senate Bill S1443

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

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Bill Status


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

  • 09 / Jan / 2013
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 18 / Mar / 2013
    • 1ST REPORT CAL.222
  • 19 / Mar / 2013
    • 2ND REPORT CAL.
  • 20 / Mar / 2013
    • ADVANCED TO THIRD READING
  • 20 / May / 2013
    • PASSED SENATE
  • 20 / May / 2013
    • DELIVERED TO ASSEMBLY
  • 20 / May / 2013
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS
  • 27 / Jan / 2014
    • 1ST REPORT CAL.61
  • 28 / Jan / 2014
    • 2ND REPORT CAL.
  • 03 / Feb / 2014
    • ADVANCED TO THIRD READING
  • 11 / Mar / 2014
    • PASSED SENATE
  • 11 / Mar / 2014
    • DELIVERED TO ASSEMBLY
  • 11 / Mar / 2014
    • REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

Summary

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

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Bill Details

See Assembly Version of this Bill:
A1599
Versions:
S1443
Legislative Cycle:
2013-2014
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:
2011-2012: S4690A, A3228A
2009-2010: S3919, A4298
2007-2008: A1343A

Sponsor Memo

BILL NUMBER:S1443

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
2012; S.4690-A Passed Senate; Assembly Corporations, Authorities &
Commissions

FISCAL IMPLICATIONS:
None noted.

EFFECTIVE DATE:
Immediately.

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

                                  1443

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 9, 2013
                               ___________

Introduced by Sens. FLANAGAN, MARTINS -- read twice and ordered printed,
  and  when  printed  to  be committed to the Committee on Corporations,
  Authorities and Commissions

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.
                                                           LBD04171-01-3

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