S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  8769--A
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               June 2, 2025
                                ___________
 
 Introduced  by M. of A. TAPIA -- read once and referred to the Committee
   on Economic Development -- committee discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the economic development law, in  relation  to  enacting
   "the  New  York state credit risk transparency and investor protection
   act"

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  This act shall be known and may be cited as the "New York
 state credit risk transparency and investor protection act".
   § 2. The economic development law is amended by adding a  new  section
 103-a to read as follows:
   §  103-A.  STATE BOND SECURITY.   1. FOR THE PURPOSES OF THIS SECTION,
 THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "CREDIT RISK DECAY" SHALL MEAN THE NATURAL REDUCTION IN THE  LIKE-
 LIHOOD  OF  BOND  DEFAULT  OVER  TIME, RESULTING FROM THE BOND'S AMORTI-
 ZATION, IMPROVED ISSUER PERFORMANCE, OR EXTERNAL ECONOMIC  FACTORS  THAT
 REDUCE DEFAULT RISK;
   (B)  "MATERIAL  CREDIT  EVENT" SHALL MEAN ANY EVENT THAT SIGNIFICANTLY
 IMPACTS THE ISSUER'S ABILITY TO MEET ITS OBLIGATIONS, INCLUDING BUT  NOT
 LIMITED TO:
   (I)  CHANGES IN FEDERAL FUNDING, INCLUDING BUT NOT LIMITED TO MEDICAID
 CUTS OR INFRASTRUCTURE FUNDING REDUCTIONS;
   (II) TARIFFS, TRADE POLICY CHANGES, OR OTHER EXTERNAL ECONOMIC FACTORS
 THAT MAY ALTER THE BOND ISSUER'S FINANCIAL POSITION; OR
   (III) ANY SIGNIFICANT MODIFICATION OF LEGAL OBLIGATIONS THAT AFFECTS A
 BOND'S PERFORMANCE;
   (C) "RISK RECONCILIATION STATEMENT"  SHALL  MEAN  A  QUARTERLY  REPORT
 FILED  BY  AN  ISSUER  OF  BONDS, WHICH PROVIDES AN UPDATE ON THE BOND'S
 CREDIT RISK, INCLUDING BUT NOT LIMITED TO:
   (I) CHANGES IN CREDIT RATINGS;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD13079-03-5
              

 A. 8769--A                          2
 
   (II) MATERIAL CREDIT EVENTS AFFECTING BOND PERFORMANCE; AND
   (III)  YIELD-TO-MATURITY  DRIFT  AND OTHER RELEVANT CREDIT PERFORMANCE
 METRICS;
   (D) "YIELD-TO-MATURITY DRIFT" OR "YTM DRIFT" SHALL MEAN THE CHANGE  IN
 THE YIELD OF A BOND OVER TIME DUE TO SHIFTS IN THE CREDIT QUALITY OF THE
 ISSUER,  AND THE COLLATERAL OR EXTERNAL CREDIT FACTORS, THAT IMPACT SUCH
 BOND'S RISK PROFILE AND VALUATION;
   (E) "FIXED POINT SCALE" SHALL  MEAN  A  STANDARDIZED  METHOD  USED  TO
 ASSESS  THE  BOND'S CURRENT PERFORMANCE BY COMPARING ITS ORIGINAL CREDIT
 RISK RATING TO THE BOND'S  CURRENT  RISK  PROFILE,  INCLUDING,  BUT  NOT
 LIMITED TO, YIELD-TO-MATURITY DRIFT AND CREDIT RATING SHIFTS;
   (F)  "INVESTOR  RIGHT  OF ACTION FOR VALUE DESTRUCTION" SHALL MEAN THE
 LEGAL RIGHT OF AN INVESTOR TO SEEK DAMAGES IF THE BOND ISSUER  FAILS  TO
 DISCLOSE  MATERIAL CREDIT EVENTS OR IF A BOND'S CREDIT RISK DETERIORATES
 WITHOUT PROPER DISCLOSURE, RESULTING IN FINANCIAL HARM TO THE  INVESTOR;
 AND
   (G)  "MATERIAL  DEVIATION" SHALL MEAN A SIGNIFICANT CHANGE IN A BOND'S
 CREDITWORTHINESS THAT DIFFERS FROM THE ISSUER'S ORIGINAL PROJECTIONS  OR
 CREDIT  RATINGS,  INCLUDING, BUT NOT LIMITED TO, A DROP IN CREDIT RATING
 OR SIGNIFICANT CHANGE IN MARKET PRICE OR ARM'S-LENGTH VALUATION DUE TO A
 MATERIAL CREDIT EVENT.
   (H) "INTENTIONAL ACTION" SHALL MEAN ANY DELIBERATE ACT OR POLICY DECI-
 SION BY ANY PUBLIC, PRIVATE, OR GOVERNMENTAL ENTITY THAT  IS  REASONABLY
 FORESEEABLE  TO  MATERIALLY AND DISPROPORTIONATELY IMPAIR THE CREDITWOR-
 THINESS, REPAYMENT, OR MARKET VALUE OF STATE-BACKED BONDS.
   (I) "ARBITRARY ACTION" SHALL MEAN ANY ACTION OR POLICY DECISION  LACK-
 ING  A  RATIONAL  OR  REASONABLE  BASIS THAT RESULTS IN THE MATERIAL AND
 DISPROPORTIONATE DEVALUATION OF STATE-BACKED  BONDS,  INCLUDING  ACTIONS
 TAKEN  WITHOUT  DUE  CONSIDERATION  OF PREDICTABLE FISCAL IMPACTS ON THE
 STATE'S DEBT OBLIGATIONS.
   2. IT SHALL BE UNLAWFUL FOR ANY BROKER, DEALER, OR  MUNICIPAL  SECURI-
 TIES  DEALER  TO  ISSUE  STATE  OR MUNICIPAL BONDS UNLESS SUCH BROKER OR
 DEALER IS IN COMPLIANCE WITH THE REQUIREMENTS OF THIS SECTION.
   3. ALL ISSUERS OF STATE AND MUNICIPAL STATE-BACKED  BONDS  WITHIN  THE
 STATE  SHALL  FILE  A  QUARTERLY  RISK RECONCILIATION STATEMENT WITH THE
 DEPARTMENT IN ACCORDANCE WITH A FILING SCHEDULE TO BE PROMULGATED BY THE
 DEPARTMENT.  SUCH STATEMENTS SHALL INCLUDE, BUT NOT BE LIMITED  TO,  THE
 FOLLOWING:
   (A) THE NAME AND ADDRESS OF THE ISSUING AUTHORITY;
   (B)  THE NAME AND PURPOSE OF THE PROJECT OR PROJECTS THE FUND IS TO BE
 USED FOR;
   (C) THE OFFERING PRICE, INTEREST RATE, SELLING COMPENSATION, AGGREGATE
 PRINCIPAL AMOUNT, PRINCIPAL AMOUNT PER MATURITY, AND DELIVERY  DATES  OF
 EACH BOND;
   (D) UP-TO-DATE CREDIT RISK PROJECTIONS AND BOND RATINGS WHERE APPLICA-
 BLE;
   (E) YIELD-TO-MATURITY DRIFT AND ITS IMPLICATIONS ON BOND VALUATION;
   (F)  ANY  MATERIAL  CREDIT EVENTS WHICH HAVE OCCURRED OR HAVE IMPACTED
 THE ISSUER'S CREDIT RISK DURING THE RELEVANT QUARTER; AND
   (G) ANY OTHER DISCLOSURES REQUIRED BY STATE OR FEDERAL LAW.
   4. NOTWITHSTANDING ANY LAWS TO THE CONTRARY, THE DEPARTMENT OF ECONOM-
 IC DEVELOPMENT SHALL CREATE A SEARCHABLE DATABASE, OR MODIFY AN EXISTING
 ONE, DISPLAYING THE QUARTERLY RISK  RECONCILIATION  STATEMENTS  OF  EACH
 STATE-BACKED BOND ISSUER WITHIN THE STATE.
   5.  WHERE  AN  ISSUER,  DEALER, OR BROKER OF STATE OR MUNICIPAL STATE-
 BACKED BONDS FAILS TO DISCLOSE A MATERIAL CREDIT EVENT OR TO UPDATE SUCH
 A. 8769--A                          3
 
 ISSUER, DEALER, OR BROKER'S  RISK  ASSESSMENTS  ON  ITS  QUARTERLY  RISK
 RECONCILIATION  STATEMENT,  AS  REQUIRED BY THIS SECTION, AN INVESTOR OR
 BOND-HOLDER INJURED BY SUCH VIOLATION OF THIS SECTION MAY BRING SUIT  IN
 SUCH  INVESTOR OR BOND-HOLDER'S OWN NAME. JUDGMENT MAY BE ENTERED IN THE
 AMOUNT OF ACTUAL DAMAGES REFLECTING THE DIFFERENCE  BETWEEN  THE  ACTUAL
 AMOUNT  PAID  FOR  THE  BOND AND THE FAIR MARKET VALUE OF SUCH BOND, FOR
 RESCISSION OF THE BOND PURCHASE, UPON WHICH THE ISSUER SHALL REFUND  THE
 INVESTOR'S ORIGINAL INVESTMENT, OR BOTH SUCH ACTIONS.
   6. (A) THE DEPARTMENT SHALL HAVE THE AUTHORITY TO ENFORCE THE REQUIRE-
 MENTS  OF THIS SECTION. THE DEPARTMENT SHALL, FROM TIME TO TIME, CONDUCT
 AUDITS OF RISK RECONCILIATION STATEMENTS FILED BY ISSUERS.
   (B) IF AN ISSUER IS FOUND TO BE IN REPEATED VIOLATION OF THIS SECTION,
 THE DEPARTMENT MAY, IN ITS DISCRETION, REFER SUCH  ISSUER  FOR  INVESTI-
 GATION  BY  THE  STATE  ATTORNEY GENERAL FOR THE PURPOSES OF DETERMINING
 COMPENSATION OF DAMAGES TO ALL INVESTORS.
   7.  (A)  THE  ATTORNEY  GENERAL  MAY   INITIATE   INVESTIGATIONS   AND
 PROCEEDINGS  AGAINST ANY ENTITY, PUBLIC, PRIVATE, OR GOVERNMENTAL, WHICH
 CAUSES, BY ITS ACTIONS, MATERIAL DEVALUATION OF STATE-BACKED BONDS WHICH
 DISPROPORTIONALLY HARM STATE-BACKED  DEBT  OBLIGATIONS.    THE  ATTORNEY
 GENERAL MAY CONSIDER, BUT IS NOT LIMITED TO, THE FOLLOWING FACTORS:
   (I) THE FORESEEABILITY OF THE IMPACT ON THE STATE'S BONDED DEBT;
   (II) WHETHER REASONABLE ALTERNATIVES WERE AVAILABLE;
   (III) THE PROPORTIONALITY OF THE IMPACT RELATIVE TO THE STATED PURPOSE
 OF THE ACTION; AND
   (IV) THE DEGREE OF TRANSPARENCY OR CONCEALMENT SURROUNDING THE ACTION.
 (B)  UPON  A FINDING THAT A PUBLIC OR GOVERNMENTAL ENTITY HAS ENGAGED IN
 AN INTENTIONAL ACTION  OR  ARBITRARY  ACTION  THAT  MATERIALLY  DEVALUES
 STATE-BACKED BONDS, THE ATTORNEY GENERAL MAY:
   (I) INITIATE LEGAL PROCEEDINGS TO ENJOIN SUCH ACTIONS;
   (II)  PURSUE  CLAIMS FOR COMPENSATORY OR EQUITABLE RELIEF ON BEHALF OF
 THE STATE OR ITS BONDHOLDERS; AND
   (III) RECOVER DAMAGES TO OFFSET INCREASED  BORROWING  COSTS  OR  OTHER
 FINANCIAL HARM INCURRED BY THE STATE AS A RESULT OF THE MATERIAL DEVALU-
 ATION.
   (C)  THE  ATTORNEY  GENERAL SHALL HAVE STANDING TO BRING CLAIMS IN ANY
 COURT OF COMPETENT JURISDICTION, WHETHER THE RESPONSIBLE PARTY IS WITHIN
 OR OUTSIDE THE STATE, TO PROTECT NEW YORK'S CREDIT  REPUTATION  AND  THE
 VALUE OF ITS PUBLIC DEBT OBLIGATIONS.
   (D)  NOTHING  IN  THIS  SECTION  SHALL BE CONSTRUED TO LIMIT ANY OTHER
 CAUSE OF ACTION OR REMEDY AVAILABLE TO THE STATE UNDER LAW.
   § 3. Severability clause. If any clause, sentence, paragraph, subdivi-
 sion, 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, subdivision, section
 or part thereof directly involved in the controversy in which such judg-
 ment shall have been rendered. It is hereby declared to be the intent of
 the legislature that this act would  have  been  enacted  even  if  such
 invalid provisions had not been included herein.
   § 4. This act shall take effect on the one hundred eightieth day after
 it  shall have become a law. Effective immediately, the addition, amend-
 ment and/or repeal of any rule or regulation necessary for the implemen-
 tation of this act on its effective date are authorized to be  made  and
 completed on or before such effective date.