BILL NUMBER: S1569
SPONSOR: TEDISCO
 
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 "back-door 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. The act also authorizes the establishment of a fund to reduce
debt and establishes the manner in which monies in this fund may be
used.
 
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.
Section 2 The state may contract debt which is secured by a pledge of
the full faith and credit of the state if such debt shall be authorized
by law, for some single capital work or purpose, to be distinctly speci-
fied therein(. No); provided that 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 nor at any general election when any other law
or any bill shall be submitted to be voted for or against.
Section 3 amends section 16 of article VII of the State Constitution to
authorize the Comptroller to set aside revenues received and pledged to
pay debt service on the new revenue bonds and to pay debt service in the
event the Legislature fails to enact such an appropriation.
Section 4 amends the State Constitution to create a new section 20 of
article VII of the State Constitution to authorize a fund to be used to
reduce State debt.
Section 5 The legislature may, at any time (after the approval of such
law by the people), if no debt have been contracted in pursuance (there
20 of), of a particular law authorized under subdivision 2 or 3 of this
section repeal (the same) such law authorizing the issuance of such
debt; and may at any time, by law, forbid the contraction of any further
debt or liability under such law.
 
JUSTIFICATION:
Just as an example, the Fiscal Year 2017-18 Capital Plan released with
the Executive Budget states that the FY 2015-16 state related debt was
$52.1 billion, the estimate for FY 2016-17 was 50.8 billion, for FY
2017-18 was $53.5 billion and for FY 2018-19, $56.4 billion and FY
2019-20 was $57.2 billion, and the number continues to rise.
This bill will provide a debt cap that will allow the State to borrow a
reasonable amount to finance a portion of the capital program while
controlling the State's debt. The bill also provides for an alternate
financing mechanism to reduce the State's dependence on debt and provide
a long-term approach to reducing the State's debt.
 
PRIOR LEGISLATIVE HISTORY:
02/13/17: S.4402 REFERRED TO JUDICIARY
02/16/17: S.4402 TO ATTORNEY-GENERAL FOR OPINION
03/10/17: S.4402 OPINION REFERRED TO JUDICIARY
01/03/18: S.4402 REFERRED TO JUDICIARY
01/12/18: S.4402 TO ATTORNEY-GENERAL FOR OPINION
02/15/18: S.4402 OPINION REFERRED TO JUDICIARY
01/23/19: S.2211 REFERRED TO JUDICIARY
02/07/19: S.2211 TO ATTORNEY-GENERAL FOR OPINION
03/01/19: S.2211 OPINION REFERRED TO JUDICIARY
01/08/20: S.2211 REFERRED TO JUDICIARY
02/14/20: S.2211 TO ATTORNEY-GENERAL FOR OPINION
03/13/20: S.2211 OPINION REFERRED TO JUDICIARY
01/08/21: S.1262 REFERRED TO JUDICIARY
02/09/21: S.1262 TO ATTORNEY-GENERAL FOR OPINION
03/04/21: S.1262 OPINION REFERRED TO JUDICIARY
01/05/22: S.1262 REFERRED TO JUDICIARY
01/28/22: S.1262 TO ATTORNEY-GENERAL FOR OPINION
03/01/22: S.1262 OPINION REFERRED TO JUDICIARY
01/05/23: S.679 REFERRED TO JUDICIARY
01/06/23: S.679 TO ATTORNEY-GENERAL FOR OPINION
02/07/23: S.679 OPINION REFERRED TO JUDICIARY
01/03/24: S.679 REFERRED TO JUDICIARY
01/04/24: S.679 TO ATTORNEY-GENERAL FOR OPINION
01/29/24: S.679 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 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.