Bill Text: NY S05136 | 2013-2014 | General Assembly | Introduced
Bill Title: Relates to the mandatory reserve fund for municipal corporations, fire districts, school districts and boards of cooperative educational services.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2014-01-08 - REFERRED TO LOCAL GOVERNMENT [S05136 Detail]
Download: New_York-2013-S05136-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
5136
2013-2014 Regular Sessions
I N S E N A T E
May 10, 2013
___________
Introduced by Sen. FLANAGAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law, in relation to the mandatory
reserve fund for municipal corporations, fire districts, school
districts and boards of cooperative educational services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Section 6-l of the general municipal law, as added by chap-
2 ter 1052 of the laws of 1965, subdivision 2 as amended by section 10 of
3 part A of chapter 93 of the laws of 2002, subdivision 2-a as added by
4 chapter 807 of the laws of 1977 and subdivision 6 as amended by chapter
5 140 of the laws of 1996, is amended to read as follows:
6 S 6-l. Mandatory reserve fund for municipal corporations, fire
7 districts [and], school districts AND BOARDS OF COOPERATIVE EDUCATIONAL
8 SERVICES. 1. As used in this section, the term "governing board," in so
9 far as it is used in reference to a municipal corporation, shall mean
10 the "legislative body" thereof, as that term is defined in section two
11 of the municipal home rule law, as amended from time to time; in so far
12 as it is used in reference to a fire district, shall mean the board of
13 fire commissioners thereof; in so far as it is used in reference to a
14 school district OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES, shall mean
15 the board of trustees thereof.
16 2. Notwithstanding any other provision of this chapter, upon the cash
17 sale by a municipal corporation, fire district [or], school district OR
18 BOARD OF COOPERATIVE EDUCATIONAL SERVICES of a capital improvement, as
19 defined in section six-c of this chapter, for the cost of which obli-
20 gations were issued pursuant to the local finance law, and when all or
21 part of such indebtedness is outstanding at the time of such sale, a
22 mandatory reserve fund shall be established for the purpose of retiring
23 such obligations, or, as an additional alternative, paying principal of,
24 or redemption premiums in connection with such obligations or other
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09636-01-3
S. 5136 2
1 obligations of at least equal weighted average life; provided however,
2 that, if the proceeds of the sale are used or set aside to be used (i)
3 to pay or provide for the construction, reconstruction, acquisition or
4 installation of capital improvements or equipment, as defined in section
5 six-c of this chapter, or (ii) for the payment of principal of, or
6 redemption premiums in connection with, any outstanding obligations
7 issued by the municipal corporation, fire district [or], school district
8 OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES to finance such capital
9 improvements or equipment, in an amount not less than the lesser of such
10 proceeds or the principal amount of the indebtedness outstanding on the
11 capital improvement sold, then such fund need not be established;
12 provided, however, that if such amount to be so used, together with any
13 other amounts so used pursuant to this sentence in the same fiscal year
14 of such municipal corporation, fire district [or], school district OR
15 BOARD OF COOPERATIVE EDUCATIONAL SERVICES, would exceed one percent of
16 the limit prescribed by section 104.00 of the local finance law, then
17 such fund shall nevertheless be established; and provided further, that
18 a municipal corporation, fire district [or], school district OR BOARD OF
19 COOPERATIVE EDUCATIONAL SERVICES shall within thirty days after the use
20 of such proceeds pursuant to clause (i) [herein] OF THE OPENING PARA-
21 GRAPH OF THIS SUBDIVISION, file a report with the state comptroller
22 identifying: (a) the asset sold, (b) the amount of net proceeds from
23 such sale, (c) the amount to be paid or provided pursuant to such clause
24 (i), and (d) the capital improvements or equipment to be so paid for or
25 provided. When a municipal corporation, fire district [or], school
26 district OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES has outstanding
27 indebtedness incurred to finance the cost of such a capital improvement,
28 federal and state aid received on account of such improvement, to the
29 extent that it is not applied directly to the payment of a part of the
30 cost of such improvement or to retire indebtedness issued in antic-
31 ipation of such aid, shall likewise be deposited in a reserve fund for
32 the purpose of retiring either such obligations or, as an additional
33 alternative, other obligations of at least equal weighted average life.
34 The entire proceeds of the sale or such state or federal aid received,
35 as the case may be, shall be deposited to the credit of such fund,
36 provided however, that if the aggregate amount thereof shall exceed the
37 principal of such indebtedness due or to become due, or if, when all
38 such outstanding obligations have been retired, any moneys remain unex-
39 pended in the reserve fund, such excess moneys may be used for any
40 lawful municipal or district purpose, as the case may be. The provisions
41 of this section shall not apply in a case where a provision of any other
42 law requires that the proceeds of the sale of a capital improvement
43 shall be deposited in a reserve fund established for the purpose of
44 retiring outstanding obligations.
45 2-a. The provisions of this section shall apply to capital improve-
46 ments of town and county improvement districts. For the purpose of
47 implementing the provisions of this section in regard to such districts,
48 the term "governing board" shall mean the governing board of the town or
49 county, as the case may be, in which such district is located, and the
50 term "chief fiscal officer" shall mean the chief fiscal officer of such
51 town or county.
52 3. Appropriations from such fund shall be made only for the payment or
53 payments of all or part of the said outstanding indebtedness. However,
54 any balance remaining in said fund upon the payment of all outstanding
55 principal and interest may be expended for any lawful purpose of the
S. 5136 3
1 municipal corporation, fire district [or], school district OR BOARD OF
2 COOPERATIVE EDUCATIONAL SERVICES.
3 4. The chief fiscal officer shall keep a separate account for each of
4 such funds established. Such account shall show:
5 a. The date of creation of the fund and the amount credited thereto.
6 b. The interest earned by such fund.
7 c. The capital gains or losses resulting from the sale of investments
8 of the fund.
9 d. The interest or capital gains which have accrued to the fund.
10 e. The amount and date of each withdrawal from the fund.
11 f. The assets of the fund, indicating the cash balance therein and a
12 schedule of the amounts invested. The chief fiscal officer at the termi-
13 nation of each fiscal year shall render a detailed report of the opera-
14 tion and condition of each of such funds to the governing board.
15 5. The members of the governing board are hereby declared trustees of
16 such funds and shall be subject to all the duties and responsibilities
17 imposed by law on trustees, and such duties and responsibilities may be
18 enforced by the municipal corporation, fire district [or], school
19 district OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES, as the case may
20 be, or by any board, commission, agency, office or taxpayer thereof. An
21 expenditure from such mandatory reserve fund may be made only by appro-
22 priation pursuant to a resolution of the governing board.
23 6. The moneys in each such fund shall be deposited and secured in the
24 manner provided by section ten of this article. The governing board or
25 the chief fiscal officer of such municipal corporation, fire district
26 [or], school district OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES, if
27 the governing board shall delegate such duty to him, may invest the
28 moneys in each such fund in the manner provided in section eleven of
29 this article. Any interest earned or capital gains realized on the
30 moneys so deposited or invested shall accrue to and become a part of
31 each such fund. The separate identity of each such fund shall be main-
32 tained whether its assets consist of cash, investments, or both.
33 7. The members of the governing board shall be guilty of a misdemeanor
34 if they:
35 a. Authorize a withdrawal from any such mandatory reserve fund for any
36 purpose other than as provided in this section.
37 b. Expend any money withdrawn from any such mandatory reserve fund for
38 a purpose other than as provided in this section.
39 S 2. This act shall take effect immediately.
