Opinion 88-37


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.

BONDS AND NOTES -- Periods of Probable Usefulness (purchase of police cars)

LOCAL FINANCE LAW, §§11.00(a)(29)(a),(77), 21.00(a), 28.00(a): The purchase of a passenger vehicle to be used as a police car may be financed by the issuance of capital notes only when the vehicle is purchased to replace a similar vehicle which was in service for a year or more. Prior opinions, including 11 Opns St Comp, 1955, p 388 and 4 Opns St Comp, 1948, p 351, are hereby superseded to the extent inconsistent.

You ask whether the city may finance the purchase of five automobiles to be used as police cars by the issuance of a capital note.

Section 28.00(a) of the Local Finance Law authorizes any municipality to issue capital notes to finance all or part of the cost of any object or purpose for which serial or sinking fund bonds may be used. Section 21.00(a) provides that a serial bond may be used for any object or purpose having a period of probable usefulness. Sinking fund bonds may be issued for any object or purpose for which serial bonds may be issued (Local Finance Law, §22.10).

Periods of probable usefulness are set forth in section 11.00(a). A five-year period of probable usefulness is established by subdivision (29) of section 11.00 for motor vehicles. The definition of the term "motor vehicle," however, specifically excepts "(a) passenger vehicle, other than a school bus, having a seating capacity of less than ten persons." In light of the quoted language, we have expressed the view that the five-year period of probable usefulness established for motor vehicles by section 11.00(a)(29) does not apply to passenger vehicles with a seating capacity of ten persons or less, such as a police car (see 11 Opns St Comp, 1955, p 388; 4 Opns St Comp, 1948, p 351).

Subsequent to the above-cited opinions, a three-year period of probable usefulness was established by subdivision (77) of section 11.00(a) for passenger vehicles when purchased as replacement vehicles (L 1972, ch 714). Subdivision (77) states, in pertinent part, as follows:

"77. * * * The purchase of a passenger vehicle, other than a school bus, having a seating capacity of less than ten persons, when purchased to replace a similar vehicle previously in service for three years or more, or in the case of a police or fire vehicle, in service for one year or more, three years." [Emphasis added]

From the provisions of section 11.00(a)(77), it is clear that a passenger vehicle to be used as a police car may be financed with the issuance of capital notes or bonds only when the vehicle is to be purchased to replace a similar vehicle which was in service for a year or more. If, therefore, police cars are to be purchased to replace similar police cars which were in service for a year or more, a three-year period of probable usefulness exists and the purchase of such cars may be financed by the issuance of a capital note. Of course, notwithstanding the three year period of probable usefulness prescribed by section 11.00(a)(77), any capital notes issued to finance the purchase of police cars, must mature "not later than the last day of the second fiscal year succeeding the fiscal year in which such notes are issued" (Local Finance Law, §28.00[a]).

Prior opinions, including 11 Opns St Comp, 1955, p 388 and 4 Opns St Comp, 1948, p 351, are hereby superseded to the extent inconsistent.

August 12, 1988
Gay H. Williams, Esq., City Attorney
City of Oswego