BILL NUMBER:  S5383

 TITLE OF BILL :

An act to amend chapter 581 of the laws of 2005 amending the local
finance law relating to statutory installment bonds, in relation to
extending the effectiveness thereof

 PURPOSE OF THE BILL :

The bill would extend to September 30, 2020 provisions relating to
statutory installment bonds issued to the New York State Environmental
Facilities Corporation ("EFC").

 SUMMARY OF PROVISIONS :

Section 1 of the bill would extend until September 30, 2020 the
"sunset" provision of Section 2 of Chapter 581 of the Laws of 2005,
thereby extending for an additional three years the provisions of
Local Finance Law ("LFL") § 62.10(c) which authorizes local
governments to issue statutory installment bonds in an amount not to
exceed $20 million to EFC at a fixed rate or, if issued in serial
maturities, at a set rate for each individual maturity.

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

              

 JUSTIFICATION :

EFC administers the Clean Water State Revolving Fund ("CWSRF") and the
Drinking Water State Revolving Fund ("DWSRF"). Under these revolving
fund programs, EFC provides low cost financial assistance to
municipalities and other entities for water and wastewater
infrastructure and other environmental projects. As of September 30,
2016, EFC has issued approximately $17.4 billion in State Revolving
Fund Bonds under the CWSRF program and the DWSRF program for the
purpose of providing financial assistance to local governments and
public benefit corporations.

Before 2005, in accordance with the LFL, a borrower receiving EFC
financing was required to issue serial bonds to EFC for each maturity;
i.e., for a 20 year financing, EFC would receive 20 separate bonds
from the community. The issuance of serial bonds caused EFC, and those
providing trustee services, excessive servicing cost and substantial
time in handling and processing of multiple bonds. This process also
resulted in unnecessary bonding costs for EFC's borrowers.

A single debt instrument for financings at or under $20 million, such
as a statutory installment bond, reduces the costs associated with
printing, processing and storage. Reduced paper usage achieves
environmental benefits, while also reducing the chance of error
associated with multiple printed bonds. This simplified approach also
benefits borrowers in making the financing process more "user
friendly" while enhancing the efficient preparation and execution of
the bonds.

 PRIOR LEGISLATIVE HISTORY :

LFL § 62.10(c) was extended until September 30, 2011 by Chapter 213 of
the Laws of 2008, until September 30, 2014 by Chapter 69 of the Laws
of 2011 and until September 30, 2017 by Chapter 110 of the Laws of
2014.

 FISCAL IMPLICATIONS :

The bill would have no budget implications to the State.

 EFFECTIVE DATE :
The bill would take effect immediately.