NY State Senate Bill 2015-S7825

Archive: Last Bill Status - In Senate Committee Finance Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 12, 2016	referred to finance

2015-S7825 (ACTIVE) - Details

Current Committee:: Senate Finance
Law Section:: State Finance Law
Laws Affected:: Add Art 17 §§250 - 258, St Fin L

2015-S7825 (ACTIVE) - Summary

Establishes the gas energy system linked deposit program to encourage and assist eligible borrowers within the state to undertake eligible projects that result in the reduction of greenhouse gases.

2015-S7825 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S7825

 TITLE OF BILL :

An act to amend the state finance law, in relation to establishing the
gas energy system linked deposit program

 PURPOSE OF THE BILL :

This bill would establish the gas energy system linked deposit program
to provide an alternative financing mechanism for eligible borrowers
within the state that would like to purchase and install a gas energy
system in connection with a conversion to natural gas, which results
in a greenhouse gas reduction.

 SUMMARY OF SPECIFIC PROVISIONS :

Adds a new Article 17 to the state finance law to establish the "gas
energy system linked deposit program act" for eligible borrowers,
defined under the bill as owners of: a single family residential
dwelling, a multi-family residential dwelling or a commercial
property, which undertakes an eligible project to purchase and install
a gas energy system.

An eligible project would be the purchase and installation of a gas
energy system in connection with a conversion to natural gas which

results in a greenhouse gas reduction. Gas energy systems are
equipment which provides heating and may also include cooling and/or
hot water through natural gas converted to energy.

The linked deposit model has been used in other state programs, such
as at Empire State Development and it is a successful method for
accessing reduced rate financing to help facilitate projects. Under
the instant bill, the Green Bank and NYSERDA would facilitate the
program, consistent with their role in forming public-private
partnerships that provide residents and businesses with affordable
capital based on bank loans at reduced interest rates. These bank
loans are subsidized by corresponding "linked" state deposits.

Lenders making linked loans could not charge any discount, points,
origination fees, handling fees, service charges, refinancing fees or
penalties or any chart other than those normally charged and in such
amounts normally charged by the lender for loans of the type being
made without regard to the program.

NYSERDA would require monitoring and periodic reports on the
activities of the program from lenders and borrowers regarding the
status of the linked loan and the eligible projects to ensure
compliance with the provisions and the intent of this legislation.

 JUSTIFICATION :

According to the Public Service Commission, "Natural gas is cleaner
than other fossil fuels used for home heating and under current market
conditions costs a third as much. Moreover, New York State is
well-located geographically to take advantage of existing and newly
developed natural gas supplies located outside our State but which,
when competitively-priced, are available to supply customers within
the State. New York's location relatively close to these new sources
of supply could provide the State a competitive advantage in
attracting and retaining employers concerned about costs of, and
access to, a reliable source of energy. In addition, consumers may
enjoy significant savings in household fuel expenses which in turn
could benefit the State's economy to the extent that households
redeploy those savings." (CASE 12-G-0297)

This bill offers a tried and true financial tool, that is in no way a
subsidy, for the benefit of owners of single or multi-family
residential properties as well as commercial properties, who wish to
take advantage of the natural gas that is abundant in our region. Not
long ago, natural gas used in New York was shipped from Canada or from
the Gulf. The proximity of this clean fuel source should be taken
advantage of where possible and where a customer decides to do so.

Expanding the availability of natural gas conversions to those who
want to make the investment has the potential to help low-income
customers and also is likely to have important implications for
economic development and the job market within New York. This bill
does not establish subsidies for natural gas, nor does it socialize
the cost of natural gas conversions. It simply provides a funding
mechanism opportunity for New Yorkers who want to improve their
circumstances with respect to energy use.

 PRIOR LEGISLATIVE HISTORY :

New bill.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect on the one hundred twentieth day after it
shall have become a law.

2015-S7825 (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7825

                            I N  S E N A T E

                              May 12, 2016
                               ___________

Introduced  by  Sen.  GRIFFO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Finance

AN ACT to amend the state finance law, in relation to  establishing  the
  gas energy system linked deposit program

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The state finance law is amended by adding a new article 17
to read as follows:
                              ARTICLE XVII
              GAS ENERGY SYSTEM LINKED DEPOSIT PROGRAM ACT
SECTION 250. SHORT TITLE.
        251. DEFINITIONS.
        252. ESTABLISHMENT AND PURPOSE; GAS ENERGY SYSTEM LINKED DEPOSIT
               PROGRAM AUTHORIZATION.
        253. LINKED LOANS.
        254. LINKED LOANS INTEREST RATE; LIMITATION ON LENDER'S FEES.
        255. APPLICATION PROCEDURE.
        256. EARLY MATURITY.
        257. MONITORING AND REPORTING.
        258. RULES AND REGULATIONS.
  S 250. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY  BE  CITED  AS
THE "GAS ENERGY SYSTEM LINKED DEPOSIT PROGRAM ACT".
  S  251.  DEFINITIONS.  WHEN  USED  IN THIS ARTICLE, UNLESS THE CONTEXT
CLEARLY INDICATES OTHERWISE, THE FOLLOWING TERMS SHALL HAVE THE  FOLLOW-
ING MEANINGS:
  1. "CORPORATION" MEANS THE NEW YORK STATE ENERGY RESEARCH AND DEVELOP-
MENT  AUTHORITY,  AS  CONTINUED BY SECTION EIGHTEEN HUNDRED FIFTY-TWO OF
THE PUBLIC AUTHORITIES LAW.
  2. "ELIGIBLE BORROWER" MEANS ANY RECIPIENT WHO IS AN OWNER OF A SINGLE
FAMILY RESIDENTIAL DWELLING, OR AN OWNER OF A  MULTI-FAMILY  RESIDENTIAL
DWELLING,  OR  AN  OWNER  OF  A COMMERCIAL PROPERTY, WHICH UNDERTAKES AN
ELIGIBLE PROJECT TO PURCHASE AND INSTALL A GAS ENERGY SYSTEM.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14749-01-6

S. 7825                             2

  3. "ELIGIBLE PROJECT" SHALL MEAN A PROJECT TO PURCHASE AND  INSTALL  A
GAS ENERGY SYSTEM IN CONNECTION WITH THE CONVERSION TO NATURAL GAS WHICH
RESULTS IN A GREENHOUSE GAS REDUCTION.
  4.  "GAS ENERGY SYSTEM" MEANS THE EQUIPMENT WHICH PROVIDES HEATING AND
MAY ALSO INCLUDE COOLING AND/OR HOT WATER THROUGH NATURAL GAS  CONVERTED
TO ENERGY.
  5.  "LENDER"  MEANS  ANY  STATE  OR  FEDERALLY-CHARTERED SAVINGS BANK,
SAVINGS AND LOAN ASSOCIATION, FEDERAL SAVINGS BANK, FEDERAL SAVINGS  AND
LOAN  ASSOCIATION, OR COMMERCIAL BANK OR TRUST COMPANY DESIGNATED BY THE
CORPORATION TO PARTICIPATE IN THE PROGRAM.
  6. "LINKED DEPOSIT"  MEANS  FINANCIAL  ASSISTANCE  UNDERTAKEN  BY  THE
CORPORATION FOR THE CONSTRUCTION OF AN ELIGIBLE PROJECT THROUGH A DEPOS-
IT  ELIGIBLE TO BE HELD BY SUCH INSTITUTION, PLACED WITH A LENDER BY THE
CORPORATION BEARING  INTEREST  AT  THE  LINKED  DEPOSIT  INTEREST  RATE,
PROVIDED THE LENDER HAS AGREED TO:
  (A)  LEND THE EQUIVALENT VALUE OF SUCH DEPOSIT TO AN ELIGIBLE BORROWER
AT THE LINKED LOAN INTEREST RATE; AND
  (B) PERMIT THE DEPOSIT TO BE COMPRISED OF A SERIES OF CERTIFICATES  OF
DEPOSIT EACH BEARING AN INTEREST RATE EQUAL TO THE LINKED DEPOSIT INTER-
EST RATE FIXED AT THE TIME THE ORIGINAL LINKED DEPOSIT IS PLACED.
  EACH  LINKED DEPOSIT SHALL BE CONTINUOUSLY AND FULLY SECURED BY DIRECT
OBLIGATIONS OF THE STATE OR THE UNITED STATES OF  AMERICA  OR  BY  OBLI-
GATIONS  THE PRINCIPAL AND INTEREST ON WHICH ARE GUARANTEED BY THE STATE
OR THE UNITED STATES OF AMERICA.
  THIS ARTICLE AND RELATED STATUTES THAT REFER TO THIS  ARTICLE  DO  NOT
GRANT  SAVINGS  BANKS,  SAVINGS  AND  LOAN ASSOCIATIONS, FEDERAL SAVINGS
BANKS, OR FEDERAL SAVINGS AND LOAN ASSOCIATIONS  ELIGIBILITY  TO  ACCEPT
PUBLIC  FUNDS  OR  PUBLIC  MONEYS  FROM  PUBLIC  ENTITIES FOR INVESTMENT
PURPOSES. A LINKED DEPOSIT IS INTENDED TO ENABLE  A  LENDER  TO  MAKE  A
LINKED LOAN TO AN ELIGIBLE BORROWER AND SUCH DEPOSIT EARNS A YIELD LOWER
THAN POSTED RATES IN ORDER TO ACCOMPLISH THE GOALS OF THIS ARTICLE.
  7. "LINKED DEPOSIT INTEREST RATE" MEANS A FIXED RATE OF INTEREST WHICH
IS BELOW THE MARKET RATE.
  8.  "LINKED LOAN" MEANS A LOAN FOR PURPOSES OF AN ELIGIBLE PROJECT, IN
AN AMOUNT EQUAL TO A LINKED DEPOSIT AND BEARING INTEREST AT  THE  LINKED
LOAN INTEREST RATE.
  9.  "LINKED  LOAN  INTEREST  RATE"  MEANS A FIXED RATE BELOW THE FIXED
INTEREST RATE THE LENDER WOULD HAVE CHARGED FOR THE LOAN IN THE  ABSENCE
OF A LINKED DEPOSIT BASED ON ITS USUAL CREDIT CONSIDERATIONS.
  10. "PROGRAM" MEANS THE GAS ENERGY SYSTEM LINKED DEPOSIT PROGRAM ACT.
  11.  "RECIPIENT"  MEANS  ANY PERSON WHO IS A RESIDENTIAL OR COMMERCIAL
UTILITY CUSTOMER UNDERTAKING AN ELIGIBLE PROJECT.
  S 252. ESTABLISHMENT AND PURPOSE; GAS  ENERGY  SYSTEM  LINKED  DEPOSIT
PROGRAM  AUTHORIZATION.  THE GAS ENERGY SYSTEM LINKED DEPOSIT PROGRAM IS
HEREBY CREATED. THE PURPOSE OF THIS PROGRAM IS TO ENCOURAGE  AND  ASSIST
ELIGIBLE  BORROWERS WITHIN THE STATE TO UNDERTAKE ELIGIBLE PROJECTS THAT
RESULT IN THE REDUCTION OF GREENHOUSE GASES. THE CORPORATION  IS  HEREBY
AUTHORIZED  TO  USE  FUNDS  IN  THE  GREEN  BANK ESTABLISHED BY A PUBLIC
SERVICE COMMISSION ORDER ISSUED DECEMBER NINETEENTH, TWO THOUSAND  THIR-
TEEN,  CASE 13-M-0412 AND CAPITALIZED MOST RECENTLY PURSUANT TO AN ORDER
OF THE PUBLIC SERVICE  COMMISSION  AUTHORIZING  THE  CLEAN  ENERGY  FUND
FRAMEWORK,  CASE  13-M-0412,  AND  HELD BY THE CORPORATION NOT TO EXCEED
TWENTY MILLION DOLLARS PER FISCAL YEAR FOR THE GAS ENERGY SYSTEM  LINKED
DEPOSIT PROGRAM.
  S  253.  LINKED LOANS. LINKED LOANS SHALL BE MADE BY LENDERS, PURSUANT
TO THE PROGRAM, ONLY TO ELIGIBLE BORROWERS IN CONNECTION  WITH  ELIGIBLE

S. 7825                             3

PROJECTS.  THE  CREDIT  DECISION  FOR MAKING A LINKED LOAN SHALL BE MADE
SOLELY BY THE LENDER.
  S  254.  LINKED  LOANS  INTEREST RATE; LIMITATION ON LENDER'S FEES. 1.
LINKED LOANS SHALL BEAR INTEREST AT THE LINKED LOAN INTEREST RATE. LEND-
ERS SHALL CERTIFY TO THE CORPORATION THAT THE LINKED LOAN INTEREST  RATE
IS BELOW THE INTEREST RATE THE LENDER WOULD HAVE CHARGED FOR THE LOAN IN
THE ABSENCE OF A LINKED DEPOSIT.
  2.  LENDERS  WHO MAKE LINKED LOANS SHALL NOT BE ENTITLED TO CHARGE ANY
DISCOUNT, POINTS, ORIGINATION  FEES,  HANDLING  FEES,  SERVICE  CHARGES,
REFINANCING  FEES  OR  PENALTIES OR ANY CHARGE OTHER THAN THOSE NORMALLY
CHARGED AND IN SUCH AMOUNTS NORMALLY CHARGED BY THE LENDER FOR LOANS  OF
THE TYPE BEING MADE WITHOUT REGARD TO THE PROGRAM.
  S  255.  APPLICATION  PROCEDURE.  1.  THE CORPORATION SHALL PROVIDE AN
APPLICATION FORM TO LENDERS FOR LINKED DEPOSITS. SUCH FORM SHALL REFLECT
THE QUALIFYING INFORMATION AS DEVELOPED BY THE CORPORATION FOR  ELIGIBLE
BORROWERS.  THE  LENDER  SHALL  FORWARD  THE  COMPLETED APPLICATION, ITS
CRITERIA FOR FINDING THAT THE BORROWER IS CREDITWORTHY, AND THE INTEREST
RATE CERTIFICATION REQUIRED PURSUANT TO SECTION TWO HUNDRED  FIFTY-THREE
OF  THIS  ARTICLE, TO THE CORPORATION WHICH SHALL EVALUATE EACH APPLICA-
TION BASED UPON THE AVAILABILITY OF FUNDS FOR THE LINKED DEPOSIT.
  2. IF THE LINKED LOAN APPLICATION RECEIVES THE APPROVAL OF THE  CORPO-
RATION  AND  ANY  OTHER  APPROVALS REQUIRED BY STATE OR FEDERAL LAW, THE
CORPORATION SHALL DEPOSIT FUNDS WITH THE LENDER PURSUANT TO THE TERMS OF
A WRITTEN DEPOSIT AGREEMENT AS THE CORPORATION AND LENDER  SHALL  DETER-
MINE.
  S  256. EARLY MATURITY. UNLESS OTHERWISE AGREED TO BY THE CORPORATION,
THE LINKED DEPOSIT SHALL AUTOMATICALLY MATURE ON THE THIRTIETH  CALENDAR
DAY  AFTER THE OCCURRENCE OF ANY EVENT, MONETARY OR NON-MONETARY, WHICH,
WHETHER DECLARED BY THE LENDER OR NOT, CONSTITUTES A DEFAULT  UNDER  ANY
TERM  OR TERMS OF THE LINKED LOAN AND SUCH DEFAULT REMAINS UNCURED AS OF
SUCH THIRTY CALENDAR DAYS. UPON EARLY REPAYMENT OF A  LINKED  LOAN,  THE
LINKED DEPOSIT SHALL AUTOMATICALLY MATURE WITH PAYMENT DUE TO THE CORPO-
RATION  ON  OR  BEFORE  THE  LAST  DAY  OF THE MONTH IN WHICH PREPAYMENT
OCCURS.
  S 257. MONITORING AND REPORTING.  1.  THE  CORPORATION  SHALL  REQUIRE
PERIODIC  REPORTS  OR  OTHER INFORMATION THE CORPORATION DEEMS NECESSARY
FROM LENDERS AND BORROWERS ON THE STATUS OF  THE  LINKED  LOAN  AND  THE
ELIGIBLE  PROJECTS  TO  ENSURE  COMPLIANCE  WITH  THE PROVISIONS AND THE
INTENT OF THIS ARTICLE.
  2. ON AN ANNUAL BASIS COMMENCING AFTER THE DATE OF THE FIRST LOAN, THE
CORPORATION SHALL SUBMIT TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE
SENATE AND THE SPEAKER OF THE ASSEMBLY A REPORT REGARDING THE ACTIVITIES
OF THE PROGRAM. SUCH REPORT SHALL INCLUDE BUT  NOT  BE  LIMITED  TO  THE
NUMBER  AND TYPE OF LINKED LOANS AND THE AMOUNT THEREOF, THE NUMBER, THE
TYPE AND LOCATION OF  LENDERS  MAKING  LINKED  LOANS  AND  OF  BORROWERS
RECEIVING  LINKED  LOANS,  THE  GEOGRAPHIC  LOCATION OF SUCH LENDERS AND
BORROWERS, AND AN ESTIMATE OF THE GREENHOUSE GAS BENEFITS  GENERATED  BY
SUCH PROGRAM.
  S 258. RULES AND REGULATIONS. THE CORPORATION MAY PROMULGATE RULES AND
REGULATIONS NECESSARY AND REASONABLE FOR THE OPERATION OF SUCH PROGRAM.
  S 2. This act shall take effect immediately.

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Senate Bill S7825

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Archive: Last Bill Status - In Senate Committee Finance Committee

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2015-S7825 (ACTIVE) - Details

2015-S7825 (ACTIVE) - Summary

2015-S7825 (ACTIVE) - Sponsor Memo

2015-S7825 (ACTIVE) - Bill Text download pdf

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Sponsored By

Joseph A. Griffo

Archive: Last Bill Status - In Senate Committee Finance Committee

Actions

2015-S7825 (ACTIVE) - Details

2015-S7825 (ACTIVE) - Summary

2015-S7825 (ACTIVE) - Sponsor Memo

2015-S7825 (ACTIVE) - Bill Text download pdf

Comments