senate Bill S4690A

2011-2012 Legislative Session

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

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Archive: Last Bill Status - Passed Senate


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

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Actions

view actions (13)
Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jun 21, 2012 referred to corporations, authorities and commissions
delivered to assembly
passed senate
Jun 18, 2012 amended on third reading 4690a
Mar 21, 2012 advanced to third reading
Mar 20, 2012 2nd report cal.
Mar 19, 2012 1st report cal.374
Jan 04, 2012 referred to corporations, authorities and commissions
Jun 24, 2011 committed to rules
May 24, 2011 advanced to third reading
May 23, 2011 2nd report cal.
May 18, 2011 1st report cal.770
Apr 14, 2011 referred to corporations, authorities and commissions

Votes

view votes

Mar 19, 2012 - Corporations, Authorities and Commissions committee Vote

S4690
5
0
committee
5
Aye
0
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Committee Vote: Mar 19, 2012

aye wr (1)

May 18, 2011 - Corporations, Authorities and Commissions committee Vote

S4690
4
1
committee
4
Aye
1
Nay
1
Aye with Reservations
0
Absent
0
Excused
0
Abstained
show committee vote details

Committee Vote: May 18, 2011

nay (1)
aye wr (1)

Bill Amendments

Original
A (Active)
Original
A (Active)

Co-Sponsors

S4690 - Bill Details

See Assembly Version of this Bill:
A3228A
Current Committee:
Law Section:
Public Authorities Law
Laws Affected:
Amd §2827-a, Pub Auth L
Versions Introduced in 2009-2010 Legislative Session:
S3919, A4298

S4690 - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S4690 REVISED 10/03/11

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 add a new §2829 to the Public Authorities Law, to
prohibit public authorities from establishing any new subsidiary
corporation without prior statutory authority therefore; to
grandfather all legally created subsidiaries established prior to
July 1, 2012; and, to require all such previously established
subsidiaries to provide a justification report to the chairs of the
Senate and Assembly Committees on Corporations, Authorities and
Commissions on or before March 31, 2013.

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

FISCAL IMPLICATIONS:
None noted.

EFFECTIVE DATE:
Immediately.

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

                                  4690

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                             April 14, 2011
                               ___________

Introduced  by Sen. FLANAGAN -- 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. The public authorities law  is  amended  by  adding  a  new
section 2829 to read as follows:
  S  2829.  SUBSIDIARIES  OF PUBLIC AUTHORITIES.  1. NOTWITHSTANDING ANY
OTHER PROVISION OF LAW TO THE CONTRARY, NO  PUBLIC  BENEFIT  CORPORATION
SHALL ESTABLISH A SUBSIDIARY CORPORATION WITHOUT STATUTORY CODIFICATION.
  2.  NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
ANY SUBSIDIARY OF A PUBLIC AUTHORITY DULY AND LAWFULLY FORMED  PRIOR  TO
THE  FIRST  DAY  OF  JULY,  TWO THOUSAND TWELVE, SHALL BE DEEMED TO BE A
PUBLIC AUTHORITY UNDER THE TERMS OF THIS  CHAPTER,  AND  NOTWITHSTANDING
ANY  OTHER PROVISION OF LAW TO THE CONTRARY, SHALL BE SUBJECT TO ALL THE
REQUIREMENTS, DUTIES AND RESPONSIBILITIES PROVIDED IN THIS CHAPTER.
  3. ON OR BEFORE THE THIRTY-FIRST DAY OF MARCH, TWO THOUSAND  THIRTEEN,
ANY  SUBSIDIARY  PUBLIC  BENEFIT  CORPORATION,  IN  COOPERATION WITH ITS
PARENT PUBLIC BENEFIT CORPORATION, SHALL PROVIDE  TO  THE  CHAIRMAN  AND
RANKING MINORITY MEMBER OF THE SENATE FINANCE COMMITTEE AND THE CHAIRMAN
AND  RANKING MINORITY MEMBER OF THE ASSEMBLY WAYS AND MEANS COMMITTEE, A
REPORT ON THE SUBSIDIARY PUBLIC BENEFIT CORPORATION. SUCH  REPORT  SHALL
INCLUDE FOR EACH SUBSIDIARY:
  (A)  THE  COMPLETE  LEGAL NAME, ADDRESS AND CONTACT INFORMATION OF THE
SUBSIDIARY;
  (B) THE STRUCTURE OF THE ORGANIZATION OF THE SUBSIDIARY, INCLUDING THE
NAMES AND TITLES OF EACH OF ITS MEMBERS, DIRECTORS AND OFFICERS, AS WELL
AS A CHART OF ITS ORGANIZATIONAL STRUCTURE;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07376-01-1

S. 4690                             2

  (C) THE COMPLETE BYLAWS AND LEGAL ORGANIZATION PAPERS OF  THE  SUBSID-
IARY;
  (D) A COMPLETE REPORT OF THE PURPOSE, OPERATIONS, MISSION AND PROJECTS
OF  THE SUBSIDIARY, INCLUDING A STATEMENT OF JUSTIFICATION AS TO WHY THE
SUBSIDIARY IS NECESSARY TO CONTINUE ITS OPERATIONS FOR THE PUBLIC  BENE-
FIT FOR THE PEOPLE OF THE STATE OF NEW YORK; AND
  (E)  ANY  OTHER  INFORMATION THE SUBSIDIARY PUBLIC BENEFIT CORPORATION
DEEMS IMPORTANT TO INCLUDE IN SUCH REPORT.
  S 2. This act shall take effect immediately.

Co-Sponsors

S4690A (ACTIVE) - Bill Details

See Assembly Version of this Bill:
A3228A
Current Committee:
Law Section:
Public Authorities Law
Laws Affected:
Amd §2827-a, Pub Auth L
Versions Introduced in 2009-2010 Legislative Session:
S3919, A4298

S4690A (ACTIVE) - Bill Texts

view summary

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

view 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 full text
download pdf
                    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

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