New York Codes, Rules and Regulations › Title 9 - EXECUTIVE DEPARTMENT › Subtitle A - Governor's Office › Chapter I - Executive Orders › Part 4 - Executive Orders (Mario M. Cuomo) › Section 4.87 - Executive order no. 87: prescribing procedures to allocate the unified state bond volume ceiling under the tax reform act of 1986

Current through Register Vol. 46, No. 28, July 10, 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.]