senate Bill S7574

2013-2014 Legislative Session

Relates to the regulation of bus privatization contracts

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Archive: Last Bill Status - In Committee


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

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
May 15, 2014 referred to corporations, authorities and commissions

S7574 - Bill Details

See Assembly Version of this Bill:
A9679
Current Committee:
Law Section:
Public Authorities Law
Laws Affected:
Add ยง2875-c, Pub Auth L

S7574 - Bill Texts

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Relates to the regulation of bus privatization contracts.

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BILL NUMBER:S7574

TITLE OF BILL: An act to amend the public authorities law, in
relation to the regulation of bus privatization contracts

GENERAL PURPOSE: This bill does not prevent privatization but
requires a careful analysis both at the local level and by the State
Comptroller to ensure that the promises being made by the private bus
company are realistic and will not negatively impact the locality, the
taxpayer or the transit rider.

SUMMARY OF PROVISIONS OF BILL:

Section 1 of the bill sets for the legislative intent of the
legislation.

Section 2 of the bill amends the public authorities law by adding a
new section 2875-c that would require that the State Comptroller sign
off on any attempt to privatize public bus service by a locality.

Section 3 of the bill sets for an effective date 90 days after it
shall have been signed into law.

JUSTIFICATION: Several localities around the State are looking into
various options to save money. One option discussed is privatizing
public services, specifically public transportation.

Many times, private bus companies approach localities promising
miraculous outcomes, which include cost savings and increased service
quality. Most often the promises made are empty promises. The cost
savings, in most cases, never materialize. There have been many cases
where the costs to the locality actually increase even though a
private entity has taken over primary operation of the system.

In addition, the service quality for transit riders always takes a
significant hit. Usually, there are significant service and route cuts
once the private bus company takes over the primary servicing of the
transit system. Further, the routes that aren't cut tend to suffer
from reliability and service issues. Thousands of New Yorkers rely on
public transportation to get to and from work and medical services.
Commuters need a public transportation system that operates in a
reliable and timely manner in order to make a living and perform basic
everyday life activities.

This legislation strikes a good balance between the desire of the
localities to find new ways to save money and ensuring that public
transportation will remain reliable and cost effective.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None

EFFECTIVE DATE: This Act shall take effect on the ninetieth day after
it shall have been signed into law.


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

                                  7574

                            I N  S E N A T E

                              May 15, 2014
                               ___________

Introduced  by  Sen.  AVELLA -- 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 the regu-
  lation of bus privatization contracts

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

  Section  1.  Legislative  intent.  The  legislature  hereby  finds and
declares that decisions to use private  contractors  to  provide  public
transportation service must be based on factors which promote the public
interest.  To  ensure  that  citizens  of the state receive high quality
transit services at low cost, with due regard for the taxpayers  of  the
state and the needs of public and private workers, the legislature finds
it necessary to regulate such privatization contracts.
  S  2.  The  public  authorities law is amended by adding a new section
2875-c to read as follows:
  S 2875-C. REGULATION OF PRIVATIZATION CONTRACTS.  1.  DEFINITIONS.  AS
USED IN THIS SECTION, THE FOLLOWING WORDS SHALL HAVE THE FOLLOWING MEAN-
INGS:
  A.  "PUBLIC  TRANSPORTATION SYSTEM" MEANS ANY PASSENGER TRANSPORTATION
SERVICE PROVIDED BY BUS, WHICH, DURING ITS HOURS OF OPERATION, IS AVAIL-
ABLE ON AN EQUAL OPPORTUNITY BASIS TO ANY PERSON, WITHOUT PREFERENCE FOR
SERVICE AVAILABILITY, ELIGIBILITY OR DESIGN BEING GIVEN TO ANY PERSON OR
POPULATION SUB-GROUP BECAUSE OF  AGE,  GENDER,  RACE,  NATIONAL  ORIGIN,
CREED  OR  AGENCY  CLIENT  STATUS, AND WHICH IS REGULARLY ADVERTISED AND
MARKETED AS AVAILABLE TO THE GENERAL PUBLIC.  NOTHING  IN  THIS  ARTICLE
SHALL  BE  DEEMED  TO  MEAN THAT THE TRANSPORTATION SERVICES OPERATED OR
PROVIDED BY HUMAN OR SOCIAL SERVICE AGENCIES SOLELY FOR THEIR CLIENTS OR
PROGRAMS  CONSTITUTE,  IN  AND  OF  THEMSELVES,  PUBLIC   TRANSPORTATION
SERVICES.
  B.  "PRIVATIZATION  CONTRACT"  SHALL  MEAN AGREEMENT OR COMBINATION OR
SERIES OF AGREEMENTS BY WHICH A PRIVATE PERSON OR ENTITY AGREES  WITH  A
PUBLIC  TRANSPORTATION SYSTEM TO PROVIDE SERVICES, VALUED AT ONE HUNDRED
THOUSAND DOLLARS OR MORE, WHICH ARE SUBSTANTIALLY SIMILAR TO AND IN LIEU

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15227-01-4

S. 7574                             2

OF, SERVICES HERETOFORE PROVIDED,  IN  WHOLE  OR  IN  PART,  BY  REGULAR
EMPLOYEES  OF  THE  PUBLIC TRANSPORTATION SYSTEM. AN AGREEMENT SOLELY TO
PROVIDE LEGAL, MANAGEMENT CONSULTING, PLANNING,  ENGINEERING  OR  DESIGN
SERVICES SHALL NOT BE CONSIDERED A PRIVATIZATION CONTRACT.
  2.  REQUIREMENTS. A. A PUBLIC TRANSPORTATION SYSTEM SHALL NOT MAKE ANY
PRIVATIZATION CONTRACT AND NO SUCH CONTRACT SHALL BE  VALID  UNLESS  THE
PUBLIC  TRANSPORTATION  SYSTEM  COMPLIES  WITH  EACH  OF  THE  FOLLOWING
REQUIREMENTS:
  (1) THE PUBLIC TRANSPORTATION SYSTEM SHALL PREPARE A SPECIFIC  WRITTEN
STATEMENT  OF  THE SERVICES PROPOSED TO BE THE SUBJECT OF THE PRIVATIZA-
TION CONTRACT, INCLUDING THE SPECIFIC QUANTITY AND STANDARD  OF  QUALITY
OF THE SUBJECT SERVICES;
  (2)  THE  PUBLIC  TRANSPORTATION  SYSTEM  SHALL INCLUDE IN THE WRITTEN
STATEMENT A SUMMARY OF THE EMPLOYEES'  SALARIES,  PENSION  BENEFITS  AND
HEALTH CARE COVERAGE AND HOW THOSE SALARIES, PENSION BENEFITS AND HEALTH
CARE COVERAGE WILL BE AFFECTED BY THE PRIVATIZATION CONTRACT;
  (3)  THE  ORGANIZATION  SHALL  SOLICIT COMPETITIVE SEALED BIDS FOR THE
PRIVATIZATION CONTRACTS BASED UPON THIS STATEMENT;
  (4) THE DAY DESIGNATED BY THE PUBLIC TRANSPORTATION SYSTEM UPON  WHICH
IT  WILL  ACCEPT  THESE  SEALED  BIDS  SHALL BE THE SAME FOR ANY AND ALL
PARTIES;
  (5) THIS STATEMENT SHALL BE A PUBLIC RECORD, SHALL  BE  FILED  AT  THE
PUBLIC  TRANSPORTATION  SYSTEM,  AND  SHALL  BE TRANSMITTED TO THE STATE
COMPTROLLER FOR REVIEW PURSUANT TO SUBDIVISION THREE OF THIS SECTION;
  (6) THE TERM OF ANY PRIVATIZATION  CONTRACT  SHALL  NOT  EXCEED  THREE
YEARS; AND
  (7)  NO AMENDMENT TO A PRIVATIZATION CONTRACT SHALL BE VALID IF IT HAS
THE PURPOSE OR EFFECT OF AVOIDING ANY REQUIREMENT OF THIS SECTION.
  B. AFTER SOLICITING AND  RECEIVING  BIDS,  THE  PUBLIC  TRANSPORTATION
SYSTEM SHALL PUBLICLY DESIGNATE THE BIDDER TO WHICH IT PROPOSES TO AWARD
THE  CONTRACT.  THE PUBLIC TRANSPORTATION SYSTEM SHALL PREPARE A COMPRE-
HENSIVE WRITTEN ANALYSIS OF THE CONTRACT COST BASED UPON THE  DESIGNATED
BID,  SPECIFICALLY  INCLUDING  THE  COSTS  OF  TRANSITION FROM PUBLIC TO
PRIVATE OPERATION, OF ADDITIONAL UNEMPLOYMENT AND  RETIREMENT  BENEFITS,
IF  ANY, AND OF MONITORING AND OTHERWISE ADMINISTERING CONTRACT PERFORM-
ANCE. IF THE DESIGNATED BIDDER IS HEADQUARTERED OUTSIDE THE STATE,  SAID
CONTRACT COST SHALL BE INCREASED BY THE AMOUNT OF INCOME TAX REVENUE, IF
ANY, WHICH WILL BE LOST TO THE STATE.
  C.  THE  PUBLIC  TRANSPORTATION  SYSTEM  SHALL  PROVIDE  A COPY OF THE
PROPOSED PRIVATIZATION CONTRACT AS WELL AS CERTIFY  IN  WRITING  TO  THE
STATE COMPTROLLER THAT:
  (1)  IT  HAS  COMPLIED  WITH ALL PROVISIONS OF THIS SECTION AND OF ALL
OTHER APPLICABLE LAWS;
  (2) THE QUALITY OF THE PUBLIC TRANSPORTATION SERVICES TO  BE  PROVIDED
BY  THE  DESIGNATED BIDDER IS LIKELY TO SATISFY THE QUALITY REQUIREMENTS
OF THE STATEMENT PREPARED PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH  (A)
OF THIS SUBDIVISION AND TO EQUAL OR EXCEED THE QUALITY OF SERVICES WHICH
COULD BE PROVIDED BY REGULAR PUBLIC TRANSPORTATION SYSTEM EMPLOYEES;
  (3)  THE  CONTRACT COST WILL BE AT LEAST FIFTEEN PERCENT LESS THAN THE
ESTIMATED CURRENT YEAR COST OF THE PUBLIC SYSTEM;
  (4) THE DESIGNATED BIDDER AND ITS SUPERVISORY EMPLOYEES, WHILE IN  THE
EMPLOY OF SAID DESIGNATED BIDDER, HAVE NO ADJUDICATED RECORD OF SUBSTAN-
TIAL  OR  REPEATED  WILLFUL  NONCOMPLIANCE  WITH ANY RELEVANT FEDERAL OR
STATE  REGULATORY  STATUTE  INCLUDING,  BUT  NOT  LIMITED  TO,  STATUTES
CONCERNING LABOR RELATIONS, OCCUPATIONAL SAFETY AND HEALTH, NONDISCRIMI-

S. 7574                             3

NATION AND AFFIRMATIVE ACTION, ENVIRONMENTAL PROTECTION AND CONFLICTS OF
INTEREST;
  (5)  THE PROPOSED PRIVATIZATION CONTRACT IS IN THE PUBLIC INTEREST, IN
THAT IT MEETS THE APPLICABLE QUALITY  AND  FISCAL  STANDARDS  SET  FORTH
HEREIN; AND
  (6) THE CONTRACT IS IN CONFORMANCE WITH THE PROVISIONS OF ANY APPLICA-
BLE COLLECTIVE BARGAINING AGREEMENT AND SUBJECT TO THE PROVISIONS OF ANY
EMPLOYEE PROTECTION ARRANGEMENTS ESTABLISHED UNDER 49 U.S.C. 5333(B).
  3.  REVIEW  BY  STATE  COMPTROLLER; APPROVAL OR OBJECTION; PROCEDURES;
PROMULGATION OF REGULATIONS. A. NO PRIVATIZATION CONTRACT SHALL BE VALID
IF WITHIN THIRTY BUSINESS DAYS AFTER RECEIVING  THE  CERTIFICATION  FROM
THE  PUBLIC  TRANSPORTATION  SYSTEM,  THE STATE COMPTROLLER NOTIFIES THE
PUBLIC TRANSPORTATION SYSTEM OF ITS OBJECTION. SUCH OBJECTION  SHALL  BE
IN  WRITING AND SHALL STATE SPECIFICALLY THE STATE COMPTROLLER'S FINDING
THAT THE PUBLIC TRANSPORTATION SYSTEM HAS FAILED TO COMPLY WITH  ONE  OR
MORE REQUIREMENT FOR PRIVATIZATION, INCLUDING THAT THE STATE COMPTROLLER
FINDS  INCORRECT, BASED ON INDEPENDENT REVIEW OF ALL THE RELEVANT FACTS,
ANY OF THE FINDINGS REACHED BY THE  PUBLIC  TRANSPORTATION  SYSTEM.  THE
STATE  COMPTROLLER  MAY  EXTEND THE TIME FOR SUCH OBJECTION FOR AN ADDI-
TIONAL PERIOD OF THIRTY BUSINESS DAYS BEYOND THE ORIGINAL  THIRTY  BUSI-
NESS DAYS BY WRITTEN NOTICE TO THE PUBLIC TRANSPORTATION SYSTEM, STATING
THE REASON FOR SUCH EXTENSION.
  B.  FOR  THE  PURPOSE  OF REVIEWING THE PUBLIC TRANSPORTATION SYSTEM'S
COMPLIANCE AND CERTIFICATION, THE STATE COMPTROLLER OR HIS OR HER DESIG-
NEE MAY REQUIRE BY SUMMONS THE ATTENDANCE AND TESTIMONY  UNDER  OATH  OF
WITNESSES AND THE PRODUCTION OF BOOKS, PAPERS AND OTHER RECORDS RELATING
TO SUCH REVIEW.
  C.  THE STATE COMPTROLLER MAY ADOPT REGULATIONS AND PRESCRIBE FORMS TO
CARRY OUT THE PROVISIONS OF THIS SECTION.
  D. THE OBJECTION OF THE STATE COMPTROLLER PURSUANT TO PARAGRAPH  A  OF
THIS SUBDIVISION SHALL BE FINAL AND BINDING ON THE PUBLIC TRANSPORTATION
SYSTEM, UNLESS THE STATE COMPTROLLER THEREAFTER IN WRITING WITHDRAWS THE
OBJECTION,  STATING  THE  SPECIFIC REASONS, BASED UPON A REVISED CERTIF-
ICATION BY THE PUBLIC TRANSPORTATION SYSTEM AND  UPON  THE  STATE  COMP-
TROLLER'S REVIEW THEREOF.
  S  3.  This  act shall take effect on the ninetieth day after it shall
have become a law.

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