NY State Senate Bill 2019-S2319

Senate Bill S2319

2019-2020 Legislative Session

Relates to prohibiting the diversion of funds for purposes other than those for which the funds were originally intended

download bill text pdf

Archive: Last Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 13, 2020	opinion referred to judiciary
Feb 14, 2020	to attorney-general for opinion
Jan 08, 2020	referred to judiciary
Mar 01, 2019	opinion referred to judiciary
Feb 07, 2019	to attorney-general for opinion
Jan 24, 2019	referred to judiciary

2019-S2319 (ACTIVE) - Details

Current Committee:: Senate Judiciary
Law Section:: Constitution, Concurrent Resolutions to Amend
Laws Affected:: Add Art 7 §20, Constn
Versions Introduced in Other Legislative Sessions:: 2015-2016: S6297
2017-2018: S486, S7084
2021-2022: S2950

2019-S2319 (ACTIVE) - Summary

Relates to prohibiting the diversion of funds for purposes other than those for which the funds were originally intended.

2019-S2319 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2319

SPONSOR: KAVANAGH
 
TITLE OF BILL:  CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing an amendment to article 7 of the constitution, in relation to
the diversion of dedicated funds

 
PURPOSE:

Prohibits the diversion of revenue from dedicated funds for purposes
other than that for which the fund was created, except in cases of
fiscal emergency.

 
SUMMARY OF PROVISIONS:

Section 1 adds a new Section 20 to Article 7 of the State Constitution
that restricts the diversion of revenues from dedicated funds for
purposes other than their intended use. The section provides for excep-
tion to the prohibition in cases in which the Governor declares a fiscal
emergency, accompanied by a Diversion Impact Statement to the Legisla-
ture.

The Diversion Impact Statement must contain the amount of the diversion
the amount diverted from each fund; the cumulative amount diverted from
each of the funds subject to diversion during the preceding five years,
which shall also be categorized by fund type; the date or dates when the
diversion is to occur; a detailed estimate of the impact of diversion
from each fund; and the purpose for which the funds will be diverted. In
cases where the emergency involves the need to repel invasion, suppress
insurrection, defend the state after a declaration of war, respond to an
act of terrorism, or respond to a natural disaster, the Diversion Impact
Statement may be submitted retroactively. Under all other circumstances,
the Legislature must receive the Diversion Impact Statement prior intro-
duction concurrent resolution declaring a fiscal emergency, the passage
of which requires a two-thirds majority vote.

A fiscal emergency may only be declared if certain economic conditions
are met, as determined by the Legislature in statute. If the fiscal
emergency declaration before the Legislature can establish such require-
ments, the Governor must use the composite index of business cycle indi-
cators established pursuant to section 14 of chapter 1 of the laws of
2007.

 
JUSTIFICATION:

The public has a right to expect that the taxes it pays for a specific
purpose actually go to that purpose. This constitutional amendment would
prohibit the diversion of any dedicated revenue from these funds to a
purpose other than their intended use, except in cases of extraordinary
circumstance. In such cases, a diversion would require joint action by
the Executive and the Legislature.

New York has a number of dedicated funds, often called "lockboxes," that
were established to ensure funds were available for key infrastructure
projects. These lockboxes include the Dedicated Highway and Bridge Trust
Fund (DHBTF) designed to support critical road and bridge needs; the
Mass Transportation Operating Assistance (MTOA) Fund and the Mass Trans-
portation Trust Fund to support transit; and the Environmental
Protection Fund (EFF) and Regional Greenhouse Gas Initiative (RGGI) fund
to support investments to protect the environment, including through
water infrastructure and energy efficiency projects.

The state could do a much better job of protecting or "locking" these
funds. From 2000 to 2010, more than $3.7 billion was diverted from dedi-
cated State funds to the General Fund. From its inception through fiscal
year 2006-09, the DHBTF collected over $33 billion meant for road and
bridge repair and capital improvements, but only about $11 billion was
spent on capital construction rather than operating or debt service
costs. As recently as this April, the 2015-16 Enacted Budget included
sweeps of $41 million and $25 million, from the RGGI and EPF, respec-
tively, to the General Fund, with no specific language authorizing its
replacement. Other states have faced this same difficulty and have
"locked their lockboxes." Maryland and Wisconsin have passed constitu-
tional amendments to prevent sweeps of dedicated infrastructure funding.
This constitutional amendment would "lock the lockboxes" in New York
State.

 
LEGISLATIVE HISTORY:

2018: S7084 - AG OPINION REFERRED TO JUDICIARY
2017: S486 - AG OPINION REFERRED TO JUDICIARY
2016: S6297 - AG OPINION REFERRED TO JUDICIARY

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Resolved, that the foregoing be referred to the first regular legisla-
tive 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.
(1) Office of the State Comptroller. New York's Deficit Shuffle. Apr,
2010
(2) Id.
(3) Office of the State Comptroller. Report on the State Fiscal Year
2015-16 Enacted Budget, Apr, 2015.
(4) Council of State Governments, Transportation Trust Funds & Lockbox
Protections, Mar. 2015.

2019-S2319 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2319
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                             January 24, 2019
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be committed to the Committee on Judiciary
 
             CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
 
 proposing an amendment to article 7 of the constitution, in relation  to
   the diversion of dedicated funds

   Section  1.  Resolved  (if the Assembly concur), That article 7 of the
 constitution be amended by adding a new section 20 to read as follows:
   § 20. RESTRICTIONS ON DIVERSION OF  DEDICATED  FUNDS;  DECLARATION  OF
 FISCAL  EMERGENCY.  1. THE LEGISLATURE SHALL NOT DIVERT REVENUES DERIVED
 FROM TAXES AND FEES PAID BY THE  PUBLIC  INTO  ANY  DEDICATED  FUND  FOR
 PURPOSES  OTHER THAN THOSE FOR WHICH THAT FUND WAS INTENDED.  PROHIBITED
 DIVERSIONS SHALL INCLUDE, WITHOUT LIMITATION:
   (A) BUDGETARY TRANSFERS OF DEDICATED FUND REVENUES  INTO  THE  GENERAL
 FUND  OF  THE STATE OR INTO ANY OTHER FUND MAINTAINED FOR THE SUPPORT OF
 ANOTHER GOVERNMENTAL PURPOSE;
   (B) ADMINISTRATIVE ACTS BY THE EXECUTIVE THAT WOULD TRANSFER DEDICATED
 FUND REVENUES INTO THE GENERAL FUND OF THE STATE OR INTO ANY OTHER  FUND
 MAINTAINED FOR THE SUPPORT OF ANOTHER GOVERNMENTAL PURPOSE;
   (C) ADDITION, BY STATUTE OR ADMINISTRATIVE ACTION, OF NEW PURPOSES FOR
 WHICH  APPROPRIATION  SHALL  BE MADE AVAILABLE FOR USE OF DEDICATED FUND
 REVENUES, INCLUDING ADDITION OF NEW PURPOSES INTO DEDICATED FUND  ENACT-
 ING LEGISLATION; AND
   (D) REMOVAL, BY STATUTE OR ADMINISTRATIVE ACTION, OF SOURCES OF REVEN-
 UE  CREATED  BY  STATUTE, UNLESS REPLACED WITH A GREATER SOURCE OF DEDI-
 CATED REVENUE.
   2. THE ONLY INSTANCE IN WHICH DEDICATED REVENUES MAY BE DIVERTED SHALL
 BE UPON DECLARATION OF A FISCAL EMERGENCY BY THE GOVERNOR,  WHICH  SHALL
 BE ACCOMPANIED BY A DIVERSION IMPACT STATEMENT.
   (A)  A  FISCAL EMERGENCY MAY BE DECLARED BY THE GOVERNOR AND DIVERSION
 OF FUNDS MAY BE AUTHORIZED IF THE GOVERNOR NEEDS THE REVENUES  TO  REPEL
 INVASION, SUPPRESS INSURRECTION, DEFEND THE STATE AFTER A DECLARATION OF
 WAR,  RESPOND  TO AN ACT OF TERRORISM, OR RESPOND TO A NATURAL DISASTER.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD89019-01-9

 S. 2319                             2
 
 PRIOR TO DIVERTING REVENUES, THE GOVERNOR SHALL NOTIFY THE MAJORITY  AND
 MINORITY  LEADERSHIP  OF THE LEGISLATURE. THE DIVERSION IMPACT STATEMENT
 MAY BE PROVIDED RETROACTIVELY UNDER THESE CIRCUMSTANCES.
   (B)  NO  OTHER  DIVERSIONS  SHALL  BE  AUTHORIZED  UNTIL  THE GOVERNOR
 DECLARES A STATE OF FISCAL EMERGENCY TO THE MAJORITY AND MINORITY  LEAD-
 ERSHIP OF THE LEGISLATURE, WHICH SHALL, BY CONCURRENT RESOLUTION, RATIFY
 THIS  FISCAL  EMERGENCY  DECLARATION.  THE  ASSENT  OF TWO-THIRDS OF THE
 MEMBERS ELECTED TO THE LEGISLATURE  SHALL  BE  REQUISITE  TO  PASS  SUCH
 RESOLUTION  AND ANY LEGISLATIVE APPROPRIATIONS THAT AUTHORIZE THE DIVER-
 SION OF FUNDS.
   (C) IF ANY DIVERSION OF FUNDS OCCURS UPON DECLARATION OF FISCAL  EMER-
 GENCY  DURING A REGULAR OR EXTRAORDINARY SESSION OF THE LEGISLATURE, THE
 BUDGET OR LEGISLATION DIVERTING FUNDS SHALL INCLUDE A  DIVERSION  IMPACT
 STATEMENT WHICH INCLUDES THE FOLLOWING INFORMATION:
   (I) THE AMOUNT DIVERTED FROM EACH FUND;
   (II)  THE CUMULATIVE AMOUNT DIVERTED FROM EACH OF THE FUNDS SUBJECT TO
 DIVERSION DURING THE PRECEDING FIVE YEARS, WHICH SHALL ALSO BE  CATEGOR-
 IZED BY FUND TYPE;
   (III) THE DATE OR DATES WHEN THE DIVERSION OR DIVERSIONS ARE TO OCCUR;
   (IV)  A  DETAILED  ESTIMATE OF THE IMPACT OF DIVERSION FROM EACH FUND;
 AND
   (V) THE PURPOSE FOR WHICH THE FUNDS WILL BE DIVERTED.
   (D) THE DIVERSION IMPACT STATEMENT MAY BE PROVIDED RETROACTIVELY  UPON
 DECLARATION  OF  A FISCAL EMERGENCY UNDER THE CIRCUMSTANCES OF PARAGRAPH
 (A) OF  THIS  SUBDIVISION.  THE  DIVERSION  IMPACT  STATEMENT  SHALL  BE
 PROVIDED  CONCURRENTLY  WITH THE GOVERNOR'S FISCAL EMERGENCY DECLARATION
 AND PRIOR TO INTRODUCTION OF THE CONCURRENT  LEGISLATIVE  RESOLUTION  IF
 THE  FISCAL  EMERGENCY  IS  DECLARED  PURSUANT  TO PARAGRAPH (B) OF THIS
 SUBDIVISION.
   (E) NOTWITHSTANDING PARAGRAPH (A) OF THIS SUBDIVISION, A FISCAL  EMER-
 GENCY  MAY  ONLY  BE  DECLARED  IF  CERTAIN ECONOMIC CONDITIONS ARE MET.
 THESE INDICATORS AND THE PROCESS FOR BRIEFING THE LEGISLATURE AND PUBLIC
 SHALL BE ESTABLISHED BY STATUTE. IF THE FISCAL EMERGENCY DECLARATION  IS
 MADE  BEFORE  PASSAGE  OF THE AFOREMENTIONED STATUTE, THE GOVERNOR SHALL
 USE THE COMPOSITE INDEX OF BUSINESS CYCLE INDICATORS ESTABLISHED  PURSU-
 ANT TO SECTION 14 OF CHAPTER 1 OF THE LAWS OF 2007.
   § 2. Resolved (if the Assembly concur), That the foregoing be referred
 to  the  first  regular  legislative  session  convening  after the next
 succeeding general election of members of the assembly, and, in conform-
 ity 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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