Relates to establishing the western New York power proceeds allocation board.

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S5407-2011 Actions

• Jan 4, 2012: REFERRED TO ENERGY AND TELECOMMUNICATIONS
• Jan 4, 2012: returned to senate
• Jan 4, 2012: died in assembly
• Jun 16, 2011: referred to energy
• Jun 16, 2011: DELIVERED TO ASSEMBLY
• Jun 16, 2011: PASSED SENATE
• Jun 1, 2011: ADVANCED TO THIRD READING
• May 25, 2011: 2ND REPORT CAL.
• May 24, 2011: 1ST REPORT CAL.847
• May 18, 2011: REFERRED TO ENERGY AND TELECOMMUNICATIONS

S5407-2011 Meetings

Energy and Telecommunications: May 24, 2011

S5407-2011 Calendars

Floor Calendar: May 25, 2011 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 7, 2011 , Floor Calendar: Jun 13, 2011 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 15, 2011 , Floor Calendar: Jun 16, 2011

S5407-2011 Votes

S5407-2011 Memo

BILL NUMBER:S5407               REVISED 05/26/11

TITLE OF BILL:
An act
to amend the economic development law, the public authorities law and
the state finance law, in relation to establishing the western New York
power proceeds allocation board; and to repeal chapter 436 of the laws
of 2010 amending the public authorities law and the economic development
law, relating to authorizing unallocated expansion or replacement power
to be allocated for western New York economic development fund benefits

PURPOSE:
To require the Power Authority (NYPA) to fully implement Chapter 436
of the laws of 2010 and the provisions of a Memorandum of
Understanding from 2003; to clarify certain ambiguities that might
exist in Chapter 436; and to establish a sound basis to go forward
with recommendation for power allocations and the binding
recommendations for the allocation of the Net Earnings from the sale
of certain hydro-power from the Niagara Power Project.

SUMMARY OF PROVISIONS:
Section 2 adds a new Article 6-a to the Economic Development law that:

o Creates the Western New York Power Proceeds Allocation Board that
shall have six members appointed by the Governor on the
recommendation of agencies that conduct economic development
activities in Western New York, and specifies its powers and duties;

o Authorizes the Board to recommend to the Empire State Development
Corporation (ESDC) how certain proceeds from the sale of Niagara
Project Hydro-Electric expansion and replacement power ("Net
Earnings") are to be granted to certain entities for economic
development purposes;

o Defines economic development power for purposes of this act to
include 250 MW of Expansion Power and 445 MW of Replacement Power and
specifies that Replacement Power includes a certain 70 MW of Niagara
Power Project that had formally been made available for other purposes;

o Authorizes the new Board to issue its own applications and conduct
its own reviews;

o Requires the Board to develop an economic development plan that will
guide it in the allocation of net earnings or to use an economic
development plan that may be adopted by the Western New York Regional
Economic Development Council, if such Council is created;

o Establishes certain criteria for use by the Board in allocating Net
Earnings including economic impact, compliance with prior awards,
compliance with regional economic development plans and similar
criteria;

o Provides that funds can be used for certain purposes ("Eligible
Projects") that must be within 30 miles of the Niagara Power project
including capital investments, training, hazardous waste remediation,
infrastructure, land acquisition, and certain research and development.


It also provides that funds may not be used for advertising or advocacy
lobbying, political purposes, debates or discussions of public issues,
legal fees, or fees related to any administrative proceeding;

o Requires NYPA to provide a full accounting of all power sales, the
funds derived there from and other information;

o Requires NYPA to transfer all Net Earnings to a new fund to be held
by ESDC;

o Requires NYPA to cooperate in the review and allocation process for
all economic development funds;

o Directs ESDC to provide staff and other support that may be needed;

o Provides that no funds derived from these Net Earnings may be spent
by NYPA or ESDC except upon the recommendation of the Board; and

o Involves ESDC in a formal role in the allocation of economic
development funds.

Section 3 adds to the unconsolidated laws:

o The Western New York Hydro-Power Allocation Advisory Group that is
similar in powers, duties and structure to the Western New York
Advisory Group that was established in a Memorandum of Understanding
signed by NYPA in 2003 and is also similar to the Western New York
Power Proceeds Allocation Board;

o Provides that the New York Hydro-Power Allocation Advisory Group is
to work through NYPA or ESDC to make recommendations to NYPA
regarding the reallocation of certain categories of Niagara Project
Expansion and Replacement Power; and

o That the Trustees of NYPA are to consider, but not be bound by, the
recommendations of the Advisory Group.

Sections 4 and 5, authorizes and directs NYPA and ESDC to carry out
certain activities related to the duties of the Western New York
Power Proceeds Allocation Board and the Western New York HydroPower
Allocation Advisory Group.

Section 6 repeals Chapter 436 of the Laws of 2010.

JUSTIFICATION:

BACKGROUND
The Niagara Power Project that is operated by the Power
Authority of the State of New York ("NYPA") has two large blocks of
hydro-electric power that total 695 megawatts ("MW") available for
sale to industries within 30 miles of the Niagara Power Project in
Lewiston New York.

In 2003, in order to better coordinate the reallocation of this power
to industries, NYPA entered into a Memorandum of Understanding
(112003 MOU") with what became called the Western New York Advisory
Group ("WNYAG") that included Erie and Niagara County based economic


development agencies. The 2003 MOU spelled out a procedure by which
NYPA would inform the WNYAG that economic development power was
available, that applications had been received for such power, and
that the WNYAG should comment upon and make recommendations regarding
such applications for the allocation of power. Although the MOU
expired in 2006, the parties, including NYPA, continued to act as
though the MOU remained in effect.

Chapter 436 of the Laws of 2010 added to the duties of the WNYAG by
providing that the WNYAG should recommend to NYPA that certain excess
revenues earned by NYPA should be allocated to industries within 30
miles of the Power Project to support and induce economic development.
The revenues affected by this law were any revenues earned by NYPA
from the sale of Niagara Project economic development power on the
open market (rather than to an industrial customer) to the extend
such revenues exceed revenues that would have been earned by NYPA if
such power had been sold to qualified industrial customers. Chapter
436 of the Laws of 2010 specifically referred to the 2003 MOU and by
reference revived it and granted it additional powers.

Unlike the 2003 MOU where the recommendations of the WNYAG were
advisory only (regarding power allocations), the 2010 law was binding
upon NYPA with regard to the use of the proceeds from the sale of
expansion and replacement power. This was accomplished by providing
that NYPA could not use such excess revenues for any purpose other
than as recommended by the WNYAG.

POWER AUTHORITY RESPONSE TO 2010 LAW
Until passage of Chapter 436 of
the Laws of 2010, there was good cooperation between NYPA and other
members of the WNYAG. This cooperation has continued with regard to
the recommendations for the allocation of hydropower to industries.
However, NYPA has refused to cooperate in the implementation of
Chapter 436. In an exchange of letters initiated by the WNYAG aimed
at the cooperative implementation of the new law, NYPA has:

o contested the existence of the WNYAG,
o refused to provide
information requested by the WNYAG and state legislators that is
needed to determine the extent that funds have been generated,
o refused repeated requests for meetings,
o refused to supply
applications that may have been submitted by companies, and
o been uncooperative with the WNYAG including with the Empire State
Development Corporation, a member of the WNYAG.

At this point there is a complete impasse, in which NYPA has refused
to implement the clear statutory directives of Chapter 436 of the
Laws of 2010.

JUSTIFICATION FOR 2011 PROPOSAL:
In order to emphasize the intent of
the Legislature, to clarify certain ambiguities that might exist in
the 2010 law, and to establish a sound basis to go forward with the
recommendation for power allocations and the more binding
recommendations for the allocation of excess revenues, it has been


decided that a bill should be introduced and passed in the 2011
session of the Legislature.

This legislation is made necessary because of NYPA's refusal to carry
out the clear intent of Chapter 436 of the Laws of 2010.

This legislation will continue the process by which expansion and
replacement power allocations are undertaken with the advice of
economic development agencies located in Western New York. This gives
greater assurance that the State's and regions' economic development
activities are coordinated and thus more likely to obtain positive
results.

The legislation will allow local economic development agencies through
a regional collaborative decision making process to fully participate
in the allocation of revenues derived from the sale of expansion and
replacement power. Certain amounts of this power when not otherwise
being used are now sold on the open market to users outside Western
New York. These open market sales are usually at a higher price than
the price charged to expansion and replacement power customers. This
bill assures that the benefits of expansion and replacement power
will remain within the 30 mile limit already established in law for
the allocation of such power. The bill guarantees that NYPA will
continue to receive the revenues it would have received if all
Expansion and Replacement Power was sold to eligible Expansion and
Replacement Power customers. Revenues derived from the sale of
Expansion and Replacement power on the open market, to the extent
such revenues exceed revenues that would have been earned if the
Replacement and Expansion Power had been sold at the applicable
Expansion and Replacement Power rates, are to be placed in the
Western New York Economic Development Fund.

LEGISLATIVE HISTORY:
New bill, but follows passage of Chapter 436 of the Laws
of 2010 (A.8712A)

FISCAL IMPLICATIONS:
None to the state. No new fiscal implications to NYPA. This bill does
not alter the fiscal impact imposed upon NYPA by Chapter 436 of the
Laws of 2010.

EFFECTIVE DATE:
Immediately.

S5407-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    5407

                         2011-2012 Regular Sessions

                              I N  SENATE

                                May 18, 2011
                                 ___________

  Introduced  by Sens. MAZIARZ, KENNEDY -- read twice and ordered printed,
    and when printed to be committed to the Committee on Energy and  Tele-
    communications

  AN ACT to amend the economic development law, the public authorities law
    and the state finance law, in relation to establishing the western New
    York power proceeds allocation board; and to repeal chapter 436 of the
    laws  of  2010  amending  the  public authorities law and the economic
    development law, relating  to  authorizing  unallocated  expansion  or
    replacement power to be allocated for western New York economic devel-
    opment fund benefits

    THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section 1. Short title.  This act shall be known as  the  western  New
  York power proceeds allocation act.
    S  2.  The economic development law is amended by adding a new article
  6-a to read as follows:

                                 ARTICLE 6-A
               WESTERN NEW YORK POWER PROCEEDS ALLOCATION ACT
  SECTION 189-A. DEFINITIONS.
          189-B. THE WESTERN NEW YORK POWER PROCEEDS ALLOCATION BOARD.
          189-C. GENERAL POWERS AND DUTIES OF THE BOARD.
          189-D. ADVISORY GROUP.
          189-E. MISCELLANEOUS PROVISIONS.
    S 189-A. DEFINITIONS. 1. "AUTHORITY" IS THE  POWER  AUTHORITY  OF  THE
  STATE OF NEW YORK.
    2.  "BOARD"  IS  THE  WESTERN NEW YORK POWER PROCEEDS ALLOCATION BOARD
  CREATED BY THIS ARTICLE.
    3. "BENEFITS" OR "FUND BENEFITS" ARE  PAYMENTS  TO  ELIGIBLE  PROJECTS
  THAT  ARE  DERIVED  FROM  NET EARNINGS THAT HAVE BEEN DEPOSITED INTO THE
  WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND.

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD11647-01-1

 S. 5407                             2

    4. "CORPORATION" IS THE NEW YORK STATE URBAN  DEVELOPMENT  CORPORATION
  DOING BUSINESS AS THE EMPIRE STATE DEVELOPMENT CORPORATION.
    5.  "ELIGIBLE  PROJECTS"  ARE  ECONOMIC  DEVELOPMENT PROJECTS THAT ARE
  LOCATED WITHIN A THIRTY-MILE RADIUS OF THE NIAGARA POWER PROJECT LOCATED
  IN LEWISTON, NEW YORK. ELIGIBLE PROJECTS INCLUDE, BUT  ARE  NOT  LIMITED
  TO, CAPITAL INVESTMENTS IN PLANT AND EQUIPMENT AND DIRECTLY RELATED SOFT
  COSTS OF SUCH CAPITAL INVESTMENTS; TRAINING AND THE IMPROVEMENT OF WORK-
  ER  PRODUCTIVITY;  REMOVAL  OF  HAZARDOUS  OR  CONTAMINATED  CONDITIONS;
  INFRASTRUCTURE PROJECTS INCLUDING,  BUT  NOT  LIMITED  TO,  ROADS,  RAIL
  LINES,  WATER,  SEWER, TELECOMMUNICATIONS, AND OTHER UTILITY EXTENSIONS,
  EXPANSIONS OR  IMPROVEMENTS;  THE  ACQUISITION  OF  LAND  NEEDED  FOR  A
  PROJECT; RESEARCH AND DEVELOPMENT WHERE THE RESULTS OF SUCH RESEARCH AND
  DEVELOPMENT  WILL DIRECTLY BENEFIT NEW YORK STATE; AND FOR OTHER SIMILAR
  USES AND ACTIVITIES. ELIGIBLE PROJECTS DO NOT INCLUDE, AND FUND BENEFITS
  MAY NOT BE USED FOR, PUBLIC INTEREST ADVERTISING OR ADVOCACY;  LOBBYING;
  THE  SUPPORT  OR  OPPOSITION  OF  ANY  CANDIDATE  FOR PUBLIC OFFICE; THE
  SUPPORT OR OPPOSITION TO ANY PUBLIC ISSUE; LEGAL FEES RELATED  TO  LITI-
  GATION  OF  ANY  KIND;  EXPENSES  RELATED  TO ADMINISTRATIVE PROCEEDINGS
  BEFORE STATE OR LOCAL AGENCIES; OR FOR SIMILAR USES OR ACTIVITIES.
    6. "EXPANSION POWER" IS  THE  TWO  HUNDRED  FIFTY  MEGAWATTS  OF  FIRM
  NIAGARA  PROJECT HYDROELECTRIC POWER AND "REPLACEMENT POWER" IS THE FOUR
  HUNDRED FORTY-FIVE MEGAWATTS OF FIRM NIAGARA PROJECT HYDROELECTRIC POWER
  AS SUCH TERMS ARE DEFINED IN SUBDIVISION THIRTEEN OF SECTION  ONE  THOU-
  SAND  FIVE  OF THE PUBLIC AUTHORITIES LAW. FOR PURPOSES OF THIS SECTION,
  EXPANSION AND REPLACEMENT POWER INCLUDES ALL ENERGY ASSOCIATED WITH SUCH
  POWER.   NOTWITHSTANDING ANY LAW, RULE, REGULATION,  OR  POLICY  TO  THE
  CONTRARY,  THE TERM REPLACEMENT POWER AS USED IN THIS ARTICLE INCLUDES A
  CERTAIN SEVENTY MEGAWATTS OF POWER THAT IS REFERRED TO  IN  SECTION  ONE
  THOUSAND FIVE OF THE PUBLIC AUTHORITIES LAW.
    7.  "NET EARNINGS" IS THE AGGREGATE EXCESS OF REVENUES RECEIVED BY THE
  POWER AUTHORITY OF THE STATE OF NEW YORK FROM THE SALE OF EXPANSION  AND
  REPLACEMENT  POWER  AND  ENERGY PRODUCED AT THE NIAGARA PROJECT THAT WAS
  SOLD IN THE WHOLESALE POWER AND ENERGY MARKET OVER WHAT  REVENUES  WOULD
  HAVE  BEEN  RECEIVED HAD SUCH POWER AND ENERGY BEEN SOLD ON A FIRM BASIS
  TO AN ELIGIBLE EXPANSION OR REPLACEMENT POWER CUSTOMER UNDER THE  APPLI-
  CABLE TARIFF OR CONTRACT.
    8. "WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND" OR "FUND" IS A FUND OF
  THE CORPORATION INTO WHICH ALL NET EARNINGS ARE DEPOSITED BY THE AUTHOR-
  ITY AND FROM WHICH ALLOCATIONS OF FUND BENEFITS TO ELIGIBLE PROJECTS ARE
  MADE.
    S  189-B.  THE  WESTERN  NEW  YORK POWER PROCEEDS ALLOCATION BOARD. 1.
  THERE IS HEREBY CREATED THE WESTERN NEW YORK POWER  PROCEEDS  ALLOCATION
  BOARD,  WHICH  SHALL  POSSESS THE POWERS AND DUTIES HEREIN SPECIFIED AND
  ALL THE POWERS NECESSARY OR PROPER TO CARRY OUT  THE  PURPOSES  OF  THIS
  ARTICLE.   THE BOARD SHALL CONSIST OF SIX MEMBERS WHO SHALL BE APPOINTED
  BY THE GOVERNOR AS FOLLOWS: (A) ONE MEMBER  APPOINTED  BY  THE  GOVERNOR
  SHALL  BE  THE  REGIONAL DIRECTOR OF THE EMPIRE STATE DEVELOPMENT CORPO-
  RATION FOR WESTERN NEW YORK; (B) ONE MEMBER APPOINTED  BY  THE  GOVERNOR
  SHALL  BE  NOMINATED BY THE CHAIR OF THE ERIE COUNTY INDUSTRIAL DEVELOP-
  MENT AGENCY; (C) ONE MEMBER APPOINTED BY THE GOVERNOR SHALL BE NOMINATED
  BY THE CHAIR OF THE NIAGARA COUNTY INDUSTRIAL  DEVELOPMENT  AGENCY;  (D)
  ONE  MEMBER APPOINTED BY THE GOVERNOR SHALL BE NOMINATED BY THE CHAIR OF
  THE BOARD OF BUFFALO-NIAGARA ENTERPRISE; (E) ONE MEMBER APPOINTED BY THE
  GOVERNOR SHALL BE THE REGIONAL EXECUTIVE OF THE NATIONAL  GRID  COMPANY;
  AND  (F)  ONE MEMBER APPOINTED BY THE GOVERNOR SHALL BE NOMINATED BY THE
  CHAIR OF THE AUTHORITY.

 S. 5407                             3

    EACH SUCH BOARD MEMBER SHALL BE AUTHORIZED  TO  APPOINT  AN  ALTERNATE
  BOARD  MEMBER  TO  SERVE  IN  THEIR ABSENCE FROM TIME TO TIME. ALTERNATE
  BOARD MEMBERS SHALL BE COUNTED AS PRESENT FOR  THE  DETERMINATION  OF  A
  QUORUM,  TO VOTE, TO FULLY PARTICIPATE IN MEETINGS, AND TO TAKE ALL SUCH
  OTHER  ACTIONS AS A BOARD MEMBER, EXCEPT THAT THEY MAY NOT APPOINT ADDI-
  TIONAL ALTERNATE BOARD MEMBERS. A BOARD MEMBER  MAY  REMOVE  OR  REPLACE
  THEIR  ALTERNATE BOARD MEMBER AT ANY TIME, FOR ANY REASON, AND MAY LATER
  REAPPOINT SUCH ALTERNATE BOARD MEMBER.
    2. THE GOVERNOR SHALL DESIGNATE A CHAIR AND VICE  CHAIR  FROM  AMONGST
  THE  MEMBERS.  THE  BOARD MEMBERS MAY SELECT SUCH OTHER OFFICERS AS THEY
  DEEM ADVISABLE.
    3. EACH MEMBER SHALL SERVE A TERM OF THREE YEARS OR UNTIL A  SUCCESSOR
  SHALL  HAVE  BEEN  NAMED  AND  QUALIFIED.  MEMBERS MAY BE REAPPOINTED TO
  SUCCESSIVE TERMS.
    4. FOUR MEMBERS SHALL CONSTITUTE A QUORUM FOR THE PURPOSES OF ORGANIZ-
  ING THE BOARD AND CONDUCTING THE BUSINESS THEREOF; AND NO ACTION OF  THE
  BOARD  MAY  BE  TAKEN  EXCEPT UPON THE AFFIRMATIVE VOTE OF AT LEAST FOUR
  MEMBERS. VIDEOCONFERENCING MAY BE USED FOR ATTENDANCE AND  PARTICIPATION
  BY  MEMBERS  OF THE BOARD. IF VIDEOCONFERENCING IS USED, THE BOARD SHALL
  PROVIDE AN OPPORTUNITY FOR THE PUBLIC TO ATTEND, LISTEN AND  OBSERVE  AT
  ANY SITE AT WHICH A MEMBER PARTICIPATES. THE PUBLIC NOTICE FOR THE MEET-
  ING  SHALL  IDENTIFY,  IF PRACTICABLE, ALL LOCATIONS WHERE A MEMBER WILL
  PARTICIPATE IN THE MEETING BY VIDEOCONFERENCE AND SHALL STATE  THAT  THE
  PUBLIC HAS THE RIGHT TO ATTEND THE MEETING AT ANY SUCH LOCATION.
    5.  MEMBERS  OF THE BOARD, EXCEPT THOSE THAT ARE EMPLOYEES OR OFFICERS
  OF THE STATE, ITS AUTHORITIES OR AGENCIES, SHALL NOT RECEIVE A SALARY OR
  OTHER COMPENSATION, BUT  SHALL  BE  ALLOWED  THE  NECESSARY  AND  ACTUAL
  EXPENSES INCURRED IN THE PERFORMANCE OF DUTIES UNDER THIS ARTICLE.
    S  189-C.  GENERAL  POWERS AND DUTIES OF THE BOARD. 1. THE BOARD SHALL
  ADOPT RULES AND REGULATIONS RELATING TO THE ACTIVITIES OF THE BOARD.
    2. THE BOARD SHALL PREPARE, DISTRIBUTE AND  RECEIVE  ALL  APPLICATIONS
  FROM,  OR  ON BEHALF OF, ELIGIBLE PROJECTS FOR THE ALLOCATION OR REALLO-
  CATION OF FUND BENEFITS, AS THIS TERM IS DEFINED IN SUBDIVISION THREE OF
  SECTION ONE HUNDRED EIGHTY-NINE-A OF THIS ARTICLE. APPLICATIONS SHALL BE
  IN A FORM AND CONTAIN SUCH INFORMATION, DATA AND EXHIBITS AS  THE  BOARD
  MAY  PRESCRIBE.  THE BOARD MAY BY RESOLUTION DIRECT THAT APPLICATIONS BE
  SUBMITTED ON BEHALF OF THE BOARD TO THE CORPORATION  OR  TO  ANY  PUBLIC
  SECTOR  ENTITY THAT HAS THE RIGHT UNDER THIS ARTICLE TO NOMINATE A BOARD
  MEMBER TO THE GOVERNOR.
    3. FUND BENEFITS MAY BE ALLOCATED TO ELIGIBLE PROJECTS THAT ARE  SPON-
  SORED BY FOR-PROFIT BUSINESS ENTITIES, NOT-FOR-PROFIT ENTITIES, SUBDIVI-
  SIONS OF THE STATE, PUBLIC BENEFIT CORPORATIONS, OR PUBLIC AUTHORITIES.
    4.  THE  BOARD  SHALL  SUBMIT  COPIES  OF ALL SUCH APPLICATIONS TO THE
  AUTHORITY. THE BOARD MAY REQUEST FROM THE AUTHORITY, AND  THE  AUTHORITY
  SHALL SUPPLY, AN ANALYSIS OF ALL SUCH APPLICATIONS ALONG WITH ANY RECOM-
  MENDATIONS OF THE AUTHORITY. IN ADDITION, THE BOARD MAY REQUEST, AND THE
  AUTHORITY  SHALL  SUPPLY,  SUCH  ADDITIONAL INFORMATION AS IS REASONABLY
  NECESSARY FOR THE BOARD TO PROPERLY PERFORM ITS DUTIES.
    5. THE BOARD SHALL ESTABLISH A SCHEDULE FOR A REVIEW  OF  APPLICATIONS
  FOR  FUND  BENEFITS  THAT SHALL OCCUR NO LESS FREQUENTLY THAN TWICE EACH
  YEAR.
    6. THE BOARD SHALL DEVELOP AND ADOPT A MULTI-YEAR ECONOMIC DEVELOPMENT
  PLAN THAT IS CONSISTENT WITH REGIONAL ECONOMIC  DEVELOPMENT  PLANS  THAT
  HAVE  OR MAY BE ADOPTED BY STATE AND REGIONAL ECONOMIC DEVELOPMENT AGEN-
  CIES. THE BOARD'S MULTI-YEAR ECONOMIC DEVELOPMENT PLAN SHALL  SET  POLI-
  CIES  AND  PRIORITIES THAT WILL BE USED TO EVALUATE ALL APPLICATIONS FOR

 S. 5407                             4

  ALLOCATION OF FUND BENEFITS. IF THE REGIONAL ECONOMIC DEVELOPMENT  COUN-
  CIL  FOR WESTERN NEW YORK ADOPTS SUCH AN ECONOMIC DEVELOPMENT PLAN, SUCH
  PLAN SHALL BE ADOPTED BY THE BOARD.
    7.  THE BOARD SHALL ADOPT CRITERIA TO BE USED TO EVALUATE ALL APPLICA-
  TIONS FOR AN ALLOCATION OF FUND BENEFITS. THE CRITERIA SHALL BE DESIGNED
  TO PROMOTE ECONOMIC DEVELOPMENT, MAINTAIN JOBS, AND ENCOURAGE NEW  CAPI-
  TAL  INVESTMENT  WITHIN  THIRTY MILES OF THE NIAGARA POWER PROJECT.  THE
  CRITERIA SHALL ADDRESS, BUT NEED NOT BE LIMITED TO:

    (A) THE OVERALL ECONOMIC IMPACT OF THE PROPOSAL IN TERMS OF THE NUMBER
  OF JOBS TO BE CREATED OR RETAINED, THE AVERAGE ANNUAL PAYROLL, THE CAPI-
  TAL INVESTMENT THAT IS PROJECTED, AND  THE  EXTENT  TO  WHICH  NEW  YORK
  SUPPLIERS ARE USED;
    (B) THE LIKELIHOOD THAT IN THE ABSENCE OF APPROVAL OF AN ALLOCATION OF
  FUND  BENEFITS,  THE APPLICANT WOULD NOT UNDERTAKE THE PROPOSED PROJECT,
  CLOSE, CONTRACT, OR RELOCATE OUTSIDE OF WESTERN NEW YORK;
    (C) THE APPLICANT'S COMPLIANCE WITH ANY PRIOR COMMITMENT TO THE CORPO-
  RATION, THE AUTHORITY, THE STATE OF NEW YORK, THE ERIE COUNTY INDUSTRIAL
  DEVELOPMENT AGENCY, THE NIAGARA COUNTY INDUSTRIAL DEVELOPMENT AGENCY, OR
  ANY LOCAL INDUSTRIAL DEVELOPMENT AGENCY TO RETAIN AND/OR CREATE JOBS  OR
  TO MAKE CAPITAL INVESTMENTS IN EXCHANGE FOR A BENEFIT FROM SUCH ENTITY;
    (D) THE EXTENT TO WHICH AN ALLOCATION OF FUND BENEFITS WILL AFFECT THE
  OVERALL  PRODUCTIVITY OR COMPETITIVENESS OF THE APPLICANT'S BUSINESS AND
  ITS EXISTING EMPLOYMENT WITHIN WESTERN NEW YORK AND  THE  STATE  OF  NEW
  YORK;
    (E)  THE  EXTENT OF OTHER BENEFITS BEING OFFERED TO THE APPLICANT FROM
  THE STATE OF NEW YORK, ITS POLITICAL SUBDIVISIONS,  PUBLIC  AUTHORITIES,
  INDUSTRIAL  DEVELOPMENT  AGENCIES,  PUBLIC  BENEFIT  CORPORATIONS, LOCAL
  DEVELOPMENT AGENCIES, OR OTHER PUBLIC AGENCIES; AND
    (F) THE OVERALL IMPACT OF THE SITE OR  USER  INCLUDING  THE  PROJECT'S
  ABILITY  TO INDUCE ADDITIONAL COMMERCIAL OR INDUSTRIAL ACTIVITY TO WEST-
  ERN NEW YORK, REVITALIZE AN URBAN AREA, AND ITS COMPLIANCE WITH REGIONAL
  DEVELOPMENT PLANS.
    8. THE BOARD SHALL RECOMMEND TO THE CORPORATION THE ALLOCATION OF FUND
  BENEFITS TO ELIGIBLE PROJECTS THAT BEST MEET  THE  CRITERIA  ESTABLISHED
  FOR THE EVALUATION OF APPLICATIONS.
    9.  THE  BOARD  MAY  INCLUDE WITHIN ITS RECOMMENDATIONS SUCH TERMS AND
  CONDITIONS AS IT DEEMS  APPROPRIATE,  INCLUDING,  BUT  NOT  LIMITED  TO,
  REASONABLE  PROVISION  FOR  THE ALLOCATION OF FUND BENEFITS OVER TIME AS
  THE  APPLICANT  ACHIEVES  MILESTONES  TOWARDS  PROJECT  COMPLETION,  THE
  PARTIAL  OR  COMPLETE  WITHDRAWAL  OR  RETURN OF FUND BENEFITS WHERE THE
  RECIPIENT HAS FAILED TO ACHIEVE OR MAINTAIN MUTUALLY AGREED UPON COMMIT-
  MENTS, OR SUCH OTHER TERMS AND CONDITIONS AS THE BOARD DEEMS ADVISABLE.
    10. RECOMMENDATION FOR APPROVAL OF THE ALLOCATION OF FUND BENEFITS  BY
  THE  BOARD  SHALL QUALIFY AN APPLICANT TO RECEIVE SUCH FUND BENEFITS FOR
  ELIGIBLE PROJECTS.
    11. THE CORPORATION SHALL NOT WITHDRAW ANY NET PROCEEDS FROM THE  FUND
  AND  MAY  NOT ALLOCATE ANY FUND BENEFIT UNLESS THE BOARD HAS RECOMMENDED
  SUCH A WITHDRAWAL OR ALLOCATION. THE TRANSFER OR USE OF ANY FUND BENEFIT
  IS PROHIBITED UNLESS SPECIFICALLY RECOMMENDED BY THE BOARD.
    12. WHEN THE CORPORATION MAKES AN ALLOCATION OF FUND BENEFITS IT SHALL
  INCLUDE WITHIN SUCH CONTRACT OR GRANT DISBURSEMENT AGREEMENT  ALL  TERMS
  AND CONDITIONS THAT HAVE BEEN RECOMMENDED BY THE BOARD.
    S  189-D. ADVISORY GROUP. NOTWITHSTANDING ANY LAW, RULE, REGULATION OR
  ADMINISTRATIVE POLICY TO THE CONTRARY, THERE IS HEREBY CREATED THE WEST-
  ERN NEW YORK HYDRO-POWER ALLOCATION ADVISORY GROUP THAT SHALL BE CONSTI-
  TUTED AND HAVE THE POWERS DESCRIBED IN THIS SECTION. 1. THE WESTERN  NEW

 S. 5407                             5

  YORK  HYDRO-POWER ALLOCATION ADVISORY GROUP SHALL CONSIST OF SIX MEMBERS
  AS FOLLOWS:

    (A)  THE REGIONAL DIRECTOR OF THE EMPIRE STATE DEVELOPMENT CORPORATION
  FOR WESTERN NEW YORK;
    (B) THE CHAIR OF THE ERIE COUNTY INDUSTRIAL DEVELOPMENT AGENCY;
    (C) THE COMMISSIONER OF THE  NIAGARA  COUNTY  DEPARTMENT  OF  ECONOMIC
  DEVELOPMENT;
    (D) THE CHAIR OF THE BOARD OF BUFFALO-NIAGARA ENTERPRISE;
    (E) THE REGIONAL DIRECTOR OF THE NATIONAL GRID COMPANY; AND
    (F) THE CHAIR OF THE BOARD OF THE NEW YORK STATE POWER AUTHORITY.
    2.  MEMBERS  OF THE ADVISORY GROUP ARE AUTHORIZED TO APPOINT AN ALTER-
  NATE MEMBER TO SERVE IN THEIR  ABSENCE  FROM  TIME  TO  TIME.  ALTERNATE
  MEMBERS  SHALL  BE COUNTED AS PRESENT FOR THE DETERMINATION OF A QUORUM,
  TO VOTE AND TO FULLY PARTICIPATE IN MEETINGS AND TO TAKE ALL SUCH  OTHER
  ACTIONS  AS  AN  ADVISORY GROUP MEMBER, EXCEPT THAT THEY MAY NOT APPOINT
  ADDITIONAL ADVISORY GROUP MEMBERS. AN ADVISORY GROUP MEMBER  MAY  REMOVE
  OR  REPLACE  THEIR  ALTERNATE  MEMBER AT ANY TIME FOR ANY REASON AND MAY
  REAPPOINT SUCH ALTERNATE ADVISORY GROUP MEMBER.
    3. THE ADVISORY GROUP SHALL SELECT A CHAIR AND  VICE  CHAIR  AND  SUCH
  OTHER OFFICERS AS IT DEEMS ADVISABLE.
    4. ADVISORY GROUP MEMBERS SHALL SERVE SO LONG AS THEY CONTINUE TO HOLD
  THE POSITION SPECIFIED IN SUBDIVISION ONE OF THIS SECTION.
    5.  FOUR MEMBERS SHALL CONSTITUTE A QUORUM FOR THE PURPOSE OF ORGANIZ-
  ING THE ADVISORY GROUP AND  CONDUCTING  THE  BUSINESS  THEREOF;  AND  NO
  ACTION  OF  THE  ADVISORY GROUP MAY BE TAKEN EXCEPT UPON THE AFFIRMATIVE
  VOTE OF AT LEAST FOUR MEMBERS. VIDEOCONFERENCING OR TELECONFERENCING MAY
  BE USED FOR ATTENDANCE AND PARTICIPATION  BY  MEMBERS  OF  THE  ADVISORY
  GROUP.
    6.  MEMBERS  OF THE ADVISORY GROUP, EXCEPT THOSE THAT ARE EMPLOYEES OR
  OFFICERS OF THE STATE, ITS AUTHORITIES OR AGENCIES, SHALL NOT RECEIVE  A
  SALARY  OR  OTHER  COMPENSATION,  BUT SHALL BE ALLOWED THE NECESSARY AND
  ACTUAL EXPENSES  INCURRED  IN  THE  PERFORMANCE  OF  DUTIES  UNDER  THIS
  SECTION.
    7.  THE  ADVISORY  GROUP SHALL RECEIVE FROM THE POWER AUTHORITY OF THE
  STATE OF NEW YORK ALL APPLICATIONS THAT THE POWER AUTHORITY HAS RECEIVED
  FROM, OR ON BEHALF OF, ANY ELIGIBLE ENTITIES FOR THE ALLOCATION OR REAL-
  LOCATION OF POWER OR ENERGY FROM THE NIAGARA POWER  PROJECT'S  EXPANSION
  POWER  OR  REPLACEMENT POWER BLOCS AS SUCH TERMS ARE DEFINED IN SUBDIVI-
  SION SIX OF SECTION ONE HUNDRED EIGHTY-NINE-A OF THIS ARTICLE  AT  LEAST
  THIRTY  DAYS  PRIOR  TO  A  DECISION  BY THE POWER AUTHORITY TRUSTEES TO
  APPROVE OR DENY SUCH ALLOCATION. THE ADVISORY GROUP MAY CHOOSE TO  WAIVE
  OR  SHORTEN  THE  THIRTY DAY NOTICE PERIOD FOR GOOD CAUSE, BY A MAJORITY
  VOTE. THE ADVISORY GROUP MAY CHOOSE  TO  ACCEPT  FROM  THE  AUTHORITY  A
  SUMMARY  OF  SUCH  APPLICATIONS, BUT MAY REQUEST AND THE POWER AUTHORITY
  SHALL SUPPLY, SUCH ADDITIONAL INFORMATION AS IS REASONABLY NECESSARY FOR
  THE ADVISORY GROUP TO PROPERLY PERFORM ITS DUTIES.
    8. UPON RECEIPT OF AN APPLICATION FOR THE ALLOCATION OF POWER OR ENER-
  GY FROM THE NIAGARA PROJECT, THE ADVISORY GROUP  SHALL  MEET  AND  SHALL
  MAKE  A  RECOMMENDATION  TO  THE  POWER  AUTHORITY  TO APPROVE, DENY, OR
  APPROVE AS MODIFIED AN APPLICATION FOR A POWER OR ENERGY ALLOCATION. THE
  ADVISORY GROUP SHALL STATE ITS REASONS FOR SUCH A  RECOMMENDATION.  SUCH
  RECOMMENDATION  SHALL  BE  PRESENTED TO THE POWER AUTHORITY TRUSTEES FOR
  ITS DELIBERATION AND CONSIDERATION, BUT SHALL BE ADVISORY ONLY AND SHALL
  NOT BE BINDING UPON THE POWER AUTHORITY.
    9. THE ADVISORY GROUP SHALL  MEET  AS  NEEDED  TO  PROVIDE  THE  POWER
  AUTHORITY WITH TIMELY RECOMMENDATIONS REGARDING PENDING APPLICATIONS FOR

 S. 5407                             6

  THE  ALLOCATION  OF  HYDRO-POWER.  SUCH  MEETINGS  SHALL  OCCUR  NO LESS
  FREQUENTLY THAN TWICE EACH YEAR.
    10.  IN  MAKING  ITS  RECOMMENDATIONS  FOR THE ALLOCATION OF POWER AND
  ENERGY, THE ADVISORY GROUP SHALL REFER TO AND  RELY  UPON  THE  ECONOMIC
  DEVELOPMENT  PLAN AND STRATEGY ESTABLISHED BY SUBDIVISION SIX OF SECTION
  ONE HUNDRED EIGHTY-NINE-C OF THIS ARTICLE.
    11. IN MAKING ITS RECOMMENDATIONS FOR  THE  ALLOCATION  OF  POWER  AND
  ENERGY,  THE  ADVISORY  GROUP  SHALL REFER TO AND RELY UPON THE CRITERIA
  ESTABLISHED IN SUBDIVISION SEVEN OF SECTION ONE HUNDRED EIGHTY-NINE-C OF
  THIS ARTICLE.
    12. THE ADVISORY GROUP SHALL RECOMMEND THE  ALLOCATION  OF  POWER  AND
  ENERGY  TO  THE COMPANY OR COMPANIES WHICH BEST MEET THE CRITERIA ESTAB-
  LISHED FOR THE EVALUATION OF EACH APPLICATION.
    13. THE ADVISORY GROUP MAY INCLUDE  WITHIN  ITS  RECOMMENDATIONS  SUCH
  TERMS AND CONDITIONS AS IT DEEMS APPROPRIATE, INCLUDING, BUT NOT LIMITED
  TO:    REASONABLE  PROVISION FOR THE ALLOCATION OF POWER AND ENERGY OVER
  TIME AS THE APPLICANT ACHIEVES MILESTONES  TOWARDS  PROJECT  COMPLETION;
  THE  PARTIAL  OR COMPLETE WITHDRAWAL OR RETURN OF POWER AND ENERGY WHERE
  THE RECIPIENT HAS FAILED TO ACHIEVE OR  MAINTAIN  MUTUALLY  AGREED  UPON
  COMMITMENTS;  OR  SUCH  OTHER TERMS AND CONDITIONS AS THE ADVISORY GROUP
  DEEMS ADVISABLE.
    S 189-E. MISCELLANEOUS PROVISIONS. NOTWITHSTANDING ANY OTHER PROVISION
  OF LAW TO THE CONTRARY, A MEMBER OF THE BOARD IS NOT  DISQUALIFIED  FROM
  FULL  PARTICIPATION IN ALL BOARD ACTIVITIES, INCLUDING VOTING, SOLELY ON
  THE GROUNDS THAT AN ORGANIZATION THAT EMPLOYS SUCH MEMBER HAS  INDICATED
  THAT IT SUPPORTS OR OPPOSES SUCH AN APPLICATION.
    S  3. Section 100 of the economic development law is amended by adding
  three new subdivisions 26-a, 26-b and 26-c to read as follows:

    26-A. TO PROVIDE ALL NECESSARY STAFF SERVICES,  ACCOUNTING,  CLERICAL,
  AND SECRETARIAL ASSISTANCE, OFFICE SPACE, AND EQUIPMENT REQUESTED BY THE
  WESTERN NEW YORK POWER PROCEEDS ALLOCATION BOARD.
    26-B.  TO  PROVIDE  ALL NECESSARY STAFF SERVICES, ACCOUNTING, CLERICAL
  AND SECRETARIAL ASSISTANCE, AND OFFICE SPACE AND EQUIPMENT REQUESTED  BY
  THE WESTERN NEW YORK HYDRO-POWER ALLOCATION ADVISORY GROUP.
    26-C. TO ESTABLISH A FUND TO BE KNOWN AS THE WESTERN NEW YORK ECONOMIC
  DEVELOPMENT FUND AS PROVIDED FOR IN ARTICLE SIX-A OF THIS CHAPTER.
    S  4.  Section 1005 of the public authorities law is amended by adding
  three new subdivisions 19, 20 and 21 to read as follows:

    19. TO FULLY AND  COMPLETELY  COOPERATE  WITH  THE  WESTERN  NEW  YORK
  HYDRO-POWER  ALLOCATION  ADVISORY GROUP, THE AUTHORITY SHALL PROVIDE THE
  ADVISORY GROUP WITH ALL MATERIALS,  INFORMATION  AND  REPORTS  THAT  ARE
  REASONABLY  REQUESTED  BY  SUCH ADVISORY GROUP. THE AUTHORITY IS FURTHER
  AUTHORIZED  AND  DIRECTED  TO  PROVIDE  ALL  NECESSARY  STAFF  SERVICES,
  ACCOUNTING,  CLERICAL  AND  SECRETARIAL  ASSISTANCE,  OFFICE  SPACE, AND
  EQUIPMENT REQUESTED BY THE WESTERN NEW YORK HYDRO-POWER ALLOCATION ADVI-
  SORY GROUP.
    20. TO FULLY AND COMPLETELY COOPERATE WITH THE WESTERN NEW YORK  POWER
  PROCEEDS  ALLOCATION  BOARD,  THE AUTHORITY SHALL PROVIDE THE BOARD WITH
  ALL MATERIALS, INFORMATION AND REPORTS THAT ARE REASONABLY REQUESTED  BY
  SUCH  BOARD. THE AUTHORITY IS FURTHER AUTHORIZED AND DIRECTED TO PROVIDE
  ALL NECESSARY  STAFF  SERVICES,  ACCOUNTING,  CLERICAL  AND  SECRETARIAL
  ASSISTANCE,  OFFICE  SPACE,  AND  EQUIPMENT REQUESTED BY THE WESTERN NEW
  YORK POWER PROCEEDS ALLOCATION BOARD.
    21. TO ALLOCATE FUNDS OF THE AUTHORITY TO THE EMPIRE STATE DEVELOPMENT
  CORPORATION'S WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND AS REQUIRED  BY

 S. 5407                             7

  ARTICLE  SIX-A  OF  THE  ECONOMIC  DEVELOPMENT  LAW  AND SUCH ADDITIONAL
  AMOUNTS AS DEEMED FEASIBLE AND ADVISABLE BY THE TRUSTEES.
    S  5. The state finance law is amended by adding a new section 99-u to
  read as follows:

    S 99-U. WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND.  1. THERE IS HERE-
  BY ESTABLISHED IN THE JOINT CUSTODY OF THE  STATE  COMPTROLLER  AND  THE
  WESTERN  NEW  YORK  POWER PROCEEDS ALLOCATION BOARD A SPECIAL FUND TO BE
  KNOWN AS THE "WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND".
    2. THE DEFINITIONS OF WORDS AND TERMS CONTAINED IN SECTION ONE HUNDRED
  EIGHTY-NINE-A OF THE  ECONOMIC  DEVELOPMENT  LAW  SHALL  APPLY  TO  THIS
  SECTION AS IF FULLY SET FORTH IN THIS SECTION.
    3.  THE  CORPORATION SHALL ESTABLISH A SEPARATE ACCOUNT TO BE KNOWN AS
  THE WESTERN NEW YORK ECONOMIC DEVELOPMENT FUND.
    4. THE AUTHORITY SHALL DEPOSIT INTO  THE  WESTERN  NEW  YORK  ECONOMIC
  DEVELOPMENT  FUND  ALL NET EARNINGS. SUCH EARNINGS SHALL BE DEPOSITED NO
  LESS FREQUENTLY THAN MONTHLY. THE FIRST PAYMENT SHALL BE MADE AT THE END
  OF THE FIRST FULL MONTH SUCCEEDING THIS SECTION BECOMING A LAW AND SHALL
  INCLUDE ALL ACCRUED NET EARNINGS AS OF THE  EFFECTIVE  DATE  OF  CHAPTER
  FOUR  HUNDRED  THIRTY-SIX OF THE LAWS OF TWO THOUSAND TEN. THE AUTHORITY
  SHALL PROVIDE THE BOARD WITH STATEMENTS, NO LESS FREQUENTLY  THAN  QUAR-
  TERLY,  THAT  CONTAIN A FULL AND COMPLETE ACCOUNTING OF ALL NET EARNINGS
  AND THE CALCULATIONS THEREOF, A STATEMENT OF ALL DEPOSITS INTO THE  FUND
  AND  OTHER  SUCH  INFORMATION  AS  THE  BOARD  MAY REASONABLY REQUIRE TO
  PERFORM ITS DUTIES.
    5. THE BOARD MAY REQUEST, AND THE  AUTHORITY  SHALL  PROVIDE  AT  SUCH
  TIMES AND COVERING SUCH PERIODS AND IN SUCH FORM AS IS REASONABLY DETER-
  MINED  BY THE BOARD AS CONVENIENT OR APPROPRIATE FOR IT TO CARRY OUT ITS
  DUTIES, A FULL ACCOUNTING OF THE SALE, USE, AND PROCEEDS FROM ALL  CATE-
  GORIES  OF  POWER AND ENERGY FROM THE NIAGARA PROJECT THAT ARE AVAILABLE
  FOR INDUSTRIAL AND COMMERCIAL USE INCLUDING, BUT NOT LIMITED TO,  EXPAN-
  SION  AND  REPLACEMENT  POWER. SUCH REPORT SHALL INCLUDE STATEMENTS THAT
  SHOW THE AMOUNT AND PROCEEDS FROM THE SALE OF POWER AND/OR ENERGY ON THE
  MARKET AND UNDER CONTRACT TO AN ELIGIBLE RECIPIENT OF SUCH POWER  AND/OR
  ENERGY,  THE  AMOUNT  OF  FUNDS THAT ARE CONSIDERED NET EARNINGS AND THE
  CALCULATION THEREOF, AND THE DISPOSITION OF ALL SUCH FUNDS.
    6. THE CORPORATION MAY NOT WITHDRAW ANY NET  EARNINGS  FROM  THE  FUND
  EXCEPT  IN  ACCORDANCE  WITH  SECTION  ONE HUNDRED EIGHTY-NINE-C OF THIS
  ARTICLE.
    7. THE CORPORATION SHALL PROVIDE THE BOARD WITH  STATEMENTS,  NO  LESS
  FREQUENTLY  THAN  QUARTERLY, THAT CONTAIN A FULL AND COMPLETE ACCOUNTING
  OF ALL NET EARNINGS DEPOSITED INTO THE FUND INCLUDING ANY STATEMENTS  OR
  REPORTS  PROVIDED  BY THE AUTHORITY, ALL WITHDRAWALS AND OTHER USES FROM
  THE FUND AND OTHER SUCH INFORMATION AS THE BOARD MAY REASONABLY  REQUIRE
  TO PERFORM ITS DUTIES.
    S  6.  Chapter 436 of the laws of 2010 amending the public authorities
  law and the economic development law, relating  to  authorizing  unallo-
  cated  expansion  or  replacement  power to be allocated for western New
  York economic development fund benefits is REPEALED.
    S 7. This act shall take effect immediately.