N.Y. Local Finance Law § 29.10: Issuance of land installment purchase obligations

* § 29.10 Issuance of land installment purchase obligations. 1. A

municipality is hereby authorized and empowered to issue land

installment purchase obligations for the purpose of financing the

acquisition of interests or rights in real property for which the

municipality has contracted, pursuant to section two hundred forty-seven

of the general municipal law, together with the preliminary and

incidental costs of such acquisition. Such obligations shall be

authorized by a statement made in a bond resolution authorizing the

issuance of bonds to finance such acquisition. Such statement shall

provide that all or a portion of the indebtedness for such purpose may

be issued in the form of a land installment purchase obligation. Any

portion of the estimated maximum cost of the object or purpose for which

the issuance of bonds has been authorized that is not financed with the

issuance of a land installment purchase obligation may be financed

through the issuance of bonds or bond anticipation notes.

2. Each land installment purchase obligation shall state the dates of

commencement and maturity, which shall establish a term no longer than

the period of probable usefulness of the interests or rights to be

acquired. Each land installment purchase obligation shall provide that

the municipality shall be vested with title and ownership of such

interests or rights and shall be entitled to possession of the interests

or rights to be acquired. A land installment purchase obligation may

include such other terms related to the acquisition or possession of

such interests or rights as may be necessary or convenient.

3. Payments under a land installment purchase obligation shall be in

semi-annual or annual installments, as provided in the land installment

purchase obligation, commencing within one year of the start of the

term, provided that only one such installment scheduled in any fiscal

year of a municipality may contain a principal component. The interest

and principal components of each installment shall be identified therein

and shall be made at the same times and in the same amounts as would be

permitted if the land installment purchase obligation were issued in the

form of a serial bond or a sinking fund bond, provided that if the

municipality elects to schedule such payments at the same times and in

the same amounts as would be permitted if the land installment purchase

agreement were a sinking fund bond, section 22.10 of this chapter shall

apply, and the owner of such land installment purchase agreement shall

be considered a bondholder for purposes of said section, provided,

however, that no such owner shall have any lien, trust or other interest

in moneys held by the state comptroller until the scheduled installment

date on which such amounts are to be paid. The first such installment

shall be sufficient to pay interest on the land installment purchase

obligation accruing prior to the date of the installment.

4. The obligation to make installment payments under a land

installment purchase obligation shall be a faith and credit obligation

of the issuer thereof and shall constitute indebtedness under this

chapter to the same extent as if issued in the form of bond bearing

interest in the amount of the interest component of each such

installment.

5. Any municipality may negotiate the terms of a land installment

purchase obligation with the owner of such interests or rights and the

finance board may delegate the power to set the terms of and sell such

land installment purchase obligation to such owner to the chief

financial officer, provided that any such delegation pursuant to this

sentence shall not include the power to negotiate the price of land

which is the subject of such land installment purchase obligation.

Before executing any such agreement, the finance board of the

municipality shall adopt a resolution determining such agreement is in

the prudent financial interest of the municipality and stating the basis

of that determination.

6. A land installment purchase obligation issued by a municipality

shall be restricted from transfer and may not be the subject of

certificates of participation, unless explicitly agreed to by the

parties.

7. The interest paid pursuant to a land installment purchase

obligation shall be exempt from taxation for municipal and state

purposes. Section 161.00 of this chapter shall not apply to land

installment purchase obligations.

* NB Repealed July 31, 2031