Authorizes the Hudson River-Black River Regulating District to temporarily advance moneys held in any fund to another fund of the district

Summary of provisions

Section 1 of the bill would add a new subdivision 3 to ECL § 15-2141 to authorize the Hudson River-Black River Regulating District to temporarily advance moneys held in any fund of such district to any other fund of such district. Any advance would be required to be repaid to the advancing fund no later than the dose of the next succeeding budget cycle. In addition, the bill would require a lost interest component to the repayment if the two funds are comprised of taxes, special ad valorem levies, or special assessments on a different base of properties.

Section 2 of the bill would amend ECL § 15-2109(1) to make the effective date of regulations promulgated by a river regulating district be in accordance with the State Administrative Procedure Act (SAPA) rather than when approved by DEC.

Section 3 of the bill would amend ECL § 15-2121 (4) to eliminate the requirement that the apportionment of costs of a river regulating district be certified to DEC for approval.

Section 4 of the bill would provide for an immediate effective date.

Existing law

Title 21 of Article 15 of the ECL authorizes the creation of river regulating districts to construct, operate and maintain reservoirs to regulate the flow of rivers in order to protect the public from flooding. The districts are public corporations and are deemed municipal corporations for purposes of receiving federal funds or any other benefit under federal law. The powers and responsibilities of the district are vested in a board, the members of which are appointed by the Governor. ECL § 15-2101 through 15-2135 govern the districts and the boards. In addition to these provisions ECL §§ 15-2137 through 15-2141 apply to the Hudson River-Black River Regulating District that was formed by the merger of the former Hudson River Regulating District with the former Black River Regulating District.

ECL § 15-2141 requires the Hudson River-Black River Regulating District to continue to maintain funds for the Hudson River area of the district that are separate from the Black River - area of the district. This was required when the two former districts were merged to create the Hudson River-Black River Regulating District (District). The Office of the State Comptroller has determined that legislation is required to specifically authorize the District to temporarily advance moneys from a fund of one area to a fund of the other area.

ECL § 15-2109 authorizes the board of any river regulating district to adopt regulations to implement Title 15 of Article 21 of the ECL. This section also provides that the regulations are effective when approved by DEC.

ECL § 15-2121 authorizes the board of any river regulating district to apportion its operating and capital costs to the public corporations and real estate parcels benefitted by the district's improvements. This section also provides that such apportionment shall be approved by DEC.

Legislative history

This is a new bill.

Statement in support

This bill would authorize the Hudson River-Black River Regulating District to advance funds held for river area operations from the general fund of one area of the District to the general fund of the other area of the District, so that those funds would be available for the cost of District operations in the other area. Money temporarily advanced would be repaid to the fund from which it was advanced as soon as available, but in no event later than the end of the next succeeding budget cycle. Repayment would include an amount reasonably estimated to be the additional amount that would have been earned on the investment of moneys in the fund making the advance had the advance not been made.

A recent ruling from the United States Court of Appeals for the DC Circuit in Albany Engineering Corp. v. Federal Energy Regulatory Commission, 548 F.3rd. 1071 (D.C. Cir., 2008), and the proceedings resulting from the Court's remand to the Federal Energy Regulatory Commission (FERC), has significantly limited the regulating district's authority to assess FERC licensed hydropower companies pursuant to Title 21 of ECL Article 15. Essentially, the Court held that Congress, in adopting Federal Power Act § 10(f), had "occupied the field" so as to preempt collection of assessments against FERC licensed hydropower operators under color of state law. As a result, Albany Engineering Corp., Curtis Palmer Hydroelectric Co., L.P., Erie Boulevard Hydropower, L.P., Fort Miller Associates, Georgia Pacific Corp., Green Island Power Authority, National Grid, New York State Electric & Gas Corp., and Stillwater Hydro Associates, LLC, have ceased paying their former assessments, which provided the majority of the District's revenues for over eighty years. While that decision eliminated the District's authority to assess FERC licensees under state law, it did not invalidate ECL § 15-2115, which requires the District to pay county and school property taxes.

Pursuant to the Federal Power Act, FERC will complete a Headwater Benefits Determination through which FERC will dictate how much of the District's expenses each hydropower licensee on the Hudson River must cover. FERC is likely to take more than one year to complete the Headwater Benefits Determination and is not likely to obligate the FERC hydropower licensees to the level of assessments seen in years past. The District will be compelled to utilize existing state statutory authority, pursuant to Title 21 of ECL Article 15, to collect assessments from municipalities and owners of real estate downstream of the District's facility at Conklingville. Given time necessary to comply with the ECL § 15-2121 DEC approval process, public notice/hearing procedures, and subsequent billing and remittance timeframes, the District is unlikely to see much revenue before the end of 2010.

In light of this court imposed fiscal shortfall, the District has been forced to defray payment of school taxes due at the end of September 2009. Once the regulating district completes the reapportionment and assessment under state law, and FERC completes its Headwater Benefits Determination under federal law, the regulating district will again be on sound financial footing and prepared to meet all obligations.

The advance of Black River area Short Term Investment Pool (STIP) funds could provide funding to cover payment of the Hudson River area 2009 school taxes, 2010 property taxes, and recurring operational expenses through the middle of 2010. However, upon review of the District's request to advance Black River area funds to the Hudson River area STIP, the Comptroller determined on the basis of ECL 15-2141 that the Black River area funds must be kept separate from funds of the Hudson River area and that such provision did not authorize any transfer of moneys from the Black River area accounts or investments to the Hudson River area accounts. ECL § 15-2141 further provides that all moneys received and held by the District on behalf of either area shall be applied solely for the cost of maintenance and operation in the respective area from which the moneys were received.

The Comptroller also noted that no other provision of the ECL authorizes a temporary loan or transfer of moneys from one account to the other. In contrast, State Finance Law § 4(5) and General Municipal Law § 9-a contain limited authority for such temporary loans or transfers of State and municipal moneys. Moreover, ECL § 15-2129(6), restricting investments of the District, precludes the District from investing in its own funds. Therefore, the Comptroller determined that this provision of law creates a strong implication that the District can not temporarily loan or transfer funds of the Black River area account to the Hudson River area account. The Comptroller suggested that the District seek legislation to authorize the temporary transfer of available excess funds, via an interfund loan, and assisted the District in drafting this proposal.

DEC's responsibility to approve the District's regulations should be eliminated because it predates modem rulemaking procedures, including those provided for under SAP A, that require both the Governor's Office of Regulatory Reform and Executive Chamber approval of regulations, the filing of proposed and adopted regulations with the Department of State, and the publication of notices in the New York State Register. Similarly, DEC's approval of the District's

apportionment of costs among the beneficiaries should also he deleted because DEC has no prior experience or expertise in this area. Indeed, records indicate that an apportionment was last undertaken in 1925.

Budget implications

This bill would have no impact on the State budget.

Effective date

This bill would take effect immediately.