Amd §§54.10, 54.90, 57.00, 90.00 & 107.00, Loc Fin L; amd §10-a, §2 of Chap 868 of 1975; amd §5, Chap 142 of
2004
Relates to the sale of bonds and notes of the city of New York, the issuance of bonds or notes with variable rates of interest, interest rate exchange agreements of the city of New York, the refunding of bonds, and the down payment for projects financed by bonds; amends the New York state financial emergency act for the city of New York; makes further amendments relating to the effectiveness thereof.
STATE OF NEW YORK
________________________________________________________________________
6293--B
2019-2020 Regular Sessions
IN ASSEMBLY
March 4, 2019
___________
Introduced by M. of A. WEINSTEIN, COLTON -- read once and referred to
the Committee on Cities -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee -- again
reported from said committee with amendments, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the local finance law, in relation to the sale of bonds
and notes of the city of New York, the issuance of bonds or notes with
variable rates of interest, interest rate exchange agreements of the
city of New York, the refunding of bonds, and the down payment for
projects financed by bonds; to amend the New York state financial
emergency act for the city of New York, in relation to a pledge and
agreement of the state; and to amend chapter 142 of the laws of 2004,
amending the local finance law relating to interest rate exchange
agreements of the city of New York and refunding bonds of such city,
in relation to the effectiveness thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The opening paragraph of paragraph (a) of section 54.10 of
2 the local finance law, as amended by chapter 91 of the laws of 2018, is
3 amended to read as follows:
4 To facilitate the marketing of any issue of bonds or notes of the city
5 of New York issued on or before June thirtieth, two thousand [nineteen]
6 twenty, the mayor and comptroller of such city may, subject to the
7 approval of the state comptroller and the limitations on private sales
8 of bonds and notes, respectively, provided by law:
9 § 2. The closing paragraph of paragraph a of section 54.90 of the
10 local finance law, as amended by chapter 91 of the laws of 2018, is
11 amended to read as follows:
12 Notwithstanding the foregoing, whenever in the judgment of the finance
13 board of the city of New York the interest of such city would be served
14 thereby, the city of New York may without further approval issue bonds
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10351-03-9
A. 6293--B 2
1 or notes, on or before July fifteenth, two thousand [nineteen] twenty,
2 with interest rates that vary in accordance with a formula or procedure
3 and are subject to a maximum rate of interest set forth or referred to
4 in the bonds or notes and may provide the holders thereof with such
5 rights to require the city or other persons to purchase such bonds or
6 notes or renewals thereof from the proceeds of the resale thereof or
7 otherwise from time to time prior to the final maturity of such bonds or
8 notes as the finance board of the city of New York may determine and the
9 city may resell, at any time prior to final maturity, any such bonds or
10 notes acquired as a result of the exercise of such rights; provided,
11 however, that at no time shall the total principal amount of bonds and
12 notes issued by the city of New York pursuant to this paragraph (other
13 than bonds and notes (1) bearing interest at rates and for periods of
14 time that are specified without reference to future events or contingen-
15 cies, or (2) described in section 136.00 of this article) exceed twen-
16 ty-five percent of the limit prescribed by section 104.00 of this arti-
17 cle.
18 § 3. The opening paragraph of subdivision 1 of paragraph d of section
19 54.90 of the local finance law, as amended by chapter 91 of the laws of
20 2018, is amended to read as follows:
21 On or before July fifteenth, two thousand [nineteen] twenty the mayor
22 and comptroller of the city of New York may:
23 § 4. The opening paragraph of paragraph a of section 57.00 of the
24 local finance law, as amended by chapter 91 of the laws of 2018, is
25 amended to read as follows:
26 Bonds shall be sold only at public sale and in accordance with the
27 procedure set forth in this section and sections 58.00 and 59.00 of this
28 title, except as otherwise provided in this paragraph. Bonds may be sold
29 at private sale to the United States government or any agency or instru-
30 mentality thereof, the state of New York municipal bond bank agency, to
31 any sinking fund or pension fund of the municipality, school district or
32 district corporation selling such bonds, or, in the case of sales by the
33 city of New York prior to July first, two thousand [nineteen] twenty,
34 also to the municipal assistance corporation for the city of New York or
35 to any other purchaser with the consent of the mayor and the comptroller
36 of such city and approval of the state comptroller, or, in the case of
37 sales by the county of Nassau prior to December thirty-first, two thou-
38 sand seven, also to the Nassau county interim finance authority with the
39 approval of the state comptroller, or, in the case of sales by the city
40 of Buffalo prior to June thirtieth, two thousand thirty-seven, also to
41 the Buffalo fiscal stability authority with the approval of the state
42 comptroller, or, in the case of bonds or other obligations of a munici-
43 pality issued for the construction of any sewage treatment works, sewage
44 collecting system, storm water collecting system, water management
45 facility, air pollution control facility or solid waste disposal facili-
46 ty, also to the New York state environmental facilities corporation, or,
47 in the case of bonds or other obligations of a school district or a city
48 acting on behalf of a city school district in a city having a population
49 in excess of one hundred twenty-five thousand but less than one million
50 inhabitants according to the latest federal census, issued to finance or
51 refinance the cost of school district capital facilities or school
52 district capital equipment, as defined in section sixteen hundred seven-
53 ty-six of the public authorities law, also to the dormitory authority of
54 the state of New York. Bonds of a river improvement or drainage district
55 established by or under the supervision of the department of environ-
56 mental conservation may be sold at private sale to the state of New York
A. 6293--B 3
1 as investments for any funds of the state which by law may be invested,
2 provided, however, that the rate of interest on any such bonds so sold
3 shall be approved by the water power and control commission and the
4 state comptroller. Bonds may also be sold at private sale as provided in
5 section 63.00 of this title. No bonds shall be sold on option or on a
6 deferred payment plan, except that options to purchase, effective for a
7 period not exceeding one year, may be given:
8 § 5. Subdivision 3 of paragraph g of section 90.00 of the local
9 finance law, as amended by chapter 91 of the laws of 2018, is amended to
10 read as follows:
11 3. Outstanding bonds may, pursuant to a power to recall and redeem or
12 with the consent of the holders thereof, be exchanged for refunding
13 bonds (i) if the refunding bonds are to bear interest at a rate equal to
14 or lower than that borne by the bonds to be refunded or (ii) if, in the
15 case of the city of New York prior to July first, two thousand [nine-
16 teen] twenty, the annual payment required for principal and interest on
17 the refunding bond is less than the annual payment required for princi-
18 pal and interest on the bond to be refunded, in each case such annual
19 payments to be determined by dividing the total principal and interest
20 payments due over the remaining life of the bond by the number of years
21 to maturity of the bond or (iii) if the bonds to be refunded were issued
22 by the city of New York after June thirtieth, nineteen hundred seventy-
23 eight and prior to July first, two thousand [nineteen] twenty and
24 contain covenants referring to the existence of the New York state
25 financial control board for the city of New York or any other covenants
26 relating to matters other than the prompt payment of principal and
27 interest on the obligations when due and the refunding bond omits or
28 modifies any such covenant.
29 § 6. Subdivision 8 of paragraph d of section 107.00 of the local
30 finance law, as amended by chapter 91 of the laws of 2018, is amended to
31 read as follows:
32 8. Notwithstanding any other provision of law, the financing by the
33 city of New York prior to July first, two thousand [nineteen] twenty-two
34 of any object or purpose which has a period of probable usefulness
35 determined by law by the issuance of any bonds or notes, including (i)
36 the issuance of bonds or notes to obtain reimbursement for funds hereto-
37 fore advanced for the object or purpose for which the bonds or notes are
38 being issued, (ii) the issuance of bonds or notes to redeem notes previ-
39 ously issued for the object or purpose for which the bonds or notes are
40 being issued or (iii) the issuance of bonds to refund bonds previously
41 issued for the object or purpose for which bonds are being issued.
42 § 7. Subdivision 1 of section 10-a of section 2 of chapter 868 of the
43 laws of 1975, constituting the New York state financial emergency act
44 for the city of New York, as amended by chapter 91 of the laws of 2018,
45 is amended to read as follows:
46 1. In the event that after the date on which the provisions of this
47 act become operative, any notes or bonds are issued by the city prior to
48 July 1, [2019] 2020, or any bonds are issued by a state financing agen-
49 cy, the state of New York hereby authorizes the city and authorizes and
50 requires such state financing agency to include a pledge and agreement
51 of the state of New York in any agreement made by the city or such state
52 financing agency with holders or guarantors of such notes or bonds that
53 the state will not take any action which will (a) substantially impair
54 the authority of the board during a control period, as defined in subdi-
55 vision twelve of section two of this act as in effect on the date such
56 notes or bonds are issued (i) to approve, disapprove, or modify any
A. 6293--B 4
1 financial plan or financial plan modification, including the revenue
2 projections (or any item thereof) contained therein, subject to the
3 standards set forth in paragraphs a, c, d, e and f of subdivision one of
4 section eight of this act as in effect on the date such notes or bonds
5 are issued and paragraph b of such subdivision as in effect from time to
6 time, (ii) to disapprove a contract of the city or a covered organiza-
7 tion if the performance of such contract would be inconsistent with the
8 financial plan or to approve or disapprove proposed short-term or long-
9 term borrowing of the city or a covered organization or any agreement or
10 other arrangement referred to in subdivision four of section seven of
11 this act, or (iii) to establish and adopt procedures with respect to the
12 deposit in and disbursement from the board fund of city revenues; (b)
13 substantially impair the authority of the board to review financial
14 plans, financial plan modifications, contracts of the city or the
15 covered organizations and proposed short-term or long-term borrowings of
16 the city and the covered organizations; (c) substantially impair the
17 independent maintenance of a separate fund for the payment of debt
18 service on bonds and notes of the city; (d) alter the composition of the
19 board so that the majority of the voting members of the board are not
20 officials of the state of New York elected in a state-wide election or
21 appointees of the governor; (e) terminate the existence of the board
22 prior to the time to be determined in accordance with section thirteen
23 of this act as in effect on the date such notes or bonds are issued; (f)
24 substantially modify the requirement that the city's financial state-
25 ments be audited by a nationally recognized independent certified public
26 accounting firm or consortium of firms and that a report on such audit
27 be furnished to the board; or (g) alter the definition of a control
28 period set forth in subdivision twelve of section two of this act, as in
29 effect on the date such notes or bonds are issued, or substantially
30 alter the authority of the board, as set forth in said subdivision to
31 reimpose or terminate a control period; provided, however, that the
32 foregoing pledge and agreement shall be of no further force and effect
33 if at any time (i) there is on deposit in a separate trust account with
34 a bank, trust company or other fiduciary sufficient moneys or direct
35 obligations of the United States or obligations guaranteed by the United
36 States, the principal of and/or interest on which will provide moneys to
37 pay punctually when due at maturity or prior to maturity by redemption,
38 in accordance with their terms, all principal of and interest on all
39 outstanding notes and bonds of the city or such state financing agency
40 containing this pledge and agreement and irrevocable instructions from
41 the city or such state financing agency to such bank, trust company or
42 other fiduciary for such payment of such principal and interest with
43 such moneys shall have been given, or (ii) such notes and bonds, togeth-
44 er with interest thereon, have been paid in full at maturity or have
45 otherwise been refunded, redeemed, defeased, or discharged; and provided
46 further that the foregoing pledge and agreement shall be of full force
47 and effect upon its inclusion in any agreement made by the city or state
48 financing agency with holders or guarantors of such notes or bonds.
49 Upon payment for such obligations issued pursuant to this act by the
50 original and all subsequent holders inclusion of the foregoing covenant
51 shall be deemed conclusive evidence of valuable consideration received
52 by the state and city for such covenant and of reliance upon such pledge
53 and agreement by any such holder. The state hereby grants any such bene-
54 fited holder the right to sue the state in a court of competent juris-
55 diction and enforce this covenant and agreement and waives all rights of
56 defense based on sovereign immunity in such an action or suit.
A. 6293--B 5
1 § 8. Section 5 of chapter 142 of the laws of 2004, amending the local
2 finance law relating to interest rate exchange agreements of the city of
3 New York and refunding bonds of such city, as amended by chapter 91 of
4 the laws of 2018, is amended to read as follows:
5 § 5. This act shall take effect immediately, provided, that section
6 three of this act shall expire and be deemed repealed July 15, [2019]
7 2020.
8 § 9. Separability. If any clause, sentence, paragraph, section or part
9 of this act shall be adjudged by any court of competent jurisdiction to
10 be invalid, such judgment shall not affect, impair or invalidate the
11 remainder thereof, but shall be confined in its operation to the clause,
12 sentence, paragraph, section or part thereof directly involved in the
13 controversy in which such judgment shall have been rendered.
14 § 10. This act shall take effect immediately.
