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Part 55, 2NYCRR Cancellation and Destruction of Obligations of Municipalities, School Districts and District Corporations

(Statutory authority: Local Finance Law, § 63.10)

Sec.
55.1 Cancellation of paid obligations
55.2 Destruction of cancelled obligations
55.3 Destruction of obligations by registration agents
55.4 Cancellation of coupons by counties or cities
55.5 Burning, pulverizing or shredding of obligations
55.6 Records to be kept
55.7 Use of facsimile signature
55.8 Cancellation and destruction of partially destroyed or defaced obligations
55.9 Effective date

§ 55.1 Cancellation of paid obligations.
Bonds, corporate stock, notes, coupons, or other evidences of indebtedness issued pursuant to the Local Finance Law or any other law, when paid, shall be cancelled in either of the following ways:

(a) by perforating the obligation with the word “Paid”, or with the word “Cancelled”, or the substantial equivalent of either word, and with words or numbers which will indicate the date of payment. Beneath such perforations and upon the face of the obligation shall be (1) subscribed in ink the name and title of the chief fiscal officer of the issuer or his duly delegated deputy, or the name and title of an officer of the paying agent of the issuer, or (2) a perforated abbreviation of the name of the municipality, school district or district corporation, such as “C of N.Y.”.

(b) by writing or stamping in ink the word “Paid” together with the date of payment upon the face of the obligation. Beneath such writing or stamp shall be subscribed in ink the name and title of the chief fiscal officer of the issuer, or his duly delegated deputy, or the name and title of an officer of the paying agent of the issuer. If this method is used, the signature or signatures of the officer or officers upon the obligation shall be cut or torn from the cancelled obligation.

§ 55.2 Destruction of cancelled obligations.
Bonds, corporate stock, notes, coupons, or other evidences of indebtedness issued pursuant to the Local Finance Law or any other law, when paid, may be destroyed, after prior cancellation, by the burning, pulverizing or shredding of such obligations by the chief fiscal officer of the issuer or by this duly delegated deputy or by a duly authorized paying agent, except that registered obligations shall not be destroyed until six years after the date of payment. Such destruction, whether by burning, pulverizing or shredding, shall be effected in such a manner as will render reproduction of such obligations in their original form impossible.

§ 55.3 Destruction of obligations by registration agents.
A registration agent may destroy bonds, corporate stock, notes and coupons when necessary to comply with the provisions of title 5 of article 2 of the Local Finance Law. Such destruction shall be accomplished by any of the following methods:

(a) by burning, pulverizing or shredding the obligations.

(b) by perforating the obligation with the word “Void” or with the word “Cancelled”, or the substantial equivalent of either word, and with words or numbers which will indicate the date upon which the obligation was rendered void. Beneath such perforations and upon the face of the obligations shall be (1) subscribed in ink the name and title of the registration agent of the issuer or his duly delegated deputy, or the name and title of an officer of the bank or trust company acting as registration agent of the issuer, or (2) a perforated abbreviation of the name of the municipality, school district or district corporation, such as “C of N.Y.”.

(c) by writing or stamping in ink the word “Void” upon the face of the obligations. Beneath such writing or stamp there shall be written or stamped in ink the date upon which the obligation was rendered void. Beneath such word and date there shall be subscribed in ink the name and title of the registration agent of the issuer or his duly delegated deputy, or the name and title of an officer of a bank or trust company acting as a registration agent of the issuer. If this method is used the signature or signatures of the officer or officers upon the obligation shall be cut or torn from the destroyed obligation.

§ 55.4 Cancellation of coupons by counties or cities.
Notwithstanding the provisions of paragraphs 1 and 3 of this Order, any county or city may cancel paid coupons or may destroy unpaid coupons by perforating the coupon in two places with holes approximately three-sixteenths of an inch in diameter. One of such perforations shall be through the signature and the other through the dollar amount.

§ 55.5 Burning, pulverizing or shredding of obligations.
Should obligations be destroyed in the manner set forth in subdivision (b) or (c) of paragraph 3 of this Order, or in the manner set forth in paragraph 4 of this Order, they shall be burned, pulverized or shredded within one year from the date of such destruction.

§ 55.6 Records to be kept.
A record shall be kept by each chief fiscal officer, registration agent and paying agent of all obligations cancelled or destroyed by them, respectively, which record shall properly describe the obligation cancelled or destroyed and state the date of such cancellation or destruction.

§ 55.7 Use of facsimile signature.
Any officer required by this order to subscribe his name upon an obligation, which is to be cancelled or destroyed may use, in lieu of an actual signature, a stamp or other device which will produce in ink a facsimile signature of such officer.

§ 55.8 Cancellation and destruction of partially destroyed or defaced obligations.
When new bonds, corporate stack, notes or coupons are to be reissued pursuant to the provisions of section 164.00 of the Local Finance Law, to replace a partially destroyed or defaced obligation, there shall be written or stamped in ink upon the face of the obligation, if possible, or if not possible then upon a paper attached to the obligation, the following words: “Void. New obligation issued pursuant to Section 164.00 of the Local Finance on……………., 19…”. The chief fiscal officer, or his duly delegated deputy, shall subscribe his name and title to such statement. Such partly destroyed or partly defaced obligation shall not be destroyed until six years after the payment of the new obligation issued in lieu thereof, at which time the destruction shall be by burning.

§ 55.9 Effective date.
This order shall take effect immediately and shall be filed in the Department of Audit and Control and a duplicate original copy hereof shall be filed in the Department of State.

(Adopted May 8, 1946; Revised May 7, 1968)