{"data":{"id":"us-ny/n.y.-const.-art.-viii-2","jurisdiction":"us-ny","citation":"N.Y. Const. art. VIII, § 2","heading":"Restrictions on indebtedness of local subdivisions; contracting and payment of local indebtedness; exceptions","body":"§ 2. No county, city, town, village or school district shall contract\nany indebtedness except for county, city, town, village or school\ndistrict purposes, respectively. No indebtedness shall be contracted for\nlonger than the period of probable usefulness of the object or purpose\nfor which such indebtedness is to be contracted, or, in the alternative,\nthe weighted average period of probable usefulness of the several\nobjects or purposes for which such indebtedness is to be contracted, to\nbe determined by the governing body of the county, city, town, village\nor school district contracting such indebtedness pursuant to general or\nspecial laws of the state legislature, which determination shall be\nconclusive, and in no event for longer than forty years. Indebtedness or\nany portion thereof may be refunded within either such period of\nprobable usefulness, or average period of probable usefulness, as may be\ndetermined by such governing body computed from the date such\nindebtedness was contracted.\n  No indebtedness shall be contracted by any county, city, town, village\nor school district unless such county, city, town, village or school\ndistrict shall have pledged its faith and credit for the payment of the\nprincipal thereof and the interest thereon. Except for indebtedness\ncontracted in anticipation of the collection of taxes actually levied\nand uncollected or to be levied for the year when such indebtedness is\ncontracted and indebtedness contracted to be paid in one of the two\nfiscal years immediately succeeding the fiscal year in which such\nindebtedness was contracted, all such indebtedness and each portion\nthereof from time to time contracted, including any refunding thereof,\nshall be paid in annual installments, the first of which, except in the\ncase of refunding of indebtedness heretofore contracted, shall be paid\nnot more than two years after such indebtedness or portion thereof shall\nhave been contracted, and no installment, except in the case of\nrefunding of indebtedness heretofore contracted, shall be more than\nfifty per centum in excess of the smallest prior installment, unless the\ngoverning body of the county, city, town, village or school district\ncontracting such indebtedness provides for substantially level or\ndeclining debt service payments as may be authorized by law.\n  Notwithstanding the foregoing provisions, indebtedness contracted by\nthe city of New York and each portion of any such indebtedness from time\nto time so contracted for the supply of water, including the acquisition\nof land in connection with such purpose, may be financed either by\nserial bonds with a maximum maturity of fifty years, in which case such\nindebtedness shall be paid in annual installments as hereinbefore\nprovided, or by sinking fund bonds with a maximum maturity of fifty\nyears, which shall be redeemed through annual contributions to sinking\nfunds established and maintained for the purpose of amortizing the\nindebtedness for which such bonds are issued. Notwithstanding the\nforegoing provisions, indebtedness hereafter contracted by the city of\nNew York and each portion of any such indebtedness from time to time so\ncontracted for (a) the acquisition, construction or equipment of rapid\ntransit railroads, or (b) the construction of docks, including the\nacquisition of land in connection with any of such purposes, may be\nfinanced either by serial bonds with a maximum maturity of forty years,\nin which case such indebtedness shall be paid in annual installments as\nhereinbefore provided, or by sinking fund bonds with a maximum maturity\nof forty years, which shall be redeemed through annual contributions to\nsinking funds established and maintained for the purpose of amortizing\nthe indebtedness for which such bonds are issued.\n  Notwithstanding the foregoing provisions, but subject to such\nrequirements as the legislature shall impose by general or special law,\nindebtedness contracted by any county, city, town, village or school\ndistrict and each portion thereof from time to time contracted for any\nobject or purpose for which indebtedness may be contracted may also be\nfinanced by sinking fund bonds with a maximum maturity of fifty years,\nwhich shall be redeemed through annual contributions to sinking funds\nestablished by such county, city, town, village or school district,\nprovided, however, that each such annual contribution shall be at least\nequal to the amount required, if any, to enable the sinking fund to\nredeem, on the date of the contribution, the same amount of such\nindebtedness as would have been paid and then be payable if such\nindebtedness had been financed entirely by the issuance of serial bonds,\nexcept, if an issue of sinking fund bonds is combined for sale with an\nissue of serial bonds, for the same object or purpose, then the amount\nof each annual sinking fund contribution shall be at least equal to the\namount required, if any, to enable the sinking fund to redeem, on the\ndate of each such annual contribution, (i) the amount which would be\nrequired to be paid annually if such indebtedness had been issued\nentirely as serial bonds, less (ii) the amount of indebtedness, if any,\nto be paid during such year on the portion of such indebtedness actually\nissued as serial bonds. Sinking funds established on or after January\nfirst, nineteen hundred eighty-six pursuant to the preceding sentence\nshall be maintained and managed by the state comptroller pursuant to\nsuch requirements and procedures as the legislature shall prescribe,\nincluding provisions for reimbursement by the issuer of bonds payable\nfrom such sinking funds for the expenses related to such maintenance and\nmanagement.\n  Provisions shall be made annually by appropriation by every county,\ncity, town, village and school district for the payment of interest on\nall indebtedness and for the amounts required for (a) the amortization\nand redemption of term bonds, sinking fund bonds and serial bonds, (b)\nthe redemption of certificates or other evidence of indebtedness (except\nthose issued in anticipation of the collection of taxes or other\nrevenues, or renewals thereof, and which are described in paragraph A of\nsection five of this article and those issued in anticipation of the\nreceipt of the proceeds of the sale of bonds theretofore authorized)\ncontracted to be paid in such year out of the tax levy or other revenues\napplicable to a reduction thereof, and (c) the redemption of\ncertificates or other evidence of indebtedness issued in anticipation of\nthe collection of taxes or other revenues, or renewals thereof, which\nare not retired within five years after their date of original issue. If\nat any time the respective appropriating authorities shall fail to make\nsuch appropriations, a sufficient sum shall be set apart from the first\nrevenues thereafter received and shall be applied to such purposes. The\nfiscal officer of any county, city, town, village or school district may\nbe required to set apart and apply such revenues as aforesaid at the\nsuit of any holder of obligations issued for any such indebtedness.\n  Notwithstanding the foregoing, all interest need not be paid annually\non an issue of indebtedness provided that either (a) substantially level\nor declining debt service payments (including all payments of interest)\nshall be made over the life of such issue of indebtedness, or (b) there\nshall annually be contributed to a sinking fund created pursuant to this\nsection, the amount necessary to bring the balance thereof, including\nincome earned on contributions, to the accreted value of the obligations\nto be paid therefrom on the date such contribution is made, less the sum\nof all required future contributions of principal, in the case of\nsinking fund obligations, or payments of principal, in the case of\nserial obligations. When obligations are sold by a county, city, town,\nvillage or school district at a discount, the debt incurred for the\npurposes of any debt limitation contained in this constitution, shall be\ndeemed to include only the amount of money actually received by the\ncounty, city, town, village or school district, irrespective of the face\namount of the obligations.","path":["Constitution","Article VIII. Local Finances"],"source_url":"https://legislation.nysenate.gov/api/3/laws/CNS/A8S2","current_through":"2026-09-11","vintage":"","retrieved_at":"2026-09-14T19:32:44Z","sha256":"7510e4863a52e081ae4dbea39e0db192993c0faf93af3d3016320b8267d1d3a6","source_id":"us-ny","stale":false,"prev":"us-ny/n.y.-const.-art.-viii-1","next":"us-ny/n.y.-const.-art.-viii-2-a"},"notice":"GroundRules: Original legal text. Not legal advice."}