Bill Text: NY A10479 | 2017-2018 | General Assembly | Introduced
Bill Title: Relates to the sale of bonds and notes of New York city, the issuance of bonds or notes with variable rates of interest, interest rate exchange agreements of New York city, the refunding of bonds, and the down payment for projects financed by bonds; amends the New York state financial emergency act for New York city; makes further amendments relating to the effectiveness thereof.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2018-07-01 - signed chap.91 [A10479 Detail]
Download: New_York-2017-A10479-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 10479 IN ASSEMBLY April 27, 2018 ___________ Introduced by M. of A. WEINSTEIN -- read once and referred to the Committee 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 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 chapter 868 of the laws of 1975 constituting 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 effective- ness 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 64 of the laws of 2017, 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 [eighteen] 6 nineteen, 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 64 of the laws of 2017, 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 15 or notes, on or before July fifteenth, two thousand [eighteen] nineteen, 16 with interest rates that vary in accordance with a formula or procedure 17 and are subject to a maximum rate of interest set forth or referred to 18 in the bonds or notes and may provide the holders thereof with such 19 rights to require the city or other persons to purchase such bonds or EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD15623-01-8A. 10479 2 1 notes or renewals thereof from the proceeds of the resale thereof or 2 otherwise from time to time prior to the final maturity of such bonds or 3 notes as the finance board of the city of New York may determine and the 4 city may resell, at any time prior to final maturity, any such bonds or 5 notes acquired as a result of the exercise of such rights; provided, 6 however, that at no time shall the total principal amount of bonds and 7 notes issued by the city of New York pursuant to this paragraph (other 8 than bonds and notes (1) bearing interest at rates and for periods of 9 time that are specified without reference to future events or contingen- 10 cies, or (2) described in section 136.00 of this article) exceed twen- 11 ty-five percent of the limit prescribed by section 104.00 of this arti- 12 cle. 13 § 3. The opening paragraph of subdivision 1 of paragraph d of section 14 54.90 of the local finance law, as amended by chapter 64 of the laws of 15 2017, is amended to read as follows: 16 On or before July fifteenth, two thousand [eighteen] nineteen the 17 mayor and comptroller of the city of New York may: 18 § 4. The opening paragraph of paragraph a of section 57.00 of the 19 local finance law, as amended by chapter 64 of the laws of 2017, is 20 amended to read as follows: 21 Bonds shall be sold only at public sale and in accordance with the 22 procedure set forth in this section and sections 58.00 and 59.00 of this 23 title, except as otherwise provided in this paragraph. Bonds may be sold 24 at private sale to the United States government or any agency or instru- 25 mentality thereof, the state of New York municipal bond bank agency, to 26 any sinking fund or pension fund of the municipality, school district or 27 district corporation selling such bonds, or, in the case of sales by the 28 city of New York prior to July first, two thousand [eighteen] nineteen, 29 also to the municipal assistance corporation for the city of New York or 30 to any other purchaser with the consent of the mayor and the comptroller 31 of such city and approval of the state comptroller, or, in the case of 32 sales by the county of Nassau prior to December thirty-first, two thou- 33 sand seven, also to the Nassau county interim finance authority with the 34 approval of the state comptroller, or, in the case of sales by the city 35 of Buffalo prior to June thirtieth, two thousand thirty-seven, also to 36 the Buffalo fiscal stability authority with the approval of the state 37 comptroller, or, in the case of bonds or other obligations of a munici- 38 pality issued for the construction of any sewage treatment works, sewage 39 collecting system, storm water collecting system, water management 40 facility, air pollution control facility or solid waste disposal facili- 41 ty, also to the New York state environmental facilities corporation, or, 42 in the case of bonds or other obligations of a school district or a city 43 acting on behalf of a city school district in a city having a population 44 in excess of one hundred twenty-five thousand but less than one million 45 inhabitants according to the latest federal census, issued to finance or 46 refinance the cost of school district capital facilities or school 47 district capital equipment, as defined in section sixteen hundred seven- 48 ty-six of the public authorities law, also to the dormitory authority of 49 the state of New York. Bonds of a river improvement or drainage district 50 established by or under the supervision of the department of environ- 51 mental conservation may be sold at private sale to the state of New York 52 as investments for any funds of the state which by law may be invested, 53 provided, however, that the rate of interest on any such bonds so sold 54 shall be approved by the water power and control commission and the 55 state comptroller. Bonds may also be sold at private sale as provided in 56 section 63.00 of this title. No bonds shall be sold on option or on aA. 10479 3 1 deferred payment plan, except that options to purchase, effective for a 2 period not exceeding one year, may be given: 3 § 5. Subdivision 3 of paragraph g of section 90.00 of the local 4 finance law, as amended by chapter 64 of the laws of 2017, is amended to 5 read as follows" 6 3. Outstanding bonds may, pursuant to a power to recall and redeem or 7 with the consent of the holders thereof, be exchanged for refunding 8 bonds (i) if the refunding bonds are to bear interest at a rate equal to 9 or lower than that borne by the bonds to be refunded or (ii) if, in the 10 case of the city of New York prior to July first, two thousand [eigh-11teen] nineteen, the annual payment required for principal and interest 12 on the refunding bond is less than the annual payment required for prin- 13 cipal and interest on the bond to be refunded, in each case such annual 14 payments to be determined by dividing the total principal and interest 15 payments due over the remaining life of the bond by the number of years 16 to maturity of the bond or (iii) if the bonds to be refunded were issued 17 by the city of New York after June thirtieth, nineteen hundred seventy- 18 eight and prior to July first, two thousand [eighteen] nineteen and 19 contain covenants referring to the existence of the New York state 20 financial control board for the city of New York or any other covenants 21 relating to matters other than the prompt payment of principal and 22 interest on the obligations when due and the refunding bond omits or 23 modifies any such covenant. 24 § 6. Subdivision 8 of paragraph d of section 107.00 of the local 25 finance law, as amended by chapter 64 of the laws of 2017, is amended to 26 read as follows: 27 8. Notwithstanding any other provision of law, the financing by the 28 city of New York prior to July first, two thousand [eighteen] nineteen 29 of any object or purpose which has a period of probable usefulness 30 determined by law by the issuance of any bonds or notes, including (i) 31 the issuance of bonds or notes to obtain reimbursement for funds hereto- 32 fore advanced for the object or purpose for which the bonds or notes are 33 being issued, (ii) the issuance of bonds or notes to redeem notes previ- 34 ously issued for the object or purpose for which the bonds or notes are 35 being issued or (iii) the issuance of bonds to refund bonds previously 36 issued for the object or purpose for which bonds are being issued. 37 § 7. Subdivision 1 of section 10-a of section 2 of chapter 868 of the 38 laws of 1975, constituting the New York state financial emergency act 39 for the city of New York, as amended by chapter 64 of the laws of 2017, 40 is amended to read as follows: 41 1. In the event that after the date on which the provisions of this 42 act become operative, any notes or bonds are issued by the city prior to 43 July 1, [2018] 2019, or any bonds are issued by a state financing agen- 44 cy, the state of New York hereby authorizes the city and authorizes and 45 requires such state financing agency to include a pledge and agreement 46 of the state of New York in any agreement made by the city or such state 47 financing agency with holders or guarantors of such notes or bonds that 48 the state will not take any action which will (a) substantially impair 49 the authority of the board during a control period, as defined in subdi- 50 vision twelve of section two of this act as in effect on the date such 51 notes or bonds are issued (i) to approve, disapprove, or modify any 52 financial plan or financial plan modification, including the revenue 53 projections (or any item thereof) contained therein, subject to the 54 standards set forth in paragraphs a, c, d, e and f of subdivision one of 55 section eight of this act as in effect on the date such notes or bonds 56 are issued and paragraph b of such subdivision as in effect from time toA. 10479 4 1 time, (ii) to disapprove a contract of the city or a covered organiza- 2 tion if the performance of such contract would be inconsistent with the 3 financial plan or to approve or disapprove proposed short-term or long- 4 term borrowing of the city or a covered organization or any agreement or 5 other arrangement referred to in subdivision four of section seven of 6 this act, or (iii) to establish and adopt procedures with respect to the 7 deposit in and disbursement from the board fund of city revenues; (b) 8 substantially impair the authority of the board to review financial 9 plans, financial plan modifications, contracts of the city or the 10 covered organizations and proposed short-term or long-term borrowings of 11 the city and the covered organizations; (c) substantially impair the 12 independent maintenance of a separate fund for the payment of debt 13 service on bonds and notes of the city; (d) alter the composition of the 14 board so that the majority of the voting members of the board are not 15 officials of the state of New York elected in a state-wide election or 16 appointees of the governor; (e) terminate the existence of the board 17 prior to the time to be determined in accordance with section thirteen 18 of this act as in effect on the date such notes or bonds are issued; (f) 19 substantially modify the requirement that the city's financial state- 20 ments be audited by a nationally recognized independent certified public 21 accounting firm or consortium of firms and that a report on such audit 22 be furnished to the board; or (g) alter the definition of a control 23 period set forth in subdivision twelve of section two of this act, as in 24 effect on the date such notes or bonds are issued, or substantially 25 alter the authority of the board, as set forth in said subdivision to 26 reimpose or terminate a control period; provided, however, that the 27 foregoing pledge and agreement shall be of no further force and effect 28 if at any time (i) there is on deposit in a separate trust account with 29 a bank, trust company or other fiduciary sufficient moneys or direct 30 obligations of the United States or obligations guaranteed by the United 31 States, the principal of and/or interest on which will provide moneys to 32 pay punctually when due at maturity or prior to maturity by redemption, 33 in accordance with their terms, all principal of and interest on all 34 outstanding notes and bonds of the city or such state financing agency 35 containing this pledge and agreement and irrevocable instructions from 36 the city or such state financing agency to such bank, trust company or 37 other fiduciary for such payment of such principal and interest with 38 such moneys shall have been given, or (ii) such notes and bonds, togeth- 39 er with interest thereon, have been paid in full at maturity or have 40 otherwise been refunded, redeemed, defeased, or discharged; and provided 41 further that the foregoing pledge and agreement shall be of full force 42 and effect upon its inclusion in any agreement made by the city or state 43 financing agency with holders or guarantors of such notes or bonds. 44 Upon payment for such obligations issued pursuant to this act by the 45 original and all subsequent holders inclusion of the foregoing covenant 46 shall be deemed conclusive evidence of valuable consideration received 47 by the state and city for such covenant and of reliance upon such pledge 48 and agreement by any such holder. The state hereby grants any such bene- 49 fited holder the right to sue the state in a court of competent juris- 50 diction and enforce this covenant and agreement and waives all rights of 51 defense based on sovereign immunity in such an action or suit. 52 § 8. Section 5 of chapter 142 of the laws of 2004, amending the local 53 finance law relating to interest rate exchange agreements of the city of 54 New York and refunding bonds of such city, as amended by chapter 64 of 55 the laws of 2017, is amended to read as follows:A. 10479 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, [2018] 3 2019. 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.
