S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9184
 
                             I N  S E N A T E
 
                               May 12, 2022
                                ___________
 
 Introduced by Sen. SEPULVEDA -- (at request of the NYC Office of Manage-
   ment  and  Budget) -- read twice and ordered printed, and when printed
   to be committed to the Committee on Cities 1
 
 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 selling of bonds at private sale, the  refunding
   of  bonds,  and  the  down  payment for projects financed by bonds; to
   amend 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 relat-
   ing  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 chapter 189 of the laws of 2021, 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-
 two]  TWENTY-THREE,  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 189 of the  laws  of  2021,  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-two] TWEN-
 TY-THREE, 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD15737-01-2
 S. 9184                             2
 
 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 chapter 189 of the laws of
 2021, is amended to read as follows:
   On  or  before  July fifteenth, two thousand [twenty-two] TWENTY-THREE
 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 189 of the laws of 2021, 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-two]  TWENTY-
 THREE,  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
 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
 S. 9184                             3
 
 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 chapter 189 of the laws of 2021,  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-
 two]  TWENTY-THREE, the annual payment required for principal and inter-
 est on the refunding bond is less than the annual payment  required  for
 principal  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-two]
 TWENTY-THREE 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 75 of the laws of 2019, 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 [twenty-two]  TWENTY-
 THREE 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 189 of the laws of 2021,
 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, [2022] 2023, 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
 S. 9184                             4
 
 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
 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 189  of
 the laws of 2021, is amended to read as follows:
 S. 9184                             5
 
   §  5.  This  act shall take effect immediately, provided, that section
 three of this act shall expire and be deemed repealed  July  15,  [2022]
 2023.
   § 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.