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A08616 Summary:

A08616 Actions:

A08616 Floor Votes:

A08616 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          8616
 
                               2009-2010 Regular Sessions
 
                   IN ASSEMBLY
 
                                      May 29, 2009
                                       ___________
 
        Introduced  by  M.  of  A. FARRELL, COOK, WRIGHT, BING, KELLNER, POWELL,
          ESPAILLAT -- Multi-Sponsored by -- M. of A. O'DONNELL -- read once and
          referred to the Committee on Ways and Means
 
        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 117 of the laws of 2008, 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 [nine] ten,
     6  the mayor and comptroller of such city may, subject to the  approval  of
     7  the  state comptroller and the limitations on private sales of bonds and
     8  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 117 of the laws of 2008, 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
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11930-01-9
        A. 8616                             2
 
     1  district corporation selling such bonds, or, in the case of sales by the
     2  city of New York prior to July first, two thousand [nine] ten,  also  to
     3  the  municipal assistance corporation for the city of New York or to any
     4  other  purchaser  with  the  consent of the mayor and the comptroller of
     5  such city and approval of the state comptroller,  or,  in  the  case  of
     6  sales  by the county of Nassau prior to December thirty-first, two thou-

     7  sand seven, also to the Nassau county interim finance authority with the
     8  approval of the state comptroller, or, in the case of sales by the  city
     9  of  Buffalo  prior to June thirtieth, two thousand thirty-seven, also to
    10  the Buffalo fiscal stability authority with the approval  of  the  state
    11  comptroller,  or, in the case of bonds or other obligations of a munici-
    12  pality issued for the construction of any sewage treatment works, sewage
    13  collecting system,  storm  water  collecting  system,  water  management
    14  facility, air pollution control facility or solid waste disposal facili-
    15  ty, also to the New York state environmental facilities corporation, or,
    16  in the case of bonds or other obligations of a school district or a city
    17  acting on behalf of a city school district in a city having a population
    18  in  excess of one hundred twenty-five thousand but less than one million

    19  inhabitants according to the latest federal census, issued to finance or
    20  refinance the cost of  school  district  capital  facilities  or  school
    21  district capital equipment, as defined in section sixteen hundred seven-
    22  ty-six of the public authorities law, also to the dormitory authority of
    23  the state of New York. Bonds of a river improvement or drainage district
    24  established  by  or  under the supervision of the department of environ-
    25  mental conservation may be sold at private sale to the State of New York
    26  as investments for any funds of the state which by law may be  invested,
    27  provided,  however,  that the rate of interest on any such bonds so sold
    28  shall be approved by the water power  and  control  commission  and  the
    29  state comptroller. Bonds may also be sold at private sale as provided in
    30  section  63.00  of  this title. No bonds shall be sold on option or on a

    31  deferred payment plan, except that options to purchase, effective for  a
    32  period not exceeding one year, may be given:
    33    §  3.  Subdivision  3  of  paragraph  g  of section 90.00 of the local
    34  finance law, as amended by chapter 117 of the laws of 2008,  is  amended
    35  to read as follows:
    36    3.  Outstanding bonds may, pursuant to a power to recall and redeem or
    37  with the consent of the holders  thereof,  be  exchanged  for  refunding
    38  bonds (i) if the refunding bonds are to bear interest at a rate equal to
    39  or  lower than that borne by the bonds to be refunded or (ii) if, in the
    40  case of the city of New York prior to July first,  two  thousand  [nine]
    41  ten,  the  annual  payment  required  for  principal and interest on the
    42  refunding bond is less than the annual payment  required  for  principal

    43  and  interest  on  the  bond  to  be  refunded, in each case such annual
    44  payments to be determined by dividing the total principal  and  interest
    45  payments  due over the remaining life of the bond by the number of years
    46  to maturity of the bond or (iii) if the bonds to be refunded were issued
    47  by the city of New York after June thirtieth, nineteen hundred  seventy-
    48  eight  and  prior  to  July  first,  two thousand [nine] ten and contain
    49  covenants referring to the existence of the  New  York  state  financial
    50  control  board  for the city of New York or any other covenants relating
    51  to matters other than the prompt payment of principal  and  interest  on
    52  the  obligations  when  due and the refunding bond omits or modifies any
    53  such covenant.
    54    § 4. Subdivision 8 of paragraph d  of  section  107.00  of  the  local

    55  finance  law,  as amended by chapter 117 of the laws of 2008, is amended
    56  to read as follows:
        A. 8616                             3
 
     1    8. Notwithstanding any other provision of law, the  financing  by  the
     2  city  of  New  York  prior to July first, two thousand [nine] ten of any
     3  object or purpose which has a period of probable  usefulness  determined
     4  by law by the issuance of any bonds or notes, including (i) the issuance
     5  of  bonds or notes to obtain reimbursement for funds heretofore advanced
     6  for the object or purpose for which the bonds or notes are being issued,
     7  (ii) the issuance of bonds or notes to redeem  notes  previously  issued
     8  for  the object or purpose for which the bonds or notes are being issued
     9  or (iii) the issuance of bonds to refund bonds previously issued for the

    10  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 117 of the laws of 2008, 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  [nine]  ten,  with
    18  interest  rates  that vary in accordance with a formula or procedure and
    19  are subject to a maximum rate of interest set forth or  referred  to  in
    20  the  bonds or notes and may provide the holders thereof with such rights
    21  to require the city or other persons to purchase such bonds or notes  or

    22  renewals  thereof  from  the proceeds of the resale thereof or otherwise
    23  from time to time prior to the final maturity of such bonds or notes  as
    24  the finance board of the city of New York may determine and the city may
    25  resell,  at  any  time  prior to final maturity, any such bonds or notes
    26  acquired as a result of the exercise of such rights; provided,  however,
    27  that  at  no  time  shall  the total principal amount of bonds and notes
    28  issued by the city of New York pursuant to this  paragraph  (other  than
    29  bonds  and  notes  (1) bearing interest at rates and for periods of time
    30  that are specified without reference to future events or  contingencies,
    31  or  (2)  described in section 136.00 of this article) exceed twenty-five
    32  percent of the limit prescribed by section 104.00 of this article.
    33    § 6. The opening paragraph of subdivision 1 of paragraph d of  section

    34  54.90 of the local finance law, as amended by chapter 117 of the laws of
    35  2008, is amended to read as follows:
    36    On  or  before  July  fifteenth, two thousand [nine] ten the mayor and
    37  comptroller of the city of New York may:
    38    § 7. Subdivision 1 of section 10-a of section 2 of chapter 868 of  the
    39  laws  of  1975,  constituting the New York state financial emergency act
    40  for the city of New York, as amended by chapter 117 of the laws of 2008,
    41  is amended to read as follows:
    42    1. In the event that after the date on which the  provisions  of  this
    43  act become operative, any notes or bonds are issued by the city prior to
    44  July  1, [2009] 2010, or any bonds are issued by a state financing agen-
    45  cy, the state of New York hereby authorizes the city and authorizes  and

    46  requires  such  state financing agency to include a pledge and agreement
    47  of the state of New York in any agreement made by the city or such state
    48  financing agency with holders or guarantors of such notes or bonds  that
    49  the  state  will not take any action which will (a) substantially impair
    50  the authority of the board during a control period, as defined in subdi-
    51  vision twelve of section two of this act as in effect on the  date  such
    52  notes  or  bonds  are  issued  (i) to approve, disapprove, or modify any
    53  financial plan or financial plan  modification,  including  the  revenue
    54  projections  (or  any  item  thereof)  contained therein, subject to the
    55  standards set forth in paragraphs a, c, d, e and f of subdivision one of
    56  section eight of this act as in effect on the date such notes  or  bonds
        A. 8616                             4
 

     1  are issued and paragraph b of such subdivision as in effect from time to
     2  time,  (ii)  to disapprove a contract of the city or a covered organiza-
     3  tion if the performance of such contract would be inconsistent with  the
     4  financial  plan or to approve or disapprove proposed short-term or long-
     5  term borrowing of the city or a covered organization or any agreement or
     6  other arrangement referred to in subdivision four of  section  seven  of
     7  this act, or (iii) to establish and adopt procedures with respect to the
     8  deposit  in  and  disbursement from the board fund of city revenues; (b)
     9  substantially impair the authority of  the  board  to  review  financial
    10  plans,  financial  plan  modifications,  contracts  of  the  city or the
    11  covered organizations and proposed short-term or long-term borrowings of
    12  the city and the covered organizations;  (c)  substantially  impair  the

    13  independent  maintenance  of  a  separate  fund  for the payment of debt
    14  service on bonds and notes of the city; (d) alter the composition of the
    15  board so that the majority of the voting members of the  board  are  not
    16  officials  of  the state of New York elected in a state-wide election or
    17  appointees of the governor; (e) terminate the  existence  of  the  board
    18  prior  to  the time to be determined in accordance with section thirteen
    19  of this act as in effect on the date such notes or bonds are issued; (f)
    20  substantially modify the requirement that the  city's  financial  state-
    21  ments be audited by a nationally recognized independent certified public
    22  accounting  firm  or consortium of firms and that a report on such audit
    23  be furnished to the board; or (g) alter  the  definition  of  a  control
    24  period set forth in subdivision twelve of section two of this act, as in

    25  effect  on  the  date  such  notes or bonds are issued, or substantially
    26  alter the authority of the board, as set forth in  said  subdivision  to
    27  reimpose  or  terminate  a  control  period; provided, however, that the
    28  foregoing pledge and agreement shall be of no further force  and  effect
    29  if  at any time (i) there is on deposit in a separate trust account with
    30  a bank, trust company or other fiduciary  sufficient  moneys  or  direct
    31  obligations of the United States or obligations guaranteed by the United
    32  States, the principal of and/or interest on which will provide moneys to
    33  pay  punctually when due at maturity or prior to maturity by redemption,
    34  in accordance with their terms, all principal of  and  interest  on  all
    35  outstanding  notes  and bonds of the city or such state financing agency
    36  containing this pledge and agreement and irrevocable  instructions  from

    37  the  city  or such state financing agency to such bank, trust company or
    38  other fiduciary for such payment of such  principal  and  interest  with
    39  such moneys shall have been given, or (ii) such notes and bonds, togeth-
    40  er  with  interest  thereon,  have been paid in full at maturity or have
    41  otherwise been refunded, redeemed, defeased, or discharged; and provided
    42  further that the foregoing pledge and agreement shall be of  full  force
    43  and effect upon its inclusion in any agreement made by the city or state
    44  financing agency with holders or guarantors of such notes or bonds.
    45    Upon  payment  for such obligations issued pursuant to this act by the
    46  original and all subsequent holders inclusion of the foregoing  covenant
    47  shall  be  deemed conclusive evidence of valuable consideration received
    48  by the state and city for such covenant and of reliance upon such pledge

    49  and agreement by any such holder. The state hereby grants any such bene-
    50  fited holder the right to sue the state in a court of  competent  juris-
    51  diction and enforce this covenant and agreement and waives all rights of
    52  defense based on sovereign immunity in such an action or suit.
    53    §  8. Section 5 of chapter 142 of the laws of 2004, amending the local
    54  finance law relating to interest rate exchange agreements of the city of
    55  New York and refunding bonds of such city, as amended by chapter 117  of
    56  the laws of 2008, is amended to read as follows:
        A. 8616                             5
 
     1    §  5.  This  act shall take effect immediately, provided, that section
     2  three of this act shall expire and be deemed repealed  July  15,  [2009]
     3  2010.

     4    § 9. Separability. If any clause, sentence, paragraph, section or part
     5  of  this act shall be adjudged by any court of competent jurisdiction to
     6  be invalid, such judgment shall not affect,  impair  or  invalidate  the
     7  remainder thereof, but shall be confined in its operation to the clause,
     8  sentence,  paragraph,  section  or part thereof directly involved in the
     9  controversy in which such judgment shall have been rendered.
    10    § 10. This act shall take effect immediately.