Relates to the authorization of debt in times of public emergency; limits the total amount of state debt; establishes a debt management board; relates to the refunding of state debts.
TITLE OF BILL: CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing amendments to article 7 of the constitution, in relation to the authorization of debt in times of public emergency, a limit on the total amount of state debt, the establishment of a debt management board, and refunding of state debts
PURPOSE OF BILL: This proposed constitutional amendment allows for emergency borrowing in times of public emergency, prohibits "back-door borrowing," limits total State debt to no more than 5% of total personal income in the State, and establishes a Debt Management Board to prescribe an annual Debt Affordability Level.
SUMMARY OF SPECIFIC PROVISIONS: Section 1 of the resolution proposes an amendment of section 10 of article 7 of the Constitution to add disasters, including those caused by acts of terrorism, to the existing list of purposes for which debt may be incurred on an emergency basis. Emergency borrowing would, however, require the approval of the Governor, the Comptroller, the Attorney General, and two-thirds of the Senate and two-thirds of the Assembly.
The amendment prescribes a procedure for the Governor to propose emergency borrowing and for the Comptroller, the Attorney General, and the Senate and the Assembly to give their approval or disapproval.
Section 2 eliminates "back-door borrowing" and, effective with State fiscal year 2015-16, establishes a cap on the total outstanding principal amount of State debt that would be equivalent to 5% of the total personal income in the State. Except for short-term revenue anticipation notes permitted by section 9 of Article 7 of the Constitution, emergency borrowing permitted by section 10 of Article 7, and refundings permitted by section 13 of Article 7, no indebtedness could be incurred for State purposes or to finance State grants unless the debt falls below the 5% cap. To eliminate "back-door borrowing," this section defines State debt to include debt supported by any financing arrangement whereby the State agrees to make payments which will be used, directly or indirectly, for the payment of principal, interest, or related payments on indebtedness incurred or contracted by the State itself for any purpose, or by any State agency, municipality, individual, public or private corporation or any other entity for State capital or operating purposes or to finance grants, loans or other assistance payments made or to be made by or on behalf of the State for any purpose. Among other provisions, the prohibition will apply (i) whether or not the obligation of the State to make payments is subject to appropriation or is otherwise contingent, or (ii)whether or not
debt service is to be paid from a revenue stream transferred by the State to another party that is responsible for making such payments.
The amendment also allows up to 5 bond acts to be presented to the voters at one time.
The amendment requires the establishment of a Debt Management Board, consisting of the Governor, the Comptroller, and a third person to be selected jointly by the Governor and the Comptroller. The Debt Management Board will have the duty of prescribing a Debt Affordability Level at an appropriate amount to prevent overburdening present or future generations, and the Debt Affordability Level will be binding on the State budget for the next fiscal year and will forecast a level to be used as benchmark in planning the 2 succeeding fiscal years. Once the 5% constitutional debt limit is in effect, the Debt Affordability Level must be set below it.
Bond issuances in the aggregate amount of $1 billion a year, or 3% of the amount determined to be equal to 5% of total personal income in the State, whichever is greater, would be permitted without voter approval, but only if the total outstanding principal amount of State debt resulting from such an issue would not exceed either the 5% cap or the Debt Affordability Level.
The amendment requires that, with the exception of refundings and short term notes and emergency borrowing permitted by sections 9 and 10 of Article 7, respectively, all future State debt will be permitted only for capital purposes. Except for constitutionally guaranteed debt, all new debt, and most refunding debt, will be required to be issued by the State Comptroller.
The amendment also prohibits, after its effective date, the issuance of any debt supported by financing arrangements where the State's obligation to make payments that are to be used for debt service is conditioned upon the insufficiency of other revenues available for the payment of debt service. The amendment also changes section 13 of Article 7 to prohibit any refunding that results in dissavings in any year.
JUSTIFICATION: Debt reform is one of the most important challenges facing New York State. The future of the State's finances depends in large measure on its ability to manage debt in a way that is disciplined and effective. Debt reform must impose meaningful caps to ensure that future debt is affordable. Since 1990, outstanding debt has grown from $14.4 billion to $45.4 billion in 2004, representing a 215 percent increase. From 1996 to 2001, while experiencing unprecedented surpluses, the State continued to borrow rather than utilizing surplus dollars and responsibly paying for capital expenditures through more pay-as-you go (PAYGO) spending. New Yorkers bear one of the highest debt burdens in the country. New York is ranked second only to California in total debt outstanding.
According to Moody's 2004 State Debt Medians, New York is fourth highest in debt per capita just behind Connecticut, Massachusetts and Hawaii. New York's $2,420 debt per capita is over two and one-half times the national average of $944. According to the U.S. Census, New York ranks second only to Alaska for state and local combined debt per capita. This proposed constitutional amendment establishes strict limits on debt. All financing arrangements in which the State agrees, even indirectly, to make payments on indebtedness incurred by the State or by a municipality, public authority or private corporation, or other entity on behalf of the State would be subject to a cap equal to 5% of total personal income of the State, beginning in 2014. Additionally, a new Debt Management Board would annually prescribe a Debt Affordability Level, and no new debt could be authorized or issued if it would cause the Debt Affordability Level to be exceeded. The dual restrictions would close loopholes in the existing statutes governing debt and assure long-term planning and affordability of the State's debt service burden. "Back-door borrowing", or borrowing outside of constitutional strictures, has been used by New York State to circumvent the requirement for public referendum. As of March 31, 2004, "backdoor borrowing" accounted for approximately 92 percent of the $45 billion in outstanding State supported obligations. Only $3.8 billion was approved by the State's voters and issued as General Obligation debt. This proposed constitutional amendment restores accountability and transparency to the decision to incur State debt by requiring voter approval of most future debt, thereby insuring that the decision to obligate future generations of New Yorkers will be subject to full public debate. New York State's capital spending on transportation, mental hygiene facilities, State park improvements, State housing programs and other programs will approach $6 billion in State fiscal year 2004--05, with nearly half of that amount financed through debt issued by public authorities on behalf of the State. When this proposed amendment is in place, New York State. will likely support its capital plan with a combination of General Obligation debt issued by the Comptroller or "pay-as-you-go" dollars appropriated in the State budget. A total of $1 billion, or 3% of the amount determined to be equal to 5% of total personal income in the State, whichever is greater, could be issued as General Obligation debt without voter approval. Any additional debt issuance would be required to be approved by the State's voters. There is a suitable time and an inappropriate time to utilize debt. This amendment would promote the appropriate use of State debt by capping its levels, closing loopholes in the existing statutes and restoring the accountability and transparency associated with the requirement for public referenda on the issuance of debt The New York State Comptroller respectfully urges passage of this concurrent resolution to amend the New York State Constitution.
PRIOR LEGISLATIVE HISTORY: 2006: S.8176 - Referred to Judiciary 2009-2010: S.525 - Referred to Judiciary
EFFECTIVE DATE: Resolved if the Assembly 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.
STATE OF NEW YORK ________________________________________________________________________ 2391 2011-2012 Regular Sessions IN SENATE January 19, 2011 ___________Introduced by Sen. LIBOUS -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary CONCURRENT RESOLUTION OF THE SENATE AND ASSEMBLY proposing amendments to article 7 of the constitution, in relation to the authorization of debt in times of public emergency, a limit on the total amount of state debt, the establishment of a debt management board and refunding of state debts Section 1. Resolved (if the Assembly concur), That section 10 of arti- cle 7 of the constitution be amended to read as follows: S 10. In addition to the above limited power to contract debts, the state may contract debts to repel invasion, suppress insurrection, [or] defend the state in war, [or to suppress forest fires] OR TO RESPOND TO ANY OTHER EMERGENCY STEMMING FROM A DISASTER INCLUDING, BUT NOT LIMITED TO, A DISASTER CAUSED BY AN ACT OF TERRORISM; but the money arising from the contracting of such debts shall be applied for the purpose for which it was raised, or to repay such debts, and to no other purpose whatever. NO DEBT SHALL BE CONTRACTED PURSUANT TO THIS SECTION WITHOUT THE CONCUR- RENCE OF THE GOVERNOR, THE COMPTROLLER, THE ATTORNEY GENERAL AND TWO-THIRDS OF THE MEMBERS ELECTED TO EACH HOUSE OF THE LEGISLATURE; AND THE GOVERNOR SHALL HAVE POWER TO SUMMON THE COMPTROLLER AND THE ATTORNEY GENERAL AND CONVENE THE LEGISLATURE IN EXTRAORDINARY SESSION FOR THE PURPOSE OF CONSIDERING SUCH EMERGENCY DEBT. AT THE TIME, DATE AND PLACE APPOINTED BY THE GOVERNOR, NO OTHER SUBJECT SHALL BE ACTED UPON UNTIL EACH, IN THE FOLLOWING ORDER, HAS GIVEN THEIR APPROVAL OR ANY ONE THERE- OF HAS GIVEN THEIR DISAPPROVAL OF THE DEBT PROPOSED BY THE GOVERNOR TO ENABLE THE STATE TO RESPOND TO SUCH EMERGENCY: THE GOVERNOR, THE COMP- TROLLER, THE ATTORNEY GENERAL, THE SENATE AND THE ASSEMBLY. THE PROPOSAL OF SUCH EMERGENCY DEBT SHALL BE IN THE FORM OF A RESOLUTION PREPARED AND SUBMITTED BY THE GOVERNOR TO THE COMPTROLLER, THE ATTORNEY GENERAL, THE SENATE AND THE ASSEMBLY, WHO SHALL APPROVE OR DISAPPROVE SUCH RESOLUTION WITHOUT ANY CHANGES THERETO; AND IF SUCH RESOLUTION IS APPROVED BY THE GOVERNOR, THE COMPTROLLER, THE ATTORNEY GENERAL, AND TWO-THIRDS OF THE EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD89095-01-1 S. 2391 2 MEMBERS ELECTED TO EACH HOUSE OF THE LEGISLATURE, THEN SUCH LAW OR LAWS SHALL BE ENACTED AS MAY BE NECESSARY OR ADVISABLE TO IMPLEMENT SUCH APPROVAL. S 2. Resolved (if the Assembly concur), That section 11 of article 7 of the constitution be amended to read as follows: S 11. 1. Except the debts or refunding debts specified in sections 9, 10 and 13 of this article, no debt shall be hereafter contracted by or [in] ON behalf of the state, unless such debt shall be authorized by law PURSUANT TO THIS SECTION, for some single work or purpose, to be distinctly specified therein. DEBT SUBJECT TO THE PROVISIONS OF THIS SECTION SHALL BE ANY DEBT OR OBLIGATION SUPPORTED IN WHOLE OR IN PART BY ANY FINANCING ARRANGEMENT WHEREBY THE STATE AGREES, WHETHER BY LAW, CONTRACT, OR OTHERWISE, TO MAKE PAYMENTS WHICH ARE TO BE USED, DIRECTLY OR INDIRECTLY, FOR THE PAYMENT OF PRINCIPAL, INTEREST, OR RELATED PAYMENTS ON INDEBTEDNESS INCURRED OR CONTRACTED BY THE STATE ITSELF FOR ANY PURPOSE, OR BY ANY STATE AGENCY, MUNICIPALITY, INDIVIDUAL, PUBLIC AUTHORITY OR OTHER PUBLIC OR PRIVATE CORPORATION OR ANY OTHER ENTITY FOR STATE CAPITAL OR OPERATING PURPOSES OR TO FINANCE GRANTS, LOANS OR OTHER ASSISTANCE PAYMENTS MADE OR TO BE MADE BY OR ON BEHALF OF THE STATE FOR ANY PURPOSE. IF THE STATE AGREES TO MAKE FUTURE REVENUES FROM A SPECIFIC STATE SOURCE AVAILABLE FOR THE PURPOSE OF SUPPORTING DEBT OF ANY MUNICI- PALITY, INDIVIDUAL, PUBLIC OR PRIVATE CORPORATION OR ANY OTHER ENTITY, SUCH DEBT SHALL BE CONSIDERED TO BE A DEBT FOR THE PURPOSE OF FINANCING A STATE GRANT, LOAN OR OTHER ASSISTANCE PAYMENT AND SHALL BE SUBJECT TO THE PROVISIONS OF THIS SECTION. THE PROVISIONS OF THIS SECTION SHALL APPLY (I) WHETHER OR NOT THE OBLIGATION OF THE STATE TO MAKE PAYMENTS IS SUBJECT TO APPROPRIATION OR IS OTHERWISE CONTINGENT, OR (II) WHETHER OR NOT DEBT SERVICE IS TO BE PAID FROM A REVENUE STREAM TRANSFERRED BY THE STATE TO ANOTHER PARTY THAT IS RESPONSIBLE FOR MAKING SUCH PAYMENTS. [No] 2. EXCEPT AS PROVIDED IN SUBDIVISION 5 OF THIS SECTION, NO such law shall take effect until it shall, at a general election, have been submitted to the people, and have received a majority of all the votes cast for and against it at such election nor shall it be submitted to be voted on within three months after its passage BY THE LEGISLATURE nor at any general election when any MORE THAN FOUR other [law or any bill] PROPOSITIONS shall be submitted to be voted for or against. 3. DURING THE FISCAL YEAR BEGINNING IN CALENDAR YEAR 2019 AND IN EVERY FISCAL YEAR THEREAFTER, NO PROPOSITION CONCERNING SUCH A LAW SHALL BE SUBMITTED TO THE PEOPLE FOR APPROVAL, AND NO SUCH LAW SHALL BE ENACTED PURSUANT TO SUBDIVISION 5 OF THIS SECTION, UNLESS THE TOTAL PRINCIPAL AMOUNT OF DEBT TO BE AUTHORIZED BY SUCH LAW, TOGETHER WITH THE TOTAL PRINCIPAL AMOUNT OF DEBT EITHER ALREADY OUTSTANDING, OR AUTHORIZED TO BE INCURRED PURSUANT TO THIS SECTION, SHALL BE EQUAL TO OR LESS THAN FIVE PERCENT OF THE TOTAL PERSONAL INCOME OF THE STATE. SUCH PERSONAL INCOME IS TO BE DETERMINED BY THE DEBT MANAGEMENT BOARD ESTABLISHED PURSUANT TO SUBDIVISION 4 OF THIS SECTION IN ACCORDANCE WITH SUCH COMMONLY ACCEPTED METHOD OR METHODS OF MEASURING THE ECONOMIC ACTIVITY OF THE STATE AS SHALL BE PRESCRIBED BY A LAW, WHICH SHALL BE ENACTED NOT LATER THAN JUNE 30, 2012, AND AS MAY BE AMENDED FROM TIME TO TIME NOT INCONSISTENT WITH THIS SECTION. DEBT SUBJECT TO THE LIMIT IMPOSED BY THIS SECTION SHALL INCLUDE ALL DEBT SUPPORTED BY FINANCING ARRANGEMENTS DESCRIBED IN SUBDI- VISION 1 OF THIS SECTION BUT SHALL NOT INCLUDE THE DEBTS SPECIFIED IN SECTIONS 9, 10 AND 13 OF THIS ARTICLE OR DEBT PREVIOUSLY AUTHORIZED BY LAW BUT NOT INCURRED BECAUSE OF THE SUBSEQUENT REPEAL OF SUCH AUTHORI- ZATION OR THE SUBSEQUENT PROHIBITION OF SUCH DEBT PURSUANT TO SUBDIVI- SION 10 OF THIS SECTION. S. 2391 3 4. A DEBT MANAGEMENT BOARD, CONSISTING OF THE GOVERNOR, THE COMP- TROLLER AND A THIRD PERSON JOINTLY SELECTED BY THE GOVERNOR AND THE COMPTROLLER, SHALL BE ESTABLISHED BY LAW. THE DEBT MANAGEMENT BOARD SHALL ANNUALLY DETERMINE, WITHIN THE LIMITS ESTABLISHED PURSUANT TO SUBDIVISION 3 OF THIS SECTION, A DEBT AFFORDABILITY LEVEL WHICH SHALL PRESCRIBE FOR EACH FISCAL YEAR AND FORECAST FOR THE TWO SUCCEEDING FISCAL YEARS THE TOTAL AMOUNT OF ADDITIONAL DEBT THAT MAY BE INCURRED AND THE TOTAL DEBT SERVICE OBLIGATIONS THAT MAY BE UNDERTAKEN BY THE STATE WITHOUT OVERBURDENING PRESENT OR FUTURE GENERATIONS. THE EXECUTIVE BUDGET SUBMITTED PURSUANT TO SECTION 2 OF THIS ARTICLE FOR THE ENSUING FISCAL YEAR AND THE BUDGET BILLS SUBMITTED PURSUANT TO SECTION 3 OF THIS ARTICLE FOR SUCH FISCAL YEAR SHALL NOT PROPOSE ANY ADDITIONAL DEBT OR NEW DEBT SERVICE EXPENSE THAT WOULD CAUSE TOTAL DEBT OR TOTAL DEBT SERVICE EXPENSES TO EXCEED THE DEBT AFFORDABILITY LEVEL PRESCRIBED FOR SUCH FISCAL YEAR, AND NEITHER THE GOVERNOR NOR THE LEGISLATURE SHALL, BY LAW, CONTRACT, OR OTHERWISE, PROVIDE FOR ANY ADDITIONAL DEBT OR NEW DEBT SERVICE EXPENSE THAT WOULD CAUSE TOTAL DEBT OR TOTAL DEBT SERVICE EXPENSES TO EXCEED SUCH LEVEL WITHOUT THE UNANIMOUS APPROVAL OF THE DEBT MANAGEMENT BOARD. DURING THE FISCAL YEAR BEGINNING IN 2015 AND IN EVERY FISCAL YEAR THEREAFTER, THE DEBT MANAGEMENT BOARD SHALL NOT ESTABLISH ANY DEBT AFFORDABILITY LEVEL WHICH WOULD RESULT IN A TOTAL PRINCIPAL AMOUNT OF DEBT IN EXCESS OF THE LIMIT ESTABLISHED PURSUANT TO SUBDIVI- SION 3 OF THIS SECTION. 5. DURING ANY FISCAL YEAR, A LAW OR LAWS AUTHORIZING DEBT IN THE COMBINED AGGREGATE AMOUNT OF ONE BILLION DOLLARS, OR THREE PERCENT OF THE LIMIT DETERMINED PURSUANT TO SUBDIVISION 3 OF THIS SECTION, WHICHEV- ER IS GREATER, MAY BE ENACTED WITHOUT BEING SUBMITTED FOR APPROVAL BY THE PEOPLE. HOWEVER, IN NO EVENT SHALL DEBT INCURRED IN FISCAL YEARS BEGINNING IN 2019 AND THEREAFTER PURSUANT TO SUCH LAW OR LAWS RESULT IN A TOTAL PRINCIPAL AMOUNT OF DEBT IN EXCESS OF THE LIMIT DETERMINED PURSUANT TO SUBDIVISION 3 OF THIS SECTION OR THE DEBT AFFORDABILITY LEVEL ESTABLISHED PURSUANT TO SUBDIVISION 4 OF THIS SECTION. 6. ALL DEBT SUBJECT TO THE PROVISIONS OF THIS SECTION (I) SHALL, EXCEPT FOR REFUNDING DEBT, BE INCURRED ONLY FOR A CAPITAL PURPOSE AUTHORIZED BY LAW, AND (II) SHALL, IF INCURRED ON OR AFTER THE FIRST DAY OF THE FIRST FISCAL YEAR BEGINNING AT LEAST ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION, BE IN THE FORM OF OBLIGATIONS ISSUED BY THE COMPTROLLER. 7. NOTHING CONTAINED IN THIS SECTION SHALL INVALIDATE DEBT OBLIGATIONS OUTSTANDING ON THE EFFECTIVE DATE OF THIS SUBDIVISION THAT WOULD BE SUBJECT TO THE PROVISIONS OF THIS SECTION IF INCURRED AFTER THE EFFEC- TIVE DATE OF THIS SUBDIVISION, AND THE STATE MAY CONTINUE TO PROVIDE FOR PAYMENTS RELATED TO SUCH DEBT ON THE SAME TERMS UNDER WHICH SUCH DEBT WAS INCURRED; PROVIDED, HOWEVER, THAT NO SUCH DEBT SHALL BE REFUNDED UNLESS (I) SUCH REFUNDING COMPLIES IN ALL RESPECTS WITH THE REQUIREMENTS OF SECTION 13 OF THIS ARTICLE, AND (II) ANY REFUNDING OBLIGATIONS ISSUED ON OR AFTER THE FIRST DAY OF THE FIRST FISCAL YEAR BEGINNING AT LEAST ONE YEAR AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION ARE ISSUED BY THE COMPTROLLER. SUCH OUTSTANDING DEBT OBLIGATIONS AND THE DEBT SERVICE EXPENSES, DIRECT OR INDIRECT, REQUIRED FOR SUCH OBLIGATIONS SHALL BE INCLUDED IN THE DETERMINATION OF THE LIMIT IMPOSED BY SUBDIVISION 3 OF THIS SECTION AND THE DEBT AFFORDABILITY LEVEL REQUIRED BY SUBDIVISION 4 OF THIS SECTION. THE PROVISIONS OF SECTION 16 OF THIS ARTICLE SHALL NOT APPLY TO STATE PAYMENTS WITH RESPECT TO ANY SUCH OBLIGATIONS UNLESS SUCH PROVISIONS WOULD HAVE APPLIED PRIOR TO THE EFFECTIVE DATE OF THIS SUBDI- VISION. S. 2391 4 8. DEBT OBLIGATIONS ISSUED TO REFUND OUTSTANDING STATE DEBT, REGARD- LESS OF WHETHER SUCH OUTSTANDING DEBT WAS INCURRED PRIOR TO THE EFFEC- TIVE DATE OF THIS SUBDIVISION, SHALL NOT BE COUNTED FOR THE PURPOSES OF THE LIMIT IMPOSED BY SUBDIVISION 3 OF THIS SECTION AND THE DEBT AFFORDA- BILITY LEVEL REQUIRED BY SUBDIVISION 4 OF THIS SECTION IF SUCH REFUNDING COMPLIES IN ALL RESPECTS WITH SECTION 13 OF THIS ARTICLE. DEBT SERVICE EXPENSES ON DEBT THAT HAS BEEN REFUNDED IN ACCORDANCE WITH SECTION 13 OF THIS ARTICLE SHALL BE EXCLUDED FROM THE DEBT AFFORDABILITY LEVEL TO THE EXTENT THAT SUCH DEBT SERVICE EXPENSES ARE TO BE PAID FROM AN ESCROW FUND ESTABLISHED WITH PROCEEDS OF THE REFUNDING DEBT, BUT DEBT SERVICE EXPENSES ON THE REFUNDING DEBT SHALL BE INCLUDED EXCEPT TO THE EXTENT THAT SUCH DEBT SERVICE EXPENSES ARE TO BE PAID FROM SUCH AN ESCROW FUND. FOR PURPOSES OF THIS SUBDIVISION AND SUBDIVISIONS 7 AND 9 OF THIS SECTION, ANY REFUNDING DEBT THAT DOES NOT EXTEND BEYOND THE FINAL MATU- RITY OF THE DEBT BEING REFUNDED SHALL BE DEEMED TO COMPLY WITH THE PROVISIONS OF SUBDIVISION 6 OF SECTION 13 OF THIS ARTICLE, PROVIDED THAT THERE IS AN ACTUAL DEBT SERVICE SAVINGS IN EVERY YEAR TO MATURITY AS A RESULT OF THE ISSUANCE OF THE REFUNDING DEBT. 9. AFTER THE EFFECTIVE DATE OF THIS SECTION THE STATE SHALL NOT, EXCEPT AS SPECIFICALLY AUTHORIZED IN SOME OTHER SECTION OF THIS CONSTI- TUTION, AGREE TO MAKE PAYMENTS, DIRECTLY OR INDIRECTLY, WHETHER OR NOT SUBJECT TO APPROPRIATION, THAT ARE TO BE AVAILABLE TO PAY DEBT SERVICE ON ANY DEBT INCURRED BY A MUNICIPALITY, INDIVIDUAL, PUBLIC AUTHORITY OR OTHER PUBLIC OR PRIVATE CORPORATION OR ANY OTHER ENTITY, FOR ANY PURPOSE, IF SUCH PAYMENTS ARE EXPECTED TO BE USED TO PAY DEBT SERVICE ONLY IF OTHER SOURCES AVAILABLE FOR THE PAYMENT OF DEBT SERVICE ARE INADEQUATE. OUTSTANDING DEBT THAT WOULD BE PROHIBITED BY THIS SUBDIVI- SION IF SUCH DEBT HAD BEEN INCURRED AFTER THE EFFECTIVE DATE OF THIS SUBDIVISION MAY BE REFUNDED BY THE ENTITY THAT INCURRED THE OUTSTANDING DEBT PROVIDED THAT ALL PROVISIONS OF SUBDIVISIONS 7 AND 8 OF THIS SECTION ARE COMPLIED WITH EXCEPT THE REQUIREMENT THAT SUCH REFUNDING DEBT OBLIGATIONS BE ISSUED BY THE COMPTROLLER, AND REFUNDING DEBT SERVICE EXPENSES SHALL ONLY BE INCLUDED IN THE DEBT AFFORDABILITY LEVEL IF THE DEBT SERVICE EXPENSES ON THE DEBT BEING REFUNDED WOULD HAVE BEEN INCLUDED. 10. The legislature may, at any time after the ENACTMENT OR approval of such law [by the people], if no debt shall have been contracted in pursuance thereof, repeal the same; and may at any time, by law, forbid the contracting of any further debt or liability under such law. S 3. Resolved (if the Assembly concur), That subdivisions 6 and 7 of section 13 of article 7 of the constitution be amended to read as follows: 6. In no event shall the last annual installment or contribution on any portion of refunding debt, including refunding obligations issued to refund other refunding obligations, be made after THE LAST INSTALLMENT ON THE RELEVANT PORTION OF THE DEBT TO BE REFUNDED OR AFTER the termi- nation of the period of probable life of the projects financed with the proceeds of the relevant portion of the debt to be refunded, or any debt previously refunded with the refunding obligations to be refunded, determined as of the date of issuance of the original obligations pursu- ant to section 12 of this article to finance such projects, or forty years from such date, if earlier; provided, however, that in lieu of the foregoing, an entire refunding issue or portion thereof may be struc- tured to mature over the remaining weighted average useful life of all projects financed with the obligations being refunded. S. 2391 5 7. [Subject to the provisions of subdivision 5 of this section, each annual installment or contribution of principal of refunding obligations shall be equal to the amount that would be required by subdivision 1 of section 12 of this article if such installments or contributions were required to be made from the year that the next installment or contrib- ution would have been due on the obligations to be refunded, if they had not been refunded, until the final maturity of the refunding obligations but excluding any year in which no installment or contribution would have been due on the obligations to be refunded or, in the alternative, the] THE total payments of principal and interest on the refunding bonds shall be less in each year to their final maturity than the total payments of principal and interest on the bonds to be refunded in each such year. S 4. Resolved (if the Assembly 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.