Can the Permanent Citizens Advisory Committee to the MTA (and its three commuter councils) raise its own funds, get IRS 501(c)(3) status, take public donations, or apply for grants from state agencies?
Plain-English summary
The Permanent Citizens Advisory Committee to the MTA (PCAC) is the umbrella organization for three statutorily-established commuter councils: the Long Island Rail Road Commuter's Council, the Metro-North Commuter Council, and the New York City Transit Authority Advisory Council. Their job is to study, investigate, monitor, and make recommendations about each transit system. Their members are unpaid commuters; the MTA itself provides their staff and budget.
PCAC's executive director asked the AG: can we raise our own money? Three specific channels were on the table:
- Apply to the IRS for 501(c)(3) status to enable tax-deductible donations.
- Solicit donations directly from the public.
- Apply to other New York state agencies for direct funding.
The AG said no on all three. The reasoning is the same Flynn v. State Ethics Commission rule that anchors so many statutory-construction opinions: a creature of statute has only the powers expressly granted plus those necessarily implied. PCAC and the councils are explicitly tasked with study/investigation/monitoring/recommendations; their only express financial-related power is the right to request and receive "assistance and data" from state agencies. None of the three proposed activities is necessary to perform those duties. The MTA-funded model is the legislative scheme the councils must work within.
The AG specifically distinguished the "request and receive assistance" language from the express grant-receipt power that the Legislature has given other entities (Public Authorities Law § 1266(6) for MTA and NYCTA; § 1204(3-b) for NYCTA). Where the Legislature wants a body to be able to receive grant money from other public entities, it says so explicitly. The councils' broader "assistance" language is read narrowly to exclude monetary grants.
Currency note
This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.
Historical context
What the opinion meant for PCAC
PCAC's research and outreach activities continued at the funding level the MTA provides. The councils could keep performing their statutory duties (study, monitor, recommend) within that budget, but could not formally launch independent fundraising operations or build a 501(c)(3) parallel organization to do so.
What the opinion meant for transit advocacy more generally
Independent transit-advocacy organizations (not statutorily-created) remain free to do the things PCAC was barred from: form 501(c)(3) entities, accept donations, and apply for grants. The opinion's restrictions are specific to statutory bodies. A truly independent rider advocacy organization can still be created outside the PCAC framework and operate fully. PCAC itself just can't transmute into one.
Why the "assistance and data" language was read narrowly
The AG cites Matter of N.Y. State Dep't of Taxation & Finance v. N.Y. State Dep't of Law (OCTF), 44 N.Y.2d 575 (1978), which described "request and receive assistance" language as "commonplace." The AG reads commonplace as meaning generic rather than broad: the language doesn't single out monetary assistance, and the Legislature has elsewhere shown it knows how to make a separate, specific grant-receipt provision when that's what it wants. So the absence of a separate grant-receipt provision for PCAC and the councils signals the narrow reading.
Common questions
Q: What is PCAC?
A: The Permanent Citizens Advisory Committee to the MTA, an umbrella organization composed of three statutorily-created commuter advisory councils for the LIRR, Metro-North, and NYCTA. It is supported by MTA funding and serves as a communication channel between MTA riders and the MTA's management.
Q: Why can't an MTA advisory body just become a 501(c)(3)?
A: Because the body is a creature of state statute with only the powers the Legislature granted it. Becoming a federally-recognized tax-exempt organization is a substantive change to the body's character that requires legislative authorization. The Legislature has not provided that authorization.
Q: Can the councils accept any external help?
A: They can request and receive "assistance and data" from state agencies and political subdivisions. Public Authorities Law §§ 1204-e(4), 1266-d(4), 1266-e(4). The AG read that as covering data, technical help, and similar in-kind support, not monetary grants. Where the Legislature wanted monetary grant authority, it said so explicitly elsewhere.
Q: Could the Legislature change this?
A: Yes. The Legislature could amend Article 1, Title 11 of the Public Authorities Law (or the relevant council provisions) to expand PCAC's funding authority. Without that amendment, the AG's reading binds.
Q: What's the broader pattern here?
A: The opinion fits with AG 2014-F1 (IDA powers) released the same day: when a statutory entity's enabling statute lists specific powers, the catch-all and assistance clauses are read narrowly. New categories of activity (subsidiaries, fundraising, taking grants) require separate legislative authorization.
Background and statutory framework
PCAC's structure is set by Public Authorities Law § 1266-i, which made PCAC the umbrella for the three statutory councils, each created in the early 1980s:
- Long Island Rail Road Commuter's Council: § 1204-e
- Metro-North Commuter Council: § 1266-d
- NYCTA Advisory Council: § 1266-e
Each council's enabling statute (1204-e(1)(2)(3)(4) and parallel sections) sets the duties (study, investigate, monitor, recommend), composition (commuters using the relevant system), expense reimbursement, and the "request and receive assistance and data" power.
The MTA's own grant-receipt authority sits separately in § 1266(6) (general MTA) and § 1204(3-b) (NYCTA-specific). The textual contrast (specific grant-receipt power for the parent authorities; only "assistance and data" for the advisory councils) is the engine of the AG's analysis.
The federal 501(c)(3) framework (26 U.S.C. § 501(c)(3)) requires an organization to be organized and operated exclusively for exempt purposes; PCAC and the councils are organized under New York public-authority law for advisory purposes, and their statutory framework does not contemplate the federal designation. The AG didn't reach whether 501(c)(3) status would be granted by the IRS; the question was whether state law authorizes the request, and it doesn't.
Citations and references
Statutes:
- N.Y. Public Authorities Law § 1204-e; § 1204-e(1), (2), (3), (4) (LIRR Council)
- N.Y. Public Authorities Law § 1266-d; § 1266-d(1), (2), (3), (4) (Metro-North Council)
- N.Y. Public Authorities Law § 1266-e; § 1266-e(1), (2), (3), (4) (NYCTA Advisory Council)
- N.Y. Public Authorities Law § 1266-i (PCAC umbrella); § 1266(6); § 1204(3-b); § 1279-c(1)
- 26 U.S.C. § 501(c)(3)
- N.Y. Economic Development Law § 241(7); N.Y. Executive Law § 580(3); N.Y. Not-for-Profit Corporation Law § 1507-a(e) (parallel "assistance and data" provisions)
Cases:
- Matter of Flynn v. State Ethics Com'n, 87 N.Y.2d 199, 202 (1995), creature of statute rule
- Matter of N.Y. State Dep't of Taxation & Finance v. N.Y. State Dep't of Law, Statewide Organized Crime Task Force [OCTF], 44 N.Y.2d 575, 581 (1978), "commonplace" assistance language
Source
- Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
- Original PDF: https://ag.ny.gov/sites/default/files/opinions/2014-f2_pw_0.pdf
Original opinion text
Public Authorities Law §§ 1204-e, 1204-e(1), 1204-e(2), 1204-e(3), 1204-e(4), 1204(3-b), 1266-d, 1266-d(1), 1266-d(2), 1266-d(3), 1266-d(4), 1266-e, 1266-e(1), 1266-e(2), 1266-e(3), 1266-e(4), 1266-i, 1266(6), 1279-c(1); Internal Revenue Code § 501(c)(3); Economic Development Law § 241(7); Executive Law § 580(3); Not-For-Profit Corporation Law § 1507-a(e)
The Permanent Citizens Advisory Committee to the MTA may not seek federal designation as a tax-exempt organization, solicit donations directly from the public, or apply to state agencies for direct funding.
September 9, 2014
William Henderson
Executive Director
Permanent Citizens Advisory Committee to the MTA
347 Madison Avenue
New York, New York 10017
Formal Opinion
No. 2014-F2
Dear Mr. Henderson:
You have asked several questions relating to the authority of the Permanent Citizens Advisory Committee to the MTA (Committee) and its component councils to raise money to fund their work. As explained below, we are of the opinion that the Committee and its councils are not authorized to pursue any of the proposed funding strategies.
The Committee initially was established by the Metropolitan Transportation Authority (MTA) board in the late 1970s, in response to a recommendation by the MTA Management Study's Citizens Advisory Committee, to enhance responsiveness to and participation by the public. The Committee was originally composed of 29 members appointed by local officials: 15 from New York City and 14 from the seven suburban New York counties in the MTA region. In the early 1980s, to distinguish the interests of the commuters of each transit system, the Legislature created a series of Advisory Councils relating to different component parts of the MTA, namely the Long Island Rail Road, Metro-North, and the New York City Transit Authority. See Public Authorities Law §§ 1204-e, 1266-d, 1266-e. In 2009 the Legislature reconstituted the Committee as an umbrella organization composed of those councils: the Long Island Rail Road Commuter's Council, the Metro-North Commuter Council, and the New York City Transit Authority Advisory Council (Councils). Public Authorities Law § 1266-i. As such, the Committee serves as the coordinating body and the funding mechanism for the Councils. The Committee has no independent statutory charge but is a mechanism through which the MTA communicates with its riders. Public Authorities Law § 1279-c(1).
The composition and responsibilities of the component Councils were established by statute. Each Council is composed entirely of commuters who use the particular transportation system within its jurisdiction. Public Authorities Law §§ 1204-e(2), 1266-d(2), 1266-e(2). Each Council is to "study, investigate, monitor and make recommendations with respect to the maintenance and operation" of the transit system within its jurisdiction. Public Authorities Law §§ 1204-e(1), 1266-d(1), 1266-e(1). And each Council "shall study and investigate all aspects of the day to day operations [of the relevant transit system], monitor its performance and recommend changes to improve the efficiency of the operation thereof." Id. Finally, each Council "may request and shall receive from any department, division, board, bureau, commission, agency, public authority of the state or any political subdivision thereof such assistance and data as will enable it properly to carry out its activities" and effectuate its purposes. Id. §§ 1204-e(4), 1266-d(4), 1266-e(4). The members of the Councils are unpaid but can be reimbursed by the Committee for expenses actually and necessarily incurred by them in the performance of their duties. Public Authorities Law §§ 1204-e(3), 1266-d(3), 1266-e(3); Permanent Citizens Advisory Comm., PCAC History (PCAC is funding mechanism for three Councils).
You have explained that the MTA currently provides the resources for the Committee's operations, which include a five-member staff of transportation planning professionals who support the work of the component Councils and address MTA-wide issues that extend beyond the scope of a single council. The members of the component Councils are interested in pursuing other sources of funding to provide additional resources to support their work and the work of the Committee.
Your first question is whether the Committee or its component Councils are authorized under New York law to seek and receive federal designation as a tax-exempt organization pursuant to section 501(c)(3) of the Internal Revenue Code. We believe that they are not. The Committee and the Councils are creatures of statute, and as such, they have only powers granted by express or necessarily implied legislative delegation. See Matter of Flynn v. State Ethics Com'n, 87 N.Y.2d 199, 202 (1995). The Councils were created by statute to allow users of the MTA's transit systems to communicate problems and make recommendations with respect to riders' experiences with the systems. Their duties are to study, investigate, monitor, and make recommendations with respect to the component transit systems. The Councils' only express power is to request and receive assistance and information from state agencies and local governments that will allow the Councils to carry out their activities. Neither that express authority nor the Councils' statutory duties necessitate designation as a tax-exempt organization under federal law. We therefore conclude that the Committee and the Councils are not permitted to seek federal tax-exempt status.
Likewise, in response to your second question, we conclude that the Committee and its component Councils are not expressly authorized to solicit donations directly from the public, nor does the fulfillment of their duties implicitly necessitate solicitation of donations from the public. Their funding is provided by the MTA, and performance of their statutory responsibilities, studying, investigating, monitoring, and recommending with respect to transit systems operations, does not necessarily require funding beyond that which the MTA provides. Accordingly, we believe the Committee and Councils may not directly solicit public donations. Under the current legislative scheme, performance of the Committee's and Councils' duties must be harmonized with the resources MTA provides.
Your third question is whether the Committee or its component Councils are authorized to apply for and receive direct funding from state departments or agencies. Arguably, the Councils' enabling statutes provide authority for this when they allow each Council to "request and . . . receive from any department, division, board, bureau, commission, agency, public authority of the state or any political subdivision thereof such assistance and data as will enable it properly to carry out its activities hereunder and effectuate the purposes set forth herein." Public Authorities Law §§ 1204-e(4), 1266-d(4), 1266-e(4). Nonetheless, we believe this language does not authorize the proposed action. This or similar broad language is found in many statutes for governmental entities, including other advisory bodies. See, e.g., Economic Development Law § 241(7) (Advisory Council on Economic Information and Research); Executive Law § 580(3) (Emergency Services Council); Not-for-Profit Corporation Law § 1507-a(e) (State Cemetery Board Citizens Advisory Council). Indeed, such statutory language has been described as "commonplace." Matter of N.Y. State Dep't of Taxation & Finance v. N.Y. State Dep't of Law, Statewide Organized Crime Task Force [OCTF], 44 N.Y.2d 575, 581 (1978). In contrast, the Legislature has granted some entities, including the public authorities within which the Councils are established, the express authority to accept grants of funds from state and local public bodies. See, e.g., Public Authorities Law § 1266(6) (MTA and New York City Transit Authority (NYCTA)); id. § 1204(3-b) (NYCTA). The Legislature thus provides separately for monetary "assistance" and in kind assistance. In light of the extensive number of public entities granted the broad authority to request and receive "assistance" from other public entities, in combination with the specificity with which the Legislature has allowed certain public entities to seek and accept money from other governmental entities, we conclude that the Committee and the Councils are not authorized under the current statutory scheme to seek funding from state entities other than the MTA.
Very truly yours,
ERIC T. SCHNEIDERMAN
Attorney General