What's happening
This bill extends various financial provisions and deadlines related to New York City's bonds, notes, and fiscal oversight from 2019 to 2020 or later.
Why it matters
Allows New York City greater flexibility in managing its debt and finances by extending the timeframes for issuing certain types of bonds and notes, which can help the city respond to changing financial conditions or emergencies.
Ensures continued access to variable-rate bonds and modern financial instruments, which can potentially lower borrowing costs but also carry specific risks that require oversight and expertise.
Maintains state oversight and fiscal controls—such as approval from the State Comptroller and provisions related to the Financial Control Board—helping to safeguard the city's fiscal stability while offering some operational leeway.
Extends protections and guarantees to bondholders and other creditors, potentially reinforcing investor confidence in New York City’s financial commitments and supporting the city's creditworthiness.
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Who cares
New York City mayor and comptroller
The bill would extend the city's authority to use private bond sales and variable-rate borrowing into 2020, subject to existing conditions.
Bond investors and guarantors
The bill would extend eligibility for the state's pledge protecting financial oversight and debt-service safeguards to city bonds and notes issued before July 1, 2020.
New York State comptroller
The bill would extend the period in which certain private sales of city bonds require the comptroller's approval.
New York City capital project planners
The bill would extend through June 30, 2022, the city's exception to down-payment requirements for projects financed with bonds or notes.
Headline styles
Extend NYC Bond Authority
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Signed chap.75
- Delivered to governor
- Returned to senate
- Passed assembly
- Ordered to third reading rules cal.451
- Substituted for A6293B
- Referred to ways and means
- Returned to assembly
- Repassed senate
- Amended on third reading 4197b
- Vote reconsidered - restored to third reading
- Returned to senate
Show 10 earlier actions
- Recalled from assembly
- Referred to cities
- Delivered to assembly
- Passed senateVote 46–12
- Advanced to third reading
- 2nd report cal.
- 1st report cal.793
- Print number 4197a
- Amend and recommit to local government
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Extend NYC Bond Deadlines
Assembly Floor Calendar · Sponsor Helene Weinstein
Full text
5 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
4197--B Cal. No. 793
2019-2020 Regular Sessions
IN SENATE
March 4, 2019
Introduced by Sen. JACKSON -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee, ordered to first and second report, ordered to a third reading, passed by Senate and delivered to the Assembly, recalled, vote reconsidered, restored to third reading, amended and ordered reprinted, retaining its place in the order of third reading
AN ACT to amend the local finance law, in relation to the sale of bonds and notes of the city of New York, the issuance of bonds or notes with variable rates of interest, interest rate exchange agreements of the city of New York, the refunding of bonds, and… Show allHide
AN ACT to amend the local finance law, in relation to the sale of bonds and notes of the city of New York, the issuance of bonds or notes with variable rates of interest, interest rate exchange agreements of the city of New York, the refunding of bonds, and the down payment for projects financed by bonds; to amend the New York state financial emergency act for the city of New York, in relation to a pledge and agreement of the state; and to amend chapter 142 of the laws of 2004, amending the local finance law relating to interest rate exchange agreements of the city of New York and refunding bonds of such city, in relation to the effectiveness thereof
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. The opening paragraph of paragraph (a) of section 54.10 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
To facilitate the marketing of any issue of bonds or notes of the city of New York issued on or before June thirtieth, two thousand [nineteen] twenty, the mayor and comptroller of such city may, subject to the approval of the state comptroller and the limitations on private sales of bonds and notes, respectively, provided by law:
§ 2. The closing paragraph of paragraph a of section 54.90 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD10405-03-9
S. 4197--B 2
Notwithstanding the foregoing, whenever in the judgment of the finance board of the city of New York the interest of such city would be served thereby, the city of New York may without further approval issue bonds or notes, on or before July fifteenth, two thousand [nineteen] twenty, with interest rates that vary in accordance with a formula or procedure and are subject to a maximum rate of interest set forth or referred to in the bonds or notes and may provide the holders thereof with such rights to require the city or other persons to purchase such bonds or notes or renewals thereof from the proceeds of the resale thereof or otherwise from time to time prior to the final maturity of such bonds or notes as the finance board of the city of New York may determine and the city may resell, at any time prior to final maturity, any such bonds or notes acquired as a result of the exercise of such rights; provided, however, that at no time shall the total principal amount of bonds and notes issued by the city of New York pursuant to this paragraph (other than bonds and notes (1) bearing interest at rates and for periods of time that are specified without reference to future events or contingencies, or (2) described in section 136.00 of this article) exceed twenty-five percent of the limit prescribed by section 104.00 of this article.
§ 3. The opening paragraph of subdivision 1 of paragraph d of section 54.90 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
On or before July fifteenth, two thousand [nineteen] twenty the mayor and comptroller of the city of New York may:
§ 4. The opening paragraph of paragraph a of section 57.00 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
Bonds shall be sold only at public sale and in accordance with the procedure set forth in this section and sections 58.00 and 59.00 of this title, except as otherwise provided in this paragraph. Bonds may be sold at private sale to the United States government or any agency or instrumentality thereof, the state of New York municipal bond bank agency, to any sinking fund or pension fund of the municipality, school district or district corporation selling such bonds, or, in the case of sales by the city of New York prior to July first, two thousand [nineteen] twenty, also to the municipal assistance corporation for the city of New York or to any other purchaser with the consent of the mayor and the comptroller of such city and approval of the state comptroller, or, in the case of sales by the county of Nassau prior to December thirty-first, two thousand seven, also to the Nassau county interim finance authority with the approval of the state comptroller, or, in the case of sales by the city of Buffalo prior to June thirtieth, two thousand thirty-seven, also to the Buffalo fiscal stability authority with the approval of the state comptroller, or, in the case of bonds or other obligations of a municipality issued for the construction of any sewage treatment works, sewage collecting system, storm water collecting system, water management facility, air pollution control facility or solid waste disposal facility, also to the New York state environmental facilities corporation, or, in the case of bonds or other obligations of a school district or a city acting on behalf of a city school district in a city having a population in excess of one hundred twenty-five thousand but less than one million inhabitants according to the latest federal census, issued to finance or refinance the cost of school district capital facilities or school district capital equipment, as defined in section sixteen hundred seventy-six of the public authorities law, also to the dormitory authority of
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the state of New York. Bonds of a river improvement or drainage district established by or under the supervision of the department of environmental conservation may be sold at private sale to the state of New York as investments for any funds of the state which by law may be invested, provided, however, that the rate of interest on any such bonds so sold shall be approved by the water power and control commission and the state comptroller. Bonds may also be sold at private sale as provided in section 63.00 of this title. No bonds shall be sold on option or on a deferred payment plan, except that options to purchase, effective for a period not exceeding one year, may be given:
§ 5. Subdivision 3 of paragraph g of section 90.00 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
3. Outstanding bonds may, pursuant to a power to recall and redeem or with the consent of the holders thereof, be exchanged for refunding bonds (i) if the refunding bonds are to bear interest at a rate equal to or lower than that borne by the bonds to be refunded or (ii) if, in the case of the city of New York prior to July first, two thousand [nineteen] twenty, the annual payment required for principal and interest on the refunding bond is less than the annual payment required for principal and interest on the bond to be refunded, in each case such annual payments to be determined by dividing the total principal and interest payments due over the remaining life of the bond by the number of years to maturity of the bond or (iii) if the bonds to be refunded were issued by the city of New York after June thirtieth, nineteen hundred seventyeight and prior to July first, two thousand [nineteen] twenty and contain covenants referring to the existence of the New York state financial control board for the city of New York or any other covenants relating to matters other than the prompt payment of principal and interest on the obligations when due and the refunding bond omits or modifies any such covenant.
§ 6. Subdivision 8 of paragraph d of section 107.00 of the local finance law, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
8. Notwithstanding any other provision of law, the financing by the city of New York prior to July first, two thousand [nineteen] twenty-two of any object or purpose which has a period of probable usefulness determined by law by the issuance of any bonds or notes, including (i) the issuance of bonds or notes to obtain reimbursement for funds heretofore advanced for the object or purpose for which the bonds or notes are being issued, (ii) the issuance of bonds or notes to redeem notes previously issued for the object or purpose for which the bonds or notes are being issued or (iii) the issuance of bonds to refund bonds previously issued for the object or purpose for which bonds are being issued.
§ 7. Subdivision 1 of section 10-a of section 2 of chapter 868 of the laws of 1975, constituting the New York state financial emergency act for the city of New York, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
1. In the event that after the date on which the provisions of this act become operative, any notes or bonds are issued by the city prior to July 1, [2019] 2020, or any bonds are issued by a state financing agency, the state of New York hereby authorizes the city and authorizes and requires such state financing agency to include a pledge and agreement of the state of New York in any agreement made by the city or such state financing agency with holders or guarantors of such notes or bonds that the state will not take any action which will (a) substantially impair
S. 4197--B 4
the authority of the board during a control period, as defined in subdivision twelve of section two of this act as in effect on the date such notes or bonds are issued (i) to approve, disapprove, or modify any financial plan or financial plan modification, including the revenue projections (or any item thereof) contained therein, subject to the standards set forth in paragraphs a, c, d, e and f of subdivision one of section eight of this act as in effect on the date such notes or bonds are issued and paragraph b of such subdivision as in effect from time to time, (ii) to disapprove a contract of the city or a covered organization if the performance of such contract would be inconsistent with the financial plan or to approve or disapprove proposed short-term or longterm borrowing of the city or a covered organization or any agreement or other arrangement referred to in subdivision four of section seven of this act, or (iii) to establish and adopt procedures with respect to the deposit in and disbursement from the board fund of city revenues; (b) substantially impair the authority of the board to review financial plans, financial plan modifications, contracts of the city or the covered organizations and proposed short-term or long-term borrowings of the city and the covered organizations; (c) substantially impair the independent maintenance of a separate fund for the payment of debt service on bonds and notes of the city; (d) alter the composition of the board so that the majority of the voting members of the board are not officials of the state of New York elected in a state-wide election or appointees of the governor; (e) terminate the existence of the board prior to the time to be determined in accordance with section thirteen of this act as in effect on the date such notes or bonds are issued; (f) substantially modify the requirement that the city's financial statements be audited by a nationally recognized independent certified public accounting firm or consortium of firms and that a report on such audit be furnished to the board; or (g) alter the definition of a control period set forth in subdivision twelve of section two of this act, as in effect on the date such notes or bonds are issued, or substantially alter the authority of the board, as set forth in said subdivision to reimpose or terminate a control period; provided, however, that the foregoing pledge and agreement shall be of no further force and effect if at any time (i) there is on deposit in a separate trust account with a bank, trust company or other fiduciary sufficient moneys or direct obligations of the United States or obligations guaranteed by the United States, the principal of and/or interest on which will provide moneys to pay punctually when due at maturity or prior to maturity by redemption, in accordance with their terms, all principal of and interest on all outstanding notes and bonds of the city or such state financing agency containing this pledge and agreement and irrevocable instructions from the city or such state financing agency to such bank, trust company or other fiduciary for such payment of such principal and interest with such moneys shall have been given, or (ii) such notes and bonds, together with interest thereon, have been paid in full at maturity or have otherwise been refunded, redeemed, defeased, or discharged; and provided further that the foregoing pledge and agreement shall be of full force and effect upon its inclusion in any agreement made by the city or state financing agency with holders or guarantors of such notes or bonds.
Upon payment for such obligations issued pursuant to this act by the original and all subsequent holders inclusion of the foregoing covenant shall be deemed conclusive evidence of valuable consideration received by the state and city for such covenant and of reliance upon such pledge and agreement by any such holder. The state hereby grants any such bene-
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fited holder the right to sue the state in a court of competent jurisdiction and enforce this covenant and agreement and waives all rights of defense based on sovereign immunity in such an action or suit.
§ 8. Section 5 of chapter 142 of the laws of 2004, amending the local finance law relating to interest rate exchange agreements of the city of New York and refunding bonds of such city, as amended by chapter 91 of the laws of 2018, is amended to read as follows:
§ 5. This act shall take effect immediately, provided, that section three of this act shall expire and be deemed repealed July 15, [2019] 2020.
§ 9. Separability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section or part thereof directly involved in the controversy in which such judgment shall have been rendered.
§ 10. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the local finance law, in relation to the sale of bonds and notes of the city of New York, the issuance of bonds or notes with variable rates of interest, interest rate exchange agreements of the city of New York, the refunding of bonds, and the down payment for projects financed by bonds; to amend the New York state financial emer- gency act for the city of New York, in relation to a pledge and agree- ment of the state; and to amend chapter 142 of the laws of 2004, amend- ing the local finance law relating to interest rate exchange agreements of the city of New York and refunding bonds of such city, in relation to the effectiveness thereof
Purpose
This act would provide a three-year extension to provisions of the Local Finance Law that includes extensions of essential borrowing programs such as Negotiated Sale of Bonds, Variable Rate Debt Authority, Swap Enhancement Authority, and Present Value Savings Analysis.
Summary of provisions
Section 1 amends § 54.10(a) of the Local Finance Law to extend until 2020 the provisions of such section authorizing the City of New York to sell its obligations through negotiated agreement, to provide for compensation for services rendered in connection with the private sale of obligations by selling such obligations at a discount, to provide for redemption of its obligations prior to maturity at prices and pursuant to terms determined by the City, and to include the costs of a negoti- ated underwriting and other costs of issuance of its obligations in the cost of the object or purpose being financed by such obligations.
Read the full memo (1,060 words)
Section 2 amends Local Finance Law § 54.90(a) to extend through July 15, 2020, the authorization for the City to issue bonds or notes with vari- able rates of interest.
Section 3 amends Local Finance Law § 54.90(d)(1) to extend through July 15, 2020, the authorization for the City to enter into interest rate exchange agreements (commonly referred to as "swaps") or other similar agreements.
Section 4 amends Local Finance Law § 57.00(a) to extend until 2020 the City's authority to sell bonds at private sale.
Section 5 amends Local Finance Law § 90.00(g)(3) to extend until 2020 the City's authorization to exchange refunding bonds for outstanding bonds under certain circumstances.
Section 6 amends Local Finance Law § 107.00(d)(8) to extend until 2022 the inapplicability of the down payment provisions of that section to certain bonds and notes of the City.
Section 7 amends § 10-a(1) of the New York State Financial Emergency Act for the City of New York to extend until 2020 the authority of the City to include the pledge and agreement of the State in agreements with holders or guarantors of City obligations. Section 8 amends § 5 of Chapter 142 of the Laws of 2004 to extend until 2020 the amendment to Local Finance Law § 90.10(b)(2)(a) providing that for purposes of calculating present value savings in a refund trans- action, the interest payments on variable rate bonds may be the fixed rate payable by the City in a related interest rate exchange agreement, if any, or as found by the Finance Board of the City of New York; and in the case of refunding of variable rate bonds with variable rate bonds, if determined by the Finance Board, present value savings would not need to be demonstrated.
Section 9 provides that if a court of competent jurisdiction declares any part of this act to be invalid, such declaration shall not affect, impair, or invalidate the remaining parts or sections of this act.
Section 10 is the effective date.
Justification
This act includes the extension of several elements that are instru- mental in ensuring that the City of New York has efficient and cost-ef- fective access to the capital markets. Since these provisions of the Local Finance Law were enacted in 1987, the Legislature has extended them annually to assist in the marketability of City bonds, thereby authorizing the sale of the bonds consistent with current market prac- tices. This network of legislation has enabled the City to continue to sell its obligations in the public credit markets during both stable and difficult times. If the City is to continue to carry out its large capi- tal program, it is essential that it retain its ability to utilize modem financing techniques. Furthermore, because the federal government recently impaired the ability of municipalities to reduce debt service costs by eliminating second advanced refundings of tax-exempt debt, it is crucial that the City maintain every tool available to it to assist in the efficient financing of its capital program.
The size of the City's capital program and the unpredictability of market conditions make the ability to sell debt through negotiated, rather than competitive, sales crucial to the City. Furthermore, the ability to enter into negotiated sales enhances the City's ability to sell its bonds through MWBE underwriters, which often have lower market capitalization that inhibits their ability to participate in competitive sales.
By extending through July 15, 2020, the authorization of the City to enter into interest rate exchange agreements or "swaps," whether or not relating to variable-rate bonds, the Legislature would be confirming the utility of these agreements, which it recognized when it created this swap authorization in Chapter 93 of the Laws of 2002.
With respect to interest on variable rate bonds used in a refunding, by extending through July 15, 2020, the amendment made to Local Finance Law § 90.10(b)(2)(a), the Legislature would enable the City to demonstrate present value savings by permitting the rate on variable rate bonds to be the fixed rate payable in a related interest rate exchange agreement or as found by the Finance Board of the City of New York. Furthermore, this would extend the City's ability to refund variable rate bonds with other variable rate bonds without reference to the present value savings test, which should not be applicable to the refinancing of bonds that trade at par value. This act facilitates the financing of the City's capital program with no offsetting cost. Consequently, it is simply pointless to require extend- ing this legislation on an annual basis.
Legislative history
New bill.
State and local fiscal implications
To be determined.
Effective date
This act shall take effect immediately.
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