N.Y. Local Finance Law § 29.20: Deficiency notes

§ 29.20 Deficiency notes. a. Any municipality, school district or

district corporation may issue deficiency notes during any fiscal year

to finance a deficiency in any fund or funds arising from revenues being

less than the amount estimated in the budget for such current fiscal

year. Such notes may be issued in such amount as the finance board shall

determine to be necessary, but not to exceed five per centum of the

amount of the annual budget of such municipality, school district or

district corporation.

b. Deficiency 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.

c. Deficiency 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.

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

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

has the power to issue deficiency 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 deficiency notes for the purposes of the

fund or funds for which such notes are issued.

e. The proceeds of such notes shall be used only to finance a

deficiency in any fund or funds arising from revenues being less than

the amount estimated in the budget for the current fiscal year or, in

the event all or a portion of the proceeds are not expended for that

purpose, the amount not so expended shall be used only for the payment

of principal of and interest on such notes. In determining whether all

or any portion of the proceeds of deficiency notes remained unexpended

at the close of a fiscal year, the moneys in such fund or funds other

than the proceeds of such notes shall be deemed to be expended prior to

the proceeds of such notes.

f. Any municipality, school district or district corporation which

shall renew deficiency notes pursuant to the provisions of paragraph b

of this section, or which shall issue deficiency notes in two or more

successive fiscal years, shall be subject to the requirements of

paragraphs c, d, e and f of section 10.10 of this article for three

years commencing with the fiscal year in which such notes were renewed

or each second successive fiscal year in which such notes were issued.