History of the Municipal Bond Bank Agency

MBBA was created in 1972 pursuant to Article 8 of the Public Authorities Law of the State of New York, as amended.  Its purpose is, in part, to foster and promote the provision of adequate capital markets for, and to facilitate borrowings by, the State's municipalities for their public improvements or purposes; to assist those municipalities in fulfilling their needs for improvements by the creation of indebtedness; and further, to encourage continued investor interest in the purchase of bonds or notes of municipalities as sound and preferred securities for investment.  In 2000, a municipal tax lien securitization program was authorized by legislation.  The program involves the issuance of obligations by MBBA (or an entity created by MBBA) to facilitate the purchase of delinquent tax liens from municipalities in the State of New York.  The obligations are collateralized only by the tax liens (which may be a pool of liens purchased from multiple municipalities throughout the State) and any other funds pledged for the repayment of such obligations.  In legislation enacted in 2002, MBBA was authorized to issue special school deficit program bonds for the enlarged city school district of the City of Troy.  The same legislation permits MBBA to issue special school purpose bonds on behalf of certain special school purpose municipalities which have prior year claims due and payable to them under certain provisions of the State Education Law.   

The membership of MBBA consists of the State Comptroller (or a director appointed by the Comptroller), the Secretary of State, the Director of the Budget, the Chairman of the New York State Housing Finance Agency, and three additional directors appointed by the Governor, with the advice and consent of the Senate, at least one of whom must be an elected official of a municipality.  The directors appointed by the Governor serve for the full or unexpired positions of four-year terms.