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A10265 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          10265
 
                   IN ASSEMBLY
 
                                      May 19, 2016
                                       ___________
 
        Introduced  by M. of A. FARRELL -- (at request of the State Comptroller)
          -- read once and referred to the Committee on Ways and Means
 
                    CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
 
        proposing amendments to article 7 of the constitution,  in  relation  to
          authorization  of debt to respond to acts of terrorism, a limit on the
          total amount of state-funded debt, and the refunding of state debts

     1    Section 1. Resolved (if the Senate concur), That section 10 of article
     2  7 of the constitution be amended to read as follows:
     3    § 10. In addition to the above limited power to  contract  debts,  the
     4  state  may contract debts to repel invasion, suppress insurrection, [or]
     5  defend the state in war, [or] to suppress forest fires or to respond  to
     6  an  act of terrorism; but the money arising from the contracting of such
     7  debts shall be applied for the purpose for which it was  raised,  or  to
     8  repay such debts, and to no other purpose whatever.
     9    §  2. Resolved (if the Senate concur), That section 11 of article 7 of
    10  the constitution be amended to read as follows:
    11    § 11. 1. Except the debts or refunding debts specified in sections  9,
    12  10  and  13 of this article, no debt shall be hereafter contracted by or
    13  [in] on behalf of the state, unless such debt shall be authorized by law
    14  pursuant to this section,  for  some  single  work  or  purpose,  to  be
    15  distinctly  specified  therein.  [No  such  law]  Debt  subject  to  the
    16  provisions of this section shall include any debt or  obligation,  other
    17  than  debt  or refunding debt incurred pursuant to sections 9, 10 and 13
    18  of this article, supported in whole or in part by any financing arrange-
    19  ment whereby the state agrees, whether by law, contract,  or  otherwise,
    20  to  make  payments which are to be used, directly or indirectly, for the
    21  payment of principal, interest,  or  related  payments  on  indebtedness
    22  incurred  or  contracted  by the state itself for any purpose, or by any
    23  state agency, municipality, individual, public authority or other public
    24  or private corporation or any other entity for state capital or  operat-
    25  ing  purposes  or  to finance grants, loans or other assistance payments
    26  made or to be made by or on behalf of the state for any purpose. If  the
    27  state  agrees  or  has  agreed on or after April first, nineteen hundred
    28  ninety-seven to make future revenues from a specific state source avail-
    29  able for the purpose of supporting debt of any municipality, individual,
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD89123-02-6

        A. 10265                            2
 
     1  public or private corporation or any other entity, or, if  on  or  after
     2  such  date, a program of debt is authorized to be issued where state aid
     3  is intended to be the sole source of payment of debt service, such  debt
     4  shall  be  considered  to be a debt for the purpose of financing a state
     5  grant, loan or other assistance payment and  shall  be  subject  to  the
     6  provisions  of  this section. The provisions of this section shall apply
     7  (i) whether or not the obligation of  the  state  to  make  payments  is
     8  subject  to  appropriation, or (ii) whether or not debt service is to be
     9  paid from a revenue stream transferred by the  state  to  another  party
    10  that is responsible for making such payments.
    11    2.  The  legislature may, by law, authorize the state to contract debt
    12  secured by a pledge of specific state revenues authorized by such law to
    13  be deposited in a dedicated trust fund  or  funds  created  for  capital
    14  works  or  purposes. The legislature shall, by law, identify the capital
    15  works or purposes to be financed with such debt.  Revenues in excess  of
    16  the  required payments of debt service and related payments on such debt
    17  shall be available for other purposes, as provided by law.
    18    3. Except as provided in subdivision 5 of this section, no law author-
    19  izing debt to be created by the state pursuant to subdivisions 1  and  2
    20  of this section shall take effect until it shall, at a general election,
    21  have  been  submitted to the people, and have received a majority of all
    22  the votes cast for and against it at  such  election  nor  shall  it  be
    23  submitted  to  be voted on within three months after its passage [nor at
    24  any general election when any other law or any bill shall  be  submitted
    25  to be voted for or against] by the legislature.
    26    The legislature may, at any time after the approval of such law by the
    27  people,  if  no  debt  shall  have been contracted in pursuance thereof,
    28  repeal the same; and may at any time, by law, forbid the contracting  of
    29  any further debt or liability under such law.
    30    4.  During the fiscal year beginning April first, two thousand twenty-
    31  six and in every fiscal year thereafter, no debt authorized pursuant  to
    32  this section shall be incurred unless the total principal amount of debt
    33  to  be  incurred pursuant to such law, together with the total principal
    34  amount of debt already outstanding, shall be equal to or less than  five
    35  percent  of the total personal income of the state as determined by law.
    36  Debts subject to the limits imposed by this section  shall  include  all
    37  debt, whenever issued, described in subdivisions 1 and 2 of this section
    38  but  shall  not  include the debts specified in sections 9, 10 and 13 of
    39  this article.
    40    5. During any fiscal year, debt in the combined  aggregate  amount  of
    41  one-half  of one percent of total governmental funds tax receipts in the
    42  immediately preceding fiscal year may be incurred pursuant to a  law  or
    43  laws  that are not submitted for approval by the people. Such debt shall
    44  be incurred only for critical capital needs. However, in no event  shall
    45  debt  incurred  in fiscal years beginning in two thousand twenty-six and
    46  thereafter pursuant to such law or laws  result  in  a  total  principal
    47  amount of debt in excess of the limit determined pursuant to subdivision
    48  4 of this section.
    49    6.  (i)  All  debt  subject  to  the provisions of this section shall,
    50  except for refunding debt,  be  incurred  only  for  a  capital  purpose
    51  authorized  by  law, and (ii) all debt subject to the provisions of this
    52  section and all debt and refunding debt specified in sections 9, 10  and
    53  13  of  this article shall, if incurred on or after the first day of the
    54  first fiscal year beginning at least one year after the date this subdi-
    55  vision shall have taken effect, be in the form of obligations issued  by
    56  the comptroller.

        A. 10265                            3
 
     1    7. Nothing contained in this section shall invalidate debt obligations
     2  outstanding  on  the  date this subdivision shall have taken effect that
     3  would be subject to the provisions of this section if incurred after the
     4  date this subdivision shall have taken effect, and the state may contin-
     5  ue  to provide for payments related to such debt on the same terms under
     6  which such debt was incurred; provided, however, that no such debt shall
     7  be refunded unless such refunding complies  in  all  respects  with  the
     8  requirements of section 13 of this article. The provisions of section 16
     9  of  this  article  shall not apply to state payments with respect to any
    10  such outstanding obligations unless such provisions would  have  applied
    11  prior to the date this subdivision shall have taken effect.
    12    8.  Debt  obligations issued to refund outstanding state debt, regard-
    13  less of whether such outstanding debt was incurred  prior  to  the  date
    14  this  subdivision  shall have taken effect, shall not be counted for the
    15  purposes of the limit imposed by subdivision 4 of this section  if  such
    16  refunding complies in all respects with section 13 of this article.  For
    17  purposes  of  this  subdivision  and  subdivision 7 of this section, any
    18  refunding debt that does not extend beyond the  final  maturity  of  the
    19  debt  being  refunded  shall  be deemed to comply with the provisions of
    20  subdivision 6 of section 13 of this article, provided that there  is  an
    21  actual debt service savings in every year to maturity as a result of the
    22  issuance of the refunding debt.
    23    9.  After  the  date  this  section shall have taken effect, the state
    24  shall not, except as specifically authorized in another section of  this
    25  constitution, agree to make payments, directly or indirectly, whether or
    26  not  subject to appropriation, that are to be available to pay interest,
    27  installments of principal, contributions to sinking funds,  and  related
    28  payments  on  any  debt  incurred  by a municipality, individual, public
    29  authority or other public or private corporation or  any  other  entity,
    30  for  any purpose, if such payments are expected to be used to pay inter-
    31  est, installments of principal,  contributions  to  sinking  funds,  and
    32  related  payments  only  if  other  sources available for the payment of
    33  interest, installments of principal, contributions to sinking funds, and
    34  related payments are inadequate. Any provision requiring  the  state  to
    35  replace monies used to pay interest, installments of principal, contrib-
    36  utions  to  sinking funds, and related payments shall be included in the
    37  prohibition set forth in this subdivision. Outstanding debt  that  would
    38  be  prohibited  by this subdivision if such debt had been incurred after
    39  the date this subdivision shall have taken effect may be refunded by the
    40  entity that incurred the outstanding debt provided that  the  provisions
    41  of  subdivisions  7  and  8 of this section are complied with except the
    42  requirement that such refunding debt obligations be issued by the  comp-
    43  troller.
    44    §  3. Resolved (if the Senate concur), That section 16 of article 7 of
    45  the constitution be amended to read as follows:
    46    § 16. The legislature shall annually provide by appropriation for  the
    47  payment  of the interest upon and installments of principal of all debts
    48  or  refunding  debts  created  on  behalf  of  the  state  except  those
    49  contracted  under section 9 of this article, as the same shall fall due,
    50  and for the contribution to all of the sinking funds created by law,  of
    51  the  amounts  annually to be contributed under the provisions of section
    52  12, 13 or 15 of this article. [If] With respect to debt contracted other
    53  than pursuant to subdivision 2 of section 11 of this article, if at  any
    54  time  the  legislature  shall  fail  to make any such appropriation, the
    55  comptroller shall set apart from the first revenues thereafter received,
    56  applicable to the general fund of the state, a  sum  sufficient  to  pay

        A. 10265                            4
 
     1  such interest, installments of principal, or contributions to such sink-
     2  ing  fund,  as  the  case may be, and shall so apply the moneys thus set
     3  apart.  If at any time the legislature shall fail to make  an  appropri-
     4  ation  for the payment of interest or installments of principal or sink-
     5  ing fund payments or related payments on any debt contracted pursuant to
     6  subdivision 2 of section 11 of this article, the comptroller  shall  set
     7  apart  from  the first revenues received and pledged to such payments, a
     8  sum sufficient to pay such  interest  or  installment  of  principal  or
     9  contributions  to  such  sinking  fund  payments, and shall so apply the
    10  moneys thus set apart, provided however that such revenues must  be  set
    11  aside  and  applied  in a manner which ensures that pledged revenues are
    12  applied only to payments on debt for which such  revenues  were  pledged
    13  pursuant to subdivision 2 of section 11 of this article. The comptroller
    14  may  be  required  to set aside and apply such revenues as aforesaid, at
    15  the suit of any holder of such bonds.
    16    Notwithstanding the foregoing provisions of this  section,  the  comp-
    17  troller  may  covenant with the purchasers of any state obligations that
    18  they shall have no further rights against the state for payment of  such
    19  obligations  or  any  interest thereon after an amount or amounts deter-
    20  mined in accordance with the provisions of such covenant is deposited in
    21  a described fund or with a named or described agency or trustee. In such
    22  case, this section shall have no further  application  with  respect  to
    23  payment  of  such  obligations  or  any interest thereon after the comp-
    24  troller has complied with the prescribed conditions of such covenant.
    25    § 4. Resolved (if the Senate concur), That the foregoing amendments be
    26  referred to the first regular legislative session  convening  after  the
    27  next  succeeding  general  election  of members of the assembly, and, in
    28  conformity with  section  1  of  article  19  of  the  constitution,  be
    29  published for 3 months previous to the time of such election.
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