§ 6-c. Capital reserve funds for counties, cities, villages, towns and
sewer and water improvement districts. 1. As used in this section:

a. The term "governing board", insofar as it is used in reference to a
village, shall mean the board of trustees thereof; insofar as it is used
in reference to a town, shall mean the town board thereof; insofar as it
is used in reference to a county, shall mean the legislative body
thereof; insofar as it is used in reference to a city, shall mean the
"local legislative body" thereof, as that term is defined in subdivision
seven of section two of the municipal home rule law, as amended from
time to time; insofar as it is used in reference to a town or county
improvement district, shall mean the town board of the town or the
legislative body of the county in which such district is located unless,
in the case of a town improvement district, such district has a separate
board of commissioners, in which case it shall mean such board of
commissioners.

b. The term "capital improvement" shall mean:

(1) Any physical public betterment or improvement or any preliminary
studies and surveys relative thereto.

(2) Land or rights in land.

(3) Any furnishings, equipment, machinery or apparatus for any
physical public betterment or improvement acquired at the time when such
betterment or improvement is constructed, reconstructed or acquired.

c. The term "equipment" shall include any equipment, machinery or
apparatus not included in the definition of the term "capital
improvement" and for the acquisition of which a period of probable
usefulness has been provided by law.

d. The term "obligations" shall include bonds, notes, certificates or
other evidences of indebtedness.

2. The governing board of any county, city, village, town or sewer and
water improvement district may establish capital reserve funds for the
financing of all or part of the cost of:

a. The construction, reconstruction or acquisition of a specific
capital improvement or the acquisition of a specific item or specific
items of equipment.

b. The construction, reconstruction or acquisition of a type of
capital improvement or the acquisition of a type of equipment.

3. The provisions of paragraph two shall not apply to:

a. Capital improvements to be constructed, reconstructed or acquired,
or equipment to be acquired, on behalf of an improvement district or
other similar district located within such municipality other than a
sewer and/or water improvement district, or

b. Capital improvements or equipment, all or part of the cost of which
is to be borne by assessments for benefit or ad valorem taxes upon the
real property within an area of benefit within such municipality other
than a sewer and/or water improvement district.

4. If the governing board authorizes the establishment of a capital
reserve fund for the financing of all or part of the cost of the
construction, reconstruction or acquisition of a specific capital
improvement or the acquisition of a specific item or specific items of
equipment, it shall set forth in such authorization the estimated
maximum cost thereof. However, if the authorization by such governing
board of the issuance of obligations for such capital improvement or
equipment is required by law to be subject to a permissive or mandatory
referendum, then the authorization of the establishment of such a fund
shall be subject to a permissive referendum. In the event that the
authorization by such governing board of the issuance of obligations for
such capital improvement or equipment is required by law to be subject
to a permissive or mandatory referendum only if such obligations are to
have a maturity of more than five years or not less than some other
minimum period, then the authorization of the establishment of such a
fund shall be subject to a permissive referendum only if the period of
probable usefulness of such capital improvement or equipment is equal to
or more than such minimum period of maturity. A permissive referendum on
the authorization of the establishment of such a capital reserve fund
shall be governed by:

a. Sections twenty-four, twenty-five and twenty-six of the municipal
home rule law, as amended from time to time, so far as they may be
applicable, in the case of cities.

b. Article seven of the town law, as amended from time to time, in the
case of towns.

c. Article nine of the village law, as amended from time to time, in
the case of villages.

5. There may be paid into any fund:

a. Such an amount as may be provided therefor by budgetary
appropriation or raised by tax therefor.

b. Such revenues as are not required by law to be paid into any other
fund or account, including the proceeds from the sale of any capital
improvement or equipment owned by such county, city, village or town.
This provision shall not prevent the use of town highway moneys for the
establishment of a capital reserve fund, provided that such moneys are
expended therefrom for the purpose for which they were levied or
received, that the consent of the town superintendent of highways and
town board, together with the approval of the county superintendent of
highways, is given to the establishment thereof, and that such moneys
are only expended therefrom on order of the town superintendent of
highways upon audit and with the consent of the town board.

7. The moneys in each such fund shall be deposited and secured in the
manner provided by section ten of this article. The governing board or
the chief fiscal officer of such municipality, if the governing board
shall delegate such duty to him, may invest the moneys in each such fund
in the manner provided in section eleven of this article. Any interest
earned or capital gains realized on the moneys so deposited or invested
shall accrue to and become part of each such fund. The separate identity
of each such fund shall be maintained, whether its assets consist of
cash or investments or both.

8. An expenditure shall be made from a fund only by an authorization
of the governing board and for a specific capital improvement or a
specific item or specific items of equipment, the cost of which may be
financed therefrom. However, if a proposed expenditure is from a fund
established for a type of capital improvement or equipment and if it is
required by law that the authorization by such governing board of the
issuance of obligations for such capital improvement or equipment be
subject to a permissive or mandatory referendum, then the authorization
of such an expenditure shall be subject to a permissive referendum. In
the event that the authorization by such governing board of the issuance
of obligations for such capital improvement or equipment is required by
law to be subject to a permissive or mandatory referendum only if such
obligations are to have a maturity of more than five years or not less
than some other minimum period, then the authorization of such an
expenditure shall be subject to a permissive referendum only if the
period of probable usefulness of such capital improvement or equipment
is equal to or more than such minimum period of maturity. Such a
permissive referendum shall be governed in the manner provided in
paragraph four of this section. Notwithstanding any other provision of
this section, but subject to the provisions of this paragraph, if a
capital reserve fund has been established for a specific capital
improvement and it is later determined that a part of the cost of such
capital improvement is to be borne by assessments for benefit or ad
valorem taxes upon real property within an area of benefit within a
municipality, such fund may be expended to pay all or part of the share
to be borne by the municipality at large.

9. The governing board may authorize the transfer to the credit of
another capital reserve fund of all or part of:

a. The unexpended balance remaining in a fund established for a
specific capital improvement or a specific item or specific items of
equipment, which improvement has been completed or acquired, or which
equipment has been acquired, after deducting from such balance a sum
sufficient to satisfy all outstanding claims arising from the
construction, reconstruction or acquisition of such capital improvement
or the acquisition of such equipment.

b. The unexpended balance remaining in a fund established for a
specific item or specific items of equipment which have not been
acquired or a specific capital improvement which has not been completed
or acquired, or remaining in a fund established for a type of capital
improvement or a type of equipment. If the proposed transfer is from a
fund established for a specific capital improvement or a specific item
or specific items of equipment, the authorization of such transfer shall
be subject to a permissive referendum if the authorization of the
creation of a fund for such capital improvement or item or items of
equipment was subject to a permissive referendum. A permissive
referendum on the authorization of such transfer shall be governed in
the manner provided in paragraph four of this section.

c. Nothing in this subdivision shall be construed to authorize the
transfer to the credit of another capital reserve fund from a capital
reserve fund having a different tax base.

9-a. The governing board also may appropriate for:

1. An object or purpose for which bonds may be issued, or

2. The payment of interest on and principal of indebtedness, other
than indebtedness evidenced by bonds and notes described in paragraphs A
and D of section five of article eight of the state constitution, and
indebtedness for assessable improvements or renewals thereof,
all or part of the unexpended balance remaining in a fund established
for a specific capital improvement or specific item or items of
equipment. Any such appropriation may not be made unless the improvement
has been completed or acquired, or the equipment has been acquired, and
shall not include any moneys required to satisfy all outstanding claims
arising from the construction, reconstruction or acquisition of such
capital improvement or the acquisition of such equipment.

10. The chief fiscal officer shall keep a separate account for each
fund established. Such account shall show:

a. The date and amount of each sum paid into the fund.

b. The interest earned by such fund.

c. The capital gains or losses resulting from the sale of investments
of the fund.

d. The interest or capital gains which have accrued to the fund.

e. The amount and date of each withdrawal from the fund.

f. The assets of the fund, indicating the cash balance therein and a
schedule of the amounts invested in federal or state obligations.
The chief fiscal officer, at the termination of each fiscal year, shall
render a detailed report of the operation and condition of each of such
funds to the governing board.

11. The members of the governing board are hereby declared trustees of
such funds and shall be subject to all the duties and responsibilities
imposed by law on trustees, and such duties and responsibilities may be
enforced by the county, city, town or village, as the case may be, or by
any board, commission, agency, officer or taxpayer thereof.

12. The members of the governing board shall be guilty of a
misdemeanor if they:

a. Authorize a withdrawal from a fund for any purpose other than for a
capital improvement or an item or items of equipment, the cost of which
has been authorized to be financed in whole or in part from such fund.

b. Expend any money withdrawn from a fund for a purpose other than
that for which it was authorized to be withdrawn.
The provisions of this paragraph shall be considered to be in addition
to any other penalties provided by law.

13. Notwithstanding the foregoing provisions of this section, in any
town which is located wholly or partly within the Adirondack park and
has within its boundaries state lands subject to taxation assessed at
more than thirty per centum of the total taxable assessed valuation of
the town as determined from the assessment rolls of the town, as
completed from time to time, a capital reserve fund shall not be
established on and after May first, nineteen hundred forty-eight, unless
the state comptroller, on behalf of the state, shall consent thereto,
and, on and after May first, nineteen hundred forty-eight, in any such
town no expenditure or transfer shall be made from a capital reserve
fund heretofore or hereafter established unless the state comptroller,
on behalf of the state, shall consent thereto.