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.

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S961-2013 Actions

• Feb 6, 2013: OPINION REFERRED TO JUDICIARY
• Jan 11, 2013: TO ATTORNEY-GENERAL FOR OPINION
• Jan 9, 2013: REFERRED TO JUDICIARY

S961-2013 Memo

BILL NUMBER:S961                 REVISED 1/7/13

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:
The proposed will improve the transparency, accountability, and
affordability of New York State's borrowing practices.

SUMMARY OF PROVISIONS:

Section 1 adds a new Article 5-B (Limitations on State Funded Debt")
to the State Finance Law, including four sections:

Section 67-a defines the terms "State debt," "State-backed debt,"
"State-funded debt" and "State-supported debt" to clarify the full
scope of the State's debt obligations. Section 67-a also defines the
terms "Revenue debt," "Total personal income of the state," "capital
work or purpose," "conduit debt obligation", "cash surplus" and
"state authority."

Section 67-b sets forth the duties with respect to state-funded debt,
which include:

o authorizing the division of the budget to annually determine the debt
limit of the state by calculating the amount equal to five percent of
the defined total personal income of the state;

o beginning SPY 2022-23, authorizing the division of the budget, by
October 31, to determine the total debt limit of the state for the
next fiscal year and report the limit to the legislature and the
comptroller;

o beginning in fiscal year 2013-14, the inclusion of a plan in the
executive budget proposal outlining the methodology for implementing
the debt limit determined by DOB.

Section 67-c continues the current limitations on the issuance of
state-supported debt. This section shall expire and be deemed
repealed on March 31, 2021 when section 67-c is in effect.

Section 67-d sets forth general limitations on State funded debt
including:

o implementation of an overall debt cap, effective on and after April
1, 2022, on all State funded debt to limit debt to no more than 51;
of the total personal income in the State;

o prohibiting the use of State funded debt for any purpose other than a
capital purpose;


o requiring all State funded debt to be in the form of obligations
issued by the Comptroller beginning with the fiscal year that is at
least one year after the effective date of an amendment to the
Constitution;

o prohibiting the issuance of any state funded debt obligation with a
final maturity exceeding the probable life of the capital project
financed by such debt, as well as prohibiting any maturity longer
than 30 years.

Section 67-e prohibits the issuance of new debt supported by a state
agreement to make payments only if expected debt service sources fall
short.

Section 67-f mandates that at the end of any fiscal year, 75 percent
of any cash surplus shall be deposited to the Rainy Day Fund until
the Fund reaches its maximum balance. The remaining 25 percent, as
well as anything after Rainy Day Fund has reached its limit, shall be
deposited in the Debt Reduction Reserve Fund.

Section 67-g creates the Debt Planning Council with seven members, one
each appointed by the Governor, the Comptroller, the Majority Leader
of the Senate and the Speaker of the Assembly and three public
finance experts drawn from a pool of candidates supplied by the
existing four and chosen by the Governor. Representatives of the
Council shall elect a chair person.

Section 67-h establishes the powers and duties of the Debt Planning
Council including annually establishing the debt affordability of the
State, which cannot be exceeded, annually reporting on all current
and projected State-Funded debt levels and factors that affect the
cost of that debt, creation of a State-Funded debt database and
making recommendations to the Governor and the Legislature on all
State-funded debt and Other capital financing matters.

Sections 2 through 13 make conforming changes to statute to the newly
created definition of "state funded debt" set forth in new State
Finance Law Article 5-B, as added by this bill.

Section 14 amends section 50 of the State Finance Law by adding a
voting representative from the Debt Planning Council.

Section 15 expands the jurisdiction of the Public Authorities Control
Board to include financing and construction of projects of all state
authorities and requires that applications include a current listing
of all debt and debt service obligations of the applicant.

Section 16 adds a new subdivision 6 to section 51 of the Public
Authorities Law to require an annual report by the Public Authorities
Control Board detailing (i) the aggregate amount of debt approved by
the Board during the fiscal year, (ii) a list of the individual
projects approved by the
Board for each public authority during the fiscal year, and (iii) the
total amount of new debt obligations the Board has approved during
the fiscal year for issuance by each public authority.


Section 17 provides for an immediate effective date. Provided,
however, that section 67-c of the state finance law shall expire and
be deemed repealed on March 31, 2021 and that subdivisions 3 and 6 of
section 67-d of the state finance law, as added by section one of
this act, shall take effect on the same date as the amendments to
article 7 of the state constitution.

JUSTIFICATION:
Although New York regularly borrows and spends money to finance long
term projects such as roads, bridges, dams, prisons and university
buildings, there is no policy to comprehensively track these capital
assets and there is no long term plan for maintaining, replacing or
adding to them. Without knowing what we have or what we need, it is
difficult to determine if the State's limited resources are being put
to the best use or if the State's infrastructure will be able to
support future citizen needs.

Furthermore, the State relies heavily on borrowing by public
authorities, which does not require the approval of taxpayers
("backdoor borrowing") to pay for a large portion of the State's
Capital Plan. Less than six percent of the State's current debt
burden has been approved by those who pay for it. Reliance on this
type of borrowing has become commonplace. The enacted Five Year
Capital Plan for SFY 2012-13 through SFY 2016-17 contains no new
borrowing proposals requiring voter approval, but instead relies upon
public authority debt. One reason is the Constitution allows only one
bond act for a single purpose to be put before voters at a time,
significantly limiting the State's flexibility to address all capital
needs in this process.

New York's already high debt burden is projected to significantly
increase over the next five years. The debt reform measures enacted
in 2000 did little to slow the growth of the State debt or restrict
the use of debt to capital projects and, as a result, the State is
rapidly approaching the statutory cap on State-supported debt
outstanding as established in the Debt Reform Act of 2000. Although
that cap was placed on the amount of debt outstanding and debt was
restricted to capital purposes only, these provisions did not apply
to all types of State debt and are statutory, not constitutional, and
thus easily by-passed. As a result, these measures have not been
effective. For example, as of March 31,
2012, 13.5 percent of the State's current debt burden is for debt that
was issued for budget relief or deficit financing, which is much like
using a mortgage to pay for groceries.

The Debt Reform Act of 2000 did not adequately restrain harmful
borrowing practices or control growth. The State's borrowing
practices must be made more transparent, accountable and affordable.

Furthermore, as of March 31, 2012, approximately 94 percent of
State-Funded debt outstanding was issued without voter approval by
myriad public authorities. The Constitution establishes a procedure
for controlling debt outstanding by keeping voters involved. This
bill will not only return voters to that role, but will also remove
public authorities from the process by having the State Comptroller
issue ALL debt for the State.

S961-2013 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                     961

                         2013-2014 Regular Sessions

                              I N  SENATE

                                 (PREFILED)

                               January 9, 2013
                                 ___________

  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

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD89066-01-3

 S. 961                              2

  GOVERNOR,  THE  COMPTROLLER, THE ATTORNEY GENERAL, AND TWO-THIRDS OF THE
  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 2022 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, 2016, 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-

 S. 961                              3

  ZATION  OR  THE SUBSEQUENT PROHIBITION OF SUCH DEBT PURSUANT TO SUBDIVI-
  SION 10 OF THIS SECTION.
    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 2018 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 2022 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

 S. 961                              4

  PROVISIONS WOULD HAVE APPLIED PRIOR TO THE EFFECTIVE DATE OF THIS SUBDI-
  VISION.
    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-

 S. 961                              5

  tured  to  mature over the remaining weighted average useful life of all
  projects financed with the obligations being refunded.
    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.