senate Bill S2391A

Relates to the authorization of debt in times of public emergency

download pdf

Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 19 / Jan / 2011
    • REFERRED TO JUDICIARY
  • 25 / Jan / 2011
    • TO ATTORNEY-GENERAL FOR OPINION
  • 27 / Apr / 2011
    • OPINION REFERRED TO JUDICIARY
  • 04 / Jan / 2012
    • REFERRED TO JUDICIARY
  • 05 / Jan / 2012
    • AMEND AND RECOMMIT TO JUDICIARY
  • 05 / Jan / 2012
    • PRINT NUMBER 2391A
  • 09 / Jan / 2012
    • TO ATTORNEY-GENERAL FOR OPINION

Summary

Relates to the authorization of debt in times of public emergency; limits the total amount of state debt; establishes a debt management board; relates to the refunding of state debts.

do you support this bill?

Bill Details

Versions:
S2391
S2391A
Legislative Cycle:
2011-2012
Current Committee:
Senate Judiciary
Law Section:
Constitution, Concurrent Resolutions to Amend
Laws Affected:
Amd Art 7 ยงยง10, 11 & 13, Constn
Versions Introduced in 2009-2010 Legislative Cycle:
S525

Sponsor Memo

BILL NUMBER:S2391A

TITLE OF BILL:
CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
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

PURPOSE OF BILL:
This proposed constitutional amendment allows for emergency borrowing
in times of public emergency, prohibits "back-door borrowing," limits
total State debt to no more than 5% of total personal income in the
State, and establishes a Debt Management Board to prescribe an annual
Debt Affordability Level.

SUMMARY OF SPECIFIC PROVISIONS:
Section 1 of the resolution proposes an amendment of section 10 of
article 7 of the Constitution to add disasters, including those
caused by acts of terrorism, to the existing list of purposes for
which debt may be incurred on an emergency basis. Emergency borrowing
would, however, require the approval of the Governor, the
Comptroller, the Attorney General, and two-thirds of the Senate and
two-thirds of the Assembly.

The amendment prescribes a procedure for the Governor to propose
emergency borrowing and for the Comptroller, the Attorney General,
and the Senate and the Assembly to give their approval or disapproval.

Section 2 eliminates "back-door borrowing" and, effective with State
fiscal year 2015-16, establishes a cap on the total outstanding
principal amount of State debt that would be equivalent to 5% of the
total personal income in the State. Except for short-term revenue
anticipation notes permitted by section
9 of Article 7 of the Constitution, emergency borrowing permitted by
section
10 of Article 7, and refundings permitted by section 13 of Article 7,
no indebtedness could be incurred for State purposes or to finance
State grants unless the debt falls below the 5% cap. To eliminate
"back-door borrowing," this section defines State debt to include
debt supported by any financing arrangement whereby the State agrees
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, individual, 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. Among other provisions,
the prohibition will apply (i) whether or not the obligation of the
State to make payments is subject to appropriation or is otherwise
contingent, or (ii)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.

The amendment also allows up to 5 bond acts to be presented to the
voters at one time.

The amendment requires the establishment of a Debt Management Board,
consisting of the Governor, the Comptroller, and a third person to be
selected jointly by the Governor and the Comptroller. The Debt
Management Board will have the duty of prescribing a Debt
Affordability Level at an appropriate amount to prevent overburdening
present or future generations, and the Debt Affordability Level will
be binding on the State budget for the next fiscal year and will
forecast a level to be used as benchmark in planning the 2 succeeding
fiscal years. Once the 5% constitutional debt limit is in effect,
the Debt Affordability Level must be set below it.

Bond issuances in the aggregate amount of $1 billion a year, or 3% of
the amount determined to be equal to 5% of total personal income in
the State, whichever is greater, would be permitted without voter
approval, but only if the total outstanding principal amount of State
debt resulting from such an issue would not exceed either the 5% cap
or the Debt Affordability Level.

The amendment requires that, with the exception of refundings and
short term notes and emergency borrowing permitted by sections 9 and
10 of Article 7, respectively, all future State debt will be
permitted only for capital purposes. Except for constitutionally
guaranteed debt, all new debt, and most refunding debt, will be
required to be issued by the State Comptroller.

The amendment also prohibits, after its effective date, the issuance
of any debt supported by financing arrangements where the State's
obligation to make payments that are to be used for debt service is
conditioned upon the insufficiency of other revenues available for
the payment of debt service. The amendment also changes section 13 of
Article 7 to prohibit any refunding that results in dissavings in any
year.

JUSTIFICATION:
Debt reform is one of the most important challenges facing New York
State. The future of the State's finances depends in large measure on
its ability to manage debt in a way that is disciplined and
effective. Debt reform must impose meaningful caps to ensure that
future debt is affordable. Since 1990, outstanding debt has grown
from $14.4 billion to $45.4 billion in 2004, representing a 21S
percent increase. From 1996 to 2001, while experiencing unprecedented
surpluses, the State continued to borrow rather than utilizing
surplus dollars and responsibly paying for capital expenditures
through more pay-as-you go (PAYGO) spending. New Yorkers bear one of
the highest debt burdens in the country. New York is ranked second
only to California in total debt outstanding. According to Moody's

2004 State Debt Medians, New York is fourth highest in debt per
capita just behind Connecticut, Massachusetts and Hawaii, New York's
$2,420 debt per capita is over two and one-half times the national
average of $944. According to the U.S. Census, New York ranks second
only to Alaska for state and local combined debt per capita. This
proposed constitutional amendment establishes strict limits on debt.
All financing arrangements in which the State agrees
, even indirectly, to make payments on indebtedness incurred by the
State or by a municipality, public authority or private corporation,
or other entity on behalf of the State would be subject to a cap
equal to 50 of total personal income of the State, beginning in
2014. Additionally, a new Debt Management Board would annually
prescribe a Debt Affordability Level, and no new debt could be
authorized or issued if it would cause the Debt Affordability Level
to be exceeded. The dual restrictions would close loop-holes in the
existing statutes governing debt and assure long-term planning and
affordability of the State's debt service burden. "Back-door
borrowing", or borrowing outside of constitutional strictures, has
been used by New York State to circumvent the requirement for public
referendum. As of March 31, 2004, "backdoor borrowing" accounted for
approximately 92 percent of the $45 billion in outstanding State
supported obligations. Only $3.8 billion was approved by the State's
voters and issued as General Obligation debt. This proposed
constitutional amendment restores accountability and transparency to
the decision to incur State debt by requiring voter approval of most
future debt, thereby insuring that the decision to obligate future
generations of New Yorkers will be subject to full public debate. New
York State's capital spending on transportation, mental hygiene
facilities, State park improvements, State housing programs and other
programs will approach $6 billion in State fiscal year
2004-05, with nearly half of that amount financed through debt
issued by public authorities on behalf of the State. When this
proposed amendment is in place, New York State. will likely support
its capital plan with a combination of General Obligation debt issued
by the Comptroller or "pay-as-you-go" dollars appropriated in the
State budget. A total of $1 billion, or 3% of the amount
determined to be equal to 5% of total personal income in the State,
whichever is greater, could be issued as General Obligation debt
without voter approval. Any additional debt issuance would be
required to be approved by the State's voters. There is a suitable
time and an inappropriate time to utilize debt. This amendment would
promote the appropriate use of State debt by capping its levels,
closing loopholes in the existing statutes and restoring the
accountability and transparency associated with the requirement for
public referenda on the issuance of debt The New York State
Comptroller respectfully urges passage of this concurrent resolution
to amend the New York State Constitution.

PRIOR LEGISLATIVE HISTORY:
2006: S.8176 - Referred to Judiciary
2009/2010: S525 - Referred to Judiciary

EFFECTIVE DATE:
Resolved if the Assembly concur, that the foregoing amendments be
referred to the first regular legislative session convening after the
next succeeding general election of members of the Assembly, and, in
conformity with section 1 of article 19 of the constitution, be
published for 3 months previous to the time of such election.

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

                                 2391--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 19, 2011
                               ___________

Introduced  by  Sen.  LIBOUS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Judiciary  --  recommitted
  to the Committee on Judiciary in accordance with Senate Rule 6, sec. 8
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

            CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY

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

  Section 1. Resolved (if the Assembly concur), That section 10 of arti-
cle 7 of the constitution be amended to read as follows:
  S 10. In addition to the above limited power to  contract  debts,  the
state  may contract debts to repel invasion, suppress insurrection, [or]
defend the state in war, [or to suppress forest fires] OR TO RESPOND  TO
ANY  OTHER EMERGENCY STEMMING FROM A DISASTER INCLUDING, BUT NOT LIMITED
TO, A DISASTER CAUSED BY AN ACT OF TERRORISM; but the money arising from
the contracting of such debts shall be applied for the purpose for which
it was raised, or to repay such debts, and to no other purpose whatever.
NO DEBT SHALL BE CONTRACTED PURSUANT TO THIS SECTION WITHOUT THE CONCUR-
RENCE OF  THE  GOVERNOR,  THE  COMPTROLLER,  THE  ATTORNEY  GENERAL  AND
TWO-THIRDS  OF THE MEMBERS ELECTED TO EACH HOUSE OF THE LEGISLATURE; AND
THE GOVERNOR SHALL HAVE POWER TO SUMMON THE COMPTROLLER AND THE ATTORNEY
GENERAL AND CONVENE THE LEGISLATURE IN  EXTRAORDINARY  SESSION  FOR  THE
PURPOSE  OF CONSIDERING SUCH EMERGENCY DEBT. AT THE TIME, DATE AND PLACE
APPOINTED BY THE GOVERNOR, NO OTHER SUBJECT SHALL BE  ACTED  UPON  UNTIL
EACH, IN THE FOLLOWING ORDER, HAS GIVEN THEIR APPROVAL OR ANY ONE THERE-
OF  HAS  GIVEN THEIR DISAPPROVAL OF THE DEBT PROPOSED BY THE GOVERNOR TO
ENABLE THE STATE TO RESPOND TO SUCH EMERGENCY: THE GOVERNOR,  THE  COMP-
TROLLER, THE ATTORNEY GENERAL, THE SENATE AND THE ASSEMBLY. THE PROPOSAL
OF SUCH EMERGENCY DEBT SHALL BE IN THE FORM OF A RESOLUTION PREPARED AND
SUBMITTED  BY THE GOVERNOR TO THE COMPTROLLER, THE ATTORNEY GENERAL, THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD89095-02-2

S. 2391--A                          2

SENATE AND THE ASSEMBLY, WHO SHALL APPROVE OR DISAPPROVE SUCH RESOLUTION
WITHOUT ANY CHANGES THERETO; AND IF SUCH RESOLUTION IS APPROVED  BY  THE
GOVERNOR,  THE  COMPTROLLER, THE ATTORNEY GENERAL, AND TWO-THIRDS OF THE
MEMBERS  ELECTED TO EACH HOUSE OF THE LEGISLATURE, THEN SUCH LAW OR LAWS
SHALL BE ENACTED AS MAY BE NECESSARY  OR  ADVISABLE  TO  IMPLEMENT  SUCH
APPROVAL.
  S  2.  Resolved (if the Assembly concur), That section 11 of article 7
of the constitution be amended to read as follows:
  S 11. 1. Except the debts or refunding debts specified in sections  9,
10  and  13 of this article, no debt shall be hereafter contracted by or
[in] ON behalf of the state, unless such debt shall be authorized by law
PURSUANT TO THIS SECTION,  for  some  single  work  or  purpose,  to  be
distinctly  specified  therein.  DEBT  SUBJECT TO THE PROVISIONS OF THIS
SECTION SHALL BE ANY DEBT OR OBLIGATION SUPPORTED IN WHOLE OR IN PART BY
ANY FINANCING ARRANGEMENT WHEREBY THE  STATE  AGREES,  WHETHER  BY  LAW,
CONTRACT,  OR OTHERWISE, TO MAKE PAYMENTS WHICH ARE TO 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,  INDIVIDUAL,  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 MUNICI-
PALITY, INDIVIDUAL, 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 SUBJECT  TO
THE  PROVISIONS  OF THIS SECTION.   THE PROVISIONS OF THIS SECTION SHALL
APPLY (I) WHETHER OR NOT THE OBLIGATION OF THE STATE TO MAKE PAYMENTS IS
SUBJECT TO APPROPRIATION OR IS OTHERWISE CONTINGENT, OR (II) 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.
  [No] 2. EXCEPT AS PROVIDED IN SUBDIVISION 5 OF THIS SECTION,  NO  such
law  shall  take effect until it shall, at a general election, have been
submitted to the people, and have received a majority of all  the  votes
cast for and against it at such election nor shall it be submitted to be
voted on within three months after its passage BY THE LEGISLATURE nor at
any  general  election  when  any MORE THAN FOUR other [law or any bill]
PROPOSITIONS shall be submitted to be voted for or against.
  3. DURING THE FISCAL YEAR BEGINNING IN CALENDAR YEAR 2021 AND IN EVERY
FISCAL YEAR THEREAFTER, NO PROPOSITION CONCERNING SUCH A  LAW  SHALL  BE
SUBMITTED  TO  THE PEOPLE FOR APPROVAL, AND NO SUCH LAW SHALL BE ENACTED
PURSUANT TO SUBDIVISION 5 OF THIS SECTION, UNLESS  THE  TOTAL  PRINCIPAL
AMOUNT  OF  DEBT  TO  BE AUTHORIZED BY SUCH LAW, TOGETHER WITH THE TOTAL
PRINCIPAL AMOUNT OF DEBT EITHER ALREADY OUTSTANDING, OR AUTHORIZED TO BE
INCURRED PURSUANT TO THIS SECTION, SHALL BE EQUAL TO OR LESS  THAN  FIVE
PERCENT  OF THE TOTAL PERSONAL INCOME OF THE STATE. SUCH PERSONAL INCOME
IS TO BE DETERMINED BY THE DEBT MANAGEMENT BOARD ESTABLISHED PURSUANT TO
SUBDIVISION 4 OF THIS SECTION IN ACCORDANCE WITH SUCH COMMONLY  ACCEPTED
METHOD  OR  METHODS  OF  MEASURING THE ECONOMIC ACTIVITY OF THE STATE AS
SHALL BE PRESCRIBED BY A LAW, WHICH SHALL BE ENACTED NOT LATER THAN JUNE
30, 2014, AND AS MAY BE AMENDED FROM TIME TO TIME NOT INCONSISTENT  WITH
THIS  SECTION.  DEBT  SUBJECT TO THE LIMIT IMPOSED BY THIS SECTION SHALL
INCLUDE ALL DEBT SUPPORTED BY FINANCING ARRANGEMENTS DESCRIBED IN SUBDI-
VISION 1 OF THIS SECTION BUT SHALL NOT INCLUDE THE  DEBTS  SPECIFIED  IN
SECTIONS  9,  10 AND 13 OF THIS ARTICLE OR DEBT PREVIOUSLY AUTHORIZED BY

S. 2391--A                          3

LAW BUT NOT INCURRED BECAUSE OF THE SUBSEQUENT REPEAL OF  SUCH  AUTHORI-
ZATION  OR  THE SUBSEQUENT PROHIBITION OF SUCH DEBT PURSUANT TO SUBDIVI-
SION 10 OF THIS SECTION.
  4.  A  DEBT  MANAGEMENT  BOARD,  CONSISTING OF THE GOVERNOR, THE COMP-
TROLLER AND A THIRD PERSON JOINTLY SELECTED  BY  THE  GOVERNOR  AND  THE
COMPTROLLER,  SHALL  BE  ESTABLISHED  BY  LAW. THE DEBT MANAGEMENT BOARD
SHALL ANNUALLY DETERMINE, WITHIN  THE  LIMITS  ESTABLISHED  PURSUANT  TO
SUBDIVISION  3  OF  THIS SECTION, A DEBT AFFORDABILITY LEVEL WHICH SHALL
PRESCRIBE FOR EACH FISCAL YEAR  AND  FORECAST  FOR  THE  TWO  SUCCEEDING
FISCAL  YEARS  THE  TOTAL AMOUNT OF ADDITIONAL DEBT THAT MAY BE INCURRED
AND THE TOTAL DEBT SERVICE OBLIGATIONS THAT MAY  BE  UNDERTAKEN  BY  THE
STATE WITHOUT OVERBURDENING PRESENT OR FUTURE GENERATIONS. THE EXECUTIVE
BUDGET  SUBMITTED  PURSUANT TO SECTION 2 OF THIS ARTICLE FOR THE ENSUING
FISCAL YEAR AND THE BUDGET BILLS SUBMITTED PURSUANT TO SECTION 3 OF THIS
ARTICLE FOR SUCH FISCAL YEAR SHALL NOT PROPOSE ANY  ADDITIONAL  DEBT  OR
NEW  DEBT  SERVICE  EXPENSE  THAT  WOULD  CAUSE TOTAL DEBT OR TOTAL DEBT
SERVICE EXPENSES TO EXCEED THE DEBT AFFORDABILITY LEVEL  PRESCRIBED  FOR
SUCH FISCAL YEAR, AND NEITHER THE GOVERNOR NOR THE LEGISLATURE SHALL, BY
LAW, CONTRACT, OR OTHERWISE, PROVIDE FOR ANY ADDITIONAL DEBT OR NEW DEBT
SERVICE  EXPENSE  THAT  WOULD  CAUSE  TOTAL  DEBT  OR TOTAL DEBT SERVICE
EXPENSES TO EXCEED SUCH LEVEL WITHOUT THE UNANIMOUS APPROVAL OF THE DEBT
MANAGEMENT BOARD. DURING THE FISCAL YEAR BEGINNING IN 2017 AND IN  EVERY
FISCAL  YEAR  THEREAFTER,  THE DEBT MANAGEMENT BOARD SHALL NOT ESTABLISH
ANY DEBT AFFORDABILITY LEVEL WHICH WOULD RESULT  IN  A  TOTAL  PRINCIPAL
AMOUNT  OF  DEBT IN EXCESS OF THE LIMIT ESTABLISHED PURSUANT TO SUBDIVI-
SION 3 OF THIS SECTION.
  5. DURING ANY FISCAL YEAR, A LAW  OR  LAWS  AUTHORIZING  DEBT  IN  THE
COMBINED  AGGREGATE  AMOUNT  OF ONE BILLION DOLLARS, OR THREE PERCENT OF
THE LIMIT DETERMINED PURSUANT TO SUBDIVISION 3 OF THIS SECTION, WHICHEV-
ER IS GREATER, MAY BE ENACTED WITHOUT BEING SUBMITTED  FOR  APPROVAL  BY
THE  PEOPLE.  HOWEVER,  IN  NO EVENT SHALL DEBT INCURRED IN FISCAL YEARS
BEGINNING IN 2021 AND THEREAFTER PURSUANT TO SUCH LAW OR LAWS RESULT  IN
A  TOTAL  PRINCIPAL  AMOUNT  OF  DEBT  IN EXCESS OF THE LIMIT DETERMINED
PURSUANT TO SUBDIVISION 3 OF THIS  SECTION  OR  THE  DEBT  AFFORDABILITY
LEVEL ESTABLISHED PURSUANT TO SUBDIVISION 4 OF THIS SECTION.
  6.  ALL  DEBT  SUBJECT  TO  THE  PROVISIONS OF THIS SECTION (I) SHALL,
EXCEPT FOR REFUNDING DEBT,  BE  INCURRED  ONLY  FOR  A  CAPITAL  PURPOSE
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  THIS  SUBDIVISION, BE IN THE FORM OF OBLIGATIONS ISSUED BY THE
COMPTROLLER.
  7. NOTHING CONTAINED IN THIS SECTION SHALL INVALIDATE DEBT OBLIGATIONS
OUTSTANDING ON THE EFFECTIVE DATE OF  THIS  SUBDIVISION  THAT  WOULD  BE
SUBJECT  TO  THE PROVISIONS OF THIS SECTION IF INCURRED AFTER THE EFFEC-
TIVE DATE OF THIS SUBDIVISION, AND THE STATE MAY CONTINUE TO PROVIDE FOR
PAYMENTS RELATED TO SUCH DEBT ON THE SAME TERMS UNDER  WHICH  SUCH  DEBT
WAS  INCURRED;  PROVIDED,  HOWEVER,  THAT NO SUCH DEBT SHALL BE REFUNDED
UNLESS (I) SUCH REFUNDING COMPLIES IN ALL RESPECTS WITH THE REQUIREMENTS
OF SECTION 13 OF THIS ARTICLE, AND (II) ANY REFUNDING OBLIGATIONS ISSUED
ON OR AFTER THE FIRST DAY OF THE FIRST FISCAL YEAR  BEGINNING  AT  LEAST
ONE  YEAR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION 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 LIMIT IMPOSED BY SUBDIVISION  3  OF
THIS  SECTION AND THE DEBT AFFORDABILITY LEVEL REQUIRED BY SUBDIVISION 4
OF THIS SECTION. THE PROVISIONS OF SECTION 16 OF THIS ARTICLE SHALL  NOT

S. 2391--A                          4

APPLY TO STATE PAYMENTS WITH RESPECT TO ANY SUCH OBLIGATIONS UNLESS SUCH
PROVISIONS WOULD HAVE APPLIED PRIOR TO THE EFFECTIVE DATE OF THIS SUBDI-
VISION.
  8.  DEBT  OBLIGATIONS ISSUED TO REFUND OUTSTANDING STATE DEBT, REGARD-
LESS OF WHETHER SUCH OUTSTANDING DEBT WAS INCURRED PRIOR TO  THE  EFFEC-
TIVE  DATE OF THIS SUBDIVISION, SHALL NOT BE COUNTED FOR THE PURPOSES OF
THE LIMIT IMPOSED BY SUBDIVISION 3 OF THIS SECTION AND THE DEBT AFFORDA-
BILITY LEVEL REQUIRED BY SUBDIVISION 4 OF THIS SECTION IF SUCH REFUNDING
COMPLIES IN ALL RESPECTS WITH SECTION 13 OF THIS ARTICLE.  DEBT  SERVICE
EXPENSES ON DEBT THAT HAS BEEN REFUNDED IN ACCORDANCE WITH SECTION 13 OF
THIS  ARTICLE SHALL BE EXCLUDED FROM 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  PURPOSES  OF  THIS  SUBDIVISION  AND  SUBDIVISIONS  7 AND 9 OF THIS
SECTION, ANY REFUNDING DEBT THAT DOES NOT EXTEND BEYOND THE FINAL  MATU-
RITY  OF  THE  DEBT  BEING  REFUNDED  SHALL BE DEEMED TO COMPLY WITH THE
PROVISIONS OF SUBDIVISION 6 OF SECTION 13 OF THIS ARTICLE, PROVIDED THAT
THERE IS AN ACTUAL DEBT SERVICE SAVINGS IN EVERY YEAR TO MATURITY  AS  A
RESULT OF THE ISSUANCE OF THE REFUNDING DEBT.
  9.  AFTER  THE  EFFECTIVE  DATE  OF  THIS SECTION THE STATE SHALL NOT,
EXCEPT AS SPECIFICALLY AUTHORIZED IN SOME OTHER SECTION OF THIS  CONSTI-
TUTION,  AGREE  TO MAKE PAYMENTS, DIRECTLY OR INDIRECTLY, WHETHER OR NOT
SUBJECT TO APPROPRIATION, 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 SUBDIVI-
SION 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  7  AND  8  OF  THIS
SECTION  ARE  COMPLIED  WITH  EXCEPT THE REQUIREMENT THAT SUCH REFUNDING
DEBT OBLIGATIONS BE  ISSUED  BY  THE  COMPTROLLER,  AND  REFUNDING  DEBT
SERVICE  EXPENSES SHALL ONLY BE INCLUDED IN THE DEBT AFFORDABILITY LEVEL
IF THE DEBT SERVICE EXPENSES ON THE DEBT BEING REFUNDED WOULD HAVE  BEEN
INCLUDED.
  10.  The  legislature may, at any time after the ENACTMENT OR approval
of such law [by the people], if no debt shall have  been  contracted  in
pursuance  thereof, repeal the same; and may at any time, by law, forbid
the contracting of any further debt or liability under such law.
  S 3. Resolved (if the Assembly concur), That subdivisions 6 and  7  of
section  13  of  article  7  of  the  constitution be amended to read as
follows:
  6. In no event shall the last annual installment  or  contribution  on
any portion of refunding debt, including refunding obligations issued to
refund  other  refunding obligations, be made after THE LAST INSTALLMENT
ON THE RELEVANT PORTION OF THE DEBT TO BE REFUNDED OR AFTER  the  termi-
nation  of the period of probable life of the projects financed with the
proceeds of the relevant portion of the debt to be refunded, or any debt
previously refunded with  the  refunding  obligations  to  be  refunded,
determined as of the date of issuance of the original obligations pursu-
ant  to  section  12  of this article to finance such projects, or forty
years from such date, if earlier; provided, however, that in lieu of the
foregoing, an entire refunding issue or portion thereof  may  be  struc-

S. 2391--A                          5

tured  to  mature over the remaining weighted average useful life of all
projects financed with the obligations being refunded.
  7.  [Subject  to the provisions of subdivision 5 of this section, each
annual installment or contribution of principal of refunding obligations
shall be equal to the amount that would be required by subdivision 1  of
section  12  of  this article if such installments or contributions were
required to be made from the year that the next installment or  contrib-
ution would have been due on the obligations to be refunded, if they had
not been refunded, until the final maturity of the refunding obligations
but  excluding  any  year  in which no installment or contribution would
have been due on the obligations to be refunded or, in the  alternative,
the] THE total payments of principal and interest on the refunding bonds
shall  be  less  in  each  year  to  their final maturity than the total
payments of principal and interest on the bonds to be refunded  in  each
such year.
  S  4. Resolved (if the Assembly concur), That the foregoing amendments
be referred to the first regular legislative session convening after the
next succeeding general election of members of  the  assembly,  and,  in
conformity  with  section  1  of  article  19  of  the  constitution, be
published for 3 months previous to the time of such election.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.