S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    758
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (PREFILED)
 
                              January 6, 2021
                                ___________
 
 Introduced  by M. of A. CARROLL -- read once and referred to the Commit-
   tee on Cities
 
 AN ACT to amend the general municipal law and the New York state  finan-
   cial  emergency  act for the city of New York, in relation to expendi-
   tures supported by monies retained in a municipal contingency and  tax
   stabilization reserve fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph l of subdivision 1 of section 6-e of the  general
 municipal  law,  as added by chapter 655 of the laws of 1992, is amended
 and a new paragraph o is added to read as follows:
   l. "Unanticipated revenue  loss"  means  estimated  revenue  which  is
 rendered  unreceivable  because  of  a  change in federal or state laws,
 rules or regulations, a court order, judgement or  decree,  AN  ECONOMIC
 RECESSION,  or  other  circumstance,  which takes effect or occurs after
 final adoption of the annual  budget  and  which  could  not  have  been
 reasonably anticipated prior to final adoption of the annual budget.
   O. "ECONOMIC RECESSION" MEANS TWO QUARTERS OF NEGATIVE ECONOMIC GROWTH
 AS EVIDENCED BY A DECLINE IN INCOME, EMPLOYMENT OR SPENDING.
   § 2. Subdivisions 3 and 4 of section 6-e of the general municipal law,
 subdivision 3 and paragraph d of subdivision 4 as amended by chapter 528
 of  the  laws  of  2000 and subdivision 4 as added by chapter 655 of the
 laws of 1992, are amended to read as follows:
   3. There may be  paid  into  the  contingency  and  tax  stabilization
 reserve  fund  such  amounts  as  may  be provided therefor by budgetary
 appropriation, unappropriated unreserved fund balance  in  the  eligible
 portion  of  the annual budget, and such revenues as are not required by
 law to be paid into any other fund or account; provided,  however,  that
 no  amount  may  be  appropriated for payment into a contingency and tax
 stabilization reserve fund which would cause the balance of the fund  to
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD04970-01-1

 A. 758                              2
 
 exceed  ten percent of the eligible portion of the annual budget for the
 fiscal year for which the appropriation would be made; PROVIDED,  HOWEV-
 ER,  THAT NO SUCH LIMITATION SHALL EXIST FOR FUNDS ESTABLISHED IN A CITY
 HAVING A POPULATION OF ONE MILLION OR MORE.
   4.  a.  The moneys in a contingency and tax stabilization reserve fund
 may be expended only pursuant to an appropriation for a purpose  author-
 ized  by this subdivision. Except as provided in paragraph [e] F of this
 subdivision, such an appropriation shall be made only upon the recommen-
 dation of the chief executive officer and the adoption of  a  resolution
 appropriating  the  recommended  amount  by  at  least two-thirds of the
 voting strength of the governing board.
   b. The moneys in a contingency and tax stabilization reserve fund  may
 be  used  to  finance  an  unanticipated  revenue loss chargeable to the
 eligible portion of the annual budget, subject to the following  limita-
 tions:
   (1)  the  maximum  amount  of  moneys  in the fund that may be used to
 finance an unanticipated revenue loss shall equal either the  amount  of
 the  revenue  actually  received  for the base year or the amount of the
 estimated revenue for the current fiscal year, whichever is less,  minus
 the amount of the revenue actually received for the current fiscal year;
 and
   (2) the moneys in the fund may be used only to finance that portion of
 the  unanticipated  revenue  loss  which,  as a matter of law, cannot be
 financed with amounts available in any other account or fund.
   c. THE MONEYS IN A CONTINGENCY AND TAX STABILIZATION RESERVE FUND  MAY
 BE  USED  TO  FINANCE  AN  UNANTICIPATED REVENUE LOSS DUE TO AN ECONOMIC
 RECESSION CHARGEABLE TO THE  ELIGIBLE  PORTION  OF  THE  ANNUAL  BUDGET,
 SUBJECT TO THE FOLLOWING LIMITATIONS:
   (1)  THE  MAXIMUM  AMOUNT  OF  MONEYS  IN THE FUND THAT MAY BE USED TO
 FINANCE AN UNANTICIPATED REVENUE LOSS  DUE  TO  A  RECESSION  SHALL  NOT
 EXCEED  ONE  HUNDRED TWO PERCENT OF EXPENDITURES IN THE BASE YEAR OR THE
 AMOUNT OF THE ESTIMATED EXPENDITURES FOR THE CURRENT FISCAL YEAR, WHICH-
 EVER IS LESS, MINUS THE AMOUNT OF THE REVENUE ACTUALLY RECEIVED FOR  THE
 CURRENT FISCAL YEAR; AND
   (2) THE MONEYS IN THE FUND MAY BE USED ONLY TO FINANCE THAT PORTION OF
 THE  UNANTICIPATED  REVENUE  LOSS  WHICH,  AS A MATTER OF LAW, CANNOT BE
 FINANCED WITH AMOUNTS AVAILABLE IN ANY OTHER ACCOUNT OR FUND.
   D. The moneys in a contingency and tax stabilization reserve fund  may
 be used to finance an unanticipated expenditure chargeable to the eligi-
 ble portion of the annual budget, subject to the following limitations:
   (1)  the  maximum  amount  of  moneys  in the fund that may be used to
 finance an unanticipated expenditure shall equal the sum of  the  amount
 of  the  unanticipated  expenditure and the amount appropriated for that
 purpose for the current fiscal year minus either the amount appropriated
 for that purpose for the current fiscal year or the  actual  expenditure
 for the same purpose in the base year, whichever is greater; and
   (2) the moneys in the fund may be used only to finance that portion of
 an  unanticipated  expenditure  which,  as  a  matter  of law, cannot be
 financed with amounts available in any other account or fund.
   [d.] E. The moneys in the contingency and  tax  stabilization  reserve
 fund  may  be used to lessen or prevent any projected increase in excess
 of two and one-half percent in the amount of the real property tax  levy
 needed to finance the eligible portion of the annual budget for the next
 succeeding  fiscal  year.  The maximum amount of moneys in the fund that
 may be used for this purpose shall  equal  the  difference  between  the
 projected  amount of such real property tax levy and one hundred two and

 A. 758                              3
 
 one-half percent of the amount of the real property tax levy  needed  to
 finance the eligible portion of the annual budget for the current fiscal
 year.
   [e.]  F.  When  preparing  the  tentative budget of a municipal corpo-
 ration, if the current balance of a contingency  and  tax  stabilization
 reserve  fund,  as  shown  by  the statement of the chief fiscal officer
 required by subdivision six of this section, exceeds ten percent of  the
 eligible  portion of the annual budget for the current fiscal year, such
 excess shall be used to reduce the amount of real property taxes  needed
 to  finance  the  eligible  portion  of  the  annual budget for the next
 succeeding fiscal year; PROVIDED,  HOWEVER,  THAT  NO  SUCH  REQUIREMENT
 SHALL  EXIST  FOR FUNDS ESTABLISHED IN A CITY HAVING A POPULATION OF ONE
 MILLION OR MORE.
   § 3. Paragraph a of subdivision 1 of section 8 of section 2 of chapter
 868 of the laws of 1975, constituting the New York state financial emer-
 gency act for the city of New York, as amended by  chapter  118  of  the
 laws of 2020, is amended to read as follows:
   a.  (I)  For  its fiscal years ending June thirtieth, nineteen hundred
 seventy-nine through June thirtieth, nineteen  hundred  eighty-one,  the
 city's  budget  covering all expenditures other than capital items shall
 be prepared and balanced so that the results thereof would  not  show  a
 deficit  when  reported in accordance with the accounting principles set
 forth in the state comptroller's uniform system of accounts for  munici-
 palities,  as  the same may be modified by the comptroller, in consulta-
 tion with the city comptroller, for application to the city; subject  to
 the provision of subdivision four of section three thousand thirty-eight
 of  the public authorities law with respect to contributions by the city
 or other public employer to any retirement system or  pension  fund  and
 subject to the provision of paragraph (c) of subdivision five of section
 three  thousand  thirty-eight of the public authorities law with respect
 to expense items included in the capital budget of  the  city.  For  the
 fiscal  year ending June thirtieth, nineteen hundred eighty-two, and for
 each fiscal year thereafter, the city's budget covering all expenditures
 other than capital items shall be prepared  and  balanced  so  that  the
 results  thereof  would  not  show a deficit when reported in accordance
 with generally accepted accounting principles and would  permit  compar-
 ison  of the budget with the report of actual financial results prepared
 in  accordance  with  generally  accepted  accounting  principles.  With
 respect  to  financial  plans  that include the fiscal years ending June
 thirtieth, nineteen hundred seventy-nine through June  thirtieth,  nine-
 teen  hundred  eighty-one,  the  city's budget covering all expenditures
 other than capital items shall be prepared in accordance with  generally
 accepted  accounting  principles and there shall be substantial progress
 in each such fiscal year towards achieving a city  budget  covering  all
 expenditures  other  than  capital  items the results of which would not
 show a deficit when  reported  in  accordance  with  generally  accepted
 accounting  principles.  The city shall eliminate expense items from its
 capital budget not later than the commencement of the fiscal year ending
 June thirtieth, nineteen hundred eighty-two. For the fiscal year  ending
 June  thirtieth,  nineteen hundred eighty-nine, and for each fiscal year
 thereafter, the budgets covering all  expenditures  other  than  capital
 items  of  each  of  the  covered  organizations  shall  be prepared and
 balanced so that the results thereof  would  not  show  a  deficit  when
 reported  in  accordance  with generally accepted accounting principles;
 and for each fiscal year  prior  thereto,  there  shall  be  substantial
 progress  towards  such  goal.  Notwithstanding  the  foregoing  and the

 A. 758                              4

 provisions of any general or special state  law  or  local  law  to  the
 contrary, including but not limited to the New York city charter:  [(i)]
 (A)  all  costs that would be capital costs in accordance with generally
 accepted  accounting principles, but for the application of governmental
 accounting standards board statement number forty-nine, shall be  deemed
 to  be capital costs for purposes of this act and any other provision of
 state or local law, including but not limited to the New York city char-
 ter, relevant to the treatment of such costs; and [(ii)] (B) the  deter-
 mination  as  to the existence of a deficit pursuant to this act and any
 other provision of state or local law, including but not limited to  the
 New  York  city  charter,  shall  be  made  without regard to changes in
 restricted fund balances, as  defined  by  the  governmental  accounting
 standards  board,  where  restrictions in relation to such fund balances
 are imposed by state or federal  law  or  regulation,  or  otherwise  by
 private  or  governmental  parties  other than the city of New York, and
 without regard to funds held  in  the  health  stabilization  fund,  the
 school  crossing guards health insurance fund, any revenue stabilization
 fund established pursuant to section fifteen hundred twenty-eight of the
 New York city charter and the management benefits  fund  established  by
 the  city of New York. Deposits into any such revenue stabilization fund
 shall be deemed to be expenses of such city in the fiscal year in  which
 such  deposits  are made, and withdrawals from such fund shall be deemed
 to be revenues of such city in the year in which  such  withdrawals  are
 made; provided however, that surpluses of such city, whether accumulated
 from  fiscal  years ending prior to the effective date of the chapter of
 the laws of two thousand twenty that amended this paragraph or  existing
 at  the close of any fiscal year ending after such effective date, shall
 be deposited into such revenue stabilization fund as soon  as  practica-
 ble,  and  such deposits shall not be deemed expenses of the city in the
 fiscal year in which such deposits are made.
   (II) EXPENDITURES SUPPORTED BY MONIES RETAINED IN A MUNICIPAL  CONTIN-
 GENCY  AND  TAX  STABILIZATION  RESERVE FUND CREATED PURSUANT TO, AND IN
 ACCORDANCE WITH, SECTION SIX-E OF THE GENERAL  MUNICIPAL  LAW  SHALL  BE
 EXCLUDED FROM THE BUDGET WHEN DETERMINING WHETHER THE BUDGET IS BALANCED
 IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES SET FORTH IN
 THE  STATE  COMPTROLLER'S UNIFORM SYSTEM OF ACCOUNTS FOR MUNICIPALITIES,
 AS THE SAME MAY BE MODIFIED BY THE COMPTROLLER, IN CONSULTATION WITH THE
 CITY COMPTROLLER.
   § 4. This act shall take effect immediately.