S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10479
 
                           I N  A S S E M B L Y
 
                              April 27, 2018
                                ___________
 
 Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
   Committee on Cities
 
 AN ACT to amend the local finance law, in relation to the sale of  bonds
   and notes of the city of New York, the issuance of bonds or notes with
   variable  rates  of interest, interest rate exchange agreements of the
   city of New York, the refunding of bonds, and  the  down  payment  for
   projects  financed  by bonds; to amend chapter 868 of the laws of 1975
   constituting the New York state financial emergency act for  the  city
   of  New  York, in relation to a pledge and agreement of the state; and
   to amend chapter 142 of the laws of 2004, amending the  local  finance
   law  relating  to interest rate exchange agreements of the city of New
   York and refunding bonds of such city, in relation to  the  effective-
   ness thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The opening paragraph of paragraph (a) of section 54.10  of
 the  local finance law, as amended by chapter 64 of the laws of 2017, is
 amended to read as follows:
   To facilitate the marketing of any issue of bonds or notes of the city
 of New York issued on or before June thirtieth, two thousand  [eighteen]
 NINETEEN,  the  mayor  and  comptroller of such city may, subject to the
 approval of the state comptroller and the limitations on  private  sales
 of bonds and notes, respectively, provided by law:
   §  2.  The  closing  paragraph  of paragraph a of section 54.90 of the
 local finance law, as amended by chapter 64 of  the  laws  of  2017,  is
 amended to read as follows:
   Notwithstanding the foregoing, whenever in the judgment of the finance
 board  of the city of New York the interest of such city would be served
 thereby, the city of New York may without further approval  issue  bonds
 or notes, on or before July fifteenth, two thousand [eighteen] NINETEEN,
 with  interest rates that vary in accordance with a formula or procedure
 and are subject to a maximum rate of interest set forth or  referred  to
 in  the  bonds  or  notes  and may provide the holders thereof with such
 rights to require the city or other persons to purchase  such  bonds  or
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD15623-01-8

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 notes  or  renewals  thereof  from the proceeds of the resale thereof or
 otherwise from time to time prior to the final maturity of such bonds or
 notes as the finance board of the city of New York may determine and the
 city  may resell, at any time prior to final maturity, any such bonds or
 notes acquired as a result of the exercise  of  such  rights;  provided,
 however,  that  at no time shall the total principal amount of bonds and
 notes issued by the city of New York pursuant to this  paragraph  (other
 than  bonds  and  notes (1) bearing interest at rates and for periods of
 time that are specified without reference to future events or contingen-
 cies, or (2) described in section 136.00 of this article)  exceed  twen-
 ty-five  percent of the limit prescribed by section 104.00 of this arti-
 cle.
   § 3. The opening paragraph of subdivision 1 of paragraph d of  section
 54.90  of the local finance law, as amended by chapter 64 of the laws of
 2017, is amended to read as follows:
   On or before July fifteenth,  two  thousand  [eighteen]  NINETEEN  the
 mayor and comptroller of the city of New York may:
   §  4.  The  opening  paragraph  of paragraph a of section 57.00 of the
 local finance law, as amended by chapter 64 of  the  laws  of  2017,  is
 amended to read as follows:
   Bonds  shall  be  sold  only at public sale and in accordance with the
 procedure set forth in this section and sections 58.00 and 59.00 of this
 title, except as otherwise provided in this paragraph. Bonds may be sold
 at private sale to the United States government or any agency or instru-
 mentality thereof, the state of New York municipal bond bank agency,  to
 any sinking fund or pension fund of the municipality, school district or
 district corporation selling such bonds, or, in the case of sales by the
 city  of New York prior to July first, two thousand [eighteen] NINETEEN,
 also to the municipal assistance corporation for the city of New York or
 to any other purchaser with the consent of the mayor and the comptroller
 of such city and approval of the state comptroller, or, in the  case  of
 sales  by the county of Nassau prior to December thirty-first, two thou-
 sand seven, also to the Nassau county interim finance authority with the
 approval of the state comptroller, or, in the case of sales by the  city
 of  Buffalo  prior to June thirtieth, two thousand thirty-seven, also to
 the Buffalo fiscal stability authority with the approval  of  the  state
 comptroller,  or, in the case of bonds or other obligations of a munici-
 pality issued for the construction of any sewage treatment works, sewage
 collecting system,  storm  water  collecting  system,  water  management
 facility, air pollution control facility or solid waste disposal facili-
 ty, also to the New York state environmental facilities corporation, or,
 in the case of bonds or other obligations of a school district or a city
 acting on behalf of a city school district in a city having a population
 in  excess of one hundred twenty-five thousand but less than one million
 inhabitants according to the latest federal census, issued to finance or
 refinance the cost of  school  district  capital  facilities  or  school
 district capital equipment, as defined in section sixteen hundred seven-
 ty-six of the public authorities law, also to the dormitory authority of
 the state of New York. Bonds of a river improvement or drainage district
 established  by  or  under the supervision of the department of environ-
 mental conservation may be sold at private sale to the state of New York
 as investments for any funds of the state which by law may be  invested,
 provided,  however,  that the rate of interest on any such bonds so sold
 shall be approved by the water power  and  control  commission  and  the
 state comptroller. Bonds may also be sold at private sale as provided in
 section  63.00  of  this title. No bonds shall be sold on option or on a

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 deferred payment plan, except that options to purchase, effective for  a
 period not exceeding one year, may be given:
   §  5.  Subdivision  3  of  paragraph  g  of section 90.00 of the local
 finance law, as amended by chapter 64 of the laws of 2017, is amended to
 read as follows"
   3. Outstanding bonds may, pursuant to a power to recall and redeem  or
 with  the  consent  of  the  holders thereof, be exchanged for refunding
 bonds (i) if the refunding bonds are to bear interest at a rate equal to
 or lower than that borne by the bonds to be refunded or (ii) if, in  the
 case  of  the  city of New York prior to July first, two thousand [eigh-
 teen] NINETEEN, the annual payment required for principal  and  interest
 on the refunding bond is less than the annual payment required for prin-
 cipal  and interest on the bond to be refunded, in each case such annual
 payments to be determined by dividing the total principal  and  interest
 payments  due over the remaining life of the bond by the number of years
 to maturity of the bond or (iii) if the bonds to be refunded were issued
 by the city of New York after June thirtieth, nineteen hundred  seventy-
 eight  and  prior  to  July  first, two thousand [eighteen] NINETEEN and
 contain covenants referring to the  existence  of  the  New  York  state
 financial  control board for the city of New York or any other covenants
 relating to matters other than  the  prompt  payment  of  principal  and
 interest  on  the  obligations  when due and the refunding bond omits or
 modifies any such covenant.
   § 6. Subdivision 8 of paragraph d  of  section  107.00  of  the  local
 finance law, as amended by chapter 64 of the laws of 2017, is amended to
 read as follows:
   8.  Notwithstanding  any  other provision of law, the financing by the
 city of New York prior to July first, two thousand  [eighteen]  NINETEEN
 of  any  object  or  purpose  which  has a period of probable usefulness
 determined by law by the issuance of any bonds or notes,  including  (i)
 the issuance of bonds or notes to obtain reimbursement for funds hereto-
 fore advanced for the object or purpose for which the bonds or notes are
 being issued, (ii) the issuance of bonds or notes to redeem notes previ-
 ously  issued for the object or purpose for which the bonds or notes are
 being issued or (iii) the issuance of bonds to refund  bonds  previously
 issued for the object or purpose for which bonds are being issued.
   §  7. Subdivision 1 of section 10-a of section 2 of chapter 868 of the
 laws of 1975, constituting the New York state  financial  emergency  act
 for  the city of New York, as amended by chapter 64 of the laws of 2017,
 is amended to read as follows:
   1. In the event that after the date on which the  provisions  of  this
 act become operative, any notes or bonds are issued by the city prior to
 July  1, [2018] 2019, or any bonds are issued by a state financing agen-
 cy, the state of New York hereby authorizes the city and authorizes  and
 requires  such  state financing agency to include a pledge and agreement
 of the state of New York in any agreement made by the city or such state
 financing agency with holders or guarantors of such notes or bonds  that
 the  state  will not take any action which will (a) substantially impair
 the authority of the board during a control period, as defined in subdi-
 vision twelve of section two of this act as in effect on the  date  such
 notes  or  bonds  are  issued  (i) to approve, disapprove, or modify any
 financial plan or financial plan  modification,  including  the  revenue
 projections  (or  any  item  thereof)  contained therein, subject to the
 standards set forth in paragraphs a, c, d, e and f of subdivision one of
 section eight of this act as in effect on the date such notes  or  bonds
 are issued and paragraph b of such subdivision as in effect from time to

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 time,  (ii)  to disapprove a contract of the city or a covered organiza-
 tion if the performance of such contract would be inconsistent with  the
 financial  plan or to approve or disapprove proposed short-term or long-
 term borrowing of the city or a covered organization or any agreement or
 other  arrangement  referred  to in subdivision four of section seven of
 this act, or (iii) to establish and adopt procedures with respect to the
 deposit in and disbursement from the board fund of  city  revenues;  (b)
 substantially  impair  the  authority  of  the board to review financial
 plans, financial plan  modifications,  contracts  of  the  city  or  the
 covered organizations and proposed short-term or long-term borrowings of
 the  city  and  the  covered organizations; (c) substantially impair the
 independent maintenance of a separate  fund  for  the  payment  of  debt
 service on bonds and notes of the city; (d) alter the composition of the
 board  so  that  the majority of the voting members of the board are not
 officials of the state of New York elected in a state-wide  election  or
 appointees  of  the  governor;  (e) terminate the existence of the board
 prior to the time to be determined in accordance with  section  thirteen
 of this act as in effect on the date such notes or bonds are issued; (f)
 substantially  modify  the  requirement that the city's financial state-
 ments be audited by a nationally recognized independent certified public
 accounting firm or consortium of firms and that a report on  such  audit
 be  furnished  to  the  board;  or (g) alter the definition of a control
 period set forth in subdivision twelve of section two of this act, as in
 effect on the date such notes or  bonds  are  issued,  or  substantially
 alter  the  authority  of the board, as set forth in said subdivision to
 reimpose or terminate a control  period;  provided,  however,  that  the
 foregoing  pledge  and agreement shall be of no further force and effect
 if at any time (i) there is on deposit in a separate trust account  with
 a  bank,  trust  company  or other fiduciary sufficient moneys or direct
 obligations of the United States or obligations guaranteed by the United
 States, the principal of and/or interest on which will provide moneys to
 pay punctually when due at maturity or prior to maturity by  redemption,
 in  accordance  with  their  terms, all principal of and interest on all
 outstanding notes and bonds of the city or such state  financing  agency
 containing  this  pledge and agreement and irrevocable instructions from
 the city or such state financing agency to such bank, trust  company  or
 other  fiduciary  for  such  payment of such principal and interest with
 such moneys shall have been given, or (ii) such notes and bonds, togeth-
 er with interest thereon, have been paid in full  at  maturity  or  have
 otherwise been refunded, redeemed, defeased, or discharged; and provided
 further  that  the foregoing pledge and agreement shall be of full force
 and effect upon its inclusion in any agreement made by the city or state
 financing agency with holders or guarantors of such notes or bonds.
   Upon payment for such obligations issued pursuant to this act  by  the
 original  and all subsequent holders inclusion of the foregoing covenant
 shall be deemed conclusive evidence of valuable  consideration  received
 by the state and city for such covenant and of reliance upon such pledge
 and agreement by any such holder. The state hereby grants any such bene-
 fited  holder  the right to sue the state in a court of competent juris-
 diction and enforce this covenant and agreement and waives all rights of
 defense based on sovereign immunity in such an action or suit.
   § 8. Section 5 of chapter 142 of the laws of 2004, amending the  local
 finance law relating to interest rate exchange agreements of the city of
 New  York  and refunding bonds of such city, as amended by chapter 64 of
 the laws of 2017, is amended to read as follows:

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   § 5. This act shall take effect immediately,  provided,  that  section
 three  of  this  act shall expire and be deemed repealed July 15, [2018]
 2019.
   § 9. Separability. If any clause, sentence, paragraph, section or part
 of  this act shall be adjudged by any court of competent jurisdiction to
 be invalid, such judgment shall not affect,  impair  or  invalidate  the
 remainder thereof, but shall be confined in its operation to the clause,
 sentence,  paragraph,  section  or part thereof directly involved in the
 controversy in which such judgment shall have been rendered.
   § 10. This act shall take effect immediately.