senate Bill S6977

Signed By Governor
2013-2014 Legislative Session

Relates to refunding bonds and extending the provisions thereof

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Archive: Last Bill Status - Signed by Governor


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jul 22, 2014 signed chap.158
Jul 11, 2014 delivered to governor
May 13, 2014 returned to senate
passed assembly
ordered to third reading cal.655
substituted for a9034
May 12, 2014 referred to ways and means
delivered to assembly
passed senate
May 05, 2014 advanced to third reading
Apr 30, 2014 2nd report cal.
Apr 29, 2014 1st report cal.452
Apr 09, 2014 referred to local government

Votes

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Apr 29, 2014 - Local Government committee Vote

S6977
8
0
committee
8
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
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Local Government Committee Vote: Apr 29, 2014

aye wr (1)

S6977 - Bill Details

See Assembly Version of this Bill:
A9034
Law Section:
Local Finance
Laws Affected:
Amd §2, Chap 629 of 2005

S6977 - Bill Texts

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Relates to refunding bonds and extending the provisions thereof.

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BILL NUMBER:S6977

TITLE OF BILL: An act to amend chapter 629 of the laws of 2005,
amending the local finance law relating to refunding bonds, in
relation to extending the provisions thereof

Purpose of the Bill:

The bill would extend for three years, to September 30, 2017,
authorization for financially distressed municipalities to sell
certain bonds to the Environmental Facilities Corporation ("EFC") in
connection with hardship state revolving loan financing.

Summary of Provisions:

Section 1 of the bill would extend the "sunset" provision of Section 2
of Chapter 629 of the Laws of 2005, thereby extending until September
30, 2017 certain provisions of Local Finance Law ("LFL") § 90.00,
which authorize municipalities with hardship State Revolving Fund
financing, who are seeking to extend the term of their zero percent
loans through refinancing and whose current bonds or notes are within
5 years of issuance, to sell their refunding bonds to EFC without
requiring a showing of savings.

Section 2 of the bill provides for an immediate effective date.

Existing Law:

Currently, under LFL § 90.00(c)(2) a municipality may sell their
refunding bonds or notes to EFC within five years of issuance without
requiring a showing of savings. This provision, however, will be
deemed repealed as of September 30, 2014.

Prior Legislative History:

These provisions were extended until September 30, 2011 by Chapter 277
of the Laws of 2008, and until September 30, 2014 by Chapter 72 of the
Laws of 2011.

Statement in Support:

The purpose of this legislation is to continue to provide critical
fiscal relief to financially distressed municipalities. The
legislation will continue certain zero interest financing
opportunities available to fiscally distressed municipalities through
the Clean Water State Revolving Fund ("CWSRF") and the Drinking Water
State Revolving Fund ("DWSRF").

EFC, together with the Department of Environmental Conservation
("DEC"), administers the CWSRF. The CWSRF was established to provide
financial assistance to various recipients in acquiring, constructing
and upgrading eligible water pollution control projects. EFC, together
with the Department of Health, also administers the DWSRF. The DWSRF
was established to provide financial assistance for acquiring,
constructing and upgrading eligible water supply projects. Under both
the CWSRF and the DWSRF, EFC is authorized to provide assistance to
recipients for the purpose of financing or refinancing such projects.


Recipients with high cost projects that serve residential areas may
qualify for a reduced interest rate or interest-free financing through
either State Revolving Fund ("SRF") program. Additionally, EFC's
reduced interest rate financings assist those recipients facing
financial hardship.

In order to expand options available to the recipients of financial
assistance from the CWSRF and DWSRF, EFC expanded the forms of
financing offered through the programs including investing in, or
purchasing of, municipal debt/bond obligations. Through this
additional form of financing, EFC is able to extend the term of the
recipient's payment obligation of the EFC financing to up to 30 years
for all SRF recipients facing fiscal hardship. Therefore, fiscally
distressed municipalities that qualify for hardship financing under
the CWSRF and DWSRF extended-term financing at a zero percent interest
rate may reduce their annual debt service by refinancing for a period
of greater than 20 years.

Municipalities wishing to refund serial bonds are subject to the
requirements of LFL § 90.00. Prior to enactment of Chapter 629 of the
Laws of 2005, pursuant to LFL § 90.00 (c)(2), municipalities refunding
notes or bonds within five years of issuance were required to show net
present value savings computed in accordance with LFL
90.10(b)(2)(a), which states that refunding bonds shall only be issued
in the event that the present value of the total payments of both
principal and interest to become due on the refunding bonds shall be
less than the present value of the principal and interest to become
due at their stated maturities on the principal amount of the bonds to
be refunded. It was impossible for the fiscally distressed
municipality to show present value savings because this type of
refinancing merely trades one zero interest financing for another.
However, the reduction in annual debt service can be dramatic.
Therefore, these fiscally distressed municipalities were forced to
delay valuable refinancing opportunities, which would provide them
with fiscal relief with a longer term, and lower annual debt service
payments. By remedying this anomaly, Chapter 629 provided a valuable
and important financing mechanism for municipalities that this bill
would continue for an additional three years.

EFC's mission is to provide low-cost capital and expert technical
assistance for environmental projects in New York State. It is
important that communities with critical fiscal needs are adequately
assisted in maintaining financing for necessary clean and drinking
water projects. This legislation will continue to provide these
communities with the necessary assistance to reduce their costs.

Budget Implications:

None.

Local Impact:

None.

Effective Date:

The bill would take effect immediately.


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

                                  6977

                            I N  S E N A T E

                              April 9, 2014
                               ___________

Introduced  by  Sen.  RANZENHOFER  --  (at  request of the Environmental
  Facilities Corporation) -- read twice and ordered  printed,  and  when
  printed to be committed to the Committee on Local Government

AN  ACT  to  amend  chapter  629 of the laws of 2005, amending the local
  finance law relating to refunding bonds, in relation to extending  the
  provisions thereof

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

  Section 1. Section 2 of chapter 629 of the laws of 2005, amending  the
local  finance law relating to refunding bonds, as amended by chapter 72
of the laws of 2011, is amended to read as follows:
  S 2. This act shall take effect immediately and shall  expire  and  be
deemed repealed September 30, [2014] 2017.
  S 2. This act shall take effect immediately.







 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13970-02-4

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