New York State public benefit corporations

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New York State public benefit corporations and authorities operate like quasi-private corporations, generally with boards appointed by elected officials. They're a form of government bureaucracy in one sense but, unlike government agencies, public benefit corporations are exempt from some regulations. Of particular importance, they can take out their own debt, allowing them to bypass legal limits on state debt. This allows them to make potentially risky capital and infrastructure investments without putting so much of the credit of New York City or New York State on the line. However, it also allows them to avoid many of the oversight and reporting regulations which apply to state government.


[edit] Origins

Public benefit corporations in New York State likely have origins in mercantile capitalism. A shared tradition of English common law and Dutch law may partly explain their origins.

Many New York public benefit corporations are powerful public authorities. The widespread use of public authorities in the United States was pioneered in New York State by Robert Moses. Much of Moses' power base resulted from his tight control of the Triborough Bridge Authority, which allowed him to earmark revenues from tolls on the bridge to other projects in New York City and around the state.

The approval of the New York State Public Authorities Control Board is required in some cases. Public authorities in New York may levy taxes and tolls. This means that they are not part of the usual state budgetary process, and gives them a certain independence. Furthermore, they may make contracts; because of public authorities' corporate status, there is, generally, no remedy against the chartering State for the breach of such contracts. John Grace & Co. v. State University Constr. Fund, 44 N.Y.2d 84, 375 N.E.2d 377; 404 N.Y.S.2d 316 (1978). On the other hand, as agents of the state, public authorities are not subject to many laws governing private corporations, and are not subject to municipal regulation. Employees of public authorities usually are not state employees, but are employees of the Authority. Ciulla v. State, 191 Misc. 528; 77 N.Y.S.2d 545; (NY Court of Claims, 1948). Public authorities can also often condemn property. See Generally 87 NY Jur PUBLIC AUTHORITIES Section 1 et. seq..

Among the major public benefit corporations in New York State, the Port Authority of New York and New Jersey (actually a bi-state agency created by interstate compact) and the Metropolitan Transportation Authority, which manages most of the public transportation to, in, and around New York City, might be the most famous. New York has hundreds of lesser-known public benefit corporations. In the wake of the September 11, 2001, terrorist attacks, the Lower Manhattan Development Corporation has been receiving a lot of press.

[edit] Incorporation

Public benefit corporations get charters from New York State and are usually designed to perform a specific, narrow function in the public interest. They are overseen by the Public Authorities Control Board.

[edit] Types of Public Authorities

The New York State Comptroller's Office lists four types of public benefit corporations and authorities:

  • Class A — these authorities and public benefit corporations have regional or statewide significance
  • Class B — according to the Comptroller's office, these "[e]ntities affiliated [are] with a State agency, or entities created by the State that have limited jurisdiction but a majority of Board appointments made by the Governor or other State officials; entities that would not exist but for their relationship with the State."[1]
  • Class C — these public authorities have local application.
  • Class D — these authorities and public benefit corporations have interstate or international jurisdiction.

[edit] Class A Public Benefit Corporations in the New York City Metropolitan Area

Below are some of the authorities operating in and around the New York City metropolitan area.

[edit] Battery Park City Authority

Fully titled the Hugh L. Carey Battery Park City Authority [2], according to its official web site, the authority is:

a New York State public benefit corporation whose mission is to plan, create, co-ordinate and maintain a balanced community of commercial, residential, retail, and park space within its designated 92-acre site on the lower west side of Manhattan.

Battery Park is located at the bottom tip of Manhattan.

[edit] Lower Manhattan Development Corporation

The Lower Manhattan Development Corporation (LMDC) was formed after the September 11 attacks to plan the reconstruction of Lower Manhattan. It was founded by Governor George Pataki and then-Mayor Rudolph Giuliani. The LMDC is a joint State-City corporation governed by a 16-member Board of Directors, half appointed by the Governor of New York and half by the Mayor of New York City.

The Development Corporation is a subsidiary of the Empire State Development Corporation.

[edit] Long Island Power Authority

The Long Island Power Authority or LIPA ["lie-pah"], a municipal subdivision of the State of New York, was created under the Long Island Power Act of 1985 to acquire the Long Island Lighting Company (LILCO)'s assets and securities. A second Long Island Power Authority (LIPA), a wholly owned subsidiary of the first, acquired LILCO's transmission and distribution system in June 1998.

[edit] Metropolitan Transportation Authority

The Metropolitan Transportation Authority [3] manages public transportation in the New York Metropolitan Area (this includes the New York Subway and public bus systems, as well as MTA Metro-North Railroad and the Long Island Rail Road).

The MTA includes the following subsidiaries:

[edit] Overcoat Development Corporation

The Overcoat Development Corporation was founded in the 1980s to lure a men's outerwear company to New York City. It continues to exist today due to a favorable real estate lease it got.

[edit] Roosevelt Island Operating Corporation

The Roosevelt Island Operating Corporation's [4] responsibility is to develop Roosevelt Island, a small strip of land in the East River, part of the borough of Manhattan.

[edit] Class A Public Benefit Corporations in Greater New York State

Some of the public benefit corporations outside of New York City's metropolitan area, or serving the entire state, are listed below.

[edit] Agriculture And New York State Horse Breeding Development Fund

The Agriculture And New York State Horse Breeding Development Fund serves equine interests in New York State and provides education concerning certain agricultural development.

A 2004 audit [5] of the fund found problems with its management.

[edit] Dormitory Authority of the State of New York

According to its web site, the Dormitory Authority of the State of New York [6] "provides financing and construction services to public and private universities, not-for-profit healthcare facilities and other institutions which serve the public good."

[edit] Empire State Development Corporation

The Empire State Development Corporation, also known as the Urban Development Corporation, maintains various programs and subsidiaries to encourage economic development in New York State.

[edit] New York State Thruway Authority

The New York State Thruway Authority [7] maintains the major highway that cuts across New York State from New York City to Buffalo.

[edit] New York State Canal Corporation

The New York State Canal Corporation is a subsidiary of the New York State Thruway Authority. It is responsible for the oversight, administration and maintenance of the New York State Canal System [8], which consists of the Erie Canal, Cayuga-Seneca Canal, Oswego Canal and Champlain Canal. It is also involved with the development and maintenance of the New York State Canalway Trail and with the general development and promotion of the Erie Canal Corridor as both a tourist attraction and a working waterway.

[edit] Capital District Transportation Authority

The Capital District Transportation Authority (CDTA) [9] is a public benefit organization which provides transportation services to the Capital District of New York State (Albany, Schenectady, and Rensselaer counties plus part of Saratoga). The function of CDTA is to operate public transportation as well as to operate Albany International Airport and the Amtrak stations in the service area (Albany-Rennselaer, Schenectady, and Saratoga Springs).

It includes the following subsidies:

  • Access Transit Services
  • Capital District Transit System
  • Capital District Transit System, Number 1
  • Capital District Transit System, Number 2
  • CTDA Facilities, Inc.

[edit] Central New York Regional Transportation Authority

The Central New York Regional Transportation Authority [10] manages much of the public transportation in and around Syracuse. This includes regional bus service and OnTrack commuter rail. Syracuse is the smallest city in the United States to have a local commuter rail line.

[edit] New York State Bridge Authority

The New York State Bridge Authority [11] owns and operates five bridges on the Hudson River.

[edit] Olympic Regional Development Authority

The Olympic Regional Development Authority [12] was designed to prepare the Lake Placid area for the 1980 Winter Olympics.

[edit] Power Authority of the State of New York

The Power Authority of the State of New York [13] provides electricity throughout New York State.

[edit] Rochester-Genesee Regional Transportation Authority

The Rochester-Genesee Regional Transportation Authority [14] consists of numerous subsidiaries, including:

  • Batavia Bus Service, Inc.
  • Genesee Transportation Service Council Staff, Inc.
  • Lift Line, Inc.
  • Livingston Area Transportation Service, Inc.
  • Orleans Area Transit System, Inc.
  • Regional Transit System, Inc.
  • Renaissance Square Corp.
  • RGRTA Maritime Development Corporation
  • Seneca Transport Systems, Inc.
  • Wayne Area Transportation Service, Inc.
  • Wyoming Transportation Service, Inc.

[edit] United Nations Development Corporation

The United Nations Development Corporation [15] was designed to assist the United Nations with its real estate and development needs.

[edit] Class B Public Authorities

[edit] Class C Public Authorities

Class C public authorities have local jurisdiction and very few are of significance outside of economic development within towns, villages, and small cities.

[edit] Class D Public Authorities

Class D public authorities have interstate and international jurisdiction. This is the complete list.

[edit] Controversy

Some of these corporations, particularly the "authorities," are criticized as being wasteful or overly secretive. There are literally hundreds, more than 640 as of 2004 according to a New York Times editorial. Some attempts at reform have been made. According to the editorial:

[New York State Comptroller Alan] Hevesi has offered a comprehensive bill that incorporates some of the best ideas in other legislation circulating in Albany [to reform the authorities]. It would also create a commission to assess whether all 640 authorities set up over the last 80 years still need to exist. The Overcoat Protection Authority, for one, would seem to have had its day. [21]

The Overcoat Protection Authority actually isn't the correct name of the entity in question. The correct name of the entity the Times was speaking of is the Overcoat Development Corporation [22], which was designed to lure a clothing manufacturer to New York from Indiana in the 1980s. (Berry, Dan. "The Cold Facts Of Officialdom, Albany-Style," The New York Times, March 20, 2004)

Lack of oversight is a major concern with New York's authorities. According to the Associated Press:

Out of 643 state and local authorities in New York, only 11 need approval by the Public Authorities Control Board before selling bonds. The comptroller's office gets financial reports from just 53. (Johnson, Mark. "Hevesi proposes reforms for state authorities," Associated Press, February 24, 2004)

The New York State Comptroller's Office, headed by Alan Hevesi, became concerned about the debt public authorities were generating in 2004:

Most public authorities have the ability to borrow funds by issuing debt. Total public authority debt reached more than $120.4 billion in 2004, and continues to grow. $37 billion of this debt is State-supported, accounting for more than 90 percent of total outstanding State-supported debt.[23]

Recently, the state has been trying to phase out public benefit corporations and authorities it considers unnecessary.

[edit] See also

[edit] External links

  • New York's Public Authorities [24]
  • List of Class A Public Authorities [25]
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New York State public benefit corporations

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