NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7639
SPONSOR: Thiele TITLE OF BILL:
An act to amend chapter 581 of the laws of 2005 amending the local
finance law relating to statutory installment bonds, in relation to
extending the effectiveness thereof
PURPOSE OF THE BILL:
The bill would extend to September 30, 2026 provisions relating to stat-
utory installment bonds issued to the New York State Environmental
Facilities Corporation ("EFC").
SUMMARY OF PROVISIONS:
Section 1 of the bill would extend until September 30, 2026 the "sunset"
provision of Section 2 of Chapter 581 of the Laws of 2005, thereby
extending for an additional three years the provisions of Local Finance
Law ("LFL") § 62.10(c) which authorizes local governments to issue stat-
utory installment bonds in an amount not to exceed $20 million to EFC at
a fixed rate or, if issued in serial maturities, at a set rate for each
individual maturity.
Section 2 of the bill provides for an immediate effective date.
JUSTIFICATION:
EFC administers the Clean Water State Revolving Fund ("CWSRF") and the
Drinking Water State Revolving Fund ("DWSRF"). Under these revolving
fund programs, EFC provides low cost financial assistance to munici-
palities and other entities for water and wastewater infrastructure and
other environmental projects. As of September 30, 2022, EFC has issued
approximately $21 billion in State Revolving Fund Bonds under the CWSRF
program and the DWSRF program for the purpose of providing financial
assistance to local governments and public benefit corporations.
Before 2005, in accordance with the LFL, a borrower receiving EFC
financing was required to issue serial bonds to EFC for each maturity;
i.e., for a 20-year financing, EFC would receive 20 separate bonds from
the community. The issuance of serial bonds caused EFC, and those
providing trustee services, excessive servicing cost and substantial
time in handling and processing of multiple bonds. This process also
resulted in unnecessary bonding costs for EFC's borrowers.
A single debt instrument for financings at or under $20 million, such as
a statutory installment bond, reduces the costs associated with print-
ing, processing and storage. Reduced paper usage achieves environmental
benefits, while also reducing the chance of error associated with multi-
ple printed bonds. This simplified approach also benefits borrowers in
making the financing process more "user friendly" while enhancing the
efficient preparation and execution of the bonds.
PRIOR LEGISLATIVE HISTORY:
LFL § 62.10(c) was extended until September 30, 2011 by Chapter 213 of
the Laws of 2008; until September 30, 2014 by Chapter 69 of the Laws of
2011; until September 30, 2017 by Chapter 110 of the Laws of 2014; until
September 30, 2020 by Chapter 139 of the Laws of 2017; and until Septem-
ber 30, 2023 Chapter 58 of the Laws of 2020.
FISCAL IMPLICATIONS:
The bill would have no budget implications to the State.
EFFECTIVE DATE:
The bill would take effect immediately.
STATE OF NEW YORK
________________________________________________________________________
7639
2023-2024 Regular Sessions
IN ASSEMBLY
May 25, 2023
___________
Introduced by M. of A. THIELE -- (at request of the Environmental Facil-
ities Corporation) -- read once and referred to the Committee on Local
Governments
AN ACT to amend chapter 581 of the laws of 2005 amending the local
finance law relating to statutory installment bonds, in relation to
extending the effectiveness thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 2 of chapter 581 of the laws of 2005, amending the
2 local finance law relating to statutory installment bonds, as amended by
3 section 1 of item B of subpart A of part XXX of chapter 58 of the laws
4 of 2020, is amended to read as follows:
5 § 2. This act shall take effect immediately and shall remain in full
6 force and effect until September 30, [2023] 2026, at which time it shall
7 expire and be deemed repealed.
8 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06149-01-3
