Bill Text: NY S04197 | 2019-2020 | General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: 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.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2019-07-03 - SIGNED CHAP.75 [S04197 Detail]

Download: New_York-2019-S04197-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         4197--A
                               2019-2020 Regular Sessions
                    IN SENATE
                                      March 4, 2019
                                       ___________
        Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
          printed to be committed  to  the  Committee  on  Local  Government  --
          committee  discharged,  bill amended, 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-two, 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
    15  or notes, on or before July fifteenth, two thousand  [nineteen]  twenty-
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10405-02-9
        S. 4197--A                          2
     1  two,  with  interest  rates  that  vary  in accordance with a formula or
     2  procedure and are subject to a maximum rate of  interest  set  forth  or
     3  referred  to  in  the bonds or notes and may provide the holders thereof
     4  with  such  rights to require the city or other persons to purchase such
     5  bonds or notes or renewals thereof from the proceeds of the resale ther-
     6  eof or otherwise from time to time prior to the final maturity  of  such
     7  bonds  or  notes as the finance board of the city of New York may deter-
     8  mine and the city may resell, at any time prior to final  maturity,  any
     9  such bonds or notes acquired as a result of the exercise of such rights;
    10  provided,  however,  that at no time shall the total principal amount of
    11  bonds and notes issued by the city of New York pursuant  to  this  para-
    12  graph  (other than bonds and notes (1) bearing interest at rates and for
    13  periods of time that are specified without reference to future events or
    14  contingencies, or (2) described  in  section  136.00  of  this  article)
    15  exceed  twenty-five percent of the limit prescribed by section 104.00 of
    16  this article.
    17    § 3. The opening paragraph of subdivision 1 of paragraph d of  section
    18  54.90  of the local finance law, as amended by chapter 91 of the laws of
    19  2018, is amended to read as follows:
    20    On or before July fifteenth, two thousand  [nineteen]  twenty-two  the
    21  mayor and comptroller of the city of New York may:
    22    §  4.  The  opening  paragraph  of paragraph a of section 57.00 of the
    23  local finance law, as amended by chapter 91 of  the  laws  of  2018,  is
    24  amended to read as follows:
    25    Bonds  shall  be  sold  only at public sale and in accordance with the
    26  procedure set forth in this section and sections 58.00 and 59.00 of this
    27  title, except as otherwise provided in this paragraph. Bonds may be sold
    28  at private sale to the United States government or any agency or instru-
    29  mentality thereof, the state of New York municipal bond bank agency,  to
    30  any sinking fund or pension fund of the municipality, school district or
    31  district corporation selling such bonds, or, in the case of sales by the
    32  city   of  New  York  prior  to  July  first,  two  thousand  [nineteen]
    33  twenty-two, also to the municipal assistance corporation for the city of
    34  New York or to any other purchaser with the consent of the mayor and the
    35  comptroller of such city and approval of the state comptroller,  or,  in
    36  the  case  of  sales  by  the county of Nassau prior to December thirty-
    37  first, two thousand seven, also to the  Nassau  county  interim  finance
    38  authority with the approval of the state comptroller, or, in the case of
    39  sales by the city of Buffalo prior to June thirtieth, two thousand thir-
    40  ty-seven,  also  to  the  Buffalo  fiscal  stability  authority with the
    41  approval of the state comptroller, or, in the case  of  bonds  or  other
    42  obligations  of a municipality issued for the construction of any sewage
    43  treatment  works,  sewage  collecting  system,  storm  water  collecting
    44  system,  water  management  facility,  air pollution control facility or
    45  solid waste disposal facility, also to the New York state  environmental
    46  facilities corporation, or, in the case of bonds or other obligations of
    47  a  school  district or a city acting on behalf of a city school district
    48  in a city having a population in excess of one hundred twenty-five thou-
    49  sand but less than one  million  inhabitants  according  to  the  latest
    50  federal  census,  issued  to  finance  or  refinance  the cost of school
    51  district capital facilities or school  district  capital  equipment,  as
    52  defined in section sixteen hundred seventy-six of the public authorities
    53  law,  also to the dormitory authority of the state of New York. Bonds of
    54  a river improvement or drainage district established  by  or  under  the
    55  supervision  of the department of environmental conservation may be sold
    56  at private sale to the state of New York as investments for any funds of
        S. 4197--A                          3
     1  the state which by law may be invested, provided, however, that the rate
     2  of interest on any such bonds so sold shall be  approved  by  the  water
     3  power  and  control commission and the state comptroller. Bonds may also
     4  be  sold  at private sale as provided in section 63.00 of this title. No
     5  bonds shall be sold on option or on a deferred payment plan, except that
     6  options to purchase, effective for a period not exceeding one year,  may
     7  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-two, the annual payment required for principal and interest
    17  on the refunding bond is less than the annual payment required for prin-
    18  cipal 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-two  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] 2022, 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
        S. 4197--A                          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.
        S. 4197--A                          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  2022.
     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.