Section 1689-C. Capital facility program, authority financing of eligible projects

1. The authority is authorized  to  finance  eligible  capital  facility program projects pursuant to the Jobs two thousand for New York
  State (J2K) Act.
    2. (a) Notwithstanding the provisions of any general or special law to
  the  contrary,  and  subject  to  the  making  of  annual appropriations
  therefor by the legislature, in order to assist  the  authority  in  the
  financing  and  refinancing  of  such  eligible capital facility program
  projects, the director of the budget is authorized to enter into one  or
  more  service  contracts,  none  of  which  shall exceed thirty years in
  duration, with the authority, upon such terms as  the  director  of  the
  budget and the dormitory authority agree;
    (b)  Any  service  contract  entered into pursuant to paragraph (a) of
  this subdivision or any payments made or to be made  thereunder  may  be
  assigned  and pledged by the authority as security for its bonds, notes,
  or other obligations;
    (c) Any such service contract shall provide that the obligation of the
  director of the budget or of the state to fund or  to  pay  the  amounts
  therein provided for shall not constitute a debt of the state within the
  meaning  of  any  constitutional or statutory provision in the event the
  authority assigns or pledges the service contract payments  as  security
  for its bonds, notes, or other obligations and shall be deemed executory
  only  to  the extent moneys are available and that no liability shall be
  incurred by the state beyond the moneys available for the  purpose,  and
  that   such  obligation  is  subject  to  annual  appropriation  by  the
  legislature;
    (d) Any service contract or contracts entered into  pursuant  to  this
  subdivision  shall  provide for state commitments to provide annually to
  the authority a sum or sums, upon such terms and conditions as shall  be
  deemed appropriate by the director of the budget, to fund the principal,
  interest,  or other related expenses required for any such bonds, notes,
  or other obligations.
    (e) On or before November fifteenth of each year and again on or after
  February fifteenth  of  each  year,  the  authority  shall  submit,  and
  thereafter  may  resubmit,  to  the  director  of  the budget, the state
  comptroller, the executive director of the  New  York  state  office  of
  science,  technology  and  academic  research,  the  chair of the senate
  finance committee and the chair of the assembly ways and means committee
  a report setting forth the amounts,  if  any,  of  all  annual  payments
  estimated  to  be appropriated to the authority pursuant to such service
  contracts between the authority and the director of the division of  the
  budget pursuant to this subdivision.
    3.  (a)  To  obtain  funds  for  the purposes of this subdivision, the
  authority shall have power from time  to  time,  in  accordance  with  a
  schedule certified to the authority by the executive director of the New
  York   state   office  of  science,  technology  and  academic  research
  identifying eligible capital  facility  program  projects  approved  for
  payment  pursuant to the Jobs two thousand for New York State (J2K) Act,
  to issue negotiable bonds or notes of the authority. Unless the  context
  shall  clearly  indicate otherwise, whenever the words "bond" or "bonds"
  are used in this section, such words shall include a note  or  notes  of
  the authority.
    (b)  The  authority shall not issue any bonds or notes in an amount in
  excess of forty-seven million five  hundred  thousand  dollars  for  the
  purposes  of  this subdivision, excluding a principal amount of bonds or
  notes issued to fund one or more debt service reserve funds, to pay  for
  the costs of issuance of such bonds, and bonds or notes issued to refund
  or  otherwise  repay  such  bonds, and bonds or notes previously issued.

  Except for the purposes of complying with the internal revenue code, any
  interest income earned on bond proceeds shall only be used to  pay  debt
  service on such bonds or notes.
    In  computing  for  the  purposes  of  this subdivision, the aggregate
  amount of indebtedness evidenced by bonds and  notes  of  the  authority
  issued  pursuant to this subdivision, there shall be excluded the amount
  of such indebtedness represented by such bonds or notes issued to refund
  or otherwise repay bonds or notes, provided that the amount so  excluded
  under  this  paragraph  may exceed the principal amount of such bonds or
  notes that were issued to refund or otherwise repay only if the  present
  value  of the aggregate debt service on the refunding or repayment bonds
  or notes shall not have at the  time  of  their  issuance  exceeded  the
  present  value  of the aggregate debt service of the bonds or notes they
  were issued to refund or repay, such present value in  each  case  being
  calculated  by  using  the  effective  interest rate of the refunding or
  repayment bonds or notes,  which  shall  be  that  rate  arrived  at  by
  doubling   the  semi-annual  interest  rate  (compounded  semi-annually)
  necessary to discount the debt service  payments  on  the  refunding  or
  repayment  bonds  or  notes from the payment date thereof to the date of
  issue of the refunding or repayment bonds or notes and to the price  bid
  therefor,  or  to  the proceeds received by the dormitory authority from
  the sale thereof, in each case including estimated accrued interest.