senate Bill S4690A

Prohibits the formation of a subsidiary of a public authority without prior approval of the legislature

download pdf

Sponsor

Co-Sponsors

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
view actions

actions

  • 14 / Apr / 2011
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 18 / May / 2011
    • 1ST REPORT CAL.770
  • 23 / May / 2011
    • 2ND REPORT CAL.
  • 24 / May / 2011
    • ADVANCED TO THIRD READING
  • 24 / Jun / 2011
    • COMMITTED TO RULES
  • 04 / Jan / 2012
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 19 / Mar / 2012
    • 1ST REPORT CAL.374
  • 20 / Mar / 2012
    • 2ND REPORT CAL.
  • 21 / Mar / 2012
    • ADVANCED TO THIRD READING
  • 18 / Jun / 2012
    • AMENDED ON THIRD READING 4690A
  • 21 / Jun / 2012
    • PASSED SENATE
  • 21 / Jun / 2012
    • DELIVERED TO ASSEMBLY
  • 21 / Jun / 2012
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

Summary

Prohibits the formation of a subsidiary of a public authority without prior approval of the legislature.

do you support this bill?

Bill Details

See Assembly Version of this Bill:
A3228A
Versions:
S4690
S4690A
Legislative Cycle:
2011-2012
Current Committee:
Assembly Corporations, Authorities And Commissions
Law Section:
Public Authorities Law
Laws Affected:
Amd §2827-a, Pub Auth L
Versions Introduced in Previous Legislative Cycles:
2009-2010: S3919, A4298
2007-2008: A1343A

Sponsor Memo

BILL NUMBER:S4690A

TITLE OF BILL:
An act
to amend the public authorities law, in relation
to prohibiting the formation of a subsidiary of a public authority
without prior permission of the legislature

PURPOSE OR GENERAL IDEA OF BILL:
This bill seeks to prohibit the formation of a subsidiary of a public
authority or public benefit corporation without prior permission of
the legislature.

SUMMARY OF SPECIFIC PROVISIONS:
This bill would amend section 2827-a of the Public Authorities Law, to
eliminate the exception to the general prohibition against public
authorities establishing any new subsidiary corporation without prior
statutory authority.

JUSTIFICATION:
Public Authorities, the hybrid of a government agency and a private
corporation, were established to perform specific, focused missions
on behalf of the people of the state of New York. As finance,
contracting and operating entities, they have the flexibility and
power to accomplish great tasks. From bridge, edifice,
infrastructure, school and highway building, to the operation of
transportation systems, convention and sports centers, economic
development programs and public health and infrastructure facilities,
these entities perform an indispensable role and dramatically enhance
the quality of the daily lives of every New Yorker.

Due to their flexibility and efficiency of operation, their design for
speed, as well as their focused mission and specific purpose, New
York's public authorities have often been tasked with performing the
most challenging, difficult and controversial of state projects. From
the time they were used by Robert Moses to build the great bridges,
buildings, parks and edifices of early 20th century New York, to the
present day, there have been many questions and concerns raised
regarding their role and their lack of accountability. Without them,
however, so many of the things that make New York the Empire State,
from our Thruway, to our State University campuses, to our New York
City Transit systems, to the site for the 1980 Olympics were
America's famous Miracle on Ice occurred, to the very housing units
millions of New Yorkers now call home, simply would not exist today.

With the immense challenges and vast revenue streams which our public
authorities have been asked to oversee, there have been many
amendments to the public authorities law to improve public
accountability without compromising their effectiveness or mission.
These reforms include the establishment of the Public Authorities
Control Board as well as the modernization of the state statutes
governing their debt issuance, capital expenditures, contracting
procedures, and reporting requirements. As we step firmly into the
realm of the new 21st century, we have again witnessed some problems
with certain operations within select public authorities. It is
therefore incumbent upon the legislature to once again address these


issues with the same determination, and in the same manner, as to
promote increased accountability without diminishing the public
benefit which these governmentally-created corporations provide.

Financial, budget and accounting questions involving billions of
dollars of public monies, require reform. uncertainty over the
fairness and propriety of procurement contract awards must be
overcome to again regain the public's confidence and trust.
Accountability and operational soundness must be clearly demonstrated
by these entities through public disclosure and access, with the
ultimate oversight, resting with the people's elected representatives
in the State Senate and Assembly.

This bill seeks to accomplish an important and major reform by
prohibiting the formation of a subsidiary of a public authority
without prior permission of the legislature. Several public
authorities have gotten themselves into trouble due to lack of
oversight and an express set of guidelines of their subsidiaries.

This bill seeks to correct this situation, and remain true to the
spirit of §5 of Article 10 of the State constitution which requires
that only the State legislature may create a public authority. The
formation of a subsidiary by a public authority which itself must be
constitutionally created by the legislature, should not be allowed to
be created by the parent public authority. To permit otherwise not
only violates the spirit of the constitution, but also permits a
questionable delegation and abrogation of state legislative authority.

PRIOR LEGISLATIVE HISTORY:
2005-06: S.5102-A/A.6757 - Veto 369
2007: Passed Senate/Assembly
Corporations Authorities & Commission Committee
2008: Passed Senate/Assembly Ways and Means Committee
2009-10: S.3919 Corporations, Authorities & Commissions Committee
2011: Third reading; Committed to Rules

FISCAL IMPLICATIONS:
None noted.

EFFECTIVE DATE:
Immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 4690--A
    Cal. No. 374

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 14, 2011
                               ___________

Introduced  by Sens. FLANAGAN, LARKIN -- read twice and ordered printed,
  and when printed to be committed to  the  Committee  on  Corporations,
  Authorities  and Commissions -- recommitted to the Committee on Corpo-
  rations, Authorities and Commissions in accordance with Senate Rule 6,
  sec. 8 -- reported favorably from said committee, ordered to first and
  second report,  ordered  to  a  third  reading,  amended  and  ordered
  reprinted, retaining its place in the order of third reading

AN  ACT  to amend the public authorities law, in relation to prohibiting
  the formation of a subsidiary of  a  public  authority  without  prior
  permission of the legislature

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 1 of section 2827-a of the  public  authorities
law,  as added by chapter 506 of the laws of 2009, is amended to read as
follows:
  1. Notwithstanding any law to the contrary, no state  authority  shall
hereafter  have  the power to organize any subsidiary corporation unless
the legislature shall have enacted a law granting such  state  authority
such  power  for  the organization of a specific corporation[, provided,
however, that a state authority may organize  a  subsidiary  corporation
pursuant to the following requirements:
  a. the purpose for which the subsidiary corporation shall be organized
shall  be  for  a  project or projects which the state authority has the
power to pursue pursuant to its corporate purposes;
  b. the primary reason for which the subsidiary  corporation  shall  be
organized  shall  be  to  limit  the  potential  liability impact of the
subsidiary's project or projects on the authority or  because  state  or
federal  law  requires  that  the  purpose of a subsidiary be undertaken
through a specific corporate structure; and
  c. the]. ANY subsidiary corporation shall make the reports  and  other
disclosures  as are required of state authorities, unless the subsidiary
corporation's operations and finances are consolidated with those of the
authority of which it is a subsidiary.
  S 2. This act shall take effect immediately.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07376-02-2

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.