Add S7-112, amd S4-116, El L; add SS6 & 65-a, amd SS92 & 97-rrr, St Fin L
Requires that any ballot proposition creating a state debt shall contain an estimate of the amortization period and the total expected debt service payable thereon until the bonds issued pursuant to such proposition are retired; relates to deposits to the tax stabilization reserve fund; provides that at least 10% of any surplus shall be used to pay down state debt.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1504
SPONSOR: Tedisco (MS) TITLE OF BILL: An act to amend the election law and the state finance
law, in relation to requiring a proposition authorizing the creation of
a state debt to contain an estimate of the debt service payable thereon,
and the state finance law, in relation to requiring publication of an
explanation of the proposition authorizing the creation of state debt,
deposits to the tax stabilization reserve fund, and using surplus moneys
to reduce outstanding state funded debt
PURPOSE OR GENERAL IDEA OF BILL: This bill requires that 10 percent
of the surplus at the end of a fiscal year shall be used to retire the
State's highest cost debt and that the amounts that are required to be
deposited into the Tax Stabilization Reserve Fund be increased. In addi-
tion, this bill would provide greater accuracy and understanding for the
voting public by requiring a bond act in the ballot proposition to list
the total debt expected and the number of years over which it will be
paid. This bill also requires that any state publication, which is
designed to promote awareness, must also include the estimate of the
amortization period and the total anticipated debt service payable on
the principal.
SUMMARY OF SPECIFIC PROVISIONS:
This bill adds a new §7-112 to the Election Law to require that any
ballot proposition creating a State debt shall contain an estimate of
the amortization period and total expected debt service payments. Amends
§4-1l6 of the Election Law to incorporate such reference in ballot
publication requirements. Adds a new §6 to the State Finance Law to
require that any State publications promoting awareness of, or explain-
ing provisions in, such a proposition shall include the amortization and
total debt information.
This bill increases the amount of money at the end of the fiscal year
that may be deposited into the Tax Stabilization Reserve Fund from 2
percent to 5 percent of the General Fund spending.
This bill requires that 10 percent of any cash surplus at the end of a
fiscal year be deposited into a new fund for the purpose of retiring the
State's highest cost debt.
JUSTIFICATION: The State's debt is reaching levels that are unmanage-
able; these provisions will help the State to control its level of
indebtedness. Current law provides that ballot propositions must show
the principal amount of proposed debt. This is extremely misleading, as
the actual taxpayer cost of the debt should also include the interest to
be paid over a certain number of years. On long-term debt, interest
payments can more than double the principal amount. State publications
often play an important role in educating the public about ballot
issues. Accordingly, these should show the true total cost of any new
debt and the number of years over which it will be paid.
PRIOR LEGISLATIVE HISTORY:
A.8450 of 2010, referred to election law.
A.8450 of 2009, referred to election law.
A.6791 of 2008, held for consideration in election law
A.6791 of 2007, referred to election law.
FISCAL IMPLICATIONS: None to the State.
EFFECTIVE DATE: Immediately.
STATE OF NEW YORK
________________________________________________________________________
1504
2011-2012 Regular Sessions
IN ASSEMBLY
January 10, 2011
___________
Introduced by M. of A. TEDISCO -- Multi-Sponsored by -- M. of A.
BARCLAY, BUTLER, CONTE, CROUCH, FINCH, KOLB, J. MILLER, OAKS, RAIA,
REILICH, SAYWARD, THIELE -- read once and referred to the Committee on
Election Law
AN ACT to amend the election law and the state finance law, in relation
to requiring a proposition authorizing the creation of a state debt to
contain an estimate of the debt service payable thereon, and the state
finance law, in relation to requiring publication of an explanation of
the proposition authorizing the creation of state debt, deposits to
the tax stabilization reserve fund, and using surplus moneys to reduce
outstanding state funded debt
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The election law is amended by adding a new section 7-112
2 to read as follows:
3 § 7-112. Ballots; form for proposition; additional requirements. Each
4 duly certified proposition contained on the ballot and submitted to the
5 voters of the state which provides for the creation of a state debt
6 shall contain an estimate of the anticipated number of years over which
7 such debt shall be amortized and the total expected debt service payable
8 on the principal amount of such bonds until their retirement. Such
9 information shall be printed in the largest type which is practicable to
10 use in the space provided for the proposition. Such information shall be
11 provided to the state board of elections and the secretary of state by
12 the state comptroller not later than seven days after the passage of the
13 law authorizing such proposition.
14 § 2. Subdivision 2 of section 4-116 of the election law, as amended by
15 chapter 60 of the laws of 1993, is amended to read as follows:
16 2. The state board of elections shall publish once in the week preced-
17 ing any election at which proposed constitutional amendments or other
18 propositions or questions are to be submitted to the voters of the state
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01952-01-1
A. 1504 2
1 an abstract of such amendment or question, including the estimate of the
2 amortization period and the total anticipated debt service payable on
3 the principal where the proposition authorizes the creation of a state
4 debt, a brief statement of the law or proceedings authorizing such
5 submission, a statement that such submission will be made and the form
6 in which it is to be submitted.
7 § 3. The state finance law is amended by adding a new section 6 to
8 read as follows:
9 § 6. State publication concerning proposition. Any report, publica-
10 tion, pamphlet or other written document prepared by a state department,
11 agency, authority or other component or division of state government,
12 intended for distribution to the public, which is intended to promote
13 awareness of or explain the provisions contained in, or incidental to, a
14 duly certified proposition to be contained on the ballot and to be
15 submitted to the voters of the state which proposition provides for the
16 creation of a state debt shall contain therein an estimate of the antic-
17 ipated number of years over which such debt shall be amortized and the
18 total expected debt service payable on the principal amount of such
19 bonds until their retirement. Such information shall be printed in the
20 largest type which is practicable to use in such document.
21 § 4. Subdivisions 3 and 4 of section 92 of the state finance law, as
22 separately amended by chapters 405 and 957 of the laws of 1981, are
23 amended to read as follows:
24 3. At the close of each fiscal year any cash surplus remaining in the
25 general fund over and above the norm for such fiscal year shall be
26 transferred from or retained in such fund as hereinafter in this subdi-
27 vision provided. There shall be transferred to the tax stabilization
28 reserve fund all of such surplus moneys, up to and including an amount
29 equivalent to [two-tenths] one-half of one per centum of such norm,
30 unless such transfer would increase such reserve fund to an amount in
31 excess of [two] five per centum of the amount of the norm for such
32 fiscal year, in which event such transfer shall be limited to such
33 amount as will increase such reserve fund to such [two] five per centum
34 limitation. Any balance of such surplus moneys, thereafter remaining in
35 the general fund, shall be retained in such fund and be available for
36 the reduction of state taxes.
37 4. In the event that at the close of any fiscal year the receipts
38 derived from the taxes, fees and other sources, required to be paid
39 during such fiscal year into the general fund of the state shall fall
40 below the norm for such fiscal year, there shall be transferred from the
41 tax stabilization reserve fund to the general fund to the extent that
42 there are sufficient moneys in the tax stabilization reserve fund, an
43 amount equal to the difference between the norm and the amount of such
44 receipts. If such transfer reduces the tax stabilization reserve fund to
45 an amount less than [two] five per centum of the norm for such fiscal
46 year, the amount so transferred shall be repaid in cash prior to the
47 computation and payment of any transfer to the fund pursuant to subdivi-
48 sion three of this section in not less than three equal annual install-
49 ments within the period of six years or less next succeeding the date of
50 such transfer; provided, however, that if any such annual installment
51 shall increase such reserve fund to an amount in excess of [two] five
52 per centum of the amount of the norm for the then current fiscal year,
53 such installment shall be limited to such amount as will increase such
54 reserve fund to such [two] five per centum limitation and no further
55 repayment of the whole or any part of such transfer shall be required in
A. 1504 3
1 any subsequent fiscal year. Repayments to the tax stabilization reserve
2 fund shall be stipulated in annual budget bills.
3 § 5. The state finance law is amended by adding a new section 65-a to
4 read as follows:
5 § 65-a. Use of surplus moneys to reduce outstanding state funded debt.
6 At the close of each fiscal year, at least ten percent of any cash
7 surplus remaining in the general fund after the transfer pursuant to
8 section ninety-two of this chapter shall be transferred to the debt
9 reduction reserve fund established by section ninety-seven-rrr of this
10 chapter.
11 § 6. Section 97-rrr of the state finance law, as amended by section 45
12 of part H of chapter 56 of the laws of 2000, is amended to read as
13 follows:
14 § 97-rrr. Debt reduction reserve fund. 1. There is hereby established
15 in the joint custody of the comptroller and the commissioner of taxation
16 and finance a fund to be known as the debt reduction reserve fund. [Such
17 fund shall be established as a capital projects fund.]
18 2. Such fund shall consist of all monies credited or transferred ther-
19 eto from the general fund or from any other fund or sources pursuant to
20 law.
21 3. The monies in such fund, following appropriation by the legislature
22 and allocation by the director of the budget, shall be available [for
23 the following purposes:
24 (a) for the payment of principal, interest, and related expenses on
25 general obligation bonds, lease purchase payments, or special contractu-
26 al obligation payments, or] only for the [purposes] purpose of retiring
27 or defeasing bonds or notes previously issued, including any accrued
28 interest thereon, for any [state-supported bonding program or programs,
29 and;
30 (b) for the funding of capital projects, equipment acquisitions, or
31 similar expenses which have been authorized by law to be financed
32 through the issuance of bonds, notes, or other obligations] state funded
33 debt.
34 § 7. This act shall take effect immediately; provided, however that
35 provisions of section four of this act shall take effect three years
36 after it shall have become a law.
