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A07880 Summary:

BILL NOA07880A
 
SAME ASSAME AS S07637
 
SPONSORSolages
 
COSPNSRShrestha, O'Donnell, Eachus, Epstein, Gunther
 
MLTSPNSR
 
Add Art 12 §§240 & 241, amd §5, Pub Serv L
 
Prohibits public utilities from using funds or being reimbursed by funds raised from ratepayers for contributions or gifts to political candidates, trade associations, public charities, and lobbyists, and for certain travel, entertainment and educational expenditures.
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A07880 Actions:

BILL NOA07880A
 
07/19/2023referred to corporations, authorities and commissions
07/31/2023amend and recommit to corporations, authorities and commissions
07/31/2023print number 7880a
01/03/2024referred to corporations, authorities and commissions
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A07880 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A7880A
 
SPONSOR: Solages
  TITLE OF BILL: An act to amend the public service law, in relation to prohibiting public utilities from using funds or being reimbursed by funds raised from ratepayers for certain activities   PURPOSE: To ensure that ratepayer funds are used appropriately, this bill prohib- its utility companies from using ratepayer funds for political activ- ities.   SUMMARY: Section 1. Amends the public service law by adding a new article 12. Section 2. Amends section 5 of the public service law by adding a new subdivision 7. Section 3. Sets the effective date.   JUSTIFICATION: There is no situation in which a utility company in New York State should be using money they receive from ratepayers for political activ- ities like lobbying. Dollars from the public should not be used to further the interests of utility companies, which are to earn greater revenue and sometimes to defeat environmental and public health protections(1). New York State currently prohibits rate determinations from including the operational costs of a utility that include the costs of lobbying or association membership dues. However, lobbying is narrowly defined, and only covers influencing the legislature and governor on bills before them. This bill follows in the footsteps of other states that have recently enacted laws that provide for more prohibitions on political activities by utility companies. This legislation will strengthen the prohibition on lobbying to include a ban on direct or reimbursed expenditures of ratepayer and large shareholder funds on political donations, the direct or grassroots influencing of officials and staff, and perks provided to a utility's board of directors. Further, this bill will require greater reporting by utility companies and make such reports publicly accessi- ble.   RACIAL JUSTICE IMPACT: TBD.   GENDER JUSTICE IMPACT: TBD.   LEGISLATIVE HISTORY: New bill.   FISCAL IMPLICATIONS: TBD.   EFFECTIVE DATE: This act shall take effect on the ninetieth day after it shall have become a law. Effective immediately, the addition, amendment and/or repeal of any rule or regulation necessary for the implementation of this act on its effective date are authorized to be made and completed on or before such effective date. (1) https://nysfocus.com/2023/05/17/national- fuel-utility-customer-gas- ban-lobbying
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A07880 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         7880--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      July 19, 2023
                                       ___________
 
        Introduced  by M. of A. SOLAGES -- read once and referred to the Commit-
          tee  on  Corporations,  Authorities  and  Commissions   --   committee
          discharged, bill amended, ordered reprinted as amended and recommitted
          to said committee
 
        AN  ACT  to  amend  the  public  service law, in relation to prohibiting
          public utilities from using funds or being reimbursed by funds  raised
          from ratepayers for certain activities
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. The public service law is amended by adding a  new  article
     2  12 to read as follows:
     3                                  ARTICLE 12
     4                             GENERAL PROVISIONS
     5  Section 240. Definitions.
     6          241. Limitations on rates.
     7    § 240. Definitions. As used in this article, unless the context other-
     8  wise indicates, the following terms have the following meanings:
     9    1. "Affiliated interest" means any person who owns directly, indirect-
    10  ly  or  through  a chain of successive ownership, ten percent or more of
    11  the voting securities of a public utility.
    12    2. "Consumer-owned transmission and distribution  utility"  means  any
    13  transmission  and  distribution  utility  wholly owned by its consumers,
    14  including its consumers served  in  the  state.  "Consumer-owned  trans-
    15  mission and distribution utility" includes but is not limited to:
    16    (a)  the transmission and distribution portion of a rural electrifica-
    17  tion cooperative;
    18    (b) the transmission and distribution portion  of  an  electrification
    19  cooperative organized on a cooperative plan under the laws of the state;
    20    (c) a municipal or quasi-municipal transmission and distribution util-
    21  ity located in the state;
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11887-03-3

        A. 7880--A                          2
 
     1    (d)  the  transmission  and  distribution  portion  of  a municipal or
     2  quasi-municipal entity located in the  state  providing  generation  and
     3  other services; and
     4    (e)  a transmission and distribution utility wholly owned by a munici-
     5  pality located in the state.
     6    3. "Consumer-owned water utility" means any  water  utility  which  is
     7  wholly  owned  by  its  consumers, including its consumers served in the
     8  state. "Consumer-owned water utility" includes but is not limited to:
     9    (a) any municipal or quasi-municipal  water  district  or  corporation
    10  located in the state;
    11    (b) any municipal water department located in the state; or
    12    (c) the water portion of any utility wholly owned by a municipality or
    13  district located in the state.
    14    4.  (a)  "Grassroots lobbying" means communication with members of the
    15  general public to solicit them to communicate directly with any  covered
    16  official  for  the purpose of influencing legislative action, other than
    17  legislation that is before the legislature  as  a  result  of  a  direct
    18  initiative  by  a  member  of the legislature, when that solicitation is
    19  made by:
    20    (i) a broadcast, cable or satellite transmission;
    21    (ii) a communication delivered by print media;
    22    (iii) a letter or other written communication delivered by mail or  by
    23  comparable delivery service;
    24    (iv)  a  communication  delivered  by  e-mail,  a website or any other
    25  digital format;
    26    (v) telephone; or
    27    (vi) a method of communication similar to  those  listed  in  subpara-
    28  graphs (i) through (v) of this paragraph.
    29    (b) "Grassroots lobbying" does not include a person communicating with
    30  the  person's  stockholders, employees, board members, officers or dues-
    31  paying members.
    32    5. "Lobbying" means to communicate directly with any official  in  the
    33  legislative  branch  or  any  official in the executive branch or with a
    34  constitutional officer for the purpose of  influencing  any  legislative
    35  action  or with the governor or the governor's cabinet and staff for the
    36  purpose of influencing the approval or veto of a legislative action when
    37  reimbursement for expenditures or compensation is made for those  activ-
    38  ities.  "Lobbying"  includes the time spent to prepare and submit to the
    39  governor, an official in the legislative  branch,  an  official  in  the
    40  executive  branch,  a  constitutional officer or a legislative committee
    41  oral and written proposals for, or testimony or analyses  concerning,  a
    42  legislative action. "Lobbying" does not include time spent by any person
    43  providing information to or participating in a subcommittee, stakeholder
    44  group,  task force or other work group regarding a legislative action by
    45  the appointment or at the request  of  the  governor,  a  legislator  or
    46  legislative  committee, a constitutional officer, a state agency commis-
    47  sioner or the chair of a state board or commission.
    48    6. "Public charity" means an entity formed  primarily  for  charitable
    49  purposes, including but not limited to:
    50    (a)  a  corporation  formed  under  the  business corporation law, the
    51  limited liability company law  or  the  not-for-profit  corporation  law
    52  primarily for charitable purposes; and
    53    (b) a charitable trust.
    54    7. "Public utility" means a public utility company or a public utility
    55  corporation subject to the provisions of this chapter.

        A. 7880--A                          3
 
     1    8. "Trade association" means a business or industry trade association,
     2  group  or  related entity incorporated under Section 501 of the Internal
     3  Revenue Code of 1986.
     4    §  241.  Limitations on rates. 1. The following expenses, whether paid
     5  directly or indirectly, through reimbursement or otherwise, incurred  by
     6  a public utility or an affiliated interest may not be included or incor-
     7  porated in operating expenses to be recovered in rates:
     8    (a) contributions or gifts to political candidates, political parties,
     9  political  or  legislative  committees  or any committee or organization
    10  working to influence referendum petitions or elections;
    11    (b) contributions to a  trade  association,  chamber  of  commerce  or
    12  public  charity, including, but not limited to, a charity managed by the
    13  public utility or affiliated  interest;  provided,  however,  that  this
    14  paragraph does not apply to a consumer-owned water utility;
    15    (c) any direct or indirect cost associated with (i) travel, lodging or
    16  food  and  beverage expenses for the public utility's board of directors
    17  and officers or the board of directors and officers of such public util-
    18  ity's parent company; (ii) entertainment  or  gifts;  (iii)  any  owned,
    19  leased  or  chartered aircraft for such public utility's board of direc-
    20  tors and officers or the board of directors and officers of such  public
    21  utility's parent company; or (iv) investor relations;
    22    (d) expenditures for lobbying or grassroots lobbying;
    23    (e)  educational  expenditures,  as defined by the commission by rule,
    24  unless approved by the commission as serving a public interest.   Educa-
    25  tional  expenditures include expenditures relating to information deliv-
    26  ered to the public or to public  utility's  customers  by  radio,  tele-
    27  vision,  the  Internet,  print  and other media or through sponsorships,
    28  paid endorsements and public relations campaigns.  This  paragraph  does
    29  not apply to a consumer-owned transmission and distribution utility or a
    30  consumer-owned water utility; or
    31    (f)  any  expenses  associated  with  the  preparation  of the reports
    32  described in subdivisions two and three of this section.
    33    2. On or before January fifteenth, two thousand twenty-five, and annu-
    34  ally thereafter, each public utility's with more than seventy-five thou-
    35  sand customers shall submit to  the  commission  a  report,  in  a  form
    36  prescribed by the commission, containing a written, itemized description
    37  of  any  expenses that may not be included or incorporated in the public
    38  utility's operating expenses under subdivision one of this section.  The
    39  report must also include a written, itemized description of the expenses
    40  that may not be included or incorporated in the public utility's operat-
    41  ing  expenses under subdivision one of this section that are relevant to
    42  the business interests of the public utility paid by a membership organ-
    43  ization of which the public utility is a member. For each  expense,  the
    44  report must include the date, the payee, the amount and a description of
    45  the  purpose of the expense and any other information deemed relevant by
    46  the commission.
    47    3. In addition to the report required under subdivision  two  of  this
    48  section,  if a public utility or an affiliated interest engages in major
    49  political activities, as defined by the commission by rule,  the  public
    50  utility  shall  file a quarterly report containing a written description
    51  of those major political activities and the expenditures associated with
    52  those activities. For each expenditure,  the  report  must  include  the
    53  date,  the  payee,  the  amount  and a description of the purpose of the
    54  expenditure.
    55    4. The public utility shall make available for public  inspection  all
    56  materials  filed with the commission in accordance with subdivisions two

        A. 7880--A                          4
 
     1  and three of this section. The commission shall make available the annu-
     2  al reports filed by public utilities in accordance with this section  on
     3  its  publicly  accessible website with notice of the availability of the
     4  reports prominently displayed on the website.
     5    §  2.  Section  5 of the public service law is amended by adding a new
     6  subdivision 7 to read as follows:
     7    7. The commission shall adopt  and  implement  rules  and  regulations
     8  necessary  to  implement the provisions of section two hundred forty-one
     9  of this chapter, including, but not limited to, rules concerning  promo-
    10  tional  advertising;  promotional allowances, including, but not limited
    11  to, the granting of  promotional  rebates  or  credits;  advertising  to
    12  promote  corporate image or goodwill; contributions to public charities;
    13  educational expenditures; or political activities, including major poli-
    14  tical activities, by a public  utility  or  an  affiliated  interest  as
    15  defined in section two hundred forty of this chapter.
    16    §  3.  This  act shall take effect on the ninetieth day after it shall
    17  have become a law. Effective immediately, the addition, amendment and/or
    18  repeal of any rule or regulation necessary  for  the  implementation  of
    19  this  act  on its effective date are authorized to be made and completed
    20  on or before such effective date.
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