N.Y. Public Authorities Law § 2435: Loans to municipalities

§ 2435. Loans to municipalities. 1. The agency may purchase, and

contract to purchase, municipal bonds from municipalities at such price

or prices, upon such terms and conditions and in such manner, not

inconsistent with the provisions of the local finance law, as the agency

shall deem advisable; provided, however, that the average interest rate

payable on all municipal bonds (taken as a group) purchased with the

proceeds of an issue of bonds shall equal or exceed the interest rate on

such issue of bonds. The agency shall not purchase the municipal bonds

of any municipality if (i) the aggregate principal amount thereof,

together with the aggregate principal balances of the municipal bonds of

such municipality then outstanding and held by the agency, exceed an

amount equal to ten percent of the aggregate principal amount of the

statutory authorization at the time for the issuance of bonds and notes,

as provided in section twenty-four hundred thirty-eight of this title,

and (ii) the aggregate principal amount thereof exceeds an amount equal

to fifty percent of the aggregate principal amount of all municipal

bonds proposed to be so purchased at the time; provided, however, that

this sentence shall not apply to local ARRA bonds or local public safety

communications bonds.

2. The agency shall require as a condition of purchase of municipal

bonds from municipalities that each such municipality shall agree (i) to

pledge its full faith and credit for the payment of the principal of and

interest on such municipal bonds, (ii) to make annual appropriations for

amounts required for the payment of such principal and interest, and

(iii) if at any time the municipality fails to make the required

appropriation to pay such principal and interest, or fails to make the

payment of the required principal and interest, the provisions of

section twenty-four hundred thirty-six and/or twenty-four hundred

thirty-six-b of this title shall take effect. All municipalities selling

municipal bonds to the agency are hereby authorized to make and carry

out the agreements with the agency required in this subdivision.

3. In connection with the sale or proposed sale of municipal bonds to

the agency, any municipality may, notwithstanding the provisions of any

general or special law to the contrary, pay (i) such fixed or annual

charges as may be prescribed from time to time by the agency for or with

respect to the purchase by the agency of the municipal bonds of such

municipality, and (ii) all charges or expenses necessary for the

conversion or reconversion of any of its municipal bonds from or into

coupon form or registered form as may be required by the agency in

connection with any sale or other disposition of such municipal bonds.