S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                   521

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 7, 2009
                               ___________

Introduced  by  Sen.  LIBOUS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the state finance law, in relation to the creation of  a
  debt  management  board,  using  surplus  moneys to reduce outstanding
  state funded debt, and limiting the amount of state funded  debt  that
  may  be incurred; and to amend the public authorities law, in relation
  to defining and listing  public  authorities,  limiting  the  debt  of
  public  authorities,  the approval by the comptroller of the terms and
  conditions of bonds or notes issued by public authorities, the  powers
  and  duties  of the public authorities control board, and the issuance
  of bonds and notes of the New York state  thruway  authority;  and  to
  repeal certain provisions of the state finance law relating thereto

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Article 5-B of the state finance law is REPEALED and a  new
article 5-B is added to read as follows:

                               ARTICLE 5-B
                          DEBT MANAGEMENT BOARD
                                   AND
                    LIMITATIONS ON STATE-FUNDED DEBT

SECTION 67-A. DEFINITIONS.
        67-B. USE  OF  SURPLUS MONEYS TO REDUCE OUTSTANDING STATE FUNDED
                DEBT.
        67-C. NEW YORK STATE DEBT MANAGEMENT BOARD; CREATION; PROCEDURE.
        67-D. POWERS AND DUTIES OF THE BOARD.
        67-E. COMPTROLLER'S DUTIES WITH RESPECT TO BOARD.
        67-F. LIMITATIONS ON STATE FUNDED DEBT AND  STATE  DEBT  SERVICE
                PAYMENTS.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
              

                                                           LBD03665-01-9

S. 521                              2

  S  67-A.  DEFINITIONS.  AS  USED IN THIS ARTICLE AND ARTICLE FIVE-C OF
THIS CHAPTER THE FOLLOWING TERMS  SHALL  HAVE  THE  MEANINGS  SET  FORTH
BELOW:
  1. "BOARD" SHALL MEAN THE NEW YORK STATE DEBT MANAGEMENT BOARD CREATED
BY SECTION SIXTY-SEVEN-C OF THIS ARTICLE.
  2. "CAPITAL PURPOSE" SHALL MEAN ANY PROJECT INVOLVING:
  (A)  THE  ACQUISITION,  CONSTRUCTION,  DEMOLITION, OR REPLACEMENT OF A
FIXED ASSET;
  (B) THE MAJOR REPAIR OR RENOVATION OF A FIXED ASSET, WHICH  MATERIALLY
EXTENDS  ITS USEFUL LIFE OR MATERIALLY IMPROVES OR INCREASES ITS CAPACI-
TY;
  (C) THE PLANNING OR DESIGN OF THE ACQUISITION,  CONSTRUCTION,  DEMOLI-
TION,  REPLACEMENT, MAJOR REPAIR OR RENOVATION OF A FIXED ASSET, INCLUD-
ING THE PREPARATION AND REVIEW OF  PLANS  AND  SPECIFICATIONS  INCLUDING
ENGINEERING  AND  OTHER SERVICES, FIELD SURVEYS AND SUB-SURFACE INVESTI-
GATIONS INCIDENTAL THERETO; OR
  (D) THE COSTS  OF  ISSUING  DEBT  OBLIGATIONS  TO  FINANCE  A  CAPITAL
PURPOSE.
  3. "CASH SURPLUS" SHALL MEAN THE AMOUNT BY WHICH GENERAL FUND RECEIPTS
IN A FISCAL YEAR EXCEED GENERAL FUND EXPENDITURES IN SUCH FISCAL YEAR.
  4. "CONDUIT DEBT OBLIGATIONS" SHALL MEAN A DEBT OBLIGATION ISSUED BY A
PUBLIC  AUTHORITY  (HEREINAFTER  REFERRED  TO IN THIS SUBDIVISION AS THE
"CONDUIT ISSUER") ON BEHALF OF A THIRD PARTY (HEREINAFTER REFERRED TO IN
THIS SUBDIVISION AS THE "CONDUIT BORROWER") OTHER THAN THE  STATE  OR  A
POLITICAL  SUBDIVISION  OF THE STATE, WHERE PAYMENT OF THE OBLIGATION IS
TO BE MADE FROM FUNDS OF THE CONDUIT  BORROWER,  THE  SECURITY  FOR  THE
OBLIGATION  IS  THE  CREDIT  OF THE CONDUIT BORROWER AND NO FUNDS OF THE
CONDUIT ISSUER, THE STATE OR A POLITICAL SUBDIVISION OF  THE  STATE  ARE
PLEDGED  TO  SECURE THE OBLIGATION, WHETHER OR NOT THE OBLIGATION OF THE
CONDUIT ISSUER, THE STATE OR  POLITICAL  SUBDIVISION  OF  THE  STATE  IS
SUBJECT TO APPROPRIATION OR IS OTHERWISE CONTINGENT.
  5.  "STATE  BACKED DEBT" SHALL MEAN ANY DEBT OR OBLIGATION, OTHER THAN
STATE DEBT, THAT IS SUPPORTED IN WHOLE  OR  IN  PART  BY  ANY  FINANCING
ARRANGEMENT  WHEREBY THE STATE AGREES OR HAS IN THE PAST AGREED, WHETHER
BY LAW, CONTRACT, OR OTHERWISE, TO MAKE PAYMENTS  WHICH  WILL  BE  USED,
DIRECTLY  OR  INDIRECTLY,  FOR  THE  PAYMENT  OF PRINCIPAL, INTEREST, OR
RELATED PAYMENTS ON INDEBTEDNESS INCURRED OR  CONTRACTED  BY  THE  STATE
ITSELF  FOR  ANY PURPOSE, OR BY ANY STATE AGENCY, MUNICIPALITY, INDIVID-
UAL, PUBLIC AUTHORITY OR OTHER PUBLIC  OR  PRIVATE  CORPORATION  OR  ANY
OTHER  ENTITY  FOR  STATE  CAPITAL  OR  OPERATING PURPOSES OR TO FINANCE
GRANTS, LOANS OR OTHER ASSISTANCE PAYMENTS MADE OR TO BE MADE BY  OR  ON
BEHALF  OF THE STATE FOR ANY PURPOSE. IF THE STATE AGREES TO MAKE FUTURE
REVENUES FROM A SPECIFIC STATE  SOURCE  AVAILABLE  FOR  THE  PURPOSE  OF
SUPPORTING  DEBT  OF  ANY  MUNICIPALITY, INDIVIDUAL, PUBLIC AUTHORITY OR
OTHER PUBLIC OR PRIVATE CORPORATION OR ANY OTHER ENTITY, SUCH DEBT SHALL
BE CONSIDERED TO BE A DEBT FOR THE PURPOSE OF FINANCING A  STATE  GRANT,
LOAN  OR OTHER ASSISTANCE PAYMENT AND SHALL BE A "STATE BACKED DEBT" FOR
THE PURPOSES OF THIS ARTICLE. THE TERM "STATE BACKED  DEBT"  APPLIES  TO
ALL  DEBT  OR  OBLIGATIONS  DESCRIBED  IN THIS SUBDIVISION FOR WHICH THE
STATE AGREES, OR HAS IN THE PAST AGREED, TO MAKE PAYMENTS (A) WHETHER OR
NOT THE OBLIGATION OF THE STATE TO MAKE PAYMENTS IS SUBJECT TO APPROPRI-
ATION OR IS OTHERWISE CONTINGENT, OR (B) WHETHER OR NOT DEBT SERVICE  IS
TO  BE  PAID  FROM  A REVENUE STREAM TRANSFERRED BY THE STATE TO ANOTHER
PARTY THAT IS RESPONSIBLE FOR MAKING SUCH PAYMENTS.
  6. "STATE FUNDED DEBT" SHALL MEAN THE  COMBINED  TOTAL  OF  ALL  STATE
DEBT,  AS DEFINED IN THIS SECTION, AND ALL STATE BACKED DEBT, AS DEFINED

S. 521                              3

IN SUBDIVISION FIVE OF THIS SECTION, EXCEPT SHORT TERM DEBT INCURRED  IN
ACCORDANCE WITH SECTION N IN OF ARTICLE SEVEN OF THE CONSTITUTION, EMER-
GENCY  DEBT  INCURRED IN ACCORDANCE WITH SECTION TEN OF ARTICLE SEVEN OF
THE CONSTITUTION, AND REFUNDING DEBT INCURRED IN ACCORDANCE WITH SECTION
THIRTEEN OF ARTICLE SEVEN OF THE CONSTITUTION.
  7.  "STATE  DEBT"  SHALL  MEAN  ALL  BONDS AND BOND ANTICIPATION NOTES
ISSUED BY THE STATE COMPTROLLER PURSUANT TO ARTICLE FIVE OF  THIS  CHAP-
TER.
  8.  "TOTAL  PERSONAL INCOME OF THE STATE" SHALL MEAN THE MOST RECENTLY
PUBLISHED ESTIMATED DOLLAR AMOUNT DETERMINED AS TOTAL PERSONAL INCOME OF
THE STATE OF NEW YORK BY THE UNITED STATES DEPARTMENT OF COMMERCE OR ANY
SUCCESSOR AGENCY FOR THE FOUR MOST RECENT SUCCESSIVE  CALENDAR  QUARTERS
FOR WHICH INFORMATION IS AVAILABLE PRIOR TO OCTOBER THIRTY-FIRST OF EACH
YEAR.  SUBSEQUENT REVISIONS OF THE PUBLISHED ESTIMATED DOLLAR AMOUNT FOR
SUCH CALENDAR QUARTERS SHALL NOT AFFECT THE  VALIDITY  OF  THE  DETERMI-
NATION MADE BY THE BOARD FOR ANY FISCAL YEAR.
  S 67-B. USE OF SURPLUS MONEYS TO REDUCE OUTSTANDING STATE FUNDED DEBT.
AT  THE CLOSE OF EACH FISCAL YEAR, A PORTION OF ANY CASH SURPLUS REMAIN-
ING  IN  THE  GENERAL  FUND  AFTER  THE  TRANSFER  PURSUANT  TO  SECTION
NINETY-TWO  OF  THIS  CHAPTER SHALL BE TRANSFERRED TO THE DEBT REDUCTION
RESERVE FUND ESTABLISHED BY SECTION NINETY-SEVEN-RRR OF THIS CHAPTER, AS
ADDED BY SECTION THIRTY-SIX OF PART B OF CHAPTER FIFTY-SEVEN OF THE LAWS
OF NINETEEN HUNDRED NINETY-EIGHT.  THE PORTION TO BE  TRANSFERRED  SHALL
BE  EQUAL TO THE PROJECTED RATIO OF TOTAL DEBT SERVICE DISBURSEMENTS FOR
THE FISCAL YEAR TO TOTAL  GOVERNMENTAL  FUNDS  DISBURSEMENTS  FOR  STATE
AGENCY OPERATIONS FOR THE FISCAL YEAR.
  S  67-C. NEW YORK STATE DEBT MANAGEMENT BOARD; CREATION; PROCEDURE. 1.
THE NEW YORK STATE DEBT MANAGEMENT BOARD IS HEREBY CREATED TO  HAVE  AND
EXERCISE  THE POWERS, DUTIES AND PREROGATIVES PROVIDED BY THE PROVISIONS
OF THIS ARTICLE AND ANY OTHER PROVISION OF LAW.
  2. THE MEMBERSHIP OF THE BOARD SHALL CONSIST OF THREE PERSONS, INCLUD-
ING THE GOVERNOR, THE COMPTROLLER AND A THIRD PERSON WHO SHALL BE JOINT-
LY APPOINTED BY THE GOVERNOR AND THE COMPTROLLER. THE TERM OF OFFICE  OF
THE MEMBERS OF THE BOARD SHALL BE THE SAME AS THE TERMS OF OFFICE OF THE
GOVERNOR  AND THE COMPTROLLER. IF THE THIRD MEMBER OF THE BOARD RESIGNS,
BECOMES INCAPACITATED, IS JOINTLY REMOVED BY THE GOVERNOR AND THE  COMP-
TROLLER,  OR  IS  OTHERWISE  UNABLE TO SERVE, THE GOVERNOR AND THE COMP-
TROLLER SHALL JOINTLY APPOINT A SUCCESSOR TO SERVE THE REMAINDER OF  THE
UNEXPIRED  TERM.    THE  GOVERNOR SHALL BE THE CHAIRPERSON OF THE BOARD.
THE BOARD SHALL ACT BY MAJORITY OF ALL OF  THE  MEMBERS  OF  THE  BOARD,
EXCEPT THAT CHANGING THE DEBT AFFORDABILITY LEVEL PREVIOUSLY ESTABLISHED
BY  THE BOARD SHALL REQUIRE UNANIMOUS APPROVAL BY ALL THE MEMBERS OF THE
BOARD. ANY ACTION BY THE BOARD SHALL BE  EVIDENCED  BY  A  CERTIFICATION
THEREOF SIGNED BY A MAJORITY OF ALL THE MEMBERS, EXCEPT THAT ALL MEMBERS
SHALL  SIGN  A CERTIFICATION OF ANY ACTION REQUIRING UNANIMOUS APPROVAL.
EACH MEMBER OF THE BOARD SHALL BE ENTITLED TO DESIGNATE A REPRESENTATIVE
TO ATTEND MEETINGS OF THE BOARD IN HIS OR HER  PLACE,  AND  TO  VOTE  OR
OTHERWISE ACT ON HIS OR HER BEHALF IN HIS OR HER ABSENCE. NOTICE OF SUCH
DESIGNATION  SHALL BE FURNISHED IN WRITING TO THE BOARD BY THE DESIGNAT-
ING MEMBER. A REPRESENTATIVE SHALL SERVE AT THE PLEASURE OF  THE  DESIG-
NATING MEMBER DURING THE MEMBER'S TERM OF OFFICE. A REPRESENTATIVE SHALL
NOT  BE AUTHORIZED TO DELEGATE ANY OF HIS OR HER DUTIES OR POWERS TO ANY
OTHER PERSON.
  3. THE THIRD MEMBER JOINTLY APPOINTED BY THE GOVERNOR  AND  THE  COMP-
TROLLER  SHALL  BE A FINANCIAL EXPERT WITH EXPERIENCE IN PUBLIC FINANCE,
ECONOMICS, ACADEMICS, OR GOVERNMENT.

S. 521                              4

  4. ALL THE MEMBERS OF THE BOARD AND  THEIR  REPRESENTATIVES  SHALL  BE
ENTITLED  TO  REIMBURSEMENT  FOR  THEIR  ACTUAL  AND  NECESSARY EXPENSES
INCURRED IN THE PERFORMANCE OF THEIR OFFICIAL DUTIES  PURSUANT  TO  THIS
SECTION OR ANY OTHER PROVISION OF LAW.
  5.  THE  BOARD SHALL MEET SEMI-ANNUALLY OR MORE FREQUENTLY AT THE CALL
OF THE CHAIRPERSON. MEETINGS OF THE BOARD SHALL BE SUBJECT TO  THE  OPEN
MEETINGS LAW ESTABLISHED BY ARTICLE SEVEN OF THE PUBLIC OFFICERS LAW.
  S  67-D.  POWERS AND DUTIES OF THE BOARD.  1. THE BOARD SHALL HAVE THE
POWER AND THE DUTY TO (A) ANNUALLY DETERMINE THE TOTAL DEBT LIMIT OF THE
STATE BY CALCULATING THE DOLLAR AMOUNT EQUIVALENT TO FIVE PERCENT OF THE
TOTAL PERSONAL INCOME OF THE STATE, AS DEFINED IN SECTION  SIXTY-SEVEN-A
OF  THIS ARTICLE, AND (B) ANNUALLY PRESCRIBE A DEBT AFFORDABILITY LEVEL,
WHICH ON AND AFTER APRIL FIRST, TWO THOUSAND SEVENTEEN SHALL BE NO HIGH-
ER THAN THE TOTAL DEBT LIMIT OF THE STATE.
  2. ON OR BEFORE OCTOBER THIRTY-FIRST OF EACH  YEAR,  THE  BOARD  SHALL
DETERMINE  THE  TOTAL  DEBT LIMIT OF THE STATE FOR THE NEXT FISCAL YEAR,
AND REPORT THE LIMIT TO THE  TEMPORARY  PRESIDENT  OF  THE  SENATE,  THE
SPEAKER  OF THE ASSEMBLY, THE CHAIRPERSON AND RANKING MINORITY MEMBER OF
THE SENATE FINANCE COMMITTEE, AND THE CHAIRPERSON AND  RANKING  MINORITY
MEMBER  OF  THE ASSEMBLY WAYS AND MEANS COMMITTEE. ON OR BEFORE THE SAME
DATE, THE BOARD SHALL ISSUE A PUBLIC ANNOUNCEMENT OF SUCH LIMIT.
  3. ON OR BEFORE OCTOBER THIRTY-FIRST OF EACH  YEAR,  THE  BOARD  SHALL
PRESCRIBE  THE DEBT AFFORDABILITY LEVEL OF THE STATE FOR THE NEXT FISCAL
YEAR, AND REPORT THE LEVEL TO THE TEMPORARY PRESIDENT OF THE SENATE, THE
SPEAKER OF THE ASSEMBLY, THE CHAIRPERSON AND RANKING MINORITY MEMBER  OF
THE  SENATE  FINANCE COMMITTEE, AND THE CHAIRPERSON AND RANKING MINORITY
MEMBER OF THE ASSEMBLY WAYS AND MEANS COMMITTEE. ON OR BEFORE  THE  SAME
DATE,  THE BOARD SHALL ISSUE A PUBLIC ANNOUNCEMENT OF SUCH LEVEL. WITHIN
THE LIMITATION ESTABLISHED BY THE TOTAL DEBT LIMIT  OF  THE  STATE,  THE
DEBT  AFFORDABILITY  LEVEL  OF THE STATE SHALL BE BASED UPON THE BOARD'S
EVALUATION OF THE TOTAL AMOUNT OF ADDITIONAL DEBT THAT MAY  BE  INCURRED
AND  THE TOTAL DEBT SERVICE OBLIGATIONS AND RELATED PAYMENTS THAT MAY BE
UNDERTAKEN BY THE STATE WITHOUT OVERBURDENING PRESENT OR  FUTURE  GENER-
ATIONS,  TAKING  INTO  ACCOUNT  THE  CURRENT  AND  EXPECTED REVENUES AND
EXPENSES OF THE STATE, THE CURRENT AND  EXPECTED  TRENDS  AFFECTING  THE
ECONOMY  OF  THE  STATE, AND SUCH OTHER FACTORS AS THE BOARD DEEMS RELE-
VANT. IN ADDITION TO THE DEBT AFFORDABILITY LEVEL OF THE STATE  FOR  THE
NEXT FISCAL YEAR, THE BOARD'S REPORT TO THE LEGISLATURE AND ANNOUNCEMENT
TO THE PUBLIC SHALL INCLUDE THE BOARD'S FORECAST OF THE DEBT AFFORDABIL-
ITY  LEVELS  EXPECTED FOR THE TWO SUCCEEDING FISCAL YEARS. FOLLOWING THE
BOARD'S ESTABLISHMENT OF A DEBT AFFORDABILITY LEVEL OF THE STATE  FOR  A
FISCAL  YEAR,  THERE SHALL BE NO CHANGE IN SUCH LEVEL (OTHER THAN A DEBT
AFFORDABILITY LEVEL FORECAST FOR A FISCAL YEAR  AFTER  THE  NEXT  FISCAL
YEAR) EXCEPT WITH THE UNANIMOUS APPROVAL OF THE MEMBERS OF THE BOARD.
  4.  THE  BOARD  SHALL  HAVE THE POWER AND IT SHALL BE ITS DUTY TO MAKE
RECOMMENDATIONS TO THE GOVERNOR  AND  THE  LEGISLATURE  OF  POLICIES  TO
GOVERN THE ISSUANCE OF ALL STATE FUNDED DEBT AND OTHER CAPITAL FINANCING
MATTERS.
  5.  THE BOARD SHALL ADOPT POLICY STANDARDS RELATING TO THE ISSUANCE OF
ALL STATE FUNDED DEBT AND FOR CAPITAL FINANCING.  SUCH  STANDARDS  SHALL
REQUIRE  THE  UNANIMOUS  APPROVAL OF ALL THREE MEMBERS OF THE BOARD, AND
SHALL COVER, AMONG OTHER ITEMS, THE FOLLOWING:
  (A) STRUCTURES FOR STATE FUNDED DEBT, SUCH AS RATE OF AMORTIZATION  OF
PRINCIPAL,  THE USE OF PREMIUMS, AND CAPITALIZATION OF INTEREST ON STATE
FUNDED DEBT;

S. 521                              5

  (B) CRITERIA FOR REFUNDING OUTSTANDING STATE FUNDED  DEBT,  INCLUDING,
BUT NOT LIMITED TO, SUCH MATTERS AS EXTENSION OF THE TERM OF OUTSTANDING
DEBT, PRESENT VALUE SAVINGS AND DISTRIBUTION OF ACTUAL SAVINGS;
  (C)  THE  USE OF CREDIT ENHANCEMENTS, DERIVATIVE INSTRUMENTS AND VARI-
ABLE OR FIXED RATE DEBT OBLIGATIONS WITH RESPECT TO STATE FUNDED DEBT;
  (D) GOALS FOR THE PROPORTION OF STATE CAPITAL SPENDING TO BE  FINANCED
WITH DEBT AND THE PROPORTION TO BE FINANCED WITH CURRENT APPROPRIATIONS;
  (E)  THE  METHOD  OF SALE, SUCH AS COMPETITIVE OR NEGOTIATED, OF STATE
FUNDED DEBT OBLIGATIONS;
  (F) CRITERIA TO BE USED IN SELECTING STATE FUNDED DEBT OBLIGATIONS  TO
BE  RETIRED  OR  DEFEASED BY THE USE OF THE PORTION OF ANY CASH SURPLUS,
DETERMINED PURSUANT TO SECTION SIXTY-SEVEN-B OF THIS ARTICLE, THAT SHALL
BE DEDICATED TO THE EXCLUSIVE PURPOSE OF REDUCING THE  AGGREGATE  AMOUNT
OF OUTSTANDING STATE FUNDED DEBT OBLIGATIONS;
  (G)  THE  DEFINITION OF NON-RECURRING REVENUES WHICH SHALL BE USED FOR
THE FUNDING OF CAPITAL PROJECTS WHICH HAVE BEEN AUTHORIZED BY LAW TO  BE
FINANCED THROUGH THE ISSUANCE OF STATE FUNDED DEBT OR FOR THE PURPOSE OF
RETIRING OR DEFEASING BONDS OR NOTES PREVIOUSLY ISSUED;
  (H) SUCH OTHER POLICY MATTERS RELATING TO THE ISSUANCE OF STATE FUNDED
DEBT AS THE BOARD MAY DETERMINE TO BE APPROPRIATE; AND
  (I)  POLICY  STANDARDS TO BE FOLLOWED BY STATE AUTHORITIES, AS DEFINED
IN SECTION TWO OF THE PUBLIC AUTHORITIES LAW, IN RELATION TO  THE  ISSU-
ANCE  BY  SUCH PUBLIC AUTHORITIES OF DEBT OBLIGATIONS OTHER THAN CONDUIT
DEBT OBLIGATIONS.  IN THE DISCRETION OF  THE  COMPTROLLER,  SUCH  POLICY
STANDARDS  MAY  BE  APPLIED BY THE COMPTROLLER IN THE EXERCISE OF HIS OR
HER CONSTITUTIONAL AUTHORITY TO SUPERVISE THE ACCOUNTS OF PUBLIC AUTHOR-
ITIES, AS DEFINED IN SECTION TWO OF  THE  PUBLIC  AUTHORITIES  LAW,  AND
POLITICAL SUBDIVISIONS.
  THE  BOARD  SHALL  ANNUALLY REVIEW THE POLICY STANDARDS AND ADOPT SUCH
CHANGES OR ADDITIONS AS IT DEEMS ADVISABLE ON OR BEFORE THE  ANNIVERSARY
DATE OF ITS ORIGINAL STANDARDS.
  S  67-E.  COMPTROLLER'S DUTIES WITH RESPECT TO BOARD.  THE COMPTROLLER
SHALL COLLECT AND ANALYZE DATA WITH RESPECT TO OUTSTANDING STATE  FUNDED
DEBT,  AND, AT LEAST ANNUALLY, ON OR BEFORE THE ONE HUNDRED FIFTIETH DAY
FOLLOWING THE END OF THE STATE FISCAL YEAR, REPORT  TO  THE  BOARD,  THE
GOVERNOR, THE TEMPORARY PRESIDENT AND THE MINORITY LEADER OF THE SENATE,
AND  THE SPEAKER AND MINORITY LEADER OF THE ASSEMBLY ON THE CONDITION OF
STATE FUNDED DEBT.  SUCH REPORT SHALL INCLUDE, BUT NOT  BE  LIMITED  TO,
THE  AMOUNT  OF STATE FUNDED DEBT OUTSTANDING, THE DIFFERENT ISSUERS AND
CATEGORIES OF SUCH DEBT, AND ANY DIFFERENCES  IN  CREDIT  RATINGS  AMONG
CATEGORIES AND ISSUES.
  S  67-F.  LIMITATIONS  ON  STATE  FUNDED  DEBT  AND STATE DEBT SERVICE
PAYMENTS.  1. NO ADDITIONAL STATE FUNDED DEBT SHALL  BE  INCURRED  AFTER
APRIL  FIRST,  TWO  THOUSAND  SEVENTEEN IF THE TOTAL PRINCIPAL AMOUNT OF
SUCH ADDITIONAL DEBT, TOGETHER WITH THE TOTAL PRINCIPAL AMOUNT OF  STATE
FUNDED  DEBT ALREADY OUTSTANDING AND THE TOTAL PRINCIPAL AMOUNT OF STATE
FUNDED DEBT ALREADY AUTHORIZED BUT NOT YET  INCURRED,  IS  EQUAL  TO  OR
GREATER  THAN  THE  TOTAL  DEBT  LIMIT OF THE STATE AS DETERMINED BY THE
BOARD PURSUANT TO SECTION SIXTY-SEVEN-D OF THIS ARTICLE.
  2. WITH THE EXCEPTION OF SHORT TERM DEBT INCURRED IN  ACCORDANCE  WITH
SECTION  NINE  OF  ARTICLE  SEVEN  OF  THE  CONSTITUTION, EMERGENCY DEBT
INCURRED IN ACCORDANCE WITH SECTION TEN OF ARTICLE SEVEN OF THE  CONSTI-
TUTION,  AND  REFUNDING  DEBT,  NO  STATE  FUNDED DEBT SHALL BE INCURRED
EXCEPT TO FINANCE A CAPITAL PURPOSE.
  3.(A) ALL DEBT SUBJECT TO THE PROVISIONS OF THIS  SECTION  (I)  SHALL,
EXCEPT  FOR  REFUNDING  DEBT,  BE  INCURRED  ONLY  FOR A CAPITAL PURPOSE

S. 521                              6

AUTHORIZED BY LAW, AND (II) SHALL, IF INCURRED ON OR AFTER THE FIRST DAY
OF THE FIRST FISCAL YEAR BEGINNING AT LEAST ONE YEAR AFTER THE EFFECTIVE
DATE OF AN AMENDMENT TO SECTION ELEVEN OF ARTICLE SEVEN OF THE CONSTITU-
TION, BE IN THE FORM OF OBLIGATIONS ISSUED BY THE COMPTROLLER.
  (B)  ON  OR AFTER APRIL FIRST, TWO THOUSAND TWELVE, NO DEBT OBLIGATION
SUBJECT TO THE PROVISIONS OF THIS SECTION SHALL  BE  ISSUED  UNLESS  THE
COMPTROLLER DETERMINES THAT SUCH ISSUANCE IS WITHIN THE DEBT AFFORDABIL-
ITY  LEVEL FOR THAT FISCAL YEAR ESTABLISHED BY THE DEBT MANAGEMENT BOARD
PURSUANT TO SECTION SIXTY-SEVEN-D OF THIS ARTICLE.  ON  OR  AFTER  APRIL
FIRST,  TWO  THOUSAND SEVENTEEN, NO SUCH DEBT OBLIGATION SHALL BE ISSUED
UNLESS THE COMPTROLLER DETERMINES THAT SUCH ISSUANCE IS WITHIN  (I)  THE
LIMIT ON STATE DEBT AND (II) THE DEBT AFFORDABILITY LEVEL ESTABLISHED BY
THE BOARD PURSUANT TO SECTION SIXTY-SEVEN-D OF THIS ARTICLE.
  4. NO STATE FUNDED DEBT SHALL BE INCURRED IN THE FORM OF AN OBLIGATION
WITH A FINAL MATURITY EXCEEDING THE PROBABLE LIFE OF THE CAPITAL PROJECT
FINANCED  BY  SUCH DEBT, AS SPECIFIED IN SECTION SIXTY-ONE OF THIS CHAP-
TER. NOTWITHSTANDING ANY OTHER PROVISION OF  LAW  TO  THE  CONTRARY,  NO
STATE  FUNDED DEBT SHALL BE INCURRED IN THE FORM OF AN OBLIGATION WITH A
FINAL MATURITY OF MORE THAN THIRTY YEARS.
  5. DURING EACH FISCAL YEAR BEGINNING ON OR AFTER THE EFFECTIVE DATE OF
THIS SECTION, UP TO AND INCLUDING ANY FISCAL YEAR ENDING IN TWO THOUSAND
SIXTEEN NO NEW STATE FUNDED DEBT SHALL BE INCURRED IN AN AGGREGATE PRIN-
CIPAL AMOUNT EXCEEDING NINETY-FIVE PERCENT OF  THE  AGGREGATE  PRINCIPAL
AMOUNT OF NEW STATE FUNDED DEBT INCURRED IN THE PRECEDING FISCAL YEAR.
  6.  NO  STATE  FUNDED  DEBT  OUTSTANDING ON THE EFFECTIVE DATE OF THIS
SUBDIVISION SHALL BE REFUNDED UNLESS (A) SUCH REFUNDING IS CONDUCTED  IN
ALL RESPECTS AS IF SECTION THIRTEEN OF ARTICLE SEVEN OF THE CONSTITUTION
APPLIED,  AND  (B) ANY SUCH REFUNDING OBLIGATIONS ISSUED ON OR AFTER THE
FIRST DAY OF THE FIRST FISCAL YEAR BEGINNING AT LEAST ONE YEAR AFTER THE
EFFECTIVE DATE OF AN AMENDMENT TO SECTION ELEVEN OF ARTICLE SEVEN OF THE
CONSTITUTION IMPOSING A LIMIT ON THE TOTAL AMOUNT  OF  STATE  DEBT,  ARE
ISSUED  BY  THE  COMPTROLLER.  SUCH OUTSTANDING DEBT OBLIGATIONS AND THE
DEBT SERVICE EXPENSES, DIRECT OR INDIRECT, REQUIRED FOR SUCH OBLIGATIONS
SHALL BE INCLUDED IN THE DETERMINATION OF THE DEBT LIMIT  AND  THE  DEBT
AFFORDABILITY LEVEL PURSUANT TO SECTION SIXTY-SEVEN-D OF THIS ARTICLE.
  7.  DEBT  OBLIGATIONS  ISSUED TO REFUND OUTSTANDING STATE FUNDED DEBT,
REGARDLESS OF WHETHER SUCH OUTSTANDING DEBT WAS INCURRED  PRIOR  TO  THE
EFFECTIVE  DATE  OF  THIS  SUBDIVISION,  SHALL  NOT  BE  COUNTED FOR THE
PURPOSES OF THE DEBT LIMIT AND THE DEBT AFFORDABILITY  LEVEL  DETERMINED
PURSUANT  TO  SECTION SIXTY-SEVEN-D OF THIS ARTICLE IF SUCH REFUNDING IS
CONDUCTED IN ALL RESPECTS AS IF SECTION THIRTEEN OF ARTICLE SEVEN OF THE
CONSTITUTION APPLIED. DEBT  SERVICE  EXPENSES  ON  DEBT  THAT  HAS  BEEN
REFUNDED  IN  ACCORDANCE  WITH  SECTION THIRTEEN OF ARTICLE SEVEN OF THE
CONSTITUTION SHALL BE EXCLUDED FOR THE DEBT AFFORDABILITY LEVEL  TO  THE
EXTENT  THAT  SUCH  DEBT  SERVICE EXPENSES ARE TO BE PAID FROM AN ESCROW
FUND ESTABLISHED WITH PROCEEDS OF THE REFUNDING DEBT, BUT  DEBT  SERVICE
EXPENSES  ON  THE  REFUNDING DEBT SHALL BE INCLUDED EXCEPT TO THE EXTENT
THAT SUCH DEBT SERVICE EXPENSES ARE TO BE PAID FROM SUCH AN ESCROW FUND.
FOR THE PURPOSES OF THIS SUBDIVISION AND SUBDIVISIONS SIX AND  EIGHT  OF
THIS  SECTION,  ANY REFUNDING DEBT THAT DOES NOT EXTEND BEYOND THE FINAL
MATURITY OF THE DEBT BEING REFUNDED SHALL BE DEEMED TO BE IN  COMPLIANCE
WITH  THE  PROVISIONS  OF SUBDIVISION SIX OF SECTION THIRTEEN OF ARTICLE
SEVEN OF THE CONSTITUTION MADE APPLICABLE BY THIS SUBDIVISION  IF  THERE
IS  AN ACTUAL DEBT SERVICE SAVINGS IN EVERY YEAR TO MATURITY AS A RESULT
OF THE ISSUANCE OF THE REFUNDING DEBT.

S. 521                              7

  8. AFTER THE EFFECTIVE DATE OF  THIS  SECTION  THE  STATE  SHALL  NOT,
EXCEPT  AS  SPECIFICALLY  AUTHORIZED  BY A PROVISION OF THE CONSTITUTION
OTHER THAN SECTION ELEVEN OF ARTICLE SEVEN OF THE CONSTITUTION, AGREE TO
MAKE PAYMENTS, DIRECTLY OR INDIRECTLY, WHETHER OR NOT SUBJECT TO  APPRO-
PRIATION,  THAT  ARE  TO  BE  AVAILABLE  TO PAY DEBT SERVICE ON ANY DEBT
INCURRED BY A MUNICIPALITY, INDIVIDUAL, PUBLIC AUTHORITY OR OTHER PUBLIC
OR PRIVATE CORPORATION OR ANY OTHER ENTITY, FOR  ANY  PURPOSE,  IF  SUCH
PAYMENTS  ARE  EXPECTED  TO  BE  USED  TO PAY DEBT SERVICE ONLY IF OTHER
SOURCES AVAILABLE FOR  THE  PAYMENT  OF  DEBT  SERVICE  ARE  INADEQUATE.
OUTSTANDING  DEBT  THAT  WOULD BE PROHIBITED BY THIS SUBDIVISION IF SUCH
DEBT HAD BEEN INCURRED AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION  MAY
BE  REFUNDED  BY  THE ENTITY THAT INCURRED THE OUTSTANDING DEBT PROVIDED
THAT ALL PROVISIONS OF SUBDIVISIONS SIX AND SEVEN OF  THIS  SECTION  ARE
COMPLIED  WITH  EXCEPT  THE  REQUIREMENT  THAT SUCH REFUNDING DEBT OBLI-
GATIONS BE  ISSUED  BY  THE  COMPTROLLER,  AND  REFUNDING  DEBT  SERVICE
EXPENSES  SHALL ONLY BE INCLUDED IN DEBT AFFORDABILITY DETERMINATIONS IF
DEBT SERVICE EXPENSES  ON  THE  DEBT  BEING  REFUNDED  WOULD  HAVE  BEEN
INCLUDED.
  S  2. Subdivision 2 of section 68-a of the state finance law, as added
by section 2 of part I of chapter 383 of the laws of 2001, is amended to
read as follows:
  2. "Authorized purpose" for purposes of this article and section nine-
ty-two-z of this chapter shall mean any  [purposes]  PURPOSE  for  which
[state-supported] STATE FUNDED debt, as defined by section sixty-seven-a
of  this  chapter,  may  BE or has been issued except debt for which the
state is constitutionally obligated thereunder to pay debt  service  and
related  expenses,  and  except  (a)  as  authorized in paragraph (b) of
subdivision one of section  three  hundred  eighty-five  of  the  public
authorities  law,  (b) as authorized for the department of health of the
state of New York facilities as specified in paragraph a of  subdivision
two of section sixteen hundred eighty of the public authorities law, (c)
state university of New York dormitory facilities as specified in subdi-
vision  eight  of  section  sixteen  hundred seventy-eight of the public
authorities law, and (d) as authorized for mental health services facil-
ities by section nine-a of section one of chapter three hundred  ninety-
two  of  the laws of nineteen hundred seventy-three constituting the New
York state medical care facilities [financing] FINANCE AGENCY act.
  S 3. Subdivision 6 of section 68-c of the state finance law, as  added
by  section  2  of part I of chapter 383 of the laws of 2001, is amended
and a new subdivision 7 is added to read as follows:
  6. Any resolution or other agreement authorizing revenue  bonds  under
this  article  shall  reserve  the right of the state, upon amendment OF
SECTION ELEVEN OF ARTICLE SEVEN  of  the  New  York  state  constitution
allowing the issuance or assumption of bonds, notes or other obligations
secured  by  revenues,  which  may include the revenues securing revenue
bonds of authorized issuers (a) to assume, in whole or in part,  revenue
bonds  of the authorized issuers, (b) to extinguish the existing lien of
such resolution, or other agreement and (c) to substitute  security  for
the  revenue  bonds of the authorized issuers, in each case only so long
as such assumption, extinguishment or substitution is done in accordance
with such resolution or other agreement AND SUCH  CONSTITUTIONAL  AMEND-
MENT.
  7.  ON  AND  AFTER THE FIRST DAY OF THE FIRST FISCAL YEAR BEGINNING AT
LEAST ONE YEAR AFTER THE EFFECTIVE DATE OF AN AMENDMENT OF SECTION ELEV-
EN OF ARTICLE SEVEN OF THE CONSTITUTION IMPOSING A LIMIT  ON  THE  TOTAL
AMOUNT OF STATE DEBT, NO REVENUE BONDS SHALL BE ISSUED.

S. 521                              8

  S 4. Section 97-rrr of the state finance law, as amended by section 45
of  part  H  of  chapter  56  of the laws of 2000, is amended to read as
follows:
  S 97-rrr. Debt  reduction reserve fund. 1. There is hereby established
in the joint custody of the comptroller and the commissioner of taxation
and finance a fund to be known as the debt reduction reserve fund. [Such
fund shall be established as a capital projects fund.]
  2. Such fund shall consist of all monies credited or transferred ther-
eto from the general fund or from any other fund or sources pursuant  to
law.
  3. The monies in such fund, following appropriation by the legislature
and  allocation  by  the director of the budget, shall be available [for
the following purposes:
  (a) for the payment of principal, interest, and  related  expenses  on
general obligation bonds, lease purchase payments, or special contractu-
al  obligation payments, or] ONLY for the [purposes] PURPOSE of retiring
or defeasing bonds OR NOTES previously  issued,  including  any  accrued
interest  thereon, for any [state-supported bonding program or programs,
and;
  (b) for the funding of capital projects,  equipment  acquisitions,  or
similar  expenses  which  have  been  authorized  by  law to be financed
through the issuance of bonds, notes, or other obligations] STATE FUNDED
DEBT.
  S 5. Section 24 of the state finance law is amended by  adding  a  new
subdivision 6 to read as follows:
  6.  THE  BUDGET  BILLS SHALL INCLUDE AN APPROPRIATION OF THE AVAILABLE
BALANCE FROM THE DEBT REDUCTION RESERVE FUND CREATED BY SECTION  NINETY-
SEVEN-RRR  OF  THIS CHAPTER, AS ADDED BY SECTION THIRTY-SIX OF PART B OF
CHAPTER FIFTY-SEVEN OF THE LAWS OF NINETEEN HUNDRED NINETY-EIGHT, TO  BE
USED  EXCLUSIVELY  FOR THE PURPOSE OF RETIRING OR DEFEASING STATE FUNDED
DEBT OBLIGATIONS IN ACCORDANCE WITH THE CRITERIA ESTABLISHED BY THE  NEW
YORK STATE DEBT MANAGEMENT BOARD.
  S  6.  Subdivision  1  of section 51 of the public authorities law, as
added by chapter 838 of the laws of 1983, paragraph k as added by  chap-
ter  506  of the laws of 1995 and paragraph l as added by chapter 468 of
the laws of 2004, is amended to read as follows:
  1. [The] SUBJECT TO (A) THE COMPTROLLERS' CONSTITUTIONAL AUTHORITY  TO
SUPERVISE  THE  ACCOUNTS  OF  PUBLIC  AUTHORITIES, (B) THE COMPTROLLER'S
STATUTORY AUTHORITY TO APPROVE THE TERMS AND CONDITIONS  OF  DEBT  OBLI-
GATIONS  ISSUED  BY  PUBLIC  AUTHORITIES,  AND  (C) THE POLICY STANDARDS
ESTABLISHED BY THE NEW YORK STATE  DEBT  MANAGEMENT  BOARD  PURSUANT  TO
SECTION  SIXTY-SEVEN-D  OF  THE  STATE FINANCE LAW IN RELATION TO PUBLIC
AUTHORITY DEBT, THE New York  state  public  authorities  control  board
shall  have  the  power and it shall be its duty to receive applications
for approval of the financing and construction of any  project  proposed
by any [of the following state public benefit corporations:
  a. New York state environmental facilities corporation
  b. New York state housing finance agency
  c. New York state medical care facilities finance agency
  d. Dormitory authority
  e. New York state urban development corporation
  f. Job development authority
  g. Battery park city authority
  h. New York state project finance agency
  i. State of New York mortgage agency
  j. New York state energy research and development authority

S. 521                              9

  k. Long Island Power Authority
  l.  Albany  Convention  Center  Authority]  CLASS  A OR CLASS B PUBLIC
AUTHORITY, AS DEFINED IN SECTION TWO OF THIS CHAPTER.
Any application made concerning  a  project  shall  include  the  terms,
conditions and dates of the repayment of state appropriations authorized
by  law  pursuant to a repayment agreement, AND A CURRENT LISTING OF ALL
OUTSTANDING DEBT AND DEBT SERVICE  OBLIGATIONS  OF  THE  APPLICANT.  Any
subsidiary  of,  or corporation with the same members or directors as, a
public benefit corporation subject to the  provisions  of  this  section
shall  also  be  subject to the provisions of this section. All applica-
tions and submissions to the board required to be made by  a  subsidiary
shall  be made on behalf of such subsidiary by the public benefit corpo-
ration which created  the  subsidiary.  No  public  benefit  corporation
subject  to  the  provisions  of this section shall make any commitment,
enter into any agreement or incur any indebtedness for  the  purpose  of
acquiring,  constructing, or financing any project unless prior approval
has been received from the board by such public benefit  corporation  as
provided herein.
  S  7.  Section 51 of the public authorities law is amended by adding a
new subdivision 6 to read as follows:
  6. NOT LATER THAN NINETY DAYS AFTER THE END OF EACH FISCAL  YEAR,  THE
BOARD SHALL SUBMIT TO THE GOVERNOR, THE COMPTROLLER, THE TEMPORARY PRES-
IDENT  AND  THE  MINORITY  LEADER OF THE SENATE, AND THE SPEAKER AND THE
MINORITY LEADER OF THE ASSEMBLY, AN ANNUAL  REPORT  DETAILING:  (A)  THE
AGGREGATE AMOUNT OF DEBT APPROVED BY THE BOARD DURING SUCH FISCAL YEAR;
  (B)  A  LIST OF THE INDIVIDUAL PROJECTS APPROVED BY THE BOARD FOR EACH
PUBLIC AUTHORITY DURING SUCH FISCAL YEAR; AND
  (C) THE TOTAL AMOUNT OF NEW DEBT OBLIGATIONS THE  BOARD  HAS  APPROVED
DURING SUCH FISCAL YEAR FOR ISSUANCE BY EACH PUBLIC AUTHORITY.
  THE  BOARD  SHALL  PUBLISH  SUCH  REPORT BY POSTING SUCH REPORT ON THE
BOARD'S INTERNET WEBSITE. EACH SUCH REPORT POSTED ON THE BOARD'S  INTER-
NET  WEBSITE  SHALL  BE  MAINTAINED  ON SUCH WEBSITE FOR AT LEAST TWELVE
MONTHS OR UNTIL THE NEXT SUCH REPORT IS POSTED ON SUCH WEBSITE, WHICHEV-
ER IS LATER. THE BOARD SHALL ISSUE A NEWS RELEASE ANNOUNCING SUCH REPORT
TO NEWSPAPERS OF GENERAL  CIRCULATION  AND  RADIO  AND  TELEVISION  NEWS
BUREAUS WITHIN THE STATE.
  S  8.  Subdivision  2 of section 365 of the public authorities law, as
separately amended by sections 349 and 381 of chapter 190 of the laws of
1990, is amended to read as follows:
  2. The notes and bonds shall be authorized by resolution of the board,
shall bear such date or dates and mature at such time or times,  in  the
case  of  notes  and  any renewals thereof within five years after their
respective dates and in the case of bonds not exceeding forty years from
their respective dates, as such resolution or resolutions  may  provide.
The  notes  and  bonds  shall bear interest at such rate or rates, be in
such denominations, be in such form, either coupon or registered,  carry
such  registration privileges, be executed in such manner, be payable in
such medium of payment, at such place or places, and be subject to  such
terms of redemption as such resolution or resolutions may provide. Bonds
and  notes shall be sold by the authority, at public or private sale, at
such price or prices as the authority may determine. Bonds and notes  of
the  authority shall not be sold by the authority at private sale unless
such sale and the terms thereof have been approved  in  writing  by  the
comptroller, where such sale is not to the comptroller, or by the direc-
tor  of  the  budget,  where such sale is to the comptroller. [Bonds and
notes sold at public sale shall be sold by the comptroller, as agent  of

S. 521                             10

the authority, in such manner as the authority, with the approval of the
comptroller, shall determine.]
  S  9.  This act shall take effect immediately; provided, however, that
paragraph a of subdivision 3 and subdivision 6 of section  67-f  of  the
state  finance  law,  as  added  by section one of this act, and section
three of this act, shall take effect on the same date  as  a  concurrent
resolution  of the Senate and Assembly entitled "proposing amendments to
article 7 of the constitution, in relation to the authorization of  debt
in times of public emergency, a limit on the total amount of state debt,
the  establishment  of  a  debt management board, and refunding of state
debts", takes effect.