S. 7637 2
efficient volume ceiling allocation process for state and local agencies
by establishing an alternative formula for making such allocations.
S 3. Definitions. As used in this act, unless the context requires
otherwise:
1. "Bonds" means bonds, notes or other obligations.
2. "Carryforward" means an amount of unused private activity bond
ceiling available to an issuer pursuant to an election filed with the
internal revenue service pursuant to section 146(f) of the code.
3. "Code" means the internal revenue code of 1986, as amended.
4. "Commissioner" means the commissioner of the New York state depart-
ment of economic development.
5. "Covered bonds" means those tax exempt private activity bonds and
that portion of the non-qualified amount of an issue of governmental use
bonds for which an allocation of the statewide ceiling is required for
the interest earned by holders of such bonds to be excluded from the
gross income of such holders for federal income tax purposes under the
code.
6. "Director" means the director of the New York state division of the
budget.
7. "Issuer" means a local agency, state agency or other issuer.
8. "Local agency" means an industrial development agency established
or operating pursuant to article 18-A of the general municipal law, the
Troy industrial development authority and the Auburn industrial develop-
ment authority.
9. "Other issuer" means any agency, political subdivision or other
entity, other than a local agency or state agency, that is authorized to
issue covered bonds.
10. "Qualified small issue bonds" means qualified small issue bonds,
as defined in section 144(a) of the code.
11. "State agency" means the state of New York, the New York state
energy research and development authority, the New York job development
authority, the New York state environmental facilities corporation, the
New York state urban development corporation and its subsidiaries, the
Battery Park city authority, the port authority of New York and New
Jersey, the power authority of the state of New York, the dormitory
authority of the state of New York, the New York state housing finance
agency, the state of New York mortgage agency, and any other public
benefit corporation or public authority designated by the governor for
the purposes of this act.
12. "Statewide ceiling" means for any calendar year the highest state
ceiling (as such term is used in section 146 of the code) applicable to
New York state.
13. "Future allocations" means allocations of statewide ceiling for up
to two future years.
14. "Multi-year housing development project" means a project (a) which
qualifies for covered bonds;
(b) which is to be constructed over two or more years; and
(c) in which at least twenty percent of the dwelling units will be
occupied by persons and families of low income.
S 4. Local agency set-aside. A set-aside of statewide ceiling for
local agencies for any calendar year shall be an amount which bears the
same ratio to one-third of the statewide ceiling as the population of
the jurisdiction of such local agency bears to the population of the
entire state. The commissioner shall administer allocations of such
set-aside to local agencies.
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S 5. State agency set-aside. A set-aside of statewide ceiling for all
state agencies for any calendar year shall be one-third of the statewide
ceiling. The director shall administer allocations of such set-aside to
state agencies and may grant an allocation to any state agency upon
receipt of an application in such form as the director shall require.
S 6. Statewide bond reserve. One-third of the statewide ceiling is
hereby set aside as a statewide bond reserve to be administered by the
director. 1. Allocation of the statewide bond reserve among state agen-
cies, local agencies and other issuers. The director shall transfer a
portion of the statewide bond reserve to the commissioner for allocation
to and use by local agencies and other issuers in accordance with the
terms of this section. The remainder of the statewide bond reserve may
be allocated by the director to state agencies in accordance with the
terms of this section.
2. Allocation of statewide bond reserve to local agencies or other
issuers. (a) Local agencies or other issuers may at any time apply to
the commissioner for an allocation from the statewide bond reserve. Such
application shall demonstrate:
(i) that the requested allocation is required under the code for the
interest earned on the bonds to be excluded from the gross income of
bondholders for federal income tax purposes;
(ii) that the local agency's remaining unused allocation provided
pursuant to section four of this act, and other issuer's remaining
unused allocation, or any available carryforward will be insufficient
for the specific project or projects for which the reserve allocation is
requested; and
(iii) that, except for those allocations made pursuant to section
twelve of this act to enable carryforward elections, the requested allo-
cation is reasonably expected to be used during the calendar year, and
the requested future allocation is reasonably expected to be used in the
calendar year to which the future allocation relates.
(b) In reviewing and approving or disapproving applications, the
commissioner shall exercise discretion to ensure an equitable distrib-
ution of allocations from the statewide bond reserve to local agencies
and other issuers. Prior to making a determination on such applications,
the commissioner shall notify and seek the recommendation of the presi-
dent and chief executive officer of the New York state housing finance
agency in the case of an application related to the issuance of multi-
family housing or mortgage revenue bonds, and in the case of other
requests, such state officers, departments, divisions and agencies as
the commissioner deems appropriate.
(c) Applications for allocations shall be made in such form and
contain such information and reports as the commissioner shall require.
(d) On or before September fifteenth of each year, the commissioner
shall publish the total amount of local agency set-aside that has been
recaptured pursuant to section twelve of this act for that year on the
department of economic development's website.
3. Allocation of statewide bond reserve to state agencies. The direc-
tor may make an allocation from the statewide bond reserve to any state
agency. Before making any allocation of statewide bond reserve to state
agencies the director shall be satisfied: (a) that the allocation is
required under the code for the interest earned on the bonds to be
excluded from the gross income of bondholders for federal income tax
purposes;
(b) that the state agency's remaining unused allocation provided
pursuant to section five of this act or any available carryforward will
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be insufficient to accommodate the specific bond issue or issues for
which the reserve allocation is requested; and
(c) that, except for those allocations made pursuant to section twelve
of this act to enable carryforward elections, the requested allocation
is reasonably expected to be used during the calendar year, and the
requested future allocation is reasonably expected to be used in the
calendar year to which the future allocation relates.
S 7. Access to employment opportunities. 1. All issuers shall require
that any new employment opportunities created in connection with the
industrial or manufacturing projects financed through the issuance of
qualified small issue bonds shall be listed with the New York state
department of labor and with the one-stop career center established
pursuant to the federal workforce investment act (Pub. L. No. 105-220)
serving the locality in which the employment opportunities are being
created. Such listing shall be in a manner and form prescribed by the
commissioner. All issuers shall further require that for any new employ-
ment opportunities created in connection with an industrial or manufac-
turing project financed through the issuance of qualified small issue
bonds by such issuer, industrial or manufacturing firms shall first
consider persons eligible to participate in workforce investment act
(Pub. L. No. 105-220) programs who shall be referred to the industrial
or manufacturing firm by one-stop centers in local workforce investment
areas or by the department of labor. Issuers of qualified small issue
bonds are required to monitor compliance with the provisions of this
section as prescribed by the commissioner.
2. Nothing in this section shall be construed to require users of
qualified small issue bonds to violate any existing collective bargain-
ing agreement with respect to the hiring of new employees. Failure on
the part of any user of qualified small issue bonds to comply with the
requirements of this section shall not affect the allocation of bonding
authority to the issuer of the bonds or the validity or tax exempt
status of such bonds.
S 8. Overlapping jurisdictions. In a geographic area represented by a
county local agency and one or more sub-county local agencies, the allo-
cation granted by section four of this act with respect to such area of
overlapping jurisdiction shall be apportioned one-half to the county
local agency and one-half to the sub-county local agency or agencies.
Where there is a local agency for the benefit of a village within the
geographic area of a town for the benefit of which there is a local
agency, the allocation of the village local agency shall be based on the
population of the geographic area of the village, and the allocation of
the town local agency shall be based upon the population of the
geographic area of the town outside of the village. Notwithstanding the
foregoing, a local agency may surrender all or part of its allocation
for such calendar year to another local agency with an overlapping
jurisdiction. Such surrender shall be made at such time and in such
manner as the commissioner shall prescribe.
S 9. Ineligible local agencies. To the extent that any allocation of
the local agency set-aside would be made by this act to a local agency
which is ineligible to receive such allocation under the code or under
regulations interpreting the state volume ceiling provisions of the
code, such allocation shall instead be made to the political subdivision
for whose benefit that local agency was created.
S 10. Municipal reallocation. The chief executive officer of any poli-
tical subdivision or, if such political subdivision has no chief execu-
tive officer, the governing board of the political subdivision for the
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benefit of which a local agency has been established, may withdraw all
or any portion of the allocation granted by section four of this act to
such local agency. The political subdivision may then reallocate all or
any portion of such allocation, as well as all or any portion of the
allocation received pursuant to section nine of this act, to itself or
any other issuer established for the benefit of that political subdivi-
sion or may assign all or any portion of the allocation received pursu-
ant to section nine of this act to the local agency created for its
benefit. The chief executive officer or governing board of the political
subdivision, as the case may be, shall notify the commissioner of any
such reallocation.
S 11. Future allocations for multi-year housing development projects.
1. In addition to other powers granted under this act, the commissioner
is authorized to make the following future allocations of statewide
ceiling for any multi-year housing development project for which the
commissioner also makes an allocation of statewide ceiling for the
current year under this act or for which, in the event of expiration of
provisions of this act described in section eighteen of this act, an
allocation of volume cap for a calendar year subsequent to such expira-
tion shall have been made under section 146 of the code: (a) to local
agencies from the local agency set-aside (but only with the approval of
the chief executive officer of the political subdivision to which the
local agency set-aside relates or the governing body of a political
subdivision having no chief executive officer) and
(b) to other issuers from that portion, if any, of the statewide bond
reserve transferred to the commissioner by the director. Any future
allocation made by the commissioner shall constitute an allocation of
statewide ceiling for the future year specified by the commissioner and
shall be deemed to have been made on the first day of the future year so
specified.
2. In addition to other powers granted under this act, the director is
authorized to make future allocations of statewide ceiling from the
state agency set-aside or from the statewide bond reserve to state agen-
cies for any multi-year housing development project for which the direc-
tor also makes an allocation of statewide ceiling from the current year
under this act or for which, in the event of expiration of provisions of
this act described in section eighteen of this act, an allocation of
volume cap for a calendar year subsequent to such expiration shall have
been made under section 146 of the code, and is authorized to make
transfers of the statewide bond reserve to the commissioner for future
allocations to other issuers for multi-year housing development projects
for which the commissioner has made an allocation of statewide ceiling
for the current year. Any such future allocation or transfer of the
statewide bond reserve for future allocation made by the director shall
constitute an allocation of statewide ceiling or transfer of the state-
wide bond reserve for the future years specified by the director and
shall be deemed to have been made on the first day of the future year so
specified.
3. (a) If an allocation made with respect to a multi-year housing
development project is not used by September fifteenth of the year to
which the allocation relates, the allocation with respect to the then
current year shall be subject to recapture in accordance with the
provisions of section twelve of this act, and in the event of such a
recapture, unless a carryforward election by another issuer shall have
been approved by the commissioner or a carryforward election by a state
agency shall have been approved by the director, all future allocations
S. 7637 6
made with respect to such project pursuant to subdivision one or two of
this section shall be canceled.
(b) The commissioner and the director shall have the authority to make
future allocations from recaptured current year allocations and canceled
future allocations to multi-year housing development projects in a
manner consistent with the provisions of this act. Any such future allo-
cation shall, unless a carryforward election by another issuer shall
have been approved by the commissioner or a carryforward election by a
state agency shall have been approved by the director, be canceled if
the current year allocation for the project is not used by December 31,
2017.
(c) The commissioner and the director shall establish procedures
consistent with the provisions of this act relating to carryforward of
future allocations.
4. The aggregate future allocations from either of the two succeeding
years shall not exceed six hundred fifty million dollars for each such
year.
S 12. Year end allocation recapture. On or before September first of
each year, each state agency shall report to the director and each local
agency and each other issuer shall report to the commissioner the amount
of bonds subject to allocation under this act that will be issued prior
to the end of the then current calendar year, and the amount of the
issuer's then total allocation that will remain unused. As of September
fifteenth of each year, the unused portion of each local agency's and
other issuer's then total allocation as reported and the unallocated
portion of the set-aside for state agencies shall be recaptured and
added to the statewide bond reserve and shall no longer be available to
covered bond issuers except as otherwise provided herein. From September
fifteenth through the end of the year, each local agency or other issuer
having an allocation shall immediately report to the commissioner and
each state agency having an allocation shall immediately report to the
director any changes to the status of its allocation or the status of
projects for which allocations have been made which should affect the
timing or likelihood of the issuance of covered bonds therefor. If the
commissioner determines that a local agency or other issuer has overes-
timated the amount of covered bonds subject to allocation that will be
issued prior to the end of the calendar year, the commissioner may
recapture the amount of the allocation to such local agency or other
issuer represented by such overestimation by notice to the local agency
or other issuer, and add such allocation to the statewide bond reserve.
The director may likewise make such determination and recapture with
respect to state agency allocations.
S 13. Allocation carryforward. 1. No local agency or other issuer
shall make a carryforward election utilizing any unused allocation
(pursuant to section 146(f) of the code) without the prior approval of
the commissioner. Likewise no state agency shall make or file such an
election, or elect to issue or carryforward mortgage credit certif-
icates, without the prior approval of the director.
2. On or before November fifteenth of each year, each state agency
seeking unused statewide ceiling for use in future years shall make a
request for an allocation for a carryforward to the director, whose
approval shall be required before a carryforward election is filed by or
on behalf of any state agency. A later request may also be considered by
the director, who may file a carryforward election for any state agency
with the consent of such agency.
S. 7637 7
3. On or before November fifteenth of each year, each local agency or
other issuer seeking unused statewide ceiling for use in future years
shall make a request for an allocation for a carryforward to the commis-
sioner, whose approval shall be required before a carryforward election
is filed by or on behalf of any local or other agency. A later request
may also be considered by the commissioner.
4. On or before January fifteenth of each year, the director shall
publish the total amount of unused statewide ceiling from the prior year
on the division of budget's website.
S 14. New York state bond allocation policy advisory panel. 1. There
is hereby created a policy advisory panel and process to provide policy
advice regarding the priorities for distribution of the statewide ceil-
ing.
2. The panel shall consist of five members, one designee being
appointed by each of the following: the governor, the temporary presi-
dent of the senate, the speaker of the assembly, the minority leader of
the senate and the minority leader of the assembly. The designee of the
governor shall chair the panel. The panel shall monitor the allocation
process through the year, and in that regard, the division of the budget
and the department of economic development shall assist and cooperate
with the panel as provided in this section. The advisory process shall
operate through the issuance of advisory opinions by members of the
panel as provided in subdivisions six and seven of this section. A meet-
ing may be held at the call of the chair with the unanimous consent of
the members.
3.(a) Upon receipt of a request for allocation or a request for
approval of a carryforward election from the statewide reserve from a
local agency or other issuer, the commissioner shall, within five work-
ing days, notify the panel of such request and provide the panel with
copies of all application materials submitted by the applicant.
(b) Upon receipt of a request for allocation or a request for approval
of carryforward election from the statewide reserve from a state agency,
the director shall, within five working days, notify the panel of such
request and provide the panel with copies of all application materials
submitted by the applicant.
4. (a) Following receipt of a request for allocation from a local
agency or other issuer, the commissioner shall notify the panel of a
decision to approve or exclude from further consideration such request,
and the commissioner shall state the reasons. Such notification shall be
made with or after the transmittal of the information specified in
subdivision three of this section and at least five working days before
formal notification is made to the applicant.
(b) Following receipt of a request for allocation from a state agency,
the director shall notify the panel of a decision to approve or exclude
from further consideration such request, and shall state the reasons.
Such notification shall be made with or after the transmission of the
information specified in subdivision three of this section and at least
five working days before formal notification is made to the state agen-
cy.
5. The requirements of subdivisions three and four of this section
shall not apply to adjustments to allocations due to bond sizing chang-
es.
6. In the event that any decision to approve or to exclude from
further consideration a request for allocation is made within ten work-
ing days of the end of the calendar year and in the case of all requests
for consent to a carryforward election, the commissioner or director, as
S. 7637 8
is appropriate, shall provide the panel with the longest possible
advance notification of the action, consistent with the requirements of
the code, and shall, wherever possible, solicit the opinions of the
members of the panel before formally notifying any applicant of the
action. Such notification may be made by means of telephone communi-
cation to the members or by written notice delivered to the Albany
office of the appointing authority of the respective members.
7. Upon notification by the director or the commissioner, any member
of the panel may, within five working days, notify the commissioner or
the director of any policy objection concerning the expected action. If
three or more members of the panel shall submit policy objections in
writing to the intended action, the commissioner or the director shall
respond in writing to the objection prior to taking the intended action
unless exigent circumstances make it necessary to respond after the
action has been taken.
8. On or before the first day of July, in any year, the director shall
report to the members of the New York state bond allocation policy advi-
sory panel on the actual utilization of volume cap for the issuance of
bonds during the prior calendar year and the amount of such cap allo-
cated for carryforwards for future bond issuance. The report shall
include, for each local agency or other issuer and each state agency the
initial allocation, the amount of bonds issued subject to the allo-
cation, the amount of the issuer's allocation that remained unused, the
allocation of the statewide bond reserve, carryforward allocations and
recapture of allocations. Further, the report shall include projections
regarding private activity bond issuance for state and local issuers for
the calendar year, as well as any recommendations for legislative
action. The director shall publish the report on the division of budg-
et's website concurrently with the release of the report to the panel.
S 15. Severability. If any clause, sentence, paragraph, section, or
part of this act shall be adjudged by any court of competent jurisdic-
tion to be invalid, such judgment shall not affect, impair, or invali-
date the remainder thereof, but shall be confined in its operation to
the clause, sentence, paragraph, section, or part thereof directly
involved in the controversy in which such judgment shall have been
rendered.
S 16. Notwithstanding any provisions of this act to the contrary (1)
provided that a local agency or other issuer certifies to the commis-
sioner on or before October 1, 2016 that it has issued private activity
bonds described in this act and the amount thereof which used statewide
ceiling, a commitment or allocation of statewide ceiling to a local
agency or other issuer made to or so used by such local agency or other
issuer pursuant to the federal tax reform act of 1986 on or after Janu-
ary 1, 2016 and prior to the effective date of this act, in an amount
which exceeds the local agency set-aside established by section four of
this act, shall be first chargeable to the statewide bond reserve estab-
lished pursuant to section six of this act, and
(2) a commitment or allocation of statewide ceiling to a state agency
made to or used by such agency pursuant to the internal revenue code, as
amended, on or after January 1, 2016 and prior to the effective date of
this act, shall be first chargeable to the state agency set-aside estab-
lished pursuant to section five of this act, and, thereafter, to the
statewide bond reserve established by section six of this act.
S 17. Nothing contained in this act shall be deemed to supersede,
alter or impair any allocation used by or committed by the director or
commissioner to a state or local agency or other issuer pursuant to the
S. 7637 9
federal tax reform act of 1986 and prior to the effective date of this
act.
S 18. This act shall take effect immediately; provided, however, that
sections three, four, five, six, seven, eight, nine, ten, twelve, thir-
teen and fourteen of this act shall expire July 1, 2018 when upon such
date the provisions of such sections shall be deemed repealed; except
that the provisions of subdivisions 2 and 3 of section thirteen of this
act shall expire and be deemed repealed February 15, 2018.
