§ 57. Issuance of state bonds. 1. Whenever the legislature, after authorization of a bond issue by the people at a general election, as provided by § 11 of the state constitution, or as provided by section three of Article 18 of the state constitution, shall have authorized, by one or more laws, the creation of a state debt or debts, bonds of the state, to the amount of the debt or debts so authorized, shall be issued and sold by the state comptroller. Any appropriation from the proceeds of the sale of bonds, pursuant to this section, shall be deemed to be an authorization for the creation of a state debt or debts to the extent of such appropriation. The state comptroller may issue and sell a single series of bonds pursuant to one or more such authorizations and for one or more duly authorized works or purposes. As part of the proceedings for each such issuance and sale of bonds, the state comptroller shall designate the works or purposes for which they are issued. It shall not be necessary for him to designate the works or purposes for which the bonds are issued on the face of the bonds. The proceeds from the sale of bonds for more than one work or purpose shall be separately accounted for according to the works or purposes designated for such sale by the comptroller and the proceeds received for each work or purpose shall be expended only for such work or purpose. The bonds shall bear interest at such rate or rates as in the judgment of the state comptroller may be sufficient or necessary to effect a sale of the bonds, and such interest shall be payable at least semi-annually, in the case of bonds with a fixed interest rate, and at least annually, in the case of bonds with an interest rate that varies periodically, in the city of New York unless annual payments of principal and interest result in substantially level or declining debt service payments over the life of an issue of bonds pursuant to paragraph (b) of subdivision two of this section or unless accrued interest is contributed to a sinking fund in accordance with subdivision three of section twelve of article seven of the state constitution, in which case interest shall be paid at such times and at such places as shall be determined by the state comptroller prior to issuance of the bonds.

Ask a legal question, get an answer ASAP!
Click here to chat with a lawyer about your rights.

2. Such bonds, or the portion thereof at any time issued, shall be made payable (a) in equal annual principal installments or (b) in annual installments of principal and interest which result in substantially level or declining debt service payments, over the life of the bonds, the first of which annual installments shall be payable not more than one year from the date of issue and the last of which shall be payable at such time as the comptroller may determine but not more than forty years or state fiscal years after the date of issue, not more than fifty years after the date of issue in the case of housing bonds, and not more than twenty-five years in the case of urban renewal bonds. Where bonds are payable pursuant to paragraph (b) of this subdivision, except for the year or state fiscal year of initial issuance if less than a full year of debt service is to become due in that year or state fiscal year, either (i) the greatest aggregate amount of debt service payable in any year or state fiscal year shall not differ from the lowest aggregate amount of debt service payable in any other year or state fiscal year by more than five percent or (ii) the aggregate amount of debt service in each year or state fiscal year shall be less than the aggregate amount of debt service in the immediately preceding year or state fiscal year. For purposes of this subdivision, debt service shall include all principal, redemption price, sinking fund installments or contributions, and interest scheduled to become due. For purposes of determining whether debt service is level or declining on bonds issued with a variable rate of interest pursuant to paragraph b of subdivision four of this section, the comptroller shall assume a market rate of interest as of the date of issuance. Where the comptroller determines that interest on any bonds shall be compounded and payable at maturity, such bonds shall be payable only in accordance with paragraph (b) of this subdivision unless accrued interest is contributed to a sinking fund in accordance with subdivision three of section twelve of article seven of the state constitution. In no case shall any bonds or portion thereof be issued for a period longer than the probable life of the work or purpose, or part thereof, to which the proceeds of the bonds are to be applied, or in the alternative, the weighted average period of the probable life of the works or purposes to which the proceeds of the bonds are to be applied taking into consideration the respective amounts of bonds issued for each work or purpose, as may be determined under section sixty-one of this article and in accordance with the certificate of the commissioner of general services, and/or the commissioner of transportation, state architect, state commissioner of housing and urban renewal, or other authority, as the case may be, having charge by law of the acquisition, construction, work or improvement for which the debt was authorized. Such certificate shall be filed in the office of the state comptroller and shall state the group, or, where the probable lives of two or more separable parts of the work or purposes are different, the groups, specified in such section, for which the amount or amounts, shall be provided by the issuance and sale of bonds. Weighted average period of probable life shall be determined by computing the sum of the products derived from multiplying the dollar value of the portion of the debt contracted for each work or purpose (or class of works or purposes) by the probable life of such work or purpose (or class of works or purposes) and dividing the resulting sum by the dollar value of the entire debt after taking into consideration any original issue discount. Any costs of issuance financed with bond proceeds shall be prorated among the various works or purposes. Such bonds, or the portion thereof at any time sold, shall be of such denominations, subject to the foregoing provisions, as the state comptroller may determine. Notwithstanding the foregoing provisions of this subdivision, the comptroller may issue all or a portion of such bonds as serial debt, term debt or a combination thereof, maturing as required by this subdivision, provided that the comptroller shall have provided for the retirement each year or state fiscal year, or otherwise have provided for the payment of, through sinking fund installment payments or otherwise, a portion of such term bonds in an amount meeting the requirements of paragraph (a) or (b) of this subdivision or shall have established a sinking fund and provided for contributions thereto as provided in subdivision eight of this section and section twelve of article seven of the state constitution.

3. The bonds shall be sold in such lot or lots, from time to time, as may be required for the work or purpose for which the creation of a state debt or debts shall have been authorized and appropriations shall have been made by law, but not in excess of the aggregate amount authorized for such purpose. For the purpose of determining the total amount of debt sold for a particular work or purpose, only the amount of money actually received by the state shall be considered when bonds are sold at a discount.

4. a. Such bonds shall be sold at par, at par plus a premium, or at a discount to the bidder offering the lowest interest cost to the state, taking into consideration any premium or discount and, in the case of refunding bonds, the bona fide initial public offering price, not less than two business days after the publication of a notice of sale at least once in a definitive trade publication of the municipal bond industry published on each business day in the state of New York which is generally available in electronic or physical form to participants in the municipal bond industry, which notice shall state the terms of the sale. The comptroller may not change the terms of the sale unless notice of such change is sent via a definitive trade wire service of the municipal bond industry which, in general, makes available information regarding activity and sales of municipal bonds and is generally available to participants in the municipal bond industry, at least one hour prior to the time of the sale as set forth in the original notice of sale. In so changing the terms or conditions of a sale the comptroller may send notice by such wire service that the sale will be delayed by up to thirty days, provided that wire notice of the new sale date will be given at least one business day prior to the new time when bids will be accepted. In such event, no new notice of sale shall be required to be published. Notwithstanding the provisions of § 305 of the state technology law or any other law, if the notice of sale contains a provision that bids will only be accepted electronically in the manner provided in such notice of sale, the comptroller shall not be required to accept non-electronic bids in any form. Advertisements shall contain a provision to the effect that the state comptroller, in his or her discretion, may reject any or all bids made in pursuance of such advertisements, and in the event of such rejection, the state comptroller is authorized to negotiate a private sale or readvertise for bids in the form and manner above described as many times as, in his or her judgment, may be necessary to effect a satisfactory sale. Notwithstanding the foregoing provisions of this paragraph, whenever in the judgment of the comptroller the interests of the state will be served thereby, he or she may sell state bonds at private sale at par, at par plus a premium, or at a discount. The comptroller shall promulgate regulations governing the terms and conditions of any such private sales, which regulations shall include a provision that he or she give notice to the governor, the temporary president of the senate, and the speaker of the assembly, of his or her intention to conduct a private sale of obligations pursuant to this section not less than two business days prior to such sale or the execution of any binding agreement to effect such sale.

b. Notwithstanding paragraph a of this subdivision, whenever in the judgment of the comptroller the interests of the state will be served thereby, such bonds may be sold at public or private sale in accordance with the procedures set forth in paragraph a of this subdivision, with interest rates that vary in accordance with a formula or procedure set forth or referred to in the bonds and may provide the holders thereof with such rights to require the state or other persons to purchase or redeem such bonds or renewals thereof from the proceeds of the resale thereof or otherwise from time to time prior to the final maturity of such bonds as the comptroller may determine and the state may resell, at any time prior to final maturity, any such bonds acquired as a result of the exercise of such rights. The holders of bonds sold pursuant to this paragraph may be provided with the right to require the state to repurchase or redeem the bonds prior to the final maturity thereof if the state has entered into one or more letter of credit agreements or other liquidity facility agreements entered into for the express purposes of such sale and which shall require a financially responsible party or parties to the agreement or agreements, which may be the state, to purchase or redeem all or any portion of such bonds tendered by the holders thereof for repurchase or redemption prior to the final maturity of such bonds. Such requirement to purchase or redeem bonds shall continue until such time as the right of the holders of such bonds to require repurchase or redemption of such bonds prior to the final maturity thereof shall cease. A financially responsible party or parties, for purposes of this paragraph, shall mean a person or persons determined by the comptroller to have sufficient net worth and liquidity to purchase and pay for on a timely basis all of the bonds which may be tendered for repurchase or redemption by the holders thereof.

5. The proceeds of bonds sold pursuant to this section shall be paid into the treasury, and each portion thereof provided for a given work or purpose shall be accounted for separately in one or more capital projects funds in accordance with generally accepted accounting principles and made available only for such work or purpose, and only to the extent of appropriations.

6. Except with respect to bonds issued in the manner provided in paragraph (c) of subdivision seven of this section, all bonds of the state of New York which the comptroller of the state of New York is authorized to issue and sell, shall be executed in the name of the state of New York by the manual or facsimile signature of the state comptroller and his seal (or a facsimile thereof) shall be thereunto affixed, imprinted, engraved or otherwise reproduced. In case the state comptroller who shall have signed and sealed any of the bonds shall cease to hold the office of state comptroller before the bonds so signed and sealed shall have been actually countersigned and delivered by the fiscal agent or trustee, such bonds may, nevertheless, be countersigned and delivered as herein provided, and may be issued as if the state comptroller who signed and sealed such bonds had not ceased to hold such office. Any bond of a series may be signed and sealed on behalf of the state of New York by such person as at the actual time of the execution of such bond shall hold the office of comptroller of the state of New York, although at the date of the bonds of such series such person may not have held such office. The coupons to be attached to the coupon bonds of each series shall be signed by the facsimile signature of the state comptroller of the state of New York or by any person who shall have held the office of state comptroller of the state of New York on or after the date of the bonds of such series, notwithstanding that such person may not have been such state comptroller at the date of any such bond or may have ceased to be such state comptroller at the date when any such bond shall be actually countersigned and delivered. The bonds of each series shall be countersigned with the manual signature of an authorized employee of the fiscal agent or trustee of the state of New York. No bond and no coupon thereunto appertaining shall be valid or obligatory for any purpose until such manual countersignature of an authorized employee of the fiscal agent or trustee of the state of New York shall have been duly affixed to such bond.

7. (a) The state comptroller is authorized to issue bonds in fully registered form, executed as provided in subdivision six of this section, in such denominations as shall be determined by the state comptroller and exchangeable for fully registered bonds in denominations as shall be determined by the state comptroller.

(b) The state comptroller is authorized to issue bonds as a single registered bond, executed as provided in subdivision six of this section, in an amount equal to the principal amount of the series of bonds being issued, or more than one registered bond in amounts equal to the principal amount of the series of bonds maturing in a single year, and to deposit the bond or bonds with a securities depository organized under the banking law of the state of New York and qualifying as a clearing agency registered under the United States Securities Exchange Act of 1934, as amended. Book entries representing beneficial ownership of the bonds shall be in denominations determined by the state comptroller.

(c) The state comptroller is authorized to issue bonds as uncertificated securities within the meaning of article eight of the uniform commercial code with beneficial ownership in denominations determined by the state comptroller and exchangeable in book entries in denominations as shall be determined by the state comptroller.

8. Any sinking funds created pursuant to this section shall be maintained and managed by the state comptroller or an agent or trustee designated by the state comptroller and shall be funded in accordance with the requirements of section twelve of article seven of the state constitution. Money in such sinking funds shall be held as cash or shall be invested in direct obligations of the federal government, or obligations the interest on which is exempt from federal income taxation and which are fully secured by direct obligations of the federal government, having such maturities and interest payment dates as required to make all payments to be made from the sinking fund as they come due. Amounts in such sinking funds shall be used solely for the purpose of retiring the bonds secured thereby except that amounts in excess of the required balance on any contribution date and amounts remaining in such funds after all of the bonds secured thereby have been retired shall be deposited in the general fund. No appropriation shall be required for disbursement of money, or income earned thereon, from any sinking fund for the purpose of paying principal of and interest on the bonds for which such fund was created, except that interest shall be paid from any such fund only if, and to the extent that, it is not payable annually and contributions on account of such interest were made to the fund.