Bill Text: NY A09033 | 2013-2014 | General Assembly | Introduced
Bill Title: Relates to the bond volume allocations made pursuant to the federal tax reform act of 1986, the unified state bond ceiling and the private activity bond allocation act of 2014.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Passed) 2014-06-30 - signed chap.49 [A09033 Detail]
Download: New_York-2013-A09033-Introduced.html
S T A T E O F N E W Y O R K
________________________________________________________________________
9033
I N A S S E M B L Y
March 10, 2014
___________
Introduced by M. of A. MAGNARELLI -- (at request of the New York State
Homes and Community Renewal) -- read once and referred to the Commit-
tee on Local Governments
AN ACT in relation to redistributing 2013 bond volume allocations made
pursuant to section 146 of the federal tax reform act of 1986, in
relation to allocation of the unified state bond volume ceiling, and
in relation to enacting the private activity bond allocation act of
2014; and providing for the repeal of certain provisions upon expira-
tion thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "private activity bond allocation act of 2014".
3 S 2. Legislative findings and declaration. The legislature hereby
4 finds and declares that the federal tax reform act of 1986 established a
5 statewide bond volume ceiling on the issuance of certain tax exempt
6 private activity bonds and notes and, under certain circumstances,
7 governmental use bonds and notes issued by the state and its public
8 authorities, local governments, agencies which issue on behalf of local
9 governments, and certain other issuers. The federal tax reform act
10 establishes a formula for the allocation of the bond volume ceiling
11 which was subject to temporary modification by gubernatorial executive
12 order until December 31, 1987. That act also permits state legislatures
13 to establish, by statute, an alternative formula for allocating the
14 volume ceiling. Bonds and notes subject to the volume ceiling require
15 an allocation from the state's annual volume ceiling in order to qualify
16 for federal tax exemption.
17 It is hereby declared to be the policy of the state to maximize the
18 public benefit through the issuance of private activity bonds for the
19 purposes of, amount other things, allocating a fair share of the bond
20 volume ceiling upon initial allocation and from a bond reserve to local
21 agencies and for needs identified by local governments; providing hous-
22 ing and promoting economic development; job creation; an economical
23 energy supply; and resource recovery and to provide for an orderly and
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13841-01-4
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1 efficient volume ceiling allocation process for state and local agencies
2 by establishing an alternative formula for making such allocations.
3 S 3. Definitions. As used in this act, unless the context requires
4 otherwise:
5 1. "Bonds" means bonds, notes or other obligations.
6 2. "Carryforward" means an amount of unused private activity bond
7 ceiling available to an issuer pursuant to an election filed with the
8 internal revenue service pursuant to section 146(f) of the code.
9 3. "Code" means the internal revenue code of 1986, as amended.
10 4. "Commissioner" means the commissioner of the New York state depart-
11 ment of economic development.
12 5. "Covered bonds" means those tax exempt private activity bonds and
13 that portion of the non-qualified amount of an issue of governmental use
14 bonds for which an allocation of the statewide ceiling is required for
15 the interest earned by holders of such bonds to be excluded from the
16 gross income of such holders for federal income tax purposes under the
17 code.
18 6. "Director" means the director of the New York state division of the
19 budget.
20 7. "Issuer" means a local agency, state agency or other issuer.
21 8. "Local agency" means an industrial development agency established
22 or operating pursuant to article 18-A of the general municipal law, the
23 Troy industrial development authority and the Auburn industrial develop-
24 ment authority.
25 9. "Other issuer" means any agency, political subdivision or other
26 entity, other than a local agency or state agency, that is authorized to
27 issue covered bonds.
28 10. "Qualified small issue bonds" means qualified small issue bonds,
29 as defined in section 144(a) of the code.
30 11. "State agency" means the state of New York, the New York state
31 energy research and development authority, the New York job development
32 authority, the New York state environmental facilities corporation, the
33 New York state urban development corporation and its subsidiaries, the
34 Battery Park city authority, the port authority of New York and New
35 Jersey, the power authority of the state of New York, the dormitory
36 authority of the state of New York, the New York state housing finance
37 agency, the state of New York mortgage agency, and any other public
38 benefit corporation or public authority designated by the governor for
39 the purposes of this act.
40 12. "Statewide ceiling" means for any calendar year the highest state
41 ceiling (as such term is used in section 146 of the code) applicable to
42 New York state.
43 13. "Future allocations" means allocations of statewide ceiling for up
44 to two future years.
45 14. "Multi-year housing development project" means a project (a) which
46 qualifies for covered bonds;
47 (b) which is to be constructed over two or more years; and
48 (c) in which at least twenty percent of the dwelling units will be
49 occupied by persons and families of low income.
50 S 4. Local agency set-aside. A set-aside of statewide ceiling for
51 local agencies for any calendar year shall be an amount which bears the
52 same ratio to one-third of the statewide ceiling as the population of
53 the jurisdiction of such local agency bears to the population of the
54 entire state. The commissioner shall administer allocations of such
55 set-aside to local agencies.
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1 S 5. State agency set-aside. A set-aside of statewide ceiling for all
2 state agencies for any calendar year shall be one-third of the statewide
3 ceiling. The director shall administer allocations of such set-aside to
4 state agencies and may grant an allocation to any state agency upon
5 receipt of an application in such form as the director shall require.
6 S 6. Statewide bond reserve. One-third of the statewide ceiling is
7 hereby set aside as a statewide bond reserve to be administered by the
8 director. 1. Allocation of the statewide bond reserve among state agen-
9 cies, local agencies and other issuers. The director shall transfer a
10 portion of the statewide bond reserve to the commissioner for allocation
11 to and use by local agencies and other issuers in accordance with the
12 terms of this section. The remainder of the statewide bond reserve may
13 be allocated by the director to state agencies in accordance with the
14 terms of this section.
15 2. Allocation of statewide bond reserve to local agencies or other
16 issuers. (a) Local agencies or other issuers may at any time apply to
17 the commissioner for an allocation from the statewide bond reserve. Such
18 application shall demonstrate:
19 (i) that the requested allocation is required under the code for the
20 interest earned on the bonds to be excluded from the gross income of
21 bondholders for federal income tax purposes;
22 (ii) that the local agency's remaining unused allocation provided
23 pursuant to section four of this act, and other issuer's remaining
24 unused allocation, or any available carryforward will be insufficient
25 for the specific project or projects for which the reserve allocation is
26 requested; and
27 (iii) that, except for those allocations made pursuant to section
28 twelve of this act to enable carryforward elections, the requested allo-
29 cation is reasonably expected to be used during the calendar year, and
30 the requested future allocation is reasonably expected to be used in the
31 calendar year to which the future allocation relates.
32 (b) In reviewing and approving or disapproving applications, the
33 commissioner shall exercise discretion to ensure an equitable distrib-
34 ution of allocations from the statewide bond reserve to local agencies
35 and other issuers. Prior to making a determination on such applications,
36 the commissioner shall notify and seek the recommendation of the presi-
37 dent and chief executive officer of the New York state housing finance
38 agency in the case of an application related to the issuance of multi-
39 family housing or mortgage revenue bonds, and in the case of other
40 requests, such state officers, departments, divisions and agencies as
41 the commissioner deems appropriate.
42 (c) Applications for allocations shall be made in such form and
43 contain such information and reports as the commissioner shall require.
44 3. Allocation of statewide bond reserve to state agencies. The direc-
45 tor may make an allocation from the statewide bond reserve to any state
46 agency. Before making any allocation of statewide bond reserve to state
47 agencies the director shall be satisfied: (a) that the allocation is
48 required under the code for the interest earned on the bonds to be
49 excluded from the gross income of bondholders for federal income tax
50 purposes;
51 (b) that the state agency's remaining unused allocation provided
52 pursuant to section five of this act or any available carryforward will
53 be insufficient to accommodate the specific bond issue or issues for
54 which the reserve allocation is requested; and
55 (c) that, except for those allocations made pursuant to section twelve
56 of this act to enable carryforward elections, the requested allocation
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1 is reasonably expected to be used during the calendar year, and the
2 requested future allocation is reasonably expected to be used in the
3 calendar year to which the future allocation relates.
4 S 7. Access to employment opportunities. 1. All issuers shall require
5 that any new employment opportunities created in connection with the
6 industrial or manufacturing projects financed through the issuance of
7 qualified small issue bonds shall be listed with the New York state
8 department of labor and with the one-stop career center established
9 pursuant to the federal workforce investment act (Pub. L. No. 105-220)
10 serving the locality in which the employment opportunities are being
11 created. Such listing shall be in a manner and form prescribed by the
12 commissioner. All issuers shall further require that for any new employ-
13 ment opportunities created in connection with an industrial or manufac-
14 turing project financed through the issuance of qualified small issue
15 bonds by such issuer, industrial or manufacturing firms shall first
16 consider persons eligible to participate in workforce investment act
17 (Pub. L. No. 105-220) programs who shall be referred to the industrial
18 or manufacturing firm by one-stop centers in local workforce investment
19 areas or by the department of labor. Issuers of qualified small issue
20 bonds are required to monitor compliance with the provisions of this
21 section as prescribed by the commissioner.
22 2. Nothing in this section shall be construed to require users of
23 qualified small issue bonds to violate any existing collective bargain-
24 ing agreement with respect to the hiring of new employees. Failure on
25 the part of any user of qualified small issue bonds to comply with the
26 requirements of this section shall not affect the allocation of bonding
27 authority to the issuer of the bonds or the validity or tax exempt
28 status of such bonds.
29 S 8. Overlapping jurisdictions. In a geographic area represented by a
30 county local agency and one or more sub-county local agencies, the allo-
31 cation granted by section four of this act with respect to such area of
32 overlapping jurisdiction shall be apportioned one-half to the county
33 local agency and one-half to the sub-county local agency or agencies.
34 Where there is a local agency for the benefit of a village within the
35 geographic area of a town for the benefit of which there is a local
36 agency, the allocation of the village local agency shall be based on the
37 population of the geographic area of the village, and the allocation of
38 the town local agency shall be based upon the population of the
39 geographic area of the town outside of the village. Notwithstanding the
40 foregoing, a local agency may surrender all or part of its allocation
41 for such calendar year to another local agency with an overlapping
42 jurisdiction. Such surrender shall be made at such time and in such
43 manner as the commissioner shall prescribe.
44 S 9. Ineligible local agencies. To the extent that any allocation of
45 the local agency set-aside would be made by this act to a local agency
46 which is ineligible to receive such allocation under the code or under
47 regulations interpreting the state volume ceiling provisions of the
48 code, such allocation shall instead be made to the political subdivision
49 for whose benefit that local agency was created.
50 S 10. Municipal reallocation. The chief executive officer of any poli-
51 tical subdivision or, if such political subdivision has no chief execu-
52 tive officer, the governing board of the political subdivision for the
53 benefit of which a local agency has been established, may withdraw all
54 or any portion of the allocation granted by section four of this act to
55 such local agency. The political subdivision may then reallocate all or
56 any portion of such allocation, as well as all or any portion of the
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1 allocation received pursuant to section nine of this act, to itself or
2 any other issuer established for the benefit of that political subdivi-
3 sion or may assign all or any portion of the allocation received pursu-
4 ant to section nine of this act to the local agency created for its
5 benefit. The chief executive officer or governing board of the political
6 subdivision, as the case may be, shall notify the commissioner of any
7 such reallocation.
8 S 11. Future allocations for multi-year housing development projects.
9 1. In addition to other powers granted under this act, the commissioner
10 is authorized to make the following future allocations of statewide
11 ceiling for any multi-year housing development project for which the
12 commissioner also makes an allocation of statewide ceiling for the
13 current year under this act or for which, in the event of expiration of
14 provisions of this act described in section eighteen of this act, an
15 allocation of volume cap for a calendar year subsequent to such expira-
16 tion shall have been made under section 146 of the code: (a) to local
17 agencies from the local agency set-aside (but only with the approval of
18 the chief executive officer of the political subdivision to which the
19 local agency set-aside relates or the governing body of a political
20 subdivision having no chief executive officer) and
21 (b) to other issuers from that portion, if any, of the statewide bond
22 reserve transferred to the commissioner by the director. Any future
23 allocation made by the commissioner shall constitute an allocation of
24 statewide ceiling for the future year specified by the commissioner and
25 shall be deemed to have been made on the first day of the future year so
26 specified.
27 2. In addition to other powers granted under this act, the director is
28 authorized to make future allocations of statewide ceiling from the
29 state agency set-aside or from the statewide bond reserve to state agen-
30 cies for any multi-year housing development project for which the direc-
31 tor also makes an allocation of statewide ceiling from the current year
32 under this act or for which, in the event of expiration of provisions of
33 this act described in section eighteen of this act, an allocation of
34 volume cap for a calendar year subsequent to such expiration shall have
35 been made under section 146 of the Code, and is authorized to make
36 transfers of the statewide bond reserve to the commissioner for future
37 allocations to other issuers for multi-year housing development projects
38 for which the commissioner has made an allocation of statewide ceiling
39 for the current year. Any such future allocation or transfer of the
40 statewide bond reserve for future allocation made by the director shall
41 constitute an allocation of statewide ceiling or transfer of the state-
42 wide bond reserve for the future years specified by the director and
43 shall be deemed to have been made on the first day of the future year so
44 specified.
45 3. (a) If an allocation made with respect to a multi-year housing
46 development project is not used by October fifteenth of the year to
47 which the allocation relates, the allocation with respect to the then
48 current year shall be subject to recapture in accordance with the
49 provisions of section twelve of this act, and in the event of such a
50 recapture, unless a carryforward election by another issuer shall have
51 been approved by the commissioner or a carryforward election by a state
52 agency shall have been approved by the director, all future allocations
53 made with respect to such project pursuant to subdivision one or two of
54 this section shall be canceled.
55 (b) The commissioner and the director shall have the authority to make
56 future allocations from recaptured current year allocations and canceled
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1 future allocations to multi-year housing development projects in a
2 manner consistent with the provisions of this act. Any such future allo-
3 cation shall, unless a carryforward election by another issuer shall
4 have been approved by the commissioner or a carryforward election by a
5 state agency shall have been approved by the director, be canceled if
6 the current year allocation for the project is not used by December 31,
7 2015.
8 (c) The commissioner and the director shall establish procedures
9 consistent with the provisions of this act relating to carryforward of
10 future allocations.
11 4. The aggregate future allocations from either of the two succeeding
12 years shall not exceed six hundred fifty million dollars for each such
13 year.
14 S 12. Year end allocation recapture. On or before October first of
15 each year, each state agency shall report to the director and each local
16 agency and each other issuer shall report to the commissioner the amount
17 of bonds subject to allocation under this act that will be issued prior
18 to the end of the then current calendar year, and the amount of the
19 issuer's then total allocation that will remain unused. As of October
20 fifteenth of each year, the unused portion of each local agency's and
21 other issuer's then total allocation as reported and the unallocated
22 portion of the set-aside for state agencies shall be recaptured and
23 added to the statewide bond reserve and shall no longer be available to
24 covered bond issuers except as otherwise provided herein. From October
25 fifteenth through the end of the year, each local agency or other issuer
26 having an allocation shall immediately report to the commissioner and
27 each state agency having an allocation shall immediately report to the
28 director any changes to the status of its allocation or the status of
29 projects for which allocations have been made which should affect the
30 timing or likelihood of the issuance of covered bonds therefor. If the
31 commissioner determines that a local agency or other issuer has overes-
32 timated the amount of covered bonds subject to allocation that will be
33 issued prior to the end of the calendar year, the commissioner may
34 recapture the amount of the allocation to such local agency or other
35 issuer represented by such overestimation by notice to the local agency
36 or other issuer, and add such allocation to the statewide bond reserve.
37 The director may likewise make such determination and recapture with
38 respect to state agency allocations.
39 S 13. Allocation carryforward. 1. No local agency or other issuer
40 shall make a carryforward election utilizing any unused allocation
41 (pursuant to section 146(f) of the code) without the prior approval of
42 the commissioner. Likewise no state agency shall make or file such an
43 election, or elect to issue or carryforward mortgage credit certif-
44 icates, without the prior approval of the director.
45 2. On or before November fifteenth of each year, each state agency
46 seeking unused statewide ceiling for use in future years shall make a
47 request for an allocation for a carryforward to the director, whose
48 approval shall be required before a carryforward election is filed by or
49 on behalf of any state agency. A later request may also be considered by
50 the director, who may file a carryforward election for any state agency
51 with the consent of such agency.
52 3. On or before November fifteenth of each year, each local agency or
53 other issuer seeking unused statewide ceiling for use in future years
54 shall make a request for an allocation for a carryforward to the commis-
55 sioner, whose approval shall be required before a carryforward election
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1 is filed by or on behalf of any local or other agency. A later request
2 may also be considered by the commissioner.
3 S 14. New York state bond allocation policy advisory panel. 1. There
4 is hereby created a policy advisory panel and process to provide policy
5 advice regarding the priorities for distribution of the statewide ceil-
6 ing.
7 2. The panel shall consist of five members, one designee being
8 appointed by each of the following: the governor, the temporary presi-
9 dent of the senate, the speaker of the assembly, the minority leader of
10 the senate and the minority leader of the assembly. The designee of the
11 governor shall chair the panel. The panel shall monitor the allocation
12 process through the year, and in that regard, the division of the budget
13 and the department of economic development shall assist and cooperate
14 with the panel as provided in this section. The advisory process shall
15 operate through the issuance of advisory opinions by members of the
16 panel as provided in subdivisions six and seven of this section. A meet-
17 ing may be held at the call of the chair with the unanimous consent of
18 the members.
19 3.(a) Upon receipt of a request for allocation or a request for
20 approval of a carryforward election from the statewide reserve from a
21 local agency or other issuer, the commissioner shall, within five work-
22 ing days, notify the panel of such request and provide the panel with
23 copies of all application materials submitted by the applicant.
24 (b) Upon receipt of a request for allocation or a request for approval
25 of carryforward election from the statewide reserve from a state agency,
26 the director shall, within five working days, notify the panel of such
27 request and provide the panel with copies of all application materials
28 submitted by the applicant.
29 4. (a) Following receipt of a request for allocation from a local
30 agency or other issuer, the commissioner shall notify the panel of a
31 decision to approve or exclude from further consideration such request,
32 and the commissioner shall state the reasons. Such notification shall be
33 made with or after the transmittal of the information specified in
34 subdivision three of this section and at least five working days before
35 formal notification is made to the applicant.
36 (b) Following receipt of a request for allocation from a state agency,
37 the director shall notify the panel of a decision to approve or exclude
38 from further consideration such request, and shall state the reasons.
39 Such notification shall be made with or after the transmission of the
40 information specified in subdivision three of this section and at least
41 five working days before formal notification is made to the state agen-
42 cy.
43 5. The requirements of subdivisions three and four of this section
44 shall not apply to adjustments to allocations due to bond sizing chang-
45 es.
46 6. In the event that any decision to approve or to exclude from
47 further consideration a request for allocation is made within ten work-
48 ing days of the end of the calendar year and in the case of all requests
49 for consent to a carryforward election, the commissioner or director, as
50 is appropriate, shall provide the panel with the longest possible
51 advance notification of the action, consistent with the requirements of
52 the code, and shall, wherever possible, solicit the opinions of the
53 members of the panel before formally notifying any applicant of the
54 action. Such notification may be made by means of telephone communi-
55 cation to the members or by written notice delivered to the Albany
56 office of the appointing authority of the respective members.
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1 7. Upon notification by the director or the commissioner, any member
2 of the panel may, within five working days, notify the commissioner or
3 the director of any policy objection concerning the expected action. If
4 three or more members of the panel shall submit policy objections in
5 writing to the intended action, the commissioner or the director shall
6 respond in writing to the objection prior to taking the intended action
7 unless exigent circumstances make it necessary to respond after the
8 action has been taken.
9 8. On or before the first day of July, in any year, the director shall
10 report to the members of the New York state bond allocation policy advi-
11 sory panel on the actual utilization of volume cap for the issuance of
12 bonds during the prior calendar year and the amount of such cap allo-
13 cated for carryforwards for future bond issuance. The report shall
14 include, for each local agency or other issuer and each state agency the
15 initial allocation, the amount of bonds issued subject to the allo-
16 cation, the amount of the issuer's allocation that remained unused, the
17 allocation of the statewide bond reserve, carryforward allocations and
18 recapture of allocations. Further, the report shall include projections
19 regarding private activity bond issuance for state and local issuers for
20 the calendar year, as well as any recommendations for legislative
21 action.
22 S 15. Severability. If any clause, sentence, paragraph, section, or
23 part of this act shall be adjudged by any court of competent jurisdic-
24 tion to be invalid, such judgment shall not affect, impair, or invali-
25 date the remainder thereof, but shall be confined in its operation to
26 the clause, sentence, paragraph, section, or part thereof directly
27 involved in the controversy in which such judgment shall have been
28 rendered.
29 S 16. Notwithstanding any provisions of this act to the contrary (1)
30 provided that a local agency or other issuer certifies to the commis-
31 sioner on or before October 1, 2014 that it has issued private activity
32 bonds described in this section and the amount thereof which used state-
33 wide ceiling, a commitment or allocation of statewide ceiling to a local
34 agency or other issuer made to or so used by such local agency or other
35 issuer pursuant to the federal tax reform act of 1986 on or after Janu-
36 ary 1, 2014 and prior to the effective date of this act, in an amount
37 which exceeds the local agency set-aside established by section four of
38 this act, shall be first chargeable to the statewide bond reserve estab-
39 lished pursuant to section six of this act, and
40 (2) a commitment or allocation of statewide ceiling to a state agency
41 made to or used by such agency pursuant to the internal revenue code, as
42 amended, on or after January 1, 2014 and prior to the effective date of
43 this act, shall be first chargeable to the state agency set-aside estab-
44 lished pursuant to section five of this act, and, thereafter, to the
45 statewide bond reserve established by section six of this act.
46 S 17. Nothing contained in this act shall be deemed to supersede,
47 alter or impair any allocation used by or committed by the director or
48 commissioner to a state or local agency or other issuer pursuant to the
49 federal tax reform act of 1986 and prior to the effective date of this
50 act.
51 S 18. This act shall take effect immediately; provided, however, that
52 sections three through ten, twelve, thirteen and fourteen of this act
53 shall expire July 1, 2016 when upon such date the provisions of such
54 sections shall be deemed repealed; except that the provisions of subdi-
55 visions 2 and 3 of section thirteen of this act shall expire and be
56 deemed repealed February 15, 2016.
