Bill Text: NY A01618 | 2017-2018 | General Assembly | Introduced
Bill Title: Authorizes installment purchase contracts by political subdivisions for the financing of technology.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2018-01-03 - referred to local governments [A01618 Detail]
Download: New_York-2017-A01618-Introduced.html
STATE OF NEW YORK ________________________________________________________________________ 1618 2017-2018 Regular Sessions IN ASSEMBLY January 12, 2017 ___________ Introduced by M. of A. HEVESI -- read once and referred to the Committee on Local Governments AN ACT to amend the general municipal law, in relation to installment contracts for the financing of technology The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Paragraph (b) of subdivision 1, paragraphs (c) and (d) of 2 subdivision 2, paragraph (a) of subdivision 3, paragraph (a) of subdivi- 3 sion 4, paragraphs (a) and (b) of subdivision 5 and paragraphs (a) and 4 (b) of subdivision 6 of section 109-b of the general municipal law, as 5 amended by chapter 258 of the laws of 1994, are amended to read as 6 follows: 7 (b) "Installment purchase contract" shall mean any lease purchase 8 agreement, installment sales agreement or other similar agreement 9 providing for periodic payments between a corporation, person or other 10 entity and a political subdivision which has as its purpose the financ- 11 ing of equipment, machinery, technology or apparatus. 12 (c) Subject to the provisions of subdivision five of this section, 13 where the financing of equipment, machinery, technology or apparatus 14 pursuant to an installment purchase contract is to be provided by agency 15 certificates of participation, the governing board of a political subdi- 16 vision shall adopt a resolution authorizing the written contract with 17 the agency setting forth the rights and liabilities of the agency and 18 the political subdivision as provided for in section twenty-four hundred 19 thirty-five-a of the public authorities law. 20 (d) The term of such installment purchase contract, including all 21 renewals thereof, shall not exceed the period of probable usefulness 22 prescribed by section 11.00 of the local finance law for the equipment, 23 machinery, technology or apparatus being financed under the installment 24 purchase contract. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD02474-01-7A. 1618 2 1 (a) Installment purchase contracts for equipment, machinery, technolo- 2 gy or apparatus shall constitute purchase contracts for public bidding 3 purposes and shall be subject to public bidding requirements to the 4 extent applicable by law. For purposes of determining whether the cost 5 of the equipment, machinery, technology or apparatus exceeds the mone- 6 tary threshold fixed in section one hundred three of this article, the 7 cost of the equipment, machinery, technology or apparatus, exclusive of 8 the cost of financing, shall be considered. If the equipment, machinery, 9 technology or apparatus is to be financed by a party other than the 10 party submitting the bid, the bid specifications may provide that the 11 political subdivision may assign its right to purchase to a third party 12 without the necessity of approval by the other party to the contract. 13 Nothing herein shall preclude a political subdivision from advertising 14 for bids in the alternative with and without financing. 15 (a) The proceeds of certificates of participation executed and deliv- 16 ered in connection with the installment purchase contract made pursuant 17 to this section, in addition to being applied towards the cost of the 18 equipment, machinery, technology or apparatus, may also be used for the 19 establishment of reserve funds to secure such certificates, the cost or 20 premium of letters of credit, insurance or other credit enhancements, 21 the costs of bond counsel, a financial advisor, underwriter, trustees 22 and paying agent, and other actual and necessary expenses directly 23 related to the issuance of such certificates. The foregoing shall not be 24 construed to authorize the use of such proceeds for the payment of 25 personal service expenses of the political subdivision. Where agency 26 certificates are executed and delivered, proceeds may be used for 27 payment by the political subdivision of the expenses incurred by the 28 agency in connection with the execution and delivery and sale of such 29 certificates. 30 (a) If an authorization for the issuance of obligations to finance the 31 equipment, machinery, technology or apparatus would have been required 32 by law to be subject to a permissive or mandatory referendum, then the 33 authorization to enter into an installment purchase contract shall be 34 subject to a permissive or mandatory referendum, as the case may be, in 35 the same manner as provided for such referendum on the issuance of obli- 36 gations. 37 (b) If the authorization for the issuance of obligations to finance 38 the equipment, machinery, technology or apparatus would have been 39 required by law to be subject to: (i) a certain supermajority vote of 40 the governing board, (ii) a mandatory or permissive referendum, or (iii) 41 both, then the authorization to enter into an installment purchase 42 contract for equipment, machinery, technology or apparatus shall be 43 subject to such vote, referendum or such referendum and vote, as the 44 case may be, in the same manner as provided for such vote and/or refer- 45 endum on the issuance of obligations. 46 (a) Installment purchase contracts made pursuant to this section, 47 together with any certificates of participation executed and delivered 48 or caused to be executed and delivered in connection therewith, shall 49 not constitute or create indebtedness of the state or a political subdi- 50 vision for purposes of article seven or eight of the state constitution 51 or section 20.00 of the local finance law, nor shall they constitute a 52 contractual obligation in excess of the amounts appropriated therefor. 53 Neither the state nor a political subdivision has any continuing legal 54 or moral obligation to appropriate money for said payments or other 55 obligations due under the installment purchase contract. No installment 56 purchase contract shall contain any provision which, in the event ofA. 1618 3 1 non-appropriation, precludes a political subdivision from acquiring 2 equipment, machinery, technology or apparatus for the same or similar 3 purpose as the equipment, machinery, technology or apparatus included in 4 the installment purchase contract for a period of more than sixty days 5 from the date of expiration, termination or cancellation of such 6 contract, provided, however, that in no case shall an installment 7 purchase contract contain any provision which would preclude a political 8 subdivision from performing any statutorily or constitutionally required 9 duties or functions, or require the political subdivision to pay liqui- 10 dated damages. 11 (b) In the case of the failure to appropriate, the sole security, 12 apart from any security provided by a credit enhancement, for any 13 remaining periodic payments shall be the equipment, machinery, technolo- 14 gy or apparatus subject to the installment purchase contract, and if 15 certificates of participation are executed and delivered or caused to be 16 executed and delivered, reserve funds, if any, or any remaining proceeds 17 from certificates executed and delivered by or on behalf of the poli- 18 tical subdivision. Any installment purchase contract or any agreement 19 for the execution and delivery of certificates of participation to fund 20 an installment purchase contract may provide that the installment 21 purchase contract or certificates of participation are secured by the 22 underlying equipment, machinery, technology or apparatus and that, in 23 the event the political subdivision fails to appropriate funds suffi- 24 cient for payments required under the contract, the financed equipment, 25 machinery, technology or apparatus may be sold on behalf of the holders 26 of the certificates or other person entitled to receive payments under 27 the installment purchase contract, provided that any excess proceeds 28 from such a sale, after deduction for and payment of fees, expenses and 29 any taxes levied on the sale, and distribution to the holders of the 30 certificates in the amount of the face value of the certificates plus 31 accrued interest shall be paid to the political subdivision. 32 § 2. This act shall take effect on the sixtieth day after it shall 33 have become a law; provided, however, that the amendments to section 34 109-b of the general municipal law made by section one of this act shall 35 not affect the repeal of such section and shall be deemed repealed ther- 36 ewith.
