A03208 Summary:

BILL NOA03208
 
SAME ASSAME AS S06527
 
SPONSORMcDonald
 
COSPNSRWoerner, Stirpe, Fahy, Dickens, Thiele, Richardson
 
MLTSPNSRSayegh
 
Amd 3-a, Gen Muni L; amd 157, Pub Hous L; amd 16, St Fin L; amd 1, Chap 585 of 1939
 
Relates to interest rates on judgments.
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A03208 Actions:

BILL NOA03208
 
01/22/2021referred to judiciary
01/05/2022referred to judiciary
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A03208 Committee Votes:

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A03208 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A3208
 
SPONSOR: McDonald
  TITLE OF BILL: 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 judg- ments and accrued claims, in relation to interest rates on judgments   PURPOSE OR GENERAL IDEA OF BILL: To provide an equitable solution regarding interest rates paid by munic- ipal governments that is on par with the rate on federal judgments.   SUMMARY OF PROVISIONS: Amends the General Municipal Law to limit the interest rate for judg- ments paid by a municipal corporation upon a judgment or accrued claim against it to nine percent and six percent a year for certain judgments and to align calculation of the rate with market rates. Amends the public housing law and the state finance law to align the calculation of the interest rate with the market rate and caps the rate at nine percent.   JUSTIFICATION: The current statutory interest rate on judgments is nine percent per year in New York State. A guaranteed return of a 9% interest rate results in prolonged litigation and inflated costs to municipalities. The Federal government pays a post judgment rate that is based on the market rate. As New York State and especially our upstate communities work to share services, cut unnecessary costs, invest in economic devel- opment, repair aging infrastructure, and grow their populations, adjust- ing for a fluctuating market is a commonsense solution. There is no question that it is fair for interest to be applied on a judgment or claim against the party who does not prevail. The issue at hand that must be addressed is the amount of interest that is applied being a static percentage that does not account for market forces.   PRIOR LEGISLATIVE HISTORY: 2018- A.9879 2019-2020: A.3875   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: Savings but no cost.   EFFECTIVE DATE: This act shall take effect on the first of April next succeeding the date upon which it shall have become a law.
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A03208 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3208
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 22, 2021
                                       ___________
 
        Introduced by M. of A. McDONALD -- Multi-Sponsored by -- M. of A. SAYEGH
          -- 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  judg-
          ments and accrued claims, in relation to interest rates on judgments
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivisions 1 and 2 of section 3-a of the general  munici-
     2  pal  law, subdivision 1 as amended by chapter 4 of the laws of 1991, and
     3  subdivision 2 as amended by chapter 777 of the laws of 1978, are amended
     4  to read as follows:
     5    1. Except as provided in subdivisions  two,  four  and  five  of  this
     6  section, the rate of interest to be paid by a municipal corporation upon
     7  any  judgment  or  accrued claim against the municipal corporation shall
     8  [not exceed] be calculated at a rate equal to  the  weekly  average  one
     9  year  constant  maturity  treasury  yield,  as published by the board of
    10  governors of the federal reserve system, for the calendar week preceding
    11  the date of the entry of the judgment awarding  damages.  In  no  event,
    12  however,  shall  an  authority pay a rate of interest on any judgment or
    13  accrued claim exceeding nine per centum per annum.
    14    2. The rate of interest to be paid upon any judgment or accrued  claim
    15  against   the   municipal   corporation   arising  out  of  condemnation
    16  proceedings or action to recover damages for wrongful death  shall  [not
    17  exceed]  be  calculated  at  a rate equal to the weekly average one year
    18  constant maturity treasury yield, as published by the board of governors
    19  of the federal reserve system, for the calendar week preceding the  date
    20  of  the  entry  of  the judgment awarding damages. In no event, however,
    21  shall an authority pay a rate of interest on  any  judgment  or  accrued
    22  claim exceeding six per centum per annum.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD01863-01-1

        A. 3208                             2
 
     1    §  2.  Subdivision  5  of  section  157  of the public housing law, as
     2  amended by chapter 681 of the laws  of  1982,  is  amended  to  read  as
     3  follows:
     4    5.  The  rate of interest to be paid by an authority upon any judgment
     5  or accrued claim against the authority shall [not exceed] be  calculated
     6  at  a rate equal to the weekly average one year constant maturity treas-
     7  ury yield, as published by the board of governors of the federal reserve
     8  system, for the calendar week preceding the date of  the  entry  of  the
     9  judgment  awarding damages. In no event, however, shall an authority pay
    10  a rate of interest on any judgment or accrued claim exceeding  nine  per
    11  centum per annum.
    12    § 3. Section 16 of the state finance law, as amended by chapter 681 of
    13  the laws of 1982, is amended to read as follows:
    14    §  16.  Rate  of  interest on judgments and accrued claims against the
    15  state.  The rate of interest to be paid by the state upon  any  judgment
    16  or accrued claim against the state shall [not exceed] be calculated at a
    17  rate  equal  to  the  weekly average one year constant maturity treasury
    18  yield, as published by the board of governors  of  the  federal  reserve
    19  system,  for  the  calendar  week preceding the date of the entry of the
    20  judgment awarding damages. In no event, however, shall an authority  pay
    21  a  rate  of interest on any judgment or accrued claim exceeding nine per
    22  centum per annum.
    23    § 4. Section 1 of chapter 585 of the laws of  1939,  relating  to  the
    24  rate  of  interest  to be paid by certain public corporations upon judg-
    25  ments and accrued claims, as amended by chapter 681 of the laws of 1982,
    26  is amended to read as follows:
    27    Section 1. The rate of interest to be paid  by  a  public  corporation
    28  upon  any judgment or accrued claim against the public corporation shall
    29  [not exceed] be calculated at a rate equal to  the  weekly  average  one
    30  year  constant  maturity  treasury  yield,  as published by the board of
    31  governors of the federal reserve system, for the calendar week preceding
    32  the date of the entry of the judgment awarding  damages.  In  no  event,
    33  however,  shall  an  authority pay a rate of interest on any judgment or
    34  accrued claim exceeding nine per centum  per  annum.  The  term  "public
    35  corporation"  as  used  in  this act shall mean and include every corpo-
    36  ration created for the construction of public improvements, other than a
    37  county, city, town, village, school district  or  fire  district  or  an
    38  improvement district established in a town or towns, and possessing both
    39  the  power  to  contract  indebtedness and the power to collect rentals,
    40  charges, rates or fees for services or facilities furnished or supplied.
    41    § 5. This act shall take effect on the first of April next  succeeding
    42  the date upon which it shall have become a law.
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