N.Y. Public Authorities Law § 1203: Transfer of transit facilities by the city to the authority

§ 1203. Transfer of transit facilities by the city to the authority.

1. a. On or before June first, nineteen hundred fifty-three, the city

may, by resolution of the board of estimate or by instruments authorized

by any such resolution, enter into an agreement with the authority for

the transfer to the authority, for use in the execution of its corporate

purposes, of the transit facilities now owned or hereafter acquired or

constructed by the city and any other materials, supplies and property

incidental to or necessary for the operation thereof. Any such agreement

shall provide for transfer of such facilities by deed, lease, license or

other arrangement, provided the term thereof shall not be less than ten

years and authorize the authority to take jurisdiction, control,

possession and supervision of such transit facilities, materials,

supplies and property on or before June fifteenth, nineteen hundred

fifty-three.

b. (i) Such agreement shall provide that capital costs of a nature not

heretofore charged as operating expenses shall be paid by the city, or

at the option of the authority may be paid in the first instance by the

authority but in such event, the authority shall be entitled to recover

from the city the amount of such costs; provided, however, that the

total amount of such capital costs which the authority may incur without

the approval of the mayor in any city fiscal year shall not exceed five

million dollars and that no other such capital costs shall be incurred

by the authority without such approval. Where the city is required to

reimburse the authority for the amount of any capital costs pursuant to

such agreement, serial bonds or capital notes may be issued by the city,

pursuant to the local finance law, to finance any such reimbursement in

the same manner and to the same extent as if such costs were to be paid

directly by the city.

The authority shall submit annually to the city planning commission

and the mayor of the city on or before October fifteenth in each year an

estimate of all such capital costs for inclusion in the capital budget

of the city.

(ii) From and after March first, nineteen hundred sixty-eight, the

authority shall also have the right to incur capital costs of such

nature in its own name to the extent that capital funds are available to

it for expenditures of such nature pursuant to the provisions of section

twelve hundred nineteen-a of this chapter or of any other provision of

law, which capital costs shall not be payable by the city; provided,

however, that no project to be financed by the use of such capital funds

which is estimated by the authority to involve an expenditure in excess

of one million dollars shall be commenced unless the mayor and the board

of estimate shall each have been notified in writing by the authority of

the intent of the authority to undertake such project and of the nature

thereof. No such project shall be commenced if and to the extent that

either the mayor or a majority in voting power of the members of the

board of estimate shall find that it is incompatible with sound planning

for the development or redevelopment of the city, provided such finding,

together with the reasons therefor, is set forth in a writing delivered

to the authority within thirty days of the receipt by the mayor or the

board of estimate, as the case may be, of the notification of the

authority relating to such project. If any such project is not so

disapproved, it may nevertheless not be commenced unless and until the

city shall have been given an opportunity to include the same in the

capital budget of the city for the first fiscal year of the city

commencing not less than six months after receipt of such notification.

If and to the extent that such project is included in such capital

budget, the authority may not thereafter incur capital costs for the

same in its own name. If or to the extent such project is not included

in such capital budget, the authority may incur capital costs for the

same in its own name. The operation of sections twenty, twenty-one and

twenty-two of the rapid transit law shall be suspended with respect to

any project financed with the capital funds referred to in this

subparagraph.

c. Such agreement shall provide that the authority shall have the use

and possession of all property owned or leased by the city and used or

occupied by the board of transportation on March fifteenth, nineteen

hundred fifty-three in connection with or incidental to the operation of

such transit facilities.

d. No provision in such agreement shall purport to limit or restrict

or have the effect of limiting or restricting, the power granted the

authority to manage, control or direct the maintenance and operation of

such transit facilities or the fares or service thereof.

2. Such agreement shall provide for payment by the city of:

a. Capital costs for projects connected with such transit facilities

included in the capital budget of the city for periods prior to December

thirty-first, nineteen hundred fifty-three, except that the authority

shall not require payment of, and the city shall not pay, capital costs

of such projects without prior approval of the board of estimate.

b. Liabilities of the city or the board of transportation for:

(1) Pension or retirement contributions on behalf of persons who were

employed on transit facilities heretofore acquired by the city.

(2) Contributions to the New York City employees' retirement system on

behalf of officers or employees whose compensation has been paid out of

the operating revenues of the board of transportation of the city, which

contributions have or shall hereafter become due or payable for fiscal

years of the city ending on or before June thirtieth, nineteen hundred

fifty-three.

c. All other liabilities of the board of transportation on the date of

the conveyance.

d. Ten million dollars derived from any funds of the city (but not

from borrowed funds), or from the operating fund of the board of

transportation at the time of such transfer, for use by the authority as

initial working capital (1) in partial consideration of the acceptance

by the authority of the initial transfer, in which case the sum shall

not be repaid, or (2) as a loan, in which case such sum shall be repaid

in not less than five nor more than ten equal annual installments,

commencing July first, nineteen hundred fifty-four.

3. a. Such agreement may contain provisions relating to the use and

occupancy by the authority of real property (in addition to that

transferred pursuant to subdivision one of this section) now or

hereafter owned or leased by the city, on such terms as may be mutually

agreed upon by the city and the authority, and may provide for or

authorize surrenders to the city of property no longer required by the

authority.

b. The authority shall be entitled to utilize the officers, employees,

agents, facilities and services of the city on the same terms and

conditions as were applicable to or provided to the board of

transportation on March fifteenth, nineteen hundred fifty-three.

4. The city and the authority are hereby authorized and empowered to

make or enter into any contracts, agreements, deeds, leases, conveyances

or other instruments as may be necessary or appropriate to effectuate

the purposes of this title and they shall have complete power and

authority to do and to authorize the doing of all things, incidental,

desirable or necessary to implement the provisions of this section.

5. Upon the filing by the authority with the clerk of the city and the

secretary of state of a copy of the instruments or documents

effectuating the transfer, the authority shall take possession and

control of the transit facilities and other property transferred thereby

together with all contracts, books, maps, plans, papers and records of

or in the possession of the board of transportation of whatever

description, incidental to or necessary for the operation of the

facilities transferred by such agreement or the performance of the

duties of the authority as provided by this title.

6. When in the discretion of the authority there is available a supply

of electric power adequate for the efficient and proper operation of the

transit facilities either from a private utility or otherwise at rates

and under circumstances deemed by the authority to be reasonable, the

authority may make such provisions for the utilization of such electric

power as it may see fit and surrender to the city the power plants

presently leased by the authority from the city pursuant to the

provisions of this title. The foregoing provisions of this subdivision

shall be applicable only to actions of the authority undertaken prior to

February first, nineteen hundred and sixty.

7. Notwithstanding the aforesaid provisions of this section the city

may transfer to the authority title and ownership to the materials,

supplies and property incidental to or necessary for the operation of

the transit facilities which were heretofore leased to the authority,

and the authority and the city may enter into an agreement, modifying

the agreement of lease dated June first, nineteen hundred fifty-three,

as amended, renewed and supplemented, to provide for such transfer of

title and ownership and containing such further terms and conditions,

not inconsistent with law, as may be agreed upon between the parties.