§ 90.10 Advance refunding of certain bonds. a. As used in this
section:

1. The term "escrow contract" shall mean a contract entered into by
and between a municipality, school district or district corporation and
a bank or trust company pursuant to paragraph i of this section.

2. The term "escrow holder" shall mean the bank or trust company
designated as such pursuant to an escrow contract.

3. The term "refunding financial plan" shall mean the financial plan
for a refunding as set forth in the refunding bond resolution relating
thereto.

4. The term "refunding bonds" shall mean refunding bonds authorized
pursuant to this section.

5. The term "refunding bond resolution" shall mean a resolution
authorizing the issuance of refunding bonds adopted pursuant to
paragraph e of this section.

b. 1. A municipality, school district or district corporation may
issue serial bonds to refund all or any portion of an issue of
outstanding serial bonds issued on or after January first, nineteen
hundred seventy, and, in addition, a municipality or school district may
issue serial bonds or serial bonds to refund all or any portion of an
issue of outstanding sinking fund bonds or sinking fund bonds issued on
or after December fifteenth, nineteen hundred eighty-one and may issue
sinking fund bonds to refund all or any portion of an issue of
outstanding serial bonds or sinking fund bonds, in the manner and
subject to the limitations and conditions set forth in this section. The
principal amount of refunding bonds shall not exceed an amount
sufficient to pay the sum of (a) the principal amount of the bonds to be
refunded, which is outstanding as of the date of issue of the refunding
bonds, (b) the aggregate amount of unmatured interest payable on the
bonds to be refunded to and including either the date or dates such
bonds mature or, if such bonds are to be called for redemption prior to
their maturities, the date or dates set for such redemption in
accordance with the refunding financial plan, (c) redemption premiums,
if any, payable on the bonds to be refunded as of such redemption date
or dates, and (d) costs and expenses incidental to the issuance of the
refunding bonds, including the development of the refunding financial
plan, and of executing and performing the terms and conditions of the
escrow contract and all fees and charges of the escrow holder. In the
event a municipality or school district issues bonds to refund sinking
fund bonds, and such refunding has the effect of permitting the
municipality or school district to withdraw assets from a sinking fund
established for such refunded bonds, then such assets shall be used to
pay principal and interest on either such refunded bonds or other bonds
of such municipality or school district.

2. * (a) Refunding bonds shall be issued only in the event that the
present value of the total payments of both principal and interest to
become due on the refunding bonds, and deducting any accrued interest or
premium received by the issuer and not used to pay the principal of or
interest on the bonds to be refunded or costs of issuance of the
refunding bonds, excluding all such principal and interest payments to
be made from income received as a result of the investment of the
proceeds from the sale of the refunding bonds, shall be less than the
present value of the principal and interest payments to become due at
their stated maturities on the principal amount of bonds to be refunded
which are outstanding as of the date of the issue of the refunding bonds
after deducting therefrom all costs and expenses incidental to the
issuance of the refunding bonds, including the development of the
refunding financial plan, and of executing and performing the terms and
conditions of the escrow contract and all fees and charges of the escrow
holder, but only to the extent such costs and expenses are not paid from
the proceeds of the refunding bonds. The present value of debt service
payments pursuant to the foregoing provisions of this subdivision shall
be computed by discounting the principal and interest payments on both
the refunding bonds and the bonds to be refunded from the respective
maturities thereof to the date of issue of the refunding bonds at a rate
equal to the effective interest cost of the refunding bonds. The
effective interest cost of the refunding bonds shall be that rate which
is arrived at by doubling the semi-annual interest rate (compounded
semi-annually) necessary to discount the debt service payments on the
refunding bonds from the maturity dates thereof to the date of issue of
the refunding bonds and to the bona fide initial public offering price
including estimated accrued interest, or, if there is no public
offering, to the price bid including estimated accrued interest. In the
case of the city of New York, notwithstanding any other provision of law
to the contrary, for purposes of calculating the present value of debt
service and calculating savings in connection with the issuance of
refunding bonds, (i) the effective interest rate and debt service
payable on variable rate bonds in connection with which, and to the
extent that, the city of New York has entered into an interest rate
exchange or similar agreement pursuant to which such city makes payments
based on a fixed rate and receives payments based on a variable rate
that shall be found by the finance board of such city to be equivalent
over time to the variable rate paid on the related variable rate bonds,
shall be calculated assuming that the rate of interest on such variable
rate bonds is the fixed rate payable by such city on such interest rate
exchange or similar agreement for the scheduled term of such agreement;
(ii) the effective interest rate and debt service on variable rate bonds
in connection with which, and to the extent that, the city of New York
has not entered into such an interest rate exchange or similar agreement
shall be calculated assuming that interest on such variable interest
rate bonds is payable at a rate or rates as shall be found by the
finance board of such city; (iii) the effective interest rate and debt
service on any bonds subject to optional or mandatory tender shall be
calculated assuming that such bonds are remarketed following any such
tender at a rate or rates as shall be found by the finance board of the
city of New York; and (iv) otherwise, the effective interest rate and
debt service on any bonds shall be calculated at a rate or rates
determined by the finance board of the city of New York. Notwithstanding
any other provision of law to the contrary, in the case of the city of
New York, for calculating the present value of debt service and
calculating savings in connection with the issuance of refunding bonds,
the refunding of variable rate debt instruments with new variable rate
debt instruments shall be excluded from any such requirements, if so
determined by the finance board of such city.

* NB Effective until July 15, 2025

* (a) Refunding bonds shall be issued only in the event that the
present value of the total payments of both principal and interest to
become due on the refunding bonds, and deducting any accrued interest or
premium received by the issuer and not used to pay the principal of or
interest on the bonds to be refunded or costs of issuance of the
refunding bonds, excluding all such principal and interest payments to
be made from income received as a result of the investment of the
proceeds from the sale of the refunding bonds, shall be less than the
present value of the principal and interest payments to become due at
their stated maturities on the principal amount of bonds to be refunded
which are outstanding as of the date of the issue of the refunding bonds
after deducting therefrom all costs and expenses incidental to the
issuance of the refunding bonds, including the development of the
refunding financial plan, and of executing and performing the terms and
conditions of the escrow contract and all fees and charges of the escrow
holder, but only to the extent such costs and expenses are not paid from
the proceeds of the refunding bonds. The present value of debt service
payments pursuant to the foregoing provisions of this subdivision shall
be computed by discounting the principal and interest payments on both
the refunding bonds and the bonds to be refunded from the respective
maturities thereof to the date of issue of the refunding bonds at a rate
equal to the effective interest cost of the refunding bonds. The
effective interest cost of the refunding bonds shall be that rate which
is arrived at by doubling the semi-annual interest rate (compounded
semi-annually) necessary to discount the debt service payments on the
refunding bonds from the maturity dates thereof to the date of issue of
the refunding bonds and to the bona fide initial public offering price
including estimated accrued interest, or, if there is no public
offering, to the price bid including estimated accrued interest.

* NB Effective July 15, 2025

(b) Notwithstanding the provisions of subparagraph (a) of this
subdivision, the city of New York may also issue refunding bonds (i) if
the bond to be refunded contains a covenant referring to the existence
of the New York state emergency financial control board for the city of
New York or any other covenant relating to matters other than the prompt
payment of principal and interest on the obligation when due, and the
refunding bond omits or modifies any such covenant or (ii) if the bond
to be refunded is guaranteed by the federal government.

(c) Notwithstanding the provisions of subparagraph (a) of this
subdivision, in the case of refunding bonds sold to the New York state
environmental facilities corporation and purchased for deposit in the
water pollution control revolving fund established pursuant to section
twelve hundred eighty-five-j of the public authorities law and for which
an allocation has been established pursuant to section 17-1909 of the
environmental conservation law, the present value of the projected total
allocation payable to the issuer of the refunding bonds or available to
make principal and interest payments on the refunding bonds shall be
subtracted from the present value of the total payments of the principal
and interest to become due on the refunding bonds in determining the
present value savings attributable to the issuance of such refunding
bonds pursuant to subparagraph (a) of this subdivision.

(d) Notwithstanding the provisions of subparagraph (a) of this
subdivision, in the case of refunding bonds sold to the New York state
environmental facilities corporation and purchased for deposit in the
drinking water revolving fund established pursuant to section twelve
hundred eighty-five-m of the public authorities law and for which an
allocation has been established pursuant to section eleven hundred
sixty-two of the public health law, the present value of the projected
total allocation payable to the issuer of the refunding bonds or
available to make principal and interest payments on the refunding bonds
shall be subtracted from the present value of the total payments of the
principal and interest to become due on the refunding bonds in
determining the present value savings attributable to the issuance of
such refunding bonds pursuant to subparagraph (a) of this subdivision.

(e) Notwithstanding the provisions of subparagraph (a) of this
subdivision, a school district may also issue refunding bonds to refund
bonds if the bonds were issued by a school district prior to December
first two thousand one, or prior to thirty days after the effective date
of this subdivision, whichever is later, for the purpose of financing
facilities that were eligible for building aid pursuant to subdivision
six of section thirty-six hundred two of the education law, and for
which the aid apportionment payable in the two thousand two--two
thousand three and two thousand three--two thousand four school years
for approved expenditures for debt service are subsequently reduced as a
result of the application of assumed amortization to unpaid principal
outstanding as of July first, two thousand two.

3. Refunding bonds may be issued at any time subsequent to the
issuance of the bonds to be refunded.

c. 1. The last installment of each separate series of refunding serial
bonds, and the maturity date of any refunding sinking fund bonds, shall
occur not later than the expiration of the maximum period of probable
usefulness permitted by law at the time of the issuance of the refunding
bonds or the bonds to be refunded for the object or purpose for which
such bonds to be refunded were issued, or in the alternative, the
weighted average remaining period of probable usefulness of the objects
or purposes (or classes of objects or purposes) financed with each
series of bonds to be refunded or the weighted average remaining period
of probable usefulness of all objects or purposes (or classes of objects
or purposes) financed with all of the bonds to be refunded. Such period
shall be computed from the date of issuance of such bonds to be refunded
or from the date of the first bond anticipation note issued in
anticipation thereof, whichever date is the earlier.

2. The first installment of each separate series of refunding bonds
shall mature not later than the date of the first stated maturity of the
bonds to be refunded next following the date of issue of the refunding
bonds. When the finance board has determined to provide for a
substantially level or declining annual debt service schedule for the
refunding bonds, as provided in subdivision three of this paragraph, the
determination of whether annual debt service is substantially level or
declining shall not take into account the year which includes the first
principal installment of the refunding bonds, provided that the first
principal installment, when added to the amount of interest payable
within one year of its accrual that would accrue on the entire refunding
debt or series of refunding bonds in one calendar year, shall be no more
than five percent less than the greatest aggregate amount of debt
service due in any other year.

3. No annual installment of each separate series of refunding bonds
shall be more than fifty per centum in excess of the smallest prior
installment unless the finance board of the municipality, school
district or district corporation issuing the bonds has determined to use
a substantially level or declining annual debt service schedule for the
refunding bonds. The amounts of annual installments of the refunding
bonds may be determined without reference to the stated maturities of
the bonds to be refunded.

4. In the event the bonds to be refunded were separately authorized
for different objects or purposes, which separately authorized bonds
were consolidated for purposes of sale and sold as a single issue
pursuant to paragraph c of section 57.00 of this chapter, each component
issue included in such consolidated issue shall be considered as a
separate issue for the purposes of the provisions of subdivisions one,
two and four of this paragraph, notwithstanding that the refunding bonds
are sold as a single issue.

5. Refunding bonds may be issued as two or more separate series.

d. Bond anticipation notes shall not be issued in anticipation of the
sale of refunding bonds.

e. The issuance of refunding bonds shall be authorized by a "refunding
bond resolution". Such a resolution shall contain, in substance, at
least the following:

1. The maximum amount of refunding bonds authorized to be issued
pursuant thereto.

2. A determination that such maximum amount of refunding bonds
authorized to be issued does not exceed the limitation imposed by
subdivision one of paragraph b of this section.

3. The amount and a description of the outstanding bonds to be
refunded.

4. A statement of the maximum period or periods of probable usefulness
permitted by law at the time of the issuance of the bonds to be refunded
for the object or purpose or objects or purposes for which such bonds to
be refunded were issued.

5. The financial plan for the refunding proposed, showing the sources
and amounts of all moneys required to accomplish such refunding, and
except where such refunding bonds are issued by the city of New York
pursuant to subparagraph (b) of subdivision two of paragraph b of this
section an estimate of the present value of the total debt service
savings anticipated, computed in accordance with subparagraph (a) of
subdivision two of paragraph b of this section.

f. 1. Any refunding bonds issued to refund bonds which are
additionally secured by a pledge of any specific moneys pursuant to any
general or special law, at the option of the finance board, may be
additionally secured to the same extent and in the same manner as the
bonds to be refunded effective upon the date of issue of such refunding
bonds, subject only to any rights of the holders of such bonds to be
refunded.

2. Refunding bonds may be sold at either public or private sale, but
they shall not be sold on option or on a deferred payment plan,
provided, however, that if such bonds are sold at private sale, the
terms and conditions of such sale shall be approved by the state
comptroller. Refunding bonds sold at private sale shall bear interest at
such rate or rates, not exceeding the maximum rate, if any, fixed by
paragraph b of section 57.00 of this chapter, as may be determined by
the finance board. Refunding bonds may be sold at private sale at a
discount in the same manner as authorized by paragraph e of section
57.00 of this chapter. The cost of such discount, together with other
costs of the issuance of obligations, shall be deemed a part of the cost
of the objects or purposes for which such obligations are issued.

g. Except where such refunding bonds are issued by the city of New
York pursuant to subparagraph (b) of subdivision two of paragraph b of
this section, no refunding bonds shall be issued pursuant to this
section unless the chief fiscal officer of the issuer shall have first
filed with the finance board a certificate, approved by the state
comptroller, which shall be final and conclusive upon all parties,
setting forth the present value of the total debt service savings to the
issuer resulting from the issuance of the refunding bonds computed in
accordance with the provisions of subparagraph (a) of subdivision two of
paragraph b of this section, except that the actual amount, rather than
an estimate, of the amount of accrued interest to be paid on such bonds
shall be used in determining the effective interest cost thereof. The
certificate shall be in the form and shall contain such information as
shall be prescribed by the state comptroller. The certificate shall not
be approved until ten days after the filing of such certificate in the
office of the state comptroller.

h. 1. Prior to the issuance of refunding bonds, the finance board
shall adopt a resolution electing to call in and redeem such portion of
the bonds to be refunded as is to be called for payment prior to the
date of their maturity in accordance with the refunding financial plan.
The resolution adopted pursuant to this paragraph shall authorize and
direct the escrow holder to cause notice of such call for redemption to
be given in the name of the issuer of such refunding bonds in the manner
and within the times provided by paragraph a of section 53.00 of this
chapter. If the issuer has no official newspaper, such resolution shall
designate a newspaper having general circulation within the
municipality, school district or district corporation for the purpose of
giving such notice.

2. Upon the issuance of the refunding bonds, the election to call in
and redeem the bonds to be refunded and the direction to the escrow
holder to cause notice thereof to be given contained in the resolution
adopted pursuant to subdivision one of this paragraph, shall become
irrevocable, and the provisions of such resolution shall constitute a
covenant with the holders of such refunding bonds, provided that such
resolution may be amended from time to time as may be necessary in order
to comply with the publication requirements of paragraph a of section
53.00 of this chapter.

i. 1. The finance board, or the chief fiscal officer if the finance
board shall delegate such duty to him, prior to the issuance of
refunding bonds, shall contract on behalf of the issuer with a bank or
trust company located and authorized to do business in this state for
the purpose of having such bank or trust company act as the escrow
holder of the proceeds, inclusive of any premium, from the sale of such
refunding bonds, together with all income derived from the investment of
such proceeds, and any other moneys to be provided by such issuer to
effectuate the refunding financial plan. Each escrow contract shall
contain such terms and conditions as shall be necessary in order to
accomplish the refunding financial plan, including, without limiting the
generality of the foregoing, provisions for the escrow holder without
further authorization or direction from the issuer of the refunding
bonds, except as otherwise provided therein, (a) to make all required
payments of principal, interest and redemption premiums to the
appropriate paying agent with respect to either the bonds to be refunded
or the refunding bonds, (b) to pay costs and expenses incidental to the
issuance of the refunding bonds, including the development of the
refunding financial plan, and of executing and performing the terms and
conditions of the escrow contract and all of its fees and charges as the
escrow holder, (c) at the appropriate time or times to cause to be given
on behalf of such issuer the notice of redemption authorized to be given
pursuant to paragraph h of this section, and (d) to invest the moneys
held by it consistent with the provisions of the refunding financial
plan. Each escrow contract shall be irrevocable and shall constitute a
covenant with the holders of the refunding bonds to which it relates.

2. The proceeds, inclusive of any premium, from the sale of refunding
bonds, immediately upon receipt, shall be placed in escrow by the issuer
with the escrow holder in accordance with the escrow contract. All
moneys held by the escrow holder shall be invested only in direct
obligations of the United States of America or in obligations the
principal of and interest on which are unconditionally guaranteed by the
United States of America, which obligations shall mature or be subject
to redemption at the option of the holder thereof not later than the
respective dates when such moneys will be required to make payments in
accordance with the refunding financial plan. Any such moneys remaining
in the custody of the escrow holder after the full execution of the
escrow contract shall be returned to the issuer of the refunding bonds
and shall be applied by such issuer to the payment of the principal of
or interest on the refunding bonds then outstanding, to the payment of
any amounts required to be paid to the United States of America in
connection with the refunding or to the payment of or reimbursement for
the costs of issuance or other administrative costs incurred in
connection with the issuance of the refunding bonds.

3. That portion of such proceeds from the sale of refunding bonds,
together with interest earned thereon and any moneys on deposit in a
sinking fund established for the refunded bonds which is applied to the
payment of the principal and interest on the refunded bonds pursuant to
subdivision one of paragraph b of this section, which shall be required
for the payment of the principal of and interest on the bonds to be
refunded, including any redemption premiums, in accordance with the
refunding financial plan, shall be irrevocably committed and pledged to
such purpose and the holders of such bonds to be refunded shall have a
lien upon such moneys and the investments thereof held by the escrow
holder. All interest earned from the investment of such moneys not
required for such payments on the bonds to be refunded, shall be
irrevocably committed and pledged to the payment of the principal of and
interest on the refunding bonds, or such portion or series thereof as
shall be required by the refunding financial plan, and the holders of
such refunding bonds shall have a lien upon such moneys held by the
escrow holder. The pledges and liens provided for in this subdivision
shall become valid and binding upon the issuance of the refunding bonds
and the moneys and investments held by the escrow holder shall
immediately be subject thereto without any further act. Such pledges and
liens shall be valid and binding as against all parties having claims of
any kind in tort, contract or otherwise against the issuer of the
refunding bonds irrespective of whether such parties have notice
thereof. Neither the refunding bond resolution, the escrow contract, nor
any other instrument relating to such pledges and liens, need be filed
or recorded.

j. The powers granted by this section to issue refunding bonds shall
be deemed to be in addition to the provisions of section 90.00 of this
chapter, but none of the provisions of section 90.00 shall apply to any
refunding bonds issued pursuant to this section. All other provisions of
this chapter, not inconsistent with this section, relating to the
authorization, estoppel from contesting validity, form and contents,
execution and issuance of bonds, other than refunding bonds, shall apply
to refunding bonds, except that:

1. The provisions of section 107.00 of this chapter shall not apply to
the issuance of refunding bonds.

2. The authorization of the issuance of refunding bonds shall not be
subject to a mandatory or permissive referendum.

3. Outstanding bonds may, with the consent of the holders thereof, be
exchanged for refunding bonds (i) if the refunding bonds are to bear
interest at a rate equal to or lower than that borne by the bonds to be
refunded, or (ii) if, in the case of the city of New York, the annual
payment required for principal and interest on the refunding bond is
less than the annual payment required for principal and interest on the
bond to be refunded, in each case such annual payments to be determined
by dividing the total principal and interest payments due over the
remaining life of the bond by the number of years to maturity of the
bond, or (iii) if, in the case of the city of New York, the bond to be
refunded contains a covenant referring to the existence of the New York
state emergency financial control board for the city of New York or any
other covenant relating to matters other than the prompt payment of
principal and interest on the obligation when due, and the refunding
bond omits or modifies any such covenant, or (iv) if, in the case of the
city of New York, the bond to be refunded is guaranteed by the federal
government.

4. All refunding bonds shall contain a recital that they are issued
pursuant to this chapter, which recital shall be conclusive evidence of
their validity and of the regularity of their issuance.

k. The authority herein granted to authorize the issuance of refunding
bonds shall in no way be affected by the invalidity of or any
irregularity in any proceedings authorizing the issuance of the bonds to
be refunded, except that refunding bonds shall not be issued to refund
bonds adjudged invalid by the final judgment of a court of competent
jurisdiction.