WILLIAM DONALD SCHAEFER, Governor Ch. 414

fund requirements on outstanding and unpaid county highway
construction bonds issued pursuant to Chapter 657 of the Laws of
1953, until an amount equal to the debt service payable in the
current fiscal year and the next succeeding fiscal year is
accumulated and, thereafter, an amount equal to debt service on
the bonds in the succeeding fiscal year, but no part of the funds
that have been previously pledged for debt service on outstanding
and unpaid bonds of the county, as provided in Title 8, Subtitle
4, may be withheld;

(4)  In any year in which any bonds covered by the
agreement are outstanding and unpaid, the county may make an
annual levy on its taxable basis in the rate and amount
sufficient to provide a sum equal to the amount to be withheld by
the State Comptroller, as provided in item (3) of this
subsection, in which event the State Comptroller may not withhold
any more of the highway user revenues of the county than
necessary to assure payment of the principal of and interest on
the bonds in the current fiscal year and the next succeeding
fiscal year; [and]

(5)  At regular intervals, the State Comptroller shall
pay from the sinking fund to the Department amounts sufficient to
pay the principal of and interest on the bonds; AND

(6)  THE COUNTY SHALL USE AND INVEST ITS SHARE OF THE
PROCEEDS OF THE BONDS WITHIN THE PARAMETERS ESTABLISHED BY THE
DEPARTMENT AND TAKE, OR REFRAIN FROM TAKING, SUCH OTHER AND
FURTHER ACTIONS AS MAY BE REQUIRED OF IT BY THE DEPARTMENT TO
MAINTAIN THE EXEMPTION FROM FEDERAL INCOME TAXATION OF INTEREST
ON THE BONDS.

(C) IF A COUNTY VIOLATES ITS AGREEMENT WITH THE DEPARTMENT
IN A MANNER THAT CAUSES THE BONDS TO LOSE THEIR TAX-EXEMPT
STATUS, THE DEPARTMENT MAY PROHIBIT THE COUNTY FROM PARTICIPATING
IN THE DEPARTMENT'S COUNTY BOND PROGRAM FOR 3 YEARS FROM THE DATE
THE VIOLATION IS DISCOVERED.

SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall
take effect June 1, 1987.

Approved May 14, 1987.

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