Opinion ID: 2234380
Heading Depth: 1
Heading Rank: 3

Heading: The MAC Refinancing Act

Text: The MAC Refinancing Act created Public Authorities Law § 3238-a, which requires LGAC to make annual payments of $170 million to the City during each City fiscal year until 2034. The first paragraph of that provision states: Notwithstanding any inconsistent provision of law, [LGAC] shall transfer to the city of New York [$170 million] from the resources of the corporation pursuant to section [3239] of this title. Such payment shall be made during each city fiscal year. Such payments from the corporation shall be made from the fund [i.e., the Tax Fund] established by [State Finance Law § 92-r] and in accordance with the provisions thereof (Public Authorities Law § 3238-a). The Act also amended Public Authorities Law § 3240 (1) to require the Chairperson of LGAC to include in its annual certifications to the Governor and Comptroller the $170 million payments it is required to make to the City. The Act further amended Public Authorities Law § 3240 (5), which contained the executory clause and addressed the manner and timing of the State's payments to LGAC, by adding a sentence at the end of the provision which stated, Provided however, this subdivision shall not apply for payments made pursuant to section [3238-a] of this title. [3] In addition, the Act permits the City's Mayor to assign the $170 million payments to a new not-for-profit local development corporation ( see Public Authorities Law § 3238-a). Once the Mayor gives notice to LGAC and the Comptroller of the assignment, the payments must be made directly to the assignee. The assigned payments then become the property of the assignee for all purposes. In accordance with this statutory scheme, the Mayor of the City of New York irrevocably assigned the City's right to receive the LGAC payments to defendant Sales Tax Asset Receivable Corporation (STARC), the not-for-profit development corporation created for this purpose. Under the assignment agreement between the City and STARC, STARC would issue bonds financed by the LGAC payments. The proceeds from the bonds would be used to retire the City's remaining $2.5 billion MAC debt. Any net proceeds not necessary to retire the remaining MAC debt would be paid to the City.