Bill S7574-2013

Relates to the regulation of bus privatization contracts

Relates to the regulation of bus privatization contracts.

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  • May 15, 2014: REFERRED TO CORPORATIONS, AUTHORITIES AND COMMISSIONS

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BILL NUMBER:S7574

TITLE OF BILL: An act to amend the public authorities law, in relation to the regulation of bus privatization contracts

GENERAL PURPOSE: This bill does not prevent privatization but requires a careful analysis both at the local level and by the State Comptroller to ensure that the promises being made by the private bus company are realistic and will not negatively impact the locality, the taxpayer or the transit rider.

SUMMARY OF PROVISIONS OF BILL:

Section 1 of the bill sets for the legislative intent of the legislation.

Section 2 of the bill amends the public authorities law by adding a new section 2875-c that would require that the State Comptroller sign off on any attempt to privatize public bus service by a locality.

Section 3 of the bill sets for an effective date 90 days after it shall have been signed into law.

JUSTIFICATION: Several localities around the State are looking into various options to save money. One option discussed is privatizing public services, specifically public transportation.

Many times, private bus companies approach localities promising miraculous outcomes, which include cost savings and increased service quality. Most often the promises made are empty promises. The cost savings, in most cases, never materialize. There have been many cases where the costs to the locality actually increase even though a private entity has taken over primary operation of the system.

In addition, the service quality for transit riders always takes a significant hit. Usually, there are significant service and route cuts once the private bus company takes over the primary servicing of the transit system. Further, the routes that aren't cut tend to suffer from reliability and service issues. Thousands of New Yorkers rely on public transportation to get to and from work and medical services. Commuters need a public transportation system that operates in a reliable and timely manner in order to make a living and perform basic everyday life activities.

This legislation strikes a good balance between the desire of the localities to find new ways to save money and ensuring that public transportation will remain reliable and cost effective.

LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None

EFFECTIVE DATE: This Act shall take effect on the ninetieth day after it shall have been signed into law.


Text

STATE OF NEW YORK ________________________________________________________________________ 7574 IN SENATE May 15, 2014 ___________
Introduced by Sen. AVELLA -- read twice and ordered printed, and when printed to be committed to the Committee on Corporations, Authorities and Commissions AN ACT to amend the public authorities law, in relation to the regu- lation of bus privatization contracts THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative intent. The legislature hereby finds and declares that decisions to use private contractors to provide public transportation service must be based on factors which promote the public interest. To ensure that citizens of the state receive high quality transit services at low cost, with due regard for the taxpayers of the state and the needs of public and private workers, the legislature finds it necessary to regulate such privatization contracts. S 2. The public authorities law is amended by adding a new section 2875-c to read as follows: S 2875-C. REGULATION OF PRIVATIZATION CONTRACTS. 1. DEFINITIONS. AS USED IN THIS SECTION, THE FOLLOWING WORDS SHALL HAVE THE FOLLOWING MEAN- INGS: A. "PUBLIC TRANSPORTATION SYSTEM" MEANS ANY PASSENGER TRANSPORTATION SERVICE PROVIDED BY BUS, WHICH, DURING ITS HOURS OF OPERATION, IS AVAIL- ABLE ON AN EQUAL OPPORTUNITY BASIS TO ANY PERSON, WITHOUT PREFERENCE FOR SERVICE AVAILABILITY, ELIGIBILITY OR DESIGN BEING GIVEN TO ANY PERSON OR POPULATION SUB-GROUP BECAUSE OF AGE, GENDER, RACE, NATIONAL ORIGIN, CREED OR AGENCY CLIENT STATUS, AND WHICH IS REGULARLY ADVERTISED AND MARKETED AS AVAILABLE TO THE GENERAL PUBLIC. NOTHING IN THIS ARTICLE SHALL BE DEEMED TO MEAN THAT THE TRANSPORTATION SERVICES OPERATED OR PROVIDED BY HUMAN OR SOCIAL SERVICE AGENCIES SOLELY FOR THEIR CLIENTS OR PROGRAMS CONSTITUTE, IN AND OF THEMSELVES, PUBLIC TRANSPORTATION SERVICES. B. "PRIVATIZATION CONTRACT" SHALL MEAN AGREEMENT OR COMBINATION OR SERIES OF AGREEMENTS BY WHICH A PRIVATE PERSON OR ENTITY AGREES WITH A PUBLIC TRANSPORTATION SYSTEM TO PROVIDE SERVICES, VALUED AT ONE HUNDRED THOUSAND DOLLARS OR MORE, WHICH ARE SUBSTANTIALLY SIMILAR TO AND IN LIEU
OF, SERVICES HERETOFORE PROVIDED, IN WHOLE OR IN PART, BY REGULAR EMPLOYEES OF THE PUBLIC TRANSPORTATION SYSTEM. AN AGREEMENT SOLELY TO PROVIDE LEGAL, MANAGEMENT CONSULTING, PLANNING, ENGINEERING OR DESIGN SERVICES SHALL NOT BE CONSIDERED A PRIVATIZATION CONTRACT. 2. REQUIREMENTS. A. A PUBLIC TRANSPORTATION SYSTEM SHALL NOT MAKE ANY PRIVATIZATION CONTRACT AND NO SUCH CONTRACT SHALL BE VALID UNLESS THE PUBLIC TRANSPORTATION SYSTEM COMPLIES WITH EACH OF THE FOLLOWING REQUIREMENTS: (1) THE PUBLIC TRANSPORTATION SYSTEM SHALL PREPARE A SPECIFIC WRITTEN STATEMENT OF THE SERVICES PROPOSED TO BE THE SUBJECT OF THE PRIVATIZA- TION CONTRACT, INCLUDING THE SPECIFIC QUANTITY AND STANDARD OF QUALITY OF THE SUBJECT SERVICES; (2) THE PUBLIC TRANSPORTATION SYSTEM SHALL INCLUDE IN THE WRITTEN STATEMENT A SUMMARY OF THE EMPLOYEES' SALARIES, PENSION BENEFITS AND HEALTH CARE COVERAGE AND HOW THOSE SALARIES, PENSION BENEFITS AND HEALTH CARE COVERAGE WILL BE AFFECTED BY THE PRIVATIZATION CONTRACT; (3) THE ORGANIZATION SHALL SOLICIT COMPETITIVE SEALED BIDS FOR THE PRIVATIZATION CONTRACTS BASED UPON THIS STATEMENT; (4) THE DAY DESIGNATED BY THE PUBLIC TRANSPORTATION SYSTEM UPON WHICH IT WILL ACCEPT THESE SEALED BIDS SHALL BE THE SAME FOR ANY AND ALL PARTIES; (5) THIS STATEMENT SHALL BE A PUBLIC RECORD, SHALL BE FILED AT THE PUBLIC TRANSPORTATION SYSTEM, AND SHALL BE TRANSMITTED TO THE STATE COMPTROLLER FOR REVIEW PURSUANT TO SUBDIVISION THREE OF THIS SECTION; (6) THE TERM OF ANY PRIVATIZATION CONTRACT SHALL NOT EXCEED THREE YEARS; AND (7) NO AMENDMENT TO A PRIVATIZATION CONTRACT SHALL BE VALID IF IT HAS THE PURPOSE OR EFFECT OF AVOIDING ANY REQUIREMENT OF THIS SECTION. B. AFTER SOLICITING AND RECEIVING BIDS, THE PUBLIC TRANSPORTATION SYSTEM SHALL PUBLICLY DESIGNATE THE BIDDER TO WHICH IT PROPOSES TO AWARD THE CONTRACT. THE PUBLIC TRANSPORTATION SYSTEM SHALL PREPARE A COMPRE- HENSIVE WRITTEN ANALYSIS OF THE CONTRACT COST BASED UPON THE DESIGNATED BID, SPECIFICALLY INCLUDING THE COSTS OF TRANSITION FROM PUBLIC TO PRIVATE OPERATION, OF ADDITIONAL UNEMPLOYMENT AND RETIREMENT BENEFITS, IF ANY, AND OF MONITORING AND OTHERWISE ADMINISTERING CONTRACT PERFORM- ANCE. IF THE DESIGNATED BIDDER IS HEADQUARTERED OUTSIDE THE STATE, SAID CONTRACT COST SHALL BE INCREASED BY THE AMOUNT OF INCOME TAX REVENUE, IF ANY, WHICH WILL BE LOST TO THE STATE. C. THE PUBLIC TRANSPORTATION SYSTEM SHALL PROVIDE A COPY OF THE PROPOSED PRIVATIZATION CONTRACT AS WELL AS CERTIFY IN WRITING TO THE STATE COMPTROLLER THAT: (1) IT HAS COMPLIED WITH ALL PROVISIONS OF THIS SECTION AND OF ALL OTHER APPLICABLE LAWS; (2) THE QUALITY OF THE PUBLIC TRANSPORTATION SERVICES TO BE PROVIDED BY THE DESIGNATED BIDDER IS LIKELY TO SATISFY THE QUALITY REQUIREMENTS OF THE STATEMENT PREPARED PURSUANT TO SUBPARAGRAPH ONE OF PARAGRAPH (A) OF THIS SUBDIVISION AND TO EQUAL OR EXCEED THE QUALITY OF SERVICES WHICH COULD BE PROVIDED BY REGULAR PUBLIC TRANSPORTATION SYSTEM EMPLOYEES; (3) THE CONTRACT COST WILL BE AT LEAST FIFTEEN PERCENT LESS THAN THE ESTIMATED CURRENT YEAR COST OF THE PUBLIC SYSTEM; (4) THE DESIGNATED BIDDER AND ITS SUPERVISORY EMPLOYEES, WHILE IN THE EMPLOY OF SAID DESIGNATED BIDDER, HAVE NO ADJUDICATED RECORD OF SUBSTAN- TIAL OR REPEATED WILLFUL NONCOMPLIANCE WITH ANY RELEVANT FEDERAL OR STATE REGULATORY STATUTE INCLUDING, BUT NOT LIMITED TO, STATUTES CONCERNING LABOR RELATIONS, OCCUPATIONAL SAFETY AND HEALTH, NONDISCRIMI-
NATION AND AFFIRMATIVE ACTION, ENVIRONMENTAL PROTECTION AND CONFLICTS OF INTEREST; (5) THE PROPOSED PRIVATIZATION CONTRACT IS IN THE PUBLIC INTEREST, IN THAT IT MEETS THE APPLICABLE QUALITY AND FISCAL STANDARDS SET FORTH HEREIN; AND (6) THE CONTRACT IS IN CONFORMANCE WITH THE PROVISIONS OF ANY APPLICA- BLE COLLECTIVE BARGAINING AGREEMENT AND SUBJECT TO THE PROVISIONS OF ANY EMPLOYEE PROTECTION ARRANGEMENTS ESTABLISHED UNDER 49 U.S.C. 5333(B). 3. REVIEW BY STATE COMPTROLLER; APPROVAL OR OBJECTION; PROCEDURES; PROMULGATION OF REGULATIONS. A. NO PRIVATIZATION CONTRACT SHALL BE VALID IF WITHIN THIRTY BUSINESS DAYS AFTER RECEIVING THE CERTIFICATION FROM THE PUBLIC TRANSPORTATION SYSTEM, THE STATE COMPTROLLER NOTIFIES THE PUBLIC TRANSPORTATION SYSTEM OF ITS OBJECTION. SUCH OBJECTION SHALL BE IN WRITING AND SHALL STATE SPECIFICALLY THE STATE COMPTROLLER'S FINDING THAT THE PUBLIC TRANSPORTATION SYSTEM HAS FAILED TO COMPLY WITH ONE OR MORE REQUIREMENT FOR PRIVATIZATION, INCLUDING THAT THE STATE COMPTROLLER FINDS INCORRECT, BASED ON INDEPENDENT REVIEW OF ALL THE RELEVANT FACTS, ANY OF THE FINDINGS REACHED BY THE PUBLIC TRANSPORTATION SYSTEM. THE STATE COMPTROLLER MAY EXTEND THE TIME FOR SUCH OBJECTION FOR AN ADDI- TIONAL PERIOD OF THIRTY BUSINESS DAYS BEYOND THE ORIGINAL THIRTY BUSI- NESS DAYS BY WRITTEN NOTICE TO THE PUBLIC TRANSPORTATION SYSTEM, STATING THE REASON FOR SUCH EXTENSION. B. FOR THE PURPOSE OF REVIEWING THE PUBLIC TRANSPORTATION SYSTEM'S COMPLIANCE AND CERTIFICATION, THE STATE COMPTROLLER OR HIS OR HER DESIG- NEE MAY REQUIRE BY SUMMONS THE ATTENDANCE AND TESTIMONY UNDER OATH OF WITNESSES AND THE PRODUCTION OF BOOKS, PAPERS AND OTHER RECORDS RELATING TO SUCH REVIEW. C. THE STATE COMPTROLLER MAY ADOPT REGULATIONS AND PRESCRIBE FORMS TO CARRY OUT THE PROVISIONS OF THIS SECTION. D. THE OBJECTION OF THE STATE COMPTROLLER PURSUANT TO PARAGRAPH A OF THIS SUBDIVISION SHALL BE FINAL AND BINDING ON THE PUBLIC TRANSPORTATION SYSTEM, UNLESS THE STATE COMPTROLLER THEREAFTER IN WRITING WITHDRAWS THE OBJECTION, STATING THE SPECIFIC REASONS, BASED UPON A REVISED CERTIF- ICATION BY THE PUBLIC TRANSPORTATION SYSTEM AND UPON THE STATE COMP- TROLLER'S REVIEW THEREOF. S 3. This act shall take effect on the ninetieth day after it shall have become a law.

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