STATE OF NEW YORK
________________________________________________________________________
4744
2013-2014 Regular Sessions
IN SENATE
April 22, 2013
___________
Introduced by Sen. MAZIARZ -- read twice and ordered printed, and when
printed to be committed to the Committee on Energy and Telecommuni-
cations
AN ACT to amend the public service law and the state finance law, in
relation to establishing the rural New York natural gas access and
investment 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 finds and
2 declares that the availability of clean and inexpensive natural gas is
3 critical to the success of manufacturers, farms and other economic
4 development initiatives in underserved and rural parts of New York
5 State. The legislature further finds and declares that extending exist-
6 ing natural gas lines and upgrading other existing natural gas infras-
7 tructure will improve access to natural gas and lead to more economic
8 development, greater job opportunity, lower prices for consumers, and
9 greater revenue for the state. The legislature further finds that resi-
10 dential customers and businesses, particularly in upstate New York, are
11 needlessly suffering from higher energy commodity prices than their
12 fellow citizens in more urban and suburban areas. Furthermore, areas of
13 upstate New York are experiencing high unemployment and lack of indus-
14 trial growth which could be alleviated through the extension of existing
15 natural gas infrastructure. Therefore, the legislature hereby acts to
16 provide incentives for the extension of existing natural gas lines and
17 the improvement of other existing natural gas infrastructure for the
18 purpose of economic development in rural and underserved areas of the
19 state.
20 § 2. Short title. This act shall be known and may be cited as the
21 "rural New York natural gas access and investment act".
22 § 3. The public service law is amended by adding a new article 12 to
23 read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10309-01-3
S. 4744 2
1 ARTICLE 12
2 RURAL NEW YORK NATURAL GAS ACCESS AND INVESTMENT ACT
3 Section 236. Definitions.
4 237. Duties and responsibilities of the department in respect to
5 the rural New York natural gas access and investment
6 fund.
7 238. Criteria for selection of eligible projects.
8 239. Financing agreements.
9 240. Inspection and certification.
10 241. Noncompliance; notification; application for service.
11 § 236. Definitions. As used in this article, the following terms shall
12 have the following meanings:
13 1. "Construction" means the construction, building, acquisition,
14 alteration, reconstruction, improvement, enlargement or extension of an
15 eligible project; the inspection and supervision thereof; and the engi-
16 neering, architectural, legal, fiscal, and economic investigations and
17 studies, surveys, designs, plans, working drawings, specifications,
18 procedures, and other actions necessary thereto.
19 2. "Eligible project" means a project intended to extend natural gas
20 supply to rural or underserved areas for economic development purposes
21 by the construction of natural gas distribution facilities.
22 A project will not be considered an eligible project if its completion
23 would result in a bypass or risk of bypass to any local distribution
24 company. A bypass or risk of bypass will exist if the completed project
25 displaces any other local distribution company's gas load or gas load
26 opportunity, unless that local distribution company chooses not to exer-
27 cise such gas load opportunity.
28 3. "Eligible costs" means that portion of an eligible project that may
29 qualify for funding herein.
30 4. "Financing agreement" means an agreement between the department,
31 the authority, and one or more recipients meeting the requirements of
32 this article.
33 5. "Fund" means the rural New York natural gas access and investment
34 fund established pursuant to this article and section ninety-nine-v of
35 the state finance law.
36 6. "Local distribution company" means a franchised natural gas utility
37 fully subject to the jurisdiction and supervision of the department in
38 all respects and having a tariff publicly filed and approved by the
39 commission prior to the disbursement of any monies.
40 7. "Recipient" means a utility or other entity deemed eligible, which
41 is empowered to construct a portion of the eligible project, or any two
42 or more such entities which are acting jointly and with the prior
43 consent of the local distribution company holding a franchise in the
44 area in which the proposed project is located.
45 8. "Commission" means the public service commission.
46 9. "Department" means the department of public service.
47 10. "Authority" means the New York state energy research and develop-
48 ment authority.
49 11. "Franchise" means a gas franchise in accordance with section
50 sixty-eight of this chapter or, in the absence of an express franchise,
51 the current and historic right and obligation to supply gas service in
52 the project area.
53 12. "Natural gas distribution facilities" shall mean, but not be
54 limited to, any main line, service line and appurtenant facilities
55 constructed pursuant to the authority of this article.
S. 4744 3
1 § 237. Duties and responsibilities of the department in respect to the
2 rural New York natural gas access and investment fund. The department
3 shall work in conjunction with the authority to provide assistance in
4 support of the program to make available to eligible recipients funding
5 for the construction of natural gas distribution facilities in accord-
6 ance with the provisions of this article or any other provision of law,
7 as determined by the commission. The department shall act in consulta-
8 tion with the authority regarding determinations of project eligibility,
9 and the authority will subsequently administer funding to recipients.
10 § 238. Criteria for selection of eligible projects. 1. The commission
11 shall establish procedures, which shall include, but not be limited to,
12 criteria and standards for selection of eligible projects; determining
13 the amount of financial assistance to a recipient for an eligible
14 project; and the manner in which funding shall be applied and distrib-
15 uted with the authority.
16 2. The commission shall devise, and the department thereafter imple-
17 ment, an appropriate application process for entities to request project
18 funding from the fund.
19 3. Pursuant to the provisions of this article, the commission shall
20 review, with the advice of local distribution companies and in consulta-
21 tion with the state department of economic development, the authority
22 and any state agency or entity which in the discretion of the commission
23 it should wish to consult, applications for funding of potentially
24 eligible projects. Review of such applications shall include, but need
25 not be limited to,
26 (a) an assessment of the potential amount of customers who would gain
27 capacity to purchase natural gas supply;
28 (b) a demonstration that the proposed affected area is either under-
29 served, or has seen a lack of appropriate infrastructure improvement for
30 any period of time;
31 (c) consideration of the region's and the state's infrastructure ener-
32 gy planning and economic development goals;
33 (d) an independent environmental review, which outlines the potential-
34 ly affected natural resources throughout the area of the project, and a
35 specific plan to avoid environmental health and safety risks surrounding
36 that area during construction;
37 (e) demonstration of the total project cost, along with justification
38 for the cost, including but not limited to the applicant's consideration
39 of using materials sourced within the state as well as the most environ-
40 mentally sound products during construction. No provision in this
41 section shall be deemed to require applicants to, or limit applicants
42 from, purchasing specific materials; and
43 (f) an assessment of compliance with state and federal laws, rules and
44 regulations.
45 4. No provision of this article shall be deemed to require a local
46 distribution company holding a franchise in, or historically serving the
47 area in which the proposed project is located, to undertake a proposed
48 project.
49 5. For all eligible recipients, provisions herein may be combined with
50 existing tax credits, exemptions and other incentives which support
51 natural gas infrastructure, including, but not limited to, eligible
52 recipients undergoing natural gas service expansion and projects affect-
53 ing the retention of jobs in the state.
54 § 239. Financing agreements. 1. Prior to the disbursement of any fund-
55 ing from the fund, the department, the authority and any recipient
56 having the power to contract with respect to the financing of an eligi-
S. 4744 4
1 ble project, shall enter into a grant disbursement agreement, providing
2 for the construction plan of the eligible project. The department shall
3 prepare each agreement, which shall include, but not be limited to, the
4 following provisions:
5 (a) a detailed description of the eligible project and the total
6 project cost;
7 (b) the right of the department to approve any contracts for funding
8 pursuant to the agreement, and to inspect and review the construction of
9 eligible projects to the extent permitted by the laws, rules and regu-
10 lations of the department;
11 (c) remedies in the event of a recipient's failure to comply with the
12 terms of an agreement;
13 (d) an agreement by the authority to grant to the recipient, for the
14 partial construction of an eligible project, a specified amount of fund-
15 ing, subject to the ability of the authority to provide such funds,
16 including any other approvals required by state or federal law and such
17 other conditions as the department shall determine necessary or desira-
18 ble; and
19 (e) an agreement by the recipient to:
20 (i) proceed expeditiously with and complete the eligible project in
21 accordance with plans approved;
22 (ii) operate and maintain the eligible project in accordance with
23 applicable requirements of federal and state law;
24 (iii) establish and maintain project accounts in accordance with the
25 agreement and generally accepted accounting standards; and
26 (iv) permit any reviews or audits and provide assistance determined to
27 be reasonable and necessary by the commissioner.
28 2. No provision of this article shall be deemed to limit the depart-
29 ment's ability to terminate or impose conditions upon the operation of
30 an eligible project pursuant to the provisions of this chapter or any
31 other provision of law.
32 3. The commission shall make any such other agreements or covenants as
33 the commission may deem necessary or desirable in connection with the
34 funding applicable herein.
35 § 240. Inspection and certification. 1. The department shall ensure
36 compliance of recipients with each financing agreement by:
37 (a) retaining the right to inspect and review work on each eligible
38 project in progress and upon completion, and determining whether such
39 work was undertaken and completed in compliance with all relevant plans
40 and the terms of such financing agreement to the extent that such
41 inspections and review are permitted by law and rules and regulations of
42 the department;
43 (b) retaining the right to disburse or refuse to disburse payments to
44 a recipient pursuant to a financing agreement based upon the determi-
45 nations of any review or audit;
46 (c) establishing remedies if work on an eligible project has not been
47 completed in accordance with all relevant plans and the terms of such
48 financing agreement due to factors within the recipient's control; and
49 (d) requiring a recipient to maintain appropriate project accounts and
50 records with respect to any eligible project.
51 2. Nothing herein shall be construed to affect or diminish the general
52 authority of the department to inspect and review the work on any
53 project financed pursuant to this article, or to inspect the records
54 relating to such project, for the purpose of determining compliance with
55 any other provisions of this chapter.
S. 4744 5
1 § 241. Noncompliance; notification; application for service. In the
2 event that the work completed pursuant to an agreement is deemed not in
3 compliance with such financing agreement, the department shall expe-
4 ditiously notify the recipient of such noncompliance and indicate the
5 reasons for such determination.
6 § 4. The state finance law is amended by adding a new section 99-v to
7 read as follows:
8 § 99-v. Rural New York natural gas access and investment fund. 1.
9 There is hereby established in the joint custody of the New York state
10 energy research and development authority, hereafter "the authority",
11 and the state comptroller a special fund to be known as the "rural New
12 York natural gas access and investment fund". The state comptroller may
13 establish within the rural New York natural gas access and investment
14 fund additional accounts or subaccounts and specify any conditions
15 applicable to the transfer of funds between such accounts or subac-
16 counts. With respect to each eligible project, the authority shall
17 establish and maintain a record of the funds allocated to each project.
18 2. Such fund shall consist of funding appropriated by the legislature
19 for the purpose of such fund or otherwise transferred by law, as well as
20 investment earnings on amounts in such fund. Funding shall be paid out
21 of the account on the audit and warrant of the state comptroller on
22 vouchers certified or approved by the commission.
23 3. Funds of the rural New York natural gas access and investment fund
24 shall be applied or distributed by the authority in accordance with
25 article twelve of the public service law to provide financial assistance
26 to recipients for acquisition and construction of eligible projects and
27 to provide for the costs of the administration and management of the
28 fund.
29 § 5. Severability. If any clause, sentence, paragraph, section or part
30 of this act shall be adjudged by any court of competent jurisdiction to
31 be invalid and after exhaustion of all further judicial review, the
32 judgment shall not affect, impair or invalidate the remainder thereof,
33 but shall be confined in its operation to the clause, sentence, para-
34 graph, section or part of this act directly involved in the controversy
35 in which the judgment shall have been rendered.
36 § 6. This act shall take effect on the ninetieth day after it shall
37 have become a law; provided, however, that any rules and regulations
38 necessary for the timely implementation of this act on its effective
39 date shall be promulgated on or before such date.
