S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   11098
 
                           I N  A S S E M B L Y
 
                             November 6, 2020
                                ___________
 
 Introduced  by  COMMITTEE ON RULES -- (at request of M. of A. Zebrowski)
   -- read once and referred to the Committee on Judiciary
 
 AN ACT to amend the uniform commercial code, in relation to  the  effect
   of  a  LIBOR  discontinuance  event on contracts, securities and other
   agreements
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The  uniform  commercial  code is amended by adding a new
 article 12 to read as follows:
                                ARTICLE 12
                           LIBOR DISCONTINUANCE
 SECTION 12-101. DEFINITIONS.
         12-102. EFFECT OF LIBOR DISCONTINUANCE.
         12-103. CONTINUITY OF CONTRACT AND SAFE HARBOR.
         12-104. SEVERABILITY.
 SECTION 12-101. DEFINITIONS.
   AS USED IN THIS ARTICLE THE FOLLOWING TERMS SHALL HAVE  THE  FOLLOWING
 MEANINGS:
   (A)  "LIBOR" SHALL MEAN, FOR PURPOSES OF THE APPLICATION OF THIS ARTI-
 CLE TO ANY PARTICULAR CONTRACT,  SECURITY  OR  INSTRUMENT,  U.S.  DOLLAR
 LIBOR  (FORMERLY KNOWN AS THE LONDON INTERBANK OFFERED RATE) AS ADMINIS-
 TERED BY ICE BENCHMARK ADMINISTRATION LIMITED (OR ANY  SUCCESSOR  THERE-
 OF).
   (B)  "LIBOR  DISCONTINUANCE EVENT" SHALL MEAN THE EARLIEST TO OCCUR OF
 ANY OF THE FOLLOWING:
   (1) A PUBLIC STATEMENT OR PUBLICATION OF INFORMATION BY OR  ON  BEHALF
 OF  THE  ADMINISTRATOR  OF  LIBOR ANNOUNCING THAT SUCH ADMINISTRATOR HAS
 CEASED OR WILL CEASE TO  PROVIDE  LIBOR,  PERMANENTLY  OR  INDEFINITELY,
 PROVIDED  THAT, AT THE TIME OF THE STATEMENT OR PUBLICATION, THERE IS NO
 SUCCESSOR ADMINISTRATOR THAT WILL CONTINUE TO PROVIDE LIBOR;
   (2) A PUBLIC STATEMENT OR PUBLICATION OF INFORMATION BY THE REGULATORY
 SUPERVISOR FOR THE ADMINISTRATOR OF LIBOR,  THE  UNITED  STATES  FEDERAL
 RESERVE SYSTEM, AN INSOLVENCY OFFICIAL WITH JURISDICTION OVER THE ADMIN-
 ISTRATOR  FOR  LIBOR,  A RESOLUTION AUTHORITY WITH JURISDICTION OVER THE
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD17365-01-0

 A. 11098                            2
 
 ADMINISTRATOR FOR LIBOR OR A COURT OR AN ENTITY WITH SIMILAR  INSOLVENCY
 OR  RESOLUTION  AUTHORITY OVER THE ADMINISTRATOR FOR LIBOR, WHICH STATES
 THAT THE ADMINISTRATOR OF LIBOR HAS CEASED  OR  WILL  CEASE  TO  PROVIDE
 LIBOR  PERMANENTLY  OR  INDEFINITELY,  PROVIDED THAT, AT THE TIME OF THE
 STATEMENT OR PUBLICATION, THERE IS NO SUCCESSOR ADMINISTRATOR THAT  WILL
 CONTINUE TO PROVIDE LIBOR; OR 
   (3)  WITH  RESPECT  TO  ANY  PARTICULAR  TYPE OF CONTRACT, SECURITY OR
 INSTRUMENT DESIGNATED BY THE RELEVANT RECOMMENDING BODY, A PUBLIC STATE-
 MENT OR PUBLICATION OF INFORMATION BY THE REGULATORY SUPERVISOR FOR  THE
 ADMINISTRATOR  OF  LIBOR  ANNOUNCING  THAT  LIBOR IS NO LONGER REPRESEN-
 TATIVE.
   (C) "LIBOR REPLACEMENT DATE" SHALL MEAN:
   (1) IN THE CASE OF A LIBOR DISCONTINUANCE EVENT DESCRIBED IN PARAGRAPH
 (1) OR (2) OF SUBSECTION (B) OF THIS SECTION, THE LATER OF (I) THE  DATE
 OF THE PUBLIC STATEMENT OR PUBLICATION OF INFORMATION REFERENCED THEREIN
 AND  (II)  THE  DATE  ON WHICH THE ADMINISTRATOR OF LIBOR PERMANENTLY OR
 INDEFINITELY CEASES TO PROVIDE LIBOR; AND
   (2) IN THE CASE OF A LIBOR DISCONTINUANCE EVENT DESCRIBED IN PARAGRAPH
 (3) OF SUBSECTION (B) OF THIS SECTION, THE DATE OF THE PUBLIC  STATEMENT
 OR  PUBLICATION OF INFORMATION REFERENCED THEREIN; PROVIDED THAT, IF THE
 DATE ON WHICH THE BENCHMARK REPLACEMENT WOULD BECOME EFFECTIVE UNDER THE
 FALLBACK PROVISIONS OF A CONTRACT, SECURITY OR INSTRUMENT IS LATER  THAN
 THE  DATE  DETERMINED  ACCORDING TO THE FOREGOING PROVISIONS, SUCH LATER
 DATE SHALL BE THE LIBOR REPLACEMENT DATE FOR SUCH CONTRACT, SECURITY  OR
 INSTRUMENT.
   (D)  "FALLBACK PROVISIONS" SHALL MEAN TERMS IN A CONTRACT, SECURITY OR
 INSTRUMENT THAT SET FORTH A METHODOLOGY OR PROCEDURE FOR  DETERMINING  A
 BENCHMARK REPLACEMENT, INCLUDING ANY TERMS RELATING TO THE DATE ON WHICH
 THE BENCHMARK REPLACEMENT BECOMES EFFECTIVE, WITHOUT REGARD TO WHETHER A
 BENCHMARK  REPLACEMENT CAN BE DETERMINED IN ACCORDANCE WITH SUCH METHOD-
 OLOGY OR PROCEDURE.
   (E) "BENCHMARK" SHALL MEAN AN INDEX OF INTEREST RATES THAT IS USED, IN
 WHOLE OR IN PART, AS THE BASIS OF OR AS A REFERENCE FOR  CALCULATING  OR
 DETERMINING  ANY  VALUATION,  PAYMENT  OR  OTHER MEASUREMENT UNDER OR IN
 RESPECT OF A CONTRACT, SECURITY OR INSTRUMENT.
   (F) "BENCHMARK REPLACEMENT" SHALL MEAN A  BENCHMARK,  OR  AN  INTEREST
 RATE  OR  RATES  (WHICH MAY OR MAY NOT BE BASED IN WHOLE OR IN PART ON A
 PRIOR SETTING OF LIBOR), TO REPLACE  OR  SUBSTITUTE  FOR  LIBOR  OR  ANY
 INTEREST RATE BASED ON LIBOR FOLLOWING THE OCCURRENCE OF A LIBOR DISCON-
 TINUANCE  EVENT  UNDER  OR IN RESPECT OF A CONTRACT, SECURITY OR INSTRU-
 MENT.
   (G)  "RECOMMENDED  BENCHMARK  REPLACEMENT"  SHALL  MEAN  A   BENCHMARK
 REPLACEMENT,  WHICH  SHALL INCLUDE ANY RECOMMENDED SPREAD ADJUSTMENT AND
 ANY BENCHMARK REPLACEMENT  CONFORMING  CHANGES,  THAT  SHALL  HAVE  BEEN
 SELECTED OR RECOMMENDED BY A RELEVANT RECOMMENDING BODY.
   (H) "RECOMMENDED SPREAD ADJUSTMENT" SHALL MEAN A SPREAD ADJUSTMENT, OR
 METHOD FOR CALCULATING OR DETERMINING SUCH SPREAD ADJUSTMENT, (WHICH MAY
 BE  A  POSITIVE OR NEGATIVE VALUE OR ZERO) THAT SHALL HAVE BEEN SELECTED
 OR RECOMMENDED BY A RELEVANT RECOMMENDING BODY TO BE APPLIED TO A RECOM-
 MENDED BENCHMARK REPLACEMENT FOR A PARTICULAR TYPE OF CONTRACT, SECURITY
 OR INSTRUMENT AND FOR A PARTICULAR TERM TO ACCOUNT FOR  THE  EFFECTS  OF
 THE  TRANSITION OR CHANGE FROM LIBOR TO A RECOMMENDED BENCHMARK REPLACE-
 MENT.
   (I)  "BENCHMARK  REPLACEMENT  CONFORMING  CHANGES"  SHALL  MEAN,  WITH
 RESPECT  TO  ANY  CONTRACT,  SECURITY OR INSTRUMENT, ANY CHANGES, ALTER-
 ATIONS OR MODIFICATIONS THAT ARE ASSOCIATED WITH AND  REASONABLY  NECES-

 A. 11098                            3
 
 SARY  TO  THE USE, ADOPTION OR IMPLEMENTATION OF A RECOMMENDED BENCHMARK
 REPLACEMENT AND THAT (1) HAVE BEEN SELECTED OR RECOMMENDED BY A RELEVANT
 RECOMMENDING BODY TO REFLECT THE USE, ADOPTION OR  IMPLEMENTATION  OF  A
 RECOMMENDED  BENCHMARK REPLACEMENT UNDER OR IN RESPECT OF SUCH CONTRACT,
 SECURITY OR INSTRUMENT OR (2) WOULD NOT, IN THE REASONABLE  JUDGMENT  OF
 THE  DETERMINING PERSON, RESULT IN A DISPOSITION OF SUCH CONTRACT, SECU-
 RITY OR INSTRUMENT FOR U.S. FEDERAL INCOME TAX PURPOSES.
   (J) "DETERMINING PERSON" SHALL MEAN, WITH  RESPECT  TO  ANY  CONTRACT,
 SECURITY  OR  INSTRUMENT, ANY PERSON SPECIFIED AS A "DETERMINING PERSON"
 OR, IF NONE IS SPECIFIED, ANY PERSON WITH THE AUTHORITY, RIGHT OR  OBLI-
 GATION  TO  (1)  DETERMINE  THE  BENCHMARK REPLACEMENT, (2) NOTIFY OTHER
 PERSONS OF THE OCCURRENCE OF  A  LIBOR  DISCONTINUANCE  EVENT,  A  LIBOR
 REPLACEMENT  DATE  OR A BENCHMARK REPLACEMENT OR (3) CALCULATE A PAYMENT
 BASED ON A BENCHMARK.
   (K) "RELEVANT RECOMMENDING BODY" SHALL MEAN THE FEDERAL RESERVE BOARD,
 THE FEDERAL RESERVE BANK OF NEW YORK, OR THE ALTERNATIVE REFERENCE RATES
 COMMITTEE, OR ANY SUCCESSOR TO ANY OF THEM.
 SECTION 12-102. EFFECT OF LIBOR DISCONTINUANCE.
   (A) ON THE LIBOR REPLACEMENT DATE, THE RECOMMENDED BENCHMARK  REPLACE-
 MENT  SHALL,  BY  OPERATION OF LAW, BE THE BENCHMARK REPLACEMENT FOR ANY
 CONTRACT, SECURITY OR INSTRUMENT THAT:  (1) USES LIBOR  AS  A  BENCHMARK
 AND CONTAINS NO FALLBACK PROVISIONS OR;
   (2) CONTAINS FALLBACK PROVISIONS THAT PROVIDE FOR A BENCHMARK REPLACE-
 MENT THAT IS BASED IN ANY WAY ON ANY LIBOR VALUE.
   (B)  FOLLOWING  THE  OCCURRENCE  OF  A LIBOR DISCONTINUANCE EVENT, ANY
 FALLBACK PROVISIONS THAT PROVIDE FOR A BENCHMARK REPLACEMENT BASED ON OR
 OTHERWISE INVOLVING A POLL, SURVEY OR INQUIRIES FOR QUOTES  OR  INFORMA-
 TION  CONCERNING  INTERBANK  LENDING RATES OR ANY INTEREST RATE BASED ON
 LIBOR SHALL BE DISREGARDED AS IF NOT INCLUDED IN SUCH CONTRACT, SECURITY
 OR INSTRUMENT AND SHALL BE DEEMED NULL AND VOID AND WITHOUT ANY FORCE OR
 EFFECT.
   (C) FOLLOWING THE OCCURRENCE OF  A  LIBOR  DISCONTINUANCE  EVENT,  ANY
 DETERMINING  PERSON  SHALL  BE  PERMITTED, BUT SHALL NOT BE REQUIRED, TO
 SELECT A RECOMMENDED BENCHMARK REPLACEMENT AS THE BENCHMARK  REPLACEMENT
 UNDER  OR  IN  RESPECT OF ANY CONTRACT, SECURITY OR INSTRUMENT, PROVIDED
 THAT SUCH CONTRACT, SECURITY  OR  INSTRUMENT  IS  NOT  SUBJECT  TO  THIS
 SECTION  AND  PROVIDED  FURTHER  THAT  THE  SELECTION  OF SUCH BENCHMARK
 REPLACEMENT SHALL BE IRREVOCABLE AND SHALL BE MADE NO LATER THAN:
   (1) THE TIME, IF ANY, SPECIFIED IN SUCH CONTRACT, SECURITY OR  INSTRU-
 MENT FOR MAKING SUCH SELECTION; OR
   (2)  IF NO SUCH TIME IS SPECIFIED IN THE CONTRACT, SECURITY OR INSTRU-
 MENT, THE FIRST DATE THAT IS  AT  LEAST  60  DAYS  FOLLOWING  THE  LIBOR
 REPLACEMENT  DATE  ON  WHICH ANY VALUATION, PAYMENT OR OTHER MEASUREMENT
 UNDER OR IN RESPECT OF SUCH CONTRACT, SECURITY OR INSTRUMENT IS REQUIRED
 TO BE CALCULATED OR DETERMINED BY REFERENCE TO A BENCHMARK REPLACEMENT.
   (D) THE PROVISIONS OF THIS ARTICLE SHALL NOT ALTER OR IMPAIR  (1)  ANY
 WRITTEN AGREEMENT BY ALL REQUISITE PARTIES THAT PROVIDES, RETROSPECTIVE-
 LY  OR  PROSPECTIVELY, THAT A CONTRACT, SECURITY OR INSTRUMENT SHALL NOT
 BE SUBJECT TO THIS ARTICLE (WITHOUT NECESSARILY  REFERRING  SPECIFICALLY
 TO THIS ARTICLE); (2) ANY CONTRACT, SECURITY OR INSTRUMENT THAT CONTAINS
 FALLBACK  PROVISIONS  THAT,  AFTER  THE APPLICATION OF SUBSECTION (A) OF
 THIS SECTION, WOULD RESULT IN A BENCHMARK REPLACEMENT THAT IS NOT  BASED
 ON  LIBOR  (INCLUDING, BUT NOT LIMITED TO, THE PRIME RATE OR THE FEDERAL
 FUNDS RATE);  (3)  ANY  CONTRACT,  SECURITY  OR  INSTRUMENT  SUBJECT  TO
 SUBSECTION (C) OF THIS SECTION AS TO WHICH A DETERMINING PERSON DOES NOT
 ELECT  TO  USE  A  RECOMMENDED  BENCHMARK  REPLACEMENT OR THAT PERMITS A

 A. 11098                            4
 
 DETERMINING PERSON TO USE A RECOMMENDED BENCHMARK REPLACEMENT  PRIOR  TO
 THE  OCCURRENCE  OF A LIBOR DISCONTINUANCE EVENT; OR (4) THE APPLICATION
 TO A RECOMMENDED BENCHMARK REPLACEMENT OF ANY CAP,  FLOOR,  MODIFIER  OR
 SPREAD  ADJUSTMENT TO WHICH LIBOR HAD BEEN SUBJECT PURSUANT TO THE TERMS
 OF A CONTRACT, SECURITY OR INSTRUMENT. FOR PURPOSES  OF  THE  FOREGOING,
 "REQUISITE  PARTIES"  MEANS  ALL PARTIES REQUIRED TO AMEND THE TERMS AND
 PROVISIONS OF A CONTRACT, SECURITY OR INSTRUMENT THAT WOULD OTHERWISE BE
 ALTERED OR IMPAIRED BY THIS ARTICLE.
   (E) NOTWITHSTANDING THIS CHAPTER OR ANY OTHER LAW OF THIS STATE,  THIS
 ARTICLE  SHALL  APPLY  TO  ALL  CONTRACTS,  SECURITIES  AND  INSTRUMENTS
 (INCLUDING CONTRACTS, WITH RESPECT TO COMMERCIAL TRANSACTIONS) AND SHALL
 NOT BE DEEMED TO BE DISPLACED BY ANY OTHER LAW OF THIS STATE.
 SECTION 12-103. CONTINUITY OF CONTRACT AND SAFE HARBOR.
   (A) THE USE OF A RECOMMENDED  BENCHMARK  REPLACEMENT  AS  A  BENCHMARK
 REPLACEMENT  UNDER  OR  IN RESPECT OF A CONTRACT, SECURITY OR INSTRUMENT
 SHALL CONSTITUTE:
   (1) A  COMMERCIALLY  REASONABLE  SUBSTITUTE  FOR  AND  A  COMMERCIALLY
 SUBSTANTIAL EQUIVALENT TO LIBOR;
   (2)  A  REASONABLE, COMPARABLE OR ANALOGOUS TERM FOR LIBOR UNDER OR IN
 RESPECT OF SUCH CONTRACT, SECURITY OR INSTRUMENT; AND
   (3) SUBSTANTIAL PERFORMANCE BY ANY PERSON OF ANY RIGHT  OR  OBLIGATION
 UNDER OR IN RESPECT OF A CONTRACT, SECURITY OR INSTRUMENT RELATING TO OR
 BASED ON LIBOR.
   (B)  NONE  OF  (1) A LIBOR DISCONTINUANCE EVENT OR A LIBOR REPLACEMENT
 DATE, (2) THE USE OF A RECOMMENDED BENCHMARK REPLACEMENT AS A  BENCHMARK
 REPLACEMENT  OR  (3)  THE  IMPLEMENTATION  OR  PERFORMANCE  OF BENCHMARK
 REPLACEMENT CONFORMING CHANGES SHALL HAVE THE EFFECT OF (I)  DISCHARGING
 OR  EXCUSING  PERFORMANCE UNDER ANY CONTRACT, SECURITY OR INSTRUMENT FOR
 ANY REASON, CLAIM OR DEFENSE (INCLUDING, BUT NOT LIMITED TO,  ANY  FORCE
 MAJEURE  OR  OTHER  PROVISION  IN ANY CONTRACT, SECURITY OR INSTRUMENT);
 (II) GIVING ANY PERSON THE RIGHT TO UNILATERALLY  TERMINATE  OR  SUSPEND
 PERFORMANCE UNDER ANY CONTRACT, SECURITY OR INSTRUMENT; (III) CONSTITUT-
 ING  A  BREACH OF A CONTRACT, SECURITY OR INSTRUMENT; OR (IV) VOIDING OR
 NULLIFYING ANY CONTRACT, SECURITY OR INSTRUMENT.
   (C) IF A RECOMMENDED BENCHMARK REPLACEMENT  IS  USED  AS  A  BENCHMARK
 REPLACEMENT  OR  A  DETERMINING  PERSON IMPLEMENTS BENCHMARK REPLACEMENT
 CONFORMING CHANGES UNDER OR  IN  RESPECT  OF  A  CONTRACT,  SECURITY  OR
 INSTRUMENT  IN  ACCORDANCE  WITH  THIS  TITLE,  NO PERSON SHALL HAVE ANY
 LIABILITY FOR DAMAGES TO ANY PERSON  OR  BE  SUBJECT  TO  ANY  CLAIM  OR
 REQUEST  FOR  EQUITABLE RELIEF ARISING OUT OF OR RELATED TO THE USE OF A
 RECOMMENDED BENCHMARK REPLACEMENT OR THE IMPLEMENTATION  OR  PERFORMANCE
 OF  BENCHMARK REPLACEMENT CONFORMING CHANGES, AND THE USE OF SUCH RECOM-
 MENDED BENCHMARK REPLACEMENT OR THE  IMPLEMENTATION  OR  PERFORMANCE  OF
 BENCHMARK  REPLACEMENT  CONFORMING  CHANGES  SHALL  NOT GIVE RISE TO ANY
 CLAIM OR CAUSE OF ACTION BY ANY PERSON IN LAW OR IN EQUITY.
   (D) THE USE OF A RECOMMENDED BENCHMARK REPLACEMENT OR THE  IMPLEMENTA-
 TION  OR  PERFORMANCE  OF  BENCHMARK  REPLACEMENT  CONFORMING CHANGES AS
 PROVIDED IN THIS ARTICLE SHALL BE DEEMED TO (1) NOT BE AN  AMENDMENT  OR
 MODIFICATION  OF ANY CONTRACT, SECURITY OR INSTRUMENT AND (2) NOT IMPAIR
 OR HAVE A MATERIAL OR ADVERSE EFFECT ON ANY  PERSON'S  RIGHTS  OR  OBLI-
 GATIONS UNDER OR IN RESPECT OF ANY CONTRACT, SECURITY OR INSTRUMENT.
   (E)  EXCEPT  IN THE CASE OF A CONTRACT, SECURITY OR INSTRUMENT COVERED
 BY SUBSECTIONS (A) OR  (B)  OF  SECTION  12-102  OF  THIS  ARTICLE,  THE
 PROVISIONS  OF  THIS  ARTICLE  SHALL  NOT BE INTERPRETED AS CREATING ANY
 NEGATIVE INFERENCE OR NEGATIVE PRESUMPTION  REGARDING  THE  VALIDITY  OR
 ENFORCEABILITY  OF  (1)  ANY  BENCHMARK REPLACEMENT THAT IS NOT A RECOM-

 A. 11098                            5
 
 MENDED REPLACEMENT BENCHMARK, (2) ANY SPREAD ADJUSTMENT, OR  METHOD  FOR
 CALCULATING  OR  DETERMINING  A  SPREAD ADJUSTMENT, THAT IS NOT A RECOM-
 MENDED SPREAD ADJUSTMENT OR (3) ANY CHANGES,  ALTERATIONS  OR  MODIFICA-
 TIONS  TO  OR  IN RESPECT OF A CONTRACT, SECURITY OR INSTRUMENT THAT ARE
 NOT BENCHMARK REPLACEMENT CONFORMING CHANGES.
 § 12-104. SEVERABILITY.
   IF ANY CLAUSE, SENTENCE, PARAGRAPH, SECTION OR PART  OF  THIS  ARTICLE
 SHALL  BE  ADJUDGED BY ANY COURT OF COMPETENT JURISDICTION TO BE INVALID
 AND AFTER EXHAUSTION OF ALL FURTHER JUDICIAL REVIEW, THE 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 OF THIS ARTICLE DIRECTLY INVOLVED IN THE CONTROVERSY IN  WHICH  THE
 JUDGMENT SHALL HAVE BEEN RENDERED.
   § 2. This act shall take effect immediately.