BILL NUMBER:  S5384

 TITLE OF BILL :

An act to amend chapter 492 of the laws of 1993 amending the local
finance law relating to installment loans and obligations evidencing
installment loans, in relation to extending the effectiveness thereof

 PURPOSE OF THE BILL :

The bill would extend to September 30, 2020 provisions relating to
bonds or notes bonds issued to the New York State Environmental
Facilities Corporation ("EFC") evidencing installment loans from the
Clean Water State Revolving Fund ("CWSRF") and the Drinking Water
State Revolving Fund ("DWSRF").

 SUMMARY OF PROVISIONS :

Section 1 of the bill would extend until September 30, 2020 the
"sunset" provision of Section 3 of Chapter 492 of the Laws of 1993,
thereby extending for an additional three years the provisions of
Local Finance Law ("LFL") § 169.00 which authorizes municipalities to
issue their bonds or notes evidencing installment loans to EFC in
order to obtain financial assistance from the CWSRF and the DWSRF.

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

 JUSTIFICATION :

EFC administers the CWSRF and the 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 and DWSRF programs.

Under both the CWSRF and the DWSRF, EFC is authorized to provide
assistance in several forms to recipients for the purpose of financing
or refinancing their capital projects. Normally, when financing is
provided to a municipality under either the CWSRF or the DWSRF, EFC
receives a general obligation bond or note from the municipality as
evidence of its obligation to repay such financing.  Installment
loans, through the use of a grid note, allow municipalities to draw
financing proceeds on a cost-incurred basis without having to issue a
separate bond or note to EFC for each amount advanced. Without grid
notes, a municipality would be required to "close" a new loan each
time it requested funds. The resultant transactional costs could be
prohibitive. The use of grid notes was authorized for the CWSRF by
Chapter 492 of the Laws of 1993, and for the DWSRF by Chapter 304 of
the Laws of 1997.

The use of grid notes in EFC's short-term financing program has been
an unqualified success in saving municipalities money. Hundreds of
counties, cities, towns and villages throughout New York have
successfully utilized grid notes to secure short-term CWSRF or DWSRF
financing. The use of grid notes has provided recipients with
flexibility and savings, and helped make low-cost financing readily
available for financing planning and design costs, as well as actual
construction, and, in many cases, interest-free "bridge" financing for
municipalities which anticipate receiving grants or other funding for
a project.

 PRIOR LEGISLATIVE HISTORY :

Chapter 492 of the Laws of 1993 enacted LFL § 169.00 and applied
initially only to the CWSRF.
Chapter 304 of the Laws of 1997 extended the application of LFL §
169.00 to the DWSRF.
By its terms, Chapter 304 of the Laws of 1997 expires the same date as
Chapter 492 of the Laws of 1993.
Chapter 492 of the Laws of 1993, which would have expired on June 30,
1996, was extended until June 30, 1999 by Chapter 250 of the Laws of
1996.
It has been extended every three years since 1999, until September 30,
2002 by Chapter 122 of the Laws of 1999; until September 30, 2005 by
Chapter 339 of the Laws of 2002; until September 30, 2008 by Chapter
628 of the Laws of 2005; until September 30, 2011 by Chapter 212 of
the Laws of 2008, until September 30, 2014 by Chapter 41 of the Laws
of 2011 and until September 30, 2017 by Chapter 111 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.