S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7398
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                May 6, 2021
                                ___________
 
 Introduced  by M. of A. JACKSON -- read once and referred to the Commit-
   tee 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  or interest, interest rate exchange agreements of the
   city of New York, and the refunding of 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
   effectiveness 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 section 1 of item QQ of  subpart  B
 of  part  XXX  of  chapter 58 of the laws of 2020, 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  [twenty-
 one]  TWENTY-TWO, 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 section 2 of item QQ of  subpart  B  of
 part  XXX  of  chapter  58  of  the  laws of 2020, 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  [twenty-one]  TWEN-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

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 A. 7398                             2
 
 TY-TWO,  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 notes or renewals thereof from the proceeds of the resale ther-
 eof 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 deter-
 mine 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  para-
 graph  (other than bonds and notes (1) bearing interest at rates and for
 periods of time that are specified without reference to future events or
 contingencies, or (2) described  in  section  136.00  of  this  article)
 exceed  twenty-five percent of the limit prescribed by section 104.00 of
 this article.
   § 3. The opening paragraph of subdivision 1 of paragraph d of  section
 54.90  of  the  local finance law, as amended by section 3 of item QQ of
 subpart B of part XXX of chapter 58 of the laws of 2020, is  amended  to
 read as follows:
   On  or before July fifteenth, two thousand [twenty-one] TWENTY-TWO 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 section 4 of item QQ of subpart B of
 part XXX of chapter 58 of the laws  of  2020,  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 [twenty-one] TWENTY-
 TWO, 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 thousand 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 thir-
 ty-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 municipality 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 facility, 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 thou-
 sand 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 seventy-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

 A. 7398                             3
 
 supervision  of the department of environmental 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 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 section 5 of item QQ of subpart B of part XXX
 of chapter 58 of the laws of 2020, 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 [twenty-
 one] TWENTY-TWO, 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 [twenty-one] TWENTY-TWO 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 1 of section 10-a 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 section 6 of item QQ of subpart B of part XXX of
 chapter 58 of the laws of 2020, 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, [2021] 2022, 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
 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

 A. 7398                             4
 
 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.
   § 7. 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 section 7 of
 item QQ of subpart B of part XXX of chapter 58 of the laws of  2020,  is
 amended to read as follows:
   §  5.  This  act shall take effect immediately, provided, that section
 three of this act shall expire and be deemed repealed  July  15,  [2021]
 2022.
   § 8. 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

 A. 7398                             5
 
 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.
   § 9. This act shall take effect immediately.