S T A T E O F N E W Y O R K
________________________________________________________________________
7642
2023-2024 Regular Sessions
I N A S S E M B L Y
May 26, 2023
___________
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 maintenance
and application of a general debt service fund for the city of New
York, and agreements and covenants with respect to obligations issued
by such city
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The local finance law is amended by adding a new section
54.15 to read as follows:
§ 54.15 MAINTENANCE AND APPLICATION OF A GENERAL DEBT SERVICE FUND FOR
THE CITY OF NEW YORK. (A) THE FOLLOWING WORDS SHALL HAVE THE FOLLOWING
MEANINGS UNLESS THE CONTEXT SHALL INDICATE ANOTHER OR DIFFERENT MEANING
OR INTENT.
(I) "AVAILABLE TAX LEVY" WITH RESPECT TO AN ISSUE OF TAX ANTICIPATION
NOTES MEANS, AT ANY DATE OF COMPUTATION, THE TOTAL AMOUNT OF CITY REAL
ESTATE TAXES OR ASSESSMENTS PROJECTED, CONSISTENT WITH THE FINANCIAL
PLAN THEN IN EFFECT, TO BE RECEIVED IN CASH ON OR BEFORE THE FIFTH DAY
PRECEDING THE MATURITY DATE OF SUCH TAX ANTICIPATION NOTE ISSUE, LESS
AMOUNTS REQUIRED DURING THE PERIOD BETWEEN THE DATE OF COMPUTATION AND
THE FIFTH DAY PRECEDING SUCH MATURITY DATE TO BE PAID INTO THE GENERAL
DEBT SERVICE FUND OR OTHERWISE REQUIRED TO PAY INTEREST PAYABLE ON OTHER
OUTSTANDING CITY BONDS AND NOTES, PRINCIPAL, INCLUDING PAYMENTS INTO
SINKING FUNDS, COMING DUE ON OUTSTANDING CITY BONDS AND PRINCIPAL TO BE
PAID FROM SOURCES OTHER THAN THE PROCEEDS OF BONDS OR RENEWAL NOTES ON
OTHER OUTSTANDING CITY NOTES, EXCLUSIVE OF REVENUE ANTICIPATION NOTES OR
RENEWALS THEREOF ISSUED LESS THAN TWO YEARS PRIOR TO THE DATE OF COMPU-
TATION, BUT NOT INCLUDING PAYMENTS FROM SINKING FUNDS REQUIRED BY THE
TERMS OF CERTAIN CITY BONDS.
(II) "CITY" MEANS THE CITY OF NEW YORK.
(III) "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11210-01-3
A. 7642 2
(IV) "FUND" MEANS THE GENERAL DEBT SERVICE FUND ESTABLISHED PURSUANT
TO THIS SECTION.
(V) "RAN DEBT SERVICE ACCOUNT" MEANS THE REVENUE ANTICIPATION NOTE
DEBT SERVICE ACCOUNT ESTABLISHED WITHIN THE FUND PURSUANT TO THIS
SECTION.
(VI) "TAN DEBT SERVICE ACCOUNT" MEANS THE TAX ANTICIPATION NOTE DEBT
SERVICE ACCOUNT ESTABLISHED WITHIN THE FUND PURSUANT TO THIS SECTION.
(B) THE CITY SHALL MAINTAIN A GENERAL DEBT SERVICE FUND FOR THE
PURPOSE OF PAYING DEBT SERVICE DUE OR BECOMING DUE IN THE CURRENT FISCAL
YEAR AND IN SUBSEQUENT FISCAL YEARS. ALL MONIES IN THE FUND SHALL BE
HELD BY THE COMPTROLLER, WHO SHALL ADMINISTER AND MAINTAIN THE FUND IN
ACCORDANCE WITH THE PROVISIONS OF THIS SECTION.
(C) ALL PAYMENTS OF OR ON ACCOUNT OF REAL ESTATE TAXES OR ASSESSMENTS,
OTHER THAN THE PROCEEDS OF TAX ANTICIPATION NOTES, SHALL BE IMMEDIATELY
UPON RECEIPT DEPOSITED IN SUCH FUND. THE COMPTROLLER SHALL RETAIN,
DISBURSE AND APPLY MONIES IN THE FUND DURING EACH MONTH AS FOLLOWS:
(I) DURING THE FIRST MONTH OF EACH FISCAL QUARTER, THERE SHALL BE
RETAINED IN THE FUND ALL REAL ESTATE TAX PAYMENTS DEPOSITED IN THE FUND
UNTIL THERE SHALL HAVE BEEN RETAINED FROM MONIES SO DEPOSITED DURING
SUCH MONTH AN AMOUNT EQUAL TO THE TOTAL MONTHLY DEBT SERVICE, COMPUTED
AS OF THE DATE OF ANY DISBURSEMENT OF MONEY FROM THE FUND, FOR THE
SECOND AND THIRD MONTHS OF SUCH FISCAL QUARTER; PROVIDED THAT SUCH
AMOUNT SHALL BE REDUCED BY ANY AMOUNT ALREADY ON DEPOSIT IN THE FUND,
WHICH MAY BE USED TO PAY THE MONTHLY DEBT SERVICE FOR SUCH MONTHS. FOR
PURPOSES OF THIS SECTION, THE TERM "FISCAL QUARTER" SHALL MEAN THE
THREE-MONTH PERIOD BEGINNING JULY FIRST, OCTOBER FIRST, JANUARY FIRST OR
APRIL FIRST, AND THE TERM "MONTHLY DEBT SERVICE" SHALL MEAN, AS OF ANY
DATE OF COMPUTATION, THE AMOUNT OF MONIES EQUAL TO THE AGGREGATE OF (1)
ALL INTEREST PAYABLE DURING SUCH MONTH ON BONDS AND NOTES OF THE CITY,
PLUS (2) THE AMOUNT OF PRINCIPAL, INCLUDING PAYMENTS INTO SINKING FUNDS,
MATURING OR OTHERWISE COMING DUE DURING SUCH MONTH ON ALL BONDS OF THE
CITY, EXCLUDING PRINCIPAL PAYMENTS MADE FROM SINKING FUNDS REQUIRED BY
THE TERMS OF CERTAIN CITY BONDS, PLUS (3) THE AMOUNT OF PRINCIPAL TO BE
PAID ON NOTES OF THE CITY DURING SUCH MONTH FROM SOURCES OTHER THAN THE
PROCEEDS OF BONDS OR RENEWAL NOTES, EXCLUSIVE OF REVENUE ANTICIPATION
NOTES AND TAX ANTICIPATION NOTES OR RENEWALS THEREOF ISSUED LESS THAN
TWO YEARS PRIOR TO THE DATE OF COMPUTATION.
(II) DURING THE SECOND AND THIRD MONTHS OF EACH FISCAL QUARTER, THERE
SHALL BE RETAINED IN THE FUND ALL REAL ESTATE TAX PAYMENTS DEPOSITED IN
THE FUND UNTIL THERE SHALL HAVE BEEN RETAINED FROM MONIES SO DEPOSITED
DURING SUCH MONTH AN AMOUNT EQUAL TO THE TOTAL MONTHLY DEBT SERVICE,
COMPUTED AS OF THE DATE OF ANY DISBURSEMENT OF MONIES FROM THE FUND, FOR
THE FIRST MONTH OF THE NEXT SUCCEEDING FISCAL QUARTER; PROVIDED THAT
SUCH AMOUNT SHALL BE REDUCED BY ANY AMOUNT ALREADY ON DEPOSIT IN THE
FUND, WHICH MAY BE USED TO PAY THE MONTHLY DEBT SERVICE FOR SUCH MONTH.
(III) DURING ANY MONTH OF A FISCAL QUARTER, AFTER THE RETENTIONS
REQUIRED BY SUBPARAGRAPHS (I) AND (II) OF THIS PARAGRAPH HAVE BEEN MADE
FOR SUCH MONTH, THE COMPTROLLER SHALL DEPOSIT ANY REMAINING BALANCE OF
REAL ESTATE TAXES RECEIVED DURING SUCH MONTH, FIRST INTO THE TAN DEBT
SERVICE ACCOUNT TO THE EXTENT REQUIRED UNDER PARAGRAPH (F) OF THIS
SECTION, AND SECOND INTO THE GENERAL FUND OF THE CITY.
(IV) THE CITY MAY AT ANY TIME PAY INTO THE FUND ANY MONIES REQUIRED BY
LAW TO BE USED TO PAY MONTHLY DEBT SERVICE AND ANY OTHER MONIES AVAIL-
ABLE FOR SUCH PURPOSE.
(D) IF THE MAYOR OF THE CITY AT ANY TIME DETERMINES THAT RETENTIONS IN
THE FUND PURSUANT TO THE PROVISIONS OF PARAGRAPH (C) OF THIS SECTION ARE
A. 7642 3
OR ARE LIKELY TO BE INSUFFICIENT TO PROVIDE FOR THE PAYMENT OF MONTHLY
DEBT SERVICE WHEN DUE, IN ORDER TO ENSURE THAT THE AMOUNTS ON DEPOSIT IN
THE FUND WILL BE SUFFICIENT TO PAY MONTHLY DEBT SERVICE WHEN DUE, THE
MAYOR OF THE CITY SHALL REQUIRE (I) THAT REAL ESTATE TAX RECEIPTS BE
RETAINED IN THE FUND IN GREATER AMOUNTS OR AT EARLIER DATES THAN THE
PROVISIONS OF SUCH PARAGRAPH REQUIRE, OR (II) THAT OTHER REVENUES OR
CASH RESOURCES OF THE CITY BE PAID INTO THE FUND.
(E) THE PAYMENT OF MONTHLY DEBT SERVICE OF THE CITY SHALL BE MADE
FIRST FROM AMOUNTS RETAINED IN THE FUND. AMOUNTS RETAINED IN THE FUND
SHALL BE USED ONLY TO PAY DEBT SERVICE OF THE CITY.
(F) UPON THE ISSUANCE OF ANY TAX ANTICIPATION NOTES FOLLOWING THE
EFFECTIVE DATE OF THIS SECTION, THE COMPTROLLER SHALL ESTABLISH AND, SO
LONG AS ANY TAX ANTICIPATION NOTES SHALL BE OUTSTANDING, SHALL MAINTAIN
A TAN DEBT SERVICE ACCOUNT WITHIN THE FUND FOR THE PURPOSE OF PAYING THE
PRINCIPAL OF TAX ANTICIPATION NOTES.
(G) THE CITY SHALL DETERMINE THE DATE ON WHICH THE PRINCIPAL DUE OR TO
BECOME DUE ON AN OUTSTANDING ISSUE OF TAX ANTICIPATION NOTES SHALL EQUAL
NINETY PERCENT OF THE AVAILABLE TAX LEVY WITH RESPECT TO SUCH ISSUE, AND
UPON REASONABLE NOTICE THEREOF, THE COMPTROLLER SHALL COMMENCE ON SUCH
DATE TO PAY INTO THE TAN DEBT SERVICE ACCOUNT FROM COLLECTIONS OF SUCH
TAXES AND ASSESSMENTS, AFTER RETAINING AMOUNTS REQUIRED TO BE DEPOSITED
IN THE FUND, AMOUNTS SUFFICIENT TO PAY WHEN DUE, THE PRINCIPAL OF SUCH
ISSUE OF TAX ANTICIPATION NOTES. THE PAYMENTS OF THE PRINCIPAL OF TAX
ANTICIPATION NOTES SHALL BE MADE FIRST FROM AMOUNTS RETAINED IN THE TAN
DEBT SERVICE ACCOUNT.
(H) UPON THE ISSUANCE OF ANY REVENUE ANTICIPATION NOTES FOLLOWING THE
EFFECTIVE DATE OF THIS SECTION, THE COMPTROLLER SHALL ESTABLISH AND, SO
LONG AS ANY REVENUE ANTICIPATION NOTES SHALL BE OUTSTANDING, SHALL MAIN-
TAIN A RAN DEBT SERVICE ACCOUNT WITHIN THE FUND FOR THE PURPOSE OF
PAYING THE PRINCIPAL OF REVENUE ANTICIPATION NOTES. EACH SPECIFIC TYPE
OF REVENUE IN ANTICIPATION OF WHICH SUCH NOTES ARE ISSUED AND AVAILABLE
FOR SUCH PURPOSE SHALL BE DEPOSITED IN SUCH ACCOUNT IMMEDIATELY UPON
RECEIPT BY THE CITY. WHERE SUCH REVENUE CONSISTS OF STATE AID OR OTHER
REVENUE TO BE PAID TO THE CITY BY THE COMPTROLLER, ON THE DATE SUCH
REVENUE IS PAYABLE TO THE CITY, THE COMPTROLLER SHALL DEPOSIT SUCH
REVENUE DIRECTLY INTO SUCH ACCOUNT IN LIEU OF PAYMENT TO THE CITY FOR
THE PURPOSE OF PAYING THE PRINCIPAL OF REVENUE ANTICIPATION NOTES.
(I) THE CITY SHALL DETERMINE THE DATE ON WHICH THE PRINCIPAL DUE OR TO
BECOME DUE ON AN OUTSTANDING ISSUE OF REVENUE ANTICIPATION NOTES SHALL
EQUAL NINETY PERCENT OF THE TOTAL AMOUNT OF REVENUE AGAINST WHICH SUCH
NOTES WERE ISSUED REMAINING TO BE PAID TO THE CITY ON OR BEFORE THE
FIFTH DAY PRIOR TO THE MATURITY DATE OF SUCH NOTES, AND UPON REASONABLE
NOTICE THEREOF, THE COMPTROLLER SHALL COMMENCE ON SUCH DATE TO RETAIN IN
THE RAN DEBT SERVICE ACCOUNT FROM AMOUNTS DEPOSITED OR TO BE DEPOSITED
THEREIN OF EACH SPECIFIC TYPE OF REVENUE IN ANTICIPATION OF WHICH REVEN-
UE SUCH ANTICIPATION NOTES WERE ISSUED, AN AMOUNT SUFFICIENT TO PAY WHEN
DUE, THE PRINCIPAL OF SUCH REVENUE ANTICIPATION NOTES. MONIES RETAINED
IN SUCH ACCOUNT SHALL VEST IMMEDIATELY IN THE COMPTROLLER IN TRUST FOR
THE BENEFIT OF THE HOLDERS OF THE REVENUE ANTICIPATION NOTES IN ANTIC-
IPATION OF WHICH SUCH NOTES WERE ISSUED. NO PERSON HAVING ANY CLAIM OF
ANY KIND IN TORT, CONTRACT OR OTHERWISE AGAINST SUCH CITY SHALL HAVE ANY
RIGHT TO OR CLAIM AGAINST ANY MONIES OF THE STATE APPROPRIATED BY THE
STATE AND IN ANTICIPATION OF WHICH SUCH NOTES HAVE BEEN ISSUED, OTHER
THAN A CLAIM FOR PAYMENT BY THE HOLDERS OF SUCH NOTES, AND SUCH MONIES
SHALL NOT BE SUBJECT TO ANY ORDER, JUDGMENT, LIEN, EXECUTION, ATTACH-
MENT, SETOFF OR COUNTER-CLAIM BY ANY SUCH PERSON; PROVIDED, HOWEVER,
A. 7642 4
THAT NOTHING CONTAINED IN THIS PARAGRAPH SHALL BE CONSTRUED TO LIMIT,
IMPAIR, IMPEDE OR OTHERWISE ADVERSELY AFFECT IN ANY MANNER THE RIGHTS OR
REMEDIES OF THE PURCHASERS AND HOLDERS AND OWNERS OF ANY BONDS OR NOTES
OF THE STATE OR ANY AGENCY, INSTRUMENTALITY, PUBLIC BENEFIT CORPORATION
OR POLITICAL SUBDIVISION THEREOF, INCLUDING THE CITY OF NEW YORK, UNDER
WHICH SUCH PURCHASERS AND HOLDERS AND OWNERS HAVE ANY RIGHT OF PAYMENT
OF SUCH BONDS OR NOTES BY RECOURSE TO STATE AID OR LOCAL ASSISTANCE
MONIES HELD BY THE STATE OR FOR THE PAYMENT OF WHICH BONDS OR NOTES
STATE AID OR LOCAL ASSISTANCE MONIES ARE A DESIGNATED SOURCE. THE
PAYMENT OF THE PRINCIPAL OF REVENUE ANTICIPATION NOTES SHALL BE MADE
FIRST FROM AMOUNTS RETAINED IN THE RAN DEBT SERVICE ACCOUNT.
(J) WHENEVER THE AMOUNT CONTAINED IN THE TAN DEBT SERVICE ACCOUNT OR
THE RAN DEBT SERVICE ACCOUNT EXCEEDS THE AMOUNT REQUIRED TO BE RETAINED
IN SUCH ACCOUNT SUCH EXCESS MONIES, INCLUDING EARNINGS ON INVESTMENTS OF
MONIES IN THE FUND, SHALL BE WITHDRAWN FROM SUCH ACCOUNT AND PAID INTO
THE GENERAL FUND OF THE CITY.
(K) THE COMPTROLLER SHALL INVEST THE MONIES RETAINED IN THE FUND IN
ACCORDANCE WITH LAW.
(L) THE LIMITATIONS IMPOSED UPON THE CITY BY THIS SECTION SHALL BE IN
ADDITION TO ANY OTHER LIMITATIONS IMPOSED UPON THE CITY BY THIS CHAPTER.
IN THE EVENT ANY OTHER PROVISIONS OF THIS CHAPTER SHALL BE INCONSISTENT
WITH THE PROVISIONS OF THIS SECTION, THE PROVISIONS OF THIS SECTION
SHALL PREVAIL.
(M) WHILE THE NEW YORK STATE FINANCIAL EMERGENCY ACT FOR THE CITY OF
NEW YORK REMAINS IN EFFECT, SUCH ACT SHALL PREVAIL IN THE EVENT ANY
PROVISION OF SUCH ACT SHALL BE INCONSISTENT WITH THE PROVISIONS OF THIS
SECTION. THE POWERS, DUTIES AND OBLIGATIONS SET FORTH IN THIS SECTION
SHALL BE SUBJECT TO THE POWERS, DUTIES AND OBLIGATIONS PLACED UPON ANY
STATE OR LOCAL OFFICER OR AGENCY, INCLUDING BUT NOT LIMITED TO THE NEW
YORK STATE FINANCIAL CONTROL BOARD, BY OR PURSUANT TO SUCH ACT WHILE
SUCH ACT REMAINS IN EFFECT.
(N) NOTWITHSTANDING ANY OTHER PROVISION OF THIS SECTION, THE CITY MAY
AT ANY TIME, SUBJECT TO APPROVAL BY THE COMPTROLLER, DESIGNATE A TRUST
COMPANY OR BANK HAVING ITS PRINCIPAL PLACE OF BUSINESS IN THE STATE OF
NEW YORK AND HAVING THE POWERS OF A TRUST COMPANY IN THE STATE OF NEW
YORK TO HOLD ALL OR ANY PART OF THE MONIES IN THE FUND AND TO ADMINISTER
AND MAINTAIN THE MONIES SO HELD IN ACCORDANCE WITH THE APPLICABLE
PROVISIONS OF THIS SECTION AND ANY AGREEMENTS MADE PURSUANT THERETO.
(O) THE MAYOR OF THE CITY IS HEREBY AUTHORIZED TO ENTER INTO AGREE-
MENTS AND TO MAKE COVENANTS WITH ANY PURCHASER OR HOLDER OF OBLIGATIONS
ISSUED BY THE CITY TO PROTECT AND SAFEGUARD THE SECURITY AND RIGHTS OF A
PURCHASER OR HOLDER OR TO PROTECT AND SAFEGUARD THE SOURCE OF PAYMENT OF
SUCH OBLIGATIONS OR AS DEEMED APPROPRIATE BY THE MAYOR WHICH AGREEMENTS
OR COVENANTS MAY CONTAIN PROVISIONS PROVIDING FOR (I) THE COMPLIANCE BY
THE CITY WITH ANY OF THE PROVISIONS OF THIS SECTION, (II) RESTRICTIONS
ON THE ISSUANCE BY THE CITY OF ITS OBLIGATIONS, LIMITATIONS ON THE
INCLUSION OF EXPENSE ITEMS IN ITS CAPITAL BUDGETS AND FINANCIAL RECORDS,
REPORTING AND DISCLOSURE REQUIREMENTS IN ADDITION TO ANY SUCH
RESTRICTIONS, LIMITATIONS OR REQUIREMENTS CONTAINED IN THIS SECTION,
(III) COMPLIANCE BY THE CITY WITH ITS FINANCIAL PLAN AS MODIFIED FROM
TIME TO TIME, (IV) CONDITIONS THAT WOULD GIVE RISE TO AN EVENT OF
DEFAULT ON SUCH OBLIGATIONS, AND (V) REMEDIES AVAILABLE TO A PURCHASER
OR HOLDER OF SUCH OBLIGATIONS, OTHER THAN ACCELERATION OR THE REQUIRED
ELIMINATION OR REDUCTION OF SPECIFIC MUNICIPAL EXPENDITURES, INCLUDING
THE CIRCUMSTANCES, IF ANY, UNDER WHICH A TRUSTEE OR TRUSTEES OR A FISCAL
AGENT MAY BE APPOINTED OR MAY ACT AS A REPRESENTATIVE OF HOLDERS OF
A. 7642 5
OBLIGATIONS ISSUED BY THE CITY IN CONNECTION WITH AN ISSUE OR ISSUES OF
OBLIGATIONS OF THE CITY AND THE RIGHTS, POWERS AND DUTIES WHICH MAY BE
VESTED IN SUCH TRUSTEE, TRUSTEES OR FISCAL AGENT AS SUCH REPRESENTATIVE.
THE STATE OF NEW YORK HEREBY PLEDGES AND AGREES THAT IT WILL TAKE NO
ACTION THAT WOULD IMPAIR THE POWER OF THE CITY TO COMPLY WITH OR TO
PERFORM ANY COVENANT OR AGREEMENT MADE PURSUANT TO THIS PARAGRAPH, OR
ANY RIGHT OR REMEDY OF A PURCHASER OR HOLDER TO ENFORCE SUCH COVENANT OR
AGREEMENT; AND THE CITY IS HEREBY AUTHORIZED TO INCLUDE SUCH PLEDGE AND
AGREEMENT IN ANY AGREEMENT MADE PURSUANT TO THIS PARAGRAPH. NOTHING
CONTAINED IN THIS PARAGRAPH SHALL PRECLUDE THE STATE FROM AUTHORIZING
THE CITY TO EXERCISE, OR THE CITY FROM EXERCISING, ANY POWER PROVIDED BY
LAW TO SEEK APPLICATION OF LAWS THEN IN EFFECT UNDER THE BANKRUPTCY
PROVISIONS OF THE UNITED STATES CONSTITUTION OR SHALL PRECLUDE THE STATE
FROM VALIDLY EXERCISING ITS POLICE POWERS.
§ 2. This act shall take effect immediately.