NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7381
SPONSOR: Burke
 
TITLE OF BILL:
An act to amend chapter 492 of the laws of 1993 amending the local
finance law relating to installment loans and obligations evidencing
installment loans, in relation to extending the effectiveness thereof
 
PURPOSE OF THE BILL:
The bill would extend to September 30, 2026 provisions relating to bonds
or notes bonds issued to the New York State Environmental Facilities
Corporation ("EFC") evidencing installment loans from the Clean Water
State Revolving Fund ("CWSRF") and the Drinking Water State Revolving
Fund ("DWSRF").
 
SUMMARY OF PROVISIONS:
Section 1 of the bill would extend until September 30, 2026 the "sunset"
provision of Section 3 of Chapter 492 of the Laws, of 1993, thereby
extending for an additional three years the provisions of Local Finance
Law ("LFL") § 169.00 which authorizes municipalities to issue their
bonds or notes evidencing installment loans to EFC in order to obtain
financial assistance from the CWSRF and the DWSRF.
Section 2 of the bill provides for an immediate effective date.
 
JUSTIFICATION:
EFC administers the CWSRF and the DWSRF. Under these revolving fund
programs, EFC provides low cost financial assistance to municipalities
and other entities for water and wastewater infrastructure and other
environmental projects. As of September 30, 2022, EFC has issued approx-
imately $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.
Under both the CWSRF and the DWSRF, EFC is authorized to provide assist-
ance in several forms to recipients for the purpose of financing or
refinancing their capital projects. Normally, when financing is provided
to a municipality under either the CWSRF or the DWSRF, EFC receives a
general obligation bond or note from the municipality as evidence of its
obligation to repay such financing.
Installment loam, through the use of a grid note, allow municipalities
to draw financing proceeds on a cost-incurred basis without having to
issue a separate bond or note to EFC for each amount advanced. Without
grid notes, a municipality would be required to "close" a new loan each
time it requested funds. The resultant transactional costs could be
prohibitive. The use of grid notes was authorized for the CWSRF by Chap-
ter 492 of the Laws of 1993, and for the DWSRF by Chapter 304 of the
Laws of 1997.
The use of grid notes in EFC's short-term financing program has been an
unqualified success in saving municipalities money. Hundreds of coun-
ties, cities, towns and villages throughout New York have successfully
utilized grid notes to secure short-term CWSRF or DWSRF financing. The
use of grid notes has provided recipients with flexibility and savings,
and helped make low-cost financing readily available for financing plan-
ning and design costs, as well as actual construction, and, in many
cases, interest-free "bridge" financing for municipalities which antic-
ipate receiving grants or other funding for, a project.
 
PRIOR LEGISLATIVE HISTORY:
Chapter 492 of the Laws of 1993 enacted LFL § 169.00 and applied
initially only to the CWSRF. Chapter 304 of the Laws of 1997 extended
the application of LFL § 169.00 to the DWSRF. By its terms, Chapter 304
of the Laws of 1997 expires the same date as Chapter 492 of the Laws of
1993. Chapter 492 of the Laws of 1993, which would have expired on June
30, 1996, was extended until June 30, 1999 by Chapter 250 of the Laws of
1996. It has been extended every three years since 1999, until September
30, 2002 by Chapter 122 of the Laws of 1999; until September 30, 2005 by
Chapter 339 of the Laws of 2002; until September 30, 2008 by Chapter 628
of the Laws of 2005; until September 30, 2011 by Chapter 212 of the Laws
of 2008; until September 30, 2014 by Chapter 41 of the Laws of 2011;
until September 30, 2017 by Chapter 111 of the Laws of 2014; until
September 30, 2020 by Chapter 46 of the Laws of 2017; and until Septem-
ber 30, 2023 by 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
________________________________________________________________________
7381
2023-2024 Regular Sessions
IN ASSEMBLY
May 18, 2023
___________
Introduced by M. of A. BURKE -- (at request of the Environmental Facili-
ties Corporation) -- read once and referred to the Committee on Local
Governments
AN ACT to amend chapter 492 of the laws of 1993 amending the local
finance law relating to installment loans and obligations evidencing
installment loans, 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 3 of chapter 492 of the laws of 1993, amending the
2 local finance law relating to installment loans and obligations evidenc-
3 ing installment loans, as amended by section 1 of item A of subpart A of
4 part XXX of chapter 58 of the laws of 2020, is amended to read as
5 follows:
6 § 3. This act shall take effect immediately and shall remain in full
7 force and effect until September 30, [2023] 2026, at which time it shall
8 be deemed repealed.
9 § 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD06155-01-3