Senate Bill S4380

                                 BILL NUMBER:  S4380

 TITLE OF BILL :

An act to amend the public authorities law, in relation to the
ownership status of transit facilities


 PURPOSE OR GENERAL IDEA OF BILL :

This bill would correct an unintended loophole in current law which
allows a small group of MTA New York City Transit (NYCT) employees to
recover from their employer in tort for personal injuries for which
they have already been fully compensated by workers' compensation
benefits.  This loophole undermines the basic premise of the workers'
compensation framework.

 SUMMARY OF PROVISIONS :

This bill amends the public Authorities Law ("PAL") to expressly
provide that NYCT is the owner of all transit facilities in the City
of New York solely for purposes of non-delegable duties of property
owners imposed by state law.

 JUSTIFICATION :

              

Under the PAL provisions creating NYCT, S 1201, ET SEQ Ct, the
Legislature authorized the City of New York to convey to NYCT by deed,
lease, license, or other arrangement all transit facilities owned and
operated, or thereafter acquired or constructed, by the City and/or
the Board of Transportation. In connection with such conveyance, NYCT
was to assume all legal responsibility therefor, via Agreements of
Lease (commonly known as the "Master Leases"). Because the City
accomplished this conveyance via the Master Leases, as opposed to
deeds, the transit facilities existing at the time of the transfer and
those built subsequently with the capital funds (but not these
properties financed by MTA or NYCT capital funds) are owned by the
City. While the City technically holds title to these facilities, the
City retains none of the traditional rights of an owner; NYCT retains
jurisdiction, control, possession and supervision of the transit
facilities. The City may not even terminate a Lease for so long as any
debt of the MTA or NYCT relating to transit facilities remain
outstanding. The City has no say over whether, when and where system
construction will occur and not power to ensure project safety.
Further, the Master Leases provide that NYCT shall indemnify the City
for any judgments arising out of ownership and control over property
subject to a Master Lease when and if NYCT ceases using a specific
piece of property acquired via a Master Lease. Certain state laws,
including Labor Law § 240, et seq., place non-delegable duties on
property owners absolutely responsible for worker safety in instance
involving the performance of certain types of construction work. Labor
Law § 240, which is a strict liability statute, is based on the
premise that property and that therefore no negligence need be shown
to find liability. Further, certain of these state laws, including
Labor Law § 240, do not exempt a fee owner from liability even if the
property is subject to a net lease and the actual fee owner retains
none of the actual indices of ownership application of these statutes
to be the unique set of facts created by the City's lease of transit
facilities to NYCT that has produced the inequitable circumstance
which this legislation seeks to remedy.

 STATEMENT IN SUPPORT :
This bill will eliminate an unintended loophole which results from the
unique circumstances of the city's lease of transit facilities to NYCT
combined with the effect of the non-delegable Labor Law provisions and

is expected to save NYCT six million ($6,000,000) dollars and numerous
hours of staff time.

In November 1997, the New York State Court of Appeals held in the case
of  COLEMAN V. CITY OF NEW YORK , 91 N.Y. 2d 821, 689 N.E.2d 523, 666
N.Y.S. 2d 553 (N.Y. 1997), that the City of New York, as fee owner of
certain transit facilities, is liable for worker injuries on the
premises of such facilities which result from a failure to comply with
Labor Law § 240, regardless of whether the City had control over the
property at the time of such injuries.  In essence,  COLEMAN  provides
that injured transit workers are able to recover twice for a single
injury received on the job - first, from NYCT under the Workers'
Compensation Law and, second, in tort against the City.  Because the
Master Leases provide for NYCT indemnification of the City for all
damages arising out of NYCT operations, any judgments against the City
resulting from a violation of Labor Law § 240 are in fact paid by
NYCT. Thus, NYCT ends up paying twice for a single injury.

The Court of Appeals noted in  COLEMAN  that the "Legislature has, in
the past, carved out exceptions from liability for certain owners,"
and the Court therefore declined to act in place of the Legislature.
Rather, the Court concluded that the Legislature could carve out an
exception for the City should it choose to and left it up to the
Legislature to so act. This bill implements the Court of Appeals'
suggestion. In so doing, this bill merely corrects an unintended
loophole, which enables workers to receive a double recovery for a
single injury at the public's expense.

 PRIOR LEGISLATIVE HISTORY :
2007:    A.560
2005-06: A.756
2003-04: S.5128
2001-02: S.5024
2000-9:  S.4487-A

 FISCAL IMPLICATIONS :

As noted, this bill would save NYCT and the City of New York the
expense of litigation and will save NYCT millions of dollars in
judgments and settlements.

 EFFECTIVE DATE :
This act shall take effect immediately.