Amends certain provisions of the New York state financial emergency act for the city of New York in relation to bond anticipation notes

6 Co-sponsors

• Vivian Cook
• Keith L.T. Wright
• Jonathan Bing
• Adam Clayton Powell IV
• Adriano Espaillat
• Micah Kellner

1 Multi-sponsor

• Daniel O'Donnell

BILL NUMBER:A8617

Title of bill

An act to amend the New York state financial emergency act for the city of New York and the New York city charter, in relation to bond anticipation notes

Summary of provisions

This bill would amend subdivision c of section 9-b of the New York State Financial Emergency Act for the City of New York, section 2 of chapter 868 of the Laws of 1975, and paragraph (3) of subdivision h of section 266 of the New York City Charter to require that bond anticipation notes issued by the City of New York mature no later than one year after their date of issuance and permit such notes to be renewed for a period not to exceed two years from the date of original issue, or such longer period as may be permitted for bond anticipation notes of the State.

Justification

When the New York State Financial Emergency Act for the City of New York (the "FEA") was enacted 30 years ago, it limited the final maturity of bond anticipation notes issued by the City to six months following the date of issuance. That limitation was incorporated into the New York City Charter by the Charter revision of 2005. Both provisions are unnecessary in 2009 when City borrowing is expressly limited under applicable law to projects that are properly included in the City's capital budget. During the current global financial, liquidity and credit crisis, the City needs all the financing alternatives provided for under the Local Finance Law in order to be able to effectively access capital markets to fund necessary infrastructure improvements, such as bridges, roads and schools. The FEA's limitation of the term of bond anticipation notes to six months, with renewal permitted only for another six months, imposes constraints that would render such notes extremely difficult to sell in the current market. The constraints on the final maturity of an issue of bond anticipation notes set forth in the State Finance Law apply to bonds of the State and would, if this bill is enacted, apply also to the City. Those constraints, together with the other limitations on borrowing set forth in the Local Finance Law, the FEA and the City Charter, provide appropriate protection against potential abuse and needed financing flexibility for the City currently enjoyed by the State.

Fiscal implications

None to the State

Effective date

Immediately