A06544 Summary:

BILL NOA06544
 
SAME ASNo same as
 
SPONSOROaks
 
COSPNSR
 
MLTSPNSR
 
Add Art 12 SS236 - 241, Pub Serv L; add S99-u, St Fin L
 
Establishes the "Natural Gas Infrastructure Act"; creates the natural gas infrastructure grant fund for the purpose of subsidizing the cost of projects to extend natural gas supply facilities to rural areas for economic development purposes by the construction of natural gas distribution facilities.
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A06544 Actions:

BILL NOA06544
 
04/04/2013referred to energy
01/08/2014referred to energy
03/19/2014held for consideration in energy
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A06544 Floor Votes:

There are no votes for this bill in this legislative session.
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A06544 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6544
 
                               2013-2014 Regular Sessions
 
                   IN ASSEMBLY
 
                                      April 4, 2013
                                       ___________
 
        Introduced  by  M. of A. OAKS -- read once and referred to the Committee
          on Energy
 
        AN ACT to amend the public service law and the  state  finance  law,  in
          relation to establishing the natural gas infrastructure act
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 

     1    Section 1. Legislative intent. The legislature hereby recognizes  that
     2  the  availability  of  natural  gas  distribution systems is critical to
     3  certain manufacturers and other energy users.  The  legislature  further
     4  recognizes  that,  in  the  wake  of  imminent  increase  of natural gas
     5  production, the state will subsequently realize excess  revenue  associ-
     6  ated  with  additional  economic  activity. As the energy industry alone
     7  lacks the ability to sustain infrastructure projects that would  connect
     8  all  potential  consumers  of  natural gas in the state, the legislature
     9  herein acts to remedy the issue. In order to make such projects  viable,
    10  the  natural  gas  infrastructure  fund  established  by  this act would
    11  provide up to one hundred percent of the  total  costs  of  an  eligible
    12  project  to  a  requesting  eligible  entity. The entity would own those

    13  facilities paid for by this fund, would provide oversight in addition to
    14  the franchise powers already given to municipalities of the  facilities,
    15  and  would  solicit local input with regard to oversight. The franchised
    16  natural gas local distribution company would operate those  sections  of
    17  the distribution system owned by the entity.
    18    §  2.  Short  title.  This  act shall be known and may be cited as the
    19  "natural gas infrastructure act".
    20    § 3. The public service law is amended by adding a new article  12  to
    21  read as follows:
    22                                 ARTICLE 12
    23                       NATURAL GAS INFRASTRUCTURE ACT
    24  Section 236. Definitions.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

                                                                   LBD09978-01-3

        A. 6544                             2
 
     1          237. Duties and responsibilities of the department in respect to
     2                 the natural gas infrastructure fund.
     3          238. Criteria for selection of eligible projects.
     4          239. Financing agreements.
     5          240. Inspection and certification.
     6          241. Noncompliance; notification; application for service.
     7    § 236. Definitions. As used in this article, the following terms shall
     8  have the following meanings:
     9    1.  "Construction"  means  the erection, building, acquisition, alter-
    10  ation, reconstruction,  improvement,  enlargement  or  extension  of  an

    11  eligible  project; the inspection and supervision thereof; and the engi-
    12  neering, architectural, legal, fiscal, and economic  investigations  and
    13  studies,  surveys,  designs,  plans,  working  drawings, specifications,
    14  procedures, and other actions necessary thereto.
    15    2. "Eligible project" means a project intended to extend  natural  gas
    16  supply  to  rural or underserved areas for economic development purposes
    17  by the construction of natural gas distribution facilities.
    18    A project will not be considered an eligible project if its completion
    19  would result in a bypass or risk of bypass  to  any  local  distribution
    20  company.  A bypass or risk of bypass will exist if the completed project

    21  displaces any other local distribution company's gas load  or  gas  load
    22  opportunity, unless that local distribution company chooses not to exer-
    23  cise such gas load opportunity.
    24    3. "Eligible costs" means that portion of an eligible project that may
    25  qualify for funding herein.
    26    4.  "Financing  agreement"  means an agreement between the department,
    27  the authority, and one or more recipients meeting  the  requirements  of
    28  this article.
    29    5. "Fund" means the natural gas infrastructure fund established pursu-
    30  ant to this article and section ninety-nine-u of the state finance law.
    31    6. "Local distribution company" means a franchised natural gas utility
    32  fully  subject  to the jurisdiction and supervision of the department in

    33  all respects and having a tariff publicly  filed  and  approved  by  the
    34  commission prior to the disbursement of any monies.
    35    7.  "Recipient" means a utility or other entity deemed eligible, which
    36  is empowered to construct a portion of the eligible project, or any  two
    37  or  more  such  entities  which  are  acting  jointly and with the prior
    38  consent of the local distribution company holding  a  franchise  in  the
    39  area in which the proposed project is located.
    40    8. "Commission" means the public service commission.
    41    9. "Department"  means the department of public service.
    42    10.  "Authority" means the New York state energy research and develop-
    43  ment authority.

    44    11. "Franchise" means a  gas  franchise  in  accordance  with  section
    45  sixty-eight  of this chapter or, in the absence of an express franchise,
    46  the current and historic right and obligation to supply gas  service  in
    47  the project area.
    48    12.  "Project  facilities" shall mean, but not be limited to, any main
    49  line, service line and appurtenant facilities  constructed  pursuant  to
    50  the authority of this article.
    51    § 237. Duties and responsibilities of the department in respect to the
    52  natural  gas  infrastructure fund. The department shall work in conjunc-
    53  tion with the authority to provide assistance in support of the  program
    54  to make available to eligible recipients funding for the construction of

    55  natural gas distribution facilities in accordance with the provisions of
    56  this article or any other provision of law, as determined by the commis-

        A. 6544                             3
 
     1  sion.  The  department  shall act in a manner as to direct the authority
     2  regarding determinations of project eligibility, and the authority  will
     3  subsequently administer funding to recipients.
     4    § 238. Criteria for selection of eligible projects.  1. The commission
     5  shall  establish procedures, which shall include, but not be limited to,
     6  criteria and standards for selection of eligible  projects;  determining
     7  the  amount  of  financial  assistance  to  a  recipient for an eligible

     8  project; and the manner in which funding shall be applied  and  distrib-
     9  uted with the authority.
    10    2.  The  commission shall devise, and the department thereafter imple-
    11  ment, an appropriate application process for entities to request project
    12  funding from the fund.
    13    3. Pursuant to the provisions of this article,  the  commission  shall
    14  review, with the advice of local distribution companies and in consulta-
    15  tion  with  the  state department of economic development, the authority
    16  and any state agency or entity which in the discretion of the commission
    17  it should wish to  consult,  applications  for  funding  of  potentially
    18  eligible  projects.  Review of such applications shall include, but need
    19  not be limited to,

    20    (a) an assessment of the potential amount of customers who would  gain
    21  capacity to purchase natural gas supply;
    22    (b)  a  demonstration that the proposed affected area is either under-
    23  served, or has seen a lack of  appropriate  infrastructural  improvement
    24  for any period of time;
    25    (c)  consideration  of  the  region's and the state's infrastructural,
    26  energy planning and economic development goals;
    27    (d) an independent environmental review, which outlines the potential-
    28  ly affected natural resources throughout the area of the project, and  a
    29  specific plan to avoid environmental health and safety risks surrounding
    30  that area during construction;
    31    (e)  demonstration of the total project cost, along with justification

    32  for the cost, including but not limited to the applicant's consideration
    33  of using materials sourced within the state as well as the most environ-
    34  mentally sound  products  during  construction.  No  provision  in  this
    35  section  shall  be  deemed to require applicants to, or limit applicants
    36  from, purchasing specific materials; and
    37    (f) an assessment of compliance with state and federal laws, rules and
    38  regulations.
    39    4. No provision of this article shall be deemed  to  require  a  local
    40  distribution company holding a franchise in, or historically serving the
    41  area  in  which the proposed project is located, to undertake a proposed
    42  project.
    43    5. For all eligible recipients, provisions herein may be combined with

    44  existing tax credits, exemptions  and  other  incentives  which  support
    45  natural  gas  infrastructure,  including,  but  not limited to, eligible
    46  recipients undergoing natural gas service expansion and projects affect-
    47  ing the retention of jobs in the state.
    48    § 239. Financing agreements. 1. Prior to the disbursement of any fund-
    49  ing from the fund, the  department,  the  authority  and  any  recipient
    50  having  the power to contract with respect to the financing of an eligi-
    51  ble project, shall enter into a grant disbursement agreement,  providing
    52  for  the construction plan of the eligible project. The department shall
    53  prepare each agreement, which shall include, but not be limited to,  the
    54  following provisions:

    55    (a)  a  detailed  description  of  the  eligible project and the total
    56  project cost;

        A. 6544                             4
 
     1    (b) the right of the department to approve any contracts  for  funding
     2  pursuant to the agreement, and to inspect and review the construction of
     3  eligible  projects  to the extent permitted by the laws, rules and regu-
     4  lations of the department;
     5    (c)  remedies in the event of a recipient's failure to comply with the
     6  terms of an agreement;
     7    (d) an agreement by the authority to grant to the recipient,  for  the
     8  partial construction of an eligible project, a specified amount of fund-
     9  ing,  subject  to  the  ability  of the authority to provide such funds,

    10  including any other approvals required by state or federal law and  such
    11  other  conditions as the department shall determine necessary or desira-
    12  ble; and
    13    (e) an agreement by the recipient to:
    14    (i) proceed expeditiously with and complete the  eligible  project  in
    15  accordance with plans approved;
    16    (ii)  operate  and  maintain  the  eligible project in accordance with
    17  applicable requirements of federal and state law;
    18    (iii) establish and maintain project accounts in accordance  with  the
    19  agreement and generally accepted accounting standards; and
    20    (iv) permit any reviews or audits and provide assistance determined to
    21  be reasonable and necessary by the commissioner.

    22    2.  No  provision of this article shall be deemed to limit the depart-
    23  ment's ability to terminate or impose conditions upon the  operation  of
    24  an  eligible  project  pursuant to the provisions of this chapter or any
    25  other provision of law.
    26    3. The commission shall make any such other agreements or covenants as
    27  the commission may deem necessary or desirable in  connection  with  the
    28  funding applicable herein.
    29    §  240.  Inspection  and certification. 1. The department shall ensure
    30  compliance of recipients with each financing agreement by:
    31    (a) retaining the right to inspect and review work  on  each  eligible
    32  project  in  progress  and upon completion, and determining whether such

    33  work was undertaken and completed in compliance with all relevant  plans
    34  and  the  terms  of  such  financing  agreement  to the extent that such
    35  inspections and review are permitted by law and rules and regulations of
    36  the department;
    37    (b) retaining the right to disburse or refuse to disburse payments  to
    38  a  recipient  pursuant  to a financing agreement based upon the determi-
    39  nations of any review or audit;
    40    (c) establishing remedies if work on a eligible project has  not  been
    41  completed  in  accordance  with all relevant plans and the terms of such
    42  financing agreement due to factors within the recipient's control; and
    43    (d) requiring a recipient to maintain appropriate project accounts and

    44  records with respect to any eligible project.
    45    2. Nothing herein shall be construed to affect or diminish the general
    46  authority of the department to  inspect  and  review  the  work  on  any
    47  project  financed  pursuant  to  this article, or to inspect the records
    48  relating to such project, for the purpose of determining compliance with
    49  any other provisions of this chapter.
    50    § 241. Noncompliance; notification; application for  service.  In  the
    51  event  that the work completed pursuant to an agreement is deemed not in
    52  compliance with such financing agreement,  the  department  shall  expe-
    53  ditiously  notify  the  recipient of such noncompliance and indicate the
    54  reasons for such determination.

    55    § 4. The state finance law is amended by adding a new section 99-u  to
    56  read as follows:

        A. 6544                             5
 
     1    §  99-u.  Natural  gas  infrastructure fund. 1. There is hereby estab-
     2  lished in the joint custody of the New York state  energy  research  and
     3  development  authority,  hereafter  "the authority", and the state comp-
     4  troller a special fund to be known as the  "natural  gas  infrastructure
     5  fund".  The  state  comptroller  may  establish  within  the natural gas
     6  infrastructure fund additional accounts or subaccounts and  specify  any
     7  conditions  applicable to the transfer of funds between such accounts or
     8  subaccounts. With respect to each eligible project, the authority  shall

     9  establish and maintain a record of the funds allocated to each project.
    10    2.  Such fund shall consist of funding appropriated by the legislature
    11  for the purpose of such fund or otherwise transferred by law, as well as
    12  investment earnings on amounts in such fund. Funding shall be  paid  out
    13  of  the  account  on  the  audit and warrant of the state comptroller on
    14  vouchers certified or approved by the commission.
    15    3. Funds of the natural gas infrastructure fund shall  be  applied  or
    16  distributed  by  the  authority in accordance with article twelve of the
    17  public service law to provide financial  assistance  to  recipients  for
    18  acquisition and construction of eligible projects and to provide for the

    19  costs of the administration and management of the fund.
    20    § 5. Severability. If any clause, sentence, paragraph, section or part
    21  of  this act shall be adjudged by any court of competent jurisdiction to
    22  be invalid and after exhaustion of  all  further  judicial  review,  the
    23  judgment  shall  not affect, impair or invalidate the remainder thereof,
    24  but shall be confined in its operation to the  clause,  sentence,  para-
    25  graph,  section or part of this act directly involved in the controversy
    26  in which the judgment shall have been rendered.
    27    § 6. This act shall take effect on the ninetieth day  after  it  shall
    28  have  become  a  law;  provided, however, that any rules and regulations
    29  necessary for the timely implementation of this  act  on  its  effective
    30  date shall be promulgated on or before such date.
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