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A07632 Summary:

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A07632 Committee Votes:

A07632 Floor Votes:

A07632 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          7632
 
                               2015-2016 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 20, 2015
                                       ___________
 
        Introduced  by M. of A. FARRELL -- read once and referred to the Commit-
          tee on Cities
 
        AN ACT to amend the local finance law, in relation to the sale of  bonds
          and  notes  of  the city of New York, the refunding of bonds, the down
          payment for projects financed by bonds, variable rate debt, and inter-
          est rate exchange agreements of the city of New York; 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 refund-
          ing 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 66 of the laws of 2014,  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 [fifteen]
     6  sixteen, 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 opening paragraph of paragraph a  of  section  57.00  of  the
    10  local  finance  law,  as  amended  by chapter 66 of the laws of 2014, is
    11  amended to read as follows:
    12    Bonds shall be sold only at public sale and  in  accordance  with  the
    13  procedure set forth in this section and sections 58.00 and 59.00 of this
    14  title, except as otherwise provided in this paragraph. Bonds may be sold
    15  at private sale to the United States government or any agency or instru-
    16  mentality  thereof, the state of New York municipal bond bank agency, to
    17  any sinking fund or pension fund of the municipality, school district or
    18  district corporation selling such bonds, or, in the case of sales by the
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10777-01-5
        A. 7632                             2
 
     1  city of New York prior to July first, two  thousand  [fifteen]  sixteen,
     2  also to the municipal assistance corporation for the city of New York or
     3  to any other purchaser with the consent of the mayor and the comptroller
     4  of  such  city and approval of the state comptroller, or, in the case of
     5  sales by the county of Nassau prior to December thirty-first, two  thou-
     6  sand seven, also to the Nassau county interim finance authority with the
     7  approval  of the state comptroller, or, in the case of sales by the city
     8  of Buffalo prior to June thirtieth, two thousand thirty-seven,  also  to
     9  the  Buffalo  fiscal  stability authority with the approval of the state
    10  comptroller, or, in the case of bonds or other obligations of a  munici-
    11  pality issued for the construction of any sewage treatment works, sewage
    12  collecting  system,  storm  water  collecting  system,  water management
    13  facility, air pollution control facility or solid waste disposal facili-
    14  ty, also to the New York state environmental facilities corporation, or,
    15  in the case of bonds or other obligations of a school district or a city
    16  acting on behalf of a city school district in a city having a population
    17  in excess of one hundred twenty-five thousand but less than one  million
    18  inhabitants according to the latest federal census, issued to finance or
    19  refinance  the  cost  of  school  district  capital facilities or school
    20  district capital equipment, as defined in section sixteen hundred seven-
    21  ty-six of the public authorities law, also to the dormitory authority of
    22  the state of New York. Bonds of a river improvement or drainage district
    23  established by or under the supervision of the  department  of  environ-
    24  mental conservation may be sold at private sale to the state of New York
    25  as  investments for any funds of the state which by law may be invested,
    26  provided, however, that the rate of interest on any such bonds  so  sold
    27  shall  be  approved  by  the  water power and control commission and the
    28  state comptroller. Bonds may also be sold at private sale as provided in
    29  section 63.00 of this title. No bonds shall be sold on option  or  on  a
    30  deferred  payment plan, except that options to purchase, effective for a
    31  period not exceeding one year, may be given:
    32    § 3. Subdivision 3 of paragraph  g  of  section  90.00  of  the  local
    33  finance law, as amended by chapter 66 of the laws of 2014, is amended to
    34  read as follows:
    35    3.  Outstanding bonds may, pursuant to a power to recall and redeem or
    36  with the consent of the holders  thereof,  be  exchanged  for  refunding
    37  bonds (i) if the refunding bonds are to bear interest at a rate equal to
    38  or  lower than that borne by the bonds to be refunded or (ii) if, in the
    39  case of the city of New York prior to July first, two thousand [fifteen]
    40  sixteen, the annual payment required for principal and interest  on  the
    41  refunding  bond  is  less than the annual payment required for principal
    42  and interest on the bond to  be  refunded,  in  each  case  such  annual
    43  payments  to  be determined by dividing the total principal and interest
    44  payments due over the remaining life of the bond by the number of  years
    45  to maturity of the bond or (iii) if the bonds to be refunded were issued
    46  by  the city of New York after June thirtieth, nineteen hundred seventy-
    47  eight and prior to  July  first,  two  thousand  [fifteen]  sixteen  and
    48  contain  covenants  referring  to  the  existence  of the New York state
    49  financial control board for the city of New York or any other  covenants
    50  relating  to  matters  other  than  the  prompt payment of principal and
    51  interest on the obligations when due and the  refunding  bond  omits  or
    52  modifies any such covenant.
    53    §  4.  Subdivision  8  of  paragraph  d of section 107.00 of the local
    54  finance law, as amended by chapter 66 of the laws of 2014, is amended to
    55  read as follows:
        A. 7632                             3
 
     1    8. Notwithstanding any other provision of law, the  financing  by  the
     2  city  of New York prior to July first, two thousand [fifteen] sixteen of
     3  any object or purpose which has a period of probable  usefulness  deter-
     4  mined  by  law  by the issuance of any bonds or notes, including (i) the
     5  issuance  of bonds or notes to obtain reimbursement for funds heretofore
     6  advanced for the object or purpose for which  the  bonds  or  notes  are
     7  being issued, (ii) the issuance of bonds or notes to redeem notes previ-
     8  ously  issued for the object or purpose for which the bonds or notes are
     9  being issued or (iii) the issuance of bonds to refund  bonds  previously
    10  issued for the object or purpose for which bonds are being issued.
    11    §  5.  The  closing  paragraph  of paragraph a of section 54.90 of the
    12  local finance law, as amended by chapter 66 of  the  laws  of  2014,  is
    13  amended to read as follows:
    14    Notwithstanding the foregoing, whenever in the judgment of the finance
    15  board  of the city of New York the interest of such city would be served
    16  thereby, the city of New York may without further approval  issue  bonds
    17  or  notes,  on or before July fifteenth, two thousand [fifteen] sixteen,
    18  with interest rates that vary in accordance with a formula or  procedure
    19  and  are  subject to a maximum rate of interest set forth or referred to
    20  in the bonds or notes and may provide  the  holders  thereof  with  such
    21  rights  to  require  the city or other persons to purchase such bonds or
    22  notes or renewals thereof from the proceeds of  the  resale  thereof  or
    23  otherwise from time to time prior to the final maturity of such bonds or
    24  notes as the finance board of the city of New York may determine and the
    25  city  may resell, at any time prior to final maturity, any such bonds or
    26  notes acquired as a result of the exercise  of  such  rights;  provided,
    27  however,  that  at no time shall the total principal amount of bonds and
    28  notes issued by the city of New York pursuant to this  paragraph  (other
    29  than  bonds  and  notes (1) bearing interest at rates and for periods of
    30  time that are specified without reference to future events or contingen-
    31  cies, or (2) described in section 136.00 of this article)  exceed  twen-
    32  ty-five  percent of the limit prescribed by section 104.00 of this arti-
    33  cle.
    34    § 6. The opening paragraph of subdivision 1 of paragraph d of  section
    35  54.90  of the local finance law, as amended by chapter 66 of the laws of
    36  2014, is amended to read as follows:
    37    On or before July fifteenth, two thousand [fifteen] sixteen the  mayor
    38  and comptroller of the city of New York may:
    39    §  7. Subdivision 1 of section 10-a of section 2 of chapter 868 of the
    40  laws of 1975, constituting the New York state  financial  emergency  act
    41  for  the city of New York, as amended by chapter 66 of the laws of 2014,
    42  is amended to read as follows:
    43    1. In the event that after the date on which the  provisions  of  this
    44  act become operative, any notes or bonds are issued by the city prior to
    45  July  1, [2015] 2016, or any bonds are issued by a state financing agen-
    46  cy, the state of New York hereby authorizes the city and authorizes  and
    47  requires  such  state financing agency to include a pledge and agreement
    48  of the state of New York in any agreement made by the city or such state
    49  financing agency with holders or guarantors of such notes or bonds  that
    50  the  state  will not take any action which will (a) substantially impair
    51  the authority of the board during a control period, as defined in subdi-
    52  vision twelve of section two of this act as in effect on the  date  such
    53  notes  or  bonds  are  issued  (i) to approve, disapprove, or modify any
    54  financial plan or financial plan  modification,  including  the  revenue
    55  projections  (or  any  item  thereof)  contained therein, subject to the
    56  standards set forth in paragraphs a, c, d, e and f of subdivision one of
        A. 7632                             4
 
     1  section eight of this act as in effect on the date such notes  or  bonds
     2  are issued and paragraph b of such subdivision as in effect from time to
     3  time,  (ii)  to disapprove a contract of the city or a covered organiza-
     4  tion  if the performance of such contract would be inconsistent with the
     5  financial plan or to approve or disapprove proposed short-term or  long-
     6  term borrowing of the city or a covered organization or any agreement or
     7  other  arrangement  referred  to in subdivision four of section seven of
     8  this act, or (iii) to establish and adopt procedures with respect to the
     9  deposit in and disbursement from the board fund of  city  revenues;  (b)
    10  substantially  impair  the  authority  of  the board to review financial
    11  plans, financial plan  modifications,  contracts  of  the  city  or  the
    12  covered organizations and proposed short-term or long-term borrowings of
    13  the  city  and  the  covered organizations; (c) substantially impair the
    14  independent maintenance of a separate  fund  for  the  payment  of  debt
    15  service on bonds and notes of the city; (d) alter the composition of the
    16  board  so  that  the majority of the voting members of the board are not
    17  officials of the state of New York elected in a state-wide  election  or
    18  appointees  of  the  governor;  (e) terminate the existence of the board
    19  prior to the time to be determined in accordance with  section  thirteen
    20  of this act as in effect on the date such notes or bonds are issued; (f)
    21  substantially  modify  the  requirement that the city's financial state-
    22  ments be audited by a nationally recognized independent certified public
    23  accounting firm or consortium of firms and that a report on  such  audit
    24  be  furnished  to  the  board;  or (g) alter the definition of a control
    25  period set forth in subdivision twelve of section two of this act, as in
    26  effect on the date such notes or  bonds  are  issued,  or  substantially
    27  alter  the  authority  of the board, as set forth in said subdivision to
    28  reimpose or terminate a control  period;  provided,  however,  that  the
    29  foregoing  pledge  and agreement shall be of no further force and effect
    30  if at any time (i) there is on deposit in a separate trust account  with
    31  a  bank,  trust  company  or other fiduciary sufficient moneys or direct
    32  obligations of the United States or obligations guaranteed by the United
    33  States, the principal of and/or interest on which will provide moneys to
    34  pay punctually when due at maturity or prior to maturity by  redemption,
    35  in  accordance  with  their  terms, all principal of and interest on all
    36  outstanding notes and bonds of the city or such state  financing  agency
    37  containing  this  pledge and agreement and irrevocable instructions from
    38  the city or such state financing agency to such bank, trust  company  or
    39  other  fiduciary  for  such  payment of such principal and interest with
    40  such moneys shall have been given, or (ii) such notes and bonds, togeth-
    41  er with interest thereon, have been paid in full  at  maturity  or  have
    42  otherwise been refunded, redeemed, defeased, or discharged; and provided
    43  further  that  the foregoing pledge and agreement shall be of full force
    44  and effect upon its inclusion in any agreement made by the city or state
    45  financing agency with holders or guarantors of such notes or bonds.
    46    Upon payment for such obligations issued pursuant to this act  by  the
    47  original  and all subsequent holders inclusion of the foregoing covenant
    48  shall be deemed conclusive evidence of valuable  consideration  received
    49  by the state and city for such covenant and of reliance upon such pledge
    50  and agreement by any such holder. The state hereby grants any such bene-
    51  fited  holder  the right to sue the state in a court of competent juris-
    52  diction and enforce this covenant and agreement and waives all rights of
    53  defense based on sovereign immunity in such an action or suit.
    54    § 8. Section 5 of chapter 142 of the laws of 2004, amending the  local
    55  finance law relating to interest rate exchange agreements of the city of
        A. 7632                             5
 
     1  New  York  and refunding bonds of such city, as amended by chapter 66 of
     2  the laws of 2014, is amended to read as follows:
     3    §  5.  This  act shall take effect immediately, provided, that section
     4  three of this act shall expire and be deemed repealed  July  15,  [2015]
     5  2016.
     6    § 9. Separability. If any clause, sentence, paragraph, section or part
     7  of  this act shall be adjudged by any court of competent jurisdiction to
     8  be invalid, such judgment shall not affect,  impair  or  invalidate  the
     9  remainder thereof, but shall be confined in its operation to the clause,
    10  sentence,  paragraph,  section  or part thereof directly involved in the
    11  controversy in which such judgment shall have been rendered.
    12    § 10. This act shall take effect immediately.