§ 2436-b. Local ARRA bonds. (1) The agency may purchase local ARRA
bonds using the proceeds of recovery act bonds, subject to the
provisions of this section and to any other provision of law applicable
to the municipality and bonds it issues, including any debt limitation
applicable to the municipality that issued the local ARRA bond, as well
as to the other provisions of this title. To the extent that any such
other provision of law conflicts with a provision of this section, the
provision of this section shall control, except as otherwise stated.

(2) Subject to the provisions of this section:

(a) Local ARRA bonds issued by a county, except a county wholly within
a city, may be additionally secured by a pledge to the agency of its
available county sales tax revenues subject to the provisions of
subdivision five of this section.

(b) Local ARRA bonds issued by a city may be additionally secured by a
pledge to the agency of its available city sales tax revenues or its
available mortgage recording tax revenues, or both subject to the
provisions of subdivision five of this section.

(c) Local ARRA bonds issued by a town may be additionally secured by a
pledge to the agency of its available mortgage recording tax revenues
subject to the provisions of subdivision five of this section.

(d) Local ARRA bonds issued by a village may be additionally secured
by a pledge to the agency of its available mortgage recording tax
revenues subject to the provisions of subdivision five of this section.

(3) (a) Nothing contained in this title shall limit the right and
obligations of a municipality to comply with the provisions of any
existing contract with or for the benefit of the holders of any of its
other bonds, notes or other obligations.

(b) Nothing contained in this title shall be construed to limit the
power of a municipality to determine, from time to time, within
available funds for the municipality, the purposes for which
expenditures are to be made by the municipality and the amounts of such
expenditures.

(c) Nothing contained in this title shall alter, limit, modify or
impair the right of any school district or of any city, town, or village
within a county to receive from the county net collections, as
authorized by section twelve hundred sixty-two of the tax law or other
applicable provision of part four of article twenty-nine of the tax law
or by an unconsolidated state law that notwithstands such provision of
the tax law, from the county's sales and compensating use taxes imposed
pursuant to the authority of subpart B of part one of article
twenty-nine of the tax law. Further, nothing contained in this title
shall alter, limit, modify or impair the right of any city or town
within a county to receive from the county the net amount of mortgage
recording tax revenues imposed by subdivision one of section two hundred
fifty-three of the tax law, as authorized by subdivision three of
section two hundred sixty-one of the tax law.

(d) The agency's recovery act bonds secured by payments of principal
and interest due with respect to local ARRA bonds shall not be a debt of
either the state or any municipality, and neither the state nor any
municipality shall be liable thereon, nor shall they be payable out of
any funds other than those of the agency; and such recovery act bonds
shall contain on the face thereof a statement to such effect.

(e) Subject to the provisions of any contract with holders of bonds,
notes or other obligations, proceeds of recovery act bonds to be paid to
a municipality to purchase its local ARRA bonds shall be paid to the
municipality and shall not be commingled with any other money of the
agency.

(f) Nothing contained in this title shall be construed to create a
debt of the state within the meaning of any constitutional or statutory
provisions. Any provision with respect to state aid shall be deemed
executory only to the extent of moneys available, and no liability shall
be incurred by the state beyond the moneys available for that purpose,
and any payment to be made by the comptroller of state aid is subject to
annual appropriation of state aid by the state legislature.

(g) Nothing contained in this title shall be deemed to restrict the
right of the state to amend, repeal, modify, or otherwise alter any
provision of law relating to state aid to municipalities. The agency
shall include in any resolution, contract, or agreement with holders of
its bonds, notes or other obligations a provision which states that no
default occurs as a result of the state's exercising its right to amend,
repeal, modify, or otherwise alter any provision of law relating to
state aid to municipalities.

(4) (a) A municipality may covenant and agree that the municipality
will not limit, alter or impair the rights hereby vested in the agency
to fulfill the terms of any agreements made with holders of the agency's
recovery act bonds, the proceeds of which were used to purchase the
municipality's local ARRA bonds, such holders pursuant to this title, or
in any way impair the rights and remedies of such holders or the
security for such bonds, until such bonds, together with the interest
thereon and all costs and expenses in connection with any action or
proceeding by or on behalf of such holders, are fully paid and
discharged. Nothing contained in this title shall be deemed to restrict
any right of the municipality to amend, modify, repeal or otherwise
alter any local laws, ordinances or resolutions imposing or relating to
taxes or fees, or appropriations relating to such taxes or fees, or
setting aside or allocating and applying, paying or using net
collections pursuant to the authority of part four of article
twenty-nine of the tax law or pursuant to the authority of any other
provision of state law that notwithstands a provision of such part, so
long as, after giving effect to such amendment, modification or other
alteration, the aggregate amount as then projected by the municipality
of (i) sales and compensating use taxes imposed by the municipality
pursuant to the authority of subpart B of part one of article
twenty-nine of the tax law (to the extent that the municipality is
authorized to impose such taxes and is imposing them at the time it
issues its local ARRA bonds); and (ii) all such net collections to be
set aside or to be allocated and applied, paid or used by the
municipality pursuant to the authority of part four of article
twenty-nine of the tax law or pursuant to any other provision of state
law that notwithstands a provision of such part four during each of the
agency's fiscal years following the effective date of such amendment,
modification or other alteration shall be not less than two hundred
percent of maximum annual debt service on the municipality's local ARRA
bonds then outstanding. Notwithstanding anything to the contrary in this
section, a municipality that imposes sales and compensating use taxes at
the time it issues local ARRA bonds further agrees that it shall
continue to impose such taxes during the time such bonds are outstanding
at the maximum rate authorized therefor, without regard to any
additional rate, provided that any increase in the rate of such taxes to
satisfy this obligation shall comply with the applicable provisions of
subpart B of part one of article twenty-nine of the tax law.

(b) Any such agreement with a municipality may be pledged by the
agency to secure its recovery act bonds used to purchase local ARRA
bonds issued by that municipality and may not be modified thereafter
except as provided by the terms of the pledge or subsequent agreements
with the holders of such recovery act bonds.

(c) The agency shall not include within any resolution, contract or
agreement with holders of recovery act bonds any provision which
provides that a default occurs as a result of a municipality exercising
its right to amend, modify, repeal or otherwise alter such taxes, fees
or appropriations or such net collections. Nothing in this title shall
be deemed to obligate a municipality to make any payments or impose any
taxes or set aside or allocate and apply, pay or use net collections
pursuant to the authority of part four of article twenty-nine of the tax
law or pursuant to the authority of an unconsolidated state law that
notwithstands a provision of such part; except that a municipality shall
impose taxes pursuant to the authority of subpart B of part one of
article twenty-nine of the tax law at the maximum rate authorized
therefor, without regard to any additional rate, provided that any
increase in the rate of such taxes to satisfy this obligation shall
comply with the applicable provisions of subpart B of part one of
article twenty-nine of the tax law.

(5) (a) If a municipality fails to pay to the agency any principal or
interest due on its local ARRA bonds secured by a pledge of its
available local sales and use tax revenues or its available mortgage
recording tax revenues, or both, as described in subdivision two of this
section, the chairman of the agency shall notify the comptroller in
writing that such municipality has failed to meet its obligations. Such
notice shall set forth in detail the term, amount, interest rate, and
payment schedule of the local ARRA bonds in default, and the exact
amounts of principal and interest due from such municipality in default.
The agency shall provide a copy of such notice to the chief fiscal
officer of such municipality in default and, in the case of a default by
a city, town, or village with respect to local ARRA bonds secured by
mortgage recording tax revenues, also to the chief fiscal officer of the
county in which the city, town, or village is located. The agency shall
provide such notice to the comptroller at least thirty days prior to the
date that the comptroller is expected to withhold and pay over local
sales and use tax revenues to the agency.

(b) Upon the comptroller receiving such complete, certified written
notice from the agency, the comptroller shall, notwithstanding any
provision of section twelve hundred sixty-one of the tax law to the
contrary, pay to the agency, on or before the fifteenth day of each
month, all or a portion of the local sales and use tax revenues due the
municipality in default, until the amount certified in default has been
extinguished. The comptroller shall make such payments to the agency
only out of net collections not otherwise pledged, required to be
intercepted or otherwise encumbered by provisions of law in effect
immediately prior to the date the municipality's local ARRA bonds
secured by a pledge authorized by this section shall have been issued.

(c) Upon receiving such complete, certified written notice from the
agency, the chief fiscal officer of a county, notwithstanding the
provisions of section two hundred sixty-one of the tax law, shall pay
over to the comptroller, the net amount of mortgage recording tax
revenues imposed by subdivision one of section two hundred fifty-three
of the tax law due to the city, town, or village in default. The chief
fiscal officer of the county shall continue to make those payments to
the comptroller until the agency sends certified notice to the officer
and to the comptroller that the city or town is no longer in default.
The comptroller shall pay to the agency, on or before the fifteenth day
of each month, all or a portion of the mortgage recording tax revenues
received from the chief fiscal officer of the county, until the amount
certified in default has been extinguished.

(d) Such payments by the comptroller to the agency shall be made on
account of, and for the benefit of, the municipality in default. If so
requested by the agency, as indicated in its certified notice to the
comptroller, the comptroller shall make such payments to a trustee
pursuant to an indenture for holders of the recovery act bonds issued by
the agency that were used to purchase the municipality's local ARRA
bonds in default. Such payments by the comptroller on behalf of such
municipality shall be applied by the agency or, if paid directly to the
trustee, by such trustee, to cure that municipality's default. To the
extent the comptroller makes any such payment to the agency or to such a
trustee, the municipality's default shall be cured.

(e) The comptroller shall not be responsible for any inaccuracy in the
amount of such payments based upon the notice furnished by the agency.
The comptroller shall not be required to make payments under this
subdivision which are greater than the amounts of local sales and use
tax revenues due the municipality, as certified to the comptroller by
the commissioner of taxation and finance as provided in subdivision (c)
of section twelve hundred sixty-one of the tax law (subject to the
limitation in paragraph (b) of this subdivision), or which are greater
than the amount of net mortgage recording tax revenues paid to the
comptroller by the chief fiscal officer of the county. After the
comptroller makes any payments of net collections required under this
section, the comptroller shall pay any balance of net collections due
such municipality to such municipality in the manner provided in
subdivision (c) of section twelve hundred sixty-one of the tax law or
other applicable law. The comptroller shall be required to make payments
under this section for only so long as the municipality is in default as
certified in the agency's notice to the comptroller.

(f) The authority in this section to withhold local sales and use tax
revenues and mortgage recording tax revenues and pay them over to the
agency shall be in addition to the state aid guaranty set forth in
section twenty four hundred thirty-six of this title; and the agency may
certify that either or both revenue sources may be withheld to the
extent necessary to satisfy the municipality's unmet obligations to the
agency.

(g) Any withholding of revenues pursuant to this subdivision or state
aid pursuant to section twenty-four hundred thirty-six of this title
with respect to local ARRA bonds shall be made in consultation with the
director of the budget of the state; provided, however, such
consultation shall not delay or otherwise adversely affect the agency's
right to receive timely payment of such revenues and/or state aid.

(6) When used in this section, the following terms shall have the
following meanings unless the context clearly indicates otherwise:

(a) "Sales and compensating use taxes" means taxes imposed by a county
or city pursuant to the authority of subpart B of part one of article
twenty-nine of the tax law.

(b) "Net collections" shall have the same meaning as in subdivision
(f) of section twelve hundred sixty-two of the tax law.

(c) "County sales tax revenues" means net collections set aside for
county purposes pursuant to subdivision (a) of section twelve hundred
sixty-two of the tax law or other applicable provision of part four of
article twenty-nine of the tax law, from a county's sales and
compensating use taxes.

(d) "City sales tax revenues" means net collections from a city's
sales and compensating use taxes.

(e) "Municipality" means municipality as defined in paragraph one of
section 2.00 of the local finance law.

(f) "Local sales and use tax revenues" means any of the tax revenues
defined in paragraph (c) or (d) of this subdivision, or any combination
of them, as the case may be.

(g) "Secure" means a pledge of sales and compensating use taxes or
mortgage recording taxes for the purposes of default by a municipality
as a result of a failure to pay debt service on its local ARRA bonds.