Relates to implementing various supplemental fees and taxes for the metropolitan commuter transportation district; repealer

Part A would impose a supplemental fee of one dollar for each six month period of validity of persons holding a learner's permit or license.

Part B would impose a supplemental fee of twenty-five dollars per year on the registration and renewals of all registrants of motor vehicles who reside within the metropolitan commuter transportation district.

Part C would impose a payroll mobility tax of 0.34 percent on payrolls within the metropolitan commuter transportation district.

Part D would apportion money to school districts for reimbursement of the payroll mobility tax.

Part E would impose a surcharge of fifty cents on taxicabs within the metropolitan commuter transportation district. Part F would impose an additional sales tax of five percent of rentals of automobiles on rental within the metropolitan commuter transportation district.

Part G would create the Metropolitan Transportation Authority Financial Assistance Fund.

Part G(1) would create the appropriations for payment of the mobility tax revenues and the other revenues to the MTA.

Part H would enact governance reforms to improve the accountability and transparency at the MTA.

Summary of specific provisions of part h

Section 1 would amend PAL § 1261 of the public authorities law to add definitions.

Section 2 would renumber PAL § 1204-a as 1204-e.

Sections 3 and 4 would amend section PAL § 1263(1)(a)(1) to require that members appointed to MTA's board with terms commencing on or after June 30, 2009 have experience in areas of activity central to the mission of the MTA. In addition, thirty days after the effective date of the chapter, the term of the chairman would expire.

Section 5 of the bill would amend PAL § 1263(4) to provide that the chairman of the MTA shall serve as the chief executive officer of the MTA and be responsible for the discharge of the executive and administrative functions and powers of the authority. The chairman is further conferred the discretion to delegate functions and powers to an executive director or other officers.

Section 5 also amends PAL § 1263(4)(d) to add a new paragraph (d) to prohibit the chairman from participating in establishing the salary or other personnel policies regarding the chief executive officer (given that the powers of chief executive officer would now be reposed in the chairman) and mandates a single salary be paid to the chairman for service as chairman and chief executive officer.

Sections 6 and 7 of the bill makes conforming amendments to PAL § 552(1) and PAL § 1201.0(2) to authorize the MTA chairman, who ex officio also serves as chairman and chief executive officer of the New York City Transportation Authority ("NYCTA") and of the Triborough Bridge and Tunnel Authority ("TBTA"), to delegate, at his or her discretion, any functions to officers of NYCTA and TBTA.

Section 7-a of the bill would amend section 1262 of the public authorities law to permit the governor to remove a member of a public authority for breach of fiduciary duty.

Section 8 of the bill would amend PAL §§ 1266(5) and (8) in order, among other things, to establish that the chairman and the executive director of each subsidiary of MTA shall be the chairman and the executive director of the MTA, serving ex officio and that the chairman shall be the chief executive officer of each subsidiary and that MTA may cause its powers, duties, functions or activities to be exercised or performed by or through TBTA (by amendment of PAL § 1266(5)); and establish that the provisions of PAL § 1266(8) also apply to TBTA (by amendment of PAL § 1266(8)).

Section 9 of the bill is intentionally omitted.

Section 10 of the bill would add a new PAL § 1266-i defining the permanent citizens advisory committee.

Section 11 of the bill would add a new section PAL § 1268-a to require the authority to promote broad usage of qualified transportation fringe benefits.

Section 11-a of the bill would amend PAL § 1269-b to require the authority to provide members of the MTA capital program review board informational copies of a proposed capital plan.

Section 12 of the bill would amend section 1269-b(2) to provide that the five-year capital plan of the authority must describe plans to promote participation by minority- and women-owned business enterprises.

Section 13 would add new sections 1269-e, f, g and h of the public authorities law.

* PAL § 1269-e would require the authority, within 30 days after the annual submission of its independent audit, to submit a report to the governor, the speaker of the assembly and the temporary president of the senate. The report is to explain the financial condition of the authority, including specified financial elements; its internal control structures and procedures; and the current state of the authority, including specified relevant issues.

* PAL § 1269-f would require the authority submit to the governor, the speaker of the assembly and the temporary president of the senate annually by October 31 a proposed mission statement and proposed performance measurements for the authority.

* PAL § 1269-g of the public authorities law would require contractors with authority public works contracts to provide information to employees on how to report fraud or abuse to the inspector general of the authority or the attorney-general of the state, along with information about the rights and protections that article 13 of the finance law and section 740 of the labor law affords employees who report fraud or abuse.

Section 14 and 15 of the bill would amend PAL § 1270-a to authorize the authority to deposit into the corporate transportation account of the MTA special assistance fund the revenues received from the State's MTA aid trust account. PAL § 1270-a is also amended to provide that monies so deposited will be used by the authority to secure bonds, notes or other obligations or pay for operating costs or capital costs (including debt service and reserve requirements).

Section 16 of the bill would add PAL §§ 1270-g and 1270-h.

* PAL § 1270-g requires the authority to implement policies to minimize unwarranted expenses in connection with provision of member or employee benefits and in assignment and use of automobiles owned or leased by the authority.

* PAL § 1270-h establishes the MTA authority finance fund, the fund in to which the comptroller is to deposit on a monthly basis the revenues from the mobility tax collected in the mobility tax trust account of the MTA financial assistance fund. The section provides that moneys deposited into the MTA authority finance fund may be pledged by the authority to secure bonds, notes or other obligations to finance capital projects or used for payment of capital costs, including debt service and reserve requirements. Subject to the provisions of any such pledge (or in the event there is no such pledge), any excess moneys in the MTA authority finance fund may be used by the authority for payment of operating costs or capital costs of the authority.

Section 17 of the bill would adds PAL § 1276-b, PAL § 1276-c and PAL § 1276-d to the public authorities law.

* PAL § 1276-b requires the authority to post its budgets and financial plans on its website, and requires, among other things, that the budgets and plans of the authority to be presented in a clear, consistent format from year to year; that the budget and financial plans be based on reasonable assumptions and methods of estimate and include estimates of projected operating revenues and expenses; that the authority provide supporting documentation for its assumptions and methods of estimation; and provide budget and financial plan updates.

* PAL § 1276-c provides that the independent auditor that performs the MTA audit shall not perform non-audit services for the authority, absent previous written approval by the audit committee.

* Section 1276-d would authorize the legislature to commission an independent outside audit of authority finances and operations.

Section 18 of the bill would add PAL § 1279-c to the public authorities law, creating the office of legislative and community input for the purposes of communicating information to, and receiving comments from, members of the legislature and PCAC. Biennially, the office is to issue a report to the legislative leaders and the public about the comments and concerns of which it has been made aware and its recommendations for addressing them.

Section 19 is amended to add PAL § 1276-e to require the authority to provide a listing of law firms retained by the authority which receive payment for services in the past year.

Section 20 would add a subdivision 15 to PAL § 1266-c of the public authorities law, providing that the authority, to the extent practicable and not inconsistent with federal law, promote meaningful participation of small business and New York state business enterprises in provision of goods and services produced or manufactured in New York state for procurements undertaken by the authority.

Section 21 would set effective dates.

Justification

The MTA faces a 2009 operating budget shortfall of $1.8 billion, a deficit rooted in years of reliance on self-supported debt to fund its capital needs. Large and growing debt service payments, which in recent years had been masked by unprecedented collection of real estate transactional taxes, now place extraordinary pressure on the 2009 MTA operating budget and will continue to pressure MTA budgets -- and the farebox -- in years to come unless legislative action is taken. The real estate bubble has burst and the weakening economy has significantly eroded existing dedicated tax sources, while simultaneously adversely impacting MTA's cost of borrowing, pension contributions and system generated revenues.

To reduce that $1.8 billion deficit, the MTA has undertaken a series of administrative and managerial cost-cutting and productivity measures, but these actions alone cannot satisfy the statutory requirement that MTA be self-sustaining. To close the substantial 2009 budgetary gap that remains after such measures, MTA has been compelled to authorize unprecedented service reductions to subway, bus and commuter rail service, as well as dramatic fare and toll increases that would raise fare and toll-generated revenues by 23 percent, beginning on June 1, 2009. These service cuts and fare increases, if implemented at these levels, would pose significant burdens on many users of the system, and, even after implementation, MTA still would confront a serious operating budget deficit in 2009 and even larger deficits in 2010.

Nor do these proposed service cuts and 23 percent fare and toll increases provide any solution to satisfying MTA's future infrastructure needs. Capital funding for the revitalization effort launched in 1982 will be exhausted by the end of this year. There is an immediate need to build on the progress made to date and address the financing of a new five-year capital program concurrently with the issue of fares and service. Disinvestment is not a viable option. That path, taken in the 1960's and 1970's, led to the near collapse of the MTA system, with ridership falling by 17 percent and the region's population declining by 5 percent. Today's record transit ridership is directly related to the publicly recognized improvements in the transit system achieved over the last two and a half decades, during which six successive capital plans have transformed the quality, reliability and safety of the system, to the enormous benefit of the City, region and State. In addition, to the direct benefits to mass transit users and to the regional and State economy, continued investment in mass transit furthers important policy goals: advancing regional energy independence, providing reliable and affordable alternatives to the high costs of driving, positioning the region to take advantage of anticipated population growth, and promoting a clean environment.

During these troubled economic times, when economic stimulus is so critically needed, the State cannot afford to postpone capital investment in mass transportation infrastructure. The economic benefits of MTA's capital program are deep and widespread. The MTA capital program is an important economic engine for the State and the region, contributing many thousands of jobs annually, while benefiting millions of straphangers and commuters and supporting the economic competitiveness of the region. Since 1982, millions of dollars have gone to companies across the State - to contractors and subcontractors who build rolling stock, to parts suppliers, to construction companies rebuilding infrastructure or working on new facilities. The capital program has been a critical component of job creation in New York City and State communities as far away as Buffalo, Albany and Plattsburgh. The most recent capital program alone is estimated to have generated nearly 350,000 total worker-years of employment, nearly $30 billion in regional economic activity, $1 billion in income taxes and $12 billion in wages statewide.

The Bill contains provisions recommended by the Metropolitan Transportation Authority Financing Commission (the "Ravitch Commission"), formed by the Governor Paterson, that will address MTA's operating and capital needs, defraying a major part of the proposed 2009 fare increase and service reductions while addressing over the next two years the need for capital investment in mass transit. New funding sources are created in the form of a new dedicated regional Mobility Tax to be imposed in the twelve counties comprising the MTA District and several additional revenue sources in the MTA District. These funding sources are necessary to support the ongoing operating and capital needs of the MTA and resulting economic and policy benefits to the region and State.

Legislative history

New bill.

Fiscal implications for state and local governments

This bill provides new and recurring sources of revenue from the mobility tax and other taxes, fees and surcharges that will support MTA programs, provide a continuing source for MTA capital investment and diminish the need for future fare and toll increases. State spending and revenues would both increase as a result of tax collection and appropriation to the MTA, yielding an impact that is cumulatively neutral on the State financial plan.

There would be a cost to the State financial plan, totaling approximately $17 million in 2009-10, as a result of the mobility tax being imposed on State payroll within the Metropolitan Commuter Transportation District. In addition, payrolls of local governments and school districts would be subject to the mobility tax. The bill provides for State's reimbursement to public school districts for the full amount of their mobility tax payments.

Effective date

Part A is effective September 1, 2009. Part B is effective September1, 2009. Part C is effective as set forth in that Part. Part D is effective July 1, 2009. Part E is effective November 1, 2009. Part F is effective June 1, 2009. Part G is effective immediately. Part G1 is effective immediately. Part H is effective immediately, except as set forth in that Part.