S T A T E O F N E W Y O R K
________________________________________________________________________
7675
2009-2010 Regular Sessions
I N A S S E M B L Y
April 20, 2009
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Introduced by M. of A. SCHROEDER -- read once and referred to the
Committee on Ways and Means
AN ACT to amend the state finance law, in relation to the creation of a
debt management board and limiting the amount of state related debt
that may be issued
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The state finance law is amended by adding a new article
5-E to read as follows:
ARTICLE 5-E
DEBT MANAGEMENT BOARD
SECTION 69-N. DEFINITIONS.
69-O. NEW YORK STATE DEBT MANAGEMENT BOARD; CREATION; PROCEDURE.
69-P. POWERS, FUNCTIONS AND DUTIES OF THE NEW YORK STATE DEBT
MANAGEMENT BOARD; LIMITATIONS.
69-Q. COMPTROLLER'S DUTIES WITH RESPECT TO BOARD.
S 69-N. DEFINITIONS. AS USED IN THIS ARTICLE AND ARTICLE FIVE-F OF
THIS CHAPTER, THE FOLLOWING TERMS SHALL HAVE THE MEANINGS SET FORTH
BELOW:
1. STATE DEBT. ALL BONDS AND BOND ANTICIPATION NOTES ISSUED BY THE
STATE COMPTROLLER PURSUANT TO ARTICLE FIVE OF THIS CHAPTER.
2. STATE BACKED DEBT. ALL DEBT OTHER THAN STATE DEBT ISSUED BY ANY
STATE OFFICER, AGENCY, OR ENTITY, INCLUDING ANY STATE PUBLIC BENEFIT
CORPORATION OR OTHER STATE PUBLIC CORPORATION, AND BACKED BY ANY AGREE-
MENT BY THE STATE, STATUTORY, CONTRACTUAL, OR OTHERWISE, WHETHER OR NOT
CONTINGENT, WHEREBY THE STATE MAY BE CALLED UPON TO MAKE PAYMENTS,
WHETHER OR NOT SUBJECT TO APPROPRIATION, THAT ARE INTENDED TO BE USED,
DIRECTLY OR INDIRECTLY, TO PAY DEBT SERVICE. STATE BACKED DEBT SHALL NOT
INCLUDE DEBT BACKED BY MONEY APPROPRIATED OR OTHERWISE MADE AVAILABLE
FOR SOME OTHER PURPOSE THAT MAY INCIDENTALLY BE USED TO PAY DEBT SERVICE
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08069-01-9
A. 7675 2
OR THAT IS APPROPRIATED TO ANOTHER ENTITY FOR A PURPOSE OTHER THAN
PAYMENT OF DEBT SERVICE AND WHICH MAY BE INTERCEPTED BY THE COMPTROLLER
ON A CONTINGENT BASIS TO PAY DEBT SERVICE OF THE ISSUING ENTITY.
3. STATE RELATED DEBT. ALL STATE DEBT AND ALL STATE BACKED DEBT.
S 69-O. NEW YORK STATE DEBT MANAGEMENT BOARD; CREATION; PROCEDURE. 1.
THE NEW YORK STATE DEBT MANAGEMENT BOARD IS HEREBY CREATED TO HAVE AND
EXERCISE THE POWERS, DUTIES, AND PREROGATIVES PROVIDED BY THE PROVISIONS
OF THIS ARTICLE AND ANY OTHER PROVISION OF LAW.
2. THE MEMBERSHIP OF THE BOARD SHALL CONSIST OF SEVEN PERSONS, INCLUD-
ING THE GOVERNOR, THE DIRECTOR OF THE BUDGET, THE STATE COMPTROLLER, THE
SPEAKER OF THE ASSEMBLY, THE TEMPORARY PRESIDENT OF THE SENATE, THE
MINORITY LEADER OF THE ASSEMBLY, AND MINORITY LEADER OF THE SENATE. THE
GOVERNOR SHALL DESIGNATE THE CHAIRPERSON, WHO SHALL SERVE AT THE PLEAS-
URE OF THE GOVERNOR. EACH MEMBER OF THE BOARD SHALL BE ENTITLED TO
DESIGNATE A REPRESENTATIVE TO ATTEND MEETINGS OF THE BOARD IN HIS OR HER
PLACE AND TO VOTE OR OTHERWISE ACT ON HIS OR HER BEHALF IN HIS OR HER
ABSENCE. NOTICE OF SUCH DESIGNATION SHALL BE FURNISHED IN WRITING TO
THE BOARD BY THE DESIGNATED MEMBER. A REPRESENTATIVE SHALL SERVE AT THE
PLEASURE OF THE DESIGNATING MEMBER DURING THE MEMBER'S TERM OF OFFICE. A
REPRESENTATIVE SHALL NOT BE AUTHORIZED TO DELEGATE ANY OF HIS OR HER
DUTIES OR FUNCTIONS TO ANY OTHER PERSON.
3. THE BOARD SHALL ACT WHENEVER AUTHORIZED BY A MAJORITY OF ALL VOTES
CAST AT A MEETING OF THE BOARD. EACH MEMBER OF THE BOARD SHALL BE ENTI-
TLED TO AS MANY VOTES AS FOLLOWS:
A. THE GOVERNOR SHALL HAVE SEVENTY-FIVE VOTES;
B. THE STATE COMPTROLLER SHALL HAVE SEVENTY-FIVE VOTES;
C. THE SPEAKER OF THE ASSEMBLY SHALL HAVE THE NUMBER OF VOTES EQUAL TO
ONE HUNDRED TIMES THE NUMBER OF MEMBERS OF HIS OR HER POLITICAL PARTY
WITHIN HIS OR HER HOUSE DIVIDED BY THE TOTAL NUMBER OF MEMBERS IN HIS OR
HER HOUSE ROUNDED TO THE NEAREST WHOLE NUMBER;
D. THE MAJORITY LEADER OF THE SENATE SHALL HAVE THE NUMBER OF VOTES
EQUAL TO ONE HUNDRED TIMES THE NUMBER OF MEMBERS OF HIS OR HER POLITICAL
PARTY WITHIN HIS OR HER HOUSE DIVIDED BY THE TOTAL NUMBER OF MEMBERS IN
HIS OR HER HOUSE ROUNDED TO THE NEAREST WHOLE NUMBER;
E. THE MINORITY LEADER OF THE ASSEMBLY SHALL HAVE THE NUMBER OF VOTES
EQUAL TO ONE HUNDRED TIMES THE NUMBER OF MEMBERS OF HIS OR HER POLITICAL
PARTY WITHIN HIS OR HER HOUSE DIVIDED BY THE TOTAL NUMBER OF MEMBERS IN
HIS OR HER HOUSE ROUNDED TO THE NEAREST WHOLE NUMBER;
F. THE MINORITY LEADER OF THE SENATE SHALL HAVE THE NUMBER OF VOTES
EQUAL TO ONE HUNDRED TIMES THE NUMBER OF MEMBERS OF HIS OR HER POLITICAL
PARTY WITHIN HIS OR HER HOUSE DIVIDED BY THE TOTAL NUMBER OF MEMBERS IN
HIS OR HER HOUSE ROUNDED TO THE NEAREST WHOLE NUMBER;
G. THE DIRECTOR OF THE BUDGET SHALL VOTE ONLY WHEN ACTING AS THE
DESIGNATED REPRESENTATIVE OF ONE OR MORE OF THE OTHER BOARD MEMBERS.
4. NOTWITHSTANDING ANY INCONSISTENT PROVISIONS OF LAW, GENERAL,
SPECIAL, OR LOCAL, NO OFFICER OR EMPLOYEE OF THE STATE, OF ANY POLITICAL
SUBDIVISION OF THE STATE, OF ANY GOVERNMENTAL ENTITY OPERATING ANY
PUBLIC SCHOOL OR COLLEGE, OR OF ANY OTHER PUBLIC AGENCY OR INSTRUMENTAL-
ITY OR UNIT OF GOVERNMENT WHICH EXERCISES GOVERNMENTAL POWERS UNDER THE
LAWS OF THE STATE SHALL FORFEIT SUCH OFFICE OR EMPLOYMENT BY REASON OF
ACCEPTANCE OR APPOINTMENT AS A MEMBER, REPRESENTATIVE, OFFICER, EMPLOY-
EE, OR AGENT OF THE BOARD, NOR SHALL SERVICE AS SUCH MEMBER, REPRESEN-
TATIVE, OFFICER, EMPLOYEE, OR AGENT OF THE BOARD BE DEEMED INCOMPATIBLE
OR IN CONFLICT WITH SUCH OFFICE OR EMPLOYMENT. THE MEMBERS, THEIR REPRE-
SENTATIVES, OFFICERS, AND STAFF OF THE BOARD SHALL BE DEEMED EMPLOYEES
WITHIN THE MEANING OF SECTION SEVENTEEN OF THE PUBLIC OFFICERS LAW.
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5. THE MEMBERS OF THE BOARD SHALL SERVE WITHOUT SALARY OR PER DIEM
ALLOWANCE BUT SHALL BE ENTITLED TO REIMBURSEMENT FOR ACTUAL AND NECES-
SARY EXPENSES INCURRED IN THE PERFORMANCE OF OFFICIAL DUTIES PURSUANT TO
THIS SECTION OR OTHER PROVISION OF LAW; PROVIDED, HOWEVER, THAT SUCH
MEMBERS AND REPRESENTATIVES ARE NOT, AT THE TIME SUCH EXPENSES ARE
INCURRED, PUBLIC EMPLOYEES OTHERWISE ENTITLED TO SUCH REIMBURSEMENT.
S 69-P. POWERS, FUNCTIONS AND DUTIES OF THE NEW YORK STATE DEBT
MANAGEMENT BOARD; LIMITATIONS. 1. THE NEW YORK STATE DEBT MANAGEMENT
BOARD SHALL HAVE THE POWER AND IT SHALL BE ITS DUTY TO MAKE RECOMMENDA-
TIONS TO THE GOVERNOR AND THE LEGISLATURE OF POLICIES TO GOVERN THE
ISSUANCE OF ALL STATE RELATED DEBT AND OTHER CAPITAL FINANCING MATTERS.
2. ON OR BEFORE THE FIRST DAY OF THE SIXTH MONTH AFTER THIS ARTICLE
SHALL HAVE BECOME LAW, THE BOARD SHALL SUGGEST POLICY GUIDELINES FOR THE
ISSUANCE OF ALL STATE RELATED DEBT AND FOR CAPITAL FINANCING. SUCH
GUIDELINES SHALL COVER, AMONG OTHER ITEMS, THE FOLLOWING:
A. CAPITALIZATION OF INTEREST ON STATE RELATED DEBT;
B. CRITERIA FOR REFUNDING OUTSTANDING STATE RELATED DEBT, INCLUDING,
BUT NOT LIMITED TO, SUCH MATTERS AS EXTENSION OF THE TERM OF OUTSTANDING
DEBT, PRESENT VALUE SAVINGS, AND DISTRIBUTION OF ACTUAL SAVINGS;
C. THE USE OF CREDIT ENHANCEMENTS WITH RESPECT TO STATE RELATED DEBT;
D. SUCH OTHER POLICY MATTERS RELATING TO THE ISSUANCE OF STATE RELATED
DEBT AS THE BOARD MAY DETERMINE TO BE APPROPRIATE;
E. STRUCTURE FOR STATE RELATED DEBT, SUCH AS RATE OF AMORTIZATION OF
PRINCIPAL; AND
F. GOALS FOR THE PROPORTION OF STATE CAPITAL SPENDING TO BE FINANCED
WITH DEBT AND THE PROPORTION TO BE FINANCED WITH CURRENT APPROPRIATIONS.
THE BOARD SHALL ANNUALLY REVIEW THE RECOMMENDED POLICY GUIDELINES AND
RECOMMEND SUCH CHANGES OR ADDITIONS AS IT DEEMS ADVISABLE ON OR BEFORE
THE ANNIVERSARY DATE OF ITS ORIGINAL RECOMMENDATION.
S 69-Q. COMPTROLLER'S DUTIES WITH RESPECT TO BOARD. THE COMPTROLLER
SHALL COLLECT AND ANALYZE DATA WITH RESPECT TO OUTSTANDING STATE RELATED
DEBT AND, AT LEAST ANNUALLY, ON OR BEFORE THE LAST DAY OF THE CALENDAR
YEAR, REPORT TO THE BOARD, THE GOVERNOR, AND THE LEGISLATURE ON THE
CONDITION OF STATE RELATED DEBT. SUCH REPORT SHALL INCLUDE, BUT NOT BE
LIMITED TO, THE AMOUNT OF STATE RELATED DEBT OUTSTANDING, THE DIFFERENT
ISSUERS AND CATEGORIES OF SUCH DEBT, AND ANY DIFFERENCES IN CREDIT
RATING AMONG CATEGORIES AND ISSUERS.
S 2. The state finance law is amended by adding a new article 5-F to
read as follows:
ARTICLE 5-F
LIMITATIONS ON STATE RELATED DEBT
SECTION 69-T. DEFINITIONS.
69-U. LIMITATIONS ON THE ISSUANCE OF STATE RELATED DEBT.
S 69-T. DEFINITIONS. WHEN USED IN THIS ARTICLE THE FOLLOWING TERMS
SHALL HAVE THE MEANINGS SET FORTH BELOW:
1. TOTAL PERSONAL INCOME OF THE STATE. THE MOST RECENTLY PUBLISHED
ESTIMATED DOLLAR AMOUNT DETERMINED AS TOTAL PERSONAL INCOME OF THE STATE
OF NEW YORK BY THE UNITED STATES DEPARTMENT OF COMMERCE OR ANY SUCCESSOR
AGENCY FOR THE FOUR MOST RECENT SUCCESSIVE CALENDAR QUARTERS FOR WHICH
INFORMATION IS AVAILABLE PRIOR TO THE SUBMISSION OF THE BUDGET BILLS
PURSUANT TO ARTICLE SEVEN OF THE CONSTITUTION. SUBSEQUENT REVISIONS OF
THE PUBLISHED ESTIMATED DOLLAR AMOUNT FOR SUCH CALENDAR QUARTERS SHALL
NOT AFFECT THE VALIDITY OF THE DETERMINATION MADE FOR ANY FISCAL YEAR.
2. TOTAL GOVERNMENTAL FUNDS RECEIPTS OF THE STATE. THE TOTAL AMOUNT OF
RECEIPTS OF ALL GOVERNMENTAL FUNDS OF THE STATE, AS REPORTED BY THE
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STATE COMPTROLLER FOR THE FISCAL YEAR PRECEDING THE YEAR IN WHICH DEBT
IS TO BE INCURRED.
S 69-U. LIMITATIONS ON THE ISSUANCE OF STATE RELATED DEBT. 1. NO STATE
BACKED DEBT SHALL BE CONTRACTED AFTER MARCH THIRTY-FIRST, TWO THOUSAND
NINE, AND NO STATE DEBT AUTHORIZED AFTER MARCH THIRTY-FIRST, TWO THOU-
SAND NINE SHALL BE CONTRACTED UNLESS, WHEN ADDED TO THE AGGREGATE
OUTSTANDING PRINCIPAL AMOUNT OF STATE BACKED DEBT CONTRACTED AFTER MARCH
THIRTY-FIRST, TWO THOUSAND NINE AND STATE DEBT AUTHORIZED AND CONTRACTED
AFTER MARCH THIRTY-FIRST, TWO THOUSAND NINE, THE TOTAL AMOUNT SHALL BE
LESS THAN THE DESIGNATED PERCENTAGE OF THE TOTAL PERSONAL INCOME OF THE
STATE. THE DESIGNATED PERCENTAGE SHALL BE ONE PERCENT FOR FISCAL YEAR
TWO THOUSAND NINE--TWO THOUSAND TEN AND SHALL INCREASE BY ONE-THIRD OF
ONE PERCENT IN EACH OF THE SEVEN SUBSEQUENT FISCAL YEARS. THE DESIGNATED
PERCENTAGE FOR FISCAL YEAR TWO THOUSAND SIXTEEN--TWO THOUSAND SEVENTEEN
AND FOR EACH FISCAL YEAR THEREAFTER SHALL BE THREE AND ONE-HALF PERCENT.
DEBT ISSUED TO REFUND STATE BACKED DEBT THAT WAS ORIGINALLY ISSUED ON OR
PRIOR TO MARCH THIRTY-FIRST, TWO THOUSAND NINE SHALL BE EXCLUDED FROM
THE CALCULATION; PROVIDED THAT THERE WAS A DEBT SERVICE SAVINGS IN EACH
YEAR TO MATURITY OF THE REFUNDING DEBT. STATE BACKED DEBT ISSUED TO
REFUND STATE BACKED DEBT ISSUED AFTER MARCH THIRTY-FIRST, TWO THOUSAND
NINE AND STATE DEBT ISSUED TO REFUND STATE DEBT AUTHORIZED AFTER MARCH
THIRTY-FIRST, TWO THOUSAND NINE SHALL BE EXCLUDED FROM THE CALCULATION
UNTIL THE DEBT IT IS ISSUED TO REFUND IS EXTINGUISHED, AT WHICH TIME A
PORTION OF SUCH DEBT SHALL BE INCLUDED THAT IS EQUAL TO THE AMOUNT OF
THE REFUNDING DEBT THEN OUTSTANDING MULTIPLIED BY A FRACTION THE NUMERA-
TOR OF WHICH IS EQUAL TO THE AMOUNT OF DEBT REFUNDED AND THE DENOMINATOR
OF WHICH IS EQUAL TO THE AMOUNT OF REFUNDING DEBT INCURRED.
2. ADDITIONALLY, NO STATE RELATED DEBT SHALL BE ISSUED AFTER SEPTEMBER
FIRST, TWO THOUSAND NINE IF THE AGGREGATE ANNUAL AMOUNT OF DEBT SERVICE,
AS DETERMINED BY THE COMPTROLLER, DUE ON ALL STATE RELATED DEBT
OUTSTANDING ON THE LAST DAY OF THE PRECEDING FISCAL YEAR AND EXPECTED TO
BE PAID, DIRECTLY OR INDIRECTLY, FROM STATE APPROPRIATIONS OR OTHER
STATE PAYMENTS SHALL EXCEED IN ANY YEAR, FIVE AND THREE-QUARTERS PERCENT
OF TOTAL GOVERNMENTAL FUNDS RECEIPTS OF THE STATE FOR SUCH PRECEDING
FISCAL YEAR.
3. THE COMPTROLLER SHALL DEVELOP PROCEDURES FOR MAINTAINING AT ALL
TIMES A CURRENT TOTAL OF THE AGGREGATE AMOUNT OF DEBT SERVICE DUE IN ANY
YEAR AND EXPECTED TO BE PAID, DIRECTLY OR INDIRECTLY, FROM STATE APPRO-
PRIATIONS, OR OTHERWISE FROM STATE PAYMENTS, ON ALL STATE RELATED DEBT
THEN OUTSTANDING. SUCH PROCEDURES SHALL BE IN PLACE NO LATER THAN AUGUST
FIRST, TWO THOUSAND NINE.
S 3. This act shall take effect immediately.