N.Y. Local Finance Law § 29.00: Budget notes

§ 29.00 Budget notes. a. 1. Any municipality or district corporation,

other than a fire district, may issue budget notes during any fiscal

year for any unforeseeable public emergency during such year such as

epidemic, conflagration, riot, storm, flood, earthquake or other unusual

peril to the lives and property of the citizens of such unit of

government in such amount as the finance board shall determine to be

necessary, but no municipality may issue such notes for emergencies in

behalf of any local improvement district. Any school district may issue

budget notes during any fiscal year to provide temporary school

buildings or facilities in such year when such buildings or facilities

are necessitated because of an unforeseeable public emergency during

such year such as epidemic, conflagration, riot, storm, flood,

earthquake or other unusual circumstance preventing the use in whole or

in part, of the buildings or other facilities used by such school

district.

2. Any municipality or district corporation which adopts an annual

budget may issue budget notes during any fiscal year for expenditures

for which an insufficient or no provision is made in the annual budget

for such fiscal year in an amount not to exceed five per centum of the

amount of such annual budget.

Notwithstanding the foregoing limitation, any fire district may issue

budget notes pursuant to this subdivision in the amount of at least one

thousand dollars. In addition, any county which adopts an annual budget

may issue budget notes pursuant to this subdivision without limitation

as to amount for necessary expenditures for the apprehension and

prosecution of persons charged with the commission of crime and for

which an insufficient or no provision has been made in the annual budget

for such fiscal year. If, however, any such municipality or district

corporation may issue budget notes for any such expenditures pursuant to

the provisions of any other paragraph of this section, such municipality

or district corporation shall not issue budget notes for any such

expenditures pursuant to this subdivision. Any town, and any county, in

computing "the amount of the annual budget" for the purposes of this

subdivision shall not include any amounts which are to be paid in the

first instance from improvement district assessments.

3. A school district may issue budget notes during the last nine

months of any fiscal year for expenditures for which an insufficient or

no provision is made in the annual budget for such fiscal year in an

amount not to exceed five per centum of such annual budget. The

foregoing limitation shall not be applicable in any case in which a

budget note resolution has been adopted by the finance board of a school

district and has been approved by a majority of the qualified voters of

the school district present and voting at any annual or special meeting

of the school district held pursuant to the provisions of the education

law during the last nine months of such fiscal year. The notice for any

such meeting, in addition to complying with applicable provisions of the

education law, must state that such budget note resolution will be

submitted for approval by the voters at such meeting; the purpose for

which moneys are proposed to be borrowed under such resolution; the

total amount proposed to be borrowed, and the fiscal year in which taxes

are required to be levied for the payment of the budget note proposed to

be issued. The vote at any such meeting on such proposition shall be by

ballot, or ascertained by taking and recording the ayes and noes of such

qualified voters attending and voting at such meeting.

3-a. Notwithstanding any other provisions of this section, where a

school district can demonstrate to the satisfaction of the commissioner

of education extenuating circumstances that a waiver is warranted for

the adoption of a budget note resolution by its finance board, upon

certification by the chief executive officer to the commissioner of

education, in such form as the commissioner of education shall determine

pursuant to guidelines developed, for the purpose of making additional

accruals requirements in the two thousand four--two thousand five or two

thousand five--two thousand six school years associated with changes in

accounting methodologies for liabilities for employer and employee

contributions due and payable to a public retirement system that will

result in a tax increase to the residents of the district in the

following school year, a school district may issue budget notes during

the last nine months of the school year in which such resolution is

adopted, or during the first three months of the following school year,

in an amount not to exceed the amount of such additional accruals for

public pension liabilities. The limitation on the amount of budget notes

contained in subdivision three of this paragraph shall not be applicable

to notes issued pursuant to this section and the amount of budget notes

issued pursuant to this section shall not be included in the computation

of such limitation.

4. Any fire district may issue budget notes for expenditures for

necessary repairs to any fire-fighting apparatus, fire-fighting vehicles

or other motorized equipment of such fire district which has been

damaged as the result of an accident; but only to the extent that

budgetary appropriations for such purpose and the proceeds of insurance

received on account of such damage and on hand at the time the repairs

are completed are insufficient to pay for such damage. Unless a

budgetary appropriation for the payment of such notes is in existence at

the time the proceeds of any such insurance are received, such proceeds

shall be used only for the payment of such notes.

5. Any municipality or fire district may issue budget notes during any

fiscal year to provide for the payment in such fiscal year of the cost

of insurance secured to indemnify against liability for benefits payable

under the volunteer firefighters' benefit law and for which cost an

insufficient or no provision was made in the annual budget of the

municipality or fire district for such fiscal year. The aggregate amount

of any such notes which may be issued for such purpose in a fiscal year

commencing after December thirty-first, nineteen hundred sixty-five,

shall not exceed the sum by which the actual cost of such insurance to

be paid in the fiscal year in which such notes are issued exceeds the

actual cost of such insurance in the fiscal year prior to the fiscal

year in which such notes are issued; provided, however, that this

limitation shall not apply in a case where the municipality or fire

district has not incurred any such cost in the fiscal year prior to that

in which such notes are issued.

6. Any fire district may issue budget notes for expenditures for water

supply and in relation to fire hydrant maintenance and rental costs; but

only to the extent that budgetary appropriations for such purpose under

subdivision twelve of section one hundred seventy-six of the town law

are insufficient to pay increased charges which the public service

commission has authorized and the fire district is required to pay in

the fiscal year in which the budget note is issued for such maintenance

or rental.

7. Any fire district which elects to become liable for payments in

lieu of contributions pursuant to section five hundred sixty-five of the

labor law and is required by the commissioner of labor to pay into the

unemployment insurance fund an amount equal to the amount of benefits

paid to claimants and charged to such fire district's account may issue

budget notes for such expenditures for the amount required to be so paid

in the fiscal year in which the budget note is issued, but only to the

extent that budgetary appropriations for such purpose are insufficient

to pay such claim.

8. Any county, city, village, town, town on behalf of an ambulance

district, or town on behalf of a fire protection district which

contracts with an ambulance service which is not organized pursuant to

section two hundred nine-b of the general municipal law, may issue

budget notes during the first fiscal year in which it is required to pay

contributions to the volunteer ambulance workers' service award program,

but only to the extent that budgetary appropriations for such purpose

are insufficient to pay such contributions.

b. Any municipality which adopts an annual budget may issue budget

notes during any fiscal year for either or both the following purposes:

1. The payment of the expenses for the removal of snow and ice,

exclusive of salaries and wages of regular employees except for overtime

work and work on Sundays and holidays, or

2. The payment of the expenses for the demolition of unsafe buildings,

to the extent that an insufficient provision shall have been made

therefor in the annual budget for such fiscal year, if such municipality

is required by statute, local law or ordinance to include in its annual

budget for such fiscal year and each fiscal year thereafter either (a)

an amount equal to at least the average of all expenditures for such

purpose during each of the five preceding fiscal years for each purpose

for which such budget notes are to be issued, or (b) such amount as is

prescribed in the schedule set forth below, for each purpose for which

such budget notes are to be issued:

1. For such fiscal year, an amount equal to at least one-fifth of the

average of all expenditures for such purpose during each of the five

preceding fiscal years.

2. For the first fiscal year succeeding such fiscal year, an amount

equal to at least two-fifths of the average of all expenditures for such

purpose during each of the five preceding fiscal years.

3. For the second fiscal year succeeding such fiscal year, an amount

equal to at least three-fifths of the average of all expenditures for

such purpose during each of the five preceding fiscal years.

4. For the third fiscal year succeeding such fiscal year, an amount

equal to at least four-fifths of the average of all expenditures for

such purpose during each of the five preceding years.

5. For the fourth fiscal year succeeding such fiscal year and for each

succeeding fiscal year thereafter, an amount equal to at least the

average of all expenditures for such purpose during each of the five

preceding fiscal years.

Any city, any county and any village having a population of five

thousand or more, as determined pursuant to the latest available federal

census, may adopt a local law or ordinance, and any other municipality

may adopt an ordinance requiring the inclusions of such amounts set

forth in the above schedule for either of or both such purposes in its

annual budget.

c. Any city which is required pursuant to law to include annually in

its annual budget an amount for:

1. Judgments which may be obtained against the city and which may

become due and payable during the fiscal year for which the budget is

adopted,

2. Claims which may be settled or compromised and become payable

during such fiscal year, and

3. The repaving of streets

may issue budget notes for any of such purposes during a fiscal year if

the amount included in the annual budget for such fiscal year is

insufficient therefor.

d. Any municipality, school district or district corporation which is

required by law to include in its annual budget the amount of judgments

or compromised or settled claims which are outstanding at the time such

budget is prepared, may issue budget notes for the payment of any such

judgment or claim. Such notes may be issued at any time prior to the

earliest time at which tax anticipation notes may be issued by such

municipality, school district or district corporation pursuant to

section 24.00 of this chapter in anticipation of the levy or collection

of taxes for such budget. If such notes are issued in a fiscal year

prior to the preparation of an annual budget during such fiscal year, an

appropriation for their redemption shall be included in such next budget

when it is prepared. If such notes are issued after an appropriation has

been included in an annual budget for the payment of the judgments or

claims for which the notes are issued, such notes shall be redeemed from

such appropriation. Such budget notes may be renewed from time to time,

but such notes including renewals thereof shall mature not later than

the close of the fiscal year for which such annual budget is adopted.

e. Any city, county or town, during any fiscal year or, in the case of

the city of New York, within ninety days after the close of such fiscal

year, for which it shall make a supplemental, deficiency or additional

appropriation for one or more purposes authorized by or under the

provisions of the social services law, including the administration

thereof, may issue budget notes for the amount of the local share of the

cost thereof.

e-1. If any town has made an appropriation in its annual budget for

any fiscal year for its share of the cost of an approved project under

article eight-A of the highway law, and the appropriation is

insufficient, the town may issue budget notes in such fiscal year to

finance such share in an amount not to exceed fifty per centum of the

town's share of the cost of such project. Budget notes may not be issued

under any other paragraph of this section to finance any portion of the

town's share of the cost of an approved project under such article

eight-A of the highway law.

f. If any municipality which is authorized or required by law to

include in its annual budget an estimate of the amount of state, county

district and other county taxes to be levied on the real property within

such municipality for or during the fiscal year for which such budget is

adopted, underestimates the amount that is actually levied, such

municipality may issue budget notes for the payment of all or part of

such deficiency.

g. If any portion of the taxes or assessments levied by a

municipality, school district or district corporation in any fiscal year

are cancelled prior to the collection thereof pursuant to a

determination by a court in an action or proceeding brought by the

taxpayer, or, in the case of a school district with the written approval

and consent of the commissioner of education under section thirty-five

hundred twelve of the education law, such municipality, school district

or district corporation may issue budget notes in the fiscal year in

which any such cancellation occurs in an amount not in excess of the

amount of taxes or assessments so cancelled. The proceeds of such notes

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

so cancelled were levied, or for the redemption of tax anticipation

notes which had been issued in anticipation of the collection of the

taxes or assessments so cancelled and for the redemption of which notes

no other provision has been made, or for the redemption of budget notes

in renewal of which they were issued.

h. Any county which does not adopt an annual budget may issue budget

notes during any fiscal year to pay accounts, claims, demands or charges

which may be directed to be paid pursuant to the provisions of any law

in an amount not in excess of the total amount of such accounts, claims,

demands or charges directed to be paid in such fiscal year and for which

an insufficient or no provision was made in the estimate upon which the

tax levy for such fiscal year was based. No county shall issue budget

notes pursuant to this paragraph on or after January first, nineteen

hundred fifty-one; provided that budget notes issued prior to such date

pursuant to this paragraph may be renewed as provided in paragraph j of

this section.

i. Any town on behalf of a town improvement district situated therein,

or any county on behalf of a county improvement district situated

therein, may issue budget notes during any fiscal year for expenditures

for which an insufficient or no provision is made in the annual estimate

for such improvement district as finally adopted for such fiscal year in

an amount not to exceed five per centum of the amount of such annual

estimate.

j. Except as otherwise provided in paragraph d of this section, budget

notes may be renewed from time to time but such notes, including the

renewals thereof, shall mature not later than the close of the fiscal

year succeeding the fiscal year in which such notes are issued. However,

such notes, including the renewals thereof, may mature not later than

the close of the second fiscal year succeeding the fiscal year in which

such notes are issued, when authorized and issued during a fiscal year

at a time subsequent to the date of the adoption of the annual budget

for the next succeeding fiscal year, by a municipality, school district

or district corporation in which the total amount of taxes or

assessments levied for a fiscal year is determined pursuant to an annual

budget adopted during the fiscal year preceding such fiscal year.

k. Budget notes shall be redeemed out of the taxes or assessments

levied or to be levied for the fiscal year in which they mature or out

of other revenues of that fiscal year legally available for that

purpose.

l. Notwithstanding the provisions of any general, special or local

law, any municipality, school district or district corporation, which

has the power to issue budget notes under this section, shall to the

same extent have the power to appropriate and expend money received from

the proceeds of the sale of budget notes for the purposes for which such

notes are issued.

m. Notwithstanding the provisions of this section or any other law, no

city shall issue budget notes for the purpose of providing funds for the

payment pursuant to section thirty-six-a of the rapid transit law, or

otherwise, of the amounts which the board of transportation or any other

agency of such city determines or estimates, claims (including claims

reduced to judgment) or certifies to the board of estimate or other

analogous local authority of such city, as the sum by which the revenues

derived from operation of any railroad, as defined in section two of the

rapid transit law, fail or will fail to provide for any costs and

expenses of operation and maintenance of such railroad for any period or

periods commencing on or after July first, nineteen hundred fifty-three.

For the purpose of this paragraph, such costs and expenses shall also

include the payments or contributions paid or payable by the board of

transportation or the city during such period to any employees' pension

or retirement system on account of membership therein of officers and

employees of such board of transportation.

n. Notwithstanding any other provision of this section, except where

any obligations other than budget notes are or have been issued for the

object or purpose described in subdivision fifty-nine of paragraph a of

section 11.00 of this chapter, budget notes may be issued by a

municipality, school district or district corporation, or by a county on

behalf of a county improvement district situated therein or by a town on

behalf of a town improvement district situated therein, pursuant to an

irrevocable election to finance all or part of the employer's share of

the cost of retroactive coverage provided to its employees under the

federal old-age and survivors insurance system pursuant to section one

hundred thirty-eight-a of the retirement and social security law where

an insufficient or no provision is or has been made in the annual budget

for such cost.

o. Notwithstanding any other provision of this section, if any city in

this state having a population of one million or more includes in its

annual budget for the fiscal year nineteen hundred seventy-one--nineteen

hundred seventy-two an estimate in an amount not to exceed one hundred

million dollars of additional revenues available to it as a result of a

federal program of general or special revenue sharing or any similar

program or any combination of such programs which relieves a financial

burden which would otherwise require expenditure from city tax receipts

in such amount for the fiscal year, and if that estimate should exceed

the amount of such revenue that actually becomes available to it, such

city may issue during the last quarter of such fiscal year budget notes

which shall have a maximum maturity of not more than one year for the

payment of all or part of the amount of such overestimate, upon a

determination by the state budget director of the amount of such

overestimate.