S T A T E   O F   N E W   Y O R K
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                                  10265

                          I N  A S S E M B L Y

                              May 19, 2016
                               ___________

Introduced  by M. of A. FARRELL -- (at request of the State Comptroller)
  -- 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
  authorization  of debt to respond to acts of terrorism, a limit on the
  total amount of state-funded debt, and the refunding of state debts

  Section 1. Resolved (if the Senate concur), That section 10 of article
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
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.
  S  2. Resolved (if the Senate 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  law]  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 ARTICLE, SUPPORTED IN WHOLE OR IN PART BY ANY FINANCING ARRANGE-
MENT 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  OPERAT-
ING  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 AVAIL-
ABLE FOR THE PURPOSE OF SUPPORTING DEBT OF ANY MUNICIPALITY, INDIVIDUAL,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD89123-02-6

A. 10265                            2

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  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.
  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  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. 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-
SIX AND IN EVERY FISCAL YEAR THEREAFTER, NO DEBT AUTHORIZED PURSUANT  TO
THIS SECTION SHALL BE INCURRED UNLESS THE TOTAL PRINCIPAL AMOUNT OF DEBT
TO  BE  INCURRED PURSUANT TO SUCH LAW, TOGETHER WITH THE TOTAL PRINCIPAL
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.
DEBTS SUBJECT TO THE LIMITS 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
ONE-HALF  OF ONE PERCENT OF TOTAL GOVERNMENTAL FUNDS TAX RECEIPTS IN THE
IMMEDIATELY PRECEDING FISCAL YEAR 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-SIX 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.

A. 10265                            3

  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 4 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 INTEREST,
INSTALLMENTS OF PRINCIPAL, CONTRIBUTIONS TO SINKING FUNDS,  AND  RELATED
PAYMENTS  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 INTER-
EST, INSTALLMENTS OF PRINCIPAL,  CONTRIBUTIONS  TO  SINKING  FUNDS,  AND
RELATED  PAYMENTS  ONLY  IF  OTHER  SOURCES AVAILABLE FOR THE PAYMENT OF
INTEREST, INSTALLMENTS OF PRINCIPAL, CONTRIBUTIONS TO SINKING FUNDS, AND
RELATED PAYMENTS ARE INADEQUATE. ANY PROVISION REQUIRING  THE  STATE  TO
REPLACE MONIES USED TO PAY INTEREST, INSTALLMENTS OF PRINCIPAL, CONTRIB-
UTIONS  TO  SINKING FUNDS, AND RELATED PAYMENTS SHALL BE INCLUDED IN THE
PROHIBITION SET FORTH IN THIS SUBDIVISION. OUTSTANDING DEBT  THAT  WOULD
BE  PROHIBITED  BY THIS SUBDIVISION IF SUCH DEBT HAD BEEN INCURRED AFTER
THE DATE THIS SUBDIVISION 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  COMP-
TROLLER.
  S  3. 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
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

A. 10265                            4

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, 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 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.