Extends until January 1, 2024 the authority of counties, cities, towns and villages to exclude from their constitutional debt limits indebtedness contracted from the construction and reconstruction of facilities for the conveyance, treatment and disposal of sewage.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A3632
SPONSOR: Magnarelli TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing an amendment to section 5 of article 8 of the constitution, in
relation to the exclusion of indebtedness contracted for sewage facili-
ties
PURPOSE: To enable counties, cities, towns and villages to finance
construction and reconstruction of sewage facilities without impairing
their ability to finance other essential capital requirements.
SUMMARY OF PROVISIONS: Section 1 of this bill amends Paragraph E of
Section 5 of Article 8 of the Constitution to extend, until January 1,
2024, the authority of counties, cities, towns and villages to exclude
from their constitutional debt limits indebtedness contracted for the
construction and reconstruction of facilities for the conveyance, treat-
ment and disposal of sewage by eliminating the expiration provision.
PRIOR LEGISLATIVE HISTORY: New bill proposed for Second Passage. First
Passage: S. 7554 and A. 9691 of 2012.
JUSTIFICATION: The exclusion of sewer debt from the constitutional
debt limits of counties, cities, towns and villages was originally
authorized in 1963 for a ten-year period. When first enacted, the gener-
al purpose of the exclusion was to encourage and enable municipalities
to participate in the State's then-new sewer construction assistance
plan without fear that, by incurring indebtedness for sewer purposes,
they would diminish their power to incur debt for other capital improve-
ments which they desired to undertake and finance.
It initially was believed that limiting the exclusion to indebtedness
incurred during a 10-year period would encourage municipalities to take
action during such 10-year period, and that the exclusion would thus
assist in accomplishing the purposes of the State's water anti-pollution
program. Reflecting the fact that these pollution concerns are continu-
ing and require an ongoing effort, however, the exclusion has been
subsequently extended for four successive ten-year periods. Without a
further extension, the exclusion will apply only to debt contracted
through the end of 2013. This amendment would permit the exclusion of
such indebtedness until January 1, 2024.
The concerns addressed in 1963 and by subsequent extensions of the
exclusion are still valid today. Although many pollution problems have
been abated, there are still significant concerns that need to be
addressed. Technology continues to evolve to make more efficient systems
available, additional development necessitates the construction of new
systems, and existing sewage treatment facilities age, necessitating
reconstruction and refurbishment.
Further, municipalities have been able to benefit from the State's
current loan program, the Clean Water State Revolving Fund (CWSRF),
administered by the State Department of Environmental Conservation (DEC)
and the Environmental Facilities Corporation (EFC). This program
provides loans at below-market interest rates to municipalities for a
variety of projects relating to water pollution, including waste-water
treatment facilities and sewer systems. Since its inception. in 1990,
the CWSRF program has loaned more than $12.1 billion for 1,500 projects
across the State. According to the 2012 intended use plan prepared with
respect to the CWSRF, DEC and EFC anticipate financing approximately
$705 million in diverse projects, including many for the conveyance,
treatment and disposal of sewage in New York State.
These numbers are indicative of the continuing efforts by the State and
municipalities to help manage sewage in the State. In addition, certain
federal agencies, such as the U.S. Department of Agriculture Rural
Development, may make loans at below-market rates, along with grants,
available. Under these programs, however, municipalities generally still
must issue their own indebtedness and, therefore, the need for debt
contracting capacity continues.
The constitutional exclusion has been implemented by Local Finance Law
Section 124.10, which requires that applications for the exclusion of
sewer indebtedness be filed with the State Comptroller. The Office of
the State Comptroller's records indicates that from January of 2001
through the close of 2011, municipalities have applied for and were
granted 178 exclusions of sewer debt. Each applicant derived benefit
from its exclusion by virtue of protecting its debt contracting margin,
thereby preserving the ability to issue debt for other capital projects
and needs. This bill would continue the exclusion of sewer debt from
debt limitations and so Maintain the resulting significant benefits to
municipalities throughout the State. The current authorization for
excluding indebtedness for sewage construction from municipal debt limi-
tations will expire on December 31, 2013. Since a constitutional amend-
ment requires passage by two consecutively elected legislatures and
approval by the voters, the current authorization will expire unless the
Legislature extends the sunset date by passing an amendment during the
2012 legislative session, which it has done, and again in the current
2013 legislative session.
The Comptroller urges the passage of this proposed legislation.
FISCAL IMPLICATIONS FOR STATE: This bill has no significant State
fiscal impact.
EFFECTIVE DATE: This amendment would become effective on the first day
of January next succeeding approval of both houses of two consecutively
elected legislatures and approval of the people in the subsequent gener-
al election.
STATE OF NEW YORK
________________________________________________________________________
3632
2013-2014 Regular Sessions
IN ASSEMBLY
January 28, 2013
___________
Introduced by M. of A. MAGNARELLI -- (at request of the State Comp-
troller) -- read once and referred to the Committee on Local Govern-
ments
CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing an amendment to section 5 of article 8 of the constitution, in
relation to the exclusion of indebtedness contracted for sewage facil-
ities
1 Section 1. Resolved (if the Senate concur), That paragraph E of
2 section 5 of article 8 of the constitution be amended to read as
3 follows:
4 E. Indebtedness contracted on or after January first, nineteen hundred
5 sixty-two and prior to January first, two thousand [fourteen] twenty-
6 four, for the construction or reconstruction of facilities for the
7 conveyance, treatment and disposal of sewage. The legislature shall
8 prescribe the method by which and the terms and conditions under which
9 the amount of any such indebtedness to be excluded shall be determined,
10 and no such indebtedness shall be excluded except in accordance with
11 such determination.
12 § 2. Resolved (if the Senate concur), That the foregoing amendment be
13 submitted to the people for approval at the general election to be held
14 in the year 2013 in accordance with the provisions of the election law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD89024-01-3
