New York Laws
Title 2 - Local Obligations: Types Thereof
29.20 - Deficiency Notes.

§ 29.20 Deficiency notes. a. Any municipality, school district or
district corporation may issue deficiency notes during any fiscal year
to finance a deficiency in any fund or funds arising from revenues being
less than the amount estimated in the budget for such current fiscal
year. Such notes may be issued in such amount as the finance board shall
determine to be necessary, but not to exceed five per centum of the
amount of the annual budget of such municipality, school district or
district corporation.

b. Deficiency notes may be renewed from time to time, but such notes,
including the renewals thereof, shall mature not later than the close of
the fiscal year succeeding the fiscal year in which such notes are
issued. However, such notes, including the renewals thereof, may mature
not later than the close of the second fiscal year succeeding the fiscal
year in which such notes are issued, when authorized and issued during a
fiscal year at a time subsequent to the date of the adoption of the
annual budget for the next succeeding fiscal year, by a municipality,
school district or district corporation in which the total amount of
taxes or assessments levied for a fiscal year is determined pursuant to
an annual budget adopted during the fiscal year preceding such fiscal
year.

c. Deficiency notes shall be redeemed out of the taxes or assessments
levied or to be levied for the fiscal year in which they mature or out
of other revenues of that fiscal year legally available for that
purpose.

d. Notwithstanding the provisions of any general, special or local
law, any municipality, school district or district corporation, which
has the power to issue deficiency notes under this section, shall to the
same extent have the power to appropriate and expend money received from
the proceeds of the sale of deficiency notes for the purposes of the
fund or funds for which such notes are issued.

e. The proceeds of such notes shall be used only to finance a
deficiency in any fund or funds arising from revenues being less than
the amount estimated in the budget for the current fiscal year or, in
the event all or a portion of the proceeds are not expended for that
purpose, the amount not so expended shall be used only for the payment
of principal of and interest on such notes. In determining whether all
or any portion of the proceeds of deficiency notes remained unexpended
at the close of a fiscal year, the moneys in such fund or funds other
than the proceeds of such notes shall be deemed to be expended prior to
the proceeds of such notes.

f. Any municipality, school district or district corporation which
shall renew deficiency notes pursuant to the provisions of paragraph b
of this section, or which shall issue deficiency notes in two or more
successive fiscal years, shall be subject to the requirements of
paragraphs c, d, e and f of section 10.10 of this article for three
years commencing with the fiscal year in which such notes were renewed
or each second successive fiscal year in which such notes were issued.