BILL NUMBER: S7526
SPONSOR: MARTINEZ
 
TITLE OF BILL:
An act in relation to enacting the private activity bond allocation act
of 2025; and providing for the repeal of certain provisions upon expira-
tion thereof
 
PURPOSE OF BILL:
This bill extends the current tax-exempt, private activity bond allo-
cation for State and local issuers allocation system from July 1, 2025
to July 1, 2028.
 
SUMMARY OF PROVISIONS:
Section 1 of the bill provides the title of the act, "Private Activity
Bond Allocation Act of 2025."
Section 2 of the bill provides the legislative findings. Section 3 of
the bill provides definitions.
Sections 4, 5, and 6 of the bill establish the allocation formula for
the distribution of private bond activity volume ceiling (IDB Cap) as
follows:
-One-third for State agencies; One-third for local agencies, including
Industrial Development Agencies (IDAs); and
-One-third for the statewide bond reserve for use by both the State and
IDAs.
The ESD Commissioner would be required to publish the amount of recap-
tured local set asides on its website each year.
Section 7 of the bill provides certain requirements and conditions
relating to access to new employment opportunities created in connection
with industrial or manufacturing projects financed through the issuance
of qualified small issue bonds.
Section 8 of the bill allocates one half to the county agency and one
half to the subcounty local agency in instances where there is overlap-
ping jurisdiction.
Section 9 of the bill allocates the local agency set-aside to the poli-
tical subdivision for of the IDA in instances where the IDA is ineligi-
ble to receive such allocation
Section 10 of the bill authorizes the chief executive officer of any
political subdivision to withdraw any portion of the allocation and
reallocate it to itself or any other issuer established for the benefit
of the political subdivision.
Section 11 of the bill authorizes the process of allocating statewide
ceiling for certain multi-year housing development projects in the
future.
Sections 12 and 13 of the bill detail provisions relating to year end
recapture of IDB Cap to the statewide bond reserve and procedures for
carry forward elections of IDB Cap, respectively.
Section 14 of the bill creates a New York State Bond Allocation Policy
Advisory Panel to provide policy advice regarding the priorities for
distribution of the statewide ceiling. The Director of the Division of
Budget would also be required to publish an annual volume cap report on
its website concurrently with providing the report to the bond allo-
cation advisory panel.
Section 15 of the bill provides for severability provisions.
Section 16 of the bill mandates that any allocation of the statewide
ceiling on or after January 1, 2025, and prior to the effective date of
the act shall first be chargeable to the statewide bond reserve for an
IDA and to the state agency set aside for any state agencies.
Section 17 of the bill prohibits the proposed legislation from supersed-
ing, altering, or impairing any allocation of IDB Cap made prior to the
effective date of the legislation.
Section 18 of the bill provides the effective date.
 
JUSTIFICATION:
The Federal Tax Reform Act of 1986, as amended, imposes a ceiling on the
volume of tax-exempt, private activity and certain other bonds that may
be issued in a state in any given year. It also establishes an allo-
cation formula which provides 50% of the statewide IDB Cap to State
agencies and the remaining 50% to local governments. Federal law permit-
ted temporary modification of this allocation formula by gubernatorial
executive order until December 31, 1987. Following this sunset, the
federal act permits states to establish an alternative formula for allo-
cation by statute. New York State has opted to establish an alternative
method of distribution in which one-third of the IDB Cap is available to
State agencies, one-third to local agencies (industrial development
agencies or IDAs) and one-third to a statewide bond reserve for use by
both the State and IDAs.
 
PRIOR LEGISLATIVE HISTORY:
The Private Activity Bond Allocation Act has been routinely extended,
including most recently:
Chapter 56 of the Laws of 2022 (ELFA Part VV)
Chapter 58 of the Laws of 2020 (TED Part XXX Subpart B Item C)
Chapter 103 of the Laws of 2018 (S.8847-A Felder)
Chapter 82 of the Laws of 2016 (S.7637 Little)
Chapter 49 of the Laws of 2014 (S.7145 Young)
Chapter 83 of the Laws of 2012 (5.6901 Young)
 
FISCAL IMPLICATIONS:
None noted.
 
EFFECTIVE DATE:
This act shall take effect immediately.