New York Senate Bill S04747 Latest Draft

   
  STATE OF NEW YORK ________________________________________________________________________ 4747 2023-2024 Regular Sessions  IN SENATE February 14, 2023 ___________ Introduced by Sen. HOYLMAN-SIGAL -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the debtor and creditor law, in relation to the recover- ability of sovereign debt The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Legislative findings and intent. The legislature finds that 2 it is a longstanding policy of the United States and the state of New 3 York, as the world's leading financial center, to support orderly, 4 collaborative and effective international debt relief for developing 5 countries with unsustainable levels of debt. Debt distress, debt crises, 6 and disorderly default are associated with unacceptable human suffering, 7 economic decline, and financial market and payment systems disruption. 8 Moreover, debt restructuring is ineffective and does not lead to 9 sustainable outcomes when it is not perceived as equitable or legitimate 10 by stakeholders in borrowing and lending countries. Additionally, public 11 creditors are unlikely to participate in debt restructuring initiatives 12 unless there is fair burden sharing among all public and private credi- 13 tors, which is essential to the legitimacy and effectiveness of debt 14 relief initiatives. The United Kingdom has successfully implemented 15 legislation to promote such burden-sharing in support of international 16 debt relief initiatives since 2010. Therefore, the legislature finds and 17 declares that it shall be the policy of the state of New York to support 18 international debt relief initiatives for developing countries in, or at 19 high risk of, debt distress, to ensure that the cost of such debt relief 20 is allocated in a fair and equitable manner, and that such costs do not 21 fall disproportionately on the residents and taxpayers of the state of 22 New York, and for other purposes. 23 § 2. The debtor and creditor law is amended by adding a new article 24 10-B to read as follows: EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD04458-01-3 
 S. 4747 2 1 ARTICLE 10-B 2 RECOVERABILITY OF SOVEREIGN DEBT 3 Section 287-a. Definitions. 4 287-b. Recoverability of eligible claims. 5 § 287-a. Definitions. As used in this article, the following terms 6 shall have the following meanings: 7 1. "International initiative" means any mechanism, framework or initi- 8 ative in which the United States government and other sovereign states 9 have engaged with international financial institutions and official and 10 commercial creditors to advance the implementation and improvement of 11 prompt and effective debt relief among eligible states, including but 12 not limited to the Heavily Indebted Poor Countries Initiative of the 13 International Monetary Fund and the World Bank, the Debt Service Suspen- 14 sion Initiative of the Group of 20, the Common Framework for Debt Treat- 15 ments beyond the DSSI, also known as the "Common Framework", and any 16 successor or similar international mechanism, framework or initiatives. 17 2. "Eligible claim" shall mean a payment claim for borrowed money, a 18 guarantee or similar obligation with respect to borrowed money, any 19 debt-equivalent claim, and any domestic or foreign judgment with respect 20 to such a claim against an eligible state participating in one or more 21 of the international initiatives. 22 3. "Eligible state" shall mean a sovereign state eligible to partic- 23 ipate in one or more of the international initiatives. 24 4. "Burden-sharing standards" shall mean standards set by the relevant 25 international initiative or international initiatives for equitable 26 burden-sharing among all creditors with material claims on each partic- 27 ipating debtor without regard for their official, private, or hybrid 28 status. 29 § 287-b. Recoverability of eligible claims. Any eligible claim 30 incurred prior to the date of an eligible state's application to partic- 31 ipate in one or more international initiatives shall only be recovera- 32 ble: 33 1. to the extent that it comports with burden-sharing standards; 34 2. provided it meets robust disclosure standards, including inter-cre- 35 ditor data sharing and a broad presumption in favor of public disclosure 36 of material terms and conditions of such claims; and 37 3. up to the proportion of the eligible claim that would have been 38 recoverable by the United States federal government under the applicable 39 international initiative if the United States federal government had 40 been the creditor holding the eligible claim. 41 § 3. This act shall take effect immediately.