S7516-2011 Actions

• May 30, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S7516-2011 Memo

BILL NUMBER:S7516

TITLE OF BILL:
An act
to amend the tax law, the vehicle and traffic law and the public
authorities law, in relation to the metropolitan commuter transportation
mobility tax

PURPOSE:
Relates to phasing out the metropolitan commuter transportation
mobility tax.

SUMMARY OF PROVISIONS:
Section 1. Amends section 801 of the tax law to provide for a tiered
relief schedule that will repeal the remaining mobility taxes for the
Hudson Valley and Long Island by 2016, and New York City by 2018.

Section 2. Amends paragraph (b-1) of subdivision 2 of section 503 of
the vehicle and traffic law to add a new subparagraph (iii) that will
provide for an annual decrease in supplemental learner
permit/license fees resulting in the elimination of such fees for
Hudson Valley and Long Island by 2014, and New York City by 2015.

Section 3. Amends section 499-c of the vehicle and traffic law to
provide for an annual decrease in supplemental registration fees
resulting in the elimination of such fees for Hudson Valley and Long
Island by 2014, and New York City by 2015.

Section 4. Amends the unconsolidated law to provide for a new
paragraph (a) and (b).
Paragraph (a) clarifies the components of total operating expense as
it relates to the proposal.
Moreover, it provides for an offset of costs for any reductions in
transit aid. Paragraph (b) directs the revenues from containing
growth of the operating expenses of the MTA to the MTA finance
fund, and any excess savings to a separate subaccount within the
finance fund for purposes of reducing the 2013 fare increase.

Section 5. Amends subdivisions 2 and 3 of section 1270-h of the public
authorities law to require the MTA to deposit in the MTA finance
fund all revenues resulting from limiting the growth of the MTA's
total operating to the MTA finance fund, and any excess savings to a
separate subaccount within the finance fund for purposes of reducing
the 2013 fare increase.
Clarifies that the monies deposited within the two thousand thirteen
fare increase reduction subaccount are exempted from alternative use.

Section 6. Effective date.

JUSTIFICATION:

In 2009, the State enacted the controversial Metropolitan
Transportation Authority (MTA) bailout plan. As part of this plan,
new revenue streams were established: a mobility tax, also known as
the MTA payroll tax was imposed on employers in the MTA region and
supplemental motor vehicle license and registration fees were
increased on owners in the MTA region. In addition, a fare increase
was scheduled to begin in 2013.

Recently, the State repealed the MTA payroll tax on 80% of all
businesses, and eliminated the payroll tax imposed on schools and
libraries. In order to achieve the repeal of the payroll tax
impacting these entities, however, the State subsidized the loss of
revenue generated from these funding streams.

Over the last several decades, the MTA budgets have far exceeded the
rate of inflation and their unsustainable levels of spending have
consistently placed a burden on tax payers by requiring increased
state subsidies.

In 2012, the MTA operating budget, excluding increases in debt
service, will exceed $13.8 billion. This figure surpasses the
operating budgets of the Power Authority; the Port Authority of New
York and New Jersey; the Dormitory Authority; the Urban Development
Corporation; the Long Island Power Authority; and the New York State
Thruway Authority - combined

In fact, the MTA operating budget exceeds the combined
operating
budgets of all cities (except NYC); all towns and all villages in the
entire state of New York.

Recognizing that the perpetually cash-hungry MTA has had a long
history of being fiscally mismanaged, this bill eliminates the newly
imposed taxes and fees and reduces projected fare increases. By
curbing the out of control spending trends that have plagued the MTA
since its inception in 1965, the MTA spending will be limited to 2%
or 120% of the CPI, whichever is less. This action will achieve
billions in revenue generated through savings over the next several
years. In fact, if the spending limitation called for in this plan
had been put in place beginning in 2006, the MTA would have already
saved New Yorkers over $6.6 billion.

Spending limits have been similarly placed on local governments and
school districts with the enactment of the Real Property Tax Cap in
2011 which imposes a 2% cap on the local tax levy.
In the same vein, the State has adhered to a self-imposed spending cap
of 2% in the adoption of the last two State budgets, while addressing
multi-billion deficits.

This plan calls for the MTA to operate more efficiently and within
the spending limits structured for municipalities across the state. As
a result, the revenues achieved through savings will allow the phase

out of the mobility/payroll tax, and the elimination of the
supplemental car registration and license fees. By creating a
mechanism which forces the MTA to be fiscally responsible, tax
relief and fare reductions are easily achieved by utilizing the
revenue generated from the significant savings produced, without
compromising the MTA capital budget.

Eliminate the Remaining Mobility Tax

o 2013- cut by 50% for the Quarter Pounder (Dutchess, Putnam, Orange,
  and Rockland) Counties

o 2014 - cut by 50% for all Hudson Valley & LI Counties

o 2015 - cut by 80% for all Hudson Valley & LI Counties

o 2015 - cut by 26% for NYC

o 2016 - repealed for all Hudson Valley and LI Counties

o 2016 - cut by 44% for NYC

o 2017 - cut by 71% for NYC

o 2018 - repealed for NYC

Eliminate the Supplemental License Fee and Supplemental
Registration Fee

o 2013 - cut by 75% for all Hudson Valley and LI Counties

o 2013 - cut by 30% for NYC

o 2014 - repealed for all Hudson Valley and LI Counties

o 2014 - cut by 65% for NYC

o 2015 - repealed for NYC

Reduce the 2013 Fare Increase

o Reduces the planned 2013 7.5% fare increase for the MTA Region to 5.5%

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
The proposal caps the growth in the MTA's operating budget over prior
year levels to the lesser of 120% of inflation or 2% growth. Further,
it utilizes the surplus revenue available from the limitation on
spending growth to offset the reduction in transit aid from reduced
taxes and fees, and to reduce the 2013 planned fare increase from

7.5% to 5.5%. As such, there are corresponding cost savings to both
consumers and the State.

EFFECTIVE DATE:
This act shall take effect immediately.

S7516-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 
                                         7516
 I N  SENATE
 May 30, 2012
 
 Introduced  by  Sens.  SALAND,  BONACIC,  BALL -- read twice and ordered
 printed, and when printed to be committed to the Committee on Investi
 gations and Government Operations
 

AN ACT to amend the tax law, the vehicle and traffic law and the  public
 authorities  law, in relation to the metropolitan commuter transporta
 tion mobility tax
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1. 

Section  801  of  the  tax law is amended by adding a new
 subsection (d) to read as follows:

 (D) FOR THE PURPOSES  OF  IMPOSING  THE  TAX  AUTHORIZED  WITHIN  THIS
 SECTION IT IS HEREBY PROVIDED THAT:

 (I)  FOR  CALENDAR  YEAR  TWO THOUSAND THIRTEEN SAID TAX FOR EMPLOYERS
 WITHIN THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM AND  ROCKLAND  SHALL  BE
 IMPOSED  AT  A  RATE OF FIFTY PERCENT OF THAT OTHERWISE AUTHORIZED UNDER
 SUBSECTION (A) OF THIS SECTION;
 (II) FOR CALENDAR YEAR TWO THOUSAND FOURTEEN SAID  TAX  FOR  EMPLOYERS
 WITHIN  THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM, ROCKLAND, WESTCHESTER,
 NASSAU AND SUFFOLK SHALL BE IMPOSED AT A RATE OF FIFTY PERCENT  OF  THAT
 OTHERWISE AUTHORIZED UNDER SUBSECTION (A) OF THIS SECTION;
 (III)  FOR  CALENDAR  YEAR TWO THOUSAND FIFTEEN SAID TAX FOR EMPLOYERS
 WITHIN THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM, ROCKLAND,  WESTCHESTER,
 NASSAU  AND SUFFOLK SHALL BE IMPOSED AT A RATE OF TWENTY PERCENT OF THAT
 OTHERWISE AUTHORIZED UNDER SUBSECTION (A) OF THIS  SECTION  AND  FURTHER
 SAID TAX FOR EMPLOYERS WITHIN THE CITY OF NEW YORK SHALL BE IMPOSED AT A
 RATE   OF  SEVENTY-FOUR  PERCENT  OF  THAT  OTHERWISE  AUTHORIZED  UNDER
 SUBSECTION (A) OF THIS SECTION;
 (IV) FOR CALENDAR YEAR TWO THOUSAND SIXTEEN AND CALENDAR YEARS  THERE
 AFTER  NO  TAX  SHALL BE IMPOSED UNDER THIS SECTION FOR EMPLOYERS WITHIN
 THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM, ROCKLAND, WESTCHESTER,  NASSAU
 AND SUFFOLK;
 (V)  FOR  CALENDAR  YEAR  TWO  THOUSAND SIXTEEN SAID TAX FOR EMPLOYERS
 WITHIN THE CITY OF NEW YORK SHALL BE IMPOSED  AT  A  RATE  OF  FIFTY-SIX
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD15901-02-2
 
       S. 7516                             2
 PERCENT  OF  THAT  OTHERWISE  AUTHORIZED  UNDER  SUBSECTION  (A) OF THIS
 SECTION;
 (VI)  FOR  CALENDAR YEAR TWO THOUSAND SEVENTEEN SAID TAX FOR EMPLOYERS
 WITHIN THE CITY OF NEW YORK SHALL BE IMPOSED AT A  RATE  OF  TWENTY-NINE
 PERCENT  OF  THAT  OTHERWISE  AUTHORIZED  UNDER  SUBSECTION  (A) OF THIS
 SECTION; AND
 (VII) FOR CALENDAR YEAR TWO THOUSAND EIGHTEEN AND CALENDAR YEARS THER
 EAFTER NO TAX SHALL BE IMPOSED UNDER THIS SECTION FOR  EMPLOYERS  WITHIN
 THE CITY OF NEW YORK.
 

S  2.  Paragraph  (b-1) of subdivision 2 of section 503 of the vehicle
 and traffic law is amended by adding a new subparagraph (iii) to read as
 follows:

 (III) FOR THE PURPOSES OF IMPOSING  THE  SUPPLEMENTAL  FEE  AUTHORIZED
 WITHIN THIS SUBDIVISION IT IS HEREBY PROVIDED THAT:

 A.  FOR  CALENDAR YEAR TWO THOUSAND THIRTEEN SAID SUPPLEMENTAL FEE FOR
 APPLICANTS WHO RESIDE WITHIN THE COUNTIES OF DUTCHESS,  ORANGE,  PUTNAM,
 ROCKLAND,  WESTCHESTER, NASSAU AND SUFFOLK SHALL BE IMPOSED AT A RATE OF
 TWENTY-FIVE PERCENT OF THAT OTHERWISE AUTHORIZED UNDER THIS  SUBDIVISION
 AND  FURTHER  FOR  APPLICANTS  RESIDING WITHIN THE CITY OF NEW YORK SAID
 SUPPLEMENTAL FEE SHALL BE IMPOSED AT A RATE OF SEVENTY PERCENT  OF  THAT
 OTHERWISE AUTHORIZED UNDER THIS SUBDIVISION;
 B.  FOR  CALENDAR YEAR TWO THOUSAND FOURTEEN AND CALENDAR YEARS THERE
 AFTER NO SUPPLEMENTAL FEE SHALL BE IMPOSED  FOR  APPLICANTS  WHO  RESIDE
 WITHIN  THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM, ROCKLAND, WESTCHESTER,
 NASSAU AND SUFFOLK;
 C. FOR CALENDAR YEAR TWO THOUSAND FOURTEEN SAID SUPPLEMENTAL  FEE  FOR
 APPLICANTS  WHO RESIDE WITHIN THE CITY OF NEW YORK SHALL BE IMPOSED AT A
 RATE OF THIRTY-FIVE PERCENT OF  THAT  OTHERWISE  AUTHORIZED  UNDER  THIS
 SUBDIVISION;
 D. FOR CALENDAR YEAR TWO THOUSAND FIFTEEN AND CALENDAR YEARS THEREAFT
 ER NO SUPPLEMENTAL FEE SHALL BE IMPOSED FOR APPLICANTS WHO RESIDE WITHIN
 THE CITY OF NEW YORK.
 

S 3.

Section 499-c of the vehicle and traffic law, as added by section
 1  of  part  B  of chapter 25 of the laws of 2009, is amended to read as
 follows:

 

S 499-c. Calculation of supplemental  registration  fee.  The  supple
 mental  registration  fee to be charged pursuant to section four hundred
 ninety-nine-b of this article, shall be calculated at a rate of  twenty
 five  dollars  per  annum  for  each year or portion of a year that such
 registration is valid.  FOR THE PURPOSES OF  IMPOSING  THE  SUPPLEMENTAL
 FEE AUTHORIZED WITHIN THIS SECTION IT IS HEREBY PROVIDED THAT:

 (I)  FOR  CALENDAR  YEAR  TWO  THOUSAND THIRTEEN SAID SUPPLEMENTAL FEE
 CHARGED TO REGISTRANTS WHO  RESIDE  WITHIN  THE  COUNTIES  OF  DUTCHESS,
 ORANGE,  PUTNAM,  ROCKLAND,  WESTCHESTER,  NASSAU  AND  SUFFOLK SHALL BE
 IMPOSED AT A RATE OF TWENTY-FIVE PERCENT OF  THAT  OTHERWISE  AUTHORIZED
 UNDER  THIS SECTION AND FURTHER FOR REGISTRANTS RESIDING WITHIN THE CITY
 OF NEW YORK SAID SUPPLEMENTAL FEE SHALL BE IMPOSED AT A RATE OF  SEVENTY
 PERCENT OF THAT OTHERWISE AUTHORIZED UNDER THIS SECTION;
 (II) FOR CALENDAR YEAR TWO THOUSAND FOURTEEN AND CALENDAR YEARS THERE
 AFTER  NO  SUPPLEMENTAL  FEE SHALL BE IMPOSED FOR REGISTRANTS WHO RESIDE
 WITHIN THE COUNTIES OF DUTCHESS, ORANGE, PUTNAM, ROCKLAND,  WESTCHESTER,
 NASSAU AND SUFFOLK;
 (III)  FOR  CALENDAR  YEAR TWO THOUSAND FOURTEEN SAID SUPPLEMENTAL FEE
 FOR REGISTRANTS WHO RESIDE WITHIN THE CITY OF NEW YORK SHALL BE  IMPOSED
 AT A RATE OF THIRTY-FIVE PERCENT OF THAT OTHERWISE AUTHORIZED UNDER THIS
 SECTION;
 
       S. 7516                             3
 (IV)  FOR CALENDAR YEAR TWO THOUSAND FIFTEEN AND CALENDAR YEARS THERE
 AFTER NO SUPPLEMENTAL FEE SHALL BE IMPOSED FOR  REGISTRANTS  WHO  RESIDE
 WITHIN THE CITY OF NEW YORK.
 

S  4.  (a)  For  the  purposes of this section total operating expense
 shall mean the  metropolitan  transportation  authority's  annual  total
 operating  expense  before  depreciation, subsidies and debt service and
 shall additionally exclude operating expenses related to pensions, other
 post-employment benefits, retroactive arbitration agreements and operat
 ing expenses related directly to system expansion which are  not  offset
 by a corresponding increase in system revenue. Any reductions in transit
 aid  authorized within this act attributable to reductions in the metro
 politan commuter transportation mobility tax authorized under article 23
 of the tax law, the  supplemental  learner  permit/license  fee  in  the
 metropolitan commuter district region authorized under article 19 of the
 vehicle  and  traffic  law  and the metropolitan commuter transportation
 district supplemental registration fee authorized under article 17-C  of
 the  vehicle  and  traffic law shall be offset by limiting the growth of
 the  metropolitan  transportation  authority's  annual  total  operating
 expense over the preceding fiscal year equal to the product of the total
 operating  expense  for  the preceding fiscal year and the lesser of one
 hundred twenty percent of the inflation rate or two percent.   Inflation
 rate  shall  mean  the  annual  percentage  change in the consumer price
 index, all urban, as published by the bureau of labor statistics, or any
 successor agency. Such limitation in total operating expense shall begin
 in calendar year 2012 and  continue  in  each  fiscal  year  thereafter,
 provided  however,  that actual realized savings for 2012 shall be equal
 to one-twelfth of that otherwise anticipated under  the  limitations  of
 growth  as  set  forth  in  this section and further provided that total
 operating expense for 2012 shall  include  reductions  already  approved
 within  the metropolitan transportation authority's 2012 total operating
 budget related to metropolitan transportation authority initiatives  and
 policy actions totaling sixty-three million dollars.
 (b)  Beginning in 2012 and thereafter, all revenues resulting from the
 savings related to limiting the growth in the  metropolitan  transporta
 tion  authority's  annual  total operating expense shall be deposited in
 the metropolitan transportation authority  finance  fund  authorized  by
 section  1270-h  of  the  public authorities law, provided however, that
 revenues resulting from the savings pursuant to this section  in  excess
 of  those  savings  required  to  offset  any  reductions in transit aid
 authorized within this act attributable to reductions in  the  metropol
 itan commuter transportation mobility tax authorized under article 23 of
 the  tax  law, the supplemental learner permit/license fee in the metro
 politan commuter district region authorized  under  article  19  of  the
 vehicle  and  traffic  law  and the metropolitan commuter transportation
 district supplemental registration fee authorized under article 17-C  of
 the  vehicle  and  traffic  law  shall  be deposited in the metropolitan
 transportation authority finance fund authorized by  section  1270-h  of
 the  public  authorities  law  within a separate subaccount and shall be
 used exclusively to reduce the seven  and  one-half  percent  2013  fare
 increase  currently  contained  within  the  metropolitan transportation
 authority's 2012 approved operating budget to an increase  of  five  and
 one-half percent.
 

S  5. Subdivisions 2 and 3 of section 1270-h of the public authorities
 law, as added by section 16 of part H of chapter 25 of the laws of 2009,
 are amended to read as follows:

 
       S. 7516                             4
 2. The comptroller shall deposit monthly, pursuant  to  appropriation,
 into  the  metropolitan transportation authority finance fund the moneys
 deposited in the mobility tax trust account of the  metropolitan  trans
 portation  authority financial assistance fund pursuant to article twen
 ty-three  of  the  tax  law, and any other provision of law directing or
 permitting the deposit of moneys in such fund.    IN  ADDITION  TO  SAID
 FUNDS,  THE METROPOLITAN TRANSPORTATION AUTHORITY SHALL DEPOSIT INTO THE
 METROPOLITAN TRANSPORTATION AUTHORITY FINANCE FUND ALL REVENUES  RESULT
 ING FROM LIMITING THE GROWTH OF THE METROPOLITAN TRANSPORTATION AUTHORI
 TY'S  ANNUAL  TOTAL  OPERATING  EXPENSE  PURSUANT  TO  THE PROVISIONS OF
 SECTION FOUR OF THE CHAPTER OF THE LAWS OF  TWO  THOUSAND  TWELVE  WHICH
 AMENDED  THIS  SUBDIVISION,  PROVIDED  HOWEVER  THAT  REVENUES DEPOSITED
 PURSUANT TO SECTION FOUR OF THE CHAPTER OF  THE  LAWS  OF  TWO  THOUSAND
 TWELVE  WHICH  AMENDED  THIS  SUBDIVISION  WHICH  ARE IN EXCESS OF THOSE
 REQUIRED TO OFFSET ANY REDUCTIONS IN TRANSIT AID AUTHORIZED WITHIN  SUCH
 CHAPTER OF THE LAWS OF TWO THOUSAND TWELVE ATTRIBUTABLE TO REDUCTIONS IN
 THE  METROPOLITAN  COMMUTER TRANSPORTATION MOBILITY TAX AUTHORIZED UNDER
 ARTICLE  TWENTY-THREE  OF  THE  TAX  LAW,   THE   SUPPLEMENTAL   LEARNER
 PERMIT/LICENSE  FEE IN THE METROPOLITAN COMMUTER DISTRICT REGION AUTHOR
 IZED UNDER ARTICLE NINETEEN OF THE  VEHICLE  AND  TRAFFIC  LAW  AND  THE
 METROPOLITAN  COMMUTER TRANSPORTATION DISTRICT SUPPLEMENTAL REGISTRATION
 FEE AUTHORIZED UNDER ARTICLE SEVENTEEN-C OF THE VEHICLE AND TRAFFIC  LAW
 SHALL BE DEPOSITED WITHIN A SEPARATE TWO THOUSAND THIRTEEN FARE INCREASE
 REDUCTION  SUBACCOUNT  AND SHALL BE USED EXCLUSIVELY TO REDUCE THE SEVEN
 AND ONE-HALF PERCENT  TWO  THOUSAND  THIRTEEN  FARE  INCREASE  CURRENTLY
 CONTAINED  WITHIN  THE METROPOLITAN TRANSPORTATION AUTHORITY'S TWO THOU
 SAND TWELVE APPROVED  OPERATING  BUDGET  TO  AN  INCREASE  OF  FIVE  AND
 ONE-HALF PERCENT.
 3.  Moneys  in the fund EXCEPT THOSE DEPOSITED WITHIN THE TWO THOUSAND
 THIRTEEN FARE INCREASE REDUCTION SUBACCOUNT may be (a)  pledged  by  the
 authority to secure and be applied to the payment of the bonds, notes or
 other obligations of the authority issued on or after the effective date
 of  this  section  to  finance capital projects of the authority and its
 subsidiaries and the New York city transit  authority  and  any  subsid
 iaries;  or  (b)  used  for  payment  of  capital  costs, including debt
 service, reserve requirements, if any, the payment of  amounts  required
 under  bond  and  note  facilities  or  agreements  related thereto, the
 payment of federal government loans, security or credit arrangements  or
 other  agreements  related thereto, and the payment of all costs related
 to such obligations, of or for the authority, the New York city  transit
 authority  and  their  subsidiaries  as  the  authority shall determine.
 Subject to the provisions of any such pledge, or in the event  there  is
 no  such  pledge,  any  excess  moneys  in  this fund may be used by the
 authority for payment of operating costs of, and capital costs,  includ
 ing debt service and reserve requirements, if any, of or for the author
 ity,  the  New York city transit authority and their subsidiaries as the
 authority shall determine. To the extent moneys in the  fund  have  been
 pledged  by  the  authority  to secure and pay the bonds, notes or other
 obligations of the authority issued to finance capital projects  of  the
 authority  and  its subsidiaries and the New York city transit authority
 and any subsidiaries as herein provided, monies deposited into the  fund
 shall  be  deposited to the extent necessary to satisfy the requirements
 of any debt service or reserve requirements, if any, of  the  resolution
 authorizing such bonds, notes or other obligations.
 

S 6. This act shall take effect immediately.

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