S T A T E   O F   N E W   Y O R K
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                                  7476

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                              April 9, 2009
                               ___________

Introduced  by  M.  of  A.  SCHROEDER  --  read once and referred to the
  Committee on Ways and Means

            CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY

proposing amendments to article 7 of the constitution,  in  relation  to
  the  prohibition  of certain borrowing arrangements, the authorization
  for the contracting of debt secured by the  state  revenues,  and  the
  manner  in  which principal and interest payments are appropriated and
  paid

  Section 1. Resolved (if the Senate concur),  That  article  7  of  the
constitution be amended by adding a new section 11-a to read as follows:
  S  11-A.  1.    EXCEPT  AS AUTHORIZED BY SECTION 11 OF THIS ARTICLE OR
SUBDIVISION 2 OF THIS SECTION,  THE  STATE  SHALL  NOT  ENTER  INTO  ANY
FINANCING  OR  OTHER  SIMILAR ARRANGEMENT, WHETHER BY STATUTE, CONTRACT,
LEASE, OR OTHER SIMILAR  AGREEMENT,  OR  OTHERWISE,  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
ISSUED  OR  CONTRACTED BY ANY STATE AGENCY, MUNICIPALITY, INDIVIDUAL, OR
PUBLIC OR PRIVATE CORPORATION FOR STATE CAPITAL OR OPERATING PURPOSES OR
TO FINANCE GRANTS MADE OR TO BE MADE BY OR ON BEHALF OF  THE  STATE  FOR
ANY  PURPOSE.  THE FOREGOING RESTRICTIONS SHALL APPLY WHETHER OR NOT THE
OBLIGATION OF THE STATE TO MAKE PAYMENTS IS SUBJECT TO APPROPRIATION  OR
IS OTHERWISE CONTINGENT.
  2.  NOTWITHSTANDING  THE PROVISIONS OF SECTION 11 OF THIS ARTICLE, THE
LEGISLATURE MAY, BY LAW, WITHOUT VOTER APPROVAL, AUTHORIZE THE STATE  TO
CONTRACT  DEBT SECURED BY A PLEDGE OF SPECIFIC STATE REVENUES AUTHORIZED
BY SUCH LAW TO BE DEPOSITED IN A DEDICATED TRUST FUND OR  FUNDS  CREATED
FOR  CAPITAL  WORKS OR PURPOSES. THE LEGISLATURE SHALL, BY LAW, IDENTIFY
THE CAPITAL WORKS OR PURPOSES TO BE FINANCED WITH SUCH DEBT. REVENUES IN
EXCESS OF THE REQUIRED PAYMENTS OF DEBT SERVICE AND RELATED PAYMENTS  ON
SUCH DEBT SHALL BE AVAILABLE FOR OTHER PURPOSES, AS PROVIDED BY LAW.
  3.  THE  STATE  MAY  NOT  CONTRACT DEBT PURSUANT TO SECTION 11 OF THIS
ARTICLE OR SUBDIVISION 2 OF THIS SECTION UNLESS THE CONDITIONS CONTAINED

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

                                                           LBD89096-01-9

A. 7476                             2

IN PARAGRAPHS (A) AND (B) OF THIS SUBDIVISION WILL  BOTH  BE  MET  AFTER
SUCH DEBT HAS BEEN CONTRACTED.
  (A)  THE TOTAL OUTSTANDING PRINCIPAL AMOUNT OF DEBT SHALL BE LESS THAN
THE DESIGNATED PERCENTAGE OF THE TOTAL PERSONAL  INCOME  OF  THE  STATE,
WHERE  SUCH  PERSONAL  INCOME IS DEFINED BY AND CALCULATED IN ACCORDANCE
WITH LAW. THE TOTAL OUTSTANDING PRINCIPAL AMOUNT OF DEBT  SHALL  INCLUDE
ALL  DEBT  OR  OTHER  OBLIGATIONS  AUTHORIZED AND CONTRACTED PURSUANT TO
SECTION 11 OF THIS ARTICLE AND SUBDIVISION 2 OF THIS SECTION ON OR AFTER
THE EFFECTIVE DATE OF THIS SECTION. THE OUTSTANDING PRINCIPAL AMOUNT  OF
DEBT,  WITH  REGARD  TO  THE  INCLUSION OF EITHER REFUNDED AND REFUNDING
OBLIGATIONS, SHALL BE DEFINED BY LAW. THE DESIGNATED PERCENTAGE SHALL BE
ONE-HALF PERCENT FOR THE FISCAL YEAR COMMENCING IMMEDIATELY  AFTER  THIS
PARAGRAPH  TAKES  EFFECT, AND SHALL INCREASE BY ONE-THIRD OF ONE PERCENT
IN EACH OF THE EIGHT SUBSEQUENT FISCAL YEARS. THE DESIGNATED  PERCENTAGE
FOR  FISCAL YEAR TWO THOUSAND NINETEEN--TWO THOUSAND TWENTY AND FOR EACH
FISCAL YEAR THEREAFTER SHALL BE THREE AND ONE-HALF PERCENT.
  (B) NO DEBT SHALL BE ISSUED AFTER JANUARY FIRST, NEXT  SUCCEEDING  THE
EFFECTIVE  DATE  OF  THIS  PARAGRAPH  PURSUANT  TO SUBDIVISION 2 OF THIS
SECTION OR SECTION 11 OF THIS ARTICLE IF THE SUM OF  (I)  THE  AGGREGATE
AMOUNT  OF  DEBT  SERVICE,  AS DETERMINED BY THE COMPTROLLER, DUE ON ALL
DEBT CONTRACTED PURSUANT TO SUBDIVISION 2 OF THIS SECTION AND SECTION 11
OF THIS ARTICLE AND OUTSTANDING AS OF THE LAST DAY OF THE    IMMEDIATELY
PRECEDING  FISCAL  YEAR  AND  (II)  ALL  PAYMENTS  PURSUANT TO FINANCING
ARRANGEMENTS THAT WOULD BE PROHIBITED BY PARAGRAPH (A) OF THIS  SUBDIVI-
SION  IF  THEY HAD BEEN ENTERED AFTER THE EFFECTIVE DATE OF THIS SECTION
SHALL IN ANY FISCAL YEAR EXCEED 5.75 PERCENT OF TOTAL GOVERNMENTAL FUNDS
RECEIPTS OF THE STATE FOR SUCH IMMEDIATELY PRECEDING FISCAL YEAR.
  4. THE LEGISLATURE SHALL PROVIDE BY LAW FOR THE MANNER BY  WHICH  DEBT
AUTHORIZED  BY  THIS  SECTION SHALL BE CONTRACTED, PROVIDED THAT NEITHER
HOUSE OF THE LEGISLATURE SHALL CONSIDER ANY SUCH BILL  UNLESS  IT  SHALL
HAVE  BEEN PRINTED AND UPON THE DESKS OF THE MEMBERS, IN ITS FINAL FORM,
AT LEAST FOURTEEN CALENDAR LEGISLATIVE DAYS PRIOR TO ITS FINAL PASSAGE.
  5. THE LEGISLATURE MAY, AT ANY  TIME,  IF  NO  DEBT  SHALL  HAVE  BEEN
CONTRACTED IN PURSUANCE OF A PARTICULAR LAW AUTHORIZED UNDER SUBDIVISION
2  OF  THIS  SECTION,  REPEAL  SUCH LAW AUTHORIZING THE ISSUANCE OF SUCH
DEBT; AND MAY AT ANY TIME, BY LAW, FORBID THE CONTRACTING OF ANY FURTHER
DEBT OR LIABILITY UNDER SUCH LAW.
  6. NO DEBT SHALL BE CONTRACTED  PURSUANT  TO  SUBDIVISION  2  OF  THIS
SECTION, EXCEPT TO FINANCE CAPITAL WORKS OR PURPOSES.
  7.  THE  STATE MAY CONTRACT DEBT TO REFUND DEBT CONTRACTED PURSUANT TO
SUBDIVISION 2 OF THIS SECTION, PROVIDING SUCH REFUNDINGS  ARE  CONDUCTED
IN ACCORDANCE WITH THE PROVISIONS OF SECTION 13 OF THIS ARTICLE.
  8.  THE PROVISIONS OF SUBDIVISION 1 OF THIS SECTION SHALL NOT PROHIBIT
THE STATE FROM PROVIDING MONIES FOR THE PAYMENT OF PRINCIPAL,  INTEREST,
OR  RELATED  PAYMENTS  ON OBLIGATIONS WHICH WERE CONTRACTED PRIOR TO THE
EFFECTIVE DATE OF THIS SUBDIVISION OR ON OBLIGATIONS  ISSUED  TO  REFUND
SUCH  OBLIGATIONS,  PROVIDED SUCH REFUNDINGS ARE CONDUCTED IN ACCORDANCE
WITH THE PROVISIONS OF SECTION 13 OF THIS ARTICLE.
  S 2. Resolved (if the Senate concur), That section 16 of article 7  of
the constitution be amended to read as follows:
  S  16. The legislature shall annually provide by appropriation for the
payment of the interest upon and installments of principal of all  debts
or  refunding  debts  created  on  behalf  of  the  state  except  those
contracted under section 9 of this article, as the same shall fall  due,
and  for the contribution to all of the sinking funds created by law, of
the amounts annually to be contributed under the provisions  of  section

A. 7476                             3

12, 13 or 15 of this article. [If] WITH RESPECT TO DEBT CONTRACTED OTHER
THAN  PURSUANT  TO  SUBDIVISION 2 OF SECTION 11-A OF THIS ARTICLE, IF at
any time the legislature shall fail to make any such appropriation,  the
comptroller shall set apart from the first revenues thereafter received,
applicable  to  the  general  fund of the state, a sum sufficient to pay
such interest, installments of principal, or contributions to such sink-
ing fund, as the case may be, and shall so apply  the  moneys  thus  set
apart.    IF AT ANY TIME THE LEGISLATURE SHALL FAIL TO MAKE AN APPROPRI-
ATION FOR THE PAYMENT OF INTEREST OR INSTALLMENTS OF PRINCIPAL OR  SINK-
ING FUND PAYMENTS OR RELATED PAYMENTS ON ANY DEBT CONTRACTED PURSUANT TO
SUBDIVISION 2 OF SECTION 11-A OF THIS ARTICLE, THE COMPTROLLER SHALL SET
APART  FROM  THE FIRST REVENUES RECEIVED AND PLEDGED TO SUCH PAYMENTS, A
SUM SUFFICIENT TO PAY SUCH  INTEREST  OR  INSTALLMENT  OF  PRINCIPAL  OR
CONTRIBUTIONS  TO  SUCH  SINKING  FUND PAYMENTS OR RELATED PAYMENTS, AND
SHALL SO APPLY THE MONEYS THUS SET APART, PROVIDED, HOWEVER,  THAT  SUCH
REVENUES  MUST  BE  SET ASIDE AND APPLIED IN A MANNER WHICH ENSURES THAT
PLEDGED REVENUES ARE APPLIED ONLY TO PAYMENTS ON  DEBT  FOR  WHICH  SUCH
REVENUES  WERE PLEDGED PURSUANT TO SUBDIVISION 2 OF SECTION 11-A OF THIS
ARTICLE. The comptroller may be required to set  aside  and  apply  such
revenues as aforesaid, at the suit of any holder of such bonds.
  Notwithstanding  the  foregoing  provisions of this section, the comp-
troller may covenant with the purchasers of any state  obligations  that
they  shall have no further rights against the state for payment of such
obligations or any interest thereon after an amount  or  amounts  deter-
mined in accordance with the provisions of such covenant is deposited in
a described fund or with a named or described agency or trustee. In such
case,  this  section  shall  have no further application with respect to
payment of such obligations or any  interest  thereon  after  the  comp-
troller has complied with the prescribed conditions of such covenant.
  S 3. Resolved (if the Senate 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.