Court Opinion

ID: 5673097
Source: CourtListenerOpinion
Date Created: 2022-01-12 14:18:21.859005+00
Date Added: 2024-06-11T08:39:40.812700
License: Public Domain

Crew, J. (concurring in part and dissenting in part).
I concur with the majority’s conclusion that the Legislature’s amendment to Public Authorities Law § 3240 (5) (see L 2003, ch 62, part A4, § 2) is severable and, further, that the portion of the Municipal Assistance Corporation Refinancing Act (hereinafter the Act) providing for the assignment of payments by plaintiff Local Government Assistance Corporation (hereinafter LGAC) to defendant Sales Tax Asset Receivable Corporation (hereinafter STARC) does not constitute impermissible revenue financing in contravention of NY Constitution, article VIII, § 2. I disagree, however, with that portion of the majority statement holding that the Act does not impair the contractual rights of existing LGAC bondholders.
The majority posits that had the Legislature intended to impair the security of LGAC’s existing bondholders, it would have said so in explicit language. In my view, the Legislature could not have been more explicit when it provided that “[notwithstanding any inconsistent provision of law [i.e., Public Authorities Law § 3239 (1) and State Finance Law § 92-r (5) (a)] [LGAC] shall transfer” $170 million annually to defendant City of New York (Public Authorities Law § 3238-a [emphasis added]). Granted, we have held the offending provisions of Public Authorities Law § 3240 (5) to be severable, thus requiring annual appropriations. However, in the event that the Legislature appropriates funds sufficient to satisfy LGAC’s present debt service or STARC payments, but not both, the Act makes plain that LGAC shall pay STARC $170 million. Thus, the Act does more than put STARC bondholders on par with LGAC’s existing bondholders, it grants them preferred status.* Accordingly, I conclude that the Act indeed impairs the contractual rights of LGAC’s bondholders.
Ordered that the appeal from the order entered August 20, 2003 is dismissed, without costs.
Ordered that the order entered September 17, 2003 is modified, on the law, without costs, by reversing so much thereof as granted defendants’ motion for summary judgment declaring constitutional the amendment to Public Authorities Law § 3240 *835(5), as contained in L 2003, ch 62, part A4, § 2, and as denied plaintiffs’ cross motion declaring said amendment unconstitutional; motion denied to that extent, cross motion granted to that extent and said amendment is declared unconstitutional and severed from the remainder of the Municipal Assistance Corporation Refinancing Act; and, as so modified, affirmed.

 Notably, some members of the Legislature seem to have recognized this, having proposed an amendment to the Act providing that the payments to the City be subordinate in all respects to any and all other amounts (see 2003 NY Senate Bill S 5692, part J, § 3; 2003 NY Assembly Bill A 9097, part J, § 3). That amendment, however, was not enacted into law.