2006 New York Code - State debts generally; how paid; restrictions on use of bond proceeds.

 
    §  12. Except the debts or refunding debts specified in sections 9, 10
  and 13 of this article, all debts  contracted  by  the  state  and  each
  portion  of  any  such  debt  from  time  to time so contracted shall be
  subject to the following rules:
    1. The principal of each debt or any portion thereof shall  either  be
  paid  in  equal  annual  installments  or in installments that result in
  substantially level or declining debt service payments such as shall  be
  authorized by law, or, in the alternative, contributions of principal in
  the amount that would otherwise be required to be paid annually shall be
  made to a sinking fund.
    2.  When  some  portions  of  the same debt are payable annually while
  other portions require contributions to a sinking fund, the entire  debt
  shall  be  structured so that the combined amount of annual installments
  of principal paid and/or annual contributions of principal made in  each
  year  shall  be equal to the amount that would be required to be paid if
  the entire debt were payable in annual installments.
    3. When interest on state obligations is not paid at  least  annually,
  there shall also be contributed to a sinking fund at least annually, the
  amount  necessary  to bring the balance thereof, including income earned
  on contributions, to the accreted value of the obligations  to  be  paid
  therefrom  on  the  date  such contribution is made, less the sum of all
  required future contributions of principal, in the case of sinking  fund
  obligations,   or   payments   of  principal,  in  the  case  of  serial
  obligations. Notwithstanding the foregoing, nothing  contained  in  this
  subdivision  shall  be  deemed  to require contributions for interest to
  sinking funds if total debt service due on the debt or  portion  thereof
  in  the  year such interest is due will be substantially the same as the
  total debt service due on such debt or portion  thereof  in  each  other
  year  or if the total amount of debt service due in each subsequent year
  on such debt or portion thereof  shall  be  less  than  the  total  debt
  service due in each prior year.
    4.  The  first  annual  installment on such debt shall be paid, or the
  first annual contribution shall be made to a sinking fund, not more than
  one year, and the last installment shall be paid, or  contribution  made
  not more than forty years, after such debt or portion thereof shall have
  been  contracted,  provided,  however, that in contracting any such debt
  the privilege of paying all or any part of such debt prior to  the  date
  on  which  the  same  shall  be due may be reserved to the state in such
  manner as may be provided by law.
    5. No such debt shall be contracted for a period longer than  that  of
  the  probable  life  of  the work or purpose for which the debt is to be
  contracted, or in  the  alternative,  the  weighted  average  period  of
  probable life of the works or purposes for which such indebtedness is to
  be  contracted.  The  probable  lives of such works or purposes shall be
  determined by general laws, which determination shall be conclusive.
    6. The money arising from any loan creating  such  debt  or  liability
  shall  be  applied  only  to  the  work  or purpose specified in the act
  authorizing such debt or liability, or for the payment of such  debt  or
  liability,  including any notes or obligations issued in anticipation of
  the sale of bonds evidencing such debt or liability.
    7. 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  amounts  in  sinking  funds
  created  pursuant  to  this section, and earnings thereon, shall be used
  solely for the purpose  of  retiring  the  obligations  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


  obligations  secured thereby have been retired shall be deposited in the
  general fund.
    8.  No  appropriation  shall be required for disbursement of money, or
  income earned thereon, from any sinking fund created  pursuant  to  this
  section  for  the  purpose  of  paying  principal of and interest on the
  obligations 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
  thereto.
    9. The provisions of section 15 of this article  shall  not  apply  to
  sinking funds created pursuant to this section.
    10.  When  state obligations are sold at a discount, the debt incurred
  for purposes of determining the amount of  debt  issued  or  outstanding
  pursuant  to a voter approved bond referendum or other limitation on the
  amount of debt that may be issued or outstanding for a work  or  purpose
  shall be deemed to include only the amount of money actually received by
  the state notwithstanding the face amount of such obligations.