N.Y. Local Finance Law § 90.00: Refunding of bonds

§ 90.00 Refunding of bonds. a. 1. A municipality, school district or

district corporation may issue serial bonds to refund bonds issued on or

after January first, nineteen hundred thirty-nine, other than bonds

issued to redeem notes, certificates or other evidences of indebtedness

issued prior to January first, nineteen hundred thirty-nine, in

anticipation of such bonds. The last installment of such refunding bonds

issued to refund bonds issued pursuant to the social services law, or

the former social welfare law, or the former public welfare law, for the

purpose of safety net assistance, as defined in such laws, shall mature

within ten years after the date of issue of the bonds to be refunded. In

all other cases the last installment of such refunding bonds shall

mature not later than the expiration of the maximum period of probable

usefulness permitted by law at the time of the issuance of the bonds to

be refunded or the refunding bonds for the object or purpose for which

the bonds to be refunded were issued. Such period shall be computed from

the date of issuance of the bonds to be refunded or from the date of

issuance of the first bond anticipation note issued in anticipation of

such bonds, whichever date is the earlier.

2. Notwithstanding the provisions of subdivision one of this

paragraph, bonds issued by a school district prior to December first two

thousand one, or prior to thirty days after the effective date of this

subdivision, whichever is later, for the purpose of financing facilities

which were eligible for building aid pursuant to section thirty-six

hundred two of the education law, and for which the aid apportionments

payable in two thousand two--two thousand three and/or two thousand

three--two thousand four school years for approved expenditures for debt

service are subsequently reduced as a result of the application of

assumed amortization to unpaid principal outstanding as of July first,

two thousand two, may be refunded and the refunding bonds may be sold at

either public or private sale in accordance with the provisions of

section 90.10 of this title; provided, however, the school district need

not comply with: (i) subparagraph (a) of subdivision two of paragraph b

of section 90.10 of this title; and (ii) if the bonds to be refunded are

to be redeemed or paid on the same date as the refunding bonds are

issued, the school district need not comply with the provisions of

section 90.10 of this title relating to the escrow of the proceeds of

the sale of the refunding bonds.

3. Refunding bonds shall not be issued to refund bonds issued to

finance an object or purpose which, at the time of the issuance of such

bonds, had a period of probable usefulness of five years or less.

4. If a budgetary appropriation has been made for the payment of the

principal on bonds, such maturity shall not be included in a refunding

bond issue.

b. The maturities and amount of such refunding bonds shall be so

arranged that the combined amount of:

1. The bonds of the original issue, and

2. Refunding bonds previously issued to refund bonds of the original

issue, if any,

to be redeemed by an appropriation other than from the proceeds of

refunding bonds during the year of refunding and the combined amount of:

1. The bonds of the original issue,

2. Such refunding bonds, and

3. Refunding bonds previously issued to refund bonds of the original

issue, if any,

to be redeemed by an appropriation other than from the proceeds of

refunding bonds in each succeeding year thereafter is not more than

fifty per centum in excess of the combined amount of:

1. The bonds of the original issue,

2. Such refunding bonds, and

3. Refunding bonds previously issued to refund bonds of the original

issue, if any,

redeemed or to be redeemed during any preceding year by an appropriation

other than from the proceeds of refunding bonds.

b-1. Refunding bonds need not comply with paragraph b of this section

provided that no annual installment of each separate series of refunding

bonds shall be more than fifty per centum in excess of the smallest

prior installment or the finance board of the municipality, school

district or district corporation issuing the bonds shall have determined

to use a substantially level or declining annual debt service schedule

for the refunding bonds. The amount of annual installments of the

refunding bonds may be determined without reference to the stated

maturities of the bonds to be refunded.

c. 1. Bonds issued on or after January first, nineteen hundred

thirty-nine, shall not be refunded within five years after the date of

original issue. This restriction shall not apply to bonds issued by the

city of New York, bonds issued by the county of Nassau for the objects

or purposes described in subdivision thirty-three-a of paragraph a of

section 11.00 of this chapter or to bonds issued to refund:

(i) Bonds issued, or

(ii) Bonds issued to redeem notes, certificates or other evidences of

temporary indebtedness issued prior to January first, nineteen hundred

thirty-nine.

* 2. Notwithstanding the provisions of subdivision one of this

paragraph and subdivision three of paragraph a of this section, bonds

may be refunded and the refunding bonds may be sold at either public or

private sale where the present value of the refunding bonds is less than

the present value of the bonds to be refunded computed in accordance

with subparagraph (a) of subdivision two of paragraph b of section 90.10

of this title and where the issuer complies with all other requirements

of such section; provided, however, that if such bonds are being sold to

the New York state environmental facilities corporation in connection

with a hardship state revolving fund financing at a rate equal to zero

percent, compliance with subparagraph (a) of subdivision two of

paragraph b of section 90.10 of this title shall not be required;

provided further, however, that if the bonds to be refunded are to be

redeemed or paid on the same date as the refunding bonds are issued, the

issuer need not comply with the provisions of section 90.10 of this

title relating to the escrow of the proceeds of the sale of the

refunding bonds.

* NB Effective until September 30, 2029

* 2. Notwithstanding the provisions of subdivision one of this

paragraph and subdivision three of paragraph a of this section, bonds

may be refunded and the refunding bonds may be sold at either public or

private sale where the present value of the refunding bonds is less than

the present value of the bonds to be refunded computed in accordance

with subparagraph (a) of subdivision two of paragraph b of section 90.10

of this title and where the issuer complies with all other requirements

of such section; provided, however, that if the bonds to be refunded are

to be redeemed or paid on the same date as the refunding bonds are

issued, the issuer need not comply with the provisions of section 90.10

of this title relating to the escrow of the proceeds of the sale of the

refunding bonds.

* NB Effective September 30, 2029

d. With the approval of and on terms and conditions prescribed by the

state comptroller, a municipality, school district or district

corporation may issue bonds to refund:

1. Bonds issued,

2. Bonds issued to redeem notes, certificates or other evidences of

temporary indebtedness issued, or

3. Bonds issued to refund bonds issued

prior to January first, nineteen hundred thirty-nine, but in no event

shall such refunding bonds mature later than twenty years after the date

thereof. The provisions of section 21.00 of this chapter shall not apply

to this paragraph.

e. The issuance of refunding bonds shall be authorized by a "refunding

bond resolution". The title of such resolution shall state that the

bonds to be authorized thereby are "refunding bonds".

f. Such a resolution shall contain, in substance, the following

provisions:

1. The amount of refunding bonds to be issued.

2. A description and the date of the bonds to be refunded.

3. If the bonds to be refunded are bonds which were issued on or after

January first, nineteen hundred thirty-nine, other than bonds issued to

redeem notes, certificates or other evidences of temporary indebtedness

issued prior to January first, nineteen hundred thirty-nine, in

anticipation of such bonds, a statement of the maximum period of

probable usefulness, at the time of the issuance of the bonds to be

refunded, of the object or purpose for which such bonds were issued.

4. A statement of the proposed maturities of such refunding bonds.

g. The provisions of this chapter relating to the authorization, form

and contents, sale, execution and issuance of bonds other than refunding

bonds, shall apply to the authorization, form and contents, sale,

execution and issuance of refunding bonds, except that:

1. The provisions of section 107.00 of this chapter shall not apply to

the issuance of refunding bonds.

2. The authorization of the issuance of refunding bonds shall not be

subject to a mandatory or permissive referendum.

3. Outstanding bonds may, pursuant to a power to recall and redeem or

with the consent of the holders thereof, be exchanged for refunding

bonds (i) if the refunding bonds are to bear interest at a rate equal to

or lower than that borne by the bonds to be refunded or (ii) if, in the

case of the city of New York prior to July first, two thousand

twenty-seven, the annual payment required for principal and interest on

the refunding bond is less than the annual payment required for

principal and interest on the bond to be refunded, in each case such

annual payments to be determined by dividing the total principal and

interest payments due over the remaining life of the bond by the number

of years to maturity of the bond or (iii) if the bonds to be refunded

were issued by the city of New York after June thirtieth, nineteen

hundred seventy-eight and prior to July first, two thousand twenty-seven

and contain covenants referring to the existence of the New York state

financial control board for the city of New York or any other covenants

relating to matters other than the prompt payment of principal and

interest on the obligations when due and the refunding bond omits or

modifies any such covenant.

4. All refunding bonds shall contain a recital that they are issued

pursuant to this chapter, which recital shall be conclusive evidence of

their validity and of the regularity of their issuance.

h. The authority herein granted to authorize the issuance of refunding

bonds shall in no way be affected by the invalidity of or any

irregularity in any proceedings authorizing the issuance of the bonds to

be refunded, except that refunding bonds shall not be issued to refund

bonds adjudged invalid by the final judgment of a court of competent

jurisdiction.

i. 1. Refunding bonds issued subsequent to January first, nineteen

hundred thirty-nine to refund:

(a) Bonds issued, or

(b) Bonds issued to redeem notes, certificates or other evidences of

temporary indebtedness issued

prior to January first, nineteen hundred thirty-nine, may be refunded by

the issuance of refunding bonds, but such refunding bonds shall mature

not later than twenty years from the date of the original refunding

bonds. Such refunding bonds shall be issued only with the approval of

and on terms and conditions prescribed by the state comptroller.

2. All other refunding bonds issued on or after January first,

nineteen hundred thirty-nine, shall not be refunded.

j. Bond anticipation notes shall not be issued in anticipation of the

sale of refunding bonds.

k. The premium, if any, resulting from the public sale of refunding

bonds may be expended for (1) the payment of the costs of the issuance

of such refunding bonds, including, but not limited to, legal fees,

printing or engraving and publication of notices, and (2) the payment of

the principal of and interest on such refunding bonds.