NY State Senate Bill 2009-S4940

Senate Bill S4940

Signed By Governor

2009-2010 Legislative Session

Relates to bonds issued by the New York City transitional finance authority

download bill text pdf

Archive: Last Bill Status Via A8614 - Signed by Governor

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 11, 2009	signed chap.182
Jul 10, 2009	delivered to governor
Jul 09, 2009	returned to assembly repassed senate vote reconsidered - restored to third reading
Jun 30, 2009	passed senate 3rd reading cal.669 substituted for s4940
Jun 30, 2009	substituted by a8614 ordered to third reading cal.669 committee discharged and committed to rules
Apr 27, 2009	referred to corporations, authorities and commissions

Votes

- Jul 9, 2009 - Floor Vote
  A8614
  
  62
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: Jul 9, 2009
      
      aye (62)
      
      Adams
      
      Addabbo Jr.
      
      Alesi
      
      Aubertine
      
      Bonacic
      
      Breslin
      
      DeFrancisco
      
      Diaz
      
      Dilan
      
      Duane
      
      Espada
      
      Farley
      
      Flanagan
      
      Foley
      
      Fuschillo
      
      Golden
      
      Griffo
      
      Hannon
      
      Hassell-Thompson
      
      Huntley
      
      Johnson
      
      Johnson
      
      Klein
      
      Krueger
      
      Kruger
      
      LaValle
      
      Lanza
      
      Larkin
      
      Leibell
      
      Libous
      
      Little
      
      Marcellino
      
      Maziarz
      
      McDonald
      
      Monserrate
      
      Montgomery
      
      Morahan
      
      Nozzolio
      
      Onorato
      
      Oppenheimer
      
      Padavan
      
      Parker
      
      Perkins
      
      Ranzenhofer
      
      Robach
      
      Saland
      
      Sampson
      
      Savino
      
      Schneiderman
      
      Serrano
      
      Seward
      
      Skelos
      
      Smith
      
      Squadron
      
      Stachowski
      
      Stavisky
      
      Stewart-Cousins
      
      Thompson
      
      Valesky
      
      Volker
      
      Winner
      
      Young
  Jun 30, 2009 - Rules Committee Vote
  S4940
  
  13
  
  Aye
  
  0
  
  Nay
  
  0
  
  Aye with Reservations
  
  11
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: Jun 30, 2009
      
      aye (13)
      
      Dilan
      
      Duane
      
      Hassell-Thompson
      
      Klein
      
      Krueger
      
      Monserrate
      
      Montgomery
      
      Parker
      
      Serrano
      
      Smith
      
      Stachowski
      
      Stewart-Cousins
      
      Valesky
      
      absent (11)
      
      Espada
      
      Farley
      
      Hannon
      
      Johnson
      
      LaValle
      
      Larkin
      
      Padavan
      
      Saland
      
      Seward
      
      Skelos
      
      Volker

2009-S4940 (ACTIVE) - Details

See Assembly Version of this Bill:: A8614
Law Section:: Public Authorities Law
Laws Affected:: Amd §§1799-bb & 2799-gg, Pub Auth L

2009-S4940 (ACTIVE) - Summary

Relates to bonds issued by the New York City transitional finance authority.

2009-S4940 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S4940

 TITLE OF BILL :

An act to amend the public authorities law, in relation to bonds
issued by the New York city transitional finance authority


 SUMMARY OF PROVISIONS :

The proposed bill will allow the City more efficient and cost
effective access to financial markets. Specifically the bill would:

(1) place outstanding TFA debt (beyond the amount authorized by Public
Authorities Law §2799(gg)) under the existing New York City General
Obligation (GO) cap in the Local Finance Law and make the existing
statutory cap on TFA borrowing for general capital purposes applicable
to outstanding debt of the TFA rather than all debt issued by the TFA;

(2) continue to exempt Recovery Bonds and Building Aid Bonds from the
TFA's general debt limit and continue to provide that the amount of
variable rate bonds outstanding for general capital purposes be
limited to the current twenty percent of the TFA's general debt limit,
with provisions for customary exclusions.

 REASONS FOR SUPPORT :

These amendments to the Transitional Finance Authority Act ("TFA Act")
will significantly reduce City debt service costs at a time when the
City is facing budget gaps ranging from $4.4 billion to $7 billion
over the next three fiscal years. It will also contribute to the
City's ability to continue to finance necessary capital improvements
while maintaining crucial public services during these times of
economic distress in the national and local economy.

During these times of economic crisis, the City needs to be able to
utilize its highest-rated, most cost-effective borrowing vehicle, the
Transitional Finance Authority.

Throughout its existence, the TFA has proven its value in helping to
reduce City debt service costs and permitting access to a broad base
of investors for access to capital to finance the City's
infrastructure needs. However, for the last two years the City has
been unable to utilize TFA bonds for general capital purposes because
it has reached its statutory bonding limit. Limiting the TFA's ability
to issue bonds artificially inflates the City's overall cost of
borrowing, restricts its flexibility in debt structuring
opportunities, and constrains its ability to take advantage of
tax-exempt borrowing. As a result, the City's debt will cost more,
making less money available to meet critical budgetary and
infrastructure requirements.

If this bill is enacted, the City would be able to finance half of its
capital program with TFA bonds and the remaining half with general
obligation bonds. The recent TFA bond refinancing indicated that TFA
debt service on newly issued debt would be up to 65 basis points
cheaper than City general obligation bonds. Due to this differential
in interest rates between the general obligation bonds and TFA's
bonds, coupled with the increasing market saturation facing the City
in the continued issuance of its general obligation debt to finance
its capital program, the City estimates that it would save $20 million
in fiscal year 2010 if the statutory limit on TFA bonds were revised
as provided in this bill.

Accordingly, the Mayor urges the earliest possible favorable
consideration of this proposal by the Legislature.

2009-S4940 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  4940

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Corporations,  Authorities
  and Commissions

AN  ACT to amend the public authorities law, in relation to bonds issued
  by the New York city transitional finance authority

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 10 of section 2799-bb of the public authorities
law,  as  added by chapter 16 of the laws of 1997, is amended to read as
follows:
  10. "Project capital costs" or "costs" means  costs,  appropriated  in
the  capital budget of the city pursuant to chapters nine and ten of the
New York city charter, as amended from time to time, providing  for  the
construction,  reconstruction,  acquisition  or installation of physical
public betterments or improvements [which would be classified as capital
assets  under  generally  accepted  accounting  principles  for  munici-
palities],  or  the  costs  of  any  preliminary studies, surveys, maps,
plans, estimates and hearings, or incidental costs, including,  but  not
limited  to,  legal fees, printing or engraving, publication of notices,
taking  of  title,  apportionment  of   costs,   and   interest   during
construction,  or any underwriting or other costs incurred in connection
with the financing thereof.
  S 2. Subdivision 1 and paragraph  (b)  of  subdivision  3  of  section
2799-gg  of the public authorities law, as amended by chapter 411 of the
laws of 2006, are amended to read as follows:
  1. The authority shall have the power and is  hereby  authorized  from
time to time to issue bonds, in conformity with applicable provisions of
the  uniform commercial code, in such principal amounts as it may deter-
mine to be necessary pursuant to section  twenty-seven  hundred  ninety-
nine-ff  of  this  title  to  pay  the  cost  of any project and to fund

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11663-01-9

S. 4940                             2

reserves  to  secure  such  bonds,  including  incidental  expenses   in
connection therewith.
  The  aggregate  principal  amount  of such bonds, notes or other obli-
gations [so issued] OUTSTANDING shall not exceed thirteen billion,  five
hundred  million  dollars  ($13,500,000,000),  excluding bonds, notes or
other obligations issued [to refund or otherwise repay bonds,  notes  or
other  obligations  theretofore  issued  for  such purposes] PURSUANT TO
SECTIONS TWENTY-SEVEN HUNDRED NINETY-NINE-SS  AND  TWENTY-SEVEN  HUNDRED
NINETY-NINE-TT OF THIS TITLE; provided, however, that upon any refunding
or  repayment  of bonds (which term shall not, for this purpose, include
bond anticipation  notes),  the  total  aggregate  principal  amount  of
outstanding  bonds, notes or other obligations may be greater than thir-
teen billion, five hundred million dollars ($13,500,000,000) only if the
refunding or repayment bonds, notes or other obligations were issued  in
accordance with the provisions of subparagraph (a) of subdivision two of
paragraph  b  of section 90.10 of the local finance law, as amended from
time to time. NOTWITHSTANDING THE FOREGOING, BONDS, NOTES OR OTHER OBLI-
GATIONS ISSUED BY THE AUTHORITY MAY BE OUTSTANDING IN AN AMOUNT  GREATER
THAN  THE AMOUNT PERMITTED BY THE PRECEDING SENTENCE, PROVIDED THAT SUCH
ADDITIONAL AMOUNT AT ISSUANCE, TOGETHER WITH THE AMOUNT OF  INDEBTEDNESS
CONTRACTED  BY  THE  CITY  OF  NEW  YORK,  SHALL  NOT  EXCEED  THE LIMIT
PRESCRIBED BY SECTION 104.00 OF THE LOCAL  FINANCE  LAW.  The  authority
shall  have  the  power  from  time  to  time to refund any bonds of the
authority by the issuance of new bonds whether the bonds to be  refunded
have  or have not matured, and may issue bonds partly to refund bonds of
the authority then outstanding and partly to pay the cost of any project
pursuant to section twenty-seven hundred ninety-nine-ff of  this  title.
Bonds  issued by the authority shall be payable solely out of particular
revenues or other moneys of the authority as may be  designated  in  the
proceedings  of  the authority under which the bonds shall be authorized
to be issued, subject to any agreements entered into between the author-
ity and the city, and subject to any  agreements  with  the  holders  of
outstanding bonds pledging any particular revenues or moneys.
  (b)  The authority shall not issue variable rate bonds [if the princi-
pal amount of its variable rate bonds outstanding  after  such  issuance
would    exceed    two    billion,   seven   hundred   million   dollars
($2,700,000,000)] PURSUANT TO THIS SECTION IN AN AMOUNT  OUTSTANDING  AT
ISSUANCE EXCEEDING TWENTY PERCENT OF THE LIMIT PRESCRIBED BY SUBDIVISION
ONE  OF  THIS SECTION, excluding bonds (i) bearing interest at rates and
for periods of time that  are  specified  without  reference  to  future
events  or contingencies, OR (ii) the interest RATE on which is [econom-
ically fixed] REASONABLY EXPECTED TO BE EQUIVALENT TO A FIXED RATE  OVER
TIME  in conjunction with other bonds[,] or [(iii) the interest on which
is offset] by REASON OF PAYMENTS MADE PURSUANT TO agreements with finan-
cially responsible third parties.
  S 3. Separability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction  to
be  invalid,  such  judgment  shall not affect, impair or invalidate the
remainder thereof, but shall be confined in its operation to the clause,
sentence, paragraph, section or part thereof directly  involved  in  the
controversy in which such judgement shall have been rendered.
  S 4. This act shall take effect immediately.

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