A 8870: Enacts the "City of Dunkirk Revenue Anticipation Note Refinancing Act" to authorize a loan to be made from the state to the city of Dunkirk (Part A); makes an appropriation therefor (Part B).

  
  STATE OF NEW YORK ________________________________________________________________________ 8870 2025-2026 Regular Sessions  IN ASSEMBLY June 9, 2025 ___________ Introduced by M. of A. PRETLOW -- (at request of the Governor) -- read once and referred to the Committee on Ways and Means AN ACT in relation to authorizing a loan from the state to the city of Dunkirk (Part A); and making an appropriation therefor (Part B) The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act enacts into law components of legislation neces- 2 sary to authorize a loan for the city of Dunkirk. Each component is 3 wholly contained within a Part identified as Parts A through B. The 4 effective date for each particular provision contained within such Part 5 is set forth in the last section of such Part. Any provision in any 6 section contained within a Part, including the effective date of the 7 Part, which makes a reference to a section "of this act", when used in 8 connection with that particular component, shall be deemed to mean and 9 refer to the corresponding section of the Part in which it is found. 10 Section three of this act sets forth the general effective date of this 11 act. 12 PART A 13 Section 1. Legislative findings. The legislature hereby finds and 14 declares that a condition of severe fiscal difficulties exists in the 15 city of Dunkirk as a result of expenditures exceeding revenues over 16 numerous years, with the substantial accumulation of deficits expected 17 for the close of the city's fiscal year 2024. Such condition, including 18 late and overdue financial statements, has contributed to a current loss 19 of confidence by investors in short-term and long-term obligations of 20 the city of Dunkirk as demonstrated by major municipal credit rating 21 agencies withdrawing credit ratings of the city. 22 It is hereby further found and declared that the city of Dunkirk pres- 23 ently has a $12.7 million revenue anticipation note with a maturity date EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD12017-01-5 
 A. 8870 2 1 of July 24, 2025. The city has indicated that it would not have suffi- 2 cient cash to repay the revenue anticipation note's principal and inter- 3 est and has not attained the willingness of investors to purchase new 4 obligations of the city in time to provide for the repayment of such 5 $12.7 million note so owed. 6 It is hereby further found and declared that the inability to pay the 7 revenue anticipation note could have significant negative financial 8 implications for the city, other municipalities across the state, and 9 the people of the state through a loss of credit access or higher cost 10 for borrowing. 11 Based upon the fiscal condition of the city of Dunkirk and the state- 12 wide concerns of the financial implications that an inability to pay the 13 revenue anticipation note may result in, the legislature through this 14 act authorizes an additional debt option for the city of Dunkirk as a 15 matter of last resort. 16 § 2. Short title. This act shall be known and may be cited as the 17 "City of Dunkirk Revenue Anticipation Note Refinancing Act". 18 § 3. Definitions. As used in this act, the following words and terms 19 shall have the following meanings respectively, unless the text shall 20 indicate another or different meaning or intent: 21 (a) "Budget director" means the state director of the budget. 22 (b) "City" means the city of Dunkirk, in the county of Chautauqua. 23 (c) "City council" means the city council of the city. 24 (d) "Deficit bonds" means the bonds authorized by the Dunkirk fiscal 25 recovery act. 26 (e) "Deficit notes" means bond anticipation notes issued in antic- 27 ipation of the issuance of deficit bonds, as authorized by the Dunkirk 28 fiscal recovery act. 29 (f) "Dunkirk fiscal recovery act" means the act pursuant to part DD of 30 chapter 56 of the laws of 2024. 31 (g) "Mayor" means the mayor of the city. 32 § 4. Establishment of a state loan to the city. Any payment made to 33 the city from an appropriation made by part B of this chapter, enacted 34 by a chapter of the laws of 2025, shall be used by the city for the 35 repayment and settlement of its revenue anticipation note due July 24, 36 2025, and shall, notwithstanding any provision of the local finance law 37 to the contrary, constitute a loan from the state to the city to address 38 a budgetary deficit, the repayment of which by the city shall be a 39 general obligation of the city and which shall be backed by the full 40 faith and credit of the city, pursuant to the terms and structure set 41 forth in this act. 42 § 5. Authorized loan amortization period and interest rate. Notwith- 43 standing any provision of law to the contrary, the amortization period 44 of the loan and the period of probable usefulness shall be fifteen 45 years. The rate of interest applied to the principal amount owed on such 46 loan shall be seven and one-half percent per annum. If the reduction of 47 any payment or payments made on or on behalf of the city pursuant to 48 section six of this act is insufficient to satisfy the annual repayment 49 amount set forth in the loan repayment schedule, the budget director may 50 modify the terms of the loan, including term and interest. 51 § 6. Loan repayment by the city. The city shall be obligated to repay 52 the loan in accordance with a loan repayment schedule provided by the 53 budget director that reflects the amount and date of all loan payments 54 made by the state to the city from an appropriation pursuant to part B 55 of this chapter during the state fiscal year beginning April 1, 2025. 56 Such loan repayment schedule may be revised from time to time to reflect 
 A. 8870 3 1 any modification of the terms of the loan as provided in section five of 2 this act. By no later than September 30, of any year while such loan is 3 outstanding, the budget director shall notify the mayor, the city coun- 4 cil, the state comptroller, the chair of the assembly ways and means 5 committee, and the chair of the senate finance committee, of (a) any 6 offset payment deemed made by or on behalf of the city in accordance 7 with section seven of this act, and (b) the principal and interest 8 repayment schedule reflecting the remaining amounts owed by the city to 9 the state, for each state fiscal year, starting with the state fiscal 10 year that begins April 1, 2026. 11 § 7. City state aid withholding. For so long as the loan shall remain 12 outstanding, the budget director may direct any department, agency, or 13 instrumentality thereof, to reduce the amount of any payment or payments 14 owed in a fiscal year to the city of Dunkirk, or any department, agency, 15 or instrumentality thereof; provided however, that such reduction shall 16 be in an amount no greater than the amount due for such year as set 17 forth in the loan repayment schedule. The budget director shall effectu- 18 ate such reduction through a budget certification and authorization sent 19 to the office of the state comptroller. To the extent the city or any 20 department, agency, or instrumentality thereof is entitled to any cash 21 disbursement authorized by any appropriation, such entitlement shall be 22 reduced commensurate with the reductions determined pursuant to sections 23 four and five of this act. 24 § 8. Early termination and payoff of the loan. The state shall not 25 require the early termination of the loan or the prepayment of any 26 amounts set forth in the loan repayment schedule. The mayor, with sepa- 27 rate concurrence from a majority of the city council, may at any time, 28 upon fifteen days' notice to the budget director, the state comptroller, 29 the chair of the assembly ways and means committee, and the chair of the 30 senate finance committee, prepay the loan in whole or in part, and if in 31 whole, subject to the written confirmation of the budget director of the 32 calculated amount of principal and interest owed by the city as of the 33 proposed date of loan repayment. 34 § 9. Miscellaneous provisions. (a) This loan shall be treated as 35 indebtedness of the city with respect to article eight of the state 36 constitution, and, provided further, the amount of the annual principal 37 and interest of such loan necessary to be raised from a tax on city real 38 estate, in order to equally compensate and replenish the city's all 39 funds budget for the annual withholding of state payments to the city 40 pursuant to section seven of this act, shall be excluded from the tax 41 limit imposed by section ten of article eight of the New York state 42 constitution. 43 (b) For so long as the state loan shall remain outstanding, the city 44 shall comply with the requirements of sections seven, eight, nine, and 45 ten of the "Dunkirk fiscal recovery act", whether or not any deficit 46 bonds or deficit notes as authorized within such act shall be outstand- 47 ing. 48 (c) Notwithstanding section four of the Dunkirk fiscal recovery act, 49 or any other law to the contrary, the period of probable usefulness of 50 the first issuance of deficit bonds or deficit notes pursuant to such 51 act shall be computed from the effective date of this act. 52 (d) On or before July 9 of each state fiscal year for which the loan 53 is still outstanding, beginning with state fiscal year 2026, the mayor 54 shall attest and provide notice of such attestation to the state direc- 55 tor of the budget, the state comptroller, the chair of the assembly ways 56 and means committee, and the chair of the senate finance committee, that 
 A. 8870 4 1 either: (i) the city, after a good faith effort, has been unable to 2 issue deficit notes or deficit bonds pursuant to the Dunkirk fiscal 3 recovery act, in order to prepay in whole or in part the loan made 4 pursuant to this act, or (ii) the city has issued deficit notes or defi- 5 cit bonds and is able to use such proceeds to prepay in whole the loan 6 made pursuant to this act. 7 § 10. This act shall take effect on the same date and in the same 8 manner as part B of this chapter, takes effect. 9 PART B 10 Section 1. The sum of up to thirteen million, seven hundred thousand 11 dollars ($13,700,000), or so much thereof as may be necessary, is hereby 12 appropriated from any moneys in the state treasury in the general fund 13 for payment to the city of Dunkirk solely to refinance its revenue 14 anticipation note with a final maturity and due date of July 24, 2025. 15 No payment shall be made from this appropriation without a written, 16 signed attestation by the mayor of the city of Dunkirk sent electron- 17 ically to the budget director, the state comptroller, the chair of the 18 assembly ways and means committee, and the chair of the senate finance 19 committee by no later than July 9, 2025, stating that the city of 20 Dunkirk has made good faith efforts, to date, to secure the full amount 21 of principal and interest due on the city of Dunkirk's revenue antic- 22 ipation note due on July 24, 2025 through and including any combination 23 of city cash on hand, issuances of new city revenue or tax anticipation 24 notes, or issuances of new deficit bonds or deficit bond anticipation 25 notes, yet the city is unable to secure enough funding to pay the full 26 amount of principal and interest owed, and is in need of a specified 27 dollar amount of the full principal and interest amount due to be loaned 28 from the state on behalf of the city of Dunkirk by means of this appro- 29 priation. Such attestation and request shall also include, on behalf of 30 the city of Dunkirk, a pledge that the repayment of such loan shall be 31 met with the full faith and credit of the city of Dunkirk. If the amount 32 of the state loan so requested by the mayor of the city of Dunkirk is 33 less than the total principal and interest owed on the revenue antic- 34 ipation note, the mayor shall further attest and certify, within such 35 communication to the state no later than July 9, 2025, that the city of 36 Dunkirk has secured and shall cause to be deposited no later than July 37 24, 2025, sufficient funds that, together with the requested state loan 38 amount paid to the city of Dunkirk, shall completely pay off and settle 39 the principal and interest of the note so due, thus avoiding a city 40 default of non-payment. Such funds shall be payable on the audit and 41 warrant of the state comptroller on vouchers certified or approved in 42 the manner provided by law. 43 § 2. This act shall take effect upon receipt of the written, signed 44 attestation submitted by the mayor of the city of Dunkirk required by 45 section one of this act; provided, however, that the state director of 46 the budget, state comptroller, chair of the assembly ways and means 47 committee, and chair of the senate finance committee shall notify the 48 legislative bill drafting commission upon receipt of such written, 49 signed attestation in order that the commission may maintain an accurate 50 and timely effective data base of the official text of the laws of the 51 state of New York in furtherance of effectuating the provisions of 52 section 44 of the legislative law and section 70-b of the public offi- 53 cers law. 
 A. 8870 5 1 § 2. Severability clause. If any clause, sentence, paragraph, subdivi- 2 sion, section or part of this act shall be adjudged by any court of 3 competent jurisdiction to be invalid, such judgment shall not affect, 4 impair, or invalidate the remainder thereof, but shall be confined in 5 its operation to the clause, sentence, paragraph, subdivision, section 6 or part thereof directly involved in the controversy in which such judg- 7 ment shall have been rendered. It is hereby declared to be the intent of 8 the legislature that this act would have been enacted even if such 9 invalid provisions had not been included herein. 10 § 3. This act shall take effect immediately; provided, however, that 11 the applicable effective date of Parts A through B of this act shall be 12 as specifically set forth in the last section of such Parts.