Creates the state infrastructure bank

BILL NUMBER:S4099A

Title of bill

An act to amend the transportation law, in relation to creating a state infrastructure and economic development bank; and to amend the state finance law, in relation to establishing the New York state infrastructure and economic development bank fund and the New York state infrastructure guarantee trust fund

Purpose

To create a method of funding highway, rail, transit, intermodal, and other transportation facilities and projects which produce revenue to amortize debt while contributing to the connectivity of New York's transportation system and further the goals such as corridor completion, economic development, competitiveness in a global economy, and quality of life.

Summary of provisions

Section one of the bill creates a state infrastructure and economic development bank. Section one authorizes the issuance of bonds. Section on also establishes the process by which criteria, priorities, and guidelines for selection of projects are established.

Additionally, Section one establishes a board of directors and delineates the powers of such board. Section one also outlines the sources of revenue and authorizes the bank to receive funds from various sources both public and private entities.

Section 2 creates and establishes the New York State infrastructure guarantee trust fund in the custody of the comptroller's special fund.

Justification

The SIB will provide local agencies and private entities low interest loans to fund important and merit-based rail, road, transit and port projects.

In 1995, Congress passed and the President signed into law the National Highway System (NHS) Designation Act. This act established a state infrastructure bank pilot program that allowed as many as ten states to allocate part of their Federal apportionment to capitalize or "seed" an infrastructure bank. The U.S. Department of Transportation solicited candidates for the pilot program and selected ten pilot states, including Ohio, Oregon, Arizona, Texas, California, Florida, Missouri, Oklahoma, south Carolina and Virginia.

In September 1996, Congress passed new legislation that enables the U.S. Department of Transportation to designate more than ten qualified states to participate in the infrastructure bank program.

Congress also approved an additional $150 million to capitalize pilot infrastructure banks following enactment of the legislation.

Many major transportation projects, whether they be highway, transit, port or intermodal, are often costly and complex to finance. The state infrastructure and economic development bank would be able to function like a revolving loan fund, bond bank. or both. As a revolving loan for an infrastructure bank could make loans for infrastructure investments while borrowers replenish the funds as they repay the loans. Once repaid, these funds can be used by a multitude of project sponsors for a broad range of projects. As a bond bank, an infrastructure bank could provide the necessary bonding requirements, letters of credit or other credit enhancements to support transportation capital projects.

This bill will provide the necessary framework for a state infrastructure and economic development bank and in turn leverage additional funding, encourage economic opportunity and provide the necessary improvement to the States transit, highway and intermodal facilities.

Legislative history

New Bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect on the one hundred twentieth day after it shall have become law.