NY State Senate Bill 2025-S2333

Current Bill Status - In Senate Committee Banks Committee

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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Jan 16, 2025	referred to banks

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2025-S2333 (ACTIVE) - Details

Current Committee:: Senate Banks
Law Section:: Debtor and Creditor Law
Laws Affected:: Add Art 8 §§220 - 232, D & C L
Versions Introduced in Other Legislative Sessions:: 2021-2022: S6627
2023-2024: S5542

2025-S2333 (ACTIVE) - Summary

Provides for restructuring unsustainable sovereign and subnational debt; provides a voluntary petition for relief may be filed with the state.

2025-S2333 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S2333

SPONSOR: RIVERA
 
TITLE OF BILL:

An act to amend the debtor and creditor law, in relation to restructur-
ing unsustainable sovereign and subnational debt

 
PURPOSE:

This bill provides effective and orderly mechanisms for restructuring
sovereign and subnational debt for foreign governments and US territo-
ries against which there are one or more claims governed by or enforced
under New York law. The bill seeks to encourage constructive resolution
of debtor-creditor disputes under New York law, ensure that access to
New York courts is not abused by holdout creditors, encourage equitable
burden sharing between public and private creditors, address economic
and supply chain shocks, prevent financial system disruption, and
protect New York taxpayers and cooperating investors.

 
SUMMARY OF PROVISIONS:

Section 1 names this act the Sovereign Debt Stability Act.

Section 2 amends the Debtor and Creditor Law, by adding a new article 8,
named Sovereign and Subnational Debt, as it relates to allowing foreign
government and US territory creditors under New York law to select one
of two mechanisms to ensure New York State's laws facilitate orderly and
efficient restructuring of distressed debt.  One mechanism is defined by
Sections 222-229, and the other is defined by Section 230 as follows.

Section 220 would establish the legislative intent of this bill.

Section 221 would set definitions for the following terms: "creditor,"
"claim," "plan," "debtor state," "independent monitor," "international
initiative," "eligible claim," "burden-sharing standards," "section 223
claim," and "section 230 claim."

Section 222 would establish a process by which debtor states can file
notice with New York to be covered under section 223 claims or section
230 claims. The debtor state is allowed to change their claim choice
once before any plan becomes binding.

Section 223 would consider claim notifications to be a voluntary peti-
tion for relief as long as the debtor state certifies that it has not
sought substantially similar relief within the past five years and that
relief is needed to address unsustainable debt; agrees to restructure
claims and to all other terms between section 223-229 of this article;
has enacted any national or subnational law needed to effectuate the
agreements; and lastly, is cooperating with the International Monetary
Fund to establish sustainability.

Section 224 would require the debtor state to notify creditors of their
intention to negotiate a plan under a section 223 claim and have the
independent monitor maintain and verify a list of current creditors of
the debtor state. The independent monitor would be acceptable to the
debtor state and the majority of creditors.


Section 225 would require debtor states and creditors to ensure records
are accurate and discrepancies are addressed amongst each other.

Section 226 would allow the debtor state to submit a plan to its credi-
tors that designates different classes of claims and how each claim will
be restructured. The plan must include the same treatment of each class
of claims, disclosing of claims excluded from the classes of claims,
adequate means for implementation, and certification that the plan will
make the debtor state's debt sustainable. The plan must be approved
through supermajority voting by each class of creditors.

Section 227 would allow the debtor state to borrow to implement the
restructuring plan and allows creditors to report to the independent
monitor whether or not they agree with the borrowing terms. Such a loan
must be approved by the creditors that hold at least two-thirds in
amount of the claims.

Section 228 would provide guidance on how the debtor state would repay
their loans and claims in accordance to approval by creditors with two-
thirds in principal amount of the covered claims.

Section 229 would allow the independent monitor to request a referee or
special master to make recommendations on resolution of disputes for
section 223 claims.

Section 230 would allow debtor states in cases where there is an inter-
national debt restructuring initiative, to prevent creditors from having
access to New York courts to enforce claims in excess of the proportion
that would have been recoverable by the US government had it been the
creditor holding such claim. Section 230 also requires that any restruc-
turing initiative meet burden-sharing standards and robust disclosure
criteria.

Section 231 would allow the restructuring for debtor states that are
sovereign nations to be retroactive.

Section 232 would establish a severability clause. If any provisions of
the bill are held invalid, this invalidity does not affect other
provisions which can be implemented without the invalid provision. If a
debtor state's choice to have claims covered by Sections 222-229 is held
invalid, another debtor state's choice to have claims covered by

Section 230 is still valid, and vice versa.

Section 3 sets the effective date.

 
JUSTIFICATION:.:

It is a longstanding policy of the State of New York, as the world's
leading financial center, to support orderly, collaborative, and effec-
tive processes for resolving unsustainable debt as part of New York's
debtor-creditor law. It is also the longstanding policy of the United
States government to participate in and support international efforts to
restructure unsustainable sovereign debt. Unlike individuals and corpo-
rations, sovereigns are not subject to liquidation or a standardized
debt restructuring process. This bill will ensure that sovereign debt
entered into under the laws of New York State can be resolved if it
becomes unsustainable, preventing costly disputes conducted in New York
courts. With approximately half of sovereign debt contracts governed by
New York law, the absence of a legal framework in the state allows bad
faith actors to exploit a void in the legal system and take advantage of
cooperative creditors, jeopardizing the functioning of sovereign lending
markets and the authority of New York State.

Unresolved unsustainable debt burdens over a prolonged period can lead
sovereign nations to lose access to the credit market, hampering their
ability to provide for their population's most basic needs.  Making debt
relief provisions more rapid and efficient will reduce shocks that
disrupt supply chains and trade partnerships on which New York,the US
economy, and consumers rely. In addition to ensuring that New York's
courts are not misused, the bill will support the stability of the
international financial system, critical to New York's financial system.

Finally, as a center of global commerce, New York is always affected
when unsustainable sovereign debt leads to humanitarian crises, with
attendant refugee flows, political instability, and economic conse-
quences. When such crises occur, they have a knock-on effect on New
York's taxpayers and consumers. These effects on financial markets and
payment systems disproportionately affect New York's economy; thus, the
state has a legitimate interest in facilitating their prompt resolution

 
LEGISLATIVE HISTORY:

2021-2022: S6627 Rivera/A7562 Davila

2023-2024: S5542-A Rivera/A2102-A Fahy

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
Effective Immediately.

2025-S2333 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2333
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             January 16, 2025
                                ___________
 
 Introduced  by  Sens.  RIVERA, BRISPORT, CLEARE, COMRIE, GIANARIS, HOYL-
   MAN-SIGAL, JACKSON, KRUEGER, MYRIE, RAMOS, SALAZAR,  SANDERS  --  read
   twice  and  ordered  printed,  and when printed to be committed to the
   Committee on Banks
 
 AN ACT to amend the debtor and creditor law, in relation to  restructur-
   ing unsustainable sovereign and subnational debt
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "sovereign debt stability act".
   §  2. The debtor and creditor law is amended by adding a new article 8
 to read as follows:
                                 ARTICLE 8
                      SOVEREIGN AND SUBNATIONAL DEBT
 SECTION 220. LEGISLATIVE INTENT.
         221. DEFINITIONS.
         222. ELECTION TO BE COVERED BY THE PROVISIONS OF THIS ARTICLE.
         223. PETITION FOR RELIEF; RECOGNITION.
         224. NOTIFICATION OF CREDITORS.
         225. DEBT RECONCILIATION.
         226. SUBMISSION, CONTENTS AND VOTING ON PLAN.
         227. FINANCING THE RESTRUCTURING.
         228. PRIORITY OF REPAYMENT.
         229. ADJUDICATION OF DISPUTES.
         230. RECOVERABILITY OF SECTION 230 CLAIMS.
         231. APPLICATION; OPT IN.
         232. SEVERABILITY.
   § 220. LEGISLATIVE INTENT.  THE LEGISLATURE FINDS THAT IT IS  A  LONG-
 STANDING  POLICY  OF THE UNITED STATES AND THE STATE OF NEW YORK, AS THE
 WORLD'S LEADING FINANCIAL CENTER, TO SUPPORT ORDERLY, COLLABORATIVE  AND
 EFFECTIVE  INTERNATIONAL SOVEREIGN DEBT RELIEF FOR COUNTRIES WITH UNSUS-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05664-01-5

 S. 2333                             2
 
 TAINABLE LEVELS OF DEBT. DEBT  DISTRESS,  DEBT  CRISES,  AND  DISORDERLY
 DEFAULT  ARE  ASSOCIATED  WITH  UNACCEPTABLE  HUMAN  SUFFERING, ECONOMIC
 DECLINE, AND FINANCIAL MARKET AND PAYMENT SYSTEMS DISRUPTION.  MOREOVER,
 DEBT  RESTRUCTURING  IS  INEFFECTIVE  AND  DOES  NOT LEAD TO SUSTAINABLE
 OUTCOMES WHEN IT IS NOT PERCEIVED AS EQUITABLE OR LEGITIMATE  BY  STAKE-
 HOLDERS  IN BORROWING AND LENDING COUNTRIES. ADDITIONALLY, PUBLIC CREDI-
 TORS ARE UNLIKELY  TO  PARTICIPATE  IN  DEBT  RESTRUCTURING  INITIATIVES
 UNLESS  THERE IS FAIR BURDEN SHARING AMONG ALL PUBLIC AND PRIVATE CREDI-
 TORS, WHICH IS ESSENTIAL TO THE LEGITIMACY  AND  EFFECTIVENESS  OF  DEBT
 RELIEF  INITIATIVES.  THEREFORE, THE LEGISLATURE FINDS AND DECLARES THAT
 IT SHALL BE THE POLICY OF NEW YORK STATE TO SUPPORT  INTERNATIONAL  DEBT
 RELIEF  INITIATIVES  FOR  COUNTRIES TO ENSURE THAT THE COST OF SUCH DEBT
 RELIEF IS ALLOCATED IN A FAIR AND EQUITABLE MANNER, AND THAT SUCH  COSTS
 DO  NOT  FALL  DISPROPORTIONATELY  ON THE RESIDENTS AND TAXPAYERS OF NEW
 YORK STATE, AND FOR OTHER PURPOSES.  THE PURPOSE OF THIS ARTICLE  IS  TO
 PROVIDE EFFECTIVE MECHANISMS FOR RESTRUCTURING SOVEREIGN AND SUBNATIONAL
 DEBT SO AS TO:
   1. REDUCE THE SOCIAL COSTS OF SOVEREIGN AND SUBNATIONAL DEBT CRISES TO
 RESIDENTS OF NEW YORK STATE;
   2.  REDUCE  SYSTEMIC  RISK  TO  THE FINANCIAL SYSTEM, A SYSTEM THAT IS
 CONCENTRATED IN NEW YORK STATE;
   3. REDUCE CREDITOR UNCERTAINTY, INCLUDING TO THE NUMEROUS  HOLDERS  OF
 SOVEREIGN DEBT THAT ARE RESIDENTS IN NEW YORK STATE;
   4. STRENGTHEN THE ROLE OF NEW YORK STATE AS A PRIMARY LOCATION FOR THE
 ISSUING AND TRADING OF SOVEREIGN DEBT;
   5.  REDUCE THE NEED FOR SOVEREIGN AND SUBNATIONAL DEBT BAILOUTS, WHICH
 CREATE MORAL HAZARD AND ARE COSTLY TO RESIDENTS OF NEW YORK STATE;
   6.  OTHERWISE  PROTECT  ECONOMIC  ACTIVITY  WITHIN  NEW  YORK  STATE'S
 BORDERS,  BY  REDUCING  THE LIKELIHOOD OF A SOVEREIGN DEBT DEFAULT WHICH
 COULD ADVERSELY IMPACT NEW YORK STATE'S ECONOMY;
   7. REDUCE, OUT OF UNIVERSAL HUMAN RIGHTS AND HUMANITARIAN IMPERATIVES,
 THE SOCIAL COST OF UNRESOLVED  SOVEREIGN  DEBT  CRISES  IMPOSED  ON  THE
 PEOPLE  OF NATIONS WITH UNSUSTAINABLE DEBT, ESPECIALLY THE POOREST AMONG
 THEM, TAKING DUE ACCOUNT OF CREDITOR RIGHTS; AND
   8. ENABLE DEBTOR STATES TO CHOOSE A  DEBT  RESTRUCTURING  OPTION  THAT
 APPROPRIATELY SUITS ITS CIRCUMSTANCES AND NEEDS.
   § 221. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE:
   1.  "CREDITOR"  MEANS  A  PERSON  OR ENTITY THAT HAS A CLAIM AGAINST A
 DEBTOR STATE;
   2. "CLAIM" MEANS A PAYMENT CLAIM AGAINST A  DEBTOR  STATE  FOR  MONIES
 BORROWED  OR  FOR  THE  DEBTOR STATE'S GUARANTEE OF, OR OTHER CONTINGENT
 OBLIGATION ON, MONIES BORROWED; THE TERM "MONIES BORROWED" SHALL INCLUDE
 THE FOLLOWING, WHETHER OR NOT IT  REPRESENTS  THE  BORROWING  OF  MONEY:
 MONIES  OWING  UNDER BONDS; DEBENTURES; NOTES, OR SIMILAR INSTRUMENTS OF
 ORIGINAL MATURITY OF AT LEAST ONE YEAR; MONIES OWING  FOR  THE  DEFERRED
 PURCHASE  PRICE OF PROPERTY OR SERVICES, OTHER THAN TRADE ACCOUNTS PAYA-
 BLE ARISING IN THE ORDINARY  COURSE  OF  GOVERNMENT  OPERATIONS;  MONIES
 OWING  ON CAPITALIZED LEASE OBLIGATIONS; MONIES OWING ON OR WITH RESPECT
 TO LETTERS OF CREDIT, BANKERS' ACCEPTANCES, OR OTHER EXTENSIONS OF CRED-
 IT OF ORIGINAL MATURITY OF AT LEAST ONE YEAR;
   3. "PLAN" MEANS A DEBT RESTRUCTURING  PLAN  PURSUANT  TO  SECTION  TWO
 HUNDRED TWENTY-SIX OF THIS ARTICLE;
   4. "DEBTOR STATE" MEANS A SOVEREIGN NATION; OR UNINCORPORATED TERRITO-
 RY;  OR  ANY  SUBNATIONAL UNIT THEREOF, EXCLUDING ANY MUNICIPALITY WHOSE
 ADJUSTMENT OR DEBTS IS GOVERNED BY 11 U.S.C. 9;
 S. 2333                             3
 
   5. "INDEPENDENT MONITOR" MEANS AN INDIVIDUAL APPOINTED BY  THE  GOVER-
 NOR,  IN CONSULTATION WITH THE UNITED STATES DEPARTMENT OF THE TREASURY,
 ACCEPTABLE TO THE SOVEREIGN DEBTOR AND TO THE HOLDERS, OR THEIR  AGENTS,
 OF  A  MAJORITY  OF THE OBLIGATIONS ISSUED UNDER NEW YORK LAW. THE INDE-
 PENDENT  MONITOR  IS  MEANT  TO  FACILITATE  AND ENCOURAGE AN EFFECTIVE,
 PROMPT AND FAIR AGREEMENT BY THE PARTIES, AS INTENDED BY  THIS  ARTICLE.
 THE  DEBTOR  STATE  SHALL PAY THE INDEPENDENT MONITOR'S REASONABLE COSTS
 AND EXPENSES;
   6. "INTERNATIONAL INITIATIVE" MEANS ANY MECHANISM, FRAMEWORK OR INITI-
 ATIVE IN WHICH THE UNITED STATES GOVERNMENT AND OTHER  SOVEREIGN  STATES
 HAVE  ENGAGED WITH INTERNATIONAL FINANCIAL INSTITUTIONS AND OFFICIAL AND
 COMMERCIAL CREDITORS TO ADVANCE THE IMPLEMENTATION  AND  IMPROVEMENT  OF
 PROMPT  AND  EFFECTIVE  DEBT RELIEF AMONG ELIGIBLE STATES, INCLUDING BUT
 NOT LIMITED TO THE HEAVILY INDEBTED POOR  COUNTRIES  INITIATIVE  OF  THE
 INTERNATIONAL MONETARY FUND AND THE WORLD BANK, THE DEBT SERVICE SUSPEN-
 SION INITIATIVE OF THE GROUP OF 20, THE COMMON FRAMEWORK FOR DEBT TREAT-
 MENTS  BEYOND  THE DSSI, ALSO KNOWN AS THE "COMMON FRAMEWORK", THE PARIS
 CLUB, AND ANY SUCCESSOR OR SIMILAR INTERNATIONAL MECHANISM, FRAMEWORK OR
 INITIATIVES;
   7. "ELIGIBLE CLAIM" SHALL MEAN A CLAIM AS DEFINED IN  SUBDIVISION  TWO
 OF  THIS  SECTION AND ANY JUDICIAL OR OTHER OFFICIAL DOMESTIC OR FOREIGN
 JUDGMENT WITH RESPECT TO SUCH A CLAIM AGAINST AN ELIGIBLE STATE  PARTIC-
 IPATING IN ONE OR MORE OF THE INTERNATIONAL INITIATIVES;
   8.  "ELIGIBLE  STATE" SHALL MEAN A SOVEREIGN STATE ELIGIBLE TO PARTIC-
 IPATE IN ONE OR MORE OF THE INTERNATIONAL INITIATIVES;
   9. "BURDEN-SHARING STANDARDS" SHALL MEAN STANDARDS SET BY THE RELEVANT
 INTERNATIONAL INITIATIVE  OR  INTERNATIONAL  INITIATIVES  FOR  EQUITABLE
 BURDEN-SHARING  AMONG ALL CREDITORS WITH MATERIAL CLAIMS ON EACH PARTIC-
 IPATING DEBTOR WITHOUT REGARD FOR THEIR  OFFICIAL,   PRIVATE, OR  HYBRID
 STATUS;
   10.  "SECTION  223  CLAIM"  SHALL  MEAN,  AS  APPLICABLE, A CLAIM WITH
 RESPECT TO WHICH THE DEBTOR STATE HAS  ELECTED  FOR  ITS  CLAIMS  TO  BE
 COVERED  BY SECTION TWO HUNDRED TWENTY-THREE THROUGH SECTION TWO HUNDRED
 TWENTY-NINE OF THIS ARTICLE; AND
   11. "SECTION 230 CLAIM" SHALL MEAN AN ELIGIBLE CLAIM WITH  RESPECT  TO
 WHICH  THE  DEBTOR STATE ISSUING SUCH CLAIM HAS ELECTED TO BE COVERED BY
 SECTION TWO HUNDRED THIRTY OF THIS ARTICLE, AND NOT  TO  BE  COVERED  BY
 SECTION TWO HUNDRED TWENTY-THREE THROUGH SECTION TWO HUNDRED TWENTY-NINE
 OF THIS ARTICLE INCLUSIVE.
   §  222.  ELECTION  TO BE COVERED BY THE PROVISIONS OF THIS ARTICLE. 1.
 ANY DEBTOR STATE AGAINST WHICH THERE ARE ONE OR MORE CLAIMS GOVERNED  BY
 OR  ENFORCED  UNDER  NEW  YORK  LAW  SHALL  HAVE THE OPTION TO APPLY THE
 PROVISIONS OF THIS ARTICLE TO SUCH CLAIMS BY  FILING  A  NOTICE  THEREOF
 WITH  THE  STATE  OF  NEW  YORK.  IN SUCH NOTICE, THE DEBTOR STATE SHALL
 CHOOSE WHETHER THOSE CLAIMS SHALL, TO THE EXTENT GOVERNED  BY  NEW  YORK
 LAW,  BE  COVERED AS SECTION 223 CLAIMS OR, TO THE EXTENT ENFORCED UNDER
 NEW YORK LAW, AS SECTION 230 CLAIMS. WITHIN  THIRTY  DAYS  AFTER  GIVING
 SUCH  NOTICE,  THE  DEBTOR STATE SHALL NOTIFY THE HOLDERS OF SUCH CLAIMS
 AND THE STATE OF NEW YORK OF ITS CHOICE. IN THE CASE OF A CHOICE TO HAVE
 THOSE CLAIMS BE COVERED AS A SECTION 223 CLAIM, THE DEBTOR  STATE  SHALL
 ALSO MAKE THE CERTIFICATIONS SPECIFIED IN SUBDIVISION TWO OF SECTION TWO
 HUNDRED  TWENTY-THREE  OF THIS ARTICLE.  ANY WAIVER OF THE PROVISIONS OF
 THIS SUBDIVISION SHALL BE INEFFECTIVE.
   2. A DEBTOR STATE THAT MAKES A CHOICE UNDER SUBDIVISION  ONE  OF  THIS
 SECTION  SHALL  HAVE  THE  RIGHT TO CHANGE THAT CHOICE ONCE, AT ANY TIME
 PRIOR TO A PLAN BECOMING EFFECTIVE AND BINDING ON THE DEBTOR  STATE  AND
 S. 2333                             4
 
 ITS CREDITORS, BY NOTIFYING THE STATE OF NEW YORK AND THE HOLDERS OF ALL
 CLAIMS AFFECTED BY THAT CHOICE.
   §  223.  PETITION  FOR  RELIEF; RECOGNITION. 1. THE NOTIFICATION UNDER
 SECTION TWO HUNDRED TWENTY-TWO OF THIS ARTICLE  THAT  CLAIMS  AGAINST  A
 DEBTOR  STATE SHALL BE COVERED AS A SECTION 223 CLAIM SHALL CONSTITUTE A
 VOLUNTARY PETITION FOR RELIEF WITH THE STATE OF NEW YORK.
   2. SUCH NOTICE SHALL CERTIFY THAT THE DEBTOR STATE:
   (A) SEEKS RELIEF AS A SECTION 223 CLAIM UNDER THIS  ARTICLE,  AND  HAS
 NOT  PREVIOUSLY SOUGHT RELIEF UNDER THIS ARTICLE, OR UNDER ANY OTHER LAW
 THAT IS SUBSTANTIALLY IN THE FORM OF THIS ARTICLE, DURING THE PAST  FIVE
 YEARS;
   (B) NEEDS RELIEF AS A SECTION 223 CLAIM UNDER THIS ARTICLE TO RESTRUC-
 TURE  CLAIMS  THAT,  ABSENT  SUCH RELIEF, WOULD CONSTITUTE UNSUSTAINABLE
 DEBT OF THE DEBTOR STATE;
   (C) AGREES TO RESTRUCTURE THOSE CLAIMS IN ACCORDANCE WITH THIS SECTION
 THROUGH SECTION TWO HUNDRED TWENTY-NINE OF THIS ARTICLE;
   (D) AGREES TO ALL OTHER  TERMS,  CONDITIONS  AND  PROVISIONS  OF  THIS
 SECTION THROUGH SECTION TWO HUNDRED TWENTY-NINE OF THIS ARTICLE;
   (E)  HAS DULY ENACTED ANY NATIONAL OR SUBNATIONAL LAW NEEDED TO EFFEC-
 TUATE THESE AGREEMENTS. IF REQUESTED BY THE  INDEPENDENT  MONITOR,  SUCH
 PETITION  SHALL  ALSO  ATTACH  DOCUMENTS  AND  LEGAL OPINIONS EVIDENCING
 COMPLIANCE WITH THIS SUBDIVISION; AND
   (F) IS COOPERATING WITH THE INTERNATIONAL MONETARY FUND TO  DEVISE  AN
 EFFECTIVE, EFFICIENT, TIMELY AND FAIR PATH BACK TO SUSTAINABILITY.
   3. IMMEDIATELY AFTER SUCH A PETITION FOR RELIEF HAS BEEN FILED, AND SO
 LONG  AS  SUCH  FILING HAS NOT BEEN DISMISSED BY THE INDEPENDENT MONITOR
 FOR LACK OF GOOD FAITH OR THE DEBTOR STATE HAS NOT  CHANGED  ITS  CHOICE
 UNDER  SUBDIVISION TWO OF SECTION TWO HUNDRED TWENTY-TWO OF THIS ARTICLE
 TO HAVE ITS CLAIMS COVERED BY SECTION  TWO HUNDRED THIRTY OF THIS  ARTI-
 CLE, THE TERMS, CONDITIONS, AND PROVISIONS OF THIS ARTICLE SHALL:
   (A) APPLY TO THE DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE DEBTOR STATE
 AND ITS CREDITORS TO THE EXTENT SUCH RELATIONSHIP IS GOVERNED BY THE LAW
 OF THIS JURISDICTION;
   (B) APPLY TO THE DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE DEBTOR STATE
 AND ITS CREDITORS TO THE EXTENT SUCH RELATIONSHIP IS GOVERNED BY THE LAW
 OF  ANOTHER  JURISDICTION THAT HAS ENACTED LAW SUBSTANTIALLY IN THE FORM
 OF THIS ARTICLE; AND
   (C) BE RECOGNIZED IN,  AND  BY,  ALL  OTHER  JURISDICTIONS  THAT  HAVE
 ENACTED LAW SUBSTANTIALLY IN THE FORM OF THIS ARTICLE.
   §  224. NOTIFICATION OF CREDITORS.  1. WITHIN THIRTY DAYS AFTER FILING
 ITS PETITION FOR RELIEF, THE DEBTOR STATE SHALL NOTIFY ALL OF ITS  KNOWN
 CREDITORS OF ITS INTENTION TO NEGOTIATE A PLAN UNDER SECTION TWO HUNDRED
 TWENTY-THREE THROUGH SECTION TWO HUNDRED TWENTY-NINE OF THIS ARTICLE.
   2.  THE  INDEPENDENT MONITOR SHALL PREPARE AND MAINTAIN A CURRENT LIST
 OF CREDITORS OF THE DEBTOR STATE AND VERIFY CLAIMS FOR THE  PURPOSES  OF
 SUPERVISING  VOTING  UNDER  SECTION  TWO  HUNDRED  TWENTY-THREE  THROUGH
 SECTION TWO HUNDRED TWENTY-NINE OF THIS ARTICLE.
   § 225.  DEBT RECONCILIATION. THE CREDITOR CLAIMS SHALL  BE  RECONCILED
 AGAINST  DEBTOR RECORDS AND ANY DISCREPANCIES SHALL BE ADDRESSED BETWEEN
 THE PARTIES.
   § 226. SUBMISSION, CONTENTS AND VOTING ON PLAN. 1.  THE  DEBTOR  STATE
 MAY  SUBMIT A PLAN TO ITS CREDITORS AT ANY TIME, AND MAY SUBMIT ALTERNA-
 TIVE PLANS FROM TIME TO TIME.
   2. NO OTHER PERSON OR ENTITY MAY SUBMIT A PLAN ON BEHALF OF THE DEBTOR
 STATE.
   3. A PLAN SHALL:
 S. 2333                             5
 
   (A) DESIGNATE CLASSES OF CLAIMS IN ACCORDANCE WITH SUBDIVISION SIX  OF
 THIS SECTION;
   (B) SPECIFY THE PROPOSED TREATMENT OF EACH CLASS OF CLAIMS;
   (C)  PROVIDE  THE SAME TREATMENT FOR EACH CLAIM OF A PARTICULAR CLASS,
 UNLESS THE HOLDER OF A CLAIM AGREES TO A LESS FAVORABLE TREATMENT;
   (D) DISCLOSE ANY CLAIMS NOT INCLUDED IN THE PLAN'S CLASSES OF CLAIMS;
   (E) PROVIDE ADEQUATE MEANS FOR THE  PLAN'S  IMPLEMENTATION  INCLUDING,
 WITH  RESPECT  TO ANY CLAIMS, CURING OR WAIVING ANY DEFAULTS OR CHANGING
 THE MATURITY DATES, PRINCIPAL AMOUNT, INTEREST RATE, OR OTHER  TERMS  OR
 CANCELING OR MODIFYING ANY LIENS OR ENCUMBRANCES; AND
   (F)  CERTIFY  THAT,  IF  THE PLAN BECOMES EFFECTIVE AND BINDING ON THE
 DEBTOR STATE AND ITS CREDITORS UNDER SUBDIVISION FOUR OF  THIS  SECTION,
 THE DEBTOR STATE'S DEBT WILL BECOME SUSTAINABLE.
   4.  A  PLAN SHALL BECOME EFFECTIVE AND BINDING ON THE DEBTOR STATE AND
 ITS CREDITORS WHEN IT HAS BEEN SUBMITTED BY THE DEBTOR STATE AND  AGREED
 TO  BY EACH CLASS OF SUCH CREDITORS' CLAIMS DESIGNATED IN THE PLAN UNDER
 SUBDIVISION THREE OF THIS SECTION. THEREUPON, THE DEBTOR STATE SHALL  BE
 DISCHARGED  FROM  ALL CLAIMS INCLUDED IN THOSE CLASSES OF CLAIMS, EXCEPT
 AS PROVIDED IN THE PLAN.
   5. A CLASS OF CLAIMS HAS AGREED TO A  PLAN  IF  CREDITORS  HOLDING  AT
 LEAST  TWO-THIRDS  IN  AMOUNT  AND  MORE  THAN ONE-HALF IN NUMBER OF THE
 CLAIMS OF SUCH CLASS VOTING ON SUCH PLAN  AGREE  TO  THE  PLAN,  WITHOUT
 COUNTING CLAIMS OWNED BY THE DEBTOR STATE OR ENTITIES IT CONTROLS.
   6.  EACH  CLASS  OF  CLAIMS SHALL CONSIST OF CLAIMS AGAINST THE DEBTOR
 STATE THAT ARE EQUAL IN PRIORITY, PROVIDED THAT:
   (A) EQUAL PRIORITY CLAIMS NEED NOT ALL BE INCLUDED IN THE SAME CLASS;
   (B) CLAIMS OF  GOVERNMENTAL  OR  MULTI-GOVERNMENTAL  ENTITIES  HOLDING
 CLAIMS EACH SHALL BE CLASSED SEPARATELY;
   (C)  CLAIMS  THAT  ARE  GOVERNED BY THIS ARTICLE OR THE LAW OF ANOTHER
 JURISDICTION THAT IS SUBSTANTIALLY IN THE FORM OF THIS ARTICLE SHALL NOT
 BE CLASSED WITH OTHER CLAIMS; AND
   (D) THE FACT THAT A CLAIM ARISES UNDER, OR IS SUPPORTED  OR  EVIDENCED
 BY,  A JUDICIAL OR OTHER OFFICIAL DOMESTIC OR FOREIGN JUDGMENT SHALL NOT
 IN AND OF ITSELF MEAN THAT SUCH CLAIM IS NOT EQUAL IN PRIORITY TO  OTHER
 CLAIMS.
   § 227. FINANCING THE RESTRUCTURING. 1. SUBJECT TO SUBDIVISION THREE OF
 THIS  SECTION  THE  DEBTOR STATE SHALL HAVE THE RIGHT TO BORROW MONEY ON
 SUCH TERMS AND CONDITIONS AS IT DEEMS APPROPRIATE.
   2. THE DEBTOR STATE SHALL NOTIFY ALL OF ITS  KNOWN  CREDITORS  OF  ITS
 INTENTION TO BORROW UNDER SUBDIVISION ONE OF THIS SECTION, THE TERMS AND
 CONDITIONS  OF THE BORROWING, AND THE PROPOSED USE OF THE LOAN PROCEEDS.
 SUCH NOTICE SHALL ALSO DIRECT THOSE CREDITORS TO RESPOND  TO  THE  INDE-
 PENDENT  MONITOR WITHIN THIRTY DAYS AS TO WHETHER THEY APPROVE OR DISAP-
 PROVE OF SUCH LOAN.
   3. ANY SUCH LOAN SHALL BE APPROVED BY CREDITORS HOLDING AT LEAST  TWO-
 THIRDS  IN AMOUNT OF THE CLAIMS OF CREDITORS RESPONDING TO THE INDEPEND-
 ENT MONITOR WITHIN THAT THIRTY-DAY PERIOD.
   4. IN ORDER FOR THE PRIORITY OF REPAYMENT, AND CORRESPONDING  SUBORDI-
 NATION,  UNDER  SECTION  TWO  HUNDRED TWENTY-EIGHT OF THIS ARTICLE TO BE
 EFFECTIVE, ANY SUCH LOAN SHALL ADDITIONALLY  BE  APPROVED  BY  CREDITORS
 HOLDING AT LEAST TWO-THIRDS IN PRINCIPAL AMOUNT OF THE COVERED CLAIMS OF
 THE  CREDITORS RESPONDING TO THE INDEPENDENT MONITOR WITHIN THAT THIRTY-
 DAY PERIOD. CLAIMS SHALL BE DEEMED TO BE COVERED IF THEY ARE GOVERNED BY
 THIS ARTICLE OR BY THE LAW OF ANOTHER JURISDICTION THAT IS SUBSTANTIALLY
 IN THE FORM OF THIS ARTICLE.
 S. 2333                             6
 
   § 228. PRIORITY OF REPAYMENT. 1. THE DEBTOR STATE  SHALL  REPAY  LOANS
 APPROVED UNDER SECTION TWO HUNDRED TWENTY-SEVEN OF THIS ARTICLE PRIOR TO
 PAYING ANY OTHER CLAIMS.
   2. THE CLAIMS OF CREDITORS OF THE DEBTOR STATE ARE SUBORDINATED TO THE
 EXTENT  NEEDED  TO  EFFECTUATE  THE PRIORITY PAYMENT UNDER THIS SECTION.
 SUCH CLAIMS ARE NOT SUBORDINATED FOR ANY OTHER PURPOSE.
   3. THE PRIORITY OF PAYMENT,  AND  CORRESPONDING  SUBORDINATION,  UNDER
 THIS  SECTION  IS  EXPRESSLY  SUBJECT TO THE APPROVAL BY CREDITORS UNDER
 SUBDIVISION FOUR OF SECTION TWO HUNDRED TWENTY-SEVEN OF THIS ARTICLE.
   § 229. ADJUDICATION OF DISPUTES.  THE INDEPENDENT MONITOR MAY  REQUEST
 THAT  A  COURT  OF COMPETENT JURISDICTION APPOINT A REFEREE OR A SPECIAL
 MASTER TO MAKE RECOMMENDATIONS TO THE COURT REGARDING THE RESOLUTION  OF
 ANY DISPUTES ARISING UNDER A SECTION 223 CLAIM UNDER THIS ARTICLE.
   §  230.  RECOVERABILITY  OF  SECTION 230 CLAIMS. ANY SECTION 230 CLAIM
 INCURRED PRIOR TO THE DATE OF AN ELIGIBLE STATE'S APPLICATION TO PARTIC-
 IPATE IN ONE OR MORE INTERNATIONAL INITIATIVES SHALL ONLY  BE  RECOVERA-
 BLE:
   1. TO THE EXTENT THAT IT COMPORTS WITH BURDEN-SHARING STANDARDS;
   2. PROVIDED IT MEETS ROBUST DISCLOSURE STANDARDS, INCLUDING INTERCRED-
 ITOR  DATA SHARING AND A BROAD PRESUMPTION IN FAVOR OF PUBLIC DISCLOSURE
 OF MATERIAL TERMS AND CONDITIONS OF SUCH CLAIMS; AND
   3.  ONLY UP TO THE PROPORTION OF THE ELIGIBLE CLAIM  THAT  WOULD  HAVE
 BEEN  RECOVERABLE  BY  THE  UNITED  STATES  FEDERAL GOVERNMENT UNDER THE
 APPLICABLE INTERNATIONAL INITIATIVE IF THE UNITED STATES FEDERAL GOVERN-
 MENT  HAD BEEN THE CREDITOR HOLDING  THE  ELIGIBLE  CLAIM,  AND  WITHOUT
 REGARD TO DE MINIMIS CLAUSES.
   §  231.  APPLICATION; OPT IN. 1.  WHERE THIS ARTICLE APPLIES, IT SHALL
 OPERATE BOTH RETROACTIVELY AND PROSPECTIVELY AND, WITHOUT  LIMITING  THE
 FOREGOING,  SHALL  WITH  RESPECT  TO  SECTION  223  CLAIMS  OVERRIDE ANY
 CONTRACTUAL PROVISIONS THAT ARE INCONSISTENT WITH THE PROVISIONS OF THIS
 ARTICLE.  NOTWITHSTANDING THE FOREGOING, THE PROVISIONS OF THIS  ARTICLE
 SHALL  NOT OPERATE RETROACTIVELY AS TO DEBTOR STATES THAT ARE NOT SOVER-
 EIGN NATIONS.
   2. ANY CREDITORS OF A DEBTOR STATE  WHOSE  CLAIMS  ARE  NOT  OTHERWISE
 GOVERNED  BY  THIS  ARTICLE  MAY  CONTRACTUALLY OPT IN TO THIS ARTICLE'S
 TERMS, CONDITIONS, AND PROVISIONS.
   3. THE TERMS, CONDITIONS, AND PROVISIONS OF THIS ARTICLE  SHALL  APPLY
 TO  THE DEBTOR-CREDITOR RELATIONSHIP BETWEEN THE DEBTOR STATE AND CREDI-
 TORS OPTING IN  UNDER  SUBDIVISION  TWO  OF  THIS  SECTION  AS  IF  SUCH
 RELATIONSHIP  WERE GOVERNED BY THE LAWS OF NEW YORK STATE UNDER SUBDIVI-
 SION THREE OF SECTION TWO HUNDRED TWENTY-THREE OF THIS ARTICLE.
   § 232. SEVERABILITY. IF ANY  PROVISION OF THIS ARTICLE OR ITS APPLICA-
 TION TO ANY PERSON OR   CIRCUMSTANCE IS  HELD  INVALID,  THE  INVALIDITY
 SHALL  NOT AFFECT OTHER PROVISIONS OR APPLICATIONS OF THIS ARTICLE WHICH
 CAN BE GIVEN EFFECT WITHOUT THE INVALID PROVISION  OR  APPLICATION,  AND
 TO    THIS  END,  THE  PROVISIONS OF THIS ARTICLE ARE SEVERABLE. WITHOUT
 LIMITING THE FOREGOING, A DEBTOR STATE'S CHOICE TO HAVE  CLAIMS  COVERED
 AS  A SECTION 223 CLAIM SHALL BE VALID EVEN IF ITS CHOICE TO HAVE CLAIMS
 COVERED AS A SECTION 230 CLAIM OF THIS ARTICLE  WOULD  BE  INVALID,  AND
 VICE VERSA.
   § 3. This act shall take effect immediately.

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Senate Bill S2333

Sponsored By

Current Bill Status - In Senate Committee Banks Committee

co-Sponsors

2025-S2333 (ACTIVE) - Details

2025-S2333 (ACTIVE) - Summary

2025-S2333 (ACTIVE) - Sponsor Memo

2025-S2333 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2333

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Sponsored By

Current Bill Status - In Senate Committee Banks Committee

co-Sponsors

2025-S2333 (ACTIVE) - Details

2025-S2333 (ACTIVE) - Summary

2025-S2333 (ACTIVE) - Sponsor Memo

2025-S2333 (ACTIVE) - Bill Text download pdf

Comments