Regular Session - March 19, 1997
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8 ALBANY, NEW YORK
9 March 19, 1997
10 11:07 a.m.
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13 REGULAR SESSION
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17 SENATOR JOHN R. KUHL, JR., Acting President
18 STEPHEN F. SLOAN, Secretary
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1 P R O C E E D I N G S
2 ACTING PRESIDENT KUHL: The
3 Senate will come to order. Ask the members to
4 find their places, the staff to find their
5 places. I'll ask everybody in the chamber to
6 rise and join me in saying the Pledge of
7 Allegiance and please remain standing for the
8 invocation.
9 (The assemblage repeated the
10 Pledge of Allegiance to the Flag.)
11 We're very pleased to be joined
12 by Rabbi Shmuel M. Butman of the Lubavitch Youth
13 Organization from Brooklyn, New York, for the
14 invocation.
15 Rabbi.
16 RABBI SHMUEL M. BUTMAN: Dear
17 God, the 11th day of the Jewish month of Nissan,
18 corresponding this year to April 18th, marks the
19 95 years since the birth of revered Jewish
20 leader Menachem M. Schneerson, the Lubavitcher
21 Rebbe. It has become customary to mark this
22 auspicious occasion as the start of this year,
23 95 days of education which you have proclaimed
24 here in the Senate and in the state of New
25 York.
1812
1 Education, as the Rebbe has
2 always emphasized, isn't just teaching facts.
3 Education means, above all, guiding everyone,
4 youth and adults, to improve ourselves to become
5 ever more ethical and caring. That's why
6 education must be a process that continues
7 throughout our life.
8 On the 95th birthday, we start
9 reading Psalm 96 -- we always do one Psalm ahead
10 -- opening with the words, "Sing to God a new
11 song. Sing to God the entire world." This
12 Psalm refers to the Messianic era foretold by
13 the biblical prophets and the Rebbe told us many
14 times that, indeed, this time is imminent and
15 the time of the redemption is upon us.
16 More and more we see, as the
17 Psalm continues, the world is firmly established
18 so that it shall not falter but when that era
19 comes, God, quote, "will judge the nations with
20 fairness and with justice." It is that era
21 which Isaiah prophesizes when he says that
22 nations shall not lift sword upon nation, nor
23 shall they learn war anymore and that there is
24 going to be universal peace and harmony for
25 all. Divine providence has chosen each and
1813
1 every one of you. You should be the custodians
2 of peace and justice of this great state of New
3 York and through you, friends, the entire United
4 States and the United States as a super power
5 through -- the only super power through the
6 United States to the whole world. This is why
7 you are, in a sense, the custodians of peace and
8 justice and harmony for all people throughout
9 the world.
10 Year by year as I come here, the
11 Rebbe told me to do a custom and to offer $1 to
12 charity so that we should know our obligations.
13 I know you're all afraid but this is not a
14 fund-raising mission so we don't have to go
15 outside of the building to do it. I want to put
16 this dollar in charity where it says In God We
17 Trust. This, the Rebbe says, is a symbol that
18 we have an obligation, not only to our friends
19 but we have an obligation to each and every
20 member of society and that is exactly what you
21 do.
22 I want to conclude with what we
23 say in our prayers every Saturday, and I want to
24 tell you after I listened to you, I felt like I
25 was in the synagogue and in the synagogue, we
1814
1 say every Saturday that those who are serving
2 the public, we ask Almighty God to bless them
3 with everything and to keep all ill away. You
4 are definitely those who serve the public and we
5 are asking Almighty God for each and every one
6 of you to keep you and to shine his countenance
7 upon you and to bestow his blessings on each and
8 every one of you, both in your private lives and
9 in your communal lives, and let us all say Amen.
10 Thank you very much.
11 ACTING PRESIDENT KUHL: Amen.
12 The reading of the Journal.
13 THE SECRETARY: In Senate,
14 Tuesday, March 18th. The Senate met pursuant to
15 adjournment. The Journal of Monday, March 17th,
16 was read and approved. On motion, the Senate
17 adjourned.
18 ACTING PRESIDENT KUHL: Hearing
19 no objection, the Journal stands approved as
20 read.
21 Presentation of petitions.
22 Messages from the Assembly.
23 Messages from the Governor.
24 Reports of standing committees.
25 The Secretary will read.
1815
1 THE SECRETARY: Senator Kuhl,
2 from the Committee on Agriculture, offers up the
3 following bills:
4 Senate Print 548, by Senator
5 Kuhl, an act to amend the Agriculture and
6 Markets Law, in relation to duties of the
7 commissioner;
8 3055, by Senator Cook, an act to
9 amend the Agriculture and Markets Law, in
10 relation to the definition of crops;
11 3158, by Senator Kuhl, an act to
12 amend the Agriculture and Markets Law, the Real
13 Property Law and the Real Property Tax Law.
14 Senator Marchi, from the
15 Committee on Corporations, Authorities and
16 Commissions, offers up the following bills:
17 Senate Print 549, by Senator
18 Kuhl, an act to amend the New York State Urban
19 Development Corporation act;
20 999, by Senator Saland, an act to
21 amend the Not-for-Profit Corporation Law;
22 2920, by Senator Leibell, an act
23 to amend the Public Authorities Law, in relation
24 to loan insurance;
25 3030, by Senator Marcellino, an
1816
1 act to amend the Public Authorities Law, in
2 relation to exempting information;
3 3173, by Senator LaValle, an act
4 to amend the Public Authorities Law.
5 All bills directly for third
6 reading.
7 ACTING PRESIDENT KUHL: Without
8 objection, all bills are reported directly to
9 third reading.
10 Communications and reports from
11 state officers.
12 Reports of select committees.
13 Motions and resolutions.
14 The Chair recognizes Senator
15 Bruno.
16 SENATOR BRUNO: Mr. President,
17 could we ask for an immediate meeting of the
18 Higher Ed' Committee in Room 332.
19 ACTING PRESIDENT KUHL: There
20 will be an immediate meeting of the Higher
21 Education Committee, immediate meeting of the
22 Higher Education Committee in the Majority
23 Conference Room, Room 332.
24 Senator Bruno.
25 SENATOR BRUNO: And, Mr.
1817
1 President, can we at this time take up
2 Privileged Resolution 734 by Senator Tully, have
3 its title read, move for its immediate adoption.
4 ACTING PRESIDENT KUHL: The
5 Secretary will read the title to the privileged
6 resolution by Senator Tully.
7 THE SECRETARY: By Senator Tully,
8 Legislative Resolution commending the New Hyde
9 Park Memorial High School Key Club for their
10 dedicated efforts to combat iodine deficiency
11 disorder.
12 ACTING PRESIDENT KUHL: The
13 question is on the resolution. All those in
14 favor signify by saying aye.
15 (Response of "Aye".)
16 Opposed, nay.
17 (There was no response.)
18 The resolution is adopted.
19 The Secretary will read the
20 substitution at the desk.
21 THE SECRETARY: Senator Volker
22 moves to discharge from the Committee on Local
23 Government Assembly Bill Number 1666 and
24 substitute it for the identical Senate Bill
25 Third Reading 350.
1818
1 ACTING PRESIDENT KUHL: The
2 substitution is ordered.
3 Senator Bruno, that brings us to
4 the calendar.
5 SENATOR BRUNO: Mr. President,
6 can we at this time take up the
7 non-controversial calendar.
8 ACTING PRESIDENT KUHL: The
9 Secretary will read the non-controversial
10 calendar.
11 THE SECRETARY: Calendar Number
12 115, by Senator Holland, Senate Print 233, an
13 act to amend the Domestic Relations Law, in
14 relation to notification concerning orders of
15 support.
16 ACTING PRESIDENT KUHL: The
17 Secretary will read the last section.
18 THE SECRETARY: Section 2. This
19 act shall take effect immediately.
20 ACTING PRESIDENT KUHL: Call the
21 roll.
22 (The Secretary called the roll.)
23 THE SECRETARY: Ayes 40.
24 ACTING PRESIDENT KUHL: The bill
25 is passed.
1819
1 THE SECRETARY: Calendar Number
2 116, by Senator Skelos, Senate Print 332, an act
3 to amend the Social Services Law, in relation to
4 access to certain conviction records.
5 ACTING PRESIDENT KUHL: The
6 Secretary will read the last section.
7 THE SECRETARY: Section 2. This
8 act shall take effect on the 120th day.
9 ACTING PRESIDENT KUHL: Call the
10 roll.
11 (The Secretary called the roll.)
12 THE SECRETARY: Ayes 43.
13 ACTING PRESIDENT KUHL: The bill
14 is passed.
15 THE SECRETARY: Calendar Number
16 117, by Senator Saland, Senate Print 489, an act
17 to amend the Family Court Act, in relation to
18 evidence of child neglect.
19 ACTING PRESIDENT KUHL: The
20 Secretary will read the last section.
21 THE SECRETARY: Section 4. This
22 act shall take effect in 120 days.
23 ACTING PRESIDENT KUHL: Call the
24 roll.
25 (The Secretary called the roll.)
1820
1 THE SECRETARY: Ayes 44.
2 ACTING PRESIDENT KUHL: The bill
3 is passed.
4 THE SECRETARY: Calendar Number
5 185, by Senator Levy, Senate Print 605, an act
6 to amend the Vehicle and Traffic Law, in
7 relation to criminal history checks on school
8 bus attendants.
9 SENATOR PATERSON: Lay it aside.
10 ACTING PRESIDENT KUHL: Lay the
11 bill aside.
12 The Secretary will continue to
13 call the non-controversial calendar.
14 THE SECRETARY: Calendar Number
15 250, by Senator Bruno, Senate Print 706, an act
16 to amend the Vehicle and Traffic Law, in
17 relation to the disqualification of a bus driver
18 in certain instances.
19 SENATOR PATERSON: Lay it aside.
20 ACTING PRESIDENT KUHL: Lay the
21 bill aside.
22 THE SECRETARY: Calendar Number
23 256, by Senator Libous, Senate Print 1231, an
24 act to amend the Uniform City Court Act, in
25 relation to an acting City Court judge for the
1821
1 city of Binghamton.
2 SENATOR BRUNO: Lay it aside for
3 the day at the request of the sponsor.
4 ACTING PRESIDENT KUHL: Lay the
5 bill aside at the request of the sponsor for the
6 day.
7 THE SECRETARY: Calendar Number
8 345, by Senator Seward, Senate Print 3486, an
9 act to amend the Public Service Law and the
10 Uniform Commercial Code, in relation to
11 financing of electric utility intangible costs
12 and assets.
13 SENATOR PATERSON: Lay it aside,
14 please.
15 ACTING PRESIDENT KUHL: Lay the
16 bill aside.
17 THE SECRETARY: Calendar Number
18 362, by Senator Seward, Senate Print 379-A, an
19 act to amend the Tax Law and the Public Service
20 Law, in relation to a reduction in the rate of
21 tax.
22 SENATOR PATERSON: Lay it aside.
23 ACTING PRESIDENT KUHL: Senator
24 Paterson, did you want to lay that bill aside?
25 SENATOR PATERSON: I've changed
1822
1 my mind, Mr. President. Let it go.
2 ACTING PRESIDENT KUHL: The
3 Secretary will read the last section.
4 THE SECRETARY: Section 13. This
5 act shall take effect immediately.
6 ACTING PRESIDENT KUHL: Call the
7 roll.
8 (The Secretary called the roll.)
9 THE SECRETARY: Ayes 45.
10 ACTING PRESIDENT KUHL: The bill
11 is passed.
12 THE SECRETARY: Calendar Number
13 368, by Senator Seward, Senate Print 3485, an
14 act to amend the Public Service Law, the Public
15 Authorities Law, the Economic Development Law
16 and the Tax Law, in relation to the provision of
17 low cost power.
18 SENATOR PATERSON: Lay it aside.
19 ACTING PRESIDENT KUHL: Lay the
20 bill aside.
21 ACTING PRESIDENT KUHL: Senator
22 Bruno, that completes the reading of the non
23 controversial calendar.
24 SENATOR BRUNO: Mr. President,
25 can we at this time take up the controversial
1823
1 calendar, beginning with Calendar Number 368.
2 ACTING PRESIDENT KUHL: The
3 Secretary will read the title to Calendar Number
4 368, Senate Print 3485, by Senator Seward.
5 THE SECRETARY: Calendar Number
6 368, by Senator Seward, Senate Print 3485, an
7 act to amend the Public Service Law, the Public
8 Authorities Law, the Economic Development Law
9 and the Tax Law, in relation to the provision of
10 low cost power.
11 ACTING PRESIDENT KUHL: Senator
12 Paterson.
13 SENATOR PATERSON: Mr. President,
14 would Senator Seward please yield for an
15 explanation?
16 ACTING PRESIDENT KUHL: Senator
17 Seward, Senator Paterson has asked for an
18 explanation of Calendar Number 368.
19 SENATOR SEWARD: Thank you very
20 much, Mr. President.
21 I'd be happy to provide an
22 explanation. This bill is called the "Power for
23 Prosperity" bill. It's a bill that would make
24 available 400 megawatts of low cost electricity
25 to businesses who are considering relocating out
1824
1 of New York State or otherwise leaving the
2 electric grid because of the high energy costs
3 here in New York.
4 Specifically under the bill, 200
5 megawatts would be supplied by the Power
6 Authority, 200 megawatts by the investor-owned
7 utilities and the utilities would receive a GRT
8 tax credit to replace the utility's lost
9 revenues by providing this low cost power and
10 this approach prevents any cost shifting to
11 other utility customers.
12 ACTING PRESIDENT KUHL: Senator
13 Paterson.
14 SENATOR PATERSON: Mr. President,
15 if Senator Seward would yield for a question.
16 ACTING PRESIDENT KUHL: Senator
17 Seward, do you yield?
18 SENATOR SEWARD: Certainly.
19 ACTING PRESIDENT KUHL: The
20 Senator yields.
21 SENATOR PATERSON: Senator, I
22 just have one question and it really relates to
23 low cost power that -- under 400 kilowatts, and
24 I wanted to know if there was any thought in
25 drafting this legislation of extending this
1825
1 protection to smaller businesses or users that
2 use less than 400 kilowatts.
3 SENATOR SEWARD: Well, Mr.
4 President, the 400 kilowatts of load that's
5 cited in the bill is consistent with the ongoing
6 programs in the state of New York. I must tell
7 you, I'm as concerned as anyone in terms of
8 providing rate relief for smaller businesses as
9 well and, in fact, as part of our -- other
10 pieces of legislation, one that has passed
11 today, the GRT phase-down and the next bill
12 we'll be considering, certainly we're looking to
13 provide relief for small businesses in other
14 ways and -- because that is an important issue.
15 ACTING PRESIDENT KUHL: Senator
16 Paterson.
17 SENATOR SEWARD: This particular
18 bill, in terms of the low cost electricity, is
19 consistent with ongoing programs that we have
20 already in the state. That's where that number
21 comes from.
22 SENATOR PATERSON: Well, thank
23 you, Mr. President.
24 On the bill, there's certainly no
25 problem with this legislation. Hopefully in a
1826
1 foresighted way, the Legislature will address
2 the issue of small business, job creation,
3 individuals that could use the same kind of low
4 cost power that's being provided here and will
5 probably help to stimulate activity in the job
6 market, but as far as this bill is concerned,
7 the explanation is satisfactory.
8 ACTING PRESIDENT KUHL: Is there
9 any other Senator wishing to speak on the bill?
10 (There was no response.)
11 Hearing none, the Secretary will
12 read the last section.
13 THE SECRETARY: Section 8. This
14 act shall take effect immediately.
15 ACTING PRESIDENT KUHL: Call the
16 roll.
17 (The Secretary called the roll.)
18 THE SECRETARY: Ayes 50.
19 ACTING PRESIDENT KUHL: The bill
20 is passed.
21 THE SECRETARY: Calendar Number
22 345, by Senator Seward, Senate Print 3486, an
23 act to amend the Public Service Law, the Uniform
24 Commercial Code Act, in relation to financing of
25 electric utility intangible costs and assets.
1827
1 SENATOR PATERSON: Explanation.
2 ACTING PRESIDENT KUHL: Senator
3 Seward, an explanation of Calendar Number 345
4 has been requested by Senators Paterson and
5 Abate.
6 SENATOR SEWARD: Certainly, Mr.
7 President.
8 As has been mentioned with the
9 passage of the previous two bills, high electric
10 rates in this state are not only strangling
11 businesses and job creation in this state but
12 also is making New York a more expensive place
13 to live than it needs to be.
14 We have to deal with the problem
15 of high electric rates and this -- the bill
16 before us addresses the problem of electric
17 rates by establishing a financing mechanism
18 through which such rates could be reduced as a
19 result of the low cost financing of certain
20 utility assets and intangible properties of the
21 utilities, such as environmental remediation,
22 demand side management provisions, IPP contracts
23 and the like.
24 Under the bill, it authorizes but
25 doesn't require utilities to present a
1828
1 refinancing plan to the Public Service
2 Commission for approval. Now, the Commission,
3 under the bill, could approve a part of it -- of
4 the plan and -- but in approving any refinancing
5 plan, it would require that significant
6 ratepayer savings would result. That's a
7 precondition of acceptance of any refinancing
8 plan under the bill.
9 The plan would also propose
10 raising from the level of expectation to the
11 level of property right these intangible
12 properties belonging to the utilities. That's
13 where the term "securitization" comes from.
14 Very important, under this bill,
15 the commission would be authorized to obtain
16 concessions from the utilities as -- such as a
17 mandatory multi-year rate reduction or a write
18 down of a portion of some of the utility's
19 stranded costs. There's a great deal of
20 flexibility in this legislation, but the only
21 thing that is not flexible here is that it would
22 require substantial rate relief for the
23 consumers of this state.
24 Now, this bill is meant as a
25 transition to the coming competition in the
1829
1 electric utility marketplace. It's not a
2 substitute for deregulation. It's merely an
3 attempt to provide an additional way to reduce
4 the -
5 ACTING PRESIDENT KUHL: Senator
6 Seward, if I might interrupt you. There's -
7 you're having a little competition. I don't
8 know whether they're trying to explain this
9 wonderful bill or whether they're just trying to
10 have some other sort of conversation, but will
11 the Senators please take their seats, or if you
12 have to have a conversation, take it out of the
13 chamber.
14 Senator Seward.
15 SENATOR SEWARD: Mr. President,
16 the point I was just making is under this
17 legislation -- this is not a total comprehensive
18 bill to deregulate the utility industry in the
19 state of New York. It's not meant to be. It's
20 merely meant to provide a tool for rate relief
21 for utility ratepayers in this state. Anyone
22 who gets a utility bill in the mail would
23 benefit from this legislation.
24 Now, since we passed this bill
25 last year, we've had a number of developments in
1830
1 the electric industry, specifically the Niagara
2 Mohawk agreements that they announced just last
3 week with their Independent Power Producers.
4 They are in the process of either modifying or
5 buying out a number of these contracts and
6 Niagara Mohawk, to finance this, would be going
7 out to the marketplace to borrow some in excess
8 of $3 billion. That is going to result in -
9 because of the buyout of these contracts and
10 modifying them, that's going to result in rate
11 relief, as an example, for Niagara Mohawk
12 customers.
13 If this bill becomes law, Niagara
14 Mohawk -- it's estimated that the savings could
15 increase by some $220 million over the next few
16 years and that would be $220 million less that
17 just the ratepayers and consumers in the Niagara
18 Mohawk service territory would be paying.
19 That's real rate relief under this legislation.
20 So I would urge my colleagues,
21 let's move this bill today. Let's get the
22 discussions started with the other house in
23 coming up with a two-house bill. Our Majority
24 Leader just the other day at a press conference
25 clearly stated that this house would consider a
1831
1 chapter amendment to make sure that the savings
2 derived from securitization would be directed to
3 residential ratepayers and small businesses. I
4 fully concur on that, and we're fully prepared
5 to present such a chapter amendment.
6 In the meantime, let's pass this
7 bill today. Let's get discussions going. The
8 ratepayers of this state, the consumers of this
9 state, anyone who gets an electric bill in the
10 mail deserve the type of rate relief that's
11 provided under this measure.
12 ACTING PRESIDENT KUHL: Senator
13 Abate.
14 SENATOR ABATE: Yes. I have an
15 amendment before you, Mr. President, and I would
16 like to waive the reading of that amendment.
17 ACTING PRESIDENT KUHL: There is
18 an amendment at the desk, Senator Abate. You're
19 absolutely correct. The reading of that is
20 waived and you're permitted an opportunity to
21 explain the amendment at this time.
22 SENATOR ABATE: Thank you, Mr.
23 President.
24 I commend Senator Seward in this
25 last statement that he is considering and will
1832
1 introduce an amendment. This is a great
2 opportunity to amend this bill. I believe that
3 his intent is that there will be significant
4 savings that do go to all ratepayers.
5 I agree with Senator Seward that
6 securitization is necessary to maintain
7 financial stability for the utility companies.
8 It will allow them to borrow at a lower rate.
9 It will allow them to recover the economic costs
10 that have been imposed upon them by government.
11 It will allow them to recover some of the
12 stranded costs that cannot be recouped in a
13 competitive market, but the plan and the
14 legislation put forward is not workable unless
15 it clearly defines what savings will be produced
16 to the small business owner and the residential
17 ratepayer and it cannot be limited just to
18 industrial users.
19 So while the bill does provide -
20 and the PSC will define "significant rate
21 savings" -- my concern is we are abrogating our
22 responsibility in the Legislature not to define
23 what, in fact, "significant" means, and so I am
24 offering an amendment that defines "significant"
25 rate savings to small businesses and residential
1833
1 ratepayers. An amendment would define it as
2 such: Ten percent in the first year. Savings
3 would go to the small business and residential
4 ratepayer and then within five years, in a
5 cumulative fashion, it would reach a 20 percent
6 savings to those ratepayers.
7 Now, you may say, let's just
8 trust PSC. They will have the interest of
9 everyone in New York State. I suggest that if
10 we look at recent experience, we should be
11 defining what those savings are and not the PSC,
12 and I look to the recently proposed deregulation
13 plan for Con Edison, and they proposed a 3.3
14 percent reduction for residential and small
15 business ratepayers compared to a 25 percent
16 reduction for industrial rates. That's a
17 seven-time difference, and you may say, Well,
18 maybe that difference is warranted but, if you
19 look at the history, industrial users pay 21
20 percent more than the average industrial user
21 nationwide but residential and small business
22 users pay a whopping 60 percent more than the
23 average. So they, I believe, in their proposed
24 Con Edison agreement, did shortchange the small
25 business and residential ratepayer.
1834
1 I believe in light of that
2 history, we need to define and ensure that
3 everyone in New York State benefits by
4 securitization. We need the utilities to
5 benefit. We need to keep them financable, but
6 we also have to ensure that a significant -- and
7 we need to define what that means. Some of
8 those savings have to be passed on to those
9 entities that will be least able to compete once
10 it goes into a competitive market. The small
11 business and residential ratepayers will not
12 have the leverage power to ensure lesser rates
13 for themselves.
14 So that's why I'm putting forth
15 this amendment. The 10 percent and 20 percent
16 were already enacted into law in California in
17 1996. Let's look to the wisdom of California.
18 They also sought, in their wisdom, to ensure and
19 define "ratepayer savings", and I hope -- this
20 is a good bill. It doesn't go far enough. I
21 hope that it's the intention of the good Senator
22 to amend this. I hope he will agree with this
23 amendment together today and we could all, as
24 united in a bipartisan way, support this with
25 this amendment.
1835
1 ACTING PRESIDENT KUHL: Is there
2 any other Senator wishing to speak on the
3 amendment?
4 Senator Seward.
5 SENATOR SEWARD: Yes, on the
6 amendment briefly, Mr. President.
7 I certainly welcome the other
8 side of the aisle to the cause of lowering
9 electric rates in the state of New York, and
10 isn't it refreshing that after ten or fifteen
11 years of constantly rising electric rates in
12 this state, that today finally we're talking
13 about how far rates should be reduced and can be
14 reduced in the state of New York. That's a
15 significant change in direction of this state
16 and I, frankly, applaud the Public Service
17 Commission and the leadership over there. They
18 are moving the electric rates in the right
19 direction and obviously we can assist in that
20 effort legislatively, and that's what this
21 legislation, the other two bills that we've
22 already passed today, can help do.
23 I've got concerns, serious
24 concerns, with the amendment as has been
25 proposed in terms of specifically citing a 10 or
1836
1 20 percent rate reduction in the law. Obviously
2 laudable goals and, believe me, I want to be
3 there with that type of rate relief, and I think
4 we can be, but the problem in putting it into
5 law, in my mind, is this: Every utility is
6 different in the state of New York and every one
7 of the qualified rate orders that would be
8 coming forth through the securitization bill
9 would be necessarily different because
10 conditions in every utility are different in
11 terms of what IPP contracts they may have and
12 other types of contracts. It's all different.
13 You cited the California statute
14 as an example. They do, in fact, have ten
15 percent in their legislation -- in their
16 legislation which is now law over there, but New
17 York is not California. They had far different
18 circumstances. In fact, they set up a quasi
19 public financing mechanism for the utilities to
20 use in California which helped them obtain the
21 ten percent level, that also they had -- a
22 number of their IPP contracts were expiring, so
23 that provided additional savings as well.
24 So the point is New York is not
25 California, and I believe that the PSC needs the
1837
1 flexibility to hammer out the arrangements with
2 these utilities so that we can achieve
3 significant rate relief.
4 The last time this Legislature -
5 that was before you and I, Senator, were here -
6 the last time this Legislature micro-managed
7 this electric utility industry in this state,
8 specifically in the law, was we did the six-cent
9 law which required utilities to pay six cents
10 per kilowatt hour for the power supplied by the
11 Independent Power Producers and it took us six
12 years to negotiate that out of the law and it
13 today continues to cause high rates in this
14 state because we were so specific in the law.
15 So I'm content to say this
16 today. We are all collectively for significant
17 rate relief. I have a serious problem in
18 specifying specific numbers in the statutes in
19 the state of New York. For example, if eight or
20 nine percent relief can be achieved under
21 securitization, are you saying that we shouldn't
22 provide that eight or nine percent relief under
23 this amendment? That's what would happen.
24 So I think let's all work
25 together to provide significant rate relief for
1838
1 the people of this state and I've already
2 stated, of course, in quoting our Majority
3 Leader, that this house fully intends to pass a
4 chapter amendment to make sure that the
5 residential and small business owners are the
6 true beneficiaries under a securitization plan.
7 ACTING PRESIDENT KUHL: Senator
8 Onorato, why do you rise?
9 SENATOR ONORATO: Senator Seward,
10 would you yield to a question, please?
11 ACTING PRESIDENT KUHL: Senator
12 Seward, do you yield to a question from Senator
13 Onorato?
14 SENATOR SEWARD: Certainly.
15 ACTING PRESIDENT KUHL: The
16 Senator yields.
17 SENATOR ONORATO: We're hearing
18 today -- yesterday we were in agreement on tax
19 relief again and today we're on the same level,
20 again trying to bring some rate relief to our
21 consumers. You had some difficulty in
22 specifying a certain percentage on savings, but
23 perhaps rather than a certain percentage, we
24 could have a proportionate as to whatever the
25 large utility users, such as the industry, if
1839
1 they're going to -- whatever their percentage is
2 going to be, if it would be 50 percent savings,
3 that a comparable savings should be awarded to
4 the residential and small business, not the way
5 it is drafted right now where the large
6 industrial would receive approximately seven
7 times the amount of rate relief that the small
8 business person and the residential user would
9 receive. What we're trying to do is bring them
10 together so that everybody gets a fair cut of
11 that particular pie. This is what we're trying
12 to accomplish here.
13 SENATOR SEWARD: Mr. President
14 and Senator Onorato, I think we're talking about
15 apples and oranges here. There's some
16 discussion about the PSC staff and Con Edison
17 agreement or proposal that you're citing some
18 numbers there in terms of rate relief to certain
19 categories of customers in the Con Ed service
20 territory. That is going to be the subject of a
21 number of evidentiary hearings and the full
22 Public Service Commission has yet to even
23 consider that. That's -- that full arrangement
24 that's been publicized in recent days is going
25 to get a full airing and ultimately a decision
1840
1 made.
2 This legislation is not related
3 to that particular announced settlement between
4 the PSC staff and Con Ed. This is a separate
5 issue, and this is one -- as this bill is
6 currently drafted before us, it would provide
7 across the board savings to all categories of
8 customers. Anybody who gets an electric bill in
9 the mail would receive savings under this
10 particular legislation before us.
11 What I'm suggesting, in echoing
12 what Senator Bruno has already said earlier this
13 week, is that let us -- we will be willing to
14 provide a chapter amendment that would, in fact,
15 say that under this particular securitization
16 bill, that any savings derived here would be
17 directed toward residential and small
18 businesses.
19 ACTING PRESIDENT KUHL: Senator
20 Onorato.
21 SENATOR ONORATO: Senator Seward,
22 again, what I'm trying to get at is that
23 whatever savings are finally arrived at, that
24 they be proportionately given out to both the
25 industrial, the small business and the
1841
1 residential, not that the discrepancy between
2 the upper industrial should be so disparate to
3 discriminate against the residential and the
4 small businessman.
5 What I'm striving for here is
6 that everybody gets a justifiable cut in their
7 rates, not one so far out of proportion that
8 everybody else says, Why are they getting so
9 much of a break? Why am I continuing to
10 subsidize them with my higher rate than they
11 are?
12 ACTING PRESIDENT KUHL: Senator
13 Dollinger, on the amendment.
14 SENATOR DOLLINGER: On the
15 amendment, will Senator Seward yield to a
16 question?
17 ACTING PRESIDENT KUHL: Senator
18 Seward, do you yield for a question on the
19 amendment?
20 SENATOR SEWARD: Certainly, Mr.
21 President.
22 ACTING PRESIDENT KUHL: The
23 Senator yields.
24 SENATOR DOLLINGER: Do I
25 understand, Mr. Chairman, that the Majority
1842
1 intends to bring a chapter amendment to this
2 bill to the floor at some time in the future
3 that will define -- better define the term
4 "significant savings" vis-a-vis small business
5 customers and residential customers?
6 SENATOR SEWARD: Mr. President,
7 what I'm suggesting, in echoing what Senator
8 Bruno has indicated earlier this week, is that
9 -- in fact, two weeks ago we had a -- the
10 Energy and Telecommunications Committee had a
11 hearing on this particular piece of legislation
12 and the PSC spokesmen at that hearing were -
13 indicated that the PSC's intent was if
14 securitization was to become law -- and they
15 were, in fact, looking at some of these pro
16 posals from the utilities -- that they intended
17 to direct the savings from securitization to the
18 residential ratepayer and small businesses, and
19 that is the PSC intent and Senator Bruno has
20 indicated that we're fully prepared on this side
21 of the aisle to present a chapter amendment that
22 would, in fact, say that the savings would be
23 directed toward residential and small
24 businesses.
25 I'm not saying that we should put
1843
1 an exact percentage in the law in the state of
2 New York. In discussing Senator Abate's
3 amendment, I think I've made my case there in
4 terms of not putting a specific amount in the
5 law of the state of New York but relying on the
6 words "significant rate relief."
7 SENATOR DOLLINGER: Again through
8 you, Mr. President.
9 ACTING PRESIDENT KUHL: Senator
10 Seward, do you yield to yield? The Senator
11 continues to yield.
12 SENATOR DOLLINGER: I understand
13 the Chairman's opposition to a specific number,
14 but if this amendment said it was the target and
15 that clearly ten percent relief would constitute
16 significant savings, is that amendment
17 acceptable to the Chair -- or to the bill?
18 SENATOR SEWARD: Well, Mr.
19 President, I would have to say that, as I stated
20 earlier, every utility is different. I just -
21 we just can't be putting numbers in the law. I
22 am fully confident that if we direct the savings
23 to residential and small businesses, if we -
24 under this bill, the PSC works out the savings
25 plans with the utilities and it results in a
1844
1 significant rate relief, that's the direction
2 that I feel we should be going.
3 I should point out in the law -
4 or in the bill, there is full public notice
5 provided for here and, in fact, judicial
6 review. If, in fact, there are those who would
7 question the decision of the PSC as it relates
8 to these proposed refinancing plans, there is an
9 opportunity there for a process to have these
10 reviewed through the judicial process. So these
11 issues of whether or not there were savings
12 derived that were significant enough, I think
13 those are issues that could be decided in that
14 forum, should that be the case.
15 SENATOR DOLLINGER: Again through
16 you, Mr. Chairman. It just seems to me that
17 Senator Abate's amendment gives the Majority the
18 opportunity to do what they've already said they
19 will do, which is to bring forward a chapter
20 amendment that will indicate that the benefits
21 of securitization will be spread among all the
22 ratepayers and across the rate base. I mean, I
23 don't think that anybody has said -- or I
24 haven't heard any evidence yet in this debate
25 that a ten percent savings for the residential
1845
1 and small business customers is not attainable.
2 It's not feasible and it seems to me we're just
3 telling the utilities that their goal has to be
4 to share the benefits of a program that needs
5 the blessing of all the people of the state of
6 New York. I don't necessarily think that's
7 unreasonable.
8 I support the bill. I'll talk on
9 the bill later, but it seems to me that
10 targeting -- and we're not intervening in the
11 marketplace. We're simply saying that we're
12 giving -- we're using the state power to create
13 a particular method of financing that should
14 reduce rates. We're simply asking that it be
15 distributed among those people, both residential
16 ratepayers and small businesses who perhaps
17 could benefit most from it. I also agree that
18 the industrial base needs rate relief.
19 I intend to vote in favor of the
20 bill when we get there because that's what I
21 think it will do, but I also think there's some
22 need to spread this benefit around.
23 ACTING PRESIDENT KUHL: Senator
24 Gold, did you wish to speak to the amendment?
25 SENATOR GOLD: I just wanted to
1846
1 ask the sponsor to yield to a question.
2 ACTING PRESIDENT KUHL: On the
3 amendment, Senator? Does it relate to the
4 amendment?
5 SENATOR GOLD: Yeah.
6 ACTING PRESIDENT KUHL: Okay.
7 Senator Seward, do you yield to a question from
8 Senator Gold?
9 SENATOR SEWARD: Certainly.
10 ACTING PRESIDENT KUHL: The
11 Senator yields.
12 SENATOR GOLD: Senator, the only
13 question -- and it's kind of in the area that
14 Senator Dollinger was going around, but I would
15 like to hit it right there. My memo on the bill
16 indicates that there is opposition and that part
17 of that opposition, in fact, comes from the
18 Majority in the other house, and what I don't
19 understand is why we are going through an
20 exercise today.
21 We in the state of New York do
22 not pass concepts. We pass words that go into a
23 statute so people can read the statute and
24 understand the law, and certainly the laws are
25 complicated enough. Why do we have to have a
1847
1 bill out there that some day will have a chapter
2 which amends that bill and somebody's got to
3 read two pieces of paper and put it together?
4 If your side of the aisle
5 acknowledges that this idea can be improved with
6 a chapter -- this bill is not apparently going
7 in the Assembly -- why don't we lay your bill
8 aside for the day. Nothing will be lost. Put
9 in whatever chapter you think or the Abate
10 amendment or something that does this and give
11 us one bill that somebody some day may be able
12 to read as one law. I don't understand why
13 we're being asked to vote on something that your
14 side acknowledges is not in that form to be the
15 law.
16 Now, one more part of this
17 question. We have on many occasions in
18 committee been asked to report bills out of
19 committee as amended and we do that knowing that
20 the bill that we are voting for is going to have
21 some change, but this is not the committee.
22 This is the Senate now acting and it seems to me
23 that to act on something which you as a sponsor
24 and Senator Bruno as our leader acknowledge,
25 requires some amendment, some change, is just an
1848
1 exercise in futility, other than to say today's
2 the day that we're going to deal with this
3 issue. Today's the day that the press releases
4 go out on this issue and we don't want to change
5 today because maybe next Monday, Tuesday, you've
6 got a different press organization set up.
7 Senator, you say we haven't
8 discussed this in years and there's no way that
9 I can avoid the fact that you're going to get
10 the credit that we're discussing it, and you
11 should get the credit. We're discussing it.
12 All I'm suggesting is if you don't want to
13 accept Senator Abate's amendment today, if you
14 want to mull that through with suggestions that
15 have been talked about by your side, lay the
16 bill aside. Let us take a bill that is one
17 bill. We don't need a chapter and put it all
18 together.
19 Now, the question, what's wrong
20 with that?
21 SENATOR SEWARD: Well, Mr.
22 President and Senator Gold, you mentioned this
23 as being just a concept, and I would take
24 exception to that. This securitization
25 legislation which first came out here in New
1849
1 York last June which we passed late in June in
2 this house, since that time actually has become
3 law in two states, California and our
4 neighboring Pennsylvania and, in fact, it is
5 working there and previous to that over in the
6 state of Washington and other states are
7 considering it. This is a concept, as you call
8 it, that is law in other states and is working
9 in other states.
10 The reason that I would urge my
11 colleagues to -- let's pass this bill as
12 proposed today is that I'm fully confident that
13 by passing the bill, that will help facilitate
14 those discussions with the other house. Let's
15 get something on the table that we can provide
16 for the other house. That's my reasoning in
17 moving ahead with the bill today.
18 SENATOR GOLD: Mr. President,
19 will the gentleman yield for one more question?
20 ACTING PRESIDENT KUHL: Senator
21 Seward, do you yield to another question from
22 Senator Gold?
23 SENATOR SEWARD: Certainly.
24 ACTING PRESIDENT KUHL: The
25 Senator yields.
1850
1 SENATOR GOLD: Senator, I
2 wouldn't say this to everybody, but you're a
3 person who I respect as having an open mind.
4 Each year, the rough number of 2,000 bills -
5 maybe it's 1900, 17-, whatever, passes in the
6 Senate and a similar number passes in the
7 Assembly and then there's a crossover of maybe
8 1,000, 1100 bills that actually go to the
9 Governor and maybe the Governor vetoes a couple
10 hundred and we wind up with 7-, 8-, 900 laws and
11 on those, if you take those numbers, Senator, it
12 must be 5-, 6-, 700 bills that we pass to,
13 quote, send a message to the Assembly. They
14 pass 5- or 600 bills to send us a message but
15 somehow in this huge divide where you need three
16 planes and a taxicab to get from our chamber to
17 their chamber, those messages don't seem to get
18 through, Senator. So I don't know why we pass
19 these bills sending messages when the proof of
20 the pudding, since you have been a Senator, is
21 that those messages mean nothing. We're going
22 to pass this bill. They don't like it and
23 they're not going to pass it.
24 My point to you is that we are
25 not voting on the word. We're not voting on the
1851
1 word. We're voting on a piece of legislation
2 and Senator Abate says to you, Senator, the
3 "concept" -- quotes-unquotes -- is good but the
4 bill is wrong and we can do something about it.
5 Senator Bruno says, we got to do something about
6 it. There will be a chapter.
7 All I'm saying is put it
8 together. Today is Wednesday. Put it in
9 tomorrow, whatever. It will be ripe for birth
10 in this house next Tuesday, Wednesday, and then
11 we got a bill and instead of having opposition
12 in this house, instead of it going -- really
13 going no place because it sends no message to
14 anybody, you could be the author of a law, and
15 that's all I'm saying. I think somebody on your
16 side has to take the chance that these pillars
17 will shatter and at one point do something
18 sensible like that.
19 I happen to think that these
20 pillars will not shatter if somebody on your
21 side lays a bill aside, amends it and does the
22 right thing but, Senator, you're just the kind
23 of person that can do it because you've got that
24 stature and backbone, and I hope the next words
25 out of your mouth will be, "Mr. President, lay
1852
1 the bill aside." Come on. Do it. It won't
2 hurt.
3 SENATOR SEWARD: Senator Gold,
4 you're very articulate but you're unconvincing,
5 and I'm shocked to hear your numbers about
6 one-house bills around here.
7 In all seriousness, this -- when
8 we're talking about the potential for savings to
9 consumers, electric consumers of this state -- I
10 mentioned already the Niagara Mohawk estimate of
11 an additional $220 million of savings with the
12 legislation before us. The Consumer Protection
13 Board at our hearing two weeks ago cited numbers
14 of $780 million of savings to consumers of this
15 state under this legislation as written -- I'm
16 very confident that this is a good piece of
17 legislation. I'm also confident that by the
18 passage of this bill today, that it will
19 facilitate a further discussion on this very
20 important issue to the people of this state and
21 that we should move forward. That's my
22 position.
23 SENATOR GOLD: Mr. President.
24 ACTING PRESIDENT KUHL: Senator
25 Gold.
1853
1 SENATOR GOLD: I just wanted to
2 have the record indicate that Senator Paterson's
3 counsel, Richard, said I did convince him.
4 ACTING PRESIDENT KUHL: Senator
5 Abate, did you wish to speak further on the
6 amendment?
7 SENATOR ABATE: Yes, on the
8 amendment.
9 ACTING PRESIDENT KUHL: Senator
10 Abate, on the amendment.
11 SENATOR ABATE: Senator -- would
12 Mr. President allow me to continue to question
13 Senator Seward?
14 ACTING PRESIDENT KUHL: Senator
15 Seward, would you yield to a question from
16 Senator Abate?
17 SENATOR ABATE: Are you under
18 oath?
19 SENATOR SEWARD: Yeah.
20 SENATOR ABATE: This is a
21 cross-examinational fashion.
22 ACTING PRESIDENT KUHL: The
23 Senator yields.
24 SENATOR ABATE: I appreciate your
25 statement that we in the Legislature should not
1854
1 micro-manage and create inflexible and prohibit
2 ing restrictions on the utility companies, but
3 were you aware that in the competitive hearings
4 -- competition hearings that the PSC has held,
5 that they have stated that they would like to
6 see a goal of a 25 percent reduction for
7 industrial users? They have, in their own
8 minds, have a goal of reaching 25 percent. Are
9 you aware of that?
10 SENATOR SEWARD: Oh, I certainly
11 am. There's -- would you like me to elaborate?
12 That's a far different process than what we deal
13 with here in the Legislature.
14 My point is if we get too
15 specific in legislation with actually numbers in
16 bills that become law in this state, that we are
17 not -- we are a deliberative body, the
18 Legislature. What that means to me is we are
19 slow to react here in this process. That's why
20 I believe that we should avoid these kinds of
21 specific numbers in legislation. The Public
22 Service Commission, as a regulatory body, they
23 can much more quickly change to make adjustments
24 that meet rapidly changing developments in this
25 industry, in this whole area. So that's far
1855
1 different than putting specific numbers in a
2 bill.
3 SENATOR ABATE: Would the Senator
4 continue to yield?
5 ACTING PRESIDENT KUHL: Senator
6 Seward, do you continue to yield?
7 SENATOR SEWARD: Certainly.
8 ACTING PRESIDENT KUHL: The
9 Senator continues to yield.
10 SENATOR ABATE: It's my
11 understanding that the PSC has been pretty
12 outspoken about their goal towards industrial
13 users. Do you know if there's a stated goal
14 towards small businesses and residential
15 ratepayers other than the Con Edison agreement
16 which might be a model for the future which they
17 stated they're looking for a 3.3 percent
18 reduction compared to the 25 percent for the
19 industrial users? Have they ever stated at
20 these hearings, we want a 25 percent goal for
21 industrial users and what is their goal for the
22 rest of us in this state?
23 SENATOR SEWARD: Well, I would
24 point out that for the first time, we have a PSC
25 that is driving rates down for everyone and the
1856
1 only discussion that I hear is what percentage
2 that's going to be. So I think that's a very
3 significant achievement by the PSC.
4 How I could respond to your
5 specific question is at the hearings -
6 SENATOR ABATE: I guess my
7 question is do you know whether they've ever
8 stated what their goal is for residential and
9 small business ratepayers? We know what their
10 stated goal is for industrial users. Have they
11 ever stated a goal for the other users?
12 SENATOR SEWARD: They are -- I
13 can't quote you a number that I've heard from
14 the PSC for each category of customer.
15 SENATOR ABATE: But, Senator,
16 aren't you concerned, given the proposal around
17 Con Ed -- and they're still talking about a 25
18 percent for industrial users -- how can you
19 assure the residential and small business users
20 that, again, they will only be faced with a
21 three percent reduction? What in this bill
22 protects those consumers? I know you said that
23 you want to make the amendment that they get -
24 something goes to them, but how will we know
25 that the differential will still not be as great
1857
1 as the comparison between 25 percent and 3
2 percent? How can you assure us that the PSC
3 will do the right thing and protect everyone in
4 this state?
5 SENATOR SEWARD: Under the bill,
6 as presented today, as I cited earlier, there is
7 full judicial review provisions there. The
8 stated goal of the PSC, as stated at our
9 hearings two weeks ago, their intent is to drive
10 the savings from securitization specifically to
11 the residential ratepayer and small businesses.
12 We've had that. As has been discussed already,
13 we're very interested in a chapter amendment to
14 actually put that in the laws of the state of
15 New York. So I -- I believe that the savings
16 are going to be there for the residential
17 ratepayers of this state. I'm fully confident
18 of that.
19 SENATOR ABATE: The same thing
20 with the Con Ed. There were savings to
21 ratepayers, the residential/small businesses but
22 in the tune of 3 percent compared to 25
23 percent. Are you agreeing that when you amend
24 the bill, there will be specifically language
25 that addresses the issue around the
1858
1 differential, that there will be proportionally
2 enough of the savings that will go to
3 residential and small business ratepayers?
4 SENATOR SEWARD: As I stated
5 earlier, we're talking about apples and oranges
6 here in terms of, you know, this proposed Con Ed
7 settlement, that's a whole -
8 SENATOR ABATE: I only use that
9 because they say that this will serve as a model
10 for deregulation and other competitive plans
11 that are going to be put in place in the
12 future. They have stated goals of savings for
13 the industrial users and are silent as to the
14 rest of us, and my concern is we should not
15 leave it up to judicial review. We have a
16 responsibility in this body to protect everyone,
17 to create a healthy economic climate so the
18 utilities fare well, the industrial users, but
19 not at the expense of the rest of us, and my
20 concern is this legislation does not put in
21 place enough safeguards to create the kind of
22 climate where everyone will benefit from these
23 savings.
24 SENATOR SEWARD: I disagree. The
25 legislation, as written, would provide
1859
1 significant rate relief for anyone who receives,
2 as I said earlier, an electric bill in the
3 mail. We are willing to, as I've stated also
4 several times, put in place a chapter amendment
5 that will specify that the savings under this
6 particular measure would go to residential and
7 small business customers. So I'm fully
8 confident that under this legislation and the
9 chapter amendment and other developments in the
10 electric utility industry, that all categories
11 of customers of this state are going to receive
12 significant rate relief.
13 ACTING PRESIDENT KUHL: Senator
14 Abate.
15 SENATOR ABATE: Yes. Would the
16 Senator continue to yield?
17 ACTING PRESIDENT KUHL: Do you
18 yield to another question, Senator Seward? The
19 Senator yields.
20 SENATOR ABATE: Would you
21 consider if the PSC determines goals of 25
22 percent for industrial and 3 to 5 percent for
23 everyone else, would that be significant rate
24 savings in terms of the residential and the
25 small business users? Is that what -- is that
1860
1 how you would, in your mind, define
2 "significant"?
3 SENATOR SEWARD: I am -- I think
4 I have stated this. I don't know how many times
5 I can say it. The legislation before us,
6 coupled with a chapter amendment, would provide
7 safeguards and significant rate relief for
8 residential ratepayers.
9 ACTING PRESIDENT KUHL: Senator
10 Abate.
11 SENATOR ABATE: Just my last
12 question.
13 ACTING PRESIDENT KUHL: Senator
14 Seward, do you continue to yield? Yes.
15 SENATOR ABATE: In order to give
16 some flexibility -- and I understand your
17 concerns -- would you consider when you do this
18 chapter amendment -- although I would hope that
19 you would join us in this amendment today, or at
20 least table the legislation -- consider setting
21 a minimum with a goal. Perhaps the minimum
22 should be 10 percent when they're talking about
23 25 percent on the high end -- 10 percent is not
24 an extraordinary amount of savings -- with a
25 goal of 20 percent over five years? There then
1861
1 is -- we're giving them flexibility but then we
2 give then some assurances without people
3 defining and leaving it up to individuals to
4 protect the interests of citizens of this
5 state. I think we need to institutionally
6 provide these protections. Would you consider
7 such language such as that in the future,
8 setting a minimum with a larger goal?
9 SENATOR SEWARD: Mr. President, I
10 think I've stated my position in terms of citing
11 any specific numbers in statute as laudable as
12 those goals are, and one of the reasons that I
13 would be hesitant to put a specific number in
14 law would be -- if you cite ten percent -- what
15 if it's eight or nine percent savings, would we
16 not do it because we didn't reach that ten
17 percent goal in that particular settlement and
18 deny the people that eight or nine percent rate
19 reduction? That doesn't make any sense in my
20 mind. That's one of the problems with citing
21 specific numbers.
22 SENATOR ABATE: But we could
23 write an escape clause.
24 ACTING PRESIDENT KUHL: Senator
25 Abate, are you asking for Senator Seward to
1862
1 yield to another question?
2 SENATOR ABATE: No. Thank you
3 very much. I'm finished.
4 ACTING PRESIDENT KUHL: Is there
5 any other Senator wishing to speak on the
6 amendment?
7 Senator Onorato, on the
8 amendment.
9 SENATOR ONORATO: I think we're
10 getting a little bit confused as to what we're
11 trying to accomplish here. Without getting into
12 specifics dealing with 10 percent, 15 percent or
13 20 percent, my goal was to allow everybody to
14 profit from this reduction, and whether you want
15 to say it's 10 percent or 15 percent, perhaps we
16 can do it in another fashion that does not set
17 the amount of actual savings but the
18 distribution of the savings can be administered
19 with a percentage category. In other words, the
20 industrial user's savings should not exceed 50
21 percent of what the small business and
22 residential users are getting. That doesn't
23 specify that they have to be a 40 percent
24 overall savings. It specifies that the
25 industrial users shall not exceed 50 percent of
1863
1 the savings administered to the small business
2 and residential users.
3 ACTING PRESIDENT KUHL: Is there
4 any other Senator wishing to speak on the
5 amendment?
6 (There was no response.)
7 Hearing none, the question is on
8 the amendment. A vote in the affirmative is for
9 the adoption of the amendment. A vote in the
10 negative is for opposition to the amendment.
11 All those in favor of the amendment signify by
12 saying aye.
13 SENATOR PATERSON: Party vote in
14 the affirmative. Call the roll.
15 ACTING PRESIDENT KUHL: The
16 Secretary will call the roll.
17 (The Secretary called the roll.)
18 THE SECRETARY: Ayes 25, nays 34,
19 party vote.
20 ACTING PRESIDENT KUHL: The
21 amendment is defeated. Debate is on the bill.
22 Any member wishing to be heard on
23 the bill?
24 Senator Paterson.
25 SENATOR PATERSON: Mr. President,
1864
1 would Senator Seward yield for a question?
2 ACTING PRESIDENT KUHL: Senator
3 Seward, do you yield to a question from Senator
4 Paterson?
5 SENATOR SEWARD: Certainly.
6 ACTING PRESIDENT KUHL: The
7 Senator yields.
8 SENATOR PATERSON: Senator, I
9 don't want to prolong this or ask you questions
10 that you've answered before, but I would just
11 like to ask you, in the -- with the distinct
12 advantage of hindsight, perhaps by examining
13 this situation involving the dissolution of Con
14 Edison and the return of savings to ratepayers,
15 in that case, perhaps we not be condemned to
16 repeat this process when the PSC examines any
17 future proceedings, and my question to you is,
18 with respect to the Con Edison situation, the
19 savings for ratepayers who are of the industrial
20 variety, as I understand it, was an immediate 25
21 percent savings. Is that correct?
22 SENATOR SEWARD: I believe so,
23 yes.
24 ACTING PRESIDENT KUHL: Senator
25 Paterson.
1865
1 SENATOR PATERSON: If the Senator
2 would continue to yield.
3 ACTING PRESIDENT KUHL: Senator
4 Seward, do you continue to yield? The Senator
5 continues to yield.
6 SENATOR PATERSON: Consequently,
7 Senator Seward, through you, Mr. President, the
8 savings for residential in this similar vein
9 would be 3.3 percent which actually would
10 accumulate over five years; in other words, at
11 the end of the five years we would reach a level
12 of a 3.3 percent reduction. That's also
13 correct.
14 SENATOR SEWARD: I've seen those
15 numbers, yes.
16 ACTING PRESIDENT KUHL: Senator
17 Paterson.
18 SENATOR PATERSON: Mr. President,
19 if the Senator would continue to yield. Then,
20 Senator -
21 ACTING PRESIDENT KUHL: The
22 Senator continues to yield.
23 SENATOR PATERSON: When Senator
24 Abate in her amendment -- buttressing her
25 amendment, which I thought was very well stated
1866
1 and which I believe should have passed, she said
2 that the savings was actually seven times
3 greater for those -- for industrial savings but
4 actually, in fact, if the 3.3 percent savings
5 was over a graduated period of five years, it
6 comes out to less than one percent savings per
7 year. In fact, Senator, it comes out to 0.66
8 percent for each year compared with 25 percent
9 for the industrial ratepayer. So actually the
10 differential in savings was that the industrial
11 savings is 37 times higher than that for
12 consumer and residential payers. Is that
13 correct, Senator?
14 SENATOR SEWARD: Well, Senator, I
15 haven't done the math as you have, but I think
16 it's significant to point out here that the bill
17 before us has -- is not -- has no direct
18 relationship with the proposed settlement with
19 Con Ed and the PSC staff.
20 I would encourage you, Senator,
21 or anyone else who has concerns about that to
22 make your case at the upcoming evidentiary
23 hearings regarding that settlement -- proposed
24 settlement and directly to the PSC commission
25 members who have not even considered that at
1867
1 this point. You're talking about a staff
2 proposal over at the PSC unrelated to this bill
3 before us today.
4 ACTING PRESIDENT KUHL: Senator
5 Paterson.
6 SENATOR PATERSON: Thank you,
7 Senator.
8 And I understand what you're
9 saying. It doesn't necessarily relate to your
10 legislation. It relates to the actions of the
11 Public Service Commission, and I thank you for
12 responding to the question.
13 Mr. President, on the bill, what
14 I'm really trying to point out is that the
15 difference in the savings, when you look at the
16 different entities, is so disparate. It's so
17 immense, that I think that I don't want to wait
18 for the Public Service Commission to hold
19 hearings. I would rather make my evidentiary
20 complaint right here and point out that rather
21 than this exercise in trying to figure out what
22 the actual statistics are, we can safely say
23 that there is a wide disparity between the
24 savings for industrial ratepayers and for those
25 for residential, and what I think Senator
1868
1 Abate's amendment was trying to do was to in
2 some way limit or in some way inhibit us from
3 going through a process that would be unfair to
4 many of the parties who are paying.
5 The process of securitization was
6 one where the dollars of all concerned were
7 going to establish what was really a property
8 right, such that the utility could invest in the
9 open market and create lower interest rates.
10 When those savings are returned, we would think
11 that they would be returned in some kind of
12 equitable fashion and the problem that I have
13 with the legislation is that, in my opinion, it
14 abrogates the responsibility of the Legislature
15 in favor of the Public Service Commission that's
16 demonstrated historically, or at least in this
17 instance and, as Senator Seward pointed out over
18 the last ten years, that they don't have any
19 great interest in returning savings to certainly
20 residential and small businesses, and we think
21 at this particular time in our state that, if
22 we're going to re-ignite the engine of our
23 economy, we're going to have to do it more
24 through these kinds of processes as much as what
25 we did yesterday in terms of tax reduction.
1869
1 So as long as I see this
2 significant difference in what the result is
3 going to be and no stated position on the part
4 of the Public Service Commission to the
5 contrary, it is very difficult for me at this
6 time to support this legislation.
7 I don't think this should be an
8 exercise in futility for utilities, and I don't
9 think that this is a legislation that
10 necessarily will help any ratepayers who are
11 residential or small businesses because we don't
12 have even a stated position on the part of the
13 Commission that they are going to engage in any
14 activity that would inure to the benefit of
15 people whose dollars provided the revenue base
16 for securitization that provided them the
17 opportunity to receive these savings in the
18 first place.
19 ACTING PRESIDENT KUHL: Senator
20 Volker, why do you rise?
21 SENATOR VOLKER: Mr. President, I
22 want to speak.
23 ACTING PRESIDENT KUHL: I have a
24 list going, Senator Volker.
25 SENATOR VOLKER: Oh, I'm sorry.
1870
1 ACTING PRESIDENT KUHL: Senator
2 Mendez, you want to speak on the bill also? Do
3 you want to speak on the bill also?
4 SENATOR MENDEZ: Mr. President,
5 yes, but I would like to ask a question of
6 Senator Seward.
7 ACTING PRESIDENT KUHL: In a
8 moment, Senator Mendez.
9 Senator Nozzolio, the Chair
10 recognizes you.
11 SENATOR NOZZOLIO: Thank you, Mr.
12 President.
13 Mr. President, my colleagues, the
14 measure before us today shows great leadership,
15 great leadership on behalf of Governor Pataki
16 and particularly here in our house, I want to
17 compliment the efforts of Senator Seward for
18 bringing this measure to the floor, for taking
19 the cutting edge leadership role in this state
20 on trying to make the right changes in the
21 energy field for New York.
22 Unfortunately, Mr. President, my
23 colleagues, New York, as we all know, has the
24 highest energy costs in the entire nation, more
25 than 60 percent above the national average. In
1871
1 Long Island, the rates are higher than any place
2 else in the country. This high cost has been an
3 extremely enormous burden to economic developers
4 across the state who are trying to bring
5 additional jobs into New York. We need to
6 address energy costs if we are ever to be the
7 job magnet that New York can be.
8 On the average, 18 cents out of
9 every dollar that we pay in our energy bills
10 goes to state and local taxes and that's the
11 second highest rate in the country. This week,
12 this Senate has taken good steps to phase out
13 the gross receipts tax, to save consumers over
14 $710 million when this cost -- tax cost cutting
15 goes into effect through the next five-year
16 period.
17 But what we have before us today
18 is the next step. As Senator Seward so
19 adequately addressed in the discussion on this
20 measure, utility companies need flexibility,
21 flexibility that all other businesses have in
22 going to the marketplace and getting reduced
23 costs of financing when that is appropriate. We
24 do that for businesses in our economic
25 development efforts. It makes sense to do it
1872
1 for utility companies so that they can pass
2 those costs directly on to customers in the form
3 of lower utility rates.
4 California and Pennsylvania have
5 already enacted securitization laws based on the
6 New York model and that we hope this can be
7 enacted quickly here and in the Assembly,
8 because if we don't enact this measure, we're
9 going to continue to languish in our economic
10 development efforts. It's that simple.
11 We should all be proud of the
12 efforts we take into cutting taxes in this
13 chamber under the leadership of our Leader, Joe
14 Bruno and our Governor, George Pataki, but we
15 cannot put this entire model together unless we
16 address the high costs of energy.
17 Corning Glass, just along the
18 Southern Tier, could easily go across the border
19 and save 30 to 50 percent on their utility
20 rates. Companies all across the central Finger
21 Lakes face that same dilemma and that this
22 measure and the measures that we've enacted this
23 week help those companies understand that New
24 York is serious about economic development.
25 Thank you, Senator Seward, for
1873
1 your leadership in this effort. Thank you, Mr.
2 President, to the opportunity to support this
3 measure.
4 ACTING PRESIDENT KUHL: Senator
5 Dollinger.
6 SENATOR DOLLINGER: Thank you,
7 Mr. President.
8 I rise today to speak in favor of
9 this bill and to join the Chairman of the Energy
10 Committee in supporting this concept.
11 I have some reservations about
12 this bill that I hope will be worked out in a
13 Conference Committee. One of them, because I
14 supported Senator Abate's amendment, is to try
15 to -- and I know the Senator has spoken about a
16 chapter amendment that would come from Senator
17 Bruno that will try to define the term
18 "significant savings" so that we can make sure
19 that there is some across the board rate
20 relief.
21 I, in particular, don't mind the
22 notion that there would be some greater rate
23 relief for the businesses that have legs in this
24 state, that have the ability to walk and take
25 their jobs with them. It's my sense in dealing
1874
1 with both Niagara Mohawk and Rochester Gas &
2 Electric, that we need to be able to reach out
3 to those businesses and provide them with
4 greater incentives to stay through lesser
5 rates. So the notion of giving the industrial
6 base some kind of preferential reduction is not
7 inapposite to my thinking on this bill or, for
8 that matter, I don't think is a bad idea for the
9 long-term economic development of this state.
10 The two issues that I would like
11 to just call your attention to that I think
12 need -
13 ACTING PRESIDENT KUHL: Senator
14 Dollinger, would you suffer an interruption.
15 Just for my own information, I checked to see if
16 there are any other conversations going on and I
17 counted at least eight conversations in this
18 chamber between members. If it's that
19 important, take it out of the chamber.
20 Thank you, Senator Dollinger. I
21 appreciate the -
22 SENATOR DOLLINGER: Thank you,
23 Mr. President.
24 The two issues that I would call
25 attention to the Chairman in the discussions of
1875
1 what I hope will be a Conference Committee
2 discussion, one is the 15-day time period for
3 appeal. These are going to be irrevocable
4 orders. I understand that they have to be
5 irrevocable because that's the only way that we
6 can create the stream of rates that will be
7 necessary to secure the bills that provide the
8 financing benefits of this bill. I understand
9 why they have to be irrevocable.
10 I would just suggest that the
11 tying of an irrevocable order to a 15-day appeal
12 period, really, what I think substantially
13 constricts the ability of any outside party to
14 challenge an irrevocable order for whatever
15 reason, even if they are just simply technical
16 defects, and I would suggest that either expand
17 the period of time to maybe 60 days, give
18 greater time to allow an appeal, to allow people
19 to evaluate the context of an irrevocable
20 order. It seems to me that that's a minimal
21 interruption of the process especially when, as
22 we understand, these are going to be irrevocable
23 long-term orders that will be used to finance
24 the secured assets.
25 I would point out just one other
1876
1 thing, Mr. President, in my support of this
2 bill, is that we've heard a lot of discussion
3 about the cost to utilities and what they have
4 to deal with. I certainly know that in
5 Rochester, Rochester Gas & Electric has done a
6 very good job of paring down one-quarter of its
7 costs that is within its control.
8 I've talked about this with the
9 Chairman of the Energy Committee. Utilities
10 face really four cost components: Their asset
11 cost, their energy cost, the cost of buying
12 power, their regulation tax cost and their
13 personnel cost. Those are really the four
14 components of utility costs in this state.
15 I know that Rochester Gas &
16 Electric has cut its work force by one-quarter,
17 has vigorously tried to reduce its own personnel
18 costs. Now we've got to turn our attention to
19 those other components.
20 I think that the Chairman of the
21 Energy Committee properly point out that these
22 are costs that we imposed on them. These are
23 costs, whether it's the GRT that we imposed on
24 them that everybody, I assume, the Majority in
25 this chamber supported at some time, to put the
1877
1 gross receipts tax on. We have supported -- and
2 that includes the Majority and the Minority -
3 this Senate has supported the kind of regulatory
4 activity to benefit consumers across the state
5 that has a cost associated with it and, as you
6 know, we pushed the utilities into the
7 independent power producing network. So all of
8 those things are a result of our dabbling in the
9 marketplace.
10 I think what this does is this
11 bill gives us a chance to partly rectify what we
12 have done wrong in trying to intervene in this
13 marketplace. I think it's a worthwhile step.
14 The fact that California and Pennsylvania have
15 done it, as Senator Nozzolio have pointed out,
16 are an indication that, if we're going to deal
17 with the problem of stranded costs, if we're
18 going to find a way to begin to rectify the
19 errors in treating these captive utilities like
20 our public property and not treating them as
21 part of the private marketplace, the only way to
22 step back from that is to give them the
23 opportunity to reduce their financing costs for
24 these assets and to begin to reduce rates across
25 the board.
1878
1 I think this is a good step. I
2 think there's some tinkering that needs to be
3 done in the Conference Committee process, but
4 I'm prepared to move this bill forward, Mr.
5 President. I think it's the right initiative.
6 It's the right time, and I hope that we get to a
7 point where we have the significant enough rate
8 reduction so that businesses will look at
9 Pennsylvania and New York and Massachusetts and
10 say, Gee, New York is just as competitive as its
11 neighbors on utility rates.
12 ACTING PRESIDENT KUHL: Senator
13 Volker.
14 SENATOR VOLKER: First of all, I
15 want to congratulate chairman of the Energy
16 Committee and I mean this very sincerely, who
17 took over the committee from the mess that it
18 was in from the previous chairman, but and I
19 also want to say -- for those that don't know,
20 that was me -- but I sincerely want to say that
21 this is a difficult period in energy. By the
22 way, the last time we micro-managed was under my
23 tenure, and I was the sponsor of the six-cent
24 bill.
25 Let me say that remember back in
1879
1 1979 the situation we were in where everybody
2 was -- everybody had determined the price of oil
3 was going to go through the roof. Gasoline was
4 going to go to $2 a gallon. The assumption was
5 that at some point within the next ten years at
6 that time that oil would go to $30 a barrel
7 which, of course, it never got anywhere near and
8 the interesting part of it is at the time that
9 my counsel and I were faced with an awful lot of
10 people who wanted to go to eight cents a
11 kilowatt hour, and some that wanted to take the
12 cap off entirely and said, Let it run with the
13 market, which by the way at times would have
14 allowed it to go to 10 or even 12 cents.
15 So it was an entirely different
16 time, and I must say that with all the talk here
17 about helping residential people and small
18 businesses, and I think that's very commendable,
19 but let's understand a little bit about the
20 utility business, something we don't often talk
21 about. One of the reasons it's important to aim
22 at big industrial users aside from the fact that
23 so many of them are leaving the state, is their
24 energy rates are so much higher than residential
25 people. There are three or four levels of rates
1880
1 in this state but two in particular.
2 Residential people pay a much
3 lower amount rate on their power than do
4 industrial people. I'm not sure exactly the
5 percentage of it. It depends on where it is.
6 Certainly Con Ed charges industrial ratepayers
7 far, far higher. I would think it's five times
8 and I'm not even sure, maybe even seven times,
9 for all I know.
10 The problem is as the industrial
11 might of this state has begun to leave it,
12 residential ratepayers pay the price because the
13 less you can spread those numbers over, the more
14 the residential and the small business people
15 are going to pay higher rates. That's been the
16 problem.
17 The problem with the utilities in
18 this state aside from problems with management,
19 and I'd be the first to say that it's not
20 entirely the IPPs and, by the way, nobody
21 mandated that some of these utilities sign these
22 long-term IPP contracts, even though they claim
23 that the Public Service Commission encouraged
24 them, and I think at times they did for various
25 reasons, but nobody mandated that that be done,
1881
1 the long-term contracts. So I think that should
2 be -- that should be clear.
3 But the problem here is we're
4 faced with the reality of 1997, and that is
5 we've got a bunch of utilities that are in
6 trouble. If we don't deal with it, residential
7 ratepayers are going to take the gaff some place
8 down the line.
9 In fact, unfortunately, what
10 happened in the late '80s, the Public Service
11 Commission encouraged the utilities to not do
12 any rate increases and to do all sorts of
13 things.
14 The problem with that was that
15 they began to lose money. Their debts started
16 piling up and their problems with the IPPs just
17 got worse, and we were saying at the time that
18 the problem is that down the line there's going
19 to be real trouble unless the economy of the
20 Northeast surges dramatically and, of course, it
21 hasn't happened.
22 So I think that one thing we
23 ought to understand and that is that the
24 business people in this state and to a certain
25 extent and some people might say to a large
1882
1 extent have been helping to finance residen
2 tial rates over the years and there's no
3 question of that and, if we don't encourage
4 business to stay in the state and if we don't
5 make sure that we recapture part of our
6 industrial and business base, I'm afraid
7 residential rates are going to go up a lot
8 more.
9 So my commendation to you,
10 Senator Seward, and I mean this very sincerely,
11 I think in stepping through a very difficult
12 period of time, I think Jack O'Mara and the
13 Public Service Commission, I happen to think in
14 a very difficult time is doing the best that
15 they can, and I think that the Public Service
16 Commission today I think is responding very
17 well.
18 Hopefully, we'll be able to get
19 through this period. We'll be able to stabilize
20 rates. By the way, a 3.3 percent decline in
21 residential rates is a lot more than people
22 realize, and if we attack, as I think we will,
23 the gross receipts tax, everyone benefits from
24 that, not businesses, small business, big
25 business, everyone benefits from it and in the
1883
1 long run, the residential ratepayers far and
2 away benefit the most because the benefits that
3 accrue to businesses works down to residential
4 people plus their personal -- the personal
5 residential people get their benefits.
6 So my commendations to you,
7 Senator Seward. I think, and I hope very much
8 and I think you feel like I do that before this
9 year is out, we're going to see some dramatic
10 changes in the whole utility industry in this
11 state.
12 ACTING PRESIDENT KUHL: For the
13 benefit of the members, this debate did start at
14 10:17, so we're a little over an hour into the
15 two-hour time limit and I have three members
16 left on the list who indicated they wanted to
17 speak: Senator Mendez, Senator Marcellino and
18 Senator Leichter.
19 I don't see Senator Mendez in the
20 chamber. Senator Marcellino?
21 SENATOR MARCELLINO: Yes, Mr.
22 Chairman, Mr. President. I thank you for
23 recognizing me and high energy costs and high
24 property taxes are a burden on the people of
25 Long Island where I live and represent, and it's
1884
1 to the credit of the Governor and Majority
2 Leader Bruno and Senator Seward and Senators
3 Cook and LaValle who initiated two sets of bills
4 that addressed these two very, very significant
5 areas.
6 Lowering property taxes, helping
7 the schools come in with lower property taxes,
8 we debated that yesterday and it was very
9 interesting to get a lecture on property taxes
10 from the Senator from Brooklyn. This was
11 interesting because by comparison it's just
12 non-existent when the two of you talk about
13 property taxes on Long Island.
14 Energy costs on Long Island are
15 an impedance to businesses staying there.
16 They're an impedance to businesses staying in
17 this state and, if we don't lower energy costs
18 and if we don't lower property taxes, we can not
19 keep businesses in this state, and that means
20 jobs. That means jobs in the city of New York
21 and it means jobs everywhere in the state,
22 including Long Island, and that's important, and
23 should be important to all of us.
24 I disagree with my colleague,
25 Manny Gold. We must send a message to the
1885
1 Assembly because they have been dragging their
2 feet on this issue. They've been totally
3 dragging their feet. They refuse to address the
4 issue up front. We have to address this issue
5 of high property taxes and high utility rates,
6 and it's about time the issues are drawn and the
7 lines are drawn as to who stands where.
8 Let's stop the silliness; let's
9 get on with the bill, let's vote this bill up as
10 we did the bill on property taxes yesterday and
11 let's get on with it and move.
12 ACTING PRESIDENT KUHL: Senator
13 Gold, why do you rise?
14 SENATOR GOLD: Mr. President,
15 will the gentleman yield to one question?
16 SENATOR MARCELLINO: Sure.
17 ACTING PRESIDENT KUHL: Senator
18 yields Sure.
19 SENATOR GOLD: Senator, I
20 appreciate the sincerity of your impassioned
21 speech but when you say we've got to send a
22 message to the Assembly, they're dragging their
23 feet, Senator Seward in his usual candor started
24 out by saying that this is the first time in 15
25 years we have discussed it on the floor.
1886
1 Are you suggesting that we have
2 been dragging our feet for 15 years?
3 SENATOR MARCELLINO: I'm
4 suggesting that the issue for the first time is
5 being drawn and being discussed, and if it
6 wasn't for George Pataki and if it wasn't for
7 Joe Bruno, and if it wasn't for the Senator over
8 here who chairs the Energy Committee and, if it
9 wasn't for Charlie Cook and Ken LaValle on the
10 Education Committee, we wouldn't have those two
11 pieces of legislation, the one we discussed
12 yesterday and the one we are discussing today,
13 and I think that's to their credit and we should
14 get on with it. If these two bills are
15 imperfect, and they probably are, you know,
16 nobody here is omniscient and draws perfect
17 pieces of legislation on either side of the
18 aisle, so let's deal with it and let's get on
19 with the negotiations and let's move ahead.
20 We made this proposal several
21 days ago. We made the proposal on property tax
22 and school relief a couple of weeks ago, and we
23 now have amendments popping up now. We'll
24 discuss them on the floor. They could have been
25 discussed a long time ago, and if this chamber
1887
1 has been dragging its feet, so be it.
2 ACTING PRESIDENT KUHL: Senator
3 Gold.
4 SENATOR GOLD: Yeah. Just want
5 to -- thank you. Senator, that's all I wanted
6 was an acknowledgement that if the other house
7 was dragging their feet that up until an hour
8 and a half ago I guess we were dragging our feet
9 also.
10 ACTING PRESIDENT KUHL: Is there
11 any other Senator wishing to speak on the bill?
12 Senator Seward would like to
13 speak on the bill.
14 SENATOR SEWARD: Point of
15 information here.
16 ACTING PRESIDENT KUHL: Chair
17 recognizes Senator Seward.
18 SENATOR SEWARD: Yes, Senator
19 Gold, I just don't want to leave you with the
20 impression that I said that this was the first
21 time in 15 years that this house has talked
22 about rate relief, because I can recall as early
23 as 1989 this house passed a gross receipts tax
24 repeal which would have cut electric rates for
25 everyone in this state.
1888
1 I refer to the first time in 10
2 to 15 years that rates are actually coming down
3 in the state of New York, and that is due to a
4 number of factors including the leadership of
5 the Governor and the Public Service Commission,
6 and we in this house, if the Assembly will get
7 on board, we can facilitate even greater savings
8 and that's what today's discussion is all about.
9 SENATOR GOLD: Will the gentleman
10 yield for one more clarification?
11 ACTING PRESIDENT KUHL: Senator
12 Seward, will you yield for one more question
13 from Senator Gold?
14 SENATOR GOLD: Yeah. I certainly
15 would never misquote you. In your last
16 statement, just so I understand it, something
17 happened in 1989 that resulted in a good law.
18 SENATOR SEWARD: In as early as
19 1989, Senator, this side of the aisle, and a
20 number of people on your side of the aisle
21 passed legislation which would have repealed,
22 phased out the gross receipts tax in this state
23 and we're still working on that issue.
24 ACTING PRESIDENT KUHL: Senator
25 Leichter, do you still wish to speak on the
1889
1 bill?
2 SENATOR LEICHTER: Yes.
3 ACTING PRESIDENT KUHL: Chair
4 recognizes Senator Leichter.
5 SENATOR LEICHTER: Yes, Mr.
6 President. I think there are many, many groups
7 and many legislators who have a lot of doubt
8 about the securitization in many different
9 respects. That's why it's being opposed by the
10 American Association of Retired Persons, the
11 American Lung Association, Citizens Utility
12 Board, EPL, Environmental Advocates, Citizens
13 Environmental Coalition, NYPIRG, Hudson River
14 Sloop Clearwater, Hudson River Keeper, Sierra
15 Club; and just to point out that when this bill
16 came up at -- in June, if I can find my list
17 here, a significant number of legislators on
18 this side of the aisle, Senator Connor,
19 Dollinger, Gold, Kruger, Leichter, Markowitz,
20 Mendez, Montgomery, Nanula, Onorato,
21 Oppenheimer, Paterson, Stachowski and Waldon
22 voted against it. When it came up in December
23 there were a few -- there weren't as many, but
24 it was Abate, Connor, Kruger, Leichter,
25 Montgomery, Onorato, Seabrook, Smith and
1890
1 Stavisky.
2 What we're really doing in this
3 securitization is, in a certain sense, we're
4 playing the market as it exists now, the prices
5 for wholesale electricity. We're playing the
6 market as it exists now in bonding and we're
7 allowing the utilities to take certain in
8 tangible costs and assure themselves that
9 they're going to be reimbursed by ratepayers.
10 Some of these are costs that the
11 ratepayers should not have to bear. Some of
12 these are costs that relate to poor business
13 judgment. I heard Senator Volker say, quite
14 rightly, nobody told them to enter into these
15 long-term contracts for independent power. So
16 now what we're doing by this is saying, O.K.,
17 where you made a bad decision, we're going to
18 assure that you're going to get paid. Manage
19 ment is not going to have to pay for that, the
20 shareholders are not going to have to pay for
21 it. It is the ratepayers, and if there's any
22 savings to be made, I point out again, it is
23 only because of the nature of the bonding and
24 because of the price of wholesale electricity.
25 So we're not really dealing with
1891
1 competition. We're not doing anything
2 structurally that's going to assure us over the
3 long period of time of actual decrease in
4 utility rates. In fact, the decrease that we're
5 going to get from this, even if it all works
6 out, is going to be very minimal. Then in
7 addition I think people have rightly pointed out
8 that the whole process is somewhat flawed.
9 Gives an enormous power to the Public Service
10 Commission, and it also fails to assure the
11 ratepayers who are going to be on the hook for
12 all of these intangible costs that are being
13 securitized, they don't even get the benefit.
14 They don't get the benefit as this bill is now
15 written. We have a somewhat vague promise and
16 somehow this same approach that we see here
17 because essentially it's a bail-out for the
18 utilities. Where you made wrong business
19 decisions, where you took risks and they didn't
20 turn out well, we're going to now step forward
21 -- we the public, we the Legislature -- and
22 we're going to say we're, in a sense, going to
23 hold you harmless. We're going to allow you to
24 make a profit on this.
25 It's really the same thing with
1892
1 Shoreham. It's interesting that we're debating
2 this bill today because I understand the
3 Governor today is announcing a multi-billion
4 dollar bail-out for LILCO.
5 Now, I'm as much committed as
6 anybody in this chamber, as much as the
7 legislators representing Long Island, in bring
8 ing down the costs of LILCO. But how are you
9 doing it? You're doing it by saddling all the
10 people of the state of New York with debt, and
11 this is a state that's already, as you know,
12 very, very heavily in debt.
13 In fact, it's interesting,
14 somebody handed it to me. This is what George
15 Pataki said in October 1994 when Mario Cuomo
16 said, Let's bond out LILCO. Let's bond out
17 Shoreham. Let's bond out the -- the real
18 property tax, I guess, at that point that even
19 wasn't in the picture.
20 So George Pataki comes out with
21 this ad, and he says: Three weeks before the
22 election Mario Cuomo wants to buy votes on Long
23 Island by putting our children $9 billion
24 further in debt. Then he goes on, says, Just to
25 try to buy votes a few weeks before the election
1893
1 Mario Cuomo promised a giant Long Island
2 electric company a sweetheart deal. Corporate
3 welfare -- I didn't know the Governor was using
4 that expression. I'm glad. Since then -- since
5 then. He seems to have embraced it, but anyhow
6 he says, Corporate welfare for them, $9 billion
7 in debt for us and our children. That's an
8 outrage. It's political opportunism at its
9 worst, and sadly it's what we've come to expect
10 from Mario Cuomo. It shows a blatant disregard
11 for taxpayers and the fiscal stability of our
12 state.
13 Now, granted that was a little
14 hyperbole in an election, but I'm not so sure
15 the Governor didn't make some good points about
16 bailing out LILCO, about saving the
17 shareholders. Why didn't they take some of the
18 risk? Why is it all the Long Island residents
19 and now the taxpayers of the state of New York?
20 I've never had a problem with
21 public power. Sort of interesting, because my
22 party, 1930, with Franklin D. Roosevelt as
23 Governor of the state of New York, fought a big
24 fight, successful, against the Republicans to
25 establish public power in this state.
1894
1 Now, I guess some people are
2 saying, Well, that's all the Republicans are
3 doing now; but there's a difference. We fought
4 to have public power to enable lower rates for
5 residential users, for small businesses. You're
6 using public power in a sense to try to save the
7 shareholders, to try to save the utilities from
8 their mistakes.
9 You know, I happen to believe in
10 the free enterprise system. You people say you
11 believe in the free enterprise system, but when
12 it's a big corporation, when it's a big busi
13 ness, you're always out there rushing to help
14 them. I'd like to see that same concern for the
15 small businesses, that concern for the -- for
16 the ratepayers and the taxpayers, because I tell
17 you, this Long Island deal is going to be an
18 extremely expensive one, and I'll tell you also
19 that this securitization may turn out to be very
20 expensive.
21 It certainly comes and bails out
22 the utilities, and I don't think that this is
23 the right way to bring down rates in the state
24 of New York.
25 ACTING PRESIDENT KUHL: Is there
1895
1 any other Senator wishing to speak on the bill?
2 Senator Bruno, to close debate.
3 SENATOR BRUNO: Mr. President, I
4 was listening partially in here, partially
5 through the intercom, and I'm constantly amazed
6 at the discussion and the rhetoric and in all
7 due respect, Senator, it is nothing but rhetoric
8 when you talk about describing the lack of
9 savings that would come from securitization, and
10 when someone or a group doesn't want to do
11 something, you can think of any number of
12 reasons not to take the proper action.
13 The bottom line is, it's more
14 political than reason. Now, you apparently
15 didn't see Crain's and I'll pass it over. In
16 that, Con Ed indicates -- thank you, Dave -- Con
17 Ed indicates that securitization by itself would
18 save the ratepayers of the City and Westchester
19 $700 million, five percent of the ratepayers
20 base. That is more than the 655 million they
21 indicate they can save through some of the
22 consolidation and other incentives that they
23 announced this past week that are going before
24 the Public Service Commission.
25 So, Senator, again in all due
1896
1 respect to you, your position, you're in the
2 City. Why would you want to be making
3 statements in the face of saving ratepayers $700
4 million? Now, if you don't want to support it,
5 if you have other reasons, if you feel like some
6 people make out better, but the Governor has
7 said to the Speaker who has refused to take this
8 bill up in the Assembly and I sense that you are
9 carrying the water for the Assembly on this
10 floor and that's your prerogative, but the
11 Governor said, and the Speaker made the point
12 that the savings may not go to ratepayers. We
13 are putting in the bill specifically that any
14 savings as a result must go to the ratepayers.
15 Now, that ought to be good enough
16 for all of us. If it's in print, it would be
17 the law, so all you have to do is support it,
18 get the Assembly to support it, and you will
19 save people throughout this state tens of
20 millions of dollars, approaches over a billion,
21 so when you talk about reasons why not, we ought
22 to focus on why this is on the floor.
23 It's the high energy costs that
24 we're addressing. Utilities are taking upon
25 themselves, NiMo, with what they're doing with
1897
1 the Independent Power Producers, LILCO this
2 morning, the Governor is out there making an
3 announcement that they have a tentative
4 agreement which will save ratepayers 20 percent
5 out there. Con Ed, and what they're doing.
6 What are the utilities doing?
7 They're recognizing that New York State has the
8 highest energy costs in the country, and the
9 Island is the highest in the country: 18 cents
10 on every dollar. You know the information. So
11 we're not out here being light; we're not out
12 higher being political. We're not out here just
13 having a good time. We're trying to do
14 something to keep the economy moving forward,
15 the programs that this Governor has initiated,
16 that we in this chamber have partnered in with
17 the Assembly; and the bottom line is job
18 creation. You cut personal income taxes, you
19 create jobs. Cut business taxes, you create
20 jobs. You cut property taxes, you save people
21 money and you create jobs. You cut energy
22 costs, you create jobs.
23 I was talking with Senator Meier
24 earlier this morning. He has industry, the
25 metal producing industries, can't expand in New
1898
1 York State because of the prohibitive cost of
2 power. So, Senator -
3 SENATOR LEICHTER: Mr. President,
4 would -
5 SENATOR BRUNO: -- if you don't
6 want to be supportive, then that's your
7 prerogative, but in terms of conversation and
8 the rhetoric, we ought to deal in facts.
9 SENATOR LEICHTER: Mr.
10 President.
11 ACTING PRESIDENT KUHL: Senator
12 Leichter, why do you rise?
13 SENATOR LEICHTER: Yes, Senator
14 Bruno, I know you're closing but if you would
15 yield to just one question.
16 ACTING PRESIDENT KUHL: Senator
17 Bruno, would you yield to just one question?
18 SENATOR BRUNO: Is this a closing
19 question, Mr. President?
20 SENATOR LEICHTER: It's a
21 definitive question.
22 SENATOR BRUNO: Thank you.
23 ACTING PRESIDENT KUHL: Senator
24 yields.
25 SENATOR LEICHTER: Senator Bruno,
1899
1 I know I heard you get up and say it, and I know
2 you believe, you're creating jobs, the tax cuts
3 are working, and so on. Did you read the piece
4 in the Times-Union that showed very clearly how
5 the state of New York is doing worse than almost
6 every state in the union? We're doing worse
7 than our neighboring states in job growth.
8 SENATOR BRUNO: I saw that,
9 Senator, and thank you, and the reason why New
10 York is lagging is because of the financial ruin
11 that was perpetrated on the people of this state
12 in the '80s and the early '90s in the Cuomo
13 administration, and we are recovering from being
14 50th in job creation in this country, having led
15 the country in job losses, so naturally New York
16 State has a much longer way to go; but in that
17 article, I believe if you look at a base of the
18 last two years, not a previous going back six or
19 eight years, I think you will find in the last
20 two years that New York State is about eighth in
21 the country in job creation, so it just depends
22 on the base that you use.
23 But thank you for your question.
24 Thank you for the opportunity that you've given
25 me to be able to respond, and, Mr. President, I
1900
1 sense my colleague on my left, on his feet so it
2 appears that he has something very worthwhile to
3 contribute to the discussion, so I would defer
4 to Senator Paterson.
5 ACTING PRESIDENT KUHL: Senator
6 Paterson, why do you rise?
7 SENATOR PATERSON: Actually, I'd
8 like to thank Senator Bruno for his contribution
9 and would like to ask if he would yield to a
10 question.
11 ACTING PRESIDENT KUHL: Senator
12 Bruno, do you yield to a question? Senator
13 yields.
14 SENATOR PATERSON: The point well
15 taken, the Senator shows us an article in the
16 Crain's Insider that quotes Eugene McGrath, who
17 is the president of the Consolidated Edison
18 Company here in New York, as saying there would
19 be an enormous savings, particularly in
20 Westchester and in other parts of this state, to
21 residents and to other ratepayers if this
22 legislation is passed, and we agree, Senator
23 Bruno.
24 This is not an issue of
25 rhetoric. This is actually an issue of a
1901
1 potential of savings. What we are simply saying
2 is if it were restricted to the stranded costs
3 that utilities have, and Senator Dollinger
4 pointed out some of those costs, the costs of
5 personnel, the costs of buying electricity and
6 the costs of maintenance, the costs of building
7 plants, those are some severe costs, and in many
8 respects the utilities have to make those costs;
9 but what this piece of legislation actually is
10 providing is for an unlimited stream of
11 financing offered by ratepayers that would also
12 cover any kind of estimated debt or any kind of
13 previous debt or any equity capital, so in other
14 words, there's no restriction on any of the -
15 on any of the procedures that the utility
16 companies might take at this particular point
17 because there's a constant really mandated
18 stream of financing that's coming from the
19 ratepayers who are, in a sense, the stockholders
20 here.
21 Senator Volker, when he was
22 talking before, was referring to situations in
23 1978-1979 where we mandated certain percentages
24 of payments come back from the utilities, but
25 that's exactly the point that, if we are going
1902
1 to lock ourselves in where there will be no
2 authority after the bonds are actually drawn,
3 there would be no legislative proceeding, no
4 action of any regulatory agency, then we're
5 going to be locked in, but at the same time the
6 legislation does not in any way accommodate what
7 are the ratepayers, whoever they are, in any
8 specificity as to what they're going to receive
9 back.
10 So all we're simply -- or all I'm
11 objecting to, not speaking for anyone else,
12 Senator, is the situation where we have a
13 constant stream of financing and really no
14 guarantee at any later date that there would be
15 any return to the actual ratepayers. There's
16 certainly statements to that effect coming from
17 the president of a company that's receiving a 25
18 percent rate reduction, while the consumers and
19 the residents and the small businesses are
20 receiving a 3.3 percent reduction over a period
21 of five years which I estimated before comes out
22 to an average of 0.66 percent of reduction every
23 year.
24 So if the Senator would yield to
25 a question: What is there that the residents or
1903
1 certainly the small business can come away from
2 this legislation that would, in a sense, make it
3 clear that there would be a significant rate
4 reduction that would be received by our passage
5 of this legislation?
6 SENATOR BRUNO: Thank you,
7 Senator Paterson, for that very concise and
8 clear question.
9 SENATOR PATERSON: Oh, one other
10 thing, Senator. Did you notice what the next
11 article was after the rate reduction?
12 SENATOR BRUNO: I'm not sure that
13 I did.
14 SENATOR PATERSON: It was on
15 casino boats.
16 SENATOR BRUNO: Ahh! Casino
17 boats, where some people should be floating.
18 Thank you, Senator. The bottom
19 line really is that this language in this bill
20 can be specifically -- and this was an agreement
21 with the Governor and with the Speaker -- that
22 any rate savings that accrue would go directly
23 to the ratepayers, not to all the others that
24 you describe, not to investors, to ratepayers.
25 That would be the language of this legislation.
1904
1 And let me just conclude, Mr.
2 President, because we have other work to do, by
3 saying that we ended up in trouble in this state
4 with businesses and with utilities by
5 micro-managing the management of businesses and
6 utilities by government literally interfering,
7 by overly regulatory ways, these utilities and
8 these businesses. We're trying to change that.
9 We're moving towards competition here in this
10 state and in an openly competitive market with
11 utilities, and that's way overdue to make us
12 more competitive with other states.
13 So I would urge my colleagues to
14 support the legislation that is before us.
15 Thank you, Mr. President.
16 ACTING PRESIDENT KUHL: The
17 Secretary will read the last section.
18 THE SECRETARY: Section 6. This
19 act shall take effect immediately.
20 ACTING PRESIDENT KUHL: Call the
21 roll.
22 (The Secretary called the roll. )
23 SENATOR GOLD: Mr. President.
24 ACTING PRESIDENT KUHL: Senator
25 Gold, to explain his vote.
1905
1 SENATOR GOLD: Yeah, Mr.
2 President and Senator Bruno, I had asked some
3 questions of Senator Seward, and I don't know, I
4 think other business may have distracted Senator
5 Bruno at the time, but those questions are valid
6 based upon Senator Bruno's comments, because
7 Senator Bruno said that the legislation will say
8 something.
9 Senator Bruno said the Assembly
10 has rejected this bill, and all that I said to
11 Senator Seward and I repeated to Senator Bruno,
12 is if the bill is laid aside, amended to have
13 this so-called chapter amendment language put in
14 it, and we have one piece of paper next Monday,
15 Tuesday or Wednesday, maybe we could on this
16 side give more support to the bill, but it's
17 silly to say that we are passing an imperfect
18 piece today, which we all know, thanks to
19 Senator Bruno's usual candor, that it will not
20 go in the Assembly. It will not become a law,
21 so why ask us to vote on something which you
22 yourself say must be amended? It's one thing to
23 do it in a committee, it's a different thing on
24 the floor.
25 So, Senator Bruno, I probably
1906
1 could support this if some of the language you
2 say will come were in this one piece of paper.
3 I would ask you to ask Senator Seward, lay it
4 aside. Amend it tomorrow or later today. We
5 have legislative days, bring it back next
6 Tuesday or Wednesday and get some broad-based
7 support and maybe the Speaker would listen. But
8 I don't -- when you say you're not being
9 political, the answer is, of course, you're
10 being political because if you weren't being
11 political, you would say, "Senator Abate, that
12 was a great idea," and, "Senator Leichter,
13 you're making some sense" and, therefore, wait
14 for my chapter amendment which will be included
15 in the bill, we'll put it before you Tuesday in
16 a non-political, bipartisan way and then let
17 Speaker Silver turn it down. Perhaps he'd
18 listen.
19 I vote no.
20 ACTING PRESIDENT KUHL: Senator
21 Gold will be recorded in the negative.
22 Senator DeFrancisco, to explain
23 his vote.
24 SENATOR DeFRANCISCO: I'd like to
25 explain my vote in the affirmative by indicating
1907
1 that presently it's my understanding there's no
2 bill in the Assembly that's in print that's even
3 close to the bill that we're discussing here
4 today, and it's important to get this process
5 going for all the reasons that were cited by
6 Senator Bruno.
7 The concept to wait for the
8 Assembly is the concept that I don't think this
9 -- this Legislature, the Senate, should ever,
10 ever follow. If we waited for the Assembly, we
11 wouldn't have a three-year income tax cut. If
12 we waited for the Assembly, we wouldn't have
13 workers' compensation relief. If we waited for
14 the Assembly who are now complaining about our
15 property tax bill, we will never have property
16 tax relief, and if we wait for the Assembly to
17 put something in print, we will never have
18 energy relief in this state.
19 So it's leadership is what we're
20 doing here. We're showing the Assembly where to
21 go and, as soon as public opinion catches up
22 with us, the Assembly will follow.
23 So I vote in the affirmative.
24 ACTING PRESIDENT KUHL: Senator
25 DeFrancisco will be voted in the affirmative.
1908
1 Senator Gentile, to explain his
2 vote.
3 SENATOR GENTILE: Yes, I'm voting
4 in favor of this bill as an affirmation that we
5 are moving in the right direction. However, it
6 baffles me sometimes to learn of some of the
7 procedural aspects of this house when we have an
8 amendment provided here that would do the same
9 thing that the chapter amendment that the other
10 side is proposing, when it's here on the floor
11 today and it's bypassed by the -- by the
12 sponsors of this bill. It baffles me that we
13 can't do everything today or put it over until
14 next week.
15 However, it's -- I look forward
16 to that chapter amendment, and I agree with
17 Senator Bruno. The good Senator said that, if
18 something is political, we could always find
19 ways to oppose it and I may need to remind the
20 good Senator of that statement in regard to the
21 constituents in my district in the very near
22 future.
23 In any case, I look forward to
24 the chapter amendment and I am voting yes.
25 ACTING PRESIDENT KUHL: Senator
1909
1 Gentile will be recorded in the affirmative.
2 Announce the results.
3 THE SECRETARY: Those recorded in
4 the negative on Calendar Number 345, Senators
5 Abate, Connor, Gold, Gonzalez, Leichter,
6 Markowitz, Montgomery, Nanula, Onorato,
7 Paterson, Sampson, Santiago, Seabrook, Smith,
8 Stachowski, Stavisky and Waldon. Ayes 44, nays
9 17.
10 ACTING PRESIDENT KUHL: The bill
11 is passed.
12 SENATOR LEICHTER: Mr.
13 President.
14 ACTING PRESIDENT KUHL: Senator
15 Leichter, why do you rise?
16 SENATOR LEICHTER: Yes. May I
17 have unanimous consent to be recorded in the
18 negative on Calendar Number 368, please.
19 ACTING PRESIDENT KUHL: Without
20 objection and hearing no objection, Senator
21 Leichter will be recorded in the negative on
22 Calendar Number 368.
23 Senator Present.
24 SENATOR PRESENT: Mr. President,
25 can we return to motions and resolutions and
1910
1 take up a Resolution 609 which was passed, have
2 it read in its entirety, and then recognize
3 Senator Cook.
4 ACTING PRESIDENT KUHL: We'll
5 return to the order of motions and resolutions.
6 Secretary will read Resolution Number 609 which
7 was previously passed, in its entirety.
8 THE SECRETARY: By Senator Cook,
9 Legislative Resolution, commending the New York
10 Association for Continuing Community Education
11 and the 1997 Students of the Year.
12 WHEREAS, the Legislature of the
13 state of New York is pleased to welcome the New
14 York Association for Continuing Community
15 Education, and proud to commend the 1997
16 Students of the Year for their outstanding work
17 as adult learners; and
18 WHEREAS, Najayyah Ahmed, Robert
19 G. Anderson, Edwin C. Andrews, Bridget Barback,
20 Maria T. Cappello, Harriet Cole, Shirley Davis,
21 Charles Gottschalk, Scott Gowans, Belinda Lopez,
22 Cheryl Lemons, Andrew Moxley and Christopher
23 Lane, all honored recipients of the year who
24 have been selected to receive this esteemed
25 distinction because of their demonstrated
1911
1 outstanding perseverance and dedication;
2 The 1997 Students of the Year
3 worked hard and overcame a myriad of challenges
4 and, in doing so, developed within themselves a
5 strong sense of independence, self-reliance and
6 self-sufficiency which can never be taken away.
7 The 1997 Students of the Year have confirmed
8 through their earnest commitment and will to
9 succeed that they should be looked upon as
10 positive role models, not only to adult learners
11 but to their community as well;
12 The Legislature of the state of
13 New York also pays tribute to the teachers,
14 coordinators, administrators and trainers of
15 these students for their selfless dedication to
16 the students and whose work has brought hope
17 into the lives of many, an accomplishment that
18 cannot be measured.
19 The Legislature of the state of
20 New York also honors the board members for their
21 guidance of the New York Association for
22 Constituting Community Education, and for their
23 continued dedication to education in New York
24 and to all the individuals on the New York State
25 committee who worked diligently in order to
1912
1 ensure these students receive the recognition
2 they deserve;
3 NOW, THEREFORE BE IT RESOLVED
4 that this legislative body pause in its
5 deliberation to commend the New York Association
6 for Continuing Community Education and the 1997
7 Students of the Year for the remarkable
8 accomplishments; and
9 BE IT FURTHER RESOLVED that
10 copies of this resolution, suitably engrossed,
11 be transmitted to each of the 1997 Students of
12 the Year, Board President Michael Mooney and
13 Awards Day Chairperson Marguerite Kershaw.
14 ACTING PRESIDENT KUHL: Chair
15 recognizes Senator Cook to speak on the
16 resolution.
17 SENATOR COOK: Mr. President,
18 this house has just passed a piece of
19 legislation, the major purpose of which was to
20 open the doors for employment to the people of
21 our state, more of the people of our state, and
22 we're now considering a resolution that honors a
23 group of people who have worked diligently to
24 better prepare themselves to walk through those
25 doors when they're open.
1913
1 These are adult learners. These
2 are people who have, through their own personal
3 commitment and dedication and ambition, gone
4 back into the educational process and with the
5 help of skilled and dedicated teachers, they
6 have brought themselves to a point now where
7 they indeed are prepared to assume their role as
8 productive members of our state, contributors to
9 our economy, as people who will improve the
10 quality of life for themselves and their
11 families because of the increased education
12 which they now have, and we should pause at this
13 point, as this resolution indicates, to
14 congratulate them for having the personal
15 initiative to undertake this task and to
16 successfully complete the programs which they
17 have followed.
18 They are present with us, Mr.
19 President, in the gallery, along with several of
20 their instructors and mentors and teachers, and
21 I would be very pleased if you would take this
22 occasion to welcome them here today and I think
23 perhaps they have met with several of the
24 members as well, who are -- who represent their
25 districts, and we all in the Senate join in
1914
1 celebrating with them this -- this very
2 significant milestone in their lives.
3 ACTING PRESIDENT KUHL: Thank
4 you, Senator Cook.
5 Would the Students of the Year
6 please rise and be recognized. We welcome you,
7 congratulate you. Let this be the beginning of
8 a wonderful life and certainly a wonderful world
9 for all of you. Thank you for sharing a moment
10 of your day with us, and again congratulations.
11 (Applause).
12 Senator DeFrancisco.
13 SENATOR DeFRANCISCO: I just want
14 to rise and second what Senator Cook had to
15 say. I don't -- I haven't met every one, all
16 the Students of the Year, but judging from
17 Cheryl Lemons who is from my district, I can
18 imagine some of the obstacles that all of you
19 have had to overcome not only to get to the
20 position that you're in but to be motivated
21 enough to start the process, and I commend all
22 of you, and especially the New York State
23 Association for Continuing Community Education.
24 It's dedicated people like yourselves who make
25 these opportunities possible and not only
1915
1 provide the opportunities but provide a future
2 for so many people.
3 The best of luck to all of you.
4 ACTING PRESIDENT KUHL: Senator
5 Present.
6 SENATOR PRESENT: Mr. President,
7 can we return to the controversial calendar and
8 take up Calendar 185, by Senator Levy.
9 ACTING PRESIDENT KUHL: We will
10 return to the controversial calendar, page 9,
11 Calendar Number 185, Senate Print 605, by
12 Senator Levy. I'll ask the Secretary to read
13 the title.
14 THE SECRETARY: Calendar Number
15 185, by Senator Levy, Senate Print 605, an act
16 to amend the Vehicle and Traffic Law, in
17 relation to criminal history checks on school
18 bus attendants.
19 SENATOR ONORATO: Explanation.
20 ACTING PRESIDENT KUHL: Senator
21 Levy, an explanation has been asked for.
22 SENATOR LEVY: Who asked for the
23 explanation?
24 ACTING PRESIDENT KUHL: Senator
25 Onorato, the Acting Minority Leader.
1916
1 SENATOR LEVY: Oh, yes, Senator,
2 this is a matter of very, very brief history and
3 I heard Senator DeFrancisco talk about waiting
4 for the Assembly. Well, we've been waiting for
5 the Assembly now for about 12 or 13 or maybe 15
6 years, and passed it each year.
7 Back when we did legislation to
8 require fingerprinting of school bus drivers, it
9 was a long complicated negotiation, and finally
10 there was a compromise with the Assembly, where
11 it agreed to fingerprinting school bus drivers,
12 refused to agree to fingerprinting school bus
13 attendants.
14 Consequently over the years,
15 we've had -- we've had people out on parole for
16 violent crimes that have been involved in the
17 commission of felonies, including sexual
18 molestation of children with or without
19 disabilities on school buses and those have been
20 school bus attendants that have committed those
21 crimes.
22 So what this bill would do would
23 be to require the fingerprinting of school bus
24 attendants, and I can only, in urging passage of
25 this bill and support for it, refer to a recent
1917
1 news clipping that I read where my distinguished
2 colleague, Senator Oppenheimer, who is the
3 ranking member of my committee, has introduced
4 legislation to fingerprint nannies, and nannies
5 may take care of a child or a family that has
6 numerous children, but these school bus
7 attendants are taking care of full buses of
8 school children and some with developmental
9 disabilities.
10 So this is really a very, very
11 significant omission of law, and it puts school
12 children being transported really at risk if we
13 don't know who's on the bus taking care of
14 them.
15 ACTING PRESIDENT KUHL: Senator
16 Paterson.
17 SENATOR PATERSON: Thank you, Mr.
18 President.
19 Last year I asked Senator Levy
20 some questions on this bill relating to the fees
21 for the bus attendants. They're apparently the
22 same as the fees of the bus drivers and
23 apparently, if I'm correct, all of the standards
24 for the attendants are the same as they are for
25 the -- the other employees, the bus drivers and
1918
1 so I'm satisfied with that explanation.
2 For the record, Senators Gold,
3 Leichter, Montgomery, Markowitz, Nanula and
4 Santiago voted against this piece of legislation
5 last year.
6 ACTING PRESIDENT KUHL: Secretary
7 will read the last section.
8 THE SECRETARY: Section 2. This
9 act shall take effect on the 90th day.
10 ACTING PRESIDENT KUHL: Call the
11 roll.
12 (The Secretary called the roll. )
13 ACTING PRESIDENT KUHL: Announce
14 the results when tabulated.
15 THE SECRETARY: Ayes 60, nays
16 one, Senator Montgomery recorded in the
17 negative.
18 ACTING PRESIDENT KUHL: The bill
19 is passed.
20 Senator Present.
21 SENATOR PRESENT: Mr. President,
22 can we return to report of standing committees?
23 I believe there's a report at the desk.
24 ACTING PRESIDENT KUHL: There is,
25 Senator Present. We will return to the order of
1919
1 standing committees. I'll ask the Secretary to
2 read.
3 THE SECRETARY: Senator LaValle,
4 from the Committee on Higher Education, offers
5 up the following bills:
6 Senate Print 1745, by Senator
7 Rath, an act to amend the Education Law, in
8 relation to requirements for written
9 prescriptions;
10 2586, by Senator LaValle, an act
11 to amend the Education Law, in relation to
12 registration of a pharmacy;
13 2804, by Senator LaValle, an act
14 to amend Chapter 31 of the Laws of 1985;
15 3200, by Senator LaValle, an act
16 to amend the Education Law and the Public Health
17 Law;
18 3201, by Senator LaValle, an act
19 to amend the Education Law, in relation to
20 proceedings in cases of professional misconduct;
21 and
22 3227, by Senator LaValle, an act
23 to amend the Education Law, in relation to the
24 operation and regulations of licensed private
25 schools.
1920
1 All bills directly to third
2 reading.
3 ACTING PRESIDENT KUHL: Without
4 objection, hearing no objection, all bills are
5 reported directly to third reading.
6 Senator Gold, why do you rise?
7 SENATOR GOLD: Thank you, Mr.
8 President.
9 Mr. President, I had to step out
10 for a moment, and I'd like to be recorded in the
11 negative on Senate 605, Calendar Number 185.
12 ACTING PRESIDENT KUHL: Without
13 objection, hearing no objection, Senator Gold
14 will be recorded in the negative on Calendar
15 Number 185.
16 We'll continue -- actually return
17 to the order of motions and resolutions. Chair
18 recognizes Senator Tully.
19 SENATOR TULLY: Thank you, Mr.
20 President. Would you please place a sponsor's
21 star on Calendar Number 312.
22 ACTING PRESIDENT KUHL: Calendar
23 Number 312 is starred at the request of the
24 sponsor.
25 Senator Tully.
1921
1 SENATOR TULLY: Thank you, Mr.
2 President.
3 On behalf of Senator Libous, on
4 page 11, I offer the following amendments to
5 Calendar Number 256, Senate Print Number 1231,
6 and ask that said bill retain its place on the
7 Third Reading Calendar.
8 ACTING PRESIDENT KUHL: The
9 amendments to Calendar Number 256 are received
10 and adopted. The bill will retain its place on
11 the Third Reading Calendar.
12 Senator Bruno.
13 SENATOR PRESENT: Mr. President,
14 can we return to the controversial calendar and
15 take up Calendar 250 by Senator Bruno.
16 ACTING PRESIDENT KUHL: We'll
17 return to the controversial calendar. Secretary
18 will read Calendar Number 250, Senate Print 706,
19 by Senator Bruno.
20 THE SECRETARY: On page 11,
21 Calendar Number 250, by Senator Bruno, Senate
22 Print 706, an act to amend the Vehicle and
23 Traffic Law, in relation to the disqualification
24 of a bus driver.
25 ACTING PRESIDENT KUHL: Senator
1922
1 Bruno, an explanation has been asked for by
2 Senator Montgomery.
3 SENATOR BRUNO: Mr. President,
4 this bill is very straightforward, basically
5 says that anyone that's driving a school bus
6 that tests positive for drugs or alcohol twice,
7 if they test positive they get retested, they
8 can be retested in whatever ways that they deem
9 appropriate and fair. If they test positive in
10 this manner, they cannot drive a school bus and
11 that they will and can lose their license.
12 That's what this bill does, in
13 essence.
14 ACTING PRESIDENT KUHL: Senator
15 Paterson.
16 SENATOR PATERSON: Thank you, Mr.
17 President. Senator -- if Senator Bruno would
18 yields for a question.
19 ACTING PRESIDENT KUHL: Senator
20 Bruno, do you yield for a question?
21 SENATOR BRUNO: Yes, Mr.
22 President.
23 ACTING PRESIDENT KUHL: Senator
24 yields.
25 SENATOR PATERSON: Senator, the
1923
1 bill amends two sections of the law. One is
2 section 509 (l) which we heartily concur with,
3 where at a point where there is a conviction or
4 there is evidence of consumption or possession
5 or use of alcohol or substances within six hours
6 of the time that the person is operating the
7 vehicle, that their -- at that point that their
8 license would be revoked, but the other section
9 of the law, section 509 (cc) which demonstrates
10 that upon a finding of evidence based on a -- on
11 drug testing, and it only takes one test, that
12 this would be the case, and this is the section
13 that I'd like you to respond to, because we know
14 that there are many types of situations that can
15 set off a positive in one of the tests. In fact
16 there was a former colleague who apparently was
17 eating a roll with poppy seeds in it that caused
18 a test to register positive when there hadn't
19 been any substance abuse. Cough medicine can
20 create that, and I was wondering if we wanted to
21 -- if we wanted to take such extreme action
22 when one test could set in motion the
23 legislation that you're proposing.
24 SENATOR BRUNO: The bottom line,
25 Senator, what we're saying is, when people are
1924
1 tested and are tested the second time, if they
2 test positive, we don't want them in a school
3 bus driving a school bus. They don't belong
4 driving children around, period. That's really
5 what this is intended to accomplish, and with
6 some of what is presently in law, if people are
7 found guilty, all right, they pay a fine and
8 then they go back to driving a bus and, Senator,
9 I don't think you for a minute would want
10 someone driving your children around, or anyone
11 else's children, that have tested twice positive
12 for drugs.
13 So that's really all that this is
14 intended to do is not have a minimum fine and
15 then say, Fine, jump back in the bus a week or
16 two weeks later and drive the children around.
17 That's where this is at, Mr. President.
18 SENATOR PATERSON: Mr. President,
19 I agree with Senator Bruno completely.
20 SENATOR BRUNO: Thank you.
21 SENATOR PATERSON: I think that
22 whereupon there's a finding in a second test
23 that this is the case, it would be extremely
24 detrimental and grave risk to have anyone
25 driving a bus that would have anybody's children
1925
1 in the bus, but if Senator Bruno would yield for
2 a question. I don't see in the legislation
3 where there is a provision for a second test.
4 That's all I'm saying.
5 I wouldn't want to rely upon the
6 first test which is where one test has been
7 employed has been proven so often to not be
8 accurate. So I'm just trying to make sure that
9 the standard and the threshold that we're using
10 is one that would be sufficiently accurate that
11 we wouldn't take citizens who are not engaging
12 in the use of any alcohol or any substances, bus
13 drivers who care about the children, who,
14 because of a random test which might have been
15 administered at a time that they might have
16 eaten a roll that had a poppy seed in it or
17 taken a certain cough medicine, I don't see in
18 the legislation where it shows that there is a
19 provision for a second test.
20 If you can show me that, I have
21 absolutely no problem with the legislation.
22 SENATOR BRUNO: Thank you,
23 Senator.
24 The present law -- present law,
25 federal law, indicates that if a test is given
1926
1 and you're not satisfied you then would be
2 tested. Isn't satisfied, you can then request
3 another test to verify the findings, so that is
4 present law, and that's what we're referring
5 to. So we would appreciate your support for
6 this because really all that we're intending is
7 that, when this process takes place, and by the
8 way this is the same testing procedure that
9 takes place for anyone that has to be tested,
10 whether you're operating a train or whatever it
11 is, so we aren't singling these people out in
12 any way other than that they relate to the same
13 procedures and laws that take place for other
14 responsible people who are responsible for other
15 people's lives.
16 So I think it's the appropriate
17 thing to do, proper thing to do, and I would
18 appreciate your support.
19 ACTING PRESIDENT KUHL: Senator
20 Paterson.
21 SENATOR PATERSON: Thank you, Mr.
22 President.
23 I would actually like to support
24 this legislation. Senator, does counsel agree
25 that the federal law would preempt in this
1927
1 situation because, in other words, what it says
2 here is that after a test finds that there is a
3 presence of alcohol or substances that there's a
4 permanency to the revocation.
5 Are we clear that the federal law
6 is the supervening law in this situation?
7 SENATOR BRUNO: The state
8 presently has the jurisdiction of issuing
9 licenses, and that's why we are legislating here
10 in the state the procedure that we are
11 describing, and the federal law is in existence
12 that describes the process that would take place
13 with the retesting if someone's not satisfied.
14 Now, if a person's license is
15 taken, a person can then have recourse in the
16 courts and go through due process to get that
17 license back if they feel that something has
18 happened that shouldn't have happened. Senator,
19 they always have recourse after the fact in the
20 courts, but our mission here is to get a person
21 out of the driver's seat of a bus driving our
22 children. That's the reason why this is on the
23 floor.
24 I had an experience in
25 Shenendehowa where a bus driver was found to be
1928
1 under the influence of drugs, and they had
2 trouble keeping him from driving the bus, and
3 this is our response for that specific and
4 others just like that all over the state.
5 ACTING PRESIDENT KUHL: Senator
6 Paterson.
7 SENATOR PATERSON: Mr. President,
8 through you, I certainly agree and there are so
9 many situations that we've read about that
10 you've just described all over the state where
11 individuals who are consuming amounts of alcohol
12 or substances are driving buses and it's -- it
13 is very important that this legislation that
14 you're proposing pass, and we would like to
15 support it, and there's just this concern that's
16 been raised from our legal staff and research
17 staff about the federal law as it applies to the
18 state law.
19 Would you consider laying this
20 bill aside for the day just perhaps to include
21 in the legislation some phrase that says as is
22 held in federal law that the right to a second
23 test is vested in the individual who's tested
24 just so that it is absolutely clear not only for
25 the children that we're trying to protect but
1929
1 for our citizens who we're trying to protect who
2 submit to random drug testing and may
3 accidentally set off the test, individuals that
4 you and I might know who would be just as
5 opposed to children being driven around by
6 individuals who are suffering from diminished
7 capacity because of the use of substance or of
8 alcohol, that those individuals who would agree
9 with us and do not engage in that activity not
10 in any way be falsely accused or in any way be
11 suffering from the fact that they set off a
12 test, a positive finding based on some
13 circumstances that are not induced by alcohol or
14 substances?
15 All I'm saying is that I would
16 think that with legislation this important that
17 we would want to be scrupulously fair to all
18 parties, and it would be in the best interest of
19 children as our priority, would you consider
20 laying this aside so we could just include that
21 one line in the legislation, we'd all want to
22 vote for?
23 SENATOR BRUNO: Senator, our
24 counsels have just had a short discussion and
25 hopefully that might be somewhat enlightening,
1930
1 but I share your concern that we don't falsely
2 accuse anyone, and create a situation that would
3 be unfair, but there is enough protection in the
4 law that would inhibit anyone from being
5 convicted falsely or losing their license
6 falsely the procedures that are presently in
7 place and what's described here in this
8 legislation.
9 So we are this far with the
10 legislation. We think it's important and we're
11 concluding session until next week, so we would
12 like to move this forward and would like to do
13 it this morning, and I think upon your review, I
14 think you'll be satisfied that we're pretty much
15 together in the conclusions that we would
16 reach.
17 ACTING PRESIDENT KUHL: Senator
18 Paterson.
19 SENATOR PATERSON: Mr. President,
20 I certainly share Senator Bruno's concern
21 although we have laid this bill aside in each of
22 the last five legislative sessions. I just
23 thought that a couple of days to ensure the
24 protection of the individuals who were taking
25 the test would be somewhat foresighted.
1931
1 Being unable to of that, I'm
2 going to take a quick look and try to come to
3 some conclusion, but I'd like to assure all the
4 members that those of us who are having problems
5 with the legislation are not having any problem
6 with the purpose of the legislation and
7 certainly agree with Senator Bruno about the
8 magnitude of the problem that this legislation
9 addresses and how eagerly we would like to pass
10 some legislation such that we don't have the
11 problem that Senator Bruno described where you
12 have individuals who are known to be using
13 substances or engaging in the use of alcohol at
14 the same time -- at the same time -- I'm not
15 here -- at the same time not suffering from the
16 situation with those individuals that are
17 continuing, they are continuing to operate
18 vehicles at a time when our children are at
19 grave risk. We understand that, we want to
20 protect it, and we want very much to support
21 Senator Bruno's bill.
22 ACTING PRESIDENT KUHL: Senator
23 Bruno.
24 SENATOR BRUNO: Thank you. By
25 way of conclusion, Mr. President, I'd like to
1932
1 remind my colleagues that this exact same piece
2 of legislation passed in this chamber
3 unanimously -- unanimously -- same piece of
4 legislation, same language, same consequences,
5 passed unanimously.
6 I'm also conscious of the fact
7 that there have been some memos in opposition
8 that relate to some of these affairs being
9 settled through collective bargaining and while
10 we respect the people that put in these memos in
11 opposition, we're more concerned with getting
12 these drivers out of the driver's seat than we
13 are with the collective bargaining procedure,
14 and that's why you joined us last year, Senator,
15 in voting for this legislation and that's why
16 I'm a little puzzled as to why now debating it
17 and talking about delaying it.
18 I'd like to see it moved and
19 perhaps in negotiations with the Assembly
20 possibly we can address and verify some of the
21 concerns that you're sharing, so I would ask you
22 to just concur in that respect, that you concur
23 as we negotiate this, and hopefully we will see
24 it become law, all of the concerns that you
25 express will be taken in consideration.
1933
1 ACTING PRESIDENT KUHL: Senator
2 Paterson.
3 SENATOR PATERSON: Mr. President,
4 I saw the memos in opposition last year and I
5 voted for this legislation, along with every
6 other colleague in this chamber, and the reason
7 I voted for it is exactly the reason that
8 Senator Bruno just averred here, that we
9 certainly must put the interest of children over
10 some of the collective bargaining and the other
11 matters that were discussed.
12 But the issue of whether or not
13 the second test would be available to the
14 subject was raised to us after the legislation
15 passed last year, and that's the reason why we
16 come back here every year, hopefully that we
17 might be enlightened by circumstances that might
18 be brought to our attention, and that's the
19 reason I raised it today.
20 I will -- I will certainly take
21 the word of the Majority Leader that the federal
22 law does provide for the administration of the
23 second test, but I just would simply ask, Mr.
24 President, how much more foresighted would it be
25 if we clear up these concerns by codifying this
1934
1 issue into law and making it very clear,
2 especially to the counsel who might be
3 representing an individual who believes that
4 they were falsely tested, that they have
5 recourse in this situation rather than at some
6 point having to go to court when their
7 reputation is sneared and certainly their -- the
8 confidence that parents would have in this
9 individual would certainly be -- would certainly
10 be challenged at this point because this person
11 has tested positive in a drug test or alcohol,
12 test for alcohol and, in fact, the positive
13 finding was created by another source.
14 If the test were so accurate that
15 only a scintilla of possibility would exist that
16 there not be a positive test, then I would
17 concur with the Majority Leader, but there are
18 numbers of instances that I've previously cited
19 where the tests have been found to be
20 unfavorable in eliciting the result that would
21 be accurate, and that is the only reason I
22 raised the issue.
23 I don't mean to quarrel with the
24 necessity nor with the scope that the
25 legislation addresses.
1935
1 ACTING PRESIDENT KUHL: Secretary
2 will read the last section.
3 THE SECRETARY: Section 4. This
4 act shall take effect immediately.
5 ACTING PRESIDENT KUHL: Call the
6 roll.
7 (The Secretary called the roll. )
8 ACTING PRESIDENT KUHL: Record
9 the negatives and announce the results.
10 SENATOR MONTGOMERY: Mr.
11 President, to explain my vote.
12 ACTING PRESIDENT KUHL: Senator
13 Montgomery, to explain her vote.
14 SENATOR MONTGOMERY: I'm going to
15 vote no on this legislation. I certainly share
16 the concerns that have been raised by the Deputy
17 Minority Leader and, since there are no clear
18 and distinct provisions in the legislation to
19 protect the -- the interest of the person who
20 would be tested and, as I have had many
21 experiences with people who have had false
22 positive tests in these instances, if there is
23 no right to appeal, I think that there is a
24 major problem and it should be clearly stated in
25 the bill.
1936
1 But I too share the concern of
2 the Majority Leader that we need to protect our
3 children, and I am certainly in favor of the
4 purpose of the bill, but I cannot vote for it as
5 it is currently crafted. So I'm voting no.
6 ACTING PRESIDENT KUHL: Senator
7 Montgomery will be recorded in the negative.
8 Announce the results.
9 THE SECRETARY: Those recorded in
10 the negative on Calendar Number 250: Senators
11 Montgomery, Sampson, Santiago and Smith. Ayes
12 57, nays 4.
13 ACTING PRESIDENT KUHL: The bill
14 is passed.
15 Senator Bruno, that completes the
16 controversial calendar.
17 SENATOR BRUNO: Mr. President,
18 any housekeeping, other matters to be taken care
19 of at the desk?
20 ACTING PRESIDENT KUHL: All taken
21 care of previously, sir.
22 SENATOR BRUNO: Thank you, Mr.
23 President.
24 There being no further business
25 to come before the Senate, I would move that we
1937
1 stand adjourned until Monday at 3 p.m.,
2 intervening days to be legislative days.
3 ACTING PRESIDENT KUHL: Without
4 objection, Senate stands adjourned until Monday,
5 March 24th, at 3:00 p.m., intervening days to be
6 legislative days.
7 (Whereupon at 12:29 p.m., the
8 Senate adjourned. )
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