BILL NUMBER: S5049

SPONSOR: COMRIE
 
TITLE OF BILL:  An act to amend the public authorities law, in
relation to exempting mass transit authorities from bond issuance charg-
es

 
PURPOSE:

To exempt all mass transit authorities in New York State from bond issu-
ance charges/fees required under current law.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 of the bill is the bill title.

Section 2 of the bill states the Legislative intent.

Section 3 defines "mass transit authority" to include several public
authorities involved in the operation of transportation authorities, as
well as provides a general definition of the term for future authorities
              

that may be created. The term is also defined to include public authori-
ties like the Triborough Bridge and Tunnel Authority, which does not
provide mass transit services itself, but is a subsidiary of and helps
fund the Metropolitan Transportation Authority.

Section 4 of the bill amends subdivision 4 of section 2976 of the Public
Authorities Law to exempt all of these mass transit authorities from the
state bond issuance charge.

Section 5 of the bill provides that this act shall take effect imme-
diately.

 
EXISTING LAW:

Currently, bonds issued by all public authorities are subject to the
bond issuance charge imposed by Public Authorities Law section
2976-which was originally enacted 30 years ago. This fee ranges from

0.168 to 0.84% of the bonds issued, depending on the monetary amount of
the bonds.

 
JUSTIFICATION:

The state's transportation authorities provide robust mass transit
services across most of the state's biggest cities and area, including
New York, Long Island, Hudson Valley, Buffalo, Rochester, Albany, Syra-
cuse, and their suburbs, serving over eight and one half billion riders
each day. Usage of mass transit services is shown to have appreciable
positive effects on mobility and pollution reduction while investments
in mass transit generate valuable economic activity. These transporta-
tion authorities often face fiscal obstacles in the way of making
desired improvement s to their service. These financial challenges often
manifest through cuts, rather than increases, to the level of rail and
bus service operated, and by postponing major capital projects like
modernizing rail infrastructure and rail/bus facilities, building new
rail lines to expand the reach of service, or creating bus rapid transit
projects to make bus service more attractive and reliable.  These
authorities often issue debt to invest in operations or capital
projects, and as a result must pay the state's bond issuance charge.
This proposal will reduce the cost of issuing bonds for these mass tran-
sit authorities, and free up funds to be reinvested into operations
(maintaining current service levels for riders) or investments into
capital projects.

 
PRIOR LEGISLATIVE HISTORY:

This is a new bill. However, prior pieces of separate legislation have
aimed to exempt some of the mass transit authorities listed in Section 3
of this bill from bond issuance fees on an individual basis.

 
FISCAL IMPLICATIONS:

To be determined. Several sources do provide estimates of money spent on
bond issuance fees, however. According to the Daily News publication in
February 2012, the metropolitan transportation authority paid $106
million in bond issuance fees over the preceding six years. It also
stated that the authority paid $30 million in bond issuance fees in year
2008-2009 and almost $20 million in fees in year 2010-2011.

According to the state Comptroller's office, the MTA paid about $14
million in bond issuance fees in 2015-2016. The state collected a total
of $91 million in fees during that year from just 14 public authorities.

According to the New York Times publication in November 2017, the MTA
paid $328 million in bond issuance fees over the preceding 15 years. It
should be noted that in 2012 and 2013, Governor Andrew M.  Cuomo agreed
to waive the bond issuance charge for certain types of bonds issued by
the metropolitan transportation authority, saving the authority an esti-
mated $50 million.

 
EFFECTIVE DATE:
This bill shall take effect immediately.