Bill S4729-2013

Provides temporary alternative methods of financing storm relief expenses

Provides temporary alternative methods of financing storm relief expenses.

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  • Jun 17, 2013: SUBSTITUTED BY A5551
  • Jun 17, 2013: ORDERED TO THIRD READING CAL.1389
  • Apr 19, 2013: REFERRED TO RULES

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BILL NUMBER:S4729

TITLE OF BILL: An act to amend the local finance law, in relation to temporary alternative methods of financing storm relief expenses

PURPOSE:

This legislation would provide municipalities, school districts and fire districts with additional flexibility to borrow for certain extraordinary expenses incurred as a result of the storm commonly known as Sandy.

SUMMARY OF PROVISIONS:

Section one of the bill would amend section 26.10 of the Local Finance Law, relating to temporary alternative methods of financing flood relief expenses, to apply to "extraordinary expenses of storm relief" necessitated by Sandy. In addition to adapting section 26.10 to apply to Sandy, bill section one would also expand the coverage of that section to include "district corporations" (e.g., fire districts), and eliminate from section 26.10 certain obsolete provisions and provisions which distinguish between local governments on the basis of when their fiscal years commence.

Section two of the bill would provide an immediate effective date.

LEGISLATIVE HISTORY:

This is a new proposal, but similar legislation has been enacted several times in the past (see, e.g. chapter 157 of the laws of 2006), and last year similar legislation was vetoed primarily because the State assumed the entire local share of flood response and recovery expenses associated with Hurricane Irene and Tropical Storm Lee (see 2011 Veto Message No. 151).

JUSTIFICATION:

The storm commonly known as Sandy was by most estimates as one of the most destructive and deadly storms to hit the United States since 1980. Sandy caused widespread destruction massive flooding and prolonged power outages. Many local governments throughout the State were severely affected by the flooding and the extraordinary costs of repairing the damage are considerable. The bill will help local governments manage the costs of repairing the damage by providing additional financing options.

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:

The bill would take effect immediately.

RECOMMENDATION:

The Comptroller urges passage of this legislation.


Text

STATE OF NEW YORK ________________________________________________________________________ 4729 2013-2014 Regular Sessions IN SENATE April 19, 2013 ___________
Introduced by COMMITTEE ON RULES -- (at request of the State Comp- troller) -- read twice and ordered printed, and when printed to be committed to the Committee on Rules AN ACT to amend the local finance law, in relation to temporary alterna- tive methods of financing storm relief expenses THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 26.10 of the local finance law, as added by chapter 599 of the laws of 1973, paragraph a and subdivisions 1, 2 and 3 of paragraph b as amended by chapter 157 of the laws of 2006 and subdivi- sions 4, 5 and 6 of paragraph b, subdivisions 1, 2, 3 and 7 of paragraph c as amended by chapter 87 of the laws of 1996, is amended to read as follows: S 26.10 Temporary alternative methods of financing [flood-relief] STORM RELIEF expenses. a. Definitions. [1. With respect to any munici- pality which has a calendar fiscal year which commenced on the first day of January, two thousand five, the] AS USED IN THIS SECTION, THE terms "extraordinary expenses [for flood] OF STORM relief" and "such extraor- dinary expenses"[, as used in this section,] shall mean [the] expenses incurred BY A MUNICIPALITY, SCHOOL DISTRICT OR DISTRICT CORPORATION BEFORE THE FIRST DAY OF JANUARY, TWO THOUSAND FOURTEEN, for [flood] STORM relief projects [involving the] NECESSITATED BY DAMAGE CAUSED BY THE STORM COMMONLY KNOWN AS SANDY ON OR SHORTLY AFTER OCTOBER TWENTY-NINTH, TWO THOUSAND TWELVE. THE TERM "STORM RELIEF PROJECTS" SHALL MEAN THE REPAIR OR RECONSTRUCTION OF public thoroughfares, [public] BUILDINGS, places, and projects of such municipality [during any or all of the months of such year], SCHOOL DISTRICT OR DISTRICT CORPORATION, in excess of the normal expenses which would have been incurred for such purposes during such periods as determined by the finance board of such municipality [and also any interest payments on revenue anticipation notes issued in anticipation of the receipt of
moneys from the state or federal government pursuant to any state or federal disaster relief act]
, SCHOOL DISTRICT OR DISTRICT CORPORATION. In making any such determination, the finance board shall not include as a part of such extraordinary expenses the salaries and wages of regular employees, except for overtime work and work on Sundays and holidays. SUCH EXTRAORDINARY EXPENSES MAY INCLUDE ANY INTEREST PAYMENTS ON REVENUE ANTICIPATION NOTES ISSUED IN ANTICIPATION OF THE RECEIPT OF MONEYS FROM THE STATE OR FEDERAL GOVERNMENT ON ACCOUNT OF SUCH STORM PURSUANT TO ANY STATE OR FEDERAL DISASTER RELIEF ACT. [2. With respect to any municipality or school district which has a fiscal year which commenced in the year two thousand five on or after the first day of March in such year, the terms "extraordinary expenses for flood relief projects" and "such extraordinary expenses", as used in this section, shall mean the expense incurred for flood relief projects involving the public thoroughfares, public places and projects of such municipality or school district during such fiscal year, in excess of the amounts appropriated for such purposes in the annual budget for such fiscal year, or, if no such appropriations were made, then in excess of the average of all expenditures for such purposes during each of the five preceding fiscal years prior to the fiscal year commencing in the year two thousand five, as determined by the finance board of such muni- cipality or school district.] b. The financing of [flood] STORM relief expenses by the issuance of serial bonds. 1. The finance board of a municipality [which has a fiscal year which commenced on the first day of January, two thousand five], SCHOOL DISTRICT OR DISTRICT CORPORATION may authorize the issuance of serial bonds [in the] ON OR BEFORE DECEMBER THIRTY-FIRST two thousand [six fiscal year] THIRTEEN to provide for the payment of all or part of the extraordinary expenses of [flood] STORM relief [incurred during any or all of the months of two thousand five], to reimburse any fund or account of the [municipality] ISSUER from which moneys to pay such extraordinary expenses have been advanced or to replenish any fund or account of the [municipality] ISSUER from which such extraordinary expenses have been paid, or any combination of such purposes, notwith- standing that there may have been lack of statutory authority for any such advance or payment from such fund or account. The period of proba- ble usefulness of such objects or purposes shall be five years. Any such serial bonds shall have a maximum maturity of over two years, but the date of final maturity of any such issue shall not extend beyond [the first day of March in the year two thousand eleven as to counties and towns and shall not extend beyond] the thirty-first day of December, two thousand [eleven, as to other municipalities] EIGHTEEN. 2. [The finance board of a municipality or school district which has a fiscal year which commenced in the year two thousand five on or after the first day of March in such year may authorize the issuance of serial bonds in the two thousand six fiscal year, or in its next succeeding fiscal year, to provide for the payment of all or part of the extraor- dinary expenses of flood relief incurred in the two thousand five fiscal year, to reimburse any fund or account of the municipality or school district from which moneys to pay such extraordinary expenses have been advanced or to replenish any fund or account of the municipality or school district from which such extraordinary expenses have been paid, or any combination of such purposes, notwithstanding that there may have been lack of statutory authority for any such advance or payment from such fund or account. The period of probable usefulness of such objects
or purposes shall be five years. Any such serial bonds shall have a maximum maturity of over two years, but the date of final maturity of any such issue shall not extend beyond the thirty-first day of December, two thousand eleven. 3.]
No provision of subdivision one [or two] of this paragraph shall be deemed to prohibit the issuance of serial bonds for the purpose of financing any portion of such extraordinary expenses described in such [subdivisions] SUBDIVISION which heretofore have been or hereafter shall be financed by the issuance of budget notes or for the purpose of redeeming any such notes. [4.] 3. Except as provided in this section, such serial bonds and any bond anticipation notes in anticipation thereof, shall be authorized, sold and issued in the manner provided by this chapter. Any bond antic- ipation notes issued in anticipation of such bonds shall, for the purpose of determining the power of the issuer to contract indebtedness and to raise taxes upon real estate, be deemed to be serial bonds of an issue having a maximum maturity of more than two years as described in paragraph A of section five and in section ten of article eight of the state constitution and for the purposes of (1) subdivision one-a of section 136.00 of this chapter, (2) section two hundred thirty-three of the county law, (3) section 5-514 of the village law, (4) any general or special law applicable to counties, cities, villages [and], school districts OR DISTRICT CORPORATIONS which relates to the raising of taxes on real estate to provide for the payment of the interest on and the principal of indebtedness, and (5) all laws relating to the financial reports, debt statements and real estate tax margin computations of such municipalities [or], school districts OR DISTRICT CORPORATIONS. The chief fiscal officer of any municipality [or], school district OR DISTRICT CORPORATION issuing or renewing such bond anticipation notes shall immediately after the issuance or renewal thereof notify the state comptroller of such issuance or renewal. The state comptroller may prescribe the form of any such notice and shall furnish such forms to municipalities [and], school districts AND DISTRICT CORPORATIONS for the purpose of making any such report. [5.] 4. Capital notes may not be issued to finance any object or purpose for which serial bonds are authorized to be issued pursuant to this paragraph. The provisions of this paragraph shall not affect the power of any municipality [or], school district OR DISTRICT CORPORATION described in paragraph a of this section to finance all or part of any such extraordinary expenses pursuant to the provisions of section 29.00 of this chapter and paragraph c of this section. [6.] 5. Section 104.10 of this chapter shall not be applicable in relation to, or as the result of, the adoption of a bond resolution authorizing the issuance of serial bonds pursuant to this paragraph. The provisions of section 10.00, paragraph a of section 21.00 and any other section of this chapter, or the provisions of any general, special or local law, which would restrict, limit or prohibit the issuance of such bonds (except those enacted to conform with the state constitution) are, to the extent that this section is utilized by a municipality [or], school district OR DISTRICT CORPORATION, suspended and made ineffective insofar as necessary to effectuate the purposes of this section. c. The financing of [flood] STORM relief expenses by the issuance of budget notes. 1. If any municipality or school district described in paragraph a of this section has heretofore issued budget notes pursuant to the provisions of subdivision two or three of paragraph a of section 29.00 of this chapter to provide for the payment of extraordinary
expenses of [flood] STORM relief, [as defined in this section,] the finance board, by resolution, may determine that such notes shall be deemed to have been issued pursuant to the provisions of subdivision one of paragraph a of such section and that such notes so issued shall not thereafter be considered in determining the power of such municipality or school district to issue budget notes pursuant to such subdivision two or three. 2. If any municipality [or], school district OR DISTRICT CORPORATION described in paragraph a of this section has heretofore issued budget notes pursuant to the provisions of subdivision one, two or three of paragraph a, or paragraph b, of section 29.00 of this chapter, to provide for the payment of extraordinary expenses of [flood] STORM relief, [as defined in this section,] the finance board may determine that the provisions of paragraph j of such section shall not be applica- ble in relation to the maturity of such notes and (a) that such notes shall mature in equal annual installments in two different fiscal years, but the final maturity of such notes shall not extend beyond the close of the second fiscal year immediately succeeding the year of their issue, or (b) if the fiscal procedures applicable to such municipality [or], school district OR DISTRICT CORPORATION will enable the necessary budgetary appropriations for debt service to be made and such appropri- ations to become available, that such notes shall mature in three equal annual installments in three different fiscal years, but the final matu- rity of any such notes shall not exceed three years in accordance with the provisions of paragraph a of section 11.00 of this chapter which prescribes a period of probable usefulness of three years for objects or purposes financed by the issuance of budget notes. Such budget notes which mature in three equal annual installments, as aforesaid, shall, for the purpose of determining the power of the issuer to contract indebtedness and to raise taxes on real estate, be deemed to be serial bonds of an issue having a maximum maturity of more than two years as described in paragraph A of section five and in section ten of article eight of the state constitution and for the purposes of (1) paragraph one-a of section 136.00 of this chapter, (2) section two hundred thir- ty-three of the county law, (3) section 5-514 of the village law, (4) any general or special law applicable to counties, cities, villages [and], school districts OR DISTRICT CORPORATIONS which relates to the raising of taxes on real estate to provide for the payment of the inter- est on and the principal of indebtedness, and (5) all laws relating to financial reports, debt statements and real estate tax margin computa- tions of such municipalities [or], school districts OR DISTRICT CORPO- RATIONS. If the finance board determines that such budget notes shall mature in three equal annual installments, as aforesaid, the chief fiscal officer of such municipality [or], school district OR DISTRICT CORPORATION immediately after the adoption of the resolution making such determination shall file a copy of the resolution with the state comp- troller and shall immediately after the issuance or renewal of such notes notify the state comptroller of such issuance or renewal. The state comptroller may prescribe the form of any such notice and shall furnish such forms to municipalities [or], school districts OR DISTRICT CORPORATIONS for the purpose of making any such report. 3. Notwithstanding any of the provisions of section 29.00 of this chapter, the finance board of a municipality or a school district described in paragraph a of this section may authorize the issuance of budget notes pursuant to subdivision one of paragraph a, or, in the case of a municipality, paragraph b of such section 29.00 of this chapter to
provide for the payment of all or part of the extraordinary expenses of [flood] STORM relief, [as defined in this section,] to reimburse any fund or account of the municipality or school district from which moneys to pay such extraordinary expenses have been advanced or to replenish any fund or account of the municipality or school district from which such extraordinary expenses have been paid, or any combination of such purposes, notwithstanding that there may have been lack of statutory authority for any such advance or payment from such fund or account. The finance board may determine that such notes may mature in the manner provided in paragraph j of section 29.00 of this chapter, or, if the fiscal procedures applicable to such municipality or school district will enable the necessary budgetary appropriations for debt service to be made and such appropriations to become available, that such notes shall mature in two equal annual installments in two different fiscal years, but the final maturity of such notes shall not extend beyond the close of the second fiscal year immediately succeeding the year of their issue. 4. [If a municipality which had a calendar fiscal year which commenced on the first day of January, nineteen hundred seventy-two, or the first day of January, nineteen hundred seventy-three, issued budget notes in such year pursuant to the provisions of section 29.00 of this chapter to finance the payment of expenses of flood relief in such fiscal years and if such budget notes, under the provisions of paragraph j of such section, could not be renewed after the close of its fiscal year which would end in the year next succeeding the year of issuance, then and in such event the finance board of such municipality may determine that the provisions of paragraph j of such section shall not be applicable in relation to the maturity of such notes and that such notes shall mature in equal annual installments in the two years next succeeding the year of issuance. 5. If a municipality which had a calendar fiscal year, which commenced on the first day of January, nineteen hundred seventy-two or the first day of January, nineteen hundred seventy-three, authorized the issuance of budget notes in such years pursuant to the provisions of section 29.00 of this chapter to finance the payment of expenses of flood relief in such years and if such notes were not issued in the years nineteen hundred seventy-two or nineteen hundred seventy-three, but were or are to be issued in the years nineteen hundred seventy-three or nineteen hundred seventy-four, and if such budget notes, under the provisions of paragraph j of such section, could not be renewed after the close of its fiscal year which would end in the year next succeeding the year of issuance, then and in any such event the finance board of such munici- pality may determine that the provisions of paragraph j of such section shall not be applicable in relation to the maturity of such notes and that such notes shall mature in equal annual installments in the two years next succeeding the year of issuance. 6. Any resolution of a finance board of a municipality making a deter- mination pursuant to subdivisions one, two, three, four or five of this paragraph may be adopted by a majority vote of the finance board, notwithstanding the provisions of paragraph d of section 40.00 of this chapter. 7.] The provisions of subdivision four of paragraph c of section 40.00 of this chapter and of any other section of this chapter and the provisions of any general, special or local law which would restrict, limit or prohibit the renewal of budget notes as provided in this para- graph (except those enacted to conform with the state constitution),
are, to the extent that this section is utilized by a municipality [or a], school district OR DISTRICT CORPORATION, suspended and made ineffec- tive insofar as necessary to effectuate the objects and purposes of this section. d. Separability. If any clause, sentence, subdivision, paragraph, or part of this section 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, subdivision, paragraph, or part thereof directly involved in the controversy in which such judgment shall have been rendered. S 2. This act shall take effect immediately.

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