A03130 Summary:

BILL NOA03130
 
SAME ASSAME AS S00679
 
SPONSORRa (MS)
 
COSPNSRBarclay, Blankenbush, Giglio JM, Thiele, Hawley, Brabenec
 
MLTSPNSRMcDonough
 
Amd Art 7 §11, Constn
 
Prohibits certain borrowing arrangements; relates to the authorization for the contracting of debt; relates to the manner by which payments are appropriated and paid.
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A03130 Committee Votes:

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A03130 Floor Votes:

There are no votes for this bill in this legislative session.
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A03130 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3130
 
SPONSOR: Ra (MS)
  TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing amendments to article 7 of the constitution, in relation to the prohibition of certain borrowing arrangements and the authorization for the contracting of debt   PURPOSE OR GENERAL IDEA OF BILL: This resolution would prohibit the practice of "backdoor borrowing" and authorize State revenue debt, and limits the amount of revenue debt that may be issued in a fiscal year to 35 percent of the capital budget for that year.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 amends section 11 of article VII of the State Constitution to prohibit "back-door borrowing," authorize State revenue debt, and limit the amount of State revenue debt to 35 percent of the State's capital expenditures or up to 50 percent in a state fiscal year where State revenue declines. Section 2 provides for the effective date.   JUSTIFICATION: The State currently has over $60.9 billion in State-supported debt as reported in the Mid-Year Update to the Financial Plan which was released in November 2022.This amount is projected to increase by over $8 billion to total $69.04 billionin FY24. During this same period, voter-approved debt will only increase by $465 million for a total of $2.3 billion. This means that over 96% of the State's outstanding debt has been issued by Public Authorities and is considered "back-door borrowing" or without voter-approval. Looking to the future, the State's debt is projected to increase by $27 billion by 2026-27 or by 44%. Out of the $27billion, only $1.1 billion will be voter-approved. The State has circumvented the need to get voter-approval on the issu- ance of debt by allowing public authorities or public benefit corpo- rations to issue debt on the State's behalf, also known as "back-door borrowing". The amount of "back-door borrowing" by state and local authorities in 2022-23 is $58.6 billion and the total amount of debt issued by these entities in FY21 was $291.7 billion. This bill would prohibit the use of public authorities to issue debt on behalf of the State and also limit the amount and scope of debt issuance.   PRIOR LEGISLATIVE HISTORY: A.6217 of 2021-2022 (Ra) Held for consideration in Ways and Means A.6844 of 2017-2018 (Oaks) Held for consideration in Ways and Means A.3758 of 2015-2016 (Tedisco) Held for consideration in Ways and Means A.6588 of 2013-2014 (Tedisco) Referred to Ways and Means A.1517 of 2011-2012 (Tedisco) Held for consideration in ways and Means A.4133 of 2009-2010 (Tedisco) Referred to Ways and Means A.5577 of 2007-2008 (Cole)referred to Ways and Means A.11646 of 2006 (Cole) Referred to Ways and Means A.545 of 2005 (Nesbitt) Opinion referred to Judiciary   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: This bill will limit the amount of debt issued by the State, and will result in significant debt service savings.   EFFECTIVE DATE: Resolved (if the Senate concur), That the foregoing amendments be referred to the first regular legislative session convening after the next succeeding general election of members of the assembly, and, in conformity with section 1 of article 19 of the constitution, be published for 3 months previous to the time of such election.
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A03130 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3130
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 2, 2023
                                       ___________
 
        Introduced  by  M. of A. RA, BARCLAY, BLANKENBUSH, J. M. GIGLIO, THIELE,
          HAWLEY, BRABENEC -- Multi-Sponsored by -- M. of A. McDONOUGH  --  read
          once and referred to the Committee on Ways and Means
 
                    CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY
 
        proposing  amendments  to  article 7 of the constitution, in relation to
          the prohibition of certain borrowing  arrangements  and  the  authori-
          zation for the contracting of debt
 
     1    Section 1. Resolved (if the Senate concur), That section 11 of article
     2  7 of the constitution be amended to read as follows:
     3    §  11. 1. Except the debts or refunding debts specified in sections 9,
     4  10 and 13 of this article, [no debt shall be hereafter contracted by  or
     5  in  behalf  of the state, unless] as authorized in subdivision 2 or 3 of
     6  this section, or as expressly provided for elsewhere in  this  constitu-
     7  tion,  the  state  shall  not  enter into any financing or other similar
     8  arrangement, whether by statute, contract, lease, or otherwise,  whereby
     9  the  state  agrees to make payments which will be used directly or indi-
    10  rectly, for the payment of interest, installments of principal, contrib-
    11  utions to sinking funds, or related payments on indebtedness  issued  or
    12  contracted  by  any state agency, municipality, individual, or public or
    13  private corporation for state purposes or to  finance  grants  or  loans
    14  made  or  to  be  made by or on behalf of the state for any purpose. The
    15  restrictions in this subdivision shall apply whether or  not  the  obli-
    16  gation of the state to make such payments is subject to appropriation or
    17  is otherwise contingent.
    18    2.  The  state  may  contract debt which is secured by a pledge of the
    19  full faith and credit of the state if such debt shall be  authorized  by
    20  law, for some single capital work or purpose, to be distinctly specified
    21  therein[.  No];  provided  that  no  such law shall take effect until it
    22  shall, at a general election, have been submitted  to  the  people,  and
    23  have  received  a  majority  of all the votes cast for and against it at
    24  such election nor shall it be submitted to  be  voted  on  within  three
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD89034-01-3

        A. 3130                             2
 
     1  months  after its passage nor at any general election when any other law
     2  or any bill shall be submitted to be voted for or against.
     3    3.  The  state  may also contract debt, in a manner prescribed by law,
     4  which shall be secured by a pledge of specific revenues  of  the  state.
     5  The  legislature shall, by law, identify the capital works or purpose to
     6  be financed with such debt. Revenues in excess of the required  payments
     7  of  interest  and  installment  payments  of principal, contributions to
     8  sinking funds, and other payments relating to such debt  shall  be  made
     9  available for such other purposes, as provided by law.
    10    4.  The  state may not contract debt pursuant to subdivision 3 of this
    11  section during any single fiscal year in excess of  thirty-five  percent
    12  of  the total amount of capital works in such fiscal year, provided that
    13  the limit may be increased to fifty percent for any year in which  total
    14  state  revenues  decline,  excluding  declines caused by a change in the
    15  rate of taxation, by two percent or more. The limit shall be reduced  to
    16  forty-five  percent  of  the  total amount of capital works in the first
    17  year succeeding a year when revenues decline by two percent or more, and
    18  to forty percent in the second year  succeeding  a  year  when  revenues
    19  decline  by  two  percent or more. The limit shall return to thirty-five
    20  percent of the total amount of capital works for  all  other  succeeding
    21  years.
    22    5. The legislature may, at any time [after the approval of such law by
    23  the  people], if no debt shall have been contracted in pursuance [there-
    24  of], of a particular law authorized under subdivision 2  or  3  of  this
    25  section  repeal  [the  same]  such  law authorizing the issuance of such
    26  debt; and may at any time, by law, forbid the contracting of any further
    27  debt or liability under such law.
    28    6. No debt may be contracted pursuant to subdivision 2 or  3  of  this
    29  section, except to finance capital works or purposes.
    30    7.  The  state may contract debt to refund debt contracted pursuant to
    31  subdivision 2  or  3  of  this  section  provided  such  refundings  are
    32  conducted  in accordance with the provisions of section 13 of this arti-
    33  cle.
    34    8. The provisions of subdivision 1 of this section shall not  prohibit
    35  the  state  from  providing  monies for any of the obligations hereafter
    36  prohibited  by  said  subdivision  1,  including  payment  of  interest,
    37  installment  payments  of  principal, contributions to sinking funds, or
    38  related payments or obligations to  the  extent  such  obligations  were
    39  contracted for or otherwise incurred prior to the effective date of such
    40  subdivision  or  on  obligations  issued  to  refund  such  obligations,
    41  provided such refundings are conducted in accordance with the provisions
    42  of section 13 of this article.
    43    § 2. Resolved (if the Senate concur), That the foregoing amendment  be
    44  referred  to  the  first regular legislative session convening after the
    45  next succeeding general election of members of  the  assembly,  and,  in
    46  conformity  with  section  1  of  article  19  of  the  constitution, be
    47  published for 3 months previous to the time of such election.
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