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A04004 Summary:

BILL NOA04004
 
SAME ASNo Same As
 
SPONSORRa
 
COSPNSR
 
MLTSPNSR
 
Amd §386-a, Pub Auth L; amd §67-b, St Fin L
 
Requires legislative oversight for debt issuances that reach maturity if such maturity exceeds thirty years; provides for the procedure for such debt issuance by the legislature.
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A04004 Actions:

BILL NOA04004
 
01/30/2025referred to corporations, authorities and commissions
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A04004 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A4004
 
SPONSOR: Ra
  TITLE OF BILL: An act to amend the public authorities law and the state finance law, in relation to requiring legislative oversight of debt issuances with a maturity of more than thirty years; and providing for the repeal of such provisions upon expiration thereof   PURPOSE:: The purpose of this bill is to ensure the legislature has oversight over decisions permitting public authorities and the state to issue debt with maturities exceeding thirty years.   SUMMARY OF PROVISIONS:: Section 1: Amends section 386-a of the public authorities law to allow for fifty-year maturities to be issued between April 1, 2025 and March 31, 2026, as opposed to extending the ability until 2027. Adds a subdi- vision 2 to require the authority, the dormitory authority or the urban development corporation, when determining that issuing debt with a final maturity exceeding thirty years is necessary, to prepare a comprehensive cost-benefit analysis demonstrating the public benefit of an extended maturity debt, submit the analysis to the chairs and ranking members of the assembly ways and means committee and the senate finance committee, the division of budget, and the state comptroller, obtain written approval from the division of budget and the state comptroller, and requires legislative approval via a resolution from the senate and assembly. Ensures that nothing within the law supersedes the authority of the public authorities control board. Section 2: Amends subdivision 4 of section 67-b of the state finance law to require a public authority, when determining that issuing debt with a final maturity exceeding thirty years is necessary, to prepare and submit a comprehensive cost-benefit analysis demonstrating the public benefit of such extended maturity debt, submit the analysis to the chairs and ranking members of the assembly ways and means committee and the senate finance committee, the division of budget, and the state comptroller, obtain written approval from the division of budget and the state comptroller, and require legislative approval via a resolution from the senate and assembly. Ensures that nothing within the law super- sedes the authority of the public authorities control board. Section 3: Effective date; repealer.   JUSTIFICATION: The FY25 Enacted Budget recently re-authorized, for an additional three years, the ability to use up to 50-year maturities for State-supported bonds issued for MTA purposes, circumventing the Debt Reform's Act otherwise 30- year maturity limit for all State-supported debt. Accord- ing to the State Comptroller's Office, to date, the deployment of this authorization has increased taxpayer costs by nearly $1.2 billion, trad- ing marginal short-term budget relief for considerably higher total long-term fixed costs. Due to the MTA's mismanagement of its finances, the State continues to ignore the Debt Reform Act of 2000, ultimately burdening the State's taxpayers and increasing costs for residents that may not ever use the MTA's transit system. This bill would reinforce the State's adherence to the Debt Reform Act and enhance fiscal responsibility. It requires a thorough analysis of borrowing costs for bonds with maturities exceeding 30 years to ensure they align with the public's best interests. Further, the bill intro- duces an oversight mechanism by requiring legislative approval, through a resolution, for the issuance of such long-term bonds. This measure is designed to prevent the State from circumventing previously established reforms intended to control borrowing costs.   LEGISLATIVE HISTORY:: New Bill.   FISCAL IMPLICATIONS:: May result in long-term savings to the State.   EFFECTIVE DATE:: April 1, 2025 and shall expire March 31, 2026.
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A04004 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          4004
 
                               2025-2026 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 30, 2025
                                       ___________
 
        Introduced  by M. of A. RA -- read once and referred to the Committee on
          Corporations, Authorities and Commissions
 
        AN ACT to amend the public authorities law and the state finance law, in
          relation to requiring legislative oversight of debt issuances  with  a
          maturity  of  more  than thirty years; and providing for the repeal of
          such provisions upon expiration thereof
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  Section  386-a of the public authorities law, as added by
     2  section 46 of part U of chapter 59 of the laws of 2012 and subdivision 1
     3  as amended by section 55 of part XX of chapter 56 of the laws  of  2024,
     4  is amended to read as follows:
     5    §  386-a.  Financing  of  metropolitan  transportation authority (MTA)
     6  transportation facilities. 1. Notwithstanding any other provision of law
     7  to the contrary, the authority, the dormitory authority  and  the  urban
     8  development corporation are hereby authorized to issue bonds or notes in
     9  one  or more series for the purpose of assisting the metropolitan trans-
    10  portation authority in the financing  of  transportation  facilities  as
    11  defined  in subdivision seventeen of section twelve hundred sixty-one of
    12  this chapter or other capital projects. The aggregate  principal  amount
    13  of  bonds  authorized  to  be  issued pursuant to this section shall not
    14  exceed twelve billion five hundred fifteen million eight hundred  fifty-
    15  six thousand dollars $12,515,856,000, excluding bonds issued to fund one
    16  or  more  debt  service  reserve funds, to pay costs of issuance of such
    17  bonds, and to refund or otherwise repay such bonds or  notes  previously
    18  issued.  Such  bonds and notes of the authority, the dormitory authority
    19  and the urban development corporation shall not be a debt of the  state,
    20  and the state shall not be liable thereon, nor shall they be payable out
    21  of  any funds other than those appropriated by the state to the authori-
    22  ty, the dormitory authority and the urban  development  corporation  for
    23  principal, interest, and related expenses pursuant to a service contract
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05922-01-5

        A. 4004                             2
 
     1  and  such  bonds and notes shall contain on the face thereof a statement
     2  to such effect. Except for  purposes  of  complying  with  the  internal
     3  revenue  code, any interest income earned on bond proceeds shall only be
     4  used  to  pay  debt  service  on  such  bonds. Notwithstanding any other
     5  provision of law to the contrary, including the limitations contained in
     6  subdivision four of section sixty-seven-b of the state finance law,  (A)
     7  any  bonds and notes issued [prior to] between April first, two thousand
     8  [twenty-seven] twenty-five and March thirty-first, two thousand  twenty-
     9  six  pursuant  to  this section may be issued with a maximum maturity of
    10  fifty years, and (B) any bonds issued to refund such bonds and notes may
    11  be issued with a maximum maturity of fifty  years  from  the  respective
    12  date of original issuance of such bonds and notes.
    13    2.  If the authority, the dormitory authority or the urban development
    14  corporation determines that issuing debt with a final maturity exceeding
    15  thirty years is necessary, it shall:
    16    (A) Prepare a comprehensive cost-benefit  analysis  demonstrating  the
    17  public  benefit of such extended maturity debt. Such cost-benefit analy-
    18  sis shall include the:
    19    (i) projected cash flows over the life of the debt;
    20    (ii) comparison of total costs between the proposed extended  maturity
    21  and a thirty year alternative;
    22    (iii) potential risks and mitigation strategies; and
    23    (iv)  impact on the authority's overall debt outstanding, debt service
    24  and credit rating, and if applicable, the impact on the state's  overall
    25  debt outstanding, debt service and credit rating.
    26    (B)  Submit  such analysis described in paragraph (A) of this subdivi-
    27  sion, along with a detailed justification, to:
    28    (i) the chair and ranking  member  of  the  assembly  ways  and  means
    29  committee;
    30    (ii) the chair and ranking member of the senate finance committee;
    31    (iii) the director of the division of the budget; and
    32    (iv) the state comptroller.
    33    (C)  Obtain  written approval from the director of the division of the
    34  budget and the state comptroller.
    35    (D) After obtaining approval from the director of the division of  the
    36  budget  and  the  state  comptroller  pursuant  to paragraph (C) of this
    37  subdivision, submit a request for legislative  approval  to  issue  such
    38  debt  to  both  houses  of  the  legislature,  and shall comply with the
    39  following:
    40    (i) such request shall include the comprehensive cost-benefit analysis
    41  prepared pursuant to paragraph (A) of this subdivision,  all  supporting
    42  documentation,  and  the  approvals from the director of the division of
    43  the budget and the state comptroller.
    44    (ii) both the assembly and senate shall pass  a  resolution  approving
    45  the  issuance  of  such  state-supported  debt with a maturity exceeding
    46  thirty years by a simple majority vote. If either house fails to approve
    47  such resolution within thirty days of submission, the request  shall  be
    48  deemed denied.
    49    (iii)  the authority, the dormitory authority or the urban development
    50  corporation shall not proceed with the  issuance  of  the  debt  at  the
    51  extended  maturity  until  it  receives approval from both houses of the
    52  legislature.
    53    (E) Nothing in this section  shall  supersede  the  authority  of  the
    54  public  authorities  control  board as outlined in article one-A of this
    55  chapter.

        A. 4004                             3
 
     1    3. Notwithstanding any other provision of  law  to  the  contrary,  in
     2  order  to  assist  the  authority, the dormitory authority and the urban
     3  development corporation in undertaking the financing of such transporta-
     4  tion facilities projects, the director of the budget is  hereby  author-
     5  ized to enter into one or more service contracts with the authority, the
     6  dormitory authority and the urban development corporation, none of which
     7  shall exceed thirty years in duration, upon such terms and conditions as
     8  the  director  of  the budget and the authority, the dormitory authority
     9  and the urban development corporation agree, so as to  annually  provide
    10  to  the  authority,  the  dormitory  authority and the urban development
    11  corporation, in the aggregate, a sum not to exceed the principal, inter-
    12  est, and related expenses required for such bonds and notes. Any service
    13  contract entered into pursuant to this section shall  provide  that  the
    14  obligation  of  the  state  to pay the amount therein provided shall not
    15  constitute a debt of the state within the meaning of any  constitutional
    16  or  statutory provision and shall be deemed executory only to the extent
    17  of monies available and that no liability shall be incurred by the state
    18  beyond the monies available for such purpose, subject to  annual  appro-
    19  priation  by  the legislature. Any such service contract or any payments
    20  made or to be made thereunder may be assigned and pledged by the author-
    21  ity, the dormitory authority and the urban  development  corporation  as
    22  security for such bonds and notes, as authorized by this section.
    23    §  2. Subdivision 4 of section 67-b of the state finance law, as added
    24  by chapter 59 of the laws of 2000, is amended to read as follows:
    25    4. Notwithstanding any other provision of  law  to  the  contrary,  no
    26  state-supported  debt shall be issued with a final maturity of more than
    27  thirty years. If a public authority determines that issuing debt with  a
    28  final maturity exceeding thirty years is necessary, it shall:
    29    (a)  Prepare  a  comprehensive cost-benefit analysis demonstrating the
    30  public benefit of such extended maturity debt. Such cost-benefit  analy-
    31  sis shall include the:
    32    (i) projected cash flows over the life of the debt;
    33    (ii)  comparison of total costs between the proposed extended maturity
    34  and a thirty year alternative;
    35    (iii) potential risks and mitigation strategies; and
    36    (iv) impact on the authority's overall debt outstanding, debt  service
    37  and  credit rating, and if applicable, the impact on the state's overall
    38  debt outstanding, debt service and credit rating.
    39    (b) Submit such analysis described in paragraph (a) of  this  subdivi-
    40  sion, along with a detailed justification, to:
    41    (i)  the  chair  and  ranking  member  of  the assembly ways and means
    42  committee;
    43    (ii) the chair and ranking member of the senate finance committee;
    44    (iii) the director of the division of the budget; and
    45    (iv) the state comptroller.
    46    (c) Obtain written approval from the director of the division  of  the
    47  budget and the state comptroller.
    48    (d)  After obtaining approval from the director of the division of the
    49  budget and the state comptroller  pursuant  to  paragraph  (c)  of  this
    50  subdivision,  submit  a  request  for legislative approval to issue such
    51  debt to both houses of  the  legislature,  and  shall  comply  with  the
    52  following:
    53    (i) such request shall include the comprehensive cost-benefit analysis
    54  prepared  pursuant  to paragraph (a) of this subdivision, all supporting
    55  documentation, and the approvals from the director of  the  division  of
    56  the budget and the state comptroller.

        A. 4004                             4
 
     1    (ii)  both  the  assembly and senate shall pass a resolution approving
     2  the issuance of such state-supported  debt  with  a  maturity  exceeding
     3  thirty years by a simple majority vote. If either house fails to approve
     4  such  resolution  within thirty days of submission, the request shall be
     5  deemed denied.
     6    (iii)  a  public  authority shall not proceed with the issuance of the
     7  debt at the extended maturity until it receives approval from both hous-
     8  es of the legislature.
     9    (e) Nothing in this section  shall  supersede  the  authority  of  the
    10  public  authorities  control  board  as outlined in article one-A of the
    11  public authorities law.
    12    § 3. This act shall take effect on April 1, 2025 and shall expire  and
    13  be deemed repealed March 31, 2026.
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