senate Bill S960

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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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Feb 19, 2014 opinion referred to judiciary
Jan 13, 2014 to attorney-general for opinion
Jan 08, 2014 referred to judiciary
Feb 06, 2013 opinion referred to judiciary
Jan 11, 2013 to attorney-general for opinion
Jan 09, 2013 referred to judiciary

S960 - Bill Details

Current Committee:
Law Section:
Constitution, Concurrent Resolutions to Amend
Laws Affected:
Amd Art 7 ยงยง10, 11 & 16, Constn
Versions Introduced in 2011-2012 Legislative Session:
S7544

S960 - Bill Texts

view summary

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:S960

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 "back-door borrowing," and
limits total State debt to no more than 5% 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, and the Senate
and the Assembly to give their approval or disapproval.

Section 2 eliminates "back-door borrowing" and, effective with State
fiscal year 2022-23, establishes a cap on the total outstanding
principal amount of State debt that would be equivalent to 5% of the
total personal income in the State. Except for short-term revenue
anticipation notes permitted by section 9 of Article 7 of the
Constitution, emergency borrowing permitted by section 10 of Article
7, and refundings permitted by section 13 of Article 7, no
indebtedness could be incurred for State purposes or to finance
State grants unless the debt falls below the 5% cap. To eliminate
"back-door borrowing," this section defines State debt to include
debt supported by any financing arrangement whereby the State agrees
to make payments which will be used, directly or indirectly, for the
payment of principal, interest, or related payments on indebtedness
incurred or contracted by the State itself for any purpose, or by any
State agency, municipality, individual, public or private corporation
or any other entity for State capital or operating purposes or to
finance grants, loans or other assistance payments made or to be made
by or on behalf of the State for any purpose. Among other provisions,
the prohibition will apply (i) whether or
not the obligation of the State to make payments is subject to

appropriation, or (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 an
issue would not exceed the 5% 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, will 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 that states if at any time the
legislature shall fail to make an appropriation for the payment of
interest or installments of principal or 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.

JUSTIFICATION:

Debt reform is one of the most important challenges facing New York
State. The future of the State's finances depends in large measure on
its ability to manage debt in a way that is disciplined and
effective. Debt reform must impose meaningful caps to ensure that
future debt is affordable.

Since 1990, outstanding debt has grown from $14.4 billion to $63.0
billion in 2012, representing a 337 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 2011 State Debt Medians, New York
is fifth highest in debt per capita behind Connecticut,
Massachusetts, Hawaii and New Jersey. New York's $3,149 debt per
capita is more than double the national average of $1,408.

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%
of total personal income of the State, beginning in 2022.

"Back-door borrowing", or borrowing outside of constitutional
strictures, has been used by New York State to circumvent the
requirement for public referendum. As of March 3, 2012, "back-door
borrowing" accounted for approximately 94 percent of the $63,0
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 exceeded $9.3 billion in State fiscal year 2011-12, with 52
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 is a suitable time and an inappropriate time to utilize debt.
This amendment would promote the appropriate use of State debt by
capping its levels, closing loopholes in the existing statutes and
restoring the accountability and transparency associated with the
requirement for public referenda on the issuance of debt.

LEGISLATIVE HISTORY:
S.7544 - To Attorney General for Opinion

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

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

                                   960

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced  by  Sen.  LIBOUS -- 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  HOUSE 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.
                                                           LBD89065-01-3

S. 960                              2

GOVERNOR, THE COMPTROLLER, AND A MAJORITY OF THE MEMBERS ELECTED TO EACH
HOUSE OF THE LEGISLATURE, THEN SUCH LAW OR LAWS SHALL BE ENACTED AS  MAY
BE NECESSARY OR ADVISABLE TO IMPLEMENT SUCH APPROVAL.
  S  2.  Resolved (if the Assembly concur), That section 11 of article 7
of the constitution be amended to read as follows:
  S 11. 1. Except the debts or refunding debts specified in sections  9,
10  and  13 of this article, no debt shall be hereafter contracted by or
[in] ON behalf of the state, unless such debt shall be authorized by law
PURSUANT TO THIS SECTION,  for  some  single  work  or  purpose,  to  be
distinctly  specified  therein. [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-EIGHT  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. 960                              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 EFFECTIVE DATE
OF THIS SUBDIVISION, BE IN THE FORM OF OBLIGATIONS ISSUED BY  THE  COMP-
TROLLER.
  7. NOTHING CONTAINED IN THIS SECTION SHALL INVALIDATE DEBT OBLIGATIONS
OUTSTANDING  ON  THE  EFFECTIVE  DATE  OF THIS SUBDIVISION THAT WOULD BE
SUBJECT TO THE PROVISIONS OF THIS SECTION IF INCURRED AFTER SUCH  EFFEC-
TIVE DATE, AND THE STATE MAY CONTINUE TO PROVIDE FOR PAYMENTS RELATED TO
SUCH  DEBT  ON  THE  SAME  TERMS  UNDER  WHICH  SUCH  DEBT WAS INCURRED;
PROVIDED, HOWEVER, THAT NO SUCH  DEBT  SHALL  BE  REFUNDED  UNLESS  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 EFFECTIVE DATE OF
THIS SUBDIVISION.
  8.  DEBT  OBLIGATIONS ISSUED TO REFUND OUTSTANDING STATE DEBT, REGARD-
LESS OF WHETHER SUCH OUTSTANDING DEBT WAS INCURRED PRIOR TO  THE  EFFEC-
TIVE  DATE OF THIS SUBDIVISION, SHALL NOT BE COUNTED FOR THE PURPOSES OF
THE LIMIT IMPOSED BY SUBDIVISION 3 OF THIS  SECTION  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 EFFECTIVE DATE OF THIS  SECTION,  THE  STATE  SHALL  NOT,
EXCEPT  AS  SPECIFICALLY AUTHORIZED IN ANOTHER SECTION OF THIS CONSTITU-
TION, 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  SUBDIVI-

S. 960                              4

SION  IF  SUCH  DEBT  HAD BEEN INCURRED AFTER THE EFFECTIVE DATE OF THIS
SUBDIVISION MAY BE REFUNDED BY THE ENTITY THAT INCURRED THE  OUTSTANDING
DEBT  PROVIDED  THAT  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 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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