N.Y. Local Finance Law § 60.10: Sale of obligations to certain banks and trust companies authorized

§ 60.10. Sale of obligations to certain banks and trust companies

authorized. a. The agency selling notes of a municipality, school

district or district corporation may sell such notes at private sale to

a bank or trust company of which an officer or employee of the

municipality, school district or district corporation has an interest

which is otherwise prohibited by the provisions of article eighteen of

the general municipal law, without limitation as to rate of interest,

provided that at least two other banks are unwilling or unable to

purchase the notes at a rate of interest equal to or less than that at

which the bank in which the officer or employee has an interest proposes

to purchase such notes. Disclosure of any such actual or prospective

sale shall be made as provided in section eight hundred three of the

general municipal law. Where any such relationship exists, however, no

such sales shall be authorized in the event that:

1. During the current fiscal year of the municipality, school district

or district corporation the bank or trust company has purchased, or by

virtue of the sale would purchase, at private sales from the

municipality, school district or district corporation, notes of such

issuer, the aggregate principal amount of which is or would exceed, one

hundred thousand dollars; or

2. The bank or trust company then is, or by virtue of the sale would

become, the holder of notes of the municipality, school district or

district corporation, purchased at private sale from such issuer, the

aggregate principal amount of which is, or would exceed, one hundred

thousand dollars.

The foregoing limitations of this paragraph a shall not be applicable

to notes renewed at private sale where such notes were originally sold

at public sale, pursuant to the requirements of former section 60.20 of

this chapter, and are renewed by the original buyer thereof at the same

or lower rate of interest.

b. The agency selling bonds of a municipality, school district, or

district corporation may, subject to the limitations of section 63.00 of

this chapter, sell such bonds at private sale to a bank or trust company

of which an officer or employee of the municipality, school district or

district corporation has an interest which is otherwise prohibited by

the provisions of article eighteen of the general municipal law.

Disclosure of any such actual or prospective sale shall be made as

provided in section eight hundred three of the general municipal law.

Where any such relationship exists, however, no such sales shall be

authorized in the event that the bank or trust company then is, or by

virtue of the sale would become, the holder of bonds of the

municipality, school district or district corporation, purchased at

private sale from such issuer, the aggregate principal amount of which

is, or would exceed one hundred thousand dollars.

c. Any officer of a municipality, school district or district

corporation who wilfully participates in authorizing the sale of, or in

selling, obligations of the municipality, school district or district

corporation in violation of the foregoing provisions of this section

shall be guilty of a misdemeanor.