NY State Senate Bill 2017-S5543

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

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

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2018	referred to energy and telecommunications
Apr 07, 2017	referred to energy and telecommunications

2017-S5543 (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Energy

2017-S5543 (ACTIVE) - Summary

Relates to qualified energy conservation bonds; provides for the reallocation of QECB volume cap abandoned or relinquished by certain local governments.

2017-S5543 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5543

 TITLE OF BILL :  An act relating to qualified energy conservation
bonds

 PURPOSE OF THE BILL :

Federal Qualified Energy Conservation Bonds ("QECBs"), established by
Congress under the 2008 Energy Improvement and Extension Act and the
2009 American Recovery and Reinvestment Act (ARRA), provide
tax-subsidy bonding authority that may be issued for a wide array of
energy efficiency, renewable energy, infrastructure and related
purposes. The federal government, through the Internal Revenue Service
and pursuant to an established formula, has provided approximately
$202,000,000 in QECB authority to New York State, the State's Large
Local Governments (LLGs) (defined in the Internal Revenue Code as
those with a population over 100,000), and Tribes.

Of the approximately $202,000,000 in QECB authority already provided
to the State, its municipalities and tribes, approximately $20,000,000
was allocated to the State itself, $87,000,000 to New York City, and
the remainder to LLGs and Tribes. While the State has used its
allocation, to date, approximately $170,000,000 remains unused by the
LLGs and Tribes.

This bill would require that LLG allocations revert back to the State

if an LLG does not state an intent to use its allocation by a certain
date. At such time, the bonding authority would then be either used by
the State or reallocated to other municipalities in amounts deemed
appropriate for planned projects.

 SUMMARY OF PROVISIONS :

Section 1 of the bill would provide definitions for the operative
terms of the legislation.

Section 2 of the bill would:

*Require the chief executive of every LLG or the governing board,
except a city with a population of one million or more, to report to
the President & CEO of NYSERDA no later than 120 days after the
effectives date of the bill, whether the LLG has: (i) issued QECB
bonds, (ii) otherwise reallocated its QECB volume cap, and if such
large local government has not used its cap, whether, how and when it
intends to do so,

*State that any LLG may affirmatively notify that it is reallocating
to the State all or any portion of its unused QECB cap, and;

*State that any LLG that does not file a report as described above
before 120 days after the effective date of the Act shall be deemed as
of such date to have abandoned and voluntarily reallocated to the
state any of the unused QECB volume cap allocated to it.

Section 3 of the bill would state that if any LLG QECB volume cap has
not been used or applied by 18 months after the effective date of the
Act, such cap shall be deemed to have been voluntarily relinquished to
the State.

Section 4 of the bill would state that NYSERDA may promulgate rules
and regulations for the implementation of the Act and may grant
extensions of time for the deadlines set forth.

Section 5 of the bill would state that any cap relinquished or
abandoned pursuant to the Act will be deemed to be reallocated to the
State for further allocation by the State.
Section 6 of the bill would set a deadline of three years after the
effective date of the Act for the issuance of local QECBs.

Section 7 of the bill would address severability.

Section 8 of the bill would state that existing QECB allocations
should not be altered by the bill.

Section 9 of the bill would make it effective immediately.

 JUSTIFICATION :

Pursuant to the 2008 Energy Improvement and Extension Act and the 2009
American Recovery and Reinvestment Act (ARRA), Congress created bond
program opportunities for state and local governments. QECB's are
tax-subsidy bonds which may be issued for certain qualifying energy
purposes. Because these QECBs allocations can provide a valuable
incentive for both public projects and private development, it is in
the State's interest to ensure that these federally supported
allocations are used.

While six LLGs have affirmatively reallocated their volume cap to the
State, the majority have neither used their authority nor reallocated
it for a variety of reasons. As a result, approximately $170,000,000
in clean energy project bonding authority has been unused for nearly
six years since the allocations were first communicated to the LLGs.

QECB bonding authority has a wide range of eligible uses, including
(as enumerated in Section 54D of the Internal Revenue Code). The
breadth of these eligible uses makes this bonding authority a good
candidate for a wide range of projects:

1.To reduce energy consumption in publicly owned buildings by at least
20%;
2.To implement green community programs (including the use of grants,
loans, or other repayment mechanisms to implement such programs);
3.For rural development (including the production of renewable
energy);
4.For certain renewable energy facilities (such as wind, solar, and
biomass);
5.For certain mass commuting projects;
6.Demonstration projects designed to promote the commercialization of
green building technology, agricultural waste projects, advanced
battery manufacturing, technologies to reduce peak use of electricity,
and others; and,
7.Public education campaigns to promote energy efficiency


Finally, the QECB bonding authority is at Treasury rate - lower than
other privately available financing-and the cost is dependent on the
term of the bonds issued and the rating of the bonds issued. The QECB
interest subsidy is the lesser of the interest rate on the bonds or
70% of a weekly index rate (Qualified Tax Credit Bond Rate) published
by US Treasury, correlated with Treasury yields, historically ranging
from 2.9%-3.9%, resulting in a net interest cost to the issuer of
around .3%-1.5%.

 PRIOR LEGISLATIVE HISTORY :

This is new legislation.

 FISCAL IMPLICATIONS :

None.

 EFFECTIVE DATE :
This act shall take effect immediately, provided that the amendments
to the State Finance Law shall not affect the repeal of such section
and shall be deemed repealed therewith and the forestry exemption
assistance in subdivision 13 shall apply beginning with the final tax
rolls filed in 2017.

2017-S5543 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5543
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               April 7, 2017
                                ___________
 
 Introduced by Sen. GRIFFO -- (at request of the Energy Research Develop-
   ment Authority) -- read twice and ordered printed, and when printed to
   be committed to the Committee on Energy and Telecommunications
 
 AN ACT relating to qualified energy conservation bonds
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Definitions. As  used  in  this  act,  unless  the  context
 requires otherwise:
   "President" means the president and chief executive officer of the New
 York state energy research and development authority.
   "Code" means the internal revenue code of 1986, as amended.
   "Issuer"  means the state, the New York State Energy Research Develop-
 ment Authority or a large local government which is authorized to  issue
 QECBs.
   "Large  local  government"  means  a municipality or county, in either
 case, within the state having a population,  as  of  July  1,  2007,  of
 100,000  or  more. For purposes of this act, large local government does
 not include an Indian tribal government.
   "Municipality" means a city or town.
   "NYSERDA" means the New York State  Energy  Research  and  Development
 Authority.
   "Qualified Energy Conservation Bonds" or "QECBs" means bonds, notes or
 other  obligations  issued  as qualified energy conservation bonds under
 section 54D of the code.
   "QECB volume cap" means the aggregate dollar amount of QECBs permitted
 to be issued by the  state  and  large  local  governments  pursuant  to
 section 54D of the code.
   "Unspecified  portion"  has the meaning ascribed to such term in para-
 graph (d) of section two of this act.
   § 2. QECB Volume Cap Utilization Reports; Abandonment and  Relinquish-
 ment  of  QECB  Volume Cap. (a) The chief executive of every large local
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD09997-02-7

 S. 5543                             2
 
 government, except for a city with a population of 1  million  or  more,
 or, if such local government has no chief executive officer, the govern-
 ing  board  of  such local government, shall report to the President and
 CEO  of  NYSERDA  no later than the 120 days following the date this act
 shall take effect:
   (i) whether such large local government has already issued QECBs  and,
 if so, copies of the information returns filed with the Internal Revenue
 Service relating to such QECBs shall also be included in its report, and
 if  such  large  local  government  has  otherwise  reallocated all or a
 portion of its QECB volume cap, a description of such reallocation; and
   (ii) if such large local government has not used and applied the  full
 portion  of  its  QECB  volume cap to the issuance of QECBs, whether and
 when it intends to do so, and if so, the projects or purposes  to  which
 such cap will be applied.
   (b)  In filing the report required by paragraph (a) of this section, a
 large local government may affirmatively state in  such  report  or  may
 notify  the President and CEO of NYSERDA at any time after the filing of
 such report that such large local  government  is  reallocating  to  the
 state  all or any portion of its unused QECB volume cap and such reallo-
 cation shall be deemed to be effective as of the date of the  filing  of
 such report or notification.
   (c) Any large local government which does not file the report required
 by subparagraph (i) of paragraph (a) of this section by the date therein
 required  shall be deemed as of such date to have abandoned, voluntarily
 relinquished and reallocated to the state any of its unused QECB  volume
 cap.
   (d)  Any large local government which timely files the report required
 by subparagraph (i) of paragraph (a) of this section but does not speci-
 fy in such report that it intends to use and apply part, but not all, of
 the full portion of its QECB volume cap for the issuance of QECBs  shall
 be deemed, as of the date of such filing, to have abandoned, voluntarily
 relinquished and reallocated to the state the portion of its unused QECB
 volume cap which is not specified in such report as being intended to be
 used (herein the "unspecified portion").
   § 3. Unused local QECB volume cap reallocated to the state. If (a) the
 report  of  a  large local government submitted pursuant to subparagraph
 (ii) of paragraph (a) of section two of this act expresses an  intention
 to  use  and  apply  any unused portion of that large local government's
 QECB volume cap in connection with the issuance of QECBs, and (b)  QECBs
 have  not  been  issued  by the date eighteen (18) months after the date
 this act shall take effect, or such later date as may be approved by the
 President and CEO of NYSERDA in accordance with  section  four  of  this
 act, then such unused QECB volume cap shall be deemed to have been aban-
 doned  by  such  large local government and voluntarily relinquished and
 reallocated to the state as of such date.
   § 4. Rules and Regulations.  Notwithstanding  any  other  law  to  the
 contrary,  the  President  and  CEO  of NYSERDA may promulgate rules and
 regulations for the implementation of this act and may grant  extensions
 to  the  deadline set forth in section three of this act with respect to
 all or a portion of the QECB volume  cap  allocable  to  a  large  local
 government  to  a  date  or  dates  not later than three years after the
 enactment of this act upon receipt of evidence satisfactory to the Pres-
 ident and CEO that such  large  local  government  has  made  sufficient
 commitments  towards  the issuance of QECBs and that it is reasonable to
 expect that such QECBs will be issued on or before the date three  years
 after the date this act shall take effect.

 S. 5543                             3
 
   § 5. Reallocation of QECB Volume Cap abandoned, relinquished and real-
 located  pursuant  to  this act. Any QECB volume cap which is abandoned,
 relinquished or reallocated to the state pursuant to  this  act  may  be
 further  reallocated  by the Governor to NYSERDA or any other issuer the
 Governor  may  designate, such reallocated QECB volume cap to be applied
 to the issuance of QECBs; provided that in considering any  reallocation
 of  QECB  volume  cap  in an aggregate amount equal to or greater than 5
 million dollars, the New York State Association  of  Counties  shall  be
 consulted prior to the final reallocation.
   §  6.  Deadline for Issuance of local QECBs. No large local government
 or local development corporation may issue QECBs after  the  date  three
 years after the date this act shall take effect.
   §  7.  Severability.  If  any clause, sentence, paragraph, section, or
 part of this act shall be adjudged by any court of  competent  jurisdic-
 tion  to  be invalid, such judgment shall not affect, impair, or invali-
 date the remainder thereof, but shall be confined in  its  operation  to
 the  clause,  sentence,  paragraph,  section,  or  part thereof directly
 involved in the controversy in  which  such  judgment  shall  have  been
 rendered.
   §  8. Existing QECB allocations not altered. Nothing contained in this
 act shall be deemed to supersede, alter or impair any allocation of QECB
 volume cap for the issuance of QECBs by a large local  government  prior
 to  the  effective  date  of this act, as such prior allocation shall be
 evidenced by the issuance of such QECBs and the filing  of  the  related
 information  return  with the internal revenue service or, if such QECBs
 have not yet been issued, the adoption of  a  resolution  prior  to  the
 effective  date  of  this  act  by  the  governing body of a large local
 government approving the issuance of QECBs and  allocating  QECB  volume
 cap to such QECBs.
   § 9. This act shall take effect immediately.

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Senate Bill S5543

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Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Actions

2017-S5543 (ACTIVE) - Details

2017-S5543 (ACTIVE) - Summary

2017-S5543 (ACTIVE) - Sponsor Memo

2017-S5543 (ACTIVE) - Bill Text download pdf

Comments

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Sponsored By

Joseph A. Griffo

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Actions

2017-S5543 (ACTIVE) - Details

2017-S5543 (ACTIVE) - Summary

2017-S5543 (ACTIVE) - Sponsor Memo

2017-S5543 (ACTIVE) - Bill Text download pdf

Comments