Tax Rich to Fund Transit

Section 1. Section 1205 of the public authorities law is amended by adding a new subdivision 9 to read as follows:

9. Notwithstanding any other provision of law, the authority and any of its subsidiary corporations shall establish and implement a half-fare rate program for low-income residents of the city who are eighteen years of age or older and younger than sixty-five years of age. For purposes of this subdivision, the term "low-income" shall mean an annual income that is below the federal poverty line as determined by the United States department of health and human services pursuant to subdivision 2 of section 9902 of title 42 of the United States code. The half-fare rate program established and implemented pursuant to this subdivision shall include subway and bus service, exclusive of express bus service during peak hours. Such half-rate program shall not be made available to such low-income residents of the city eighteen years of age or older and younger than sixty-five years of age who are eligible for the half-fare rate programs available to seniors and people with disabilities pursuant to subdivision two or eight of this section. Upon the written request of

EXPLANATION--Matter in italics (underscored) is new; matter in brackets

[ ] is old law to be omitted.

LBD13277-09-8

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the mayor and in accordance with such request, the authority or its subsidiary corporations shall delegate authority to the city to assist with the administration of such half-fare rate program, including the eligibility of applicants.

§ 2. The public authorities law is amended by adding a new section 1270-i to read as follows:

§ 1270-i. New York city dedicated personal income tax surcharge fund. 1. The authority shall establish a fund to be known as the "New York city dedicated personal income tax surcharge fund" which shall be kept separate from and shall not be commingled with any other moneys of the authority. The fund shall consist of a "transit infrastructure improvement account" and a "low-income resident reduced fare account."

2. There shall be deposited into the New York city dedicated personal income tax surcharge fund the moneys transferred to the metropolitan transportation authority from the New York city transitional finance authority pursuant to subsection (e) of section thirteen hundred four-E of the tax law, and any other provision of law directing or permitting the deposit of moneys in such fund, to be used exclusively for the financing of transit infrastructure improvements and reduced fares for low-income residents of the city of New York.

3. Moneys in the transit infrastructure improvement account (a) shall be used to fund capital projects that satisfy the following criteria: (i) defined as state of good repair, normal replacement, or an Americans with Disabilities Act related system improvement within the capital program of the authority; and (ii) included in any of the following categories within the capital program of the authority: New York city transit authority buses, subway cars, track, line equipment, line structures, signals and communications, traction power, shops and yards, depots, service vehicles, passenger station projects, as needed to comply with the Americans with Disabilities Act, Staten Island railway and authority bus company projects; and (b) may be (i) pledged by the authority as security for the payment of principal and interest on bonds issued after July first, two thousand eighteen to finance capital projects that meet the criteria identified in paragraph (a) of this subdivision, including bonds issued to refund such bonds and (ii) used for payment of principal and interest on such bonds, funding of reserves required in connection with such bonds, and the payment of costs of issuance related to such bonds. To the extent moneys in the transit infrastructure improvement account have been pledged by the authority to secure the payment of principal and interest on bonds as herein provided, moneys deposited into the New York city dedicated personal income tax surcharge fund shall first be deposited into the transit infrastructure account to the extent necessary to make payments pursuant to paragraph (b) of this subdivision. After making such payments, moneys deposited in the transit infrastructure improvement account shall be used to fund projects that meet the criteria identified in paragraph (a) of this subdivision.

4. The state does hereby pledge and agree with the holders of any issue of bonds secured by pledge described in paragraph (b) of subdivision three of this section that the state will not limit or alter the rights hereby vested in the metropolitan transportation authority to fulfill the terms of any agreements made with bondholders pursuant to this title, or in any way impair the rights and remedies of such holders or the security for such bonds until such bonds are fully paid and discharged. Nothing contained in this section shall be deemed to restrict the right of the state to amend, modify, repeal or otherwise

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alter statutes imposing or relating to the taxes payable to the New York city transitional finance authority pursuant to section thirteen hundred thirteen of the tax law, but such taxes shall in all events continue to be so payable so long as any such taxes are imposed. Nothing in this section shall be deemed to obligate the state to make any additional payments or impose any taxes to satisfy the debt service obligations of the metropolitan transportation authority.

5. Moneys in the low-income resident reduced fare account shall be used to fund the half-fare rate program for low-income residents of the city of New York pursuant to subdivision nine of section twelve hundred five of this article and may be used for payment of the reasonable operating costs incurred by the New York city transit authority for the administration of the half-fare rate program, provided that no more than one percent of the moneys deposited into the low-income resident reduced fare account pursuant to subdivision six of this section shall be used for such costs.

6. The moneys deposited into the fund from the New York city transitional finance authority shall be equally divided between the transit infrastructure improvement account and the low-income resident reduced fare account.

7. Twice each calendar year, the mayor of the city of New York shall conduct a review of the amount of moneys deposited in each of the two accounts. To the extent such review indicates that:

a. the moneys in the transit infrastructure improvement account are sufficient to satisfy the requirements of any debt service incurred in such calendar year as a result of obligations issued and secured pursuant to paragraph b of subdivision three of this section, and the moneys in the low-income resident reduced fare account are insufficient to satisfy the total needs of the low-income resident reduced fare program established pursuant to subdivision nine of section twelve hundred five of this article, the mayor of the city of New York, or such mayor's designee, may direct the metropolitan transportation authority to transfer a specified amount of moneys from the transit infrastructure improvement account to the low-income resident reduced fare account; and

b. the moneys in the low-income resident reduced fare account are sufficient to satisfy the needs of the half-fare rate program for lowincome residents of the city of New York established pursuant to subdivision nine of section twelve hundred five of this article, in such calendar year, the mayor of the city of New York, or such mayor's designee, may direct the metropolitan transportation authority to transfer a specified amount of moneys from the low-income resident reduced fare account to the transit infrastructure improvement account.

§ 3. Subdivision 5 of section 2799-hh of the public authorities law, as added by chapter 16 of the laws of 1997, is amended to read as follows:

5. Tax revenues received by the authority pursuant to section thirteen hundred thirteen of the tax law, together with any alternative revenues received by the authority, shall be applied in the following order of priority: first pursuant to the authority's contracts with bondholders, then to pay the authority's operating expenses not otherwise provided for, then to a dedicated personal income tax surcharge fund pursuant to subsection (d) of section thirteen hundred four-E of the tax law in the amount provided for in such section, and then pursuant to the authority's agreements with the city, which agreements shall require the authority to transfer the balance of such taxes not required to meet

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contractual or other obligations of the authority to the city as frequently as practicable.

§ 4. The tax law is amended by adding a new section 1304-E to read as follows:

§ 1304-E. Tax surcharge for transit infrastructure improvements and reduced fares for low-income residents of the city of New York. (a) In addition to the taxes authorized by subsection (a) of section thirteen hundred one of this article, any city imposing such taxes is hereby authorized and empowered to adopt and amend local laws imposing in any such city for each taxable year beginning after two thousand seventeen, a tax surcharge on the city taxable income of certain city resident individuals, estates and trusts.

(b) A tax surcharge imposed pursuant to the authority of this section shall be determined as follows:

(1) Resident married individuals filing joint returns and resident surviving spouses. The tax surcharge under this section on the city taxable income of certain city resident married individuals who make a single return jointly with his or her spouse under subsection (b) of section thirteen hundred six of this article and on the city taxable income of certain city resident surviving spouses shall be determined in accordance with the following table:

For taxable years beginning after two thousand seventeen:

If the city taxable income is: The tax surcharge is:

Over $1,000,000 .534% of excess over $1,000,000

(2) Resident heads of households. The tax surcharge under this section on the city taxable income of certain city resident heads of households shall be determined in accordance with the following table:

For taxable years beginning after two thousand seventeen:

If the city taxable income is: The tax surcharge is:

Over $750,000 .534% of excess over $750,000

(3) Resident unmarried individuals, resident married individuals filing separate returns and resident estates and trusts. The tax surcharge under this section on the city taxable income of certain city resident individuals who are not city resident married individuals who make a single return jointly with his or her spouse under subsection (b) of section thirteen hundred six of this article or city resident heads of households or city resident surviving spouses, and on the city taxable income of certain city resident estates and trusts shall be determined in accordance with the following table:

For taxable years beginning after two thousand seventeen:

If the city taxable income is: The tax surcharge is:

Over $500,000 .534% of excess over $500,000

(c) A tax surcharge imposed pursuant to the authority of this section shall be administered and collected in the same manner as the taxes imposed pursuant to the authority of this article, and all of the provisions of this article, including section thirteen hundred ten, shall apply to the tax surcharge imposed pursuant to the authority of this section.

(d) Subject to the priority of payments identified in section twentyseven hundred ninety-nine-hh of the public authorities law, the New York city transitional finance authority shall transfer to the metropolitan transportation authority the amount estimated by the mayor of the city of New York to be the amount received by the New York city transitional finance authority from the tax surcharge imposed pursuant to the authority of this section, up to the total amount available after deducting from revenues received by the New York city transitional finance author-

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ity pursuant to this section and subsection (c) of section thirteen hundred thirteen of this article amounts to be paid pursuant to the New York city transitional finance authority's contracts with bondholders and the New York city transitional finance authority's operating expenses not otherwise provided for. After the mayor of the city of New York has received data from the department allowing such mayor to determine the actual amount of revenues received by the New York city transitional finance authority that are attributable to the tax surcharge imposed pursuant to the authority of this section, such mayor shall inform the New York city transitional finance authority of such actual amount, minus any actual operating costs assumed by the city of New York attributable to the half-fare rate program pursuant to subdivision nine of section twelve hundred five of the public authorities law, and the New York city transitional finance authority shall adjust the next payment to be made to the metropolitan transportation authority pursuant to this section to reflect any difference between such actual amount minus such operating costs and the estimate previously provided by such mayor.