What's happening
This bill changes the interest rate on judgments against New York public entities to a market-based Treasury yield, capped at 9% (or 6% for condemnation/wrongful death cases).
Why it matters
Aligns Interest Rates with Market Conditions. By tying the interest rate on judgments to the one-year Treasury yield, the bill makes the cost of delayed payments by public entities more responsive to current economic reality, rather than relying on outdated fixed rates.
Potentially Reduces Payouts from Taxpayer-Funded Entities. In periods of low Treasury yields, public entities (like cities, housing authorities, or the state) will pay less interest on judgments, possibly leading to significant savings for government budgets and, indirectly, for taxpayers.
Limits Financial Uncertainty for Both Sides. The cap (9% for most cases, 6% for condemnation/wrongful death) ensures that even in times of high interest rates, public entities are protected from runaway interest costs, while plaintiffs are protected from rates dropping to zero.
May Affect Settlement Incentives and Litigation Strategies. With a market-based (and likely lower) interest rate, there may be less pressure on public entities to settle quickly, potentially prolonging litigation and delaying payment to claimants, especially when market rates are low.
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Municipal governments
The bill would tie interest on judgments and accrued claims against them to the prior calendar week’s average one-year Treasury yield, with separate provisions for condemnation and wrongful death claims.
Public housing authorities
Interest on judgments and accrued claims against them would follow the Treasury-based formula, subject to a nine percent annual cap.
New York State and public improvement corporations
The bill would replace their existing interest-rate provisions for judgments and accrued claims with a Treasury-based calculation.
People pursuing claims against government entities
The new formula would determine interest on their awards, including municipal condemnation and wrongful death claims covered by a six percent annual cap.
Headline styles
Change Interest on Judgments
Plain English, a few words. Used as the page title.
Sponsors
Assembly Member · Assembly District 108
1 Co-sponsor
1 Multi-sponsor
History
- Referred to judiciary
- Referred to judiciary
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3875
2019-2020 Regular Sessions
IN ASSEMBLY
January 31, 2019
Introduced by M. of A. McDONALD -- read once and referred to the Committee on Judiciary
AN ACT to amend the general municipal law, the public housing law, the state finance law and chapter 585 of the laws of 1939, relating to the rate of interest to be paid by certain public corporations upon judgments and accrued claims, in relation to interest rates on judgments
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivisions 1 and 2 of section 3-a of the general municipal law, subdivision 1 as amended by chapter 4 of the laws of 1991, and subdivision 2 as amended by chapter 777 of the laws of 1978, are amended to read as follows:
1. Except as provided in subdivisions two, four and five of this section, the rate of interest to be paid by a municipal corporation upon any judgment or accrued claim against the municipal corporation shall [not exceed] be calculated at a rate equal to the weekly average one year constant maturity treasury yield, as published by the board of governors of the federal reserve system, for the calendar week preceding the date of the entry of the judgment awarding damages. In no event, however, shall an authority pay a rate of interest on any judgment or accrued claim exceeding nine per centum per annum.
2. The rate of interest to be paid upon any judgment or accrued claim against the municipal corporation arising out of condemnation proceedings or action to recover damages for wrongful death shall [not exceed] be calculated at a rate equal to the weekly average one year constant maturity treasury yield, as published by the board of governors of the federal reserve system, for the calendar week preceding the date of the entry of the judgment awarding damages. In no event, however, shall an authority pay a rate of interest on any judgment or accrued claim exceeding six per centum per annum.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00668-01-9
A. 3875 2
§ 2. Subdivision 5 of section 157 of the public housing law, as amended by chapter 681 of the laws of 1982, is amended to read as follows:
5. The rate of interest to be paid by an authority upon any judgment or accrued claim against the authority shall [not exceed] be calculated at a rate equal to the weekly average one year constant maturity treasury yield, as published by the board of governors of the federal reserve system, for the calendar week preceding the date of the entry of the judgment awarding damages. In no event, however, shall an authority pay a rate of interest on any judgment or accrued claim exceeding nine per centum per annum.
§ 3. Section 16 of the state finance law, as amended by chapter 681 of the laws of 1982, is amended to read as follows:
§ 16. Rate of interest on judgments and accrued claims against the state. The rate of interest to be paid by the state upon any judgment or accrued claim against the state shall [not exceed] be calculated at a rate equal to the weekly average one year constant maturity treasury yield, as published by the board of governors of the federal reserve system, for the calendar week preceding the date of the entry of the judgment awarding damages. In no event, however, shall an authority pay a rate of interest on any judgment or accrued claim exceeding nine per centum per annum.
§ 4. Section 1 of chapter 585 of the laws of 1939, relating to the rate of interest to be paid by certain public corporations upon judgments and accrued claims, as amended by chapter 681 of the laws of 1982, is amended to read as follows:
Section 1. The rate of interest to be paid by a public corporation upon any judgment or accrued claim against the public corporation shall [not exceed] be calculated at a rate equal to the weekly average one year constant maturity treasury yield, as published by the board of governors of the federal reserve system, for the calendar week preceding the date of the entry of the judgment awarding damages. In no event, however, shall an authority pay a rate of interest on any judgment or accrued claim exceeding nine per centum per annum. The term "public corporation" as used in this act shall mean and include every corporation created for the construction of public improvements, other than a county, city, town, village, school district or fire district or an improvement district established in a town or towns, and possessing both the power to contract indebtedness and the power to collect rentals, charges, rates or fees for services or facilities furnished or supplied.
§ 5. This act shall take effect on the first of April next succeeding the date upon which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.