2023 New York Laws › FEA - NYS Financial Emergency Act for the city of NY 868/75

NEW YORK STATE FINANCIAL EMERGENCY ACT FOR THE CITY OF NEW YORK *
  Section  1.   Short title.
2.   Definitions.
2-a. Legislative declaration of financial emergency.
3.   General rights and prohibitions.
4.   Power  of  city  or  covered organization to determine the
expenditure of available funds.
5.   New York state financial control board; created.
6.   Administration of the board.
7.   Functions of the board.
7-a. Reports of the city.
8.   Development of the financial plan.
9.   Establishment and application of the board fund.
9-a. Establishment and application of a  general  debt  service
fund.
9-b. Limitations on short-term borrowing.
10.   Wage freeze.
10-a. Covenants, authorizations to agree and remedies.
11.   Prohibitions; penalties.
12.   Indemnification.
13.   Termination.
14.   Separability.
15.   Court preference.
* Terminates July 1, 2008 or ... see § 13
* Section  1.   Short  title.  This act shall be known and may
be cited as the "New York State Financial Emergency Act for  The
City of New York".
* Terminates July 1, 2008 or ... see § 13
* §  2.  Definitions. As used in this act, the following words
and terms shall have the following meanings unless  the  context
shall indicate another or different meaning or intent.
1.  "Comptroller"  means  the  comptroller of the state of New
York.
2. "City" means the city of New York.
3. "Mayor" means the mayor of the city of New York.
4. "City comptroller" means the comptroller of the city.
5.  "Covered  organization"  means  any  governmental  agency,
public authority or public benefit corporation which receives or
may  receive monies directly, indirectly or contingently, (other
than monies received for the sale of goods or the  rendering  of
services  or  the loan of monies to the city) from the city, and
in  any  event  includes,  without  limitation,  the  board   of
education of the city of New York, the board of higher education
of  the city of New York, the New York city transitional finance
authority, the health and hospitals corporation,  the  New  York
city transit authority, the New York city housing authority, the
New  York  city housing development corporation, city university
construction fund, Battery park city authority,  New  York  city
convention  and  exhibition  center  corporation,  Manhattan and
Bronx surface transit operating authority, Staten  Island  rapid
transit  operating authority, the New York city sports authority
and the Brooklyn sports center authority but shall  not  include
(i)  any governmental agency, public authority or public benefit
corporation specifically exempted from the  provisions  of  this
act  by  order  of  the  board  upon application of such agency,
authority, or corporation to the board or  at  the  board's  own
motion  upon a finding by the board that such exemption does not
materially affect the ability of the city to adopt and  maintain
a  budget  pursuant  to  the provisions of this act and provided
that at the time of such exemption there  shall  have  been  and
during  the  period  of  such exemption there shall be an annual
audit  by  a  nationally recognized independent certified public
accounting firm or consortium of firms, one of which shall be  a
nationally   recognized  firm,  of  the  covered  organization's
financial statements  performed  in  accordance  with  generally
accepted  auditing  standards and report by such auditor thereon
which includes an  opinion  that  the  financial  statements  so
audited have been prepared in accordance with generally accepted
accounting  principles (subject to the provisions of subdivision
two-a of section eight of this act) and such  other  information
as  such  auditors  deem  appropriate,  (ii)  any  state  public
authority as defined in section two hundred  one  of  the  civil
service  law,  unless  specifically  named  above,  or (iii) any
governmental agency, authority,  commission  or  instrumentality
created  by  compact  or agreement between the state of New York
and another state or states; provided, however, that  the  board
may  terminate  any  exemption  granted  by  order  of the board
pursuant to this  subdivision  upon  a  determination  that  the
circumstances  upon  which  such  exemption  was  granted are no
longer applicable.
6. "Board" means the governmental agency  created  by  section
five of this act.
7.  "Deputy  comptroller" means the deputy comptroller for the
city of New York created by section forty-one-a of the executive
law.
8. "Municipal assistance corporation for the city of New York"
means the corporate governmental agency created by section three
thousand thirty-three of the public authorities law.
9. "Short-term obligations" means tax anticipation notes, bond
anticipation notes, revenue anticipation notes, budget notes and
urban renewal notes of the city.
10. "Revenues" mean all taxes, federal and state  aid,  rents,
fees,  charges, payments, all proceeds from borrowings and other
income and receipts paid or payable to or for the account of the
city or any of the covered organizations.
11. "Financial plan" means the financial plan of the city  and
the  covered  organizations  to be developed pursuant to section
eight of this act, as from time to time modified.
12. "Control  period"  means  the  period  of  time  from  the
effective  date  of this act until the date when (a) there shall
no longer be effective  or  outstanding  any  guarantee  by  the
United  States  of  America  as  to  payment  of principal of or
interest on any note or bond issued  by  the  city  or  a  state
financing agency, (b) the board shall determine, based on annual
audit reports furnished in accordance with section seven-a, that
for  each  of  the three immediately preceding fiscal years, the
city  has  adopted  and  adhered   to   budgets   covering   all
expenditures  other than capital items, the results of which did
not show a deficit when reported in  accordance  with  generally
accepted  accounting  principles  subject  to  the provisions of
subdivision two-a of section eight  of  this  act  and  (c)  the
comptroller of the state and the comptroller of the city jointly
shall  certify that securities sold by or for the benefit of the
city during the fiscal year immediately preceding such date  and
the  then  current  fiscal  year  in  the  general public market
satisfied the capital and seasonal financing requirements of the
city  during  such  period  and  that  there  is  a  substantial
likelihood  that  such  securities  can  be  sold in the general
public market from  such  date  through  the  end  of  the  next
succeeding   fiscal   year   in   amounts   which  will  satisfy
substantially  all  of  the  capital  and   seasonal   financing
requirements  of  the city during such period in accordance with
the financial plan then  in  effect,  provided  that  for  these
purposes  sales  to  any  fund whose governing body includes any
designated representative  of  the  state  or  city  or  to  any
financial  institution which participates in a private placement
for the purchase of securities  for  the  benefit  of  the  city
during  its  nineteen hundred seventy-nine fiscal year shall not
be deemed sales in the general public market, unless in the case
of sales to  such  a  financial  institution  such  comptrollers
jointly  certify at the time of each such sale that a sale could
have been made in such amount and on reasonably comparable terms
in the general public market. After termination of  the  control
period  in  accordance  with  the foregoing provisions and until
there shall no longer be outstanding any notes or  bonds  issued
by  the  city  or a state financing agency which are entitled to
the benefits of the pledge and agreement authorized  by  section
ten-a  hereof,  the board shall reimpose a control period upon a
determination at any time that any of the following  events  has
occurred or that there is a substantial likelihood and imminence
of  such  occurrence:  (i) the city shall have failed to pay the
principal of or interest on any of its bonds or notes  when  due
or  payable  (other  than notes held by the municipal assistance
corporation for the city of New York to  the  extent  that  such
corporation  has  evidenced  its  intention  not to present such
notes  for  payment  during  the  fiscal  year  in   which   the
determination is made provided that such notes were held by such
corporation on June thirtieth, nineteen hundred seventy-eight or
were  issued in exchange for or in refunding or renewal of notes
held by such corporation on such date), (ii) the city shall have
incurred a deficit of more  than  one  hundred  million  dollars
during its fiscal year in the results of operations covered by a
budget  covering  all  expenditures  other than capital items as
reported  in  accordance  with  generally  accepted   accounting
principles,  subject  to  the provisions of subdivision two-a of
section eight of this act, (iii)  the  city  shall  have  issued
notes in violation of section nine-b of this act as amended from
time  to  time,  (iv) the city shall have otherwise violated any
provision of this act and such violation  substantially  impairs
the  ability  of the city to pay principal of or interest on its
bonds or notes when due and payable or its ability to  adopt  or
adhere  to a budget covering all expenditures other than capital
items  balanced  in  accordance  with  this  act  or   (v)   the
comptrollers' joint certification at any time, at the request of
the  board or on the comptrollers' joint initiative, which joint
certification shall be made from time to  time  as  promptly  as
circumstances  warrant  and  reported  to the board, that on the
basis of facts existing at such time they  could  not  make  the
joint  certification  described  by  clause (c) of the preceding
sentence. The board shall terminate any such  reimposed  control
period  when  it  determines  that  none of the conditions which
would permit the board to reimpose a control period exist. After
termination  of  a  control  period  the  board  shall  annually
consider  items  (i) through (v) above and determine whether, in
its judgment, any of the events described  in  such  items  have
occurred  and  the  board shall publish each such determination.
Each such joint certification made by the comptrollers hereunder
shall  be  based  on their separate written determinations which
shall take into account a report and  opinion  of  a  nationally
recognized  independent  expert  in  the  marketing of municipal
securities  selected  by  the  board  as  well  as   any   other
information  which may be available to each comptroller and each
such separate written determination by  the  comptrollers  shall
have  annexed  thereto the report and opinion of such expert and
any other information taken  into  account  and  shall  be  made
public  when delivered to the board. Notwithstanding any part of
the foregoing to the contrary, in no  event  shall  any  control
period  continue  beyond  the  earlier  of  (a)  July first, two
thousand eight or (b) the date (i)  when  all  bonds  and  notes
containing  the pledge and agreement authorized by section ten-a
of this act are  refunded,  redeemed,  discharged  or  otherwise
defeased  or  (ii) when there shall no longer be outstanding any
guarantee by the United States  of  America  or  any  agency  or
instrumentality  thereof  as  to  payment  of  principal  of  or
interest on any note or bond issued  by  the  city  or  a  state
financing agency, whichever of (i) or (ii) shall occur later.
13. "Debt service repayment account" means the special account
established pursuant to subdivision four of section nine of this
act.
14.  "Fund"  means  the  general debt service fund established
pursuant to section nine-a of this act.
15. "Board fund" means the board fund established pursuant  to
section nine of this act.
16. "TAN debt service account" means the tax anticipation note
debt  service  account  established  within the fund pursuant to
section nine-a of this act.
17. "RAN debt service account" means the revenue  anticipation
note  debt  service account established within the fund pursuant
to section nine-a of this act.
18. "Available funds" means at any  date  of  computation  the
monies  held by the city or a covered organization which (i) are
not required (a) to be applied to the fund, the TAN debt service
account, the RAN debt service account or otherwise to  meet  the
debt   service   requirements   of  the  city  and  the  covered
organizations on their bonds and notes  (other  than  bonds  and
notes   of  covered  organizations  payable  from  revenues  not
included in the fund) as they become due, or (b)  to  pay  other
liabilities  of  the  city  and the covered organizations having
statutory or contractual priority over remaining liabilities  of
the  city and the covered organizations, and (ii) therefore, may
be applied to the payment of other obligations on  an  allocated
basis  as  specified  by the city for expenditures in accordance
with a financial plan.
19. "Available tax levy" with  respect  to  an  issue  of  tax
anticipation  notes  means  at any date of computation the total
amount of city  real  estate  taxes  or  assessments  projected,
consistent  with  the  financial  plan  then  in  effect,  to be
received in cash on  or  before  the  fifth  day  preceding  the
maturity  date of such tax anticipation note issue, less amounts
required during the period between the date of  computation  and
the  fifth  day preceding such maturity date to be paid into the
general debt service fund or otherwise required to pay  interest
payable  on  other  outstanding  city bonds and notes, principal
(including  payments  into  sinking   funds)   coming   due   on
outstanding  city  bonds  and  principal to be paid from sources
other  than  the  proceeds  of  bonds  or renewal notes on other
outstanding city notes (exclusive of revenue anticipation  notes
or renewals thereof issued less than two years prior to the date
of  computation)  but  not including payments from sinking funds
required by the terms of certain city bonds. For the purposes of
this  subdivision  such  amounts  required  shall  not   include
principal  of  or  interest on any notes of the city held by the
municipal assistance corporation for the city of New York to the
extent that such corporation has evidenced its intention not  to
present  such  notes for payment of principal or interest during
the fiscal year in which the computation is made  provided  that
such  notes  were  held  by  such corporation on June thirtieth,
nineteen hundred seventy-eight or were issued in exchange for or
in refunding or renewal of notes held  by  such  corporation  on
such date.
20.  "State  financing  agency" means the municipal assistance
corporation for the city of New York or its successor.
* Terminates July 1, 2008 or ... see § 13
* § 2-a. Legislative declaration of financial  emergency.  The
legislature  hereby finds and declares that a state of financial
emergency continues to exist within the  city.  The  legislature
further finds and declares that the maintenance by the city of a
balanced budget in accordance with generally accepted accounting
principles  and  the  city's  borrowing  practices  are and will
continue to be a matter of overriding state concern, and that it
is  also  appropriate  and  desirable  for  the  legislature  to
exercise  its  duty under section twelve of article eight of the
state constitution to restrict the powers of the city to prevent
abuses  in  taxation  and  assessments  and  in  contracting  of
indebtedness by the city.
* Terminates July 1, 2008 or ... see § 13
* §  3.  General  rights and prohibitions. 1. Neither the city
nor any covered organization shall borrow or expend any  monies,
or  in any way, directly or indirectly, expressly or implicitly,
engage its credit during any control period except in compliance
with the provisions of this act.
2. Nothing contained in this act shall limit the right of  the
city  or  any covered organization to comply with the provisions
of any existing contract with or for the benefit of the  holders
of  any  bonds or notes of the city or such covered organization
or any public authority or public benefit corporation.
3. Nothing contained in this act shall be construed to  impair
the right of employees to organize or to bargain collectively.
* Terminates July 1, 2008 or ... see § 13
* §  4. Power of city or covered organization to determine the
expenditure of available funds. Nothing contained  in  this  act
shall  be  construed to limit the power of the city or a covered
organization to determine, from time to time,  within  available
funds  for  the  city  or  for  such  covered  organization, the
purposes for which expenditures are to be made by  the  city  or
such  covered organization and the amounts of such expenditures,
consistent with the aggregate expenditures then permitted  under
the financial plan for the city or such covered organization.
* Terminates July 1, 2008 or ... see § 13
* §  5. New York state financial control board; created. There
is hereby created the New York state  financial  control  board.
The  board shall be a governmental agency and instrumentality of
the state and it shall have such powers and functions as are set
forth in this act.
* Terminates July 1, 2008 or ... see § 13
* §  6.  Administration of the board. 1. The membership of the
board shall be the governor, the state comptroller (pursuant  to
his  authority  to  supervise  the  accounts  of  any  political
subdivision of the state), the mayor, the city  comptroller  and
three  members  appointed  by  the  governor with the advice and
consent of the senate. At least two  of  the  appointed  members
shall  be residents of the city or have their principal place of
business in the city. Such appointed members shall serve at  the
pleasure  of the governor. The governor shall be the chairman of
the board and the governor or his representative  shall  preside
over  all meetings of the board. The board shall act by majority
vote of the entire board. The board shall maintain a  record  of
its  proceedings  in  such  form  as  it may determine, but such
record shall indicate attendance and  all  votes  cast  by  each
member.  Every  member of the board, who is otherwise an elected
official of the state or city, shall be entitled to designate  a
representative  to  attend,  in his place, meetings of the board
and to vote or otherwise act in his behalf.  Written  notice  of
such  designation  shall  be  furnished  to  the  board  by  the
designating  member  prior  to  any  meeting  attended  by   his
representative.  Any  such  representative  shall  serve  at the
pleasure of the designating member. No such representative shall
be authorized to delegate any of his duties or functions to  any
other  person.  The  lieutenant governor, temporary president of
the senate, the minority  leader  of  the  senate,  speaker  and
minority leader of the assembly, the president of the council of
the  city  of  New  York,  the  city board of estimate acting by
majority vote, and the vice-chairman and the minority leader  of
the  council  of the city of New York, shall each be entitled to
appoint a representative to the board.  Each such representative
shall be entitled  to  receive  notice  of  and  to  attend  all
meetings  of  the  board  but  shall not be entitled to vote. No
representative shall be an employee or officer of  the  federal,
state  or  city  governments. Each representative shall serve at
the pleasure of  the  appointing  official  or  body,  shall  be
eligible  for  reappointment,  and  shall  hold office until his
successor has been appointed.
2.  Notwithstanding  any  inconsistent  provisions   of   law,
general,  special or local, no officer or employee of the state,
or political subdivision of the state, any  governmental  entity
operating any public school or college or other public agency or
instrumentality   or   unit   of   government   which  exercises
governmental powers under the laws of the state,  shall  forfeit
his  office  or  employment  by  reason  of  his  acceptance  or
appointment as a member, representative,  officer,  employee  or
agent   of   the   board  nor  shall  service  as  such  member,
representative, officer, employee  or  agent  of  the  board  be
deemed   incompatible   or  in  conflict  with  such  office  or
employment.
3. The members of the board appointed by the governor and  all
representatives  designated  by members of the board shall serve
without salary or per diem allowance but shall  be  entitled  to
reimbursement  for actual and necessary expenses incurred in the
performance of official duties under this act, provided  however
that  such members and representatives are not, at the time such
expenses  are  incurred,  public employees otherwise entitled to
such reimbursement.
4. The governor and  the  mayor,  jointly,  shall  appoint  an
executive  director of the board who shall serve at the pleasure
of the board and may be removed by  the  board.  The  board  may
delegate  to  the  executive  director  or to one or more of its
other officers, employees or agents, such powers and  duties  as
the  board  may deem proper, except any duties inconsistent with
the duties and functions  prescribed  by  any  other  office  or
position any such person may hold.
* Terminates July 1, 2008 or ... see § 13
* § 7. Functions of the board. 1. In carrying out the purposes
of this act, the board shall perform the following functions:
a.  In accordance with the provisions of section eight of this
act, the board shall (i) consult with the city and  the  covered
organizations  in  the  preparation  of  the financial plan, and
certify to the city the revenue estimates approved therein, (ii)
prescribe the form of the  financial  plan  and  the  supporting
information required in connection therewith, and (iii) exercise
the  rights  of  approval,  disapproval  and  modification  with
respect to the financial plan, including but not limited to  the
revenue estimates contained therein.
b.  The  board,  to  the  extent  it  deems  it  necessary  or
appropriate in order to accomplish the  purposes  of  this  act,
shall  establish  and  adopt  procedures with respect to the (i)
proper maintenance of the  board  fund,  (ii)  the  deposit  and
investment  of  revenues  in such fund and (iii) disbursement of
monies from such fund.
c. The board shall, from time to time and  to  the  extent  it
deems  necessary  or  appropriate  in  order  to  accomplish the
purposes of this act, (i)  review  the  operations,  management,
efficiency  and productivity of such city operations and of such
covered organizations or  portions  thereof  as  the  board  may
determine,  and make reports thereon; (ii) audit compliance with
the financial plan in such areas as  the  board  may  determine;
(iii)  recommend  to the city and the covered organizations such
measures relating to their  operations,  management,  efficiency
and  productivity  as  it  deems appropriate to reduce costs and
improve services so as to advance the purposes of this act;  and
(iv)  obtain information of the financial condition and needs of
the city and the covered  organizations.  Nothing  herein  shall
diminish the powers of the comptroller otherwise provided by law
and  the  board may request the assistance of the comptroller in
performing the above functions.
d. The board (i) shall receive from the city  and  review  the
reports  to  be prepared by or on behalf of the city pursuant to
section seven-a; (ii)  shall  receive  from  the  city  and  the
covered organizations and from the deputy comptroller, and shall
review such financial statements and projections, budgetary data
and  information,  and  management  reports and materials as the
board deems necessary or desirable to accomplish the purposes of
this act; and (iii) shall inspect, copy and audit such books and
records of the city and the covered organizations as  the  board
deems  necessary or desirable to accomplish the purposes of this
act.
e. All contracts entered into  by  the  city  or  any  covered
organization  must be consistent with the provisions of this act
and must comply with the requirements of the financial  plan  as
approved  by  the  board. With respect to all contracts or other
obligations  to  be  entered  into  by  the  city or any covered
organization   after   October   fifteenth,   nineteen   hundred
seventy-five, requiring the payment of funds or the incurring of
costs by the city or any covered organization:
(i) Within twenty days from the effective date of this act the
mayor shall present to the board proposed regulations respecting
the  categories  and  types  of  contracts and other obligations
required  to  be  reviewed  by  the  board  pursuant   to   this
subdivision  e.  Within  thirty  days from the effective date of
this act, the board shall approve or  modify  and  approve  such
proposed  regulations  or  promulgate  its own in the event that
such proposed regulations are not submitted  to  it  within  the
twenty  days  as  provided  for  herein.  Such  regulations  may
thereafter be modified by the board from time  to  time  on  not
less than thirty days notice to the mayor and the mayor may from
time   to  time  propose  modifications  to  the  board.  Unless
expressly disapproved or modified by  the  board  within  thirty
days from the date of submission by the mayor, any such proposed
regulations  or  modifications  shall  be deemed approved by the
board;
(ii) Prior to entering into any contract or other  obligations
subject  to  review of the board under its regulations, the city
or any covered organization shall submit a copy of such contract
or other obligation to the board accompanied by an  analysis  of
the  projected  costs of such contract or other obligation and a
certification that performance thereof  will  be  in  accordance
with  the  financial  plan,  all  in  such  form  and  with such
additional information as the board  may  prescribe.  The  board
shall  promptly  review  the  terms  of  such  contract or other
obligation and the supporting information in order to  determine
compliance with the financial plan;
(iii)  During  a  control  period  the  board shall, by order,
disapprove any contract or other obligation reviewed by it  only
upon  a  determination that, in its judgment, the performance of
such contract or other obligation would be inconsistent with the
financial plan and the city or covered  organization  shall  not
enter into such contract or other obligation;
(iv)  During  a control period if the board approves the terms
of a reviewed contract or other obligation, the city or  covered
organization  may  enter  into such contract or other obligation
upon the terms submitted to the board. Failure of the  board  to
notify  the  city or covered organization within thirty days (or
such additional time not exceeding  thirty  days  as  the  board
shall  have  notified  the city or covered organization, that it
requires to complete its review and analysis)  after  submission
to  it  of  a contract or other obligation that such contract or
other  obligation  has  been  disapproved  shall  be  deemed  to
constitute board approval thereof.
f. Upon submission thereof by the city, the board shall review
the terms of each proposed long-term and short-term borrowing by
the  city  and  any covered organization to be affected during a
control period but after  October  fifteenth,  nineteen  hundred
seventy-five,  and  no  such  borrowing  shall  be  made  unless
approved by the board. Each such proposed borrowing by a covered
organization shall be submitted  to  the  city  by  the  covered
organization  before it may be considered by the board. Not more
than  thirty  days  after  any  such  submission  by  a  covered
organization  the city shall transmit any such proposed terms of
borrowing to the board together with the  certification  of  the
city  as  to  whether  such  proposed  terms of borrowing are in
accordance with the financial plan and are consistent  with  the
objectives  and purposes of this act. Any such submission to the
city shall be accompanied by  a  certification  of  the  covered
organization  that  the terms thereof are in accordance with the
financial  plan  and  are  consistent  with  the  objectives  or
purposes  of  this act. The transmittal by the city to the board
shall include a recommendation by the city for the  approval  or
disapproval  of such proposed terms of borrowing pursuant to the
terms of this paragraph. In the event the  city  does  not  make
such  transmittal  within  such  thirty day period, such covered
organization may submit such proposed borrowing directly to  the
board. The board shall disapprove any borrowing if it determines
that  such  borrowing is inconsistent with the financial plan or
the objectives or purposes of this act. The board shall  consult
and coordinate with the municipal assistance corporation for the
city  of New York with respect to borrowings of the city and any
covered organization and shall receive reports from the muncipal
assistance corporation for the city of New York on its review of
borrowings by  the  city.  No  covered  organizations  shall  be
prohibited  from issuing bonds or notes to pay outstanding bonds
or notes.
g. The board  and  the  comptroller  shall  receive  quarterly
reports from the city comptroller setting forth the debt service
requirements  on all bonds and notes of the city and the covered
organizations for the following quarter, which reports shall  be
in  such  form  and  contain such information as the board shall
determine. Such reports shall be issued no later than sixty days
prior to the start of the quarter  to  which  they  pertain  and
shall  be  updated  immediately  upon  each issuance of bonds or
notes after the date of such report to  reflect  any  change  in
debt  service  requirements  as  a  result of such issuance. The
board also shall receive from the  city  monthly  and  quarterly
financial  reports,  which  reports  shall  be  in such form and
contain such information as the board shall determine and  shall
be  made available by the city to the public.  In order to avoid
duplicative reports and reporting requirements,  to  the  extent
that  the  city  is  required  to  submit  monthly  or quarterly
financial reports to the department of the treasury pursuant  to
any  agreement  or  arrangement  made in connection with federal
guarantees of notes or bonds issued  by  the  city  or  a  state
financing  agency,  copies of such reports shall be submitted to
the board in satisfaction of the monthly and quarterly reporting
requirements set forth  above,  together  with  such  additional
information as the board may require. Each monthly and quarterly
report  herein  required  to  be  submitted  to  the  board must
indicate any variance  between  actual  and  budgeted  revenues,
expenses or cash for the period covered by such report.
h.  The board shall issue, to the appropriate officials of the
city and the covered organizations,  such  orders  as  it  deems
necessary  to accomplish the purposes of this act, including but
not limited to timely  and  satisfactory  implementation  of  an
approved  financial  plan.  Any order so issued shall be binding
upon the official to whom it was issued and  failure  to  comply
with  such  order  shall  subject  the official to the penalties
described in section eleven of this act.
i.  The  board  shall coordinate with the municipal assistance
corporation for the city of New York and the deputy  comptroller
with  respect to the performance of its review and monitoring of
the revenues and  expenditures  of  the  city  and  the  covered
organizations.
2.  In the event of any default by the city on its outstanding
bonds or notes, and so long as such default has not been  cured,
the  board may, any provisions of this act notwithstanding, take
any action that it is authorized to take pursuant to title six-A
of article two of the local finance law, and may direct the city
to take any action that the city is  authorized  to  take  under
such law.
* 3.  (a)  Notwithstanding  any provision of the New York City
Collective Bargaining Law, codified as chapter fifty-four of the
New York city administrative code, or any general or special law
to the contrary, any report  or  recommendation  of  an  impasse
panel constituted pursuant to such chapter which provides for an
increase in wages or fringe benefits of any employee of the city
or covered organization, in addition to considering any standard
or factor required to be considered by applicable law, including
the  standards  enumerated  in section 1173-7.0(c)(3)(b) of such
chapter,  shall  also  take  into   consideration   and   accord
substantial  weight  to the financial ability of the city and or
covered organization to pay the cost of such increase  in  wages
or fringe benefits.
(b) The board of collective bargaining constituted pursuant to
such  chapter,  when  reviewing  such  report  or recommendation
before proceeding  to  other  issues,  shall  make  a  threshold
determination as to whether such report or recommendation for an
increase in wages or fringe benefits is within the city's and or
covered   organization's   financial  ability  to  pay.  If  the
threshold determination is in the negative, the matter shall  be
remitted  to the impasse panel for further consideration. If the
threshold determination  is  in  the  affirmative,  the  further
review  of  the  report  or recommendation with respect to other
issues, if any, shall proceed as provided  by  law.  Unless  the
parties  stipulate  otherwise, the threshold determination shall
be made within thirty days after submission  of  the  report  or
recommendation to the board of collective bargaining.
(c)  Any  determination pursuant to article eight of the labor
law or any agreement or stipulation entered into in lieu thereof
which provides for an increase in wages or  fringe  benefits  of
any  employee  of  the  city  or  covered organization shall, in
addition to considering any standard or factor  required  to  be
considered  by  applicable law, also take into consideration and
accord substantial weight to the financial ability of  the  city
and or covered organization to pay the cost of such increase.
(d)  Any report or recommendation of a fact finding or similar
type panel or any interest arbitration award which provides  for
an  increase  in wages or fringe benefits of any employee of the
city or covered organization not subject to  the  provisions  of
the New York City Collective Bargaining Law, codified as chapter
fifty-four  of  the New York city administrative code, shall, in
addition to considering any standard or factor  required  to  be
considered  by  applicable law, also take into consideration and
accord substantial weight to the financial ability of  the  city
and or covered organization to pay the cost of such increase.
(e)  Any  party to a proceeding before the board of collective
bargaining as described  in  paragraph  (b)  or  other  body  as
described in paragraphs (c) or (d) hereof may commence a special
proceeding  in the appellate division, first department, supreme
court, state of New York, to review the threshold  determination
as  to  the city and or covered organization's financial ability
to pay. Such proceeding shall be commenced not later than thirty
days after the final determination has been made by the board of
collective bargaining in the case of paragraph (b) or other body
in the case of paragraphs (c) or (d). Such proceeding shall have
preference over all other causes  in  such  appellate  division,
other than causes relating to the election law.
(f) The court shall make a de novo review of the record solely
for  the  purpose of determining whether an award of an increase
in wages or fringe benefits was within the city's and or covered
organization's financial ability to pay. The court's findings as
to such issue shall be based upon a  preponderance  of  all  the
evidence  set forth in the record.  Unless the parties stipulate
otherwise, arguments or submission shall be had  within  fifteen
days  after commencement of the special proceeding and the court
shall render its decision within fifteen  days  thereafter.  All
questions,  other  than  the  question relating to the threshold
determination, shall be reviewed by the  appellate  division  in
the   same   proceeding  in  the  manner  provided  by  articles
seventy-five or seventy-eight of  the  civil  practice  law  and
rules  as  may  be  appropriate,  notwithstanding that the issue
would otherwise have  been  cognizable  in  the  first  instance
before  a  special  or  trial  term of the supreme court.  If an
appeal shall  otherwise  lie  from  such  determination  of  the
appellate  division  to  the  court  of  appeals, notice of such
appeal shall be filed within thirty days after the entry of  the
final order or judgment of the appellate division if such appeal
is  of right or within ten days after entry of an order granting
leave to appeal and such appeal shall have preference  over  all
other appeals other than appeals relating to the election law.
(g)  At any stage of any proceeding under paragraphs (a), (b),
(c), (d) and (e) hereof or any appeal from an order or  judgment
therefrom,  the  board  may intervene as a party on the issue of
the financial ability of the city and or covered organization to
pay the cost of an increase in wages or fringe benefits.
(h) For the purposes of this subdivision, financial ability to
pay shall mean the financial ability of the city and or  covered
organization  to pay the cost of any increase in wages or fringe
benefits without requiring an increase  in  the  level  of  city
taxes  existing  at the time of the commencement of a proceeding
under paragraph (a), (c) or (d) hereof.
(i) The provisions of this subdivision shall terminate on June
thirtieth, nineteen hundred eighty-six.
* NB Expires June 30, 1986
4. During a control period, except upon approval by the  board
in  accordance  with  the  provisions  of  paragraph  e  or f of
subdivision one of this section, as the board  shall  determine,
neither  the  city  nor  a  covered organization shall enter any
agreement or other arrangement, whether or not it creates a debt
of the city or a covered organization,  pursuant  to  which  the
revenues  or  credit  of  the city may be directly or indirectly
pledged, encumbered,  committed  or  promised,  contingently  or
otherwise,  for  the  payment of obligations of a public benefit
corporation. Nothing in this subdivision shall limit  the  right
of  the  city  to  comply  with  the  provisions of any existing
agreement or other arrangement in respect of the obligations  of
a public benefit corporation.
5.  The  board  may  employ  such  consultants  as it may deem
necessary to assist it  in  performing  its  functions  required
under this act.
6.  The  board  shall  have  the authority to make and execute
agreements and all  other  instruments  which  the  board  deems
necessary   for   the  exercise  of  its  powers  and  functions
including, in connection  with  any  agreement  by  the  federal
government or any agency or instrumentality thereof to guarantee
the  payment  of  the principal of or interest on bonds or notes
issued by the city or by a state financing agency, to enter into
one or more agreements containing terms and conditions  required
by  the  secretary of the treasury pursuant to the New York City
Loan Guarantee Act of l978, Public Law 95-339 with  the  federal
government or any agency or instrumentality thereof with respect
to  such  guarantee or any matters related thereto and to comply
with such terms and conditions.
7. The board may appoint qualified individuals to  participate
as  members of such audit, productivity or similar committees or
councils as  the  city  may  from  time  to  time  establish  in
consultation  with  the board.  Such individuals, however, shall
not be deemed to be officers, employees or agents of the  board.
The  board  shall  review and report on, not less than annually,
the development and implementation of methods for enhancing  the
productivity  of  the  city's  labor  force proposed by any such
committee or council.
* Terminates July 1, 2008 or ... see § 13
* § 7-a. Reports of the city. 1.  The  city  shall  take  such
action  as  may  be  necessary to enable a nationally recognized
independent certified public accounting firm  or  consortium  of
firms,  one  of  which  at  least  is  a  nationally  recognized
independent certified public  accounting  firm,  to  perform  an
annual  audit  in  accordance  with  generally accepted auditing
standards and to furnish to the board the report on  such  audit
prepared by such firm or consortium of firms, which report shall
include an opinion as to whether the city's financial statements
have   been  prepared  in  accordance  with  generally  accepted
accounting principles subject to the provisions  of  subdivision
two-a  of  section eight of this act and shall state whether the
audit of such financial statements was made in  accordance  with
generally  accepted  auditing standards and accordingly included
such tests of the accounting records  and  such  other  auditing
procedures as were considered necessary under the circumstances.
Such  report  shall note the nature and extent of variations, if
any, from generally accepted accounting principles reflected  in
the  city's  financial statements. The city shall make available
for inspection and copying all books, records, work  papers  and
other  data  and  material as required by such auditors, and the
city shall make its officers and  employees  available  to,  and
shall  cooperate  with such auditors so as to permit such annual
audit to be completed and the report issued to the city  and  to
the  board  within  four  months  after  the close of the city's
fiscal year.
2.  Not  later  than  January  fifteenth,   nineteen   hundred
eighty-one,  the  city  shall issue a report to the board on its
program designed to enable the city (i) during its fiscal  years
ending  June  thirtieth,  nineteen hundred eighty-three and June
thirtieth,   nineteen   hundred  eighty-four,  to  minimize  its
dependence upon the state financing agency to the extent that it
shall be prudent to satisfy the city's financing  needs  by  the
sale  of  obligations  of the city or its agencies in the public
markets, and (ii) thereafter  to  satisfy  its  financing  needs
entirely  by  the  sale  of  such  obligations. The report shall
describe such  actions  that  the  city  proposes  to  take,  in
addition  to  those  actions  required  by law, to implement the
program and shall contain such further information as the  board
may  reasonably  specify.  After  the  issuance  of such initial
report,  the  city  shall  report  to   the   board   at   least
semi-annually   through   June   thirtieth,   nineteen   hundred
eighty-two and thereafter at least quarterly on the  actions  it
has  taken  to implement the program and on the results thereof.
The city may revise the program from  time  to  time  but  shall
promptly  describe any revisions and the reasons therefor to the
board.   The city may  comply  with  the  requirements  of  this
subdivision   by   submitting   the   necessary  information  as
supplementary material to a financial  plan  or  financial  plan
modification  in accordance with the standards and procedures of
section eight of this act. The provisions  of  this  subdivision
shall terminate on June thirtieth, nineteen hundred eighty-five.
* Terminates July 1, 2008 or ... see § 13
* §  8.  Development of the financial plan. 1. Pursuant to the
procedures contained in subdivision three of this section,  each
year  the  city shall develop, and may from time to time modify,
with the approval of the board during a control period,  a  four
year   financial   plan   covering  the  city  and  the  covered
organizations.
Each such financial plan and financial plan modification shall
comply with the requirements of subdivision four of this section
and shall, except as otherwise provided pursuant to  subdivision
two-a of this section, conform to the following standards:
a.  For  its  fiscal  years  ending  June  thirtieth, nineteen
hundred seventy-nine through June  thirtieth,  nineteen  hundred
eighty-one,  the  city's  budget covering all expenditures other
than capital items shall be prepared and balanced  so  that  the
results  thereof  would  not  show  a  deficit  when reported in
accordance with the accounting principles set forth in the state
comptroller's uniform system of accounts for municipalities,  as
the  same  may  be  modified by the comptroller, in consultation
with the city comptroller, for application to the city;  subject
to  the  provision of subdivision four of section three thousand
thirty-eight of the  public  authorities  law  with  respect  to
contributions  by  the  city  or  other  public  employer to any
retirement system or pension fund and subject to  the  provision
of  paragraph  (c) of subdivision five of section three thousand
thirty-eight of the  public  authorities  law  with  respect  to
expense  items  included  in the capital budget of the city. For
the  fiscal  year  ending  June  thirtieth,   nineteen   hundred
eighty-two,  and  for  each  fiscal  year thereafter, the city's
budget covering all expenditures other than capital items  shall
be  prepared  and balanced so that the results thereof would not
show a  deficit  when  reported  in  accordance  with  generally
accepted  accounting  principles  and would permit comparison of
the budget with the report of actual financial results  prepared
in  accordance  with  generally  accepted accounting principles.
With  respect  to  financial plans that include the fiscal years
ending June thirtieth,  nineteen  hundred  seventy-nine  through
June  thirtieth,  nineteen hundred eighty-one, the city's budget
covering all expenditures other  than  capital  items  shall  be
prepared   in  accordance  with  generally  accepted  accounting
principles and there shall be substantial progress in each  such
fiscal  year  towards  achieving  a  city  budget  covering  all
expenditures other than capital items the results of which would
not show a deficit when reported in  accordance  with  generally
accepted accounting principles. The city shall eliminate expense
items from its capital budget not later than the commencement of
the   fiscal   year  ending  June  thirtieth,  nineteen  hundred
eighty-two. For the fiscal year ending June thirtieth,  nineteen
hundred  eighty-nine,  and  for each fiscal year thereafter, the
budgets covering all expenditures other than  capital  items  of
each of the covered organizations shall be prepared and balanced
so  that  the  results  thereof  would  not  show a deficit when
reported  in  accordance  with  generally  accepted   accounting
principles;  and for each fiscal year prior thereto, there shall
be substantial progress towards such goal.  Notwithstanding  the
foregoing and the provisions of any general or special state law
or  local  law to the contrary, including but not limited to the
New York city charter:   (i) all costs  that  would  be  capital
costs   in   accordance   with   generally  accepted  accounting
principles, but for the application of  governmental  accounting
standards  board statement number forty-nine, shall be deemed to
be capital  costs  for  purposes  of  this  act  and  any  other
provision  of  state  or local law, including but not limited to
the New York city charter, relevant to  the  treatment  of  such
costs;  and  (ii)  the  determination  as  to the existence of a
deficit pursuant to this act and any other provision of state or
local law, including but  not  limited  to  the  New  York  city
charter,  shall  be made without regard to changes in restricted
fund  balances,  as  defined  by  the  governmental   accounting
standards  board,  where  restrictions  in relation to such fund
balances are imposed by state or federal law or  regulation,  or
otherwise by private or governmental parties other than the city
of  New  York,  and  without  regard to funds held in the health
stabilization fund, the school crossing guards health  insurance
fund,  any  revenue  stabilization  fund established pursuant to
section fifteen  hundred  twenty-eight  of  the  New  York  city
charter and the management benefits fund established by the city
of  New  York. Deposits into any such revenue stabilization fund
shall be deemed to be expenses of such city in the  fiscal  year
in  which such deposits are made, and withdrawals from such fund
shall be deemed to be revenues of such city in the year in which
such withdrawals are made; provided however, that  surpluses  of
such city, whether accumulated from fiscal years ending prior to
the  effective  date  of the chapter of the laws of two thousand
twenty that amended this paragraph or existing at the  close  of
any  fiscal  year  ending  after  such  effective date, shall be
deposited into  such  revenue  stabilization  fund  as  soon  as
practicable,  and  such deposits shall not be deemed expenses of
the city in the fiscal year in which such deposits are made.
b. The limitations on its outstanding  short-term  obligations
required   by   subdivision   nine  of  section  three  thousand
thirty-eight of the public authorities law and by section nine-b
of this act shall be observed at all times, as each  is  amended
from time to time.
c. Provision shall be made for the payment in full of the debt
service  on  all  bonds  and  notes  of the city and the covered
organizations (other than notes held by the municipal assistance
corporation for the city of New York to  the  extent  that  such
corporation  has  evidenced  its  intention  not to present such
notes  for  payment  during  the  fiscal  year  in   which   the
determination is made provided that such notes were held by such
corporation on June thirtieth, nineteen hundred seventy-eight or
were  issued in exchange for or in refunding or renewal of notes
held by such corporation on such date), for the adequate funding
of programs of the city and the covered organizations which  are
mandated  by  state or federal law and for which obligations are
going to be incurred during the fiscal year and for payment of a
guarantee fee or any other amounts required by the United States
of  America  or  any  agency  or  instrumentality   thereof   in
connection with the guarantee of the payment of the principal of
or interest on bonds or notes issued by the city.
d. All projections of revenues and expenditures contained in a
financial  plan  shall  be  based  on reasonable and appropriate
assumptions and methods of estimation. All cash flow projections
shall be based upon reasonable and appropriate assumptions as to
sources and uses of cash  (including  but  not  limited  to  the
timing  thereof),  and  shall provide for operations of the city
and covered  organizations  to  be  conducted  within  the  cash
resources so projected.
e.  The  city  shall provide a general reserve for each fiscal
year to cover potential reductions in its projected revenues  or
increases  in its projected expenditures during each such fiscal
year. The amount provided for  such  general  reserve  shall  be
estimated  by  the  city  in accordance with paragraph d of this
subdivision, but in no event shall it be less than  one  hundred
million dollars at the beginning of any fiscal year.
f.  For  financial plans beginning with the fiscal year ending
June thirtieth, nineteen hundred eighty-three or any  succeeding
fiscal  year,  the  first  fiscal year included in any financial
plan shall make provision  for  the  repayment  of  any  deficit
incurred by the city during the preceding fiscal year.
2.  In  developing  the  financial plan the city shall seek to
achieve a stabilized work force for the city and, to the  extent
a  reduction  in  the  work  force is required, primary recourse
shall be  had  to  the  attrition  process  to  accomplish  such
reduction.
2-a.  The  city  and  the  board  shall  confer concerning the
projected effect on the budgets of  the  city  and  the  covered
organizations  of  any  change  in generally accepted accounting
principles, or change in the application of  generally  accepted
accounting principles to the city and the covered organizations,
made  after  the  effective  date  of  this  act.  If  the board
determines that immediate compliance with such change will  have
a   material   effect   on  such  budgets  over  a  time  period
insufficient to accommodate the  effect  without  a  substantial
adverse  impact on the delivery of essential services, the board
may authorize and approve a method of phasing  the  requirements
of   such   change   into  such  budgets  over  such  reasonably
expeditious time period as the board deems appropriate.
3. The financial plan shall be developed and, during a control
period,  shall  be  approved,  and  may  from  time  to  time be
modified, in accordance with the following procedures:
a.  The  city  shall,  by   June   first,   nineteen   hundred
seventy-eight,  prepare and submit a financial plan to the board
covering the four year period which begins with the fiscal  year
ending    June   thirtieth,   nineteen   hundred   seventy-nine.
Thereafter, at least fifty days prior to the beginning  of  each
fiscal  year or on such other date as the board may approve upon
the request of the city, the city shall  prepare  and  submit  a
financial  plan  to  the  board  covering  the  four year period
beginning with such fiscal year. On such dates the  mayor  shall
also  submit  to the board the city's executive expense, revenue
and  capital  budgets  for  the  ensuing  fiscal  year   and   a
certificate   of   the  mayor  stating  that  such  budgets  are
consistent with the financial  plan  submitted  therewith,  that
projections  contained  in  the  budgets  and financial plan are
based upon reasonable and appropriate assumptions and methods of
estimation, and that operation within the budgets is feasible.
b. (i) During a control period the board shall promptly review
each financial plan and financial plan modification submitted by
the city.  Not more than forty-five days after submission  of  a
financial  plan  or  more than thirty days after submission of a
financial plan modification the board  shall  determine  whether
the  financial  plan  or financial plan modification is complete
and complies with the standards set forth in subdivision one  of
this  section and shall approve or disapprove the financial plan
or financial plan modification in accordance with the provisions
of this section. If the board determines that the financial plan
or financial plan modification is complete and complies with the
standards set forth in subdivision  one  of  this  section,  the
board  shall  approve  the  financial  plan  or  financial  plan
modification. Upon making such  determination  the  board  shall
make a certification to the city setting forth revenue estimates
approved by the board in accordance with such determination.
(ii) At all times other than during a control period the board
shall  promptly  review  each  financial plan and financial plan
modification submitted by the  city.  If  the  board  determines
after  such  review  that  the  financial plan or financial plan
modification submitted by the city is not in accordance with the
standards set forth in subdivision  one  of  this  section,  the
board  shall promptly so notify the city and may take such other
action under this act as it deems appropriate.
c. The board shall disapprove a financial  plan  or  financial
plan  modification if during a control period it determines that
the financial plan or financial plan modification is  incomplete
or  fails  to  comply  with the provisions of subdivision one of
this section. In disapproving a financial plan  or  a  financial
plan  modification  the  board may order that one or more of the
following actions be taken:
(i) expenditures or reserves to assure availability of amounts
required for debt service requirements on all bonds and notes of
the city and the covered organizations or expenditures  required
for  adequate  funding  of  programs of the city and the covered
organizations mandated by state or federal  law  and  for  which
obligations  are going to be incurred during the fiscal year, be
increased to the levels required to provide for their payment in
full;
(ii)  the revenue projections (or any item thereof) during any
period be adjusted to comply with the  standards  set  forth  in
subdivision one of this section; and
(iii)  the  aggregate expenditures projected for any period be
reduced to conform to revenue estimates certified by  the  board
in  order  to comply with the standards set forth in subdivision
one of this section.
d. During a control period in the event that the  city  shall,
for  any  reason,  fail  to submit a financial plan prior to the
beginning of a fiscal year, as required by paragraph a  of  this
subdivision,  or  in  the  event that the board has not, for any
reason permitted under  this  act,  approved  a  financial  plan
submitted  by  the city prior to the beginning of a fiscal year,
the board shall formulate and  adopt  a  financial  plan  to  be
effective until the board approves a financial plan submitted by
the  city.  Any  financial plan so formulated by the board shall
comply with the standards set forth in subdivision one  of  this
section.  The budgets and operations of the city and the covered
organizations  at  all  times  shall  be  in   conformance   and
compliance with the financial plan then in effect.
e.  After the initial adoption by the city, or the approval by
the  board  during  a  control  period,  of  a  financial  plan,
projections  of  revenues  and  expenditures and other estimates
contained in the financial plan shall be reexamined by the board
at least quarterly in consultation with the city and the covered
organizations, and  during  a  control  period  the  city  shall
prepare  and submit to the board financial plan modifications at
such times, in such detail and within such time periods  as  the
board  may  require  in  order  to  modify the financial plan to
conform to the standards set forth in subdivision  one  of  this
section.  During  a  control  period  in  the  event  the  board
determines that (i) revenue estimates (or any item thereof) must
be adjusted to ensure compliance with the standards set forth in
subdivision one of this section, or (ii)  that  the  city  or  a
covered  organization  is  expending  funds at a rate that would
cause  expenditures  to   exceed   the   aggregate   expenditure
limitation  for the city or covered organization provided for in
the financial plan then in effect, prior to  the  expiration  of
the  fiscal  year,  the  city  shall  submit  a  financial  plan
modification to effect such adjustments in revenue estimates and
reductions in total expenditures as may be necessary to  conform
to  such  standards  or  aggregate  expenditure  limitations. If
during  a  control  period  the  city  fails  to   submit   such
modification  after  such  determination  as  to  adjustments in
revenue  estimates  or  such  determination  as  to   rates   of
expenditures,  or to submit a financial plan modification in the
detail or within the time period specified by the board,  or  if
such  modification is disapproved by the board as not conforming
to the standards set forth in subdivision one of  this  section,
the   board   may   formulate  and  adopt  such  financial  plan
modification  as  it  deems  appropriate  to  ensure  that   the
financial   plan   continues   to   meet  such  standards.  Such
modification   shall   become   effective   on   its   adoption.
Notwithstanding the provisions of this section, in the event the
city  shall  determine  that,  due to unforeseen events during a
fiscal  year,  compliance  with  the  standards  set  forth   in
paragraph a of subdivision one of this section would result in a
material adverse impact upon the delivery of essential services,
the  city shall notify the board of such determination, together
with  such information, projections or analyses relating thereto
as the board may require, and shall submit a modification to the
financial plan reflecting such determination. During  a  control
period  the  board shall disapprove any such modification unless
it finds that (i)  the  city's  determination  is  supported  by
information,  projections  and  analyses  which  the board deems
substantially accurate in all material respects  and  (ii)  such
events,  in  its  judgment,  warrant  such  modification  to the
financial plan to avoid such adverse impact on the  delivery  of
essential services.
f.  The  city  may,  from  time to time, submit financial plan
modifications for review by the board. During a  control  period
the  board shall approve such modifications unless it determines
that such modifications would constitute grounds for disapproval
of  the  financial  plan  pursuant  to  paragraph  c   of   this
subdivision,  or  if applicable, pursuant to paragraph e of this
subdivision.
g.  Anything  contained  in   this   act   to   the   contrary
notwithstanding,  during  a  control period the board may at any
time disapprove or after consultation with the city  revise  the
revenue  estimates (or any item thereof) prepared by the city in
connection with the preparation  of  a  financial  plan  or  any
modification thereto and determined by the board not to be based
on  assumptions  and  methods of estimation which are reasonable
and appropriate under the  circumstances  and  in  view  of  the
objectives  and  purposes  of  the  act.  The  board  may  after
consultation with the city determine the estimated  revenues  of
the  city  and the covered organizations provided, however, that
any revenues estimated by the board shall be based on reasonable
and appropriate assumptions and methods of estimation.
4. Each financial plan shall be in such form and shall contain
such information for each year during which the  financial  plan
is in effect as the board may specify, and shall, in such detail
as   the   board  may  from  time  to  time  prescribe,  include
projections  of  all  revenues,  expenditures  and  cash   flows
(including but not limited to projected capital expenditures and
debt  issuances) and a schedule of projected capital commitments
of the city and except in such instances as the board  may  deem
appropriate each of the covered organizations. In addition, each
financial  plan  and financial plan modification shall include a
statement  of  the  significant  assumptions  and   methods   of
estimation   used  in  arriving  at  the  projections  contained
therein, set forth in such form and in such detail as the  board
may from time to time prescribe.
5.  The  city  and  the  covered  organizations shall promptly
furnish the board with  any  information  which  the  board  may
request  to satisfy itself that (i) projected employment levels,
collective bargaining agreements and other  action  relating  to
employee  costs,  capital construction and such other matters as
the board may specify, are consistent with the  provisions  made
for  such  costs  in  the  financial plan, (ii) the city and the
covered organizations are taking whatever  action  is  necessary
with  respect  to  programs mandated by state and federal law to
ensure that expenditures for such programs are  limited  to  and
covered  by  the  expenditures stated in the financial plan, and
(iii)  adequate  reserves  are  provided  to  maintain  programs
mandated  by state and federal law and for which obligations are
going to be incurred in the  fiscal  year  and  other  essential
programs  in  the  event  revenues  have  been  overestimated or
expenditures underestimated for any period.
6. For each financial plan and financial plan modification  to
be  prepared  and submitted by the city to the board pursuant to
the provisions of this section, the covered organizations  shall
submit  to  the  city  such  information  with  respect to their
projected expenditures, revenues, cash flows and a  schedule  of
projected  capital  commitments  for  each  year covered by such
financial plan or modification  as  the  city  shall  determine.
Notwithstanding   any   other  provision  of  law  limiting  the
authority of the city with respect to any covered  organization,
the  city,  in  the  preparation and submission of the financial
plan and modifications thereof, shall (except for  debt  service
or  for  other expenditures to the extent that such expenditures
are required by law) have the power to determine  the  aggregate
expenditures  to be allocated to any covered organization in the
financial plan and any modifications thereto.
* Terminates July 1, 2008 or ... see § 13
* § 9. Establishment and application of  the  board  fund.  1.
There  is  hereby  established a fund designated the board fund.
Commencing on October twentieth, nineteen hundred  seventy-five,
and  for the duration of a control period, all revenues received
or to be received by the city or any covered organization shall,
unless exempted by order of the board, be revenues of the  board
fund and shall be for the account of the city or the appropriate
covered  organizations,  except  (i)  to  the  extent  expressly
prohibited by federal law, (ii) where revenues of the  city  are
deposited in the general debt service fund, the TAN debt service
account  or  the  RAN  debt service account, or (iii) where such
revenues are pledged to the payment of  any  outstanding  bonds,
notes  or  other  obligations  of covered organizations or state
public authorities as defined in section two hundred one of  the
civil  service  law.   Disbursement from the board fund shall be
made by the board in accordance with the approved financial plan
except as provided in subdivision five  of  this  section  nine.
Commencing  on October twentieth, nineteen hundred seventy-five,
and for the duration of a control period, all funds and accounts
established or thereafter established by the city or the covered
organizations shall, unless exempted  by  order  of  the  board,
thereafter be funds and accounts of the board fund except to the
extent  expressly  prohibited  by  federal  law or to the extent
pledged by covenants or agreements relating to  any  outstanding
bonds,  notes  or  other obligations of covered organizations or
public authorities as defined in section two hundred one of  the
civil  service  law;  and no monies or funds held in the general
debt service fund, the TAN debt service account or the RAN  debt
service  account  shall  be  part  of  the  board fund. All such
accounts of the board shall have such captions  and  entries  as
the  board  shall  determine  to  be  necessary  to  credit  the
foregoing revenues and receipts to the board fund. The monies of
the fund shall not be deemed to be money of the state  or  money
under its control.
2.  The  deposit  of  revenues  into  the  board  fund and the
investment or  deposit  of  monies  therein  shall  be  made  in
accordance  with  and  pursuant to procedures established by the
board.
3.  In order to assure compliance with the financial plan, the
board shall from time to time adopt procedures  controlling  the
disbursement  of  monies  from  the  board fund. The board shall
authorize the city to make all disbursements  of  city  revenues
from  the  board  fund,  which  disbursements  shall  be made in
accordance with the approved financial plan; provided, that  the
board  may withdraw such authorization if it determines that (a)
any disbursements made or to be made by the city have  not  been
or  are  likely  not  to  be  in  compliance  with  the approved
financial plan, (b) the city has violated any  other  provisions
of  this act, or (c) the city has violated an agreement with any
holder or guarantor of bonds or notes issued by the  city  or  a
state financing agency.
4. Within the board fund there is hereby established a special
account designated the debt service repayment account. The board
shall  from  time  to time direct, in accordance with procedures
adopted by the board, the deposit in the debt service  repayment
account  of  such amounts as the board shall, in its discretion,
determine to be sufficient to meet the debt service requirements
of the covered organizations on their  bonds  and  notes  (other
than  bonds  and  notes  of  covered  organizations payable from
revenues not included in the board fund)  as  they  become  due.
Amounts  in  the debt service repayment account shall be used to
meet   such   debt   service   requirements   of   the   covered
organizations.
5.  If  at  any time the board determines that the amount then
held in the board fund or the amount estimated by the  board  to
be held in the board fund is or will be insufficient to meet the
expenditures  in  the  amounts  and at the times required by the
financial plan, the board shall require disbursements  from  the
board  fund to be made in the following order or priority unless
otherwise required by law of the United States of  America:  (i)
the  payment  of amounts from the board fund to the debt service
repayment account, the general debt service fund, the  TAN  debt
service  account  and  the RAN debt service account, to maintain
therein the amount required, to meet debt  service  requirements
of  the  city  and  the covered organizations on their bonds and
notes as  they  may  become  due,  (ii)  the  payment  of  other
liabilities   having  statutory  or  contractual  priority  over
remaining liabilities of the city and the covered  organizations
whose  monies  are  included  in  the  board fund, and (iii) the
payment of other obligations on an allocated basis as  specified
by  the  city  for expenditures in accordance with the financial
plan provided that, in the event  that  the  city  fails  to  so
specify,  the  board  may  withhold payment of any of such other
obligations or may direct their payment pro rata.
6. The board shall cause to be performed  such  pre-audit  and
post-audit   reviews   of  the  board  funds  and  disbursements
therefrom as it may determine.
* Terminates July 1, 2008 or ... see § 13
* § 9-a. Establishment  and  application  of  a  general  debt
service  fund.  1. Commencing on the first day of the first full
fiscal quarter subsequent to  the  first  sale  of  a  federally
guaranteed  city  obligation, the city shall establish a general
debt service fund for the purpose of paying debt service due  or
becoming  due  in the then current fiscal year and in subsequent
fiscal years. All monies in  the  fund  shall  be  held  by  the
comptroller,  who  shall  administer  and  maintain  the fund in
accordance with the provisions of this section.
2.  All  payments  of  or  on  account of real estate taxes or
assessments, other than the proceeds of tax anticipation  notes,
shall  be  immediately  upon receipt deposited in such fund. The
comptroller shall retain, disburse and apply monies in the  fund
during each month as follows:
a.  During the first month of each fiscal quarter, there shall
be  retained  in  the  fund,  subject  to  the   provisions   of
subdivision  three of this section, all real estate tax payments
deposited in the fund until there shall have been retained  from
monies  so  deposited  during  such month an amount equal to the
total monthly debt service, computed  as  of  the  date  of  any
disbursement  of  money  from the fund, for the second and third
months of such fiscal quarter; provided that such  amount  shall
be  reduced  by  any amount already on deposit in the fund which
may be used to pay the monthly debt service for such months.
For purposes of this section, fiscal quarter  shall  mean  the
three-month  period beginning July first, October first, January
first or April first, and monthly debt service shall mean, as of
any date of computation, the  amount  of  monies  equal  to  the
aggregate of (i) all interest payable during such month on bonds
and  notes  of  the  city,  plus  (ii)  the  amount of principal
(including payments into sinking funds)  maturing  or  otherwise
coming due during such month on all bonds of the city (excluding
principal payments made from sinking funds required by the terms
of certain city bonds), plus (iii) the amount of principal to be
paid  on  notes of the city during such month from sources other
than the proceeds  of  bonds  or  renewal  notes  (exclusive  of
revenue   anticipation  notes  and  tax  anticipation  notes  or
renewals thereof issued less than two years prior to the date of
computation).
b. During the second and third months of each fiscal  quarter,
there  shall  be retained in the fund, subject to the provisions
of subdivision three  of  this  section,  all  real  estate  tax
payments  deposited  in  the  fund  until  there shall have been
retained from monies so deposited during such  month  an  amount
equal to the total monthly debt service, computed as of the date
of any disbursement of monies from the fund, for the first month
of the next succeeding fiscal quarter; provided that such amount
shall  be  reduced  by any amount already on deposit in the fund
which may be used to pay  the  monthly  debt  service  for  such
month.
c.  During any month of a fiscal quarter, after the retentions
required by paragraphs a and b of  this  subdivision  have  been
made for such month, the comptroller shall deposit any remaining
balance  of  real estate taxes received during such month, first
into the TAN debt service account to the extent  required  under
subdivision  six of this section, and second into the board fund
to be applied in accordance with procedures of the board.
d. The city may at any time  pay  into  the  fund  any  monies
required  by  law to be used to pay monthly debt service and any
other monies available for such purpose.
3. The board may approve, subject to agreements made with  the
holders or guarantors of outstanding notes or bonds issued by or
for  the  benefit  of  the city after the effective date of this
act, criteria for calculating a proportion of  real  estate  tax
receipts  to be retained in the fund in order to provide for the
retention of amounts required by the provisions  of  subdivision
two  of  this  section  in  lieu of the retention of all initial
receipts  as required by such subdivision; provided, that if the
board at  any  time  determines  that  retentions  in  the  fund
pursuant to the provisions of such subdivision are or are likely
to  be  insufficient  to provide for the payment of monthly debt
service when due, in order to ensure that the amounts on deposit
in the fund will be sufficient to pay monthly debt service  when
due,  the  board shall require (i) that real estate tax receipts
be retained in the fund in greater amounts or at  earlier  dates
than  the  provisions  of such subdivision require, or (ii) that
other revenues or cash resources of the city be  paid  into  the
fund.   The board shall consider the impact of earlier or larger
retention of real estate tax receipts  on  the  city's  seasonal
borrowing requirements when determining whether it shall require
such  additional  retention  or  that  other  revenues  or  cash
resources of the city be paid into  the  fund.    Prior  to  the
issuance  by  the  city  of  any bonds or notes, the board shall
review  any  criteria  then  in  effect  which   determine   the
proportion  of  real  estate  tax receipts to be retained in the
fund to determine whether the proposed debt service schedule for
such bonds or notes is consistent with the monies which will  be
available  therefor  or whether such criteria should be revised.
The board shall from  time  to  time  take  such  action  as  it
determines  is  necessary,  including  disapproval of a proposed
issue pursuant to paragraph f  of  subdivision  one  of  section
seven,  so that the monies in the fund shall be adequate to meet
debt service requirements.
4. Commencing on the first day of  the  second  month  of  the
first  full  fiscal  quarter  subsequent  to the first sale of a
federally guaranteed city obligation,  the  payment  of  monthly
debt  service shall be made, first, from amounts retained in the
fund. Amounts retained in the fund shall be  used  only  to  pay
debt service of the city.
5.  Upon  the issuance of any tax anticipation notes following
the effective date of this act, the comptroller shall  establish
and, so long as any tax anticipation notes shall be outstanding,
shall  maintain  a  tax  anticipation  note debt service account
within the fund for the purpose of paying the principal  of  tax
anticipation notes.
6.  The  city  shall determine the date on which the principal
due or to become due on an outstanding issue of tax anticipation
notes shall equal ninety percent of the available tax levy  with
respect  to  such  issue, and upon reasonable notice thereof the
comptroller shall commence on such date to pay into the TAN debt
service account from collections of such taxes and  assessments,
after  retaining  amounts  required to be deposited in the fund,
amounts sufficient to pay when due, the principal of such  issue
of  tax anticipation notes. The payments of the principal of tax
anticipation notes shall be made, first, from  amounts  retained
in the TAN debt service account.
7.  Upon  the  issuance  of  any  revenue  anticipation  notes
following the effective date of this act, the comptroller  shall
establish  and,  so long as any revenue anticipation notes shall
be outstanding, shall maintain a revenue anticipation note  debt
service  account  within  the fund for the purpose of paying the
principal of revenue anticipation notes. Each specific  type  of
revenue  in  anticipation  of  which  such  notes are issued and
available for such purpose shall be deposited  in  such  account
immediately  upon  receipt  by  the  city.  Where  such  revenue
consists of state aid or other revenue to be paid to the city by
the  comptroller,  on  the  date  such revenue is payable to the
city, the comptroller shall deposit such revenue  directly  into
such  account  in  lieu  of  payment  to  the city. All revenues
deposited  in  the  RAN  debt  service  account  shall  be  paid
immediately  into the board fund except as otherwise provided in
subdivision eight of this section.
8. The city shall determine the date on  which  the  principal
due  or  to  become  due  on  an  outstanding  issue  of revenue
anticipation notes shall  equal  ninety  percent  of  the  total
amount of revenue against which such notes were issued remaining
to  be  paid to the city on or before the fifth day prior to the
maturity date of such notes and upon reasonable  notice  thereof
the comptroller shall commence on such date to retain in the RAN
debt  service  account from amounts deposited or to be deposited
therein of each specific type  of  revenue  in  anticipation  of
which  revenue  such  anticipation  notes were issued, an amount
sufficient to pay, when  due,  the  principal  of  such  revenue
anticipation  notes.  Monies retained in such account shall vest
immediately in the comptroller in trust for the benefit  of  the
holders  of  the  revenue  anticipation notes in anticipation of
which such notes were issued. No person having any claim of  any
kind in tort, contract or otherwise against such city shall have
any   right  to  or  claim  against  any  monies  of  the  state
appropriated by the state and  in  anticipation  of  which  such
notes  have  been  issued, other than a claim for payment by the
holders of such notes, and such monies shall not be  subject  to
any  order,  judgment,  lien,  execution,  attachment, setoff or
counter-claim  by  any  such  person;  provided,  however,  that
nothing contained in this paragraph shall be construed to limit,
impair,  impede  or otherwise adversely affect in any manner the
rights or remedies of the purchasers and holders and  owners  of
any  bonds or notes of the state or any agency, instrumentality,
public benefit corporation  or  political  subdivision  thereof,
including  the city of New York, under which such purchasers and
holders and owners have any right of payment of  such  bonds  or
notes  by  recourse to state aid or local assistance monies held
by the state or for the payment of which bonds  or  notes  state
aid  or  local  assistance  monies  are a designated source. The
payment of the principal of revenue anticipation notes shall  be
made  first  from  amounts  retained  in  the  RAN  debt service
account.
9. Whenever the amount  contained  in  the  TAN  debt  service
account  or  the  RAN  debt  service  account exceeds the amount
required to be retained in  such  account  such  excess  monies,
including  earnings  on investments of monies in the fund, shall
be withdrawn from such account and paid into the board fund.
10. Subject to agreements made with holders or  guarantors  of
outstanding  notes  or bonds issued by or for the benefit of the
city after the effective date of this act, the comptroller shall
invest the monies retained in the fund in accordance with law.
11. The limitations imposed upon  the  city  by  this  section
shall  be  in  addition to any limitations imposed upon the city
under the local finance law. In the event any provisions of  the
local  finance  law shall be inconsistent with the provisions of
this section, the provisions of this section shall prevail.  The
requirements  of this section shall not apply to any note of the
city held by the municipal assistance corporation for  the  city
of  New  York  to the extent that such corporation has evidenced
its intention not to present such notes for payment  during  the
fiscal  year  in  which  the determination is made provided that
such notes were held by  such  corporation  on  June  thirtieth,
nineteen hundred seventy-eight or were issued in exchange for or
in  refunding  or  renewal  of notes held by such corporation on
such date.
12. Notwithstanding any other provision of this  section,  the
city  may,  at any time, subject to approval by the comptroller,
designate a trust company or bank having its principal place  of
business  in  the  state  of New York and having the powers of a
trust company in the state of New York to hold all or  any  part
of  the  monies  in  the fund and to administer and maintain the
monies so held in accordance with the applicable  provisions  of
this section and any agreements made pursuant thereto.
* Terminates July 1, 2008 or ... see § 13
* §   9-b.   Limitations   on  short-term  borrowing.  1.  The
limitations on short-term borrowing imposed  upon  the  city  by
this  section  shall  be  in  addition  to  the  limitations  on
short-term borrowing imposed on the city under the local finance
law. In the event any provisions of the local finance law  shall
be  inconsistent  with  the  provisions  of  this  section,  the
provisions of this section shall prevail. For  the  purposes  of
this   section   the   terms  "bond  anticipation  notes",  "tax
anticipation notes", "revenue anticipation  notes"  and  "budget
notes"  shall  not  mean one or more of or any of the respective
notes held by the municipal assistance corporation for the  city
of New York on June thirtieth, nineteen hundred seventy-eight or
any note of the city held by such corporation issued in exchange
for or in refunding or renewal of any such note.
2. a. No tax anticipation notes shall be issued by the city in
anticipation  of  the  collection of taxes or assessments levied
for a fiscal year which would cause the principal amount of such
issue of tax anticipation notes to exceed  an  amount  equal  to
ninety  per  cent of the available tax levy with respect to such
issue.
b. Tax anticipation notes and renewals  thereof  shall  mature
not  later  than  the  last day of the fiscal year in which they
were issued.
3. a. No revenue anticipation note shall be issued by the city
in anticipation of the collection or receipt  of  revenue  in  a
fiscal  year  which  would cause the principal amount of revenue
anticipation notes outstanding to exceed ninety per cent of  the
available  revenues  for  such fiscal year. For purposes of this
subdivision, available revenues shall be the revenues other than
real estate taxes and assessments which have been  estimated  in
the financial plan to be realized in cash during such year, less
revenues previously collected, other than revenues on deposit in
the  RAN  debt  service  account or any special fund established
pursuant to law for the payment of interest and/or principal  of
revenue anticipation notes.
b.  Each  issue  of revenue anticipation notes shall be issued
only in anticipation of the receipt of a specific type or  types
of  revenue and the amount of revenue, the source of revenue and
the  anticipated  date  of  payment  shall  be  stated  in   the
proceedings authorizing the issuance of such notes.
c.  Revenue anticipation notes shall mature not later than the
last day of the fiscal year in which they were issued,  and  may
not  be  renewed  or extended to a date more than ten days after
the anticipated date of receipt of such revenue. No such renewal
note shall mature after the last day of such fiscal year  unless
the  board  shall  certify  that  the revenue against which such
renewal note is issued has been properly accrued  and  estimated
in  the financial plan in effect on the date of issuance of such
renewal note; provided that in no event shall any  such  renewal
notes  mature  later than one year subsequent to the last day of
the fiscal year during which  such  revenue  anticipation  notes
were originally issued.
4. a. No bond anticipation note shall be issued by the city in
any  fiscal  year which would cause the principal amount of bond
anticipation notes outstanding, together with interest due or to
become due thereon, to exceed fifty per cent  of  the  principal
amount  of  bonds  issued  by  the  city  in  the  twelve months
immediately preceding the month in  which  the  note  is  to  be
issued.
b.  The proceeds of each bond issue shall be (i) held in trust
for the payment, at maturity, of the principal of  and  interest
on   any   bond   anticipation  notes  of  the  city  issued  in
anticipation of such bonds and outstanding at the  time  of  the
issuance  of  such bonds, (ii) paid into the general fund of the
city in repayment of any advance made from such fund pursuant to
section 165.10 of the local finance law, and (iii)  any  balance
shall be expended for the object or purpose for which such bonds
were issued.
c.  Bond  anticipation  notes  shall mature not later than one
year after their date of issuance  and  may  be  renewed  for  a
period  not to exceed two years, or such longer period as may be
permitted for bond anticipation notes of  the  state,  from  the
date of original issue.
5.  Budget notes issued pursuant to section 29.00 of the local
finance law may only be issued to fund projected expense  budget
deficits.  No  budget  notes  or  renewals thereof, shall mature
later than sixty days prior to the last day of the  fiscal  year
next  succeeding  the fiscal year during which such budget notes
were originally issued.
6.  The  city  shall  issue  no  obligations  which  shall  be
inconsistent with the financial plan or with the limitations set
forth in subdivisions one through five of this section.
* Terminates July 1, 2008 or ... see § 13
* §  10.  Wage  freeze.  1.  Increases  in  salary or wages of
employees of the city and  employees  of  covered  organizations
which  have  taken effect since June thirtieth, nineteen hundred
seventy-five or which will take effect after that date  pursuant
to   collective   bargaining   agreements   or  other  analogous
contracts, now in existence or hereafter entered into, requiring
such  salary  increases  as  of  July  first,  nineteen  hundred
seventy-five  or as of any date thereafter are hereby suspended.
All increased payments for holiday and  vacation  differentials,
shift  differentials,  salary  adjustments according to plan and
step-ups or increments for employees of the city  and  employees
of  covered  organizations  which  have  taken effect since June
thirtieth, nineteen hundred  seventy-five  or  which  will  take
effect   after  that  date  pursuant  to  collective  bargaining
agreements or other analogous contracts requiring such increased
payments as of July first, nineteen hundred seventy-five  as  of
any  date  thereafter are hereby, in the same manner, suspended.
For the purposes of computing the  pension  base  of  retirement
allowances,  the  suspended  salary  or  wage  increases and the
suspended other payments shall not  be  considered  as  part  of
compensation or final compensation or of annual salary earned or
earnable. The suspensions provided herein shall be effective for
the first pay period ending on or subsequent to September first,
nineteen  hundred seventy-five and shall continue until one year
thereafter and, to the extent of any determination of the  board
that  a continuation of such suspensions, to a date specified by
the board, is necessary in order to achieve  the  objectives  of
the  financial  plan, such suspensions shall be continued to the
date specified by such board, which date shall in  no  event  be
later than the end of the emergency period.
2.  This  section  shall not be applicable to employees of the
city or  employees  of  a  covered  organization  covered  by  a
collective  bargaining agreement or an employee of the city or a
covered organization not  covered  by  a  collective  bargaining
agreement where the collective bargaining representative or such
unrepresented  employee  has  agreed to a deferment of salary or
wage increase, by  an  instrument  in  writing  which  has  been
certified  by  the  mayor on or before September first, nineteen
hundred seventy-five, or certified by the board after  September
first,  nineteen hundred seventy-five as being an acceptable and
appropriate contribution toward alleviating the fiscal crisis of
the city. The board may, if it finds that the fiscal crisis  has
been  sufficiently  alleviated  or  for  any  other  appropriate
reason, direct that the suspensions of salary or wage  increases
or suspensions of other increased payments shall, in whole or in
part, be terminated.
3.  The  provisions  of  this  section shall terminate on July
first, nineteen hundred seventy-eight.
* Terminates July 1, 2008 or ... see § 13
* § 10-a. Covenants, authorizations to agree and remedies.  1.
In the event that after the date on which the provisions of this
act become operative, any notes or bonds are issued by the  city
prior  to  July  1,  2024,  or  any  bonds are issued by a state
financing agency, the state of New York  hereby  authorizes  the
city  and authorizes and requires such state financing agency to
include a pledge and agreement of the state of New York  in  any
agreement  made  by the city or such state financing agency with
holders or guarantors of such notes or bonds that the state will
not take any action which  will  (a)  substantially  impair  the
authority  of  the  board during a control period, as defined in
subdivision twelve of section two of this act as  in  effect  on
the  date  such  notes  or  bonds  are  issued  (i)  to approve,
disapprove, or modify  any  financial  plan  or  financial  plan
modification,  including  the  revenue  projections (or any item
thereof) contained therein, subject to the standards  set  forth
in  paragraphs  a,  c,  d, e and f of subdivision one of section
eight of this act as in effect on the date such notes  or  bonds
are issued and paragraph b of such subdivision as in effect from
time  to  time,  (ii)  to disapprove a contract of the city or a
covered organization if the performance of such  contract  would
be  inconsistent  with  the  financial  plan  or  to  approve or
disapprove proposed short-term or  long-term  borrowing  of  the
city  or  a  covered  organization  or  any  agreement  or other
arrangement referred to in subdivision four of section seven  of
this  act,  or  (iii)  to  establish  and  adopt procedures with
respect to the deposit in and disbursement from the  board  fund
of  city revenues; (b) substantially impair the authority of the
board to review financial plans, financial  plan  modifications,
contracts  of the city or the covered organizations and proposed
short-term or long-term borrowings of the city and  the  covered
organizations;   (c)   substantially   impair   the  independent
maintenance of a separate fund for the payment of  debt  service
on bonds and notes of the city; (d) alter the composition of the
board  so  that  the majority of the voting members of the board
are not officials  of  the  state  of  New  York  elected  in  a
state-wide election or appointees of the governor; (e) terminate
the existence of the board prior to the time to be determined in
accordance with section thirteen of this act as in effect on the
date  such  notes  or bonds are issued; (f) substantially modify
the requirement that the city's financial statements be  audited
by   a   nationally   recognized  independent  certified  public
accounting firm or consortium of firms and that a report on such
audit be furnished to the board; or (g) alter the definition  of
a  control period set forth in subdivision twelve of section two
of this act, as in effect on the date such notes  or  bonds  are
issued,  or  substantially  alter the authority of the board, as
set forth in said subdivision to reimpose or terminate a control
period;  provided,  however,  that  the  foregoing  pledge   and
agreement shall be of no further force and effect if at any time
(i) there is on deposit in a separate trust account with a bank,
trust  company  or  other  fiduciary sufficient moneys or direct
obligations of the United States or  obligations  guaranteed  by
the  United  States,  the  principal of and/or interest on which
will provide moneys to pay punctually when due  at  maturity  or
prior to maturity by redemption, in accordance with their terms,
all principal of and interest on all outstanding notes and bonds
of  the  city  or  such  state  financing agency containing this
pledge and agreement and irrevocable instructions from the  city
or  such  state  financing agency to such bank, trust company or
other fiduciary for such payment of such principal and  interest
with  such  moneys shall have been given, or (ii) such notes and
bonds, together with interest thereon, have been paid in full at
maturity or have otherwise been refunded, redeemed, defeased, or
discharged; and provided further that the foregoing  pledge  and
agreement  shall  be of full force and effect upon its inclusion
in any agreement made by the city or state financing agency with
holders or guarantors of such notes or bonds.
Upon payment for such obligations issued pursuant to this  act
by  the  original  and  all  subsequent holders inclusion of the
foregoing  covenant  shall  be  deemed  conclusive  evidence  of
valuable  consideration  received by the state and city for such
covenant and of reliance upon such pledge and agreement  by  any
such  holder.  The state hereby grants any such benefited holder
the right to sue the state in a court of competent  jurisdiction
and enforce this covenant and agreement and waives all rights of
defense based on sovereign immunity in such an action or suit.
2.  Every such bond or note which shall contain the pledge and
agreement referred to in subdivision one above shall be callable
for  redemption  commencing  not   later   than   the   eleventh
anniversary  of  its  date  of issuance and shall contain on its
face a recital to such  effect,  together  with  the  terms  and
conditions under which such obligation may be redeemed.
3. The finance board of the city is hereby authorized to enter
into agreements and to make covenants with any purchaser, holder
or  guarantor  of  obligations  issued by the city or by a state
financing agency to  protect  and  safeguard  the  security  and
rights  of  a  purchaser,  holder or guarantor or to protect and
safeguard the source of payment of such obligations or as deemed
appropriate by the finance board which agreements  or  covenants
may  contain  provisions providing for (a) (i) the compliance by
the city with any of the provisions of this act or  of  the  New
York  City  Loan Guaranty Act of nineteen hundred seventy-eight,
Public Law 95-339, or, (ii) in any agreements with the guarantor
of such obligations but only in such agreements unless otherwise
authorized by law, the compliance with  any  of  the  terms  and
conditions required by the secretary of the treasury pursuant to
such  act,  (b)  restrictions on the issuance by the city of its
obligations, limitations on the inclusion of  expense  items  in
its   capital  budgets  and  financial  records,  reporting  and
disclosure requirements in addition to  any  such  restrictions,
limitations   or   requirements   contained  in  this  act,  (c)
compliance by the city with its financial plan as modified  from
time to time, (d) conditions that would give rise to an event of
default  on  such  obligations,  and (e) remedies available to a
purchaser, holder or guarantor of such obligations,  other  than
acceleration   or  the  required  elimination  or  reduction  of
specific municipal expenditures, including the circumstances, if
any, under which a trustee or trustees or a fiscal agent may  be
appointed   or  may  act  as  a  representative  of  holders  of
obligations issued by the city in connection with  an  issue  or
issues  of  obligations  of  the city and the rights, powers and
duties which may be vested in such trustee, trustees  or  fiscal
agent  as  such  representative.    The state of New York hereby
pledges and agrees that it will take no action that would impair
the power of the city to comply with or to perform any  covenant
or  agreement made pursuant to this subdivision, or any right or
remedy of a purchaser,  holder  or  guarantor  to  enforce  such
covenant  or agreement; and the city or a state financing agency
is hereby authorized to include such pledge and agreement in any
agreement made pursuant to this subdivision.  Nothing  contained
in  this  subdivision  shall preclude the state from authorizing
the city to exercise, or the city  from  exercising,  any  power
provided by law to seek application of laws then in effect under
the  bankruptcy  provisions of the United States constitution or
shall preclude the state  from  validly  exercising  its  police
powers.
4. Notwithstanding any other provision of law, the trustees of
any  retirement,  pension or annuity fund or system of the state
of New York or of the city of New York are hereby authorized  to
enter  into commitments to purchase and to purchase notes, bonds
or other obligations of the city of  New  York  or  of  a  state
financing  agency, the payment in whole or in part, of interest,
principal, or both,  is  guaranteed  by  the  secretary  of  the
Treasury  of  the  United  States of America pursuant to the New
York City Loan Guarantee Act of  1978,  Public  Law  95-339,  as
presently  in  effect  or hereafter amended or to purchase other
bonds or notes of such city or of a state financing agency prior
to June thirtieth, nineteen hundred eighty-two, or in  the  case
of  the  trustees  of any retirement, pension or annuity fund or
system of the city of New York, to  enter  into  commitments  to
purchase  such  other  bonds or notes of such city or of a state
financing agency  prior  to  June  thirtieth,  nineteen  hundred
eighty-two.  Such  commitments to purchase shall be binding upon
and enforceable against successor trustees of  such  retirement,
pension  or annuity funds or systems of the state of New York or
city of New York.
5. The secretary of the  treasury  shall  have  the  right  to
initiate  a  proceeding in the supreme court of the state of New
York in and for the county of New York or the court of claims of
the state of New York to obtain a court order or other relief in
connection with any agreements  or  other  transactions  entered
into   by  the  secretary  relative  to  his  guarantee  of  the
principal, interest, or both of city indebtedness.
6. Notwithstanding any other provision of law to the contrary,
the governor shall have the authority  in  connection  with  any
agreement   by   the   federal   government  or  any  agency  or
instrumentality  thereof  to  guarantee  the  payment   of   the
principal of or interest on bonds or notes issued by the city of
New  York  or  by a state financing agency, to enter into one or
more agreements containing terms and conditions required by  the
secretary  of  the  treasury  pursuant to the New York City Loan
Guarantee Act of  1978,  Public  Law  95-339,  approved  by  the
comptroller  and  approved  as  to form by the attorney general,
with the federal government or  any  agency  or  instrumentality
thereof  with  respect  to such guarantee or any matters related
thereto and to comply with such terms and conditions.
7. Nothing in this section contained shall preclude the  state
from authorizing the board or the city to exercise, or the board
or  city  from  exercising,  any  power  provided by law to seek
application  of  laws  then  in  effect  under  the   bankruptcy
provisions  of the United States constitution or to preclude the
state from a further exercise of its powers under article eight,
section twelve, of the state constitution.
* Terminates July 1, 2008 or ... see § 13
* § 11. Prohibitions; penalties. 1. During a  control  period,
(i)  no officer or employee of the city or of any of the covered
organizations shall make or authorize  an  obligation  or  other
liability  in  excess of the amount available therefor under the
financial plan as then in effect; (ii) no officer or employee of
the city or of any of the covered  organizations  shall  involve
the  city or any of the covered organizations in any contract or
other obligation or liability for the payment of money  for  any
purpose  required  to  be  approved  by  the  board  unless such
contract, obligation or liability has been so approved or deemed
to be approved as provided in paragraphs e and f of  subdivision
one  of  section seven and unless such contract or obligation or
liability is in compliance with the financial plan  as  then  in
effect.
2.  No  officer  or employee of the city or any of the covered
organizations shall take any action in violation  of  any  valid
order  of  the  board or shall fail or refuse to take any action
required by any such order or shall prepare, present or  certify
any  information  (including  any  projections  or estimates) or
report for the board or any of  its  agents  that  is  false  or
misleading, or, upon learning that any such information is false
or  misleading,  shall  fail promptly to advise the board or its
agents thereof.
3.  In  addition  to any penalty or liability under other law,
any officer or employee of  the  city  or  any  of  the  covered
organizations   who   shall   knowingly  and  willfully  violate
subdivision one or two of  this  section  shall  be  subject  to
appropriate    administrative    discipline,   including,   when
circumstances warrant,  suspension  from  duty  without  pay  or
removal from office by order of either the governor or the mayor
and shall, upon conviction, be guilty of a misdemeanor.
4.  In  the  case  of a violation of subdivision one or two of
this section by an officer or employee of the city or any of the
covered organizations, the mayor or the chief executive  officer
of  such  covered  organization  shall immediately report to the
board all pertinent facts  together  with  a  statement  of  the
action taken thereon.
* Terminates July 1, 2008 or ... see § 13
* §  12. Indemnification. a. The state shall save harmless and
indemnify members, officers and employees of and representatives
to the board, all of whom shall be deemed officers and employees
of the state for purposes of section  seventeen  of  the  public
officers  law,  against  any  claim,  demand,  suit, or judgment
arising by reason of any act or omission to act by such  member,
officer,  employee  or representative occurring in the discharge
of his duties and within the scope of his service on  behalf  of
such  board  including any claim, demand, suit or judgment based
on allegations that financial loss was sustained by  any  person
in  connection  with  the acquisition, disposition or holding of
securities or other obligations. In the event of any such claim,
demand, suit or judgment, a member, officer or  employee  of  or
representative   to  the  board  shall  be  saved  harmless  and
indemnified, notwithstanding the limitations of subdivision  one
of  section  seventeen  of  the public officers law, unless such
individual is found by a final  judicial  determination  not  to
have  acted,  in  good  faith, for a purpose which he reasonably
believed to be in the best interest of the board or not to  have
had reasonable cause to believe that his conduct was lawful.
b.  In  connection  with  any  such  claim,  demand,  suit, or
judgment, any member, officer or employee of  or  representative
to  the  board  shall  be  entitled to representation by private
counsel of his choice in any civil judicial proceeding  whenever
the attorney general determines based upon his investigation and
review   of  the  facts  and  circumstances  of  the  case  that
representation by the attorney general would  be  inappropriate.
The  attorney general shall notify the individiual in writing of
such  determination  that  the  individual  is  entitled  to  be
represented   by  private  counsel.  The  attorney  general  may
require, as a condition to payment of the fees and  expenses  of
such representative, that appropriate groups of such individuals
be  represented by the same counsel. If the individual or groups
of individuals is entitled to representation by private  counsel
under the provisions of this section, the attorney general shall
so  certify  to  the  comptroller. Reasonable attorneys fees and
litigation expenses shall be paid by the state to  such  private
counsel  from  time  to  time  during  the pendency of the civil
action  or  proceeding,  subject  to  certification   that   the
individual  is  entitled  to  representation under the terms and
conditions of this section by the chairman of  the  board,  upon
the audit and warrant of the comptroller. The provisions of this
subdivision  shall  be in addition to and shall not supplant any
indemnification  or  other  benefits  heretofore  or   hereafter
conferred   upon   members,   officers,   or  employees  of  and
representatives to the board by section seventeen of the  public
officers   law,  by  action  of  the  board  or  otherwise.  The
provisions of this subdivision  shall  inure  only  to  members,
officers  and  employees  of  and  representatives to the board,
shall not enlarge or diminish the rights of any other party, and
shall not impair, limit or modify the rights and obligations  of
any insurer under any policy of insurance.
* Terminates July 1, 2008 or ... see § 13
§  13.  Termination.  This act shall terminate on the later of
(a) July first, two thousand eight or (b) the date (i) when  all
bonds  and  notes containing the pledge and agreement authorized
by subdivision one of section ten-a of this  act  are  refunded,
redeemed,  discharged  or otherwise defeased, or (ii) when there
shall no longer be  outstanding  any  guarantee  by  the  United
States of America or any agency or instrumentality thereof as to
payment  of  principal of or interest on any note or bond issued
by the city or a state financing agency,  whichever  of  (i)  or
(ii) shall occur later.
* Terminates July 1, 2008 or ... see § 13
* §  14.  Separability.  If  any  clause, sentence, paragraph,
subdivision, or other part of this act shall for any  reason  be
adjudged   by   any   court  of  competent  jurisdiction  to  be
unconstitutional or otherwise invalid, such judgment  shall  not
affect,  impair,  or  invalidate  the remainder of this act, but
shall be confined in its  operation  to  the  clause,  sentence,
paragraph,  subdivision or part thereof directly involved in the
controversy in which such judgment shall have been rendered  and
it  shall  be  construed  to have been the legislative intent to
pass this act without such  unconstitutional,  or  invalid  part
therein.
* Terminates July 1, 2008 or ... see § 13
* § 15. Court preference. If any section, part or provision of
this  act  shall  be  declared  unconstitutional  or  invalid or
ineffective by any court of  this  state,  any  appeal  of  such
judgment or order shall have preference over all other causes in
any  court  of  this  state. Service upon the adverse party of a
notice of appeal shall stay the effect of the judgment or  order
appealed  from  pending  the  hearing  and  determination of the
appeal.
* Terminates July 1, 2008 or ... see § 13