Amd §§4 & 99-ff, St Fin L; amd §553-j, Pub Auth L; amd §§1261 & 1148, Tax L
Directs payment of certain internet sales and use taxes into the central business district tolling capital lockbox fund partially dedicated for the MTA to be made without appropriation.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A2895A
SPONSOR: Gonzalez-Rojas TITLE OF BILL:
An act to amend the state finance law, the public authorities law and
the tax law, in relation to directing payment of certain taxes into the
central business district tolling capital lockbox fund to be made with-
out appropriation
PURPOSE OR GENERAL IDEA OF BILL::
Remits funding from the internet sales tax to the Metropolitan Transpor-
tation Authority without appropriation, increasing the MTA's financial
stability.
SUMMARY OF PROVISIONS::
Section 1 amends section 4 of the state finance law by adding a new
subdivision 14 to provide that revenue from taxes imposed pursuant to
subparagraph (ii) of paragraph five of subdivision c) of section twelve
hundred sixty-one of the tax law, paid in accordance with section five
hundred fifty-three-j of the public authorities law shall be made pursu-
ant to statute but without appropriation.
Section 2 amends subdivision 1 of section 553-j of the public authori-
ties law to provide that funds from subparagraph (ii) of paragraph five
of subdivision (c) of section twelve hundred sixty-one of the tax law
shall be provided to the central business district tolling capital lock-
box fund without appropriation.
Section 3 amends subparagraph (ii) of paragraph five of subdivision
(c) of section twelve hundred sixty-one of the tax law, as amended by
section 2 of part RR of chapter 57 of 6 the laws of 2022, to provide
that funds shall be deposited monthly in equal installments without
appropriation.
Section 4 amends subparagraph (ii) of paragraph 5 of subdivision (c) of
section 1261 of the tax law, as added by section 6-b of part G of chap-
ter 59 of the laws of 2019, to provide that funds shall be deposited
monthly in equal installments without appropriation.
Section 5 sets the effective date.
JUSTIFICATION::
The Metropolitan Transportation Authority (MTA) is currently facing an
operating budget crisis due to declines in ridership from the COVID-19
pandemic and the MTA's historically high debt loads.
Given the MTA's budget challenges, it is critically important for its
existing funding to be safeguarded and delivered in a timely manner.
Providing funding directly to the MTA, without appropriation, will
increase the MTA's financial stability and improve its credit ratings.
It will also reduce the risk of cuts or sweeps during the state budget
process.
Enactment of this legislation is also consistent with how many existing
state dedicated funds are provided to the MTA. The payroll mobility tax
(PMT), originally created in 2009, was newly provided without appropri-
ation in 2018. The State Division of the Budget at the time stated that
"Taking the PMT revenues off-budget will also provide credit enhancement
for the MTA to lower capital financing costs as the revenues will flow
more frequently, and will not be subject to legislative appropriation"
(1).
Providing dedicated funding directly to the MTA without appropriation
will also reduce the risk of funding being raided for other state uses.
In past budget cycles, the executive budget has repeatedly transferred
dedicated transit funds to the state's general fund, reducing the
state's commitment to the MTA and other transit systems by hundreds of
millions of dollars (2).
(1)
https://www.budget.ny.gov/pubs /archive/fy19 /exec/agencies/appropData/M
etropolitan T ransportationAuthority.html
(2)
https://nyc.streetsbl og.org/2020/04/30/tran sit-watch do gs-ra iding-
mta-taxes-will-threate n-a-federal-bailout/
and
https://www.nvc.gov/office-of-the-mavor/news/524-17/the- money-the-mta-
s-subway-crisis-plan-in-governor-cuomo-s-budget
PRIOR LEGISLATIVE HISTORY::
New bill.
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS::
This legislation will positively benefit the MTA's financial stability
by increasing its credit ratings, therefore reducing the cost of inter-
est payments made from bonds backed by the internet sales tax.
EFFECTIVE DATE::
The effective .date as immediately; provided that the amendments to
subparagraph (ii) of paragraph 5 of subdivision (c) of section 1261 of
the tax law made by section three of this act shall be subject to the
expiration and reversion of such subparagraph pursuant to section 5 of
part ZZ of chapter 56 of the laws of 2020, as amended, when upon such
date the provisions of section four of this act shall take effect.
STATE OF NEW YORK
________________________________________________________________________
2895--A
2023-2024 Regular Sessions
IN ASSEMBLY
January 31, 2023
___________
Introduced by M. of A. GONZALEZ-ROJAS, MAMDANI, DINOWITZ, SEAWRIGHT,
SEPTIMO, SIMONE, GALLAGHER, MITAYNES, SHRESTHA, CARROLL, HYNDMAN,
CUNNINGHAM, SIMON, DARLING, TAPIA -- read once and referred to the
Committee on Ways and Means -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee
AN ACT to amend the state finance law, the public authorities law and
the tax law, in relation to directing payment of certain taxes into
the central business district tolling capital lockbox fund to be made
without appropriation
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Section 4 of the state finance law is amended by adding a
2 new subdivision 14 to read as follows:
3 14. Notwithstanding subdivision one of this section and any other law
4 to the contrary, the revenue (including fees, taxes, interest and penal-
5 ties) from the taxes imposed pursuant to subparagraph (ii) of paragraph
6 five of subdivision (c) of section twelve hundred sixty-one of the tax
7 law which are paid in accordance with subdivision one of section five
8 hundred fifty-three-j of the public authorities law into the central
9 business district tolling capital lockbox fund established by section
10 five hundred fifty-three-j of the public authorities law shall be allo-
11 cated pursuant to statute but without appropriation.
12 § 2. Subdivision 3 of section 99-ff of the state finance law, as added
13 by section 6-c of part G of chapter 59 of the laws of 2019, is amended
14 to read as follows:
15 3. Uses of funds. [Following appropriation by the legislature, moneys]
16 Moneys shall be available for distribution to the central business
17 district tolling capital lockbox fund established pursuant to section
18 five hundred fifty-three-j of the public authorities law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02284-02-3
A. 2895--A 2
1 § 3. Subdivision 1 of section 553-j of the public authorities law, as
2 added by section 5 of subpart A of part ZZZ of chapter 59 of the laws of
3 2019, is amended to read as follows:
4 1. The authority shall establish a fund to be known as the central
5 business district tolling capital lockbox fund which shall be kept sepa-
6 rate from and shall not be commingled with any other monies of the
7 authority. The fund shall consist of all monies received by the authori-
8 ty pursuant to article forty-four-C of the vehicle and traffic law,
9 subdivision twelve-a of section five hundred fifty-three of this title,
10 and revenues of the real estate transfer tax deposited pursuant to
11 subdivision (b) of section fourteen hundred twenty-one of the tax law,
12 and sales tax pursuant to subdivision (c) of section eleven hundred
13 forty-eight of the tax law, [subparagraph (B) of paragraph five of
14 subdivision (c) of section twelve hundred sixty-one of the tax law, and]
15 funds appropriated from the central business district trust fund estab-
16 lished pursuant to section [ninty-nine-ff] ninety-nine-ff of the state
17 finance law, and, without appropriation, the revenue including taxes,
18 interest and penalties collected in accordance with subparagraph (ii) of
19 paragraph five of subdivision (c) of section twelve hundred sixty-one of
20 the tax law.
21 § 4. Subdivision (c) of section 1148 of the tax law, as added by
22 section 6-a of part G of chapter 59 of the laws of 2019, is amended to
23 read as follows:
24 (c) Provided however, after funds are distributed pursuant to subdivi-
25 sion (b) of this section but before such funds are distributed pursuant
26 to subdivision (a) of this section, funds shall be deposited by the
27 comptroller into the New York central business district trust fund
28 established pursuant to section ninety-nine-ff of the state finance law
29 in accordance with the following schedule: (1) in state fiscal year two
30 thousand nineteen - two thousand twenty, one hundred twelve million five
31 hundred thousand dollars; (2) in state fiscal year two thousand twenty -
32 two thousand twenty-one, one hundred fifty million dollars; and (3) in
33 state fiscal year two thousand twenty-one - two thousand twenty-two and
34 every succeeding state fiscal year, an amount equal to one hundred one
35 percent of the amount deposited in the immediately preceding state
36 fiscal year. The funds deposited into the New York central business
37 district trust fund shall be deposited monthly in equal installments
38 without appropriation.
39 § 5. Subparagraph (ii) of paragraph 5 of subdivision (c) of section
40 1261 of the tax law, as amended by section 2 of part RR of chapter 57 of
41 the laws of 2022, is amended to read as follows:
42 (ii) After withholding the taxes, penalties and interest imposed by
43 the city of New York on and after August first, two thousand eight as
44 provided in subparagraph (i) of this paragraph, the comptroller shall
45 withhold a portion of such taxes, penalties and interest sufficient to
46 deposit annually into the central business district tolling capital
47 lockbox established pursuant to section five hundred fifty-three-j of
48 the public authorities law: (A) in state fiscal year two thousand nine-
49 teen - two thousand twenty, one hundred twenty-seven million five
50 hundred thousand dollars; (B) in state fiscal year two thousand twenty -
51 two thousand twenty-one, one hundred seventy million dollars; (C) in
52 state fiscal year two thousand twenty-one - two thousand twenty-two and
53 every succeeding state fiscal year, an amount equal to one hundred one
54 percent of the amount deposited in the immediately preceding state
55 fiscal year. The funds shall be deposited monthly in equal installments
56 without appropriation. During the period that the comptroller is
A. 2895--A 3
1 required to withhold amounts and make payments described in this para-
2 graph, the city of New York has no right, title or interest in or to
3 those taxes, penalties and interest required to be paid into the above
4 referenced central business district tolling capital lockbox. In addi-
5 tion, the comptroller shall withhold a portion of such taxes, penalties
6 and interest in the amount of one hundred fifty million dollars, to be
7 withheld in four quarterly installments on January fifteenth, April
8 fifteenth, July fifteenth and October fifteenth of each year, and shall
9 deposit such amounts into the New York State Agency Trust Fund,
10 Distressed Provider Assistance Account.
11 § 6. Subparagraph (ii) of paragraph 5 of subdivision (c) of section
12 1261 of the tax law, as added by section 6-b of part G of chapter 59 of
13 the laws of 2019, is amended to read as follows:
14 (ii) After withholding the taxes, penalties and interest imposed by
15 the city of New York on and after August first, two thousand eight as
16 provided in subparagraph (i) of this paragraph, the comptroller shall
17 withhold a portion of such taxes, penalties and interest sufficient to
18 deposit annually into the central business district tolling capital
19 lockbox established pursuant to section five hundred fifty-three-j of
20 the public authorities law: (A) in state fiscal year two thousand nine-
21 teen - two thousand twenty, one hundred twenty-seven million five
22 hundred thousand dollars; (B) in state fiscal year two thousand twenty -
23 two thousand twenty-one, one hundred seventy million dollars; and (C) in
24 state fiscal year two thousand twenty-one - two thousand twenty-two and
25 every succeeding state fiscal year, an amount equal to one hundred one
26 percent of the amount deposited in the immediately preceding state
27 fiscal year. The funds shall be deposited monthly in equal installments
28 without appropriation. During the period that the comptroller is
29 required to withhold amounts and make payments described in this para-
30 graph, the city of New York has no right, title or interest in or to
31 those taxes, penalties and interest required to be paid into the above
32 referenced central business district tolling capital lockbox.
33 § 7. This act shall take effect immediately; provided that the amend-
34 ments to subparagraph (ii) of paragraph 5 of subdivision (c) of section
35 1261 of the tax law made by section five of this act shall be subject to
36 the expiration and reversion of such subparagraph pursuant to section 5
37 of part ZZ of chapter 56 of the laws of 2020, as amended, when upon such
38 date the provisions of section six of this act shall take effect.
