senate Bill S2392A

Creates a debt management board; repealer

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Bill Status


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

  • 19 / Jan / 2011
    • REFERRED TO FINANCE
  • 04 / Jan / 2012
    • REFERRED TO FINANCE
  • 05 / Jan / 2012
    • AMEND AND RECOMMIT TO FINANCE
  • 05 / Jan / 2012
    • PRINT NUMBER 2392A

Summary

Creates a debt management board with authority to set a limit on state debt; authorizes the use of surplus moneys to reduce outstanding state debt; limits the amount of state debt that may be incurred; limits the debt of public authorities.

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Bill Details

Versions:
S2392
S2392A
Legislative Cycle:
2011-2012
Current Committee:
Senate Finance
Law Section:
State Finance Law
Laws Affected:
Rpld & add Art 5-B §§67-a - 67-f, amd §§68-a, 68-c, 97-rrr & 24, St Fin L; amd §§51 & 365, Pub Auth L
Versions Introduced in 2009-2010 Legislative Cycle:
S521

Sponsor Memo

BILL NUMBER:S2392A

TITLE OF BILL:
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; 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
article 5-B of the state finance law relating to limitations on
state-supported debt

PURPOSE:
To impose discipline on the State's borrowing practices by
establishing a State Debt Management Board and strict limitations on
State and public authority debt.

SUMMARY OF PROVISIONS:
Section 1 adds a new Article 5-8 ("Debt Management Board and
Limitations on State Funded Debt") to the State Finance Law,
including six sections:

Section 67-a defines the terms "State debt," "State backed debt" and
"State funded debt" to clarify the full scope of the State's debt
obligation.

Section 67-a also defines the terms "Board" (i.e., the New York
State Debt Management Board), "Total personal income of the state,
"capital purpose," "conduit debt obligation" and "cash surplus."

Section 67-b requires, after any transfer to the Tax Stabilization
Reserve Fund, that a portion of any cash surplus accumulated in the
General Fund as of the end of any fiscal year, be deposited in the
Debt Reduction Reserve Fund for the exclusive purpose of reducing the
aggregate amount of outstanding State funded debt obligations.

Section 67-c creates the New York State Debt Management Board
consisting of the Governor, the Comptroller, and a third person, who
shall be a financial expert jointly selected by the Governor and the
Comptroller.

Section 67-d sets forth the powers and duties of the Board, which
include monitoring all debt of the State and public authorities,
establishing an annual debt affordability level, and adopting debt
policy standards addressing:

* structure for State funded debt;

* criteria for refunding, including extending debt and use of savings;

* use of credit enhancements and derivative instruments;

* goals for the proportion of state capital spending to be financed
with debt and the proportion to be financed with current
appropriations;

* methods of sale;

* criteria for selecting State funded obligations to be retired or
defeased by the use of a portion of any cash surplus;

* the definition of non-recurring revenues to be used for the funding
of capital projects or for the purpose of retiring or defeasing bonds
or notes previously issued;

* other policy standards the Board may determine to be appropriate; and

* policy standards for the issuance of debt obligations by Class A and
Class B public authorities.

Section 67-e requires the Comptroller to annually report to the Debt
Management Board on the amount of State funded debt outstanding.

Section 67-f sets forth general limitations on State funded debt and
State debt service payments, including:

* implementation of an overall debt cap, effective on and after April
1, 2015, on all State funded debt to limit debt to no more than 5%
of the total personal income in the State;

* implementation of the annual debt affordability level established by
the Debt Management Board;

* prohibiting the use of State funded debt for any purpose other than a
capital purpose;

* requiring all State funded debt to be in the form of obligations
issued by the Comptroller, beginning with the fiscal year that is at
least one year after the effective date of an amendment to the
Constitution;

* prohibiting the issuance of any state funded debt obligation with a
final maturity exceeding the probable life of the capital project
financed by such debt, as well as prohibiting any maturity longer
than 30 years;

* up to and including State fiscal year 2015-2016, limiting the
issuance of new State funded debt obligations in any fiscal year to
no more than 9596 of the amount of the State funded debt incurred in
the last complete fiscal year.

* Prohibiting the issuance of new debt supported by a state agreement
to make payments only if expected debt service sources fall short.

Section 2 amends subdivision 2 of section 6B-a of Article 5-C
("Revenue Bond Financing Program") of the State Finance Law to
conform the definition of "authorized purpose" to the definition of
"state funded debt" set forth in new State Finance Law Article 5-B,
as added by this bill.

Section 3 amends subdivision 6 and adds a new subdivision 7 to section
68-c of the State Finance Law to prohibit, on a contingent basis, the
issuance of revenue bonds when and if the Constitution is amended to
eliminate backdoor borrowing.

Section 4 amends section 97-rrr of the State Finance Law to dedicate
the moneys of the Debt Reduction Reserve Fund to the purpose of
retiring or defeasing State funded debt obligations.

Section 5 adds a new subdivision 4 to section 24 of the State Finance
Law to require the inclusion in the budget bills submitted with each
year's Executive Budget an appropriation of the available balance
from the Debt Reduction Reserve Fund to be used exclusively for the
purpose of retiring or defeasing State funded debt obligations.

Section 6 adds a new section 2 to the Public Authorities Law to
establish a new comprehensive definition of a public authority. The
term "public authority' is defined as:

(i) any public authority, public benefit corporation, or commission
created by or existing under the Public Authorities Law or any other
law;

(ii) a public authority or a public benefit corporation, at least one
of whose members is appointed by the governor or who serves by virtue
of holding a civil office of the State;

(iii) a not-for-profit corporation affiliated with, sponsored by, or
created by a State agency;

(iv) a not-for-profit corporation created by or existing under article
2 of the racing, pari-mutuel wagering and breeding law and operating
under an exclusive franchise granted by the state;

(v) a local industrial development agency or other local public
benefit corporation; or

(vi) a subsidiary or affiliate of such a public authority.

Section 6 also adds definitions of the terms "affiliate," "affiliated
with," "subsidiary" and "other debt obligations." This section
categorizes all current or future public authorities into four
classes: Class A: major public authorities with statewide or regional

significance and their subsidiaries; Class B: entities affiliated
with a State agency or created by the State that have limited
jurisdiction but a majority of board members appointed by the
Governor or other State officials; Class C: entities with local
jurisdiction; and Class D: entities with inter- state or
international jurisdiction. Classes A, B, C and D include, but are
not limited to, the more than 720 public authorities specified by
name in the bill.

Section 7 adds a new section 3 to the Public Authorities Law imposing
limitations on the terms and conditions of any Class A or Class B
public authority debt obligations issued after the effective date of
this legislation. No Class A or Class B public authority may include
in a bond covenant or other debt instrument a requirement or
guarantee that the public authority will remain in existence until
the debt is repaid. Unless (i) permitted under a statutory debt cap
applicable to a Class A or Class B Public authority, or (ii)
specifically authorized by an act
of the Legislature, no Class A or Class B public authority can issue
any bonds or notes, nor incur any other similar debt. Refundings or
refinancings would be permitted if they achieve cost savings without
extending the maturity of any existing debt. Further, no Class A or
Class B public authority can include any provision having the effect
of extending the life of the authority when refunding or refinancing
any current debt obligation.

Section 8 amends subdivision 1 of section 51 of the Public Authorities
Law to expand the jurisdiction of the Public Authorities Control
Board to approving the financing and construction of projects of all
Class A and Class B public authorities.

Section 9 adds a new subdivision 6 to section 51 of the Public
Authorities Law to require an annual report by the Public Authorities
Control Board detailing (i) the aggregate amount of debt approved by
the Board during the fiscal year, (ii) a list of the individual
projects approved by the Board for each public authority during the
fiscal year, and (iii) the total amount of new debt obligations the
Board has approved during the fiscal year for issuance by each public
authority.

Section 10 amends subdivision 2 of section 365 of the Public
Authorities Law to delete the requirement that Thruway Authority
bonds and notes sold at public sale must be issued by the Comptroller.

Section 11 provides for an immediate effective date.

JUSTIFICATION:
The construction of roads, bridges, canals, housing developments,
hospitals, universities mass transit and other government facilities
has made New York the Empire State. Debt is a tool that, when used
prudently,- helps governments plan and pay for such large public

works projects. Borrowing in moderation allows those who will benefit
from necessary, worthwhile capital investment to pay the costs.

Since 1990, New York State's outstanding debt has grown from $14.4
billion to $45.4 billion in 2004, representing a 215 percent
increase. From 1996 to 2001 when the State experienced 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.

Furthermore, New Yorkers bear one of the highest debt burdens in the
country. New York is ranked second to California in total outstanding
debt. 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
Census, New York ranks second only to Alaska for state and local
combined debt per capita.

This bill proposes major reforms that should be enacted into law to
restore accountability, and transparency and limit debt to an
affordable level. It is long past time for effective reform that will
decrease the State's propensity to utilize debt financing, recognize
the value of pay as-you-go spending and open the process to the
public. Successful reforms must implement debt management policy that
balances need with capacity and intergenerational equity. To be
competitive with other states, New York must continue to make needed,
affordable capital investments.

Establishing a new, all-inclusive definition of "State funded debt"
will provide a more comprehensive accounting of the State's debt
portfolio, eliminate loopholes in the current statutes and insure
that all State funded debt is subject to the cap equal to 5 percent
of the State's personal income beginning in 2014. As New York's
outstanding debt is currently equal to 6.5 percent of personal
income, steps will have to be taken to bring down the debt to 5
percent.

To force discipline and reach the proposed Constitutional debt cap of
5 percent by State Fiscal Year 2015-16, the legislation limits annual
debt issuance to 95 percent of the last complete fiscal year's
issuance starting immediately and continuing through March 31, 2016.
The establishment of a Debt Management Board will provide coordinated
policy direction, monitoring and reporting for all debt, including
debt issued by public authorities. The three-person Debt Management
Board made up of the Governor, the State Comptroller, and a financial
expert, selected jointly by the Governor and Comptroller, would be
vested with the responsibility to issue a binding debt affordability
study, annually by October 31. Additionally, the board would forecast
the debt affordability level expected for the two succeeding fiscal
years based on multi- year projections of State revenues and
spending. With this structure, the State's chief executive and the

State's chief fiscal officer jointly would be responsible for
controlling, planning, implementing, reporting and managing the
State's borrowing from beginning to end. Beginning in, the issuance
of State debt will be subject to the Board's debt affordability level.

Additional oversight of public authority debt is provided by expanding
the responsibilities of the Public Authorities Control Board (PACB)
to include the oversight of all major State and regional authorities,
requiring an annual report from the PACB and requiring that all
public authority negotiated bond sales be submitted to the
Comptroller for approval of their terms and conditions.

There is a suitable time and an inappropriate time to utilize debt. In
New York State, debt has been utilized all too often, for
objectionable purposes, and has become an easy answer to solving the
State's fiscal problems. With no sign of this harmful trend ceasing
anytime in the future, it is time for reform. For the foregoing
reasons, the Comptroller respectfully urges passage of this
legislation.

PRIOR LEGISLATIVE HISTORY:
S.8175 of 2006: Referred to Rules
S.1303 of 2007: Referred to Finance
S.1303 of 2008: Referred to Finance
S.521 of 2009/2010: Referred to Finance

EFFECTIVE DATE:
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 state 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.

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

                                 2392--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 Finance -- recommitted  to
  the  Committee  on Finance in accordance with Senate Rule 6, sec. 8 --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted to said committee

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; 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  condi-
  tions  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
  article 5-B of the state finance law relating to limitations on state-
  supported debt

  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.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07311-02-2

S. 2392--A                          2

        67-F. LIMITATIONS ON STATE FUNDED DEBT AND  STATE  DEBT  SERVICE
                PAYMENTS.
  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 ESTAB-
LISHED 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.

S. 2392--A                          3

  6. "STATE FUNDED DEBT" SHALL MEAN THE COMBINED TOTAL OF ALL STATE DEBT
AND ALL STATE BACKED DEBT, EXCEPT 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 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  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 DETERMINATION
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 ESTABLISHED 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.

S. 2392--A                          4

  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.
  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 TWENTY-ONE SHALL BE NO
HIGHER 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:

S. 2392--A                          5

  (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;
  (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 TWENTY-ONE 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-

S. 2392--A                          6

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
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 AND AFTER APRIL FIRST, TWO THOUSAND SIXTEEN, 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 TWENTY-ONE, 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
TWENTY  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

S. 2392--A                          7

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.
  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
amended  by  section 36 of part BB of chapter 58 of the laws of 2011, 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.
Notwithstanding  the  provisions  of clause (d) of this subdivision, for
the period April first, two thousand nine  through  March  thirty-first,
two thousand twelve, mental health services facilities, as authorized 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, shall constitute
an authorized purpose.
  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

S. 2392--A                          8

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 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, paragraph l as added by chapter 468 of the
laws of 2004, paragraph m as added by section 10 of part  E  of  chapter
494  of  the laws of 2009 and paragraph n as added by chapter 533 of the
laws of 2010, 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

S. 2392--A                          9

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
  k. Long Island Power Authority
  l. Albany Convention Center Authority
  m.  State  of  New  York  Municipal  Bond Bank Agency for bonds issued
pursuant to section two thousand four hundred thirty-six-b of this chap-
ter
  n. North Country Power 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:

S. 2392--A                         10

  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
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.

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