Current through Register Vol. 46, No. 39, September 25, 2024
WHEREAS, The Tax Reform Act of 1986 ("act") establishes a
unified statewide bond ceiling ("statewide ceiling") for tax exempt private
activity bonds and the private use portion of a governmental use bond on a per
capita basis for New York State;
WHEREAS, The statewide ceiling applies to certain tax
exempt private activity bonds and, under certain circumstances and to a certain
extent, with respect to the nonqualified amount of an issue of governmental use
bonds (together "covered bonds") issued by the State and its agencies ("State
agencies"), agencies issuing on behalf of local governments ("local agencies")
and other issuers ("other issuers");
WHEREAS, The statewide ceiling for covered bonds for New
York State is $75 per resident for the balance of the calendar year 1986 and
$75 per resident for calendar year 1987, based on the most recent population
estimate provided by the United States Bureau of the Census before the
beginning of the calendar year to which the limitation applies;
WHEREAS, The application of the statewide ceiling to
projects and programs financed by covered bonds in New York State will require
annual allocation authorizations to State and local agencies and other issuers
which may limit the ability of certain issuers to finance projects and programs
and will require that all issues of such bonds be coordinated in order to meet
the requirements of the act relating to the ceiling;
WHEREAS, The State should maximize the public benefit of
covered bond issues and minimize conflicts among issuing agencies;
WHEREAS, For certain issues the State should maximize the
impact of business development and job development incentives particularly on
distressed areas of the State; and
WHEREAS, The act authorizes the governor of each state to
proclaim a formula for allocating the covered bond volume limit among such
governmental units and other authorities in the state as have authority to
issue covered bonds;
NOW, THEREFORE, I, Mario M. Cuomo, Governor of the State of
New York, by virtue of the authority vested in me by the Constitution and laws
of the State of New York and the Tax Reform Act of 1986, do hereby proclaim and
order as follows:
I. Definitions
A. Code shall mean the Internal Revenue Code
of 1986.
B. Covered bonds shall
mean those tax exempt private activity bonds and that portion of the
nonqualified amount of an issue of governmental use bonds to which an
allocation of the statewide ceiling is necessary to preserve the tax exempt
status of such bonds under the code.
C. Issuer shall mean a local agency, State
agency or other issuer.
D. Local
agency shall mean an industrial development agency established or operating
pursuant to article 18-A of the General Municipal Law, the Troy Industrial
Development Authority and the Auburn Industrial Development
Authority.
E. Other issuer shall
mean any agency, political subdivision or other entity, other than a local
agency or State agency, that is authorized to issue covered bonds.
F. Qualified small issue bonds shall mean
qualified small issue bonds, as defined in section 144(a) of the
code.
G. State agency shall mean
the State of New York, New York State Energy Research and Development
Authority, New York Job Development Authority, New York State Environmental
Facilities Corporation, New York State Urban Development Corporation and its
subsidiaries, Battery Park City Authority, Port Authority of New York and New
Jersey, Power Authority of the State of New York, Dormitory Authority of the
State of New York, New York State Housing Finance Agency, State of New York
Mortgage Agency and any other State agency designated by the
Governor.
H. Statewide ceiling
shall mean for any calendar year the state ceiling (as such term is used in
section 146 of the code) applicable to New York State.
II. Aggregate Amount of Covered Bonds
A. Covered bond limit for local agencies--in
general. The covered bond limit for local agencies for any calendar year shall
be an amount which bears the same ratio to two fifths (40 percent) of the
statewide ceiling as the population of the jurisdiction of such local agency
bears to the population of the entire State.
B. Covered bond limit for State agencies--in
general. The covered bond limit for all State agencies for any calendar year
shall be two fifths (40 percent) of the statewide ceiling. The Director of the
Budget shall administer allocations under the State agency limit and may grant
an allocation to any State agency.
C. Overlapping jurisdictions. In a geographic
area represented by a county local agency and one or more subcounty local
agencies, the allocation granted by paragraph A of this section with respect to
such area shall be split one-half to the county local agency and one-half to
the subcounty local agency or agencies. Where there is a local agency for the
benefit of a village within the geographic area of a town for the benefit of
which there is a local agency, the allocation of the village local agency shall
be based on the population of the geographic area of the village, and the
allocation of the town local agency shall be based upon the population of the
geographic area of the town outside of the village. Notwithstanding the
foregoing, a local agency may elect to surrender all or part of its allocation
for such calendar year to another local agency with an overlapping
jurisdiction. Such election shall be made at such time and in such manner as
the Commissioner of Commerce shall prescribe.
D. Ineligible local agencies. To the extent
that any allocation of the covered bond limit would be made by this Order to a
local agency which is ineligible to receive such allocation under the code or
under regulations interpreting the state volume cap provisions of the code,
such allocation shall instead be made to the political subdivision for whose
benefit that local agency was created.
E. Municipal reallocation. The chief
executive officer of any political subdivision or, if such political
subdivision has no chief executive officer, the governing board of the
political subdivision for the benefit of which a local agency has been
established may withdraw all or any portion of the allocation granted by
paragraph A of this section to such local agency and reallocate all or any
portion of such allocation, as well as all or any portion of the allocation
received pursuant to paragraph D of this section, to the political subdivision
or other issuer established for the benefit of that political subdivision or
may assign all or any portion of the allocation received pursuant to paragraph
D of this section to the local agency created for its benefit. The chief
executive officer or governing board of the political subdivision, as the case
may be, shall notify the Commissioner of Commerce of any such
reallocation.
F. Statewide bond
reserve. One fifth (20 percent) of the statewide ceiling is hereby allocated to
the Division of the Budget for a statewide bond reserve to be administered by
the Director of the Budget.
1. Allocation of
the statewide bond reserve among State and local agencies and other issuers.
The Director of the Budget shall transfer a portion of the statewide bond
reserve to the Commissioner of Commerce for allocation to and use by local
agencies and other issuers in accordance with the terms of this section. The
remainder of the statewide bond reserve may be allocated by the Director of the
Budget to State agencies, in accordance with the terms of this
section.
2. Allocation of statewide
bond reserve to local agencies or other issuers.
Local agencies or other issuers may at any time apply to
the Commissioner of Commerce for an allocation from the statewide bond reserve.
Such application shall demonstrate:
that in the case of an issue of governmental use bonds, the
requested allocation is necessary to preserve its tax-exempt status;
that in the case of an issue of covered bonds to be issued
by a local agency or other issuer prior to the close of the calendar year for
which the allocation is requested, the local agency's or other issuer's
remaining unused allocation will be insufficient to finance the specific
project or projects; and
that in the case of an issue of covered bonds (other than
governmental use bonds), the proposed project or projects for which the
allocation is requested constitute a valid public purpose and, in the case of
qualified small issue bonds, would contribute to economic development in New
York State.
The Commissioner of Commerce shall not approve any
allocation from the statewide bond reserve for an issue the proceeds of which
are to be used directly or indirectly for:
a commercial facility more than 25 percent of which is used
to make retail sales of goods or services to customers who personally visit
such facility to obtain goods or services, unless such facility is to be
located in a chronically depressed area as defined by the Commissioner of
Commerce;
a commercial facility more than 25 percent of which is used
by doctors, lawyers or similar professionals in the course of a business which
principally serves local markets, unless such facility is located in a
chronically depressed area as defined by the Commissioner of Commerce;
a commercial facility primarily used for overnight lodging,
unless such facility is located in a chronically depressed area as defined by
the Commissioner of Commerce, or unless such facility is primarily used in
support of tourism development as defined by the Commissioner of Commerce;
or
a facility licensed and regulated pursuant to article 28
of the Public Health Law.
In reviewing and approving or disapproving applications,
the Commissioner of Commerce shall exercise discretion to ensure an equitable
distribution of allocations from the statewide bond reserve to local agencies
and other issuers.
Applications for allocations shall be made in such form and
contain such information and reports as the Commissioner of Commerce shall
require.
3. Allocation of
statewide bond reserve to State agencies. The Director of the Budget may grant
an allocation from the statewide bond reserve to any State agency.
4. Year-end allocation adjustment. On or
before November 5th of each year, each State agency shall report to the
Director of the Budget, and each local agency and each other issuer shall
report to the Commissioner of Commerce, the amount of bonds subject to
allocation that will be issued prior to the end of the then current calendar
year, and the amount of the issuer's allocation that will remain unused. As of
November 20th of each year, the unused portion of each issuer's allocation as
reported and the unallocated portion of the covered bond limit for State
agencies shall be added to the statewide bond reserve and shall no longer be
available to the issuers except as otherwise provided herein. On or before
December 1st of each year, each issuer shall update its report on its bond
issuance plans and any additional portion of each issuer's allocation that will
remain unused as so reported shall be added to the statewide bond reserve as of
December 1st of such year. Notwithstanding the foregoing, if the Commissioner
of Commerce determines that a local agency or other issuer has overestimated
the amount of bonds subject to allocation that will be issued prior to the end
of the calendar year, he may withdraw the amount of the allocation to such
local agency or other issuer represented by such overestimation by notice to
the local agency or other issuer and add such allocation to the statewide bond
reserve.
G.
Carry-forward of allocation.
1. No local
agency or other issuer shall exercise its option to carry forward a portion of
its annual allocation for use in future years (pursuant to section 146[f] of
the code) without the prior approval of the Commissioner of Commerce. No State
agency shall exercise such an option or elect to issue or carry forward
mortgage credit certificates without the prior approval of the Director of the
Budget.
2. On or before November
20th of each year, each State agency seeking to carry forward an allocation for
use in future years shall make a request for such a carry-forward to the
Director of the Budget. A later request may also be considered by the director.
The director may authorize or file a carry-forward for any State
agency.
3. On or before November
20th of each year, each local agency or other issuer seeking to carry forward
an allocation for use in future years shall make a request for such a
carry-forward to the Commissioner of Commerce. A later request may also be
considered by the commissioner. The commissioner may authorize a carry-forward
for any local agency or other issuer.
H. Access to employment opportunities. It is
the policy of New York State to assure that the use of qualified small issue
bonds results in the creation of new job opportunities for poor and chronically
unemployed New Yorkers.
1. All issuers shall
require that any new employment opportunities created in connection with
industrial or commercial projects financed through the issuance of qualified
small issue bonds shall be listed with the New York State Department of Labor,
Job Service Division, and with the administrative entity of the service
delivery area created pursuant to the Job Training Partnership Act ( P.L.
97-300) in which the project is located. Such listing shall be in a manner and
form prescribed by the Commissioner of Commerce.
2. Each State agency shall further require
that, to the extent practicable and feasible, at least 10 percent of any new
jobs created in connection with an industrial or commercial project financed
through the issuance of qualified small issue bonds by such agency in amounts
of $1 million or more shall be filled by persons eligible for service under the
Job Training Partnership Act.
3.
Issuers of qualified small issue bonds are required to monitor compliance with
the provisions of this section as prescribed by the Commissioner of
Commerce.
4. Nothing in this
section shall be construed to require users of qualified small issue bonds to
violate any existing collective bargaining agreement with respect to the hiring
of new employees.
5. Failure on the
part of any user of qualified small issue bonds to comply with the requirements
of this section shall not affect the allocation of bonding authority to the
issuing agency or the validity or tax-exempt status of such bonds.
III. Procedures and
Guidelines
The Director of the Budget and Commissioner of Commerce are
authorized and directed to establish procedures and guidelines to implement the
provisions of this Order. Such procedures and guidelines shall set forth the
amount of the statewide ceiling and provide guidance for issuers, procedures
for making applications, standards and criteria for granting approvals,
allocations, carry-forwards of allocations and certifications, and a method for
tracking the issuance of covered bonds by issuers. Such procedures and
guidelines may address any other matters the Director of the Budget and
Commissioner of Commerce deem appropriate.
IV. Effectiveness
This Order shall take effect immediately. Nothing contained
in this Order shall be deemed to supersede, alter or impair any provision of
(i) the Executive Order prescribing procedures to allocate the private activity
bond volume ceiling under the Deficit Reduction Act of 1984 or (ii) the Tax
Reform Act of 1986 (other than the provisions of section 146[b] and [c] of the
code) or any regulations promulgated thereunder. If any provision of this Order
is adjudged or ruled invalid, such judgment or ruling shall not affect any
other provisions of this Order.
V. Retroactivity
A. Prior issues. For covered bonds subject to
allocation which were issued by an issuer after August 15, 1986 and prior to
the effective date of this Order, there shall be allocated to such issuer the
amount of such covered bonds in accordance with the terms of this section.
There shall be allocated to a local agency, pursuant to paragraph A of section
II of this Order, the amount of covered bonds subject to allocation which were
issued by such local agency after August 15, 1986 and prior to the effective
date of this Order. Any allocation to a local agency pursuant to paragraph A of
section II of this Order shall be reduced by the amount of covered bonds
subject to allocation which were issued by such local agency after August 15,
1986 and prior to the effective date of this Order. There shall be allocated to
a State agency pursuant to paragraph B of section II of this Order the amount
of covered bonds subject to allocation which were issued by such State agency
after August 15, 1986 and prior to the effective date of this Order. If the
amount of covered bonds issued after August 15, 1986 and prior to the effective
date of this Order by a local agency exceeds the allocation pursuant to such
paragraph A, or in the case of such covered bonds issued by a State agency the
allocation pursuant to such paragraph B, there shall be allocated to such local
agency or State agency, as the case may be, from the statewide bond reserve the
amount of such excess. There shall also be allocated to any other issuer from
the statewide bond reserve the amount of any covered bonds subject to
allocation which were issued by such other issuer after August 15, 1986 and
prior to the effective date of this Order.
B. Reports. On or before November 1, 1986,
each State agency shall report to the Director of Budget, and each local agency
and other issuer shall report to the Commissioner of Commerce, the amount of
covered bonds subject to allocation in accordance with the terms of this
section which were issued after August 15, 1986 and prior to the effective date
of this Order.
VI.
Amendments
This Order may be amended or modified from time to
time.
VII. Expiration
The provisions of this Order shall expire on the earlier of
the effective date of legislation enacted into law for the purpose of
allocating the statewide ceiling under the Tax Reform Act of 1986, or December
31, 1987, and be of no further effect after that date.
Signed: Mario M. CuomoDated: October 24, 1986
[FN*] [Revoked by Executive Order No. 29 (George E.
Pataki), infra.]
[FN[DAGGER]] [Revoked by Executive Order No. 5 (Eliot
Spitzer), infra.]
[Revoked by Executive Order No. 9 (David A. Paterson),
infra.]
[Revoked by Executive Order No. 2 (Andrew M. Cuomo),
infra.]
