N.Y. State Finance Law § 67-c: Authorization for consolidated service contract refundings

§ 67-c. Authorization for consolidated service contract refundings. 1.

In addition to the authorizations for state-supported debt specified in

any other provision of law, the issuers of state-supported debt may also

issue bonds and notes to refund or otherwise repay previously issued

state-supported debt.

(a) The aggregate amount of indebtedness evidenced by bonds and notes

of the authorized issuer hereinafter issued pursuant to this section,

including as is authorized in any other provision of law, shall exclude

the amount of such indebtedness represented by such bonds or notes

issued to refund or otherwise repay bonds or notes; provided that the

amount so excluded under this section may exceed the principal amount of

such bonds or notes that were refunded or otherwise repaid only if the

present value of the aggregate debt service on the refunding bonds or

notes shall not have at the time of their issuance exceeded the present

value of the aggregate debt service of the bonds or notes they were

issued to refund or repay, such present value in each case being

calculated by using the effective interest rate of the refunding or

repayment bonds or notes, which shall be that rate arrived at by

doubling the semi-annual interest rate (compounded semi-annually)

necessary to discount the debt service payments on the refunding or

repayment bonds or notes from the payment date thereof to the date of

issue of the refunding or repayment bonds or notes and to the price bid

therefor, or to the proceeds received by the authorized issuer from the

sale thereof.

(b) Notwithstanding any other provision of law to the contrary, and

subject to the limitations of paragraph (a) of this subdivision, issuers

of state-supported debt may also refund or otherwise repay bonds or

notes of any other issuers of state-supported debt where the payment of

debt service and related expenses of both such refunding and refunded

bonds and notes are subject to appropriation and not otherwise secured

by a dedication of specific revenues.

(i) In order to assist the issuer of such refunding bonds, the

director of the budget is authorized to enter into one or more service

contracts or other agreements, none of which shall exceed the lesser of

thirty years in duration or the final maturity of the bonds to be

refunded, with the issuer of such refunding bonds, upon such terms and

conditions as the director of the budget and the issuer shall agree.

(ii) Any service contract or other agreements entered into pursuant to

subparagraph (i) of this paragraph or any payments made or to be made

thereunder may be assigned and pledged by the issuer as security for its

bonds, notes, or other obligations.

(iii) Any such service contract or other agreements shall provide that

the obligation of the director of the budget or of the state to fund or

to pay the amounts therein provided for shall not constitute a debt of

the state within the meaning of any constitutional or statutory

provision and shall be deemed executory only to the extent moneys are

available and that no liability shall be incurred by the state beyond

the moneys available for such purpose, and that such obligation is

subject to annual appropriation by the legislature.

(iv) Any service contract or other agreements entered into pursuant to

subparagraph (i) of this paragraph shall provide for state commitments

to provide annually to the issuer a sum or sums, upon such terms and

conditions as shall be deemed appropriate by the director of the budget

and the authorized issuer, to fund the principal, interest, and other

related expenses required for any bonds, notes, or other obligations.

(v) In addition to the foregoing, the authorized issuers of the bonds

to be so refunded shall be authorized to enter into such agreements with

the director of the budget and/or the authorized issuer of the refunding

bonds and related parties to take or cause to be taken any such actions

necessary to effectuate the purposes of such refunding issue.

(vi) Nothing contained in this subdivision, shall be construed to

limit the abilities of the director of the budget and the authorized

issuers of state-supported debt to perform their respective obligations

on existing service contracts or other agreements entered into prior to

April first, two thousand seven.

(vii) If an authorized issuer issues an amount of refunding bonds for

an authorized purpose of another authorized issuer which would otherwise

require the approval of the public authorities control board, then such

amount of refunding bonds shall be subject to the approval of the public

authorities control board pursuant to the provisions of section

fifty-one of the public authorities law.

2. Refundings conducted pursuant to this section shall not be financed

pursuant to article five-C of this chapter.