Bill Text: NY A10971 | 2017-2018 | General Assembly | Amended
Bill Title: Relates to federal bond volume allocations, the unified state bond ceiling and the private activity bond allocation act of 2018.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Passed) 2018-07-01 - signed chap.103 [A10971 Detail]
Download: New_York-2017-A10971-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 10971--A IN ASSEMBLY May 29, 2018 ___________ Introduced by M. of A. MAGNARELLI, CYMBROWITZ -- read once and referred to the Committee on Local Governments -- reported and referred to the Committee on Ways and Means -- reported and referred to the Committee on Rules -- Rules Committee discharged, bill amended, ordered reprinted as amended and recommitted to the Committee on Rules AN ACT redistributing bond volume allocations made pursuant to section 146 of the federal tax reform act of 1986, relating to allocation of the unified state bond volume ceiling, and enacting the private activ- ity bond allocation act of 2018; and providing for the repeal of certain provisions upon expiration 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 2018". 3 § 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 an 15 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, among 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 EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD16080-02-8A. 10971--A 2 1 energy supply; and resource recovery and to provide for an orderly and 2 efficient volume ceiling allocation process for state and local agencies 3 by establishing an alternative formula for making such allocations. 4 § 3. Definitions. As used in this act, unless the context requires 5 otherwise: 6 1. "Bonds" means bonds, notes or other obligations. 7 2. "Carryforward" means an amount of unused private activity bond 8 ceiling available to an issuer pursuant to an election filed with the 9 internal revenue service pursuant to section 146(f) of the code. 10 3. "Code" means the internal revenue code of 1986, as amended. 11 4. "Commissioner" means the commissioner of the New York state depart- 12 ment of economic development. 13 5. "Covered bonds" means those tax exempt private activity bonds and 14 that portion of the non-qualified amount of an issue of governmental use 15 bonds for which an allocation of the statewide ceiling is required for 16 the interest earned by holders of such bonds to be excluded from the 17 gross income of such holders for federal income tax purposes under the 18 code. 19 6. "Director" means the director of the New York state division of the 20 budget. 21 7. "Issuer" means a local agency, state agency or other issuer. 22 8. "Local agency" means an industrial development agency established 23 or operating pursuant to article 18-A of the general municipal law, the 24 Troy industrial development authority and the Auburn industrial develop- 25 ment authority. 26 9. "Other issuer" means any agency, political subdivision or other 27 entity, other than a local agency or state agency, that is authorized to 28 issue covered bonds. 29 10. "Qualified small issue bonds" means qualified small issue bonds, 30 as defined in section 144(a) of the code. 31 11. "State agency" means the state of New York, the New York state 32 energy research and development authority, the New York job development 33 authority, the New York state environmental facilities corporation, the 34 New York state urban development corporation and its subsidiaries, the 35 Battery Park city authority, the port authority of New York and New 36 Jersey, the power authority of the state of New York, the dormitory 37 authority of the state of New York, the New York state housing finance 38 agency, the state of New York mortgage agency, and any other public 39 benefit corporation or public authority designated by the governor for 40 the purposes of this act. 41 12. "Statewide ceiling" means for any calendar year the highest state 42 ceiling (as such term is used in section 146 of the code) applicable to 43 New York state. 44 13. "Future allocations" means allocations of statewide ceiling for up 45 to two future years. 46 14. "Multi-year housing development project" means a project (a) which 47 qualifies for covered bonds; (b) which is to be constructed over two or 48 more years and (c) in which at least twenty percent of the dwelling 49 units will be occupied by persons and families of low income. 50 § 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.A. 10971--A 3 1 § 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 § 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. 9 1. Allocation of the statewide bond reserve among state agencies, 10 local agencies and other issuers. The director shall transfer a portion 11 of the statewide bond reserve to the commissioner for allocation to and 12 use by local agencies and other issuers in accordance with the terms of 13 this section. The remainder of the statewide bond reserve may be allo- 14 cated by the director to state agencies in accordance with the terms of 15 this section. 16 2. Allocation of statewide bond reserve to local agencies or other 17 issuers. 18 (a) Local agencies or other issuers may at any time apply to the 19 commissioner for an allocation from the statewide bond reserve. Such 20 application shall demonstrate: 21 (i) that the requested allocation is required under the code for the 22 interest earned on the bonds to be excluded from the gross income of 23 bondholders for federal income tax purposes; 24 (ii) that the local agency's remaining unused allocation provided 25 pursuant to section four of this act, and other issuer's remaining 26 unused allocation, or any available carryforward will be insufficient 27 for the specific project or projects for which the reserve allocation is 28 requested; and 29 (iii) that, except for those allocations made pursuant to section 30 thirteen of this act to enable carryforward elections, the requested 31 allocation is reasonably expected to be used during the calendar year, 32 and the requested future allocation is reasonably expected to be used in 33 the calendar year to which the future allocation relates. 34 (b) In reviewing and approving or disapproving applications, the 35 commissioner shall exercise discretion to ensure an equitable distrib- 36 ution of allocations from the statewide bond reserve to local agencies 37 and other issuers. Prior to making a determination on such applications, 38 the commissioner shall notify and seek the recommendation of the presi- 39 dent and chief executive officer of the New York state housing finance 40 agency in the case of an application related to the issuance of multi- 41 family housing or mortgage revenue bonds, and in the case of other 42 requests, such state officers, departments, divisions and agencies as 43 the commissioner deems appropriate. 44 (c) Applications for allocations shall be made in such form and 45 contain such information and reports as the commissioner shall require. 46 (d) On or before September fifteenth of each year, the commissioner 47 shall publish the total amount of local agency set-aside that has been 48 recaptured pursuant to section twelve of this act for that year on the 49 department of economic development's website. 50 3. Allocation of statewide bond reserve to state agencies. The direc- 51 tor may make an allocation from the statewide bond reserve to any state 52 agency. Before making any allocation of statewide bond reserve to state 53 agencies the director shall be satisfied: 54 (a) that the allocation is required under the code for the interest 55 earned on the bonds to be excluded from the gross income of bondholders 56 for federal income tax purposes;A. 10971--A 4 1 (b) that the state agency's remaining unused allocation provided 2 pursuant to section five of this act or any available carryforward will 3 be insufficient to accommodate the specific bond issue or issues for 4 which the reserve allocation is requested; and 5 (c) that, except for those allocations made pursuant to section thir- 6 teen of this act to enable carryforward elections, the requested allo- 7 cation is reasonably expected to be used during the calendar year, and 8 the requested future allocation is reasonably expected to be used in the 9 calendar year to which the future allocation relates. 10 § 7. Access to employment opportunities. 1. All issuers shall require 11 that any new employment opportunities created in connection with indus- 12 trial or manufacturing projects financed through the issuance of quali- 13 fied small issue bonds shall be listed with the New York state depart- 14 ment of labor and with the one-stop career center established pursuant 15 to the federal Workforce Innovation and Opportunity Act (Pub. L. No. 16 113-128) serving the locality in which the employment opportunities are 17 being created. Such listing shall be in a manner and form prescribed by 18 the commissioner. All issuers shall further require that for any new 19 employment opportunities created in connection with an industrial or 20 manufacturing project financed through the issuance of qualified small 21 issue bonds by such issuer, industrial or manufacturing firms shall 22 first consider persons eligible to participate in the Workforce Inno- 23 vation and Opportunity Act (Pub. L. No. 113-128) programs who shall be 24 referred to the industrial or manufacturing firm by one-stop centers in 25 local workforce investment areas or by the department of labor. Issuers 26 of qualified small issue bonds are required to monitor compliance with 27 the provisions of this section as prescribed by the commissioner. 28 2. Nothing in this section shall be construed to require users of 29 qualified small issue bonds to violate any existing collective bargain- 30 ing agreement with respect to the hiring of new employees. Failure on 31 the part of any user of qualified small issue bonds to comply with the 32 requirements of this section shall not affect the allocation of bonding 33 authority to the issuer of the bonds or the validity or tax exempt 34 status of such bonds. 35 § 8. Overlapping jurisdictions. In a geographic area represented by a 36 county local agency and one or more sub-county local agencies, the allo- 37 cation granted by section four of this act with respect to such area of 38 overlapping jurisdiction shall be apportioned one-half to the county 39 local agency and one-half to the sub-county local agency or agencies. 40 Where there is a local agency for the benefit of a village within the 41 geographic area of a town for the benefit of which there is a local 42 agency, the allocation of the village local agency shall be based on the 43 population of the geographic area of the village, and the allocation of 44 the town local agency shall be based upon the population of the 45 geographic area of the town outside of the village. Notwithstanding the 46 foregoing, a local agency may surrender all or part of its allocation 47 for such calendar year to another local agency with an overlapping 48 jurisdiction. Such surrender shall be made at such time and in such 49 manner as the commissioner shall prescribe. 50 § 9. Ineligible local agencies. To the extent that any allocation of 51 the local agency set-aside would be made by this act to a local agency 52 which is ineligible to receive such allocation under the code or under 53 regulations interpreting the state volume ceiling provisions of the 54 code, such allocation shall instead be made to the political subdivision 55 for whose benefit that local agency was created.A. 10971--A 5 1 § 10. Municipal reallocation. The chief executive officer of any poli- 2 tical subdivision or, if such political subdivision has no chief execu- 3 tive officer, the governing board of the political subdivision for the 4 benefit of which a local agency has been established, may withdraw all 5 or any portion of the allocation granted by section four of this act to 6 such local agency. The political subdivision may then reallocate all or 7 any portion of such allocation, as well as all or any portion of the 8 allocation received pursuant to section nine of this act, to itself or 9 any other issuer established for the benefit of that political subdivi- 10 sion or may assign all or any portion of the allocation received pursu- 11 ant to section nine of this act to the local agency created for its 12 benefit. The chief executive officer or governing board of the political 13 subdivision, as the case may be, shall notify the commissioner of any 14 such reallocation. 15 § 11. Future allocations for multi-year housing development projects. 16 1. In addition to other powers granted under this act, the commissioner 17 is authorized to make the following future allocations of statewide 18 ceiling for any multi-year housing development project for which the 19 commissioner also makes an allocation of statewide ceiling for the 20 current year under this act or for which, in the event of expiration of 21 provisions of this act described in section eighteen of this act, an 22 allocation of volume cap for a calendar year subsequent to such expira- 23 tion shall have been made under section 146 of the code: (a) to local 24 agencies from the local agency set-aside (but only with the approval of 25 the chief executive officer of the political subdivision to which the 26 local agency set-aside relates or the governing body of a political 27 subdivision having no chief executive officer) and (b) to other issuers 28 from that portion, if any, of the statewide bond reserve transferred to 29 the commissioner by the director. Any future allocation made by the 30 commissioner shall constitute an allocation of statewide ceiling for the 31 future year specified by the commissioner and shall be deemed to have 32 been made on the first day of the future year so specified. 33 2. In addition to other powers granted under this act, the director is 34 authorized to make future allocations of statewide ceiling from the 35 state agency set-aside or from the statewide bond reserve to state agen- 36 cies for any multi-year housing development project for which the direc- 37 tor also makes an allocation of statewide ceiling from the current year 38 under this act or for which, in the event of expiration of provisions of 39 this act described in section eighteen of this act, an allocation of 40 volume cap for a calendar year subsequent to such expiration shall have 41 been made under section 146 of the code, and is authorized to make 42 transfers of the statewide bond reserve to the commissioner for future 43 allocations to other issuers for multi-year housing development projects 44 for which the commissioner has made an allocation of statewide ceiling 45 for the current year. Any such future allocation or transfer of the 46 statewide bond reserve for future allocation made by the director shall 47 constitute an allocation of statewide ceiling or transfer of the state- 48 wide bond reserve for the future years specified by the director and 49 shall be deemed to have been made on the first day of the future year so 50 specified. 51 3. (a) If an allocation made with respect to a multi-year housing 52 development project is not used by September fifteenth of the year to 53 which the allocation relates, the allocation with respect to the then 54 current year shall be subject to recapture in accordance with the 55 provisions of section twelve of this act, and in the event of such a 56 recapture, unless a carryforward election by another issuer shall haveA. 10971--A 6 1 been approved by the commissioner or a carryforward election by a state 2 agency shall have been approved by the director, all future allocations 3 made with respect to such project pursuant to subdivision one or two of 4 this section shall be canceled. 5 (b) The commissioner and the director shall have the authority to make 6 future allocations from recaptured current year allocations and canceled 7 future allocations to multi-year housing development projects in a 8 manner consistent with the provisions of this act. Any such future allo- 9 cation shall, unless a carryforward election by another issuer shall 10 have been approved by the commissioner or a carryforward election by a 11 state agency shall have been approved by the director, be canceled if 12 the current year allocation for the project is not used by December 31, 13 2019. 14 (c) The commissioner and the director shall establish procedures 15 consistent with the provisions of this act relating to carryforward of 16 future allocations. 17 4. The aggregate future allocations from either of the two succeeding 18 years shall not exceed six hundred fifty million dollars for each such 19 year. 20 § 12. Year end allocation recapture. On or before September first of 21 each year, each state agency shall report to the director and each local 22 agency and each other issuer shall report to the commissioner the amount 23 of bonds subject to allocation under this act that will be issued prior 24 to the end of the then current calendar year, and the amount of the 25 issuer's then total allocation that will remain unused. As of September 26 fifteenth of each year, the unused portion of each local agency's and 27 other issuer's then total allocation as reported and the unallocated 28 portion of the set-aside for state agencies shall be recaptured and 29 added to the statewide bond reserve and shall no longer be available to 30 covered bond issuers except as otherwise provided herein. From September 31 fifteenth through the end of the year, each local agency or other issuer 32 having an allocation shall immediately report to the commissioner and 33 each state agency having an allocation shall immediately report to the 34 director any changes to the status of its allocation or the status of 35 projects for which allocations have been made which should affect the 36 timing or likelihood of the issuance of covered bonds therefor. If the 37 commissioner determines that a local agency or other issuer has overes- 38 timated the amount of covered bonds subject to allocation that will be 39 issued prior to the end of the calendar year, the commissioner may 40 recapture the amount of the allocation to such local agency or other 41 issuer represented by such overestimation by notice to the local agency 42 or other issuer, and add such allocation to the statewide bond reserve. 43 The director may likewise make such determination and recapture with 44 respect to state agency allocations. 45 § 13. Allocation carryforward. 1. No local agency or other issuer 46 shall make a carryforward election utilizing any unused allocation 47 (pursuant to section 146(f) of the code) without the prior approval of 48 the commissioner. Likewise no state agency shall make or file such an 49 election, or elect to issue or carryforward mortgage credit certif- 50 icates, without the prior approval of the director. 51 2. On or before November fifteenth of each year, each state agency 52 seeking unused statewide ceiling for use in future years shall make a 53 request for an allocation for a carryforward to the director, whose 54 approval shall be required before a carryforward election is filed by or 55 on behalf of any state agency. A later request may also be considered byA. 10971--A 7 1 the director, who may file a carryforward election for any state agency 2 with the consent of such agency. 3 3. On or before November fifteenth of each year, each local agency or 4 other issuer seeking unused statewide ceiling for use in future years 5 shall make a request for an allocation for a carryforward to the commis- 6 sioner, whose approval shall be required before a carryforward election 7 is filed by or on behalf of any local or other agency. A later request 8 may also be considered by the commissioner. 9 4. On or before January fifteenth of each year, the director shall 10 publish the total amount of unused statewide ceiling from the prior year 11 on the division of budget's website. 12 § 14. New York state bond allocation policy advisory panel. 1. There 13 is hereby created a policy advisory panel and process to provide policy 14 advice regarding the priorities for distribution of the statewide ceil- 15 ing. 16 2. The panel shall consist of five members, one designee being 17 appointed by each of the following: the governor, the temporary presi- 18 dent of the senate, the speaker of the assembly, the minority leader of 19 the senate and the minority leader of the assembly. The designee of the 20 governor shall chair the panel. The panel shall monitor the allocation 21 process through the year, and in that regard, the division of the budget 22 and the department of economic development shall assist and cooperate 23 with the panel as provided in this section. The advisory process shall 24 operate through the issuance of advisory opinions by members of the 25 panel as provided in subdivisions six and seven of this section. A meet- 26 ing may be held at the call of the chair with the unanimous consent of 27 the members. 28 3. (a) Upon receipt of a request for allocation or a request for 29 approval of a carryforward election from the statewide reserve from a 30 local agency or other issuer, the commissioner shall, within five work- 31 ing days, notify the panel of such request and provide the panel with 32 copies of all application materials submitted by the applicant. 33 (b) Upon receipt of a request for allocation or a request for approval 34 of carryforward election from the statewide reserve from a state agency, 35 the director shall, within five working days, notify the panel of such 36 request and provide the panel with copies of all application materials 37 submitted by the applicant. 38 4. (a) Following receipt of a request for allocation from a local 39 agency or other issuer, the commissioner shall notify the panel of a 40 decision to approve or exclude from further consideration such request, 41 and the commissioner shall state the reasons. Such notification shall be 42 made with or after the transmittal of the information specified in 43 subdivision three of this section and at least five working days before 44 formal notification is made to the applicant. 45 (b) Following receipt of a request for allocation from a state agency, 46 the director shall notify the panel of a decision to approve or exclude 47 from further consideration such request, and shall state the reasons. 48 Such notification shall be made with or after the transmission of the 49 information specified in subdivision three of this section and at least 50 five working days before formal notification is made to the state agen- 51 cy. 52 5. The requirements of subdivisions three and four of this section 53 shall not apply to adjustments to allocations due to bond sizing chang- 54 es. 55 6. In the event that any decision to approve or to exclude from 56 further consideration a request for allocation is made within ten work-A. 10971--A 8 1 ing days of the end of the calendar year and in the case of all requests 2 for consent to a carryforward election, the commissioner or director, as 3 is appropriate, shall provide the panel with the longest possible 4 advance notification of the action, consistent with the requirements of 5 the code, and shall, wherever possible, solicit the opinions of the 6 members of the panel before formally notifying any applicant of the 7 action. Such notification may be made by means of telephone communi- 8 cation to the members or by written notice delivered to the Albany 9 office of the appointing authority of the respective members. 10 7. Upon notification by the director or the commissioner, any member 11 of the panel may, within five working days, notify the commissioner or 12 the director of any policy objection concerning the expected action. If 13 three or more members of the panel shall submit policy objections in 14 writing to the intended action, the commissioner or the director shall 15 respond in writing to the objection prior to taking the intended action 16 unless exigent circumstances make it necessary to respond after the 17 action has been taken. 18 8. On or before the first day of July, in any year, the director shall 19 report to the members of the New York state bond allocation policy advi- 20 sory panel on the actual utilization of volume cap for the issuance of 21 bonds during the prior calendar year and the amount of such cap allo- 22 cated for carryforwards for future bond issuance. The report shall 23 include, for each local agency or other issuer and each state agency the 24 initial allocation, the amount of bonds issued subject to the allo- 25 cation, the amount of the issuer's allocation that remained unused, the 26 allocation of the statewide bond reserve, carryforward allocations and 27 recapture of allocations. Further, the report shall include projections 28 regarding private activity bond issuance for state and local issuers for 29 the calendar year, as well as any recommendations for legislative 30 action. The director shall publish the report on the division of budg- 31 et's website concurrently with the release of the report to the panel. 32 § 15. Severability. If any clause, sentence, paragraph, section, or 33 part of this act shall be adjudged by any court of competent jurisdic- 34 tion to be invalid, such judgment shall not affect, impair, or invali- 35 date the remainder thereof, but shall be confined in its operation to 36 the clause, sentence, paragraph, section, or part thereof directly 37 involved in the controversy in which such judgment shall have been 38 rendered. 39 § 16. Notwithstanding any provisions of this act to the contrary (1) 40 provided that a local agency or other issuer certifies to the commis- 41 sioner on or before October 1, 2018 that it has issued private activity 42 bonds described in this act and the amount thereof which used statewide 43 ceiling, a commitment or allocation of statewide ceiling to a local 44 agency or other issuer made to or so used by such local agency or other 45 issuer pursuant to the federal tax reform act of 1986 on or after Janu- 46 ary 1, 2018 and prior to the effective date of this act, in an amount 47 which exceeds the local agency set-aside established by section four of 48 this act, shall be first chargeable to the statewide bond reserve estab- 49 lished pursuant to section six of this act, and (2) a commitment or 50 allocation of statewide ceiling to a state agency made to or used by 51 such agency pursuant to the internal revenue code, as amended, on or 52 after January 1, 2018 and prior to the effective date of this act, shall 53 be first chargeable to the state agency set-aside established pursuant 54 to section five of this act, and, thereafter, to the statewide bond 55 reserve established by section six of this act.A. 10971--A 9 1 § 17. Nothing contained in this act shall be deemed to supersede, 2 alter or impair any allocation used by or committed by the director or 3 commissioner to a state or local agency or other issuer pursuant to the 4 federal tax reform act of 1986 and prior to the effective date of this 5 act. 6 § 18. This act shall take effect immediately; provided, however, that 7 sections three, four, five, six, seven, eight, nine, ten, twelve, thir- 8 teen and fourteen of this act shall expire July 1, 2020 when upon such 9 date the provisions of such sections shall be deemed repealed; except 10 that the provisions of subdivisions two and three of section thirteen of 11 this act shall expire and be deemed repealed February 15, 2020.
