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Legislative Memo

Darren Suarez
Director of Government Affairs
T 518.465.7511
www.bcnys.org

BILL:

S.2008/A.3008 TED Article VII Budget Bill - Part V

Support

SUBJECT:

Expansion of the 18-a (1-a) Assessment

 

DATE:

February 6, 2017

 

The Business Council of the State of New York opposes Part V which would authorize the Department of Public Service (DPS) to assess public utilities (telephone, electric, water, and natural gas companies) and ultimately their customers for expenses of the Departments of Agriculture and Markets, Environmental Conservation, State, and the Office of Parks, Recreation and Historic Preservation.

Section 18-a (2)  of the Public Service Law (PSL) authorizes the DPS to assess public utilities for costs associated with administering Public Service Law programs.  In 2009, Public Service Law Section 18-a was restructured to end a practice of off-loading various agency costs on to utilities.

Specifically, the 2009-2010 Budget increased the permanent assessment from one-third of one percent to a full percent (Section 18-a (2)(G)) of a utility’s annual gross intrastate operating revenue.  The 2009-2010 Budget also included a new two-percent “temporary state energy and utility service conservation assessment”. The more famous temporary assessment was scheduled to expire in March of 2014. In 2013, after extensive negotiations, the final 2013-14 state budget included an extension of the assessment, but committed the state to a full phase-out of the temporary assessment scheduled by the aforementioned March 2017 date.  This budget does not extend the temporary assessment.

TED Part V would treat expenses of the Departments of Agriculture and Markets, Environmental Conservation, State, and the Office of Parks, Recreation and Historic Preservation as eligible expenses of utility assessment revenues making expenditures by those agencies a covered expense of the utility assessment revenues.  Each of the agencies would effectively be cap at the level of the proposed appropriation as follows:

Departments of Agriculture and Markets $435,000
Department of Environmental Conservation $1,610,500
Department of State $808,000
Office of Parks, Recreation and Historic Preservation $97,000

The Business Council does not oppose the historic 18-a assessment which enables state regulators to recover their costs for regulating the various utilities (telephone, electric, water, and natural gas companies) they oversee. But the assessment should be reduced to its past level which was one-third of one percent.  The State should reject this expanding taxing mechanism and instead pay for general spending with general fund dollars.