BILL NUMBER: S8342

SPONSOR: COMRIE
 
TITLE OF BILL:

An act to amend part P of chapter 39 of the laws of 2019, amending the
public authorities law relating to the acquisition and disposition of
real property, in relation to extending the effectiveness thereof

 
PURPOSE OF THE BILL:

This bill will reduce costs for MTA's acquisition of real property for
its capital projects.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill extends subdivision 1 of Section § 1267 of the PAL
to extend the sunset of June 24, 2025, an additional three years.

 
JUSTIFICATION:

              

On June 24, 2019, Public Authorities Law § 1267, MTA's condemnation
statute, was amended to specify an interest rate to be paid of six
percent, effective for three years concluding in June 2022. This was
extended in June 2022 for an additional 3 years. This rate is the same
rate paid by municipal corporations, including the City of New York,
under General Municipal Law § 3-a (2), which provides that " 
The rate
of interest to be paid upon any judgment or accrued claim against the
municipal corporation arising out of condemnation proceedings...shall
not exceed six per centum." Absent an extension, MTA's rate of interest
will revert to the statutory rate of nine per centum pursuant to Uncon-
solidated Laws § 2501 (see also CPLR § 5004).

When MTA condemns a property to support a capital project, it pays an
estimate of fair market value. That value is often disputed by the prop-
erty owner. When a settlement is eventually reached, the property owner
is owed interest on the difference between the final settlement and the
initial compensation. At an interest rate of 9%, property owners have an
incentive to delay reaching a settlement. Thus, the current 6% interest
rate expedites settlements and reduces MTA's costs in connection with
its capital projects. Further, the 6% interest rate that MTA proposes to
extend is well above current market interest rates and thus cannot be
questioned on the grounds of equity.

This bill requests a three-year extension in line with past extenders.

 
PRIOR LEGISLATIVE HISTORY:

CH  278 of the laws of 2022 (A9868/S8852)

 
FISCAL IMPLICATIONS:

Potentially millions of dollars in cost savings for MTA's acquisition of
real property in support if its capital projects

 
EFFECTIVE DATE:
This act shall take effect immediately.