N.Y. Public Authorities Law § 1203-a: Subsidiary corporation

§ 1203-a. Subsidiary corporation. 1. Notwithstanding the provisions of

this title or of any general, special or local law to the contrary, the

city and the transit authority may enter into an agreement which shall

provide that any omnibus lines hereafter acquired by the city may be

leased by the city for operation and maintenance to a public benefit

corporation which shall be a subsidiary of the transit authority. The

status of such officers and employees as shall be taken into the service

of such subsidiary corporation, including those who had been employed by

the former owner of any such omnibus lines, shall be governed

exclusively by the provisions of this section.

2. A public benefit corporation entitled Manhattan and Bronx surface

transit operating authority (hereinafter referred to as the subsidiary

corporation) is hereby created. The purpose of said subsidiary

corporation shall be to operate, pursuant to the powers conferred

hereunder and for a temporary period, the omnibus lines hereafter

acquired by the city, until the said omnibus lines shall be sold or

otherwise disposed of to private or public operation. The directors of

such subsidiary corporation shall be the persons holding the offices of

chairman and members of the transit authority or their successors. The

provisions of this title concerning the number of members of the

authority, the number thereof required for a quorum and to transact

business, the powers and functions of the chairman and his authority to

delegate the same, and the effect which the tenure of the members and

chairman has upon the holding of other public office shall all be

applicable with like force and effect to the directors of such

subsidiary corporation.

3. The subsidiary corporation shall have all of the powers vested in

the transit authority by section twelve hundred four of this title

except those contained in subdivisions five, six, eight, nine, fourteen

and sixteen thereof. In addition, such subsidiary corporation shall have

the following powers:

(a) pursuant to the provisions of this section, to maintain and

operate the omnibus lines transferred to it by the city;

(b) to appoint officers and employees, assign powers and duties to

them and fix their compensation. Said officers and employees shall not

become, for any purpose, employees of the city or of the transit

authority and shall not acquire civil service status or become members

of the New York city employees' retirement system but, shall, for

purposes of subparagraph (i) of paragraph three of subsection (c) of

section six hundred twelve of the tax law be deemed to be officers and

employees of a subdivision of the state;

(c) to improve, maintain and operate such buildings, structures and

facilities as may be necessary or convenient;

(d) with the consent of the transit authority, to use officers,

employees, agents and facilities of the transit authority and to

reimburse the transit authority therefor;

(e) to utilize business methods and efficient procedures to promote

the safety and convenience of the traveling public, in the carrying out

of its corporate purposes;

(f) to operate omnibus lines on those routes in the city of New York

where on February twenty-eighth, nineteen hundred sixty-two, omnibus

lines were operated under franchises or temporary certificates of

convenience and necessity which have been revoked, terminated, rescinded

or condemned, or acquired by any other means, and to extend such routes

so as to provide the complete service operated on February

twenty-eighth, nineteen hundred sixty-two; and such operation, together

with the necessary extensions, shall be deemed to constitute operation

over approved routes with the same force and effect as if the said

routes had been duly approved by the board of estimate of the city, as

provided by law; and to operate on such other routes as the board may

authorize by resolution adopted only after a public hearing held after

notice thereof, and of the proposed route, and the proposed resolutions

authorizing the same, have been published in full for at least fifteen

days, except Sundays and legal holidays, immediately prior thereto in

the City Record, and at least twice in two newspapers published in the

borough or boroughs affected, to be designated by the board.

4. Such subsidiary corporation and any of its property, functions and

activities shall have all of the privileges, immunities, tax exemptions

and other exemptions of the transit authority.

5. The agreement between the city and the subsidiary corporation by

which the said omnibus lines are leased shall provide as follows:

(a) for the rate or rates of fare to be charged on such omnibus lines,

provided, however, that from and after March first, nineteen hundred

sixty-eight, the subsidiary corporation shall have full and exclusive

control over the setting of such rate or rates of fare;

(b) the subsidiary corporation shall be entitled to utilize the

officers, employees, agents, facilities and services of the city on the

same terms and conditions as are applicable to or provided to the

transit authority;

(c) capital costs not now charged by the transit authority as

operating expenses shall be paid by the city; provided, however, that

from and after March first, nineteen hundred sixty-eight, the subsidiary

corporation shall also have the right to incur capital costs in its own

name to the extent that capital funds are available to it pursuant to

the provisions of sections twelve hundred nineteen-a and twelve hundred

three-b of this chapter or of any other law, which capital costs shall

not be payable by the city; and provided, further, that no project to be

financed by the use of such capital funds which is estimated by the

subsidiary corporation 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 subsidiary

corporation of the intent of the subsidiary corporation 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 subsidiary corporation within

thirty days of the receipt by the mayor or the board of estimate, as the

case may be, of the notification of the subsidiary corporation relating

to such project. Where the city is required to pay the capital costs of

the subsidiary corporation 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 costs. The subsidiary corporation shall submit

timely requests for the necessary capital funds to the city planning

commission and the mayor of the city;

(d) The initial working capital of the subsidiary corporation shall be

advanced by the city from any funds of the city (but not from borrowed

funds) in the form of a grant or a loan in such amount as the parties

shall deem necessary but in no event shall the said amount exceed five

million dollars. If in the form of a grant, the advance shall be deemed

to be in partial consideration of the acceptance by the subsidiary

corporation of the initial transfer, in which case the sum shall not be

repaid, but if in the form of a loan, the amount of the advance shall be

repaid under such terms and conditions as shall be mutually agreed upon

by the parties.

6. The provisions of section twelve hundred seven, subdivision one,

sections twelve hundred eight, twelve hundred nine, twelve hundred

eleven, twelve hundred twelve, twelve hundred twelve-a, twelve hundred

thirteen, twelve hundred fifteen, twelve hundred sixteen, twelve hundred

twenty and twelve hundred twenty-one of this title, shall apply to the

subsidiary corporation in the same manner as to the transit authority

and the term "authority", as used in such sections shall be deemed to

apply to the subsidiary corporation.

7. Upon the written request of the mayor the subsidiary corporation

shall permit reduced fares for one or more classes of omnibus line users

designated by the mayor upon the agreement of the city to assume the

burden of the resulting differential, together with the attendant

administrative costs of the subsidiary corporation, pursuant to

procedures satisfactory to the subsidiary corporation.

8. From and after March first, nineteen hundred sixty-eight, no

substantial or general change in the levels of service furnished upon

the facilities of the subsidiary corporation shall be instituted except

upon not less than thirty days' written notice to the mayor and to the

board of estimate.

9. The subsidiary corporation shall establish and publish or cause to

be published schedules for all passenger transportation services under

its operation. Such schedules shall include the estimated departure and

arrival time at each terminal point of each route except that, on lines

where the headway time during the period between six A.M. and seven P.M.

is less than ten minutes, such headway time alone may be listed for that

period. Such schedules shall also show the elapsed running time between

the terminal and each station. Schedules shall be made available on each

omnibus operated on the line to which the schedule applies.

10. No acts or activities taken or proposed to be taken by the

subsidiary corporation pursuant to the provisions of paragraph (a) of

subdivision five or subdivision seven of this section shall be deemed to

be "actions" for the purposes or within the meaning of article eight of

the environmental conservation law.

11. The subsidiary corporation and its corporate existence shall

continue until terminated by law, provided however, that no such law

shall take effect so long as the subsidiary corporation or the transit

authority or any other of its subsidiaries shall have outstanding any

notes or bonds or lease, sublease or other contractual obligations

issued or incurred pursuant to section twelve hundred seven-m of this

title or issued or incurred in connection with the transfer of its

interest in and the lease from the transferee of any property furnished

to it pursuant to chapter twelve of the laws of nineteen hundred

seventy-nine or section fifteen of chapter three hundred fourteen of the

laws of nineteen hundred eighty-one, unless adequate provision has been

made for the payment or satisfaction of such outstanding notes, bonds,

lease, sublease or other contractual obligations.