Bill Text: NY A09671 | 2023-2024 | General Assembly | Introduced

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Bill Title: Extends certain provisions relating 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; extends 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) 2024-06-28 - signed chap.139 [A09671 Detail]

Download: New_York-2023-A09671-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          9671

                   IN ASSEMBLY

                                     March 29, 2024
                                       ___________

        Introduced  by  M.  of  A.  BRAUNSTEIN  -- 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 selling of bonds at private sale, 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 relat-
          ing  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 152 of the laws of 2023, 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  [twenty-
     6  four]  twenty-five,  the mayor and comptroller of such city may, subject
     7  to the approval of the state comptroller and the limitations on  private
     8  sales 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 152 of the  laws  of  2023,  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 [twenty-four] twen-
    16  ty-five, with interest rates that vary in accordance with a  formula  or
    17  procedure  and  are  subject  to a maximum rate of interest set forth or
    18  referred to in the bonds or notes and may provide  the  holders  thereof
    19  with  such  rights to require the city or other persons to purchase such
    20  bonds or notes or renewals thereof from the proceeds of the resale ther-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD15085-01-4
        A. 9671                             2

     1  eof or otherwise from time to time prior to the final maturity  of  such
     2  bonds  or  notes as the finance board of the city of New York may deter-
     3  mine and the city may resell, at any time prior to final  maturity,  any
     4  such bonds or notes acquired as a result of the exercise of such rights;
     5  provided,  however,  that at no time shall the total principal amount of
     6  bonds and notes issued by the city of New York pursuant  to  this  para-
     7  graph  (other than bonds and notes (1) bearing interest at rates and for
     8  periods of time that are specified without reference to future events or
     9  contingencies, or (2) described  in  section  136.00  of  this  article)
    10  exceed  twenty-five percent of the limit prescribed by section 104.00 of
    11  this article.
    12    § 3. The opening paragraph of subdivision 1 of paragraph d of  section
    13  54.90 of the local finance law, as amended by chapter 152 of the laws of
    14  2023, is amended to read as follows:
    15    On  or  before  July fifteenth, two thousand [twenty-four] twenty-five
    16  the mayor and comptroller of the city of New York may:
    17    § 4. The opening paragraph of paragraph a  of  section  57.00  of  the
    18  local  finance  law,  as  amended by chapter 152 of the laws of 2023, is
    19  amended to read as follows:
    20    Bonds shall be sold only at public sale and  in  accordance  with  the
    21  procedure set forth in this section and sections 58.00 and 59.00 of this
    22  title, except as otherwise provided in this paragraph. Bonds may be sold
    23  at private sale to the United States government or any agency or instru-
    24  mentality  thereof, the state of New York municipal bond bank agency, to
    25  any sinking fund or pension fund of the municipality, school district or
    26  district corporation selling such bonds, or, in the case of sales by the
    27  city of New York prior to July first, two thousand  [twenty-four]  twen-
    28  ty-five,  also  to  the municipal assistance corporation for the city of
    29  New York or to any other purchaser with the consent of the mayor and the
    30  comptroller of such city and approval of the state comptroller,  or,  in
    31  the  case  of  sales  by  the county of Nassau prior to December thirty-
    32  first, two thousand seven, also to the  Nassau  county  interim  finance
    33  authority with the approval of the state comptroller, or, in the case of
    34  sales by the city of Buffalo prior to June thirtieth, two thousand thir-
    35  ty-seven,  also  to  the  Buffalo  fiscal  stability  authority with the
    36  approval of the state comptroller, or, in the case  of  bonds  or  other
    37  obligations  of a municipality issued for the construction of any sewage
    38  treatment  works,  sewage  collecting  system,  storm  water  collecting
    39  system,  water  management  facility,  air pollution control facility or
    40  solid waste disposal facility, also to the New York state  environmental
    41  facilities corporation, or, in the case of bonds or other obligations of
    42  a  school  district or a city acting on behalf of a city school district
    43  in a city having a population in excess of one hundred twenty-five thou-
    44  sand but less than one  million  inhabitants  according  to  the  latest
    45  federal  census,  issued  to  finance  or  refinance  the cost of school
    46  district capital facilities or school  district  capital  equipment,  as
    47  defined in section sixteen hundred seventy-six of the public authorities
    48  law,  also to the dormitory authority of the state of New York. Bonds of
    49  a river improvement or drainage district established  by  or  under  the
    50  supervision  of the department of environmental conservation may be sold
    51  at private sale to the state of New York as investments for any funds of
    52  the state which by law may be invested, provided, however, that the rate
    53  of interest on any such bonds so sold shall be  approved  by  the  water
    54  power  and  control commission and the state comptroller. Bonds may also
    55  be sold at private sale as provided in section 63.00 of this  title.  No
    56  bonds shall be sold on option or on a deferred payment plan, except that
        A. 9671                             3

     1  options  to purchase, effective for a period not exceeding one year, may
     2  be given:
     3    §  5.  Subdivision  3  of  paragraph  g  of section 90.00 of the local
     4  finance law, as amended by chapter 152 of the laws of 2023,  is  amended
     5  to 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  [twenty-
    11  four]  twenty-five, the annual payment required for principal and inter-
    12  est on the refunding bond is less than the annual payment  required  for
    13  principal  and  interest  on  the bond to be refunded, in each case such
    14  annual payments to be determined by dividing  the  total  principal  and
    15  interest  payments due over the remaining life of the bond by the number
    16  of years to maturity of the bond or (iii) if the bonds  to  be  refunded
    17  were  issued  by  the  city  of  New York after June thirtieth, nineteen
    18  hundred seventy-eight and prior to July  first,  two  thousand  [twenty-
    19  four]  twenty-five  and  contain covenants referring to the existence of
    20  the New York state financial control board for the city of New  York  or
    21  any other covenants relating to matters other than the prompt payment of
    22  principal  and  interest  on  the obligations when due and the refunding
    23  bond omits or 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 152 of the laws of 2023, is amended
    26  to 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 [twenty-four] twen-
    29  ty-five of any object or purpose which has a period of probable  useful-
    30  ness  determined by law by the issuance of any bonds or notes, including
    31  (i) the issuance of bonds or notes to  obtain  reimbursement  for  funds
    32  heretofore  advanced  for  the  object or purpose for which the bonds or
    33  notes are being issued, (ii) the issuance of bonds or  notes  to  redeem
    34  notes previously issued for the object or purpose for which the bonds or
    35  notes  are  being  issued or (iii) the issuance of bonds to refund bonds
    36  previously issued for the object or purpose for which  bonds  are  being
    37  issued.
    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 152 of the laws of 2023,
    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, [2024] 2025, 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. 9671                             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 152  of
    56  the laws of 2023, is amended to read as follows:
        A. 9671                             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,  [2024]
     3  2025.
     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.