What's happening
This bill sets procedures for reallocating unused Qualified Energy Conservation Bond (QECB) authority from large local governments to the state.
Why it matters
Ensures Unused QECB Funding Gets Used. By requiring large local governments to report on their use or intent to use QECBs, this bill aims to prevent valuable federal energy conservation bond authority from sitting idle, making it more likely that these funds will actually support energy-saving projects in New York.
Increases Statewide Access to Energy Project Funding. If large local governments do not use their allocations, the state can reclaim and redistribute those resources to other entities (like NYSERDA or other issuers) that are more prepared or motivated to implement energy conservation initiatives, potentially resulting in more projects statewide.
Creates Deadlines and Accountability. The bill sets clear reporting requirements and strict timelines (including an 18-month window, with possible extensions up to three years) for local governments to act on their allocations, ensuring that decisions are made promptly and that reallocation happens efficiently if local governments are nonresponsive or inactive.
Protects Existing Commitments and Provides Local Input. Prior allocations and projects already underway are protected, so ongoing efforts aren’t disrupted. Additionally, for major reallocations ($5 million or more), the New York State Association of Counties must be consulted, giving local governments a voice in how these significant resources are reassigned.
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Who cares
Headline styles
Reclaim Unused Energy Bond Funds
Plain English, a few words. Used as the page title.
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History
- Referred to energy and telecommunications
- Referred to energy and telecommunications
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5543
2017-2018 Regular Sessions
IN SENATE
April 7, 2017
Introduced by Sen. GRIFFO -- (at request of the Energy Research Development Authority) -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT relating to qualified energy conservation bonds
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Definitions. As used in this act, unless the context requires otherwise:
"President" means the president and chief executive officer of the New York state energy research and development authority.
"Code" means the internal revenue code of 1986, as amended.
"Issuer" means the state, the New York State Energy Research Development Authority or a large local government which is authorized to issue QECBs.
"Large local government" means a municipality or county, in either case, within the state having a population, as of July 1, 2007, of 100,000 or more. For purposes of this act, large local government does not include an Indian tribal government.
"Municipality" means a city or town.
"NYSERDA" means the New York State Energy Research and Development Authority.
"Qualified Energy Conservation Bonds" or "QECBs" means bonds, notes or other obligations issued as qualified energy conservation bonds under section 54D of the code.
"QECB volume cap" means the aggregate dollar amount of QECBs permitted to be issued by the state and large local governments pursuant to section 54D of the code.
"Unspecified portion" has the meaning ascribed to such term in paragraph (d) of section two of this act.
§ 2. QECB Volume Cap Utilization Reports; Abandonment and Relinquishment of QECB Volume Cap. (a) The chief executive of every large local
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09997-02-7
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government, except for a city with a population of 1 million or more, or, if such local government has no chief executive officer, the governing board of such local government, shall report to the President and CEO of NYSERDA no later than the 120 days following the date this act shall take effect:
(i) whether such large local government has already issued QECBs and, if so, copies of the information returns filed with the Internal Revenue Service relating to such QECBs shall also be included in its report, and if such large local government has otherwise reallocated all or a portion of its QECB volume cap, a description of such reallocation; and
(ii) if such large local government has not used and applied the full portion of its QECB volume cap to the issuance of QECBs, whether and when it intends to do so, and if so, the projects or purposes to which such cap will be applied.
(b) In filing the report required by paragraph (a) of this section, a large local government may affirmatively state in such report or may notify the President and CEO of NYSERDA at any time after the filing of such report that such large local government is reallocating to the state all or any portion of its unused QECB volume cap and such reallocation shall be deemed to be effective as of the date of the filing of such report or notification.
(c) Any large local government which does not file the report required by subparagraph (i) of paragraph (a) of this section by the date therein required shall be deemed as of such date to have abandoned, voluntarily relinquished and reallocated to the state any of its unused QECB volume cap.
(d) Any large local government which timely files the report required by subparagraph (i) of paragraph (a) of this section but does not specify in such report that it intends to use and apply part, but not all, of the full portion of its QECB volume cap for the issuance of QECBs shall be deemed, as of the date of such filing, to have abandoned, voluntarily relinquished and reallocated to the state the portion of its unused QECB volume cap which is not specified in such report as being intended to be used (herein the "unspecified portion").
§ 3. Unused local QECB volume cap reallocated to the state. If (a) the report of a large local government submitted pursuant to subparagraph (ii) of paragraph (a) of section two of this act expresses an intention to use and apply any unused portion of that large local government's QECB volume cap in connection with the issuance of QECBs, and (b) QECBs have not been issued by the date eighteen (18) months after the date this act shall take effect, or such later date as may be approved by the President and CEO of NYSERDA in accordance with section four of this act, then such unused QECB volume cap shall be deemed to have been abandoned by such large local government and voluntarily relinquished and reallocated to the state as of such date.
§ 4. Rules and Regulations. Notwithstanding any other law to the contrary, the President and CEO of NYSERDA may promulgate rules and regulations for the implementation of this act and may grant extensions to the deadline set forth in section three of this act with respect to all or a portion of the QECB volume cap allocable to a large local government to a date or dates not later than three years after the enactment of this act upon receipt of evidence satisfactory to the President and CEO that such large local government has made sufficient commitments towards the issuance of QECBs and that it is reasonable to expect that such QECBs will be issued on or before the date three years after the date this act shall take effect.
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§ 5. Reallocation of QECB Volume Cap abandoned, relinquished and reallocated pursuant to this act. Any QECB volume cap which is abandoned, relinquished or reallocated to the state pursuant to this act may be further reallocated by the Governor to NYSERDA or any other issuer the Governor may designate, such reallocated QECB volume cap to be applied to the issuance of QECBs; provided that in considering any reallocation of QECB volume cap in an aggregate amount equal to or greater than 5 million dollars, the New York State Association of Counties shall be consulted prior to the final reallocation.
§ 6. Deadline for Issuance of local QECBs. No large local government or local development corporation may issue QECBs after the date three years after the date this act shall take effect.
§ 7. Severability. If any clause, sentence, paragraph, section, or part of this act shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, paragraph, section, or part thereof directly involved in the controversy in which such judgment shall have been rendered.
§ 8. Existing QECB allocations not altered. Nothing contained in this act shall be deemed to supersede, alter or impair any allocation of QECB volume cap for the issuance of QECBs by a large local government prior to the effective date of this act, as such prior allocation shall be evidenced by the issuance of such QECBs and the filing of the related information return with the internal revenue service or, if such QECBs have not yet been issued, the adoption of a resolution prior to the effective date of this act by the governing body of a large local government approving the issuance of QECBs and allocating QECB volume cap to such QECBs.
§ 9. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act relating to qualified energy conservation bonds
Purpose of the bill
Federal Qualified Energy Conservation Bonds ("QECBs"), established by Congress under the 2008 Energy Improvement and Extension Act and the 2009 American Recovery and Reinvestment Act (ARRA), provide tax-subsidy bonding authority that may be issued for a wide array of energy efficiency, renewable energy, infrastructure and related purposes. The federal government, through the Internal Revenue Service and pursuant to an established formula, has provided approximately $202,000,000 in QECB authority to New York State, the State's Large Local Governments (LLGs) (defined in the Internal Revenue Code as those with a population over 100,000), and Tribes.
Of the approximately $202,000,000 in QECB authority already provided to the State, its municipalities and tribes, approximately $20,000,000 was allocated to the State itself, $87,000,000 to New York City, and the remainder to LLGs and Tribes. While the State has used its allocation, to date, approximately $170,000,000 remains unused by the LLGs and Tribes.
Read the full memo (969 words)
This bill would require that LLG allocations revert back to the State if an LLG does not state an intent to use its allocation by a certain date. At such time, the bonding authority would then be either used by the State or reallocated to other municipalities in amounts deemed appropriate for planned projects.
Summary of provisions
Section 1 of the bill would provide definitions for the operative terms of the legislation.
Section 2 of the bill would:
*Require the chief executive of every LLG or the governing board, except a city with a population of one million or more, to report to the President & CEO of NYSERDA no later than 120 days after the effectives date of the bill, whether the LLG has: (i) issued QECB bonds, (ii) otherwise reallocated its QECB volume cap, and if such large local government has not used its cap, whether, how and when it intends to do so,
*State that any LLG may affirmatively notify that it is reallocating to the State all or any portion of its unused QECB cap, and;
*State that any LLG that does not file a report as described above before 120 days after the effective date of the Act shall be deemed as of such date to have abandoned and voluntarily reallocated to the state any of the unused QECB volume cap allocated to it.
Section 3 of the bill would state that if any LLG QECB volume cap has not been used or applied by 18 months after the effective date of the Act, such cap shall be deemed to have been voluntarily relinquished to the State.
Section 4 of the bill would state that NYSERDA may promulgate rules and regulations for the implementation of the Act and may grant extensions of time for the deadlines set forth.
Section 5 of the bill would state that any cap relinquished or abandoned pursuant to the Act will be deemed to be reallocated to the State for further allocation by the State. Section 6 of the bill would set a deadline of three years after the effective date of the Act for the issuance of local QECBs.
Section 7 of the bill would address severability.
Section 8 of the bill would state that existing QECB allocations should not be altered by the bill.
Section 9 of the bill would make it effective immediately.
Justification
Pursuant to the 2008 Energy Improvement and Extension Act and the 2009 American Recovery and Reinvestment Act (ARRA), Congress created bond program opportunities for state and local governments. QECB's are tax-subsidy bonds which may be issued for certain qualifying energy purposes. Because these QECBs allocations can provide a valuable incentive for both public projects and private development, it is in the State's interest to ensure that these federally supported allocations are used.
While six LLGs have affirmatively reallocated their volume cap to the State, the majority have neither used their authority nor reallocated it for a variety of reasons. As a result, approximately $170,000,000 in clean energy project bonding authority has been unused for nearly six years since the allocations were first communicated to the LLGs.
QECB bonding authority has a wide range of eligible uses, including (as enumerated in Section 54D of the Internal Revenue Code). The breadth of these eligible uses makes this bonding authority a good candidate for a wide range of projects:
1.To reduce energy consumption in publicly owned buildings by at least 20%; 2.To implement green community programs (including the use of grants, loans, or other repayment mechanisms to implement such programs); 3.For rural development (including the production of renewable energy); 4.For certain renewable energy facilities (such as wind, solar, and biomass); 5.For certain mass commuting projects; 6.Demonstration projects designed to promote the commercialization of green building technology, agricultural waste projects, advanced battery manufacturing, technologies to reduce peak use of electricity, and others; and, 7.Public education campaigns to promote energy efficiency
Finally, the QECB bonding authority is at Treasury rate - lower than other privately available financing-and the cost is dependent on the term of the bonds issued and the rating of the bonds issued. The QECB interest subsidy is the lesser of the interest rate on the bonds or 70% of a weekly index rate (Qualified Tax Credit Bond Rate) published by US Treasury, correlated with Treasury yields, historically ranging from 2.9%-3.9%, resulting in a net interest cost to the issuer of around .3%-1.5%.
Prior legislative history
This is new legislation.
Fiscal implications
None.
Effective date
This act shall take effect immediately, provided that the amendments to the State Finance Law shall not affect the repeal of such section and shall be deemed repealed therewith and the forestry exemption assistance in subdivision 13 shall apply beginning with the final tax rolls filed in 2017.
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