Establishes oversight of debts issued during a state of emergency; establishes the procedure of how the legislature may oversee such debts issued during a state of emergency.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2700
SPONSOR: Ra TITLE OF BILL:
An act to amend the state finance law, in relation to requiring the
legislature to approve the suspension of the debt cap for debt issuances
during times of emergency
PURPOSE:
The purpose of this bill is to include legislative oversight of certain
State debt practices during times of emergency.
SUMMARY OF PROVISIONS:
Section 1: Amends subdivision 1 of section 67-b of the state finance law
by adding a new paragraph c, requiring that any state-supported debt
issued during a declared state of emergency be subject to legislative
oversight. The legislature shall, by resolution, vote to approve whether
such state-supported debt issued during a declared emergency shall be
subject to the debt cap limitations outlined in paragraph a of subdivi-
sion 1 of section 67-b.
Section 2: Effective date.
JUSTIFICATION:
In 2000, the State enacted the Debt Reform Act, establishing limitations
on the amount and utilization of State-supported debt. However, since
its inception, the State has found ways to circumvent the reforms
intended by this Act through 'various statutory and executive measures.
These actions have deliberately undermined the Act's goal of protecting
taxpayers by constraining debt levels.
The integrity of the Act's guardrails was further compromised by
provisions in the FY21 and FY22 Enacted Budgets, which excluded approxi-
mately $18 billion in State-supported debt issued during those two years
from the Act's debt caps. According to the 2023 Comptroller's Report
titled "A Roadmap for State Debt Reform," nearly one-third of State-sup-
ported debt was excluded from the State's debt limits as of FY22, total-
ing around $20 billion when combined with previously exempted debt.
Without these exclusions, the State would exceed its debt limit by as
much as $16.9 billion by the end of its Financial Plan. The Comptroller
has also stated that "these actions have rendered the State's debt
limits functionally meaningless".
To restore the integrity of the State's Debt Reform Act and enhance
oversight of debt practices, this bill requires that the legislature
vote by resolution to determine whether state-supported debt issued
during a declared emergency will be subject to the established debt cap
limitations. By requiring this necessary oversight, this bill aims to
ensure greater accountability and transparency in the State's borrowing
practices, ultimately protecting taxpayers and reinforcing fiscal
responsibility.
LEGISLATIVE HISTORY:
New Bill.
FISCAL IMPLICATIONS:
None to the State.
EFFECTIVE DATE:
Immediately.
STATE OF NEW YORK
________________________________________________________________________
2700
2025-2026 Regular Sessions
IN ASSEMBLY
January 22, 2025
___________
Introduced by M. of A. RA -- read once and referred to the Committee on
Ways and Means
AN ACT to amend the state finance law, in relation to requiring the
legislature to approve the suspension of the debt cap for debt issu-
ances during times of emergency
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subdivision 1 of section 67-b of the state finance law is
2 amended by adding a new paragraph (c) to read as follows:
3 (c) Notwithstanding the provisions of paragraphs (a) and (b) of this
4 subdivision, any state-supported debt issued during a declared state of
5 emergency shall be subject to legislative oversight as follows:
6 (i) The legislature shall, by resolution, vote to approve whether such
7 state-supported debt issued during the declared emergency shall be
8 subject to the debt cap limitations outlined in paragraph (a) of this
9 subdivision.
10 (ii) The resolution shall specify the:
11 (A) total amount of state-supported debt to be exempted from the debt
12 cap;
13 (B) purpose for which the debt is to be issued; and
14 (C) duration of the exemption, not to exceed the duration of the
15 declared emergency.
16 (iii) A two-thirds vote in both houses of the legislature shall be
17 required for approval of the resolution.
18 (iv) If the resolution is not approved, the state-supported debt
19 issued during the declared emergency shall remain subject to the debt
20 cap limitations set forth in paragraph (a) of this subdivision.
21 (v) The legislature may, by subsequent resolution approved in the same
22 manner as set forth in the paragraph, modify or rescind any previously
23 approved exemption to the debt cap for emergency-related debt.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05919-01-5
A. 2700 2
1 (vi) The state comptroller shall maintain a separate accounting of all
2 state-supported debt issued pursuant to this paragraph and report quar-
3 terly to the legislature on the status and impact on such debt issued
4 pursuant to this paragraph on the state's overall debt position.
5 § 2. This act shall take effect immediately.
