Relates to the authorization of debt in times of public emergency; limits the total amount of state debt; establishes a debt management board; relates to the refunding of state debts.
STATE OF NEW YORK
________________________________________________________________________
4302
2017-2018 Regular Sessions
IN SENATE
February 8, 2017
___________
Introduced by Sen. AKSHAR -- read twice and ordered printed, and when
printed to be committed to the Committee on Judiciary
CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
proposing amendments to article 7 of the constitution, in relation to
the authorization of debt in times of public emergency, a limit on the
total amount of state debt, the establishment of a debt management
board and refunding of state debts
1 Section 1. Resolved (if the Assembly concur), That section 10 of arti-
2 cle 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 any other emergency stemming from a disaster including, but not limited
7 to, a disaster caused by an act of terrorism; but the money arising from
8 the contracting of such debts shall be applied for the purpose for which
9 it was raised, or to repay such debts, and to no other purpose whatever.
10 No debt shall be contracted pursuant to this section without the concur-
11 rence of the governor, the comptroller, the attorney general and two-
12 thirds of the members elected to each house of the legislature; and the
13 governor shall have power to summon the comptroller and the attorney
14 general and convene the legislature in extraordinary session for the
15 purpose of considering such emergency debt. At the time, date and place
16 appointed by the governor, no other subject shall be acted upon until
17 each, in the following order, has given their approval or any one there-
18 of has given their disapproval of the debt proposed by the governor to
19 enable the state to respond to such emergency: the governor, the comp-
20 troller, the attorney general, the senate and the assembly. The proposal
21 of such emergency debt shall be in the form of a resolution prepared and
22 submitted by the governor to the comptroller, the attorney general, the
23 senate and the assembly, who shall approve or disapprove such resolution
24 without any changes thereto; and if such resolution is approved by the
25 governor, the comptroller, the attorney general, and two-thirds of the
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD89066-01-7
S. 4302 2
1 members elected to each house of the legislature, then such law or laws
2 shall be enacted as may be necessary or advisable to implement such
3 approval.
4 § 2. Resolved (if the Assembly concur), That section 11 of article 7
5 of the constitution be amended to read as follows:
6 § 11. 1. Except the debts or refunding debts specified in sections 9,
7 10 and 13 of this article, no debt shall be hereafter contracted by or
8 [in] on behalf of the state, unless such debt shall be authorized by law
9 pursuant to this section, for some single work or purpose, to be
10 distinctly specified therein. Debt subject to the provisions of this
11 section shall be any debt or obligation supported in whole or in part by
12 any financing arrangement whereby the state agrees, whether by law,
13 contract, or otherwise, to make payments which are to be used, directly
14 or indirectly, for the payment of principal, interest, or related
15 payments on indebtedness incurred or contracted by the state itself for
16 any purpose, or by any state agency, municipality, individual, public
17 authority or other public or private corporation or any other entity for
18 state capital or operating purposes or to finance grants, loans or other
19 assistance payments made or to be made by or on behalf of the state for
20 any purpose. If the state agrees to make future revenues from a specific
21 state source available for the purpose of supporting debt of any munici-
22 pality, individual, public or private corporation or any other entity,
23 such debt shall be considered to be a debt for the purpose of financing
24 a state grant, loan or other assistance payment and shall be subject to
25 the provisions of this section. The provisions of this section shall
26 apply (i) whether or not the obligation of the state to make payments is
27 subject to appropriation or is otherwise contingent, or (ii) whether or
28 not debt service is to be paid from a revenue stream transferred by the
29 state to another party that is responsible for making such payments.
30 [No] 2. Except as provided in subdivision 5 of this section, no such
31 law shall take effect until it shall, at a general election, have been
32 submitted to the people, and have received a majority of all the votes
33 cast for and against it at such election nor shall it be submitted to be
34 voted on within three months after its passage by the legislature nor at
35 any general election when any more than four other [law or any bill]
36 propositions shall be submitted to be voted for or against.
37 3. During the fiscal year beginning in calendar year 2026 and in every
38 fiscal year thereafter, no proposition concerning such a law shall be
39 submitted to the people for approval, and no such law shall be enacted
40 pursuant to subdivision 5 of this section, unless the total principal
41 amount of debt to be authorized by such law, together with the total
42 principal amount of debt either already outstanding, or authorized to be
43 incurred pursuant to this section, shall be equal to or less than five
44 percent of the total personal income of the state. Such personal income
45 is to be determined by the debt management board established pursuant to
46 subdivision 4 of this section in accordance with such commonly accepted
47 method or methods of measuring the economic activity of the state as
48 shall be prescribed by a law, which shall be enacted not later than June
49 30, 2019, and as may be amended from time to time not inconsistent with
50 this section. Debt subject to the limit imposed by this section shall
51 include all debt supported by financing arrangements described in subdi-
52 vision 1 of this section but shall not include the debts specified in
53 sections 9, 10 and 13 of this article or debt previously authorized by
54 law but not incurred because of the subsequent repeal of such authori-
55 zation or the subsequent prohibition of such debt pursuant to subdivi-
56 sion 10 of this section.
S. 4302 3
1 4. A debt management board, consisting of the governor, the comp-
2 troller and a third person jointly selected by the governor and the
3 comptroller, shall be established by law. The debt management board
4 shall annually determine, within the limits established pursuant to
5 subdivision 3 of this section, a debt affordability level which shall
6 prescribe for each fiscal year and forecast for the two succeeding
7 fiscal years the total amount of additional debt that may be incurred
8 and the total debt service obligations that may be undertaken by the
9 state without overburdening present or future generations. The executive
10 budget submitted pursuant to section 2 of this article for the ensuing
11 fiscal year and the budget bills submitted pursuant to section 3 of this
12 article for such fiscal year shall not propose any additional debt or
13 new debt service expense that would cause total debt or total debt
14 service expenses to exceed the debt affordability level prescribed for
15 such fiscal year, and neither the governor nor the legislature shall, by
16 law, contract, or otherwise, provide for any additional debt or new debt
17 service expense that would cause total debt or total debt service
18 expenses to exceed such level without the unanimous approval of the debt
19 management board. During the fiscal year beginning in 2022 and in every
20 fiscal year thereafter, the debt management board shall not establish
21 any debt affordability level which would result in a total principal
22 amount of debt in excess of the limit established pursuant to subdivi-
23 sion 3 of this section.
24 5. During any fiscal year, a law or laws authorizing debt in the
25 combined aggregate amount of one billion dollars, or three percent of
26 the limit determined pursuant to subdivision 3 of this section, whichev-
27 er is greater, may be enacted without being submitted for approval by
28 the people. However, in no event shall debt incurred in fiscal years
29 beginning in 2026 and thereafter pursuant to such law or laws result in
30 a total principal amount of debt in excess of the limit determined
31 pursuant to subdivision 3 of this section or the debt affordability
32 level established pursuant to subdivision 4 of this section.
33 6. All debt subject to the provisions of this section (i) shall,
34 except for refunding debt, be incurred only for a capital purpose
35 authorized by law, and (ii) shall, if incurred on or after the first day
36 of the first fiscal year beginning at least one year after the effective
37 date of this subdivision, be in the form of obligations issued by the
38 comptroller.
39 7. Nothing contained in this section shall invalidate debt obligations
40 outstanding on the effective date of this subdivision that would be
41 subject to the provisions of this section if incurred after the effec-
42 tive date of this subdivision, and the state may continue to provide for
43 payments related to such debt on the same terms under which such debt
44 was incurred; provided, however, that no such debt shall be refunded
45 unless (i) such refunding complies in all respects with the requirements
46 of section 13 of this article, and (ii) any refunding obligations issued
47 on or after the first day of the first fiscal year beginning at least
48 one year after the effective date of this subdivision are issued by the
49 comptroller. Such outstanding debt obligations and the debt service
50 expenses, direct or indirect, required for such obligations shall be
51 included in the determination of the limit imposed by subdivision 3 of
52 this section and the debt affordability level required by subdivision 4
53 of this section. The provisions of section 16 of this article shall not
54 apply to state payments with respect to any such obligations unless such
55 provisions would have applied prior to the effective date of this subdi-
56 vision.
S. 4302 4
1 8. Debt obligations issued to refund outstanding state debt, regard-
2 less of whether such outstanding debt was incurred prior to the effec-
3 tive date of this subdivision, shall not be counted for the purposes of
4 the limit imposed by subdivision 3 of this section and the debt afforda-
5 bility level required by subdivision 4 of this section if such refunding
6 complies in all respects with section 13 of this article. Debt service
7 expenses on debt that has been refunded in accordance with section 13 of
8 this article shall be excluded from the debt affordability level to the
9 extent that such debt service expenses are to be paid from an escrow
10 fund established with proceeds of the refunding debt, but debt service
11 expenses on the refunding debt shall be included except to the extent
12 that such debt service expenses are to be paid from such an escrow fund.
13 For purposes of this subdivision and subdivisions 7 and 9 of this
14 section, any refunding debt that does not extend beyond the final matu-
15 rity of the debt being refunded shall be deemed to comply with the
16 provisions of subdivision 6 of section 13 of this article, provided that
17 there is an actual debt service savings in every year to maturity as a
18 result of the issuance of the refunding debt.
19 9. After the effective date of this section the state shall not,
20 except as specifically authorized in some other section of this consti-
21 tution, agree to make payments, directly or indirectly, whether or not
22 subject to appropriation, that are to be available to pay debt service
23 on any debt incurred by a municipality, individual, public authority or
24 other public or private corporation or any other entity, for any
25 purpose, if such payments are expected to be used to pay debt service
26 only if other sources available for the payment of debt service are
27 inadequate. Outstanding debt that would be prohibited by this subdivi-
28 sion if such debt had been incurred after the effective date of this
29 subdivision may be refunded by the entity that incurred the outstanding
30 debt provided that all provisions of subdivisions 7 and 8 of this
31 section are complied with except the requirement that such refunding
32 debt obligations be issued by the comptroller, and refunding debt
33 service expenses shall only be included in the debt affordability level
34 if the debt service expenses on the debt being refunded would have been
35 included.
36 10. The legislature may, at any time after the enactment or approval
37 of such law [by the people], if no debt shall have been contracted in
38 pursuance thereof, repeal the same; and may at any time, by law, forbid
39 the contracting of any further debt or liability under such law.
40 § 3. Resolved (if the Assembly concur), That subdivisions 6 and 7 of
41 section 13 of article 7 of the constitution be amended to read as
42 follows:
43 6. In no event shall the last annual installment or contribution on
44 any portion of refunding debt, including refunding obligations issued to
45 refund other refunding obligations, be made after the last installment
46 on the relevant portion of the debt to be refunded or after the termi-
47 nation of the period of probable life of the projects financed with the
48 proceeds of the relevant portion of the debt to be refunded, or any debt
49 previously refunded with the refunding obligations to be refunded,
50 determined as of the date of issuance of the original obligations pursu-
51 ant to section 12 of this article to finance such projects, or forty
52 years from such date, if earlier; provided, however, that in lieu of the
53 foregoing, an entire refunding issue or portion thereof may be struc-
54 tured to mature over the remaining weighted average useful life of all
55 projects financed with the obligations being refunded.
S. 4302 5
1 7. [Subject to the provisions of subdivision 5 of this section, each
2 annual installment or contribution of principal of refunding obligations
3 shall be equal to the amount that would be required by subdivision 1 of
4 section 12 of this article if such installments or contributions were
5 required to be made from the year that the next installment or contrib-
6 ution would have been due on the obligations to be refunded, if they had
7 not been refunded, until the final maturity of the refunding obligations
8 but excluding any year in which no installment or contribution would
9 have been due on the obligations to be refunded or, in the alternative,
10 the] The total payments of principal and interest on the refunding bonds
11 shall be less in each year to their final maturity than the total
12 payments of principal and interest on the bonds to be refunded in each
13 such year.
14 § 4. Resolved (if the Assembly concur), That the foregoing amendments
15 be referred to the first regular legislative session convening after the
16 next succeeding general election of members of the assembly, and, in
17 conformity with section 1 of article 19 of the constitution, be
18 published for 3 months previous to the time of such election.
