senate Bill S4026

2013-2014 Legislative Session

Relates to authorization of debt in times of public emergency; and a limit on state funded debt and refunding of state debts

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Archive: Last Bill Status - In Committee


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

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Feb 11, 2014 opinion referred to judiciary
Jan 13, 2014 to attorney-general for opinion
Jan 08, 2014 referred to judiciary
Apr 10, 2013 opinion referred to judiciary
Mar 18, 2013 to attorney-general for opinion
Mar 05, 2013 referred to judiciary

S4026 - Bill Details

See Assembly Version of this Bill:
A7301
Current Committee:
Senate Judiciary
Law Section:
Constitution, Concurrent Resolutions to Amend
Laws Affected:
Amd Art 7 §§10, 11, 16 & 2, add §§1-a & 1-b, Constn
Versions Introduced in 2011-2012 Legislative Session:
S6364, A7907

S4026 - Bill Texts

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Relates to authorization of debt in times of public emergency; relates to a limit on state funded debt and refunding of state debts.

view sponsor memo
BILL NUMBER:S4026

TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing amendments to article 7 of the constitution, in relation to
authorization of debt in times of public emergency, a limit on the
total amount of state-funded debt, the refunding of state debts,
providing for the use of conference committees, consensus forecasting
and the submission of a capital program and financing plan

PURPOSE: This proposed Constitutional amendment allows for emergency
borrowing in times of public emergency, prohibits "backdoor
borrowing," and limits total State debt to no more than 5 percent of
total personal income in the State.

SUMMARY OF 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, and a majority of the
Senate and a majority of the Assembly The amendment prescribes a
procedure for the Governor to propose emergency borrowing and for the
Comptroller, the Senate and the Assembly to give their approval or
disapproval.

Section 2 eliminates "backdoor borrowing" and, effective with State
fiscal year 2023, 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 percent cap. To eliminate
"backdoor 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, and (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 would authorize the State to issue revenue debt
backed by specific revenue sources. Such debt would be included in the
debt cap and would be subject to all other restrictions on State debt
such as voter approval. The amendment would also allow multiple bond
acts to be presented to the voters at one time and would ban future
contingent obligation debt.


Bond issuances in the aggregate amount of $250 million a year would be
permitted without voter approval, but only if the total outstanding
principal amount of State debt resulting from such issuances would not
exceed the 5 percent cap.

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. All new debt, and most refunding debt,
would be required to be issued by the State Comptroller.

Section 3 of the resolution proposes an amendment of Section 16 of
Article 7 of the Constitution stating that if at any time the
Legislature shall fail to make an appropriation for the payment of
interest or installments of principal on sinking fund payments, the
State Comptroller shall set apart from the first revenues received and
pledged to such payments a sum sufficient to pay such interest or
installments of principal or contributions to such sinking fund
payments, and shall apply the moneys thus set apart.

Section 4 of the resolution adds a Section 1-a to Article 7 of the
Constitution which states that within ten days following the
submission of the budget by the Governor pursuant to this article,
such bills shall be referred to a joint budget conference committee to
consider and reconcile such budget resolution or budget bills as may
be passed by each house of the Legislature. The Temporary President of
the Senate and the Speaker of the Assembly shall jointly convene such
joint budget conference committee. Such conference committee meetings
shall be required to meet and shall be open to the public

Section 5 of the resolution adds a Section 1-b to Article 7 of the
Constitution to require the Comptroller to certify that the resources
used to finance the final budget acted upon by the Legislature conform
to the resources projected in the binding consensus report on receipts
and other available resources.

Section 6 of the resolution proposes an amendment of Section 2 of
Article 7 of the Constitution to require annual submission of a
detailed multi-year capital program and financing plan by the
Governor.

PRIOR LEGISLATIVE HISTORY: 2011-12: S. 6364 / A. 7907

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 the State's 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 $63.3
billion in 2012, representing a 340 percent increase. The State's use
of pay-as-you-go (PAYGO) financing for State funded capital spending
has declined, even during times of unprecedented surplus, replaced
with an increased dependence on debt.

Furthermore, 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 2012 State Debt Medians, New York is
fifth highest in debt per capita behind Connecticut, Massachusetts,
Hawaii and New Jersey. New York's $3,253 debt per capita is more than
double the national average of $1,117.

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 5
percent of total personal income of the State, beginning in 2023.

"Backdoor 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, 2010, "back-door
borrowing" accounted for approximately 94 percent of the $63.3 billion
in outstanding State-funded obligations. Only $3.5 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 is expected to approach $10 billion in State fiscal year
2012-13, with 54 percent 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 or revenue debt issued
by the Comptroller or "pay-as-you-go" dollars appropriated in the
State budget. A total of $250 million in debt could be issued annually
without voter approval. Any additional debt issuance would be required
to be approved by the State's voters.

There are suitable times and inappropriate times 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.

This proposal also requires the joint committees to meet publicly to
negotiate the budget, allowing enhanced public discussion and
oversight. These conference committee meetings would provide a
structure needed for open budget deliberations, give a greater voice
to individual legislators and improve public awareness of fiscal
decisions that affect New Yorkers.

Additionally, current State law requires the Executive and Legislature
to agree on a revenue forecast by March 1 of each year to provide a
framework for the upcoming budget Absent agreement, the Comptroller is
directed to provide a forecast by March 5. However, this process
covers only tax revenues, certain miscellaneous receipts and Lottery
revenue, not all resources available to the State, In addition, the
final revenue forecast in no way limits the level of spending in the
Enacted Budget.


To close these loopholes, this proposal requires the Legislature and
the Executive to reach a consensus on all revenues and other resources
available for spending (including bond proceeds, spending re-estimates
and close-out balances from the prior fiscal year) The State
Comptroller would be required to review and comment on this forecast.
If agreement is not reached by March 1, the State Comptroller would
provide the forecast. The established forecast would be binding. By
limiting spending to available means, this reform would impose the
overall budgetary discipline that has long been absent in New York
State.

Finally, this proposal requires the submission of a detailed
multi-year capital plan Such a plan outlining the States capital needs
is a prerequisite for a responsible State debt policy. A detailed
multi-year capital plan prepared by the Governor would provide
valuable information about proposed capital projects and the sources
from which they would be funded.

The State Comptroller respectfully urges passage of this concurrent
resolution to amend the New York State Constitution.

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

                                  4026

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              March 5, 2013
                               ___________

Introduced  by  Sen.  LIBOUS -- (at request of the State Comptroller) --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Judiciary

            CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY

proposing  amendments  to  article 7 of the constitution, in relation to
  authorization of debt in times of public emergency,  a  limit  on  the
  total  amount  of  state-funded  debt,  the  refunding of state debts,
  providing for the use of conference committees, consensus  forecasting
  and the submission of a capital program and financing plan

  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, AND A MAJORITY OF THE MEMBERS
ELECTED TO EACH BRANCH OF THE LEGISLATURE; AND THE GOVERNOR  SHALL  HAVE
POWER  TO SUMMON THE COMPTROLLER AND CONVENE THE LEGISLATURE IN EXTRAOR-
DINARY 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  THEREOF  HAS GIVEN THEIR DISAPPROVAL OF THE DEBT
PROPOSED BY THE GOVERNOR TO ENABLE THE STATE TO RESPOND TO SUCH EMERGEN-
CY: THE GOVERNOR, THE COMPTROLLER, 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  SENATE
AND  THE ASSEMBLY, WHO SHALL APPROVE OR DISAPPROVE SUCH RESOLUTION WITH-
OUT ANY CHANGES THERETO; AND IF  SUCH  RESOLUTION  IS  APPROVED  BY  THE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD89097-01-3

S. 4026                             2

GOVERNOR, THE COMPTROLLER, AND A MAJORITY OF THE MEMBERS ELECTED TO EACH
BRANCH 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. [No such] DEBT SUBJECT TO THE PROVISIONS
OF THIS SECTION SHALL INCLUDE ANY DEBT OR OBLIGATION, OTHER THAN DEBT OR
REFUNDING DEBT INCURRED PURSUANT TO SECTIONS 9, 10 AND 13 OF THIS  ARTI-
CLE,  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
OR HAS AGREED ON OR AFTER APRIL FIRST, NINETEEN HUNDRED NINETY-SEVEN  TO
MAKE  FUTURE  REVENUES  FROM  A  SPECIFIC STATE SOURCE AVAILABLE FOR THE
PURPOSE OF SUPPORTING DEBT OF ANY MUNICIPALITY,  INDIVIDUAL,  PUBLIC  OR
PRIVATE CORPORATION OR ANY OTHER ENTITY, OR, IF ON OR AFTER SUCH DATE, A
PROGRAM  OF  DEBT IS AUTHORIZED TO BE ISSUED WHERE STATE AID IS INTENDED
TO BE THE SOLE SOURCE OF PAYMENT OF DEBT SERVICE,  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 APPROPRI-
ATION,  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.
  2. THE LEGISLATURE MAY, BY LAW, 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 A SINGLE
CAPITAL WORK OR PURPOSE. THE LEGISLATURE SHALL,  BY  LAW,  IDENTIFY  THE
CAPITAL  WORK  OR  PURPOSE  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. EXCEPT AS PROVIDED IN SUBDIVISION 5 OF THIS SECTION, NO law AUTHOR-
IZING  DEBT  TO BE CREATED BY THE STATE PURSUANT TO SUBDIVISIONS 1 AND 2
OF THIS SECTION 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  [nor  at
any  general  election when any other law or any bill shall be submitted
to be voted for or against] BY THE LEGISLATURE.
  The legislature may, at any time after the 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.
  4. DURING THE FISCAL YEAR BEGINNING APRIL FIRST, TWO THOUSAND  TWENTY-
THREE  AND  IN EVERY FISCAL YEAR THEREAFTER, NO DEBT AUTHORIZED PURSUANT
TO THIS SECTION SHALL BE INCURRED UNLESS THE TOTAL PRINCIPAL  AMOUNT  OF

S. 4026                             3

DEBT  TO BE INCURRED PURSUANT TO SUCH LAW, TOGETHER WITH THE TOTAL PRIN-
CIPAL AMOUNT OF DEBT ALREADY OUTSTANDING, SHALL BE EQUAL TO OR LESS THAN
FIVE PERCENT OF THE TOTAL PERSONAL INCOME OF THE STATE AS DETERMINED  BY
LAW. DEBT SUBJECT TO THE LIMIT IMPOSED BY THIS SECTION SHALL INCLUDE ALL
DEBT, WHENEVER ISSUED, DESCRIBED IN SUBDIVISIONS 1 AND 2 OF THIS SECTION
BUT  SHALL  NOT  INCLUDE THE DEBTS SPECIFIED IN SECTIONS 9, 10 AND 13 OF
THIS ARTICLE.
  5. DURING ANY FISCAL YEAR, DEBT IN THE COMBINED  AGGREGATE  AMOUNT  OF
TWO  HUNDRED  FIFTY MILLION DOLLARS MAY BE INCURRED PURSUANT TO A LAW OR
LAWS THAT ARE NOT SUBMITTED FOR APPROVAL BY THE PEOPLE. SUCH DEBT  SHALL
BE INCURRED ONLY FOR CRITICAL CAPITAL NEEDS.  HOWEVER, IN NO EVENT SHALL
DEBT INCURRED IN FISCAL YEARS BEGINNING IN TWO THOUSAND TWENTY-THREE 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
4 OF THIS SECTION.
  6. (I) ALL DEBT SUBJECT TO  THE  PROVISIONS  OF  THIS  SECTION  SHALL,
EXCEPT  FOR  REFUNDING  DEBT,  BE  INCURRED  ONLY  FOR A CAPITAL PURPOSE
AUTHORIZED BY LAW, AND (II) ALL DEBT SUBJECT TO THE PROVISIONS  OF  THIS
SECTION  AND ALL DEBT AND REFUNDING DEBT SPECIFIED IN SECTIONS 9, 10 AND
13 OF THIS ARTICLE SHALL, IF INCURRED ON OR AFTER THE FIRST DAY  OF  THE
FIRST FISCAL YEAR BEGINNING AT LEAST ONE YEAR AFTER THE DATE THIS SUBDI-
VISION  SHALL HAVE TAKEN EFFECT, BE IN THE FORM OF OBLIGATIONS ISSUED BY
THE COMPTROLLER.
  7. NOTHING CONTAINED IN THIS SECTION SHALL INVALIDATE DEBT OBLIGATIONS
OUTSTANDING ON THE DATE THIS SUBDIVISION SHALL HAVE  TAKEN  EFFECT  THAT
WOULD BE SUBJECT TO THE PROVISIONS OF THIS SECTION IF INCURRED AFTER THE
DATE THIS SUBDIVISION SHALL HAVE TAKEN EFFECT, AND THE STATE MAY CONTIN-
UE  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 SUCH REFUNDING COMPLIES  IN  ALL  RESPECTS  WITH  THE
REQUIREMENTS OF SECTION 13 OF THIS ARTICLE. THE PROVISIONS OF SECTION 16
OF  THIS  ARTICLE  SHALL NOT APPLY TO STATE PAYMENTS WITH RESPECT TO ANY
SUCH OUTSTANDING OBLIGATIONS UNLESS SUCH PROVISIONS WOULD  HAVE  APPLIED
PRIOR TO THE DATE THIS SUBDIVISION SHALL HAVE TAKEN EFFECT.
  8.  DEBT  OBLIGATIONS ISSUED TO REFUND OUTSTANDING STATE DEBT, REGARD-
LESS OF WHETHER SUCH OUTSTANDING DEBT WAS INCURRED  PRIOR  TO  THE  DATE
THIS  SUBDIVISION  SHALL HAVE TAKEN EFFECT, SHALL NOT BE COUNTED FOR THE
PURPOSES OF THE LIMIT IMPOSED BY SUBDIVISION 3 OF THIS SECTION  IF  SUCH
REFUNDING  COMPLIES IN ALL RESPECTS WITH SECTION 13 OF THIS ARTICLE. FOR
PURPOSES OF THIS SUBDIVISION AND SUBDIVISION  7  OF  THIS  SECTION,  ANY
REFUNDING  DEBT  THAT  DOES  NOT EXTEND BEYOND THE FINAL MATURITY 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 DATE THIS SECTION SHALL  HAVE  TAKEN  EFFECT,  THE  STATE
SHALL  NOT, EXCEPT AS SPECIFICALLY AUTHORIZED IN ANOTHER SECTION OF THIS
CONSTITUTION, 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. ANY PROVISION REQUIRING THE STATE TO REPLACE MONIES USED
TO  PAY  DEBT  SERVICE SHALL BE INCLUDED IN THE PROHIBITION SET FORTH IN
THIS SUBDIVISION. OUTSTANDING DEBT THAT  WOULD  BE  PROHIBITED  BY  THIS

S. 4026                             4

SUBDIVISION  IF SUCH DEBT HAD BEEN INCURRED AFTER THE DATE THIS SUBDIVI-
SION SHALL HAVE TAKEN EFFECT MAY BE REFUNDED BY THE ENTITY THAT INCURRED
THE OUTSTANDING DEBT PROVIDED THAT THE 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.
  10. THE LEGISLATURE MAY, AT ANY TIME AFTER THE ENACTMENT  OR  APPROVAL
OF  LAW AUTHORIZING THE STATE TO CONTRACT DEBT PURSUANT TO THIS SECTION,
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 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
12, 13 or 15 of this article. [If] WITH RESPECT TO DEBT CONTRACTED OTHER
THAN PURSUANT TO SUBDIVISION 2 OF SECTION 11 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 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 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  4. Resolved (if the Assembly concur), That article 7 of the consti-
tution be amended by adding a new section 1-a to read as follows:
  S 1-A. WITHIN TEN DAYS FOLLOWING THE SUBMISSION OF THE BUDGET  BY  THE
GOVERNOR  PURSUANT  TO  THIS  ARTICLE, SUCH BILLS SHALL BE REFERRED TO A
JOINT BUDGET CONFERENCE COMMITTEE TO CONSIDER AND RECONCILE SUCH  BUDGET
RESOLUTION OR BUDGET BILLS AS MAY BE PASSED BY EACH HOUSE. THE TEMPORARY
PRESIDENT  OF  THE  SENATE AND THE SPEAKER OF THE ASSEMBLY SHALL JOINTLY
CONVENE SUCH JOINT BUDGET CONFERENCE COMMITTEE. SUCH CONFERENCE  COMMIT-
TEE MEETINGS SHALL BE REQUIRED TO MEET AND SHALL BE OPEN TO THE PUBLIC.

S. 4026                             5

  S  5. Resolved (if the Assembly concur), That article 7 of the consti-
tution be amended by adding a new section 1-b to read as follows:
  S  1-B.  1.  BY  THE END OF FEBRUARY IN EACH YEAR, PRIOR TO THE REPORT
REQUIRED BY SUBDIVISION 2 OF THIS SECTION, THE CHAIRPERSON  AND  RANKING
MINORITY  MEMBER  OF  THE  SENATE FINANCE COMMITTEE, THE CHAIRPERSON AND
RANKING MINORITY MEMBER OF THE ASSEMBLY WAYS AND MEANS COMMITTEE AND THE
DIRECTOR OF THE BUDGET SHALL JOINTLY CONVENE A  CONSENSUS  ECONOMIC  AND
REVENUE FORECASTING CONFERENCE IN THE FORM OF A JOINT LEGISLATIVE-EXECU-
TIVE HEARING, FOR THE PURPOSE OF ASSISTING THE GOVERNOR AND THE LEGISLA-
TURE  IN REACHING THE CONSENSUS REVENUE FORECAST REQUIRED BY SUBDIVISION
2 OF THIS SECTION. THE CONVENERS OF  THE  CONFERENCE  SHALL  INVITE  THE
STATE  COMPTROLLER  AND  SUCH  OTHER  PARTICIPANTS  TO THE CONFERENCE AS
SHALL, IN THEIR JUDGMENT, PROVIDE GUIDANCE ON THE CURRENT CONDITIONS IN,
AND PROBABLE OUTLOOK FOR THE PERFORMANCE OF, THE ECONOMY OF  THE  STATE,
AS  WELL  AS THE EFFECT OF SUCH CONDITIONS AND SUCH PERFORMANCE ON STATE
RECEIPTS.
  2. ON OR BEFORE MARCH FIRST IN EACH YEAR, THE DIRECTOR OF  THE  BUDGET
AND  THE  SECRETARY OF THE SENATE FINANCE COMMITTEE AND THE SECRETARY OF
THE ASSEMBLY WAYS  AND  MEANS  COMMITTEE  SHALL  ISSUE  A  JOINT  REPORT
CONTAINING  A  CONSENSUS  FORECAST  OF  THE ECONOMY AND SPECIFIC BINDING
ESTIMATES OF RECEIPTS AND ANY AND ALL OTHER AVAILABLE RESOURCES USED  TO
SUPPORT  DISBURSEMENT FOR THE CURRENT AND THE ENSUING STATE FISCAL YEAR.
SUCH ESTIMATES SHALL INCLUDE, BUT NOT  BE  LIMITED  TO:    EXPECTED  TAX
RECEIPTS  ON AN ALL-FUNDS BASIS, PROJECTED LOTTERY RECEIPTS, ANTICIPATED
MISCELLANEOUS RECEIPTS AND OTHER FINANCING SOURCES  INCLUDING,  BUT  NOT
LIMITED  TO,  RE-ESTIMATES  THAT WOULD LOWER CURRENT PROJECTED DISBURSE-
MENTS AS WELL AS OTHER RESOURCES THAT WOULD BE USED TO SUPPORT DISBURSE-
MENTS. THE ESTIMATE OF RECEIPTS FOR THE ENSUING FISCAL YEAR CONTAINED IN
THE REPORT SHALL BE ALL RECEIPTS FROM SUCH  SOURCES  DESCRIBED  IN  THIS
SUBDIVISION AVAILABLE TO MAKE DISBURSEMENTS AUTHORIZED BY THE THE APPRO-
PRIATION  BILLS  SUBMITTED BY THE GOVERNOR PURSUANT TO SECTION 3 OF THIS
ARTICLE FOR THE ENSUING FISCAL YEAR. THE COMPTROLLER  SHALL  COMMENT  ON
THE REASONABLENESS AND RELIABILITY OF THE CONSENSUS FORECAST.
  3.  ON  A  FAILURE OF THE DIRECTOR OF THE BUDGET, THE SECRETARY OF THE
SENATE FINANCE COMMITTEE AND THE SECRETARY  OF  THE  ASSEMBLY  WAYS  AND
MEANS  COMMITTEE TO ISSUE A JOINT REPORT CONTAINING A CONSENSUS FORECAST
AS PROVIDED IN SUBDIVISION 2 OF THIS SECTION,  OR  IF  THE  STATE  COMP-
TROLLER REJECTS SUCH FORECAST, THE STATE COMPTROLLER SHALL, ON OR BEFORE
MARCH  FIFTH,  PROVIDE BINDING ESTIMATES OF RECEIPTS AND OTHER RESOURCES
FOR THE CURRENT AND THE ENSUING STATE FISCAL YEAR. SUCH ESTIMATES  SHALL
INCLUDE,  BUT  NOT  BE LIMITED TO, EXPECTED TAX RECEIPTS ON AN ALL-FUNDS
BASIS, PROJECTED LOTTERY RECEIPTS, MISCELLANEOUS  RECEIPTS,  ANTICIPATED
MISCELLANEOUS  RECEIPTS  AND  OTHER FINANCING SOURCES INCLUDING RE-ESTI-
MATES THAT WOULD LOWER CURRENT PROJECTED DISBURSEMENTS AS WELL AS  OTHER
RESOURCES  THAT WOULD BE USED TO SUPPORT DISBURSEMENTS. IN RENDERING HIS
OR HER ESTIMATE, AS REQUIRED IN THIS SUBDIVISION, THE COMPTROLLER  SHALL
GIVE  DUE  CONSIDERATION  TO  THE INHERENT RISKS IN ECONOMIC AND REVENUE
FORECASTING AND THE INTEREST OF THE STATE  TO  MAINTAIN  BUDGET  BALANCE
THROUGHOUT  THE  FISCAL  YEAR.  THE ESTIMATE OF RECEIPTS FOR THE ENSUING
FISCAL YEAR PROVIDED BY THE STATE COMPTROLLER SHALL BE ALL RECEIPTS  AND
OTHER  RESOURCES  FROM  SUCH  SOURCES  AVAILABLE  TO  MAKE DISBURSEMENTS
AUTHORIZED BY THE APPROPRIATION BILLS SUBMITTED BY THE GOVERNOR PURSUANT
TO SECTION 3 OF THIS ARTICLE FOR THE ENSUING FISCAL YEAR.
  S 6. Resolved (if the Assembly concur), That section 2 of article 7 of
the constitution be amended to read as follows:

S. 4026                             6

  S 2. Annually, on or before the first day of  February  in  each  year
following  the year fixed by the constitution for the election of gover-
nor and lieutenant governor, and on or before the second Tuesday follow-
ing the first day of the annual meeting of the legislature, in all other
years,  the governor shall submit to the legislature a budget containing
a complete plan of expenditures proposed to be made before the close  of
the  ensuing  fiscal  year  and  all moneys and revenues estimated to be
available therefor, together with an explanation of the  basis  of  such
estimates  and recommendations as to proposed legislation, if any, which
the governor may deem necessary to provide moneys  and  revenues  suffi-
cient  to  meet  such  proposed expenditures. It shall also contain such
other recommendations and information as the governor  may  deem  proper
and such additional information as may be required by law.
  ANNUALLY,  AS PROVIDED BY LAW, THE GOVERNOR SHALL SUBMIT TO THE LEGIS-
LATURE A DETAILED LONG-TERM CAPITAL PROGRAM AND FINANCING  PLAN  CONCUR-
RENT WITH THE EXECUTIVE BUDGET.
  S  7. 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.

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