, such proceeds

shall be treated as surplus moneys for the fiscal year in which they are

collected.

6. (a) Where a tax anticipation note issued pursuant to this paragraph

is to be renewed by the issuance of a renewal note, and the assessments

or installment thereof in anticipation of which it was issued have been

levied, but remain uncollected, such renewal note shall not be issued

for an amount in excess of the amount of such assessments or installment

thereof remaining uncollected at the time of such renewal, less the

amount of any other outstanding tax anticipation notes issued in

anticipation of the collection of such assessments or installment

thereof; but in no event shall such a renewal note be issued for an

amount in excess of the original amount of the note in renewal of which

it is to be issued.

(b) Where a tax anticipation note issued pursuant to this paragraph is

to be renewed, and the assessments or installment thereof in

anticipation of which it was issued have not been levied, such renewal

note shall not be issued for an amount in excess of the original amount

of the note in renewal of which it is to be issued.

h. Tax anticipation notes may be issued by any municipality during any

fiscal year thereof in anticipation of the levy or distribution of

assessments for work or services if the expenditures for such work or

services are financed from a fund into which are paid the proceeds of

such notes and if such assessments are required to be collected in one

installment and included in the tax roll for the fiscal year succeeding

the fiscal year in which such notes were issued or in the tax roll for

the second succeeding fiscal year. Any such municipality shall pay the

proceeds of such assessments into any such fund. Notes issued pursuant

to the provisions of this paragraph shall mature within one year from

the date of their issuance and may be renewed from time to time but each

renewal shall be for a period not to exceed one year and in no event

shall such notes or the renewals thereof extend beyond the close of the

second fiscal year succeeding the fiscal year in which such notes were

issued. No such renewal note shall be issued for an amount in excess of

the original amount of the note in renewal of which it was issued.

i. For the purpose of this section, taxes or assessments shall be

deemed to be uncollected and not received by a municipality, school

district or district corporation until cash is paid to such

municipality, school district or district corporation for such taxes or

assessments and such taxes or assessments are cancelled or the title to

such taxes or assessments is transferred by such municipality, school

district or district corporation, or until real property has been sold

for such taxes or assessments and has been acquired by such

municipality, school district or district corporation and such

municipality, school district or district corporation has realized cash

by the sale of such real property. For the purpose of this section the

term "taxes" or the term "assessments" shall not include interest or

penalties upon uncollected taxes or assessments.

j. Notwithstanding any provision of any other law, general or special,

a central high school district may issue tax anticipation notes in

accordance with and subject to the provisions of this section applicable

to a school district; provided, however, that the aggregate amount of

taxes in anticipation of which a central high school district may issue

tax anticipation notes shall not exceed the sum of the taxes levied or

to be levied for central high school district purposes in each school

district included within the central high school district and, provided

further, that no such school district included within the central high

school district shall be authorized to issue tax anticipation notes in

anticipation of taxes levied or to be levied therein for central high

school district purposes.