Relates to redistributing 2009 bond volume allocations

Section 2 of the bill would set forth the legislative findings.

Section 3 of the bill would set forth defined terms.

Sections 4 through 6, 8 through 10 and 15 would detail the allocation formula for the distribution of private activity bond volume ceiling ("IDB Cap"), which can be generally described as follows: one-third of the IDB Cap is available to State agencies, one-third to local agencies (industrial development agencies or IDAs) and one-third to a statewide bond reserve for use by both the State and IDAs.

Section 7 of the bill would provide for certain requirements and conditions relating to access to new employment opportunities created in connection with industrial or manufacturing projects financed through the issuance of qualified small issue bonds.

Section 10-a of the bill would authorize and describe the process for future allocations of statewide ceiling for certain multi-year housing development projects.

Sections 11 and 12 of the bill would detail provisions relating to year end recapture of IDB Cap to the statewide bond reserve and procedures for carryforward elections of IDB Cap, respectively.

Section 13 of the bill would create a New York State Bond Allocation Policy Advisory Panel to provide policy advice regarding the priorities for distribution of the statewide ceiling.

Section 14 of the bill would provide for a severability provision.

Section 16 of the bill would prohibit the proposed legislation from superseding, altering or impairing any allocation of IDB Cap made prior to t11e effective date of the legislation.

Section 17 of the bill would provide for an immediate effective date.

Existing law

Most of the provisions of the Private Activity Bond Allocation Act of 2009 shall expire on January 1, 2010.

Legislative history

Similar bills have been enacted on an annual basis with respect to the State's bond volume system. See Chapter 180 of the Laws of 2009; Chapter 110 of the Laws of 2008; Chapter 593 of the Laws of 2007; Chapter 228 of the Laws of 2006; Chapter 79 of the Laws of 2005; Chapter 27 of the Laws of 2004; Chapter 32 of the Laws of 2003; Chapter 97 of the Laws of 2002; and Chapter 15 of the Laws of 2001.

Statement in support

The Federal Tax Reform Act of 1986, as amended, imposes a ceiling on the volume of tax-exempt, private activity and certain other bonds that may be issued in a state in any given year. It also establishes an allocation formula which provides 50% of the statewide IDB Cap to State agencies and the remaining 50% to local governments. New York State has opted to establish an alternative method of distribution in which one-third of the IDB Cap is available to State agencies, one-third to local agencies (industrial development agencies or IDAs) and one-third to a statewide bond reserve for use by both the State and IDAs. Federal law permitted temporary modification of this allocation formula by gubernatorial executive order until December 31, 1987. Following this sunset, the federal act permits states to establish an alternative formula for allocation by statute.

The system implemented in 2000, regarding the multi-year funding of large residential projects, as modified in the Private Activity Bond Allocation Act of 2008, has served New York well. As development projects grow in scale, they face increasing regulatory hurdles and take longer to complete. Further, issuers around the state are familiar with the process, and therefore the statutory continuation of this approach would provide the least disruptive, most flexible and least costly alternative for the allocation of the State's bond volume. The multi-year provision permits more of these projects to proceed and provides funds in the actual year it is needed. This bill is necessary to sustain construction activity and jobs and to continue the development of much-needed affordable housing for all New Yorkers.

In sum, this bill would continue the orderly flow of Private Activity Bonds for the development of affordable housing and other economic activity in New York.

Fiscal impact

This bill would have no fiscal impact.

Effective date

This act would take effect immediately, with the following exceptions: sections three through fourteen would expire on January 1, 2011; except that subdivision eight of section fourteen of this act would expire on March 1, 2011, and subdivisions two and three of section thirteen of this act would expire on February 15, 2011. Section eleven would continue in full force and effect and would be subject to the applicable provisions of this act notwithstanding the expirations of law set forth in this section.