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S08473 Summary:

Amd Part TT §2, Chap 58 of 2023; amd §256-b, County L; amd §1210-A, Tax L
Amends provisions of the Suffolk county water quality restoration act relating to the expenditure of funds for certain water projects.
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S08473 Text:

                STATE OF NEW YORK
                    IN SENATE
                                    February 1, 2024
        Introduced  by Sen. MARTINEZ -- read twice and ordered printed, and when
          printed to be committed to the Committee on Local Government
        AN ACT to amend the county law, the tax law and the Suffolk county water
          quality restoration act, in relation to the use  of  moneys  from  the
          water quality restoration fund
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Section 2 of part TT of chapter 58  of  the  laws  of  2023
     2  constituting  the  Suffolk  county  water  quality  restoration  act, is
     3  amended to read as follows:
     4    § 2. Legislative intent. The county  of  Suffolk  ("county"),  with  a
     5  population  of  one million five hundred thousand persons, has in excess
     6  of three hundred eighty thousand  existing  onsite  wastewater  disposal
     7  systems,  comprised  mostly  of  cesspools  and septic systems, with two
     8  hundred nine thousand of these onsite systems in environmentally  sensi-
     9  tive  areas which could benefit from nitrogen-reducing technologies. The
    10  United States Environmental Protection Agency recognizes Long Island  as
    11  having  a  sole  source  aquifer  system  for its drinking water supply.
    12  Suffolk county has an imminent need  to  preserve  this  valuable  water
    13  resource  by reducing the amount of nitrogen discharged into the ground-
    14  water by onsite systems. The full water cycle is impacted by  increasing
    15  quantities of nutrients, pathogens, pesticides, volatile organic contam-
    16  inants  and saltwater intrusion, as well as a number of emerging threats
    17  such as prescription drugs and sea level rise.
    18    The Suffolk county subwatersheds wastewater plan ("SWP"), certified by
    19  the  department  of  environmental  conservation  as  a  Nine   Elements
    20  Watershed  (9E)  plan,  has  documented  the devastating effects of high
    21  levels of nitrogen pollution, not only on the  drinking  water  quality,
    22  but  also  on  coastal  ecosystems,  dissolved  oxygen,  water  clarity,
    23  eelgrass, wetlands, shellfish,  coastal  resilience  and  in  triggering
    24  harmful  algal  blooms.  The SWP is a long-term plan to address the need
    25  for wastewater treatment infrastructure throughout the county comprehen-
    26  sively over a period of fifty years. The SWP delineates the  source  and
    27  concentration  of  nitrogen  loading  in  one hundred ninety-one subwat-
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 8473                             2
     1  ersheds throughout the county, and establishes nitrogen reduction  goals
     2  for each watershed.
     3    For many areas of the county, installing or connecting sewers is not a
     4  practical  or  cost-effective  method  of  treating wastewater. For that
     5  reason, the SWP prescribes a hybrid approach  that  relies  on  sewering
     6  where feasible, and the replacement of cesspools and septic systems with
     7  innovative/alternative  onsite wastewater treatment systems. The consol-
     8  idation of any or all of the twenty-seven  county  sewer  districts,  as
     9  well  as  unsewered  areas  of the county, into a county-wide wastewater
    10  management district, the establishment of a  water  quality  restoration
    11  fund,  and  a county board of trustees to monitor progress and the allo-
    12  cation of resources consistent with the goals of the SWP would allow for
    13  the implementation of a  much  needed  integrated  long-term  wastewater
    14  solution for the county through comprehensive planning and management to
    15  improve water quality.
    16    The  purpose of this act is to create a water quality restoration fund
    17  to finance projects for the protection, preservation, and rehabilitation
    18  of groundwater and surface waters as recommended by the  SWP.  This  act
    19  would allow the funding of projects that will mitigate wastewater pollu-
    20  tants  utilizing  the best available technology consistent with the SWP.
    21  The water quality restoration fund would be financed  with  a  dedicated
    22  and recurring revenue source by the enactment of an additional sales and
    23  compensating  use  tax  at  the  rate of one-eighth of one percent until
    24  2060. After deducting administrative and planning costs,  fifty  percent
    25  of  the  revenue  shall be dedicated to funding individual septic system
    26  projects and fifty percent of the revenue shall be dedicated to  funding
    27  projects  related  to wastewater treatment facilities. Such tax would be
    28  enacted pursuant to a mandatory referendum.
    29    This act shall also provide  Suffolk  county  with  the  authority  to
    30  create  a county-wide wastewater management district through the consol-
    31  idation of existing county  sewer  districts  with  currently  unsewered
    32  areas  of  the county. A county-wide wastewater management district will
    33  provide an integrated and  efficient  approach  to  managing  wastewater
    34  services  across  the county; allow the county to enhance and expand its
    35  incentive program to property owners to upgrade their wastewater  treat-
    36  ment systems; to manage, monitor and enforce nitrogen reduction programs
    37  throughout  the  county;  complete  additional sewer extension projects;
    38  improve the economic wellbeing of communities; and provide  an  opportu-
    39  nity  to consolidate and streamline the county's existing sewer district
    40  system and normalize  the  inequitable  rate  structure  that  has  long
    41  existed.
    42    In  addition,  this  act  will  extend the existing one-quarter of one
    43  percent  sales  tax  utilized  to  finance  the  county  drinking  water
    44  protection program until 2060. Twenty-five percent of such tax is appor-
    45  tioned  for  sewer taxpayer protection.  Beginning with the first fiscal
    46  year after the adoption of the water quality restoration fund, a portion
    47  of the net collections  of  such  tax  apportioned  for  sewer  taxpayer
    48  protection  shall  be transferred to the water quality restoration fund,
    49  established pursuant to subdivision 11 of section 256-b  of  the  county
    50  law.  Such  revenues  shall  be  dedicated  solely to funding individual
    51  septic system projects as defined in such subdivision.    In  the  first
    52  four  years,  the  portion  to be transferred from funds apportioned for
    53  sewer taxpayer protection to the water quality restoration fund shall be
    54  five percent. In year five, the portion to  be  transferred  from  funds
    55  apportioned for sewer tax payer protection to the water quality restora-
    56  tion  fund  shall be twenty percent.  The amount to be transferred shall

        S. 8473                             3
     1  be thirty percent in year  six,  forty  percent  in  year  seven,  fifty
     2  percent  in  year eight, and seventy percent in years nine and ten.  The
     3  portion transferred to the fund shall be  fifty  percent  in  all  years
     4  thereafter.
     5    §  2.  Subdivision  11 of section 256-b of the county law, as added by
     6  section 3 of part TT of chapter 58 of the laws of 2023,  is  amended  to
     7  read as follows:
     8    11.  Water quality restoration fund. (a) Notwithstanding any provision
     9  of law to the contrary, the county of  Suffolk  shall  deposit  the  net
    10  collections  from  the  sales  and  compensating  use  tax authorized by
    11  section one thousand two hundred ten-F of the tax law into  the  Suffolk
    12  county  water  quality restoration fund established in accordance there-
    13  with, and shall utilize all monies transferred from the fund  consistent
    14  with this section.  Nothing contained in this section shall be construed
    15  to  prevent  the  financing  in  whole or in part, pursuant to the local
    16  finance law, of any project authorized pursuant to this section.  Monies
    17  from  the  fund may be utilized to repay any indebtedness or obligations
    18  incurred pursuant to the local finance law consistent with  effectuating
    19  the  purposes of this section.  Where Suffolk county finances a project,
    20  in whole, or in part, pursuant to the local finance law, the  resolution
    21  authorizing  such indebtedness shall be accompanied by a report from the
    22  county executive demonstrating how said indebtedness will be  repaid  by
    23  the fund. Said report shall include an estimate of projected revenues of
    24  the  fund  during  the  period  of  indebtedness.  The report shall also
    25  provide an accounting of all other  indebtedness  incurred  against  the
    26  fund  to  be  repaid  for the same period.  The county legislature shall
    27  make findings by resolution that there will  be  sufficient  revenue  to
    28  repay such indebtedness in its entirety from the fund before authorizing
    29  such  indebtedness.  Monies  in  said  fund  may be appropriated from or
    30  expended in any fiscal year to implement the powers set  forth  in  this
    31  section  and  to repay any indebtedness or obligations incurred pursuant
    32  to the local finance law for the purposes authorized  pursuant  to  this
    33  section.
    34    (b) (i) Water quality improvement projects shall be eligible for fund-
    35  ing  pursuant  to  this  section.   For purposes of this section, "water
    36  quality improvement projects" shall  mean:  (A)  the  planning,  design,
    37  construction,  acquisition,  enlargement,  extension, or alteration of a
    38  county, town or village wastewater treatment facility,  including  indi-
    39  vidual hookups, and projects for the reuse of treated effluent from such
    40  wastewater  treatment  facilities,  or  (B) an individual septic system,
    41  including an alternative wastewater treatment facility or an  individual
    42  septic  system  with  active treatment, to treat, neutralize, stabilize,
    43  eliminate or partially eliminate sewage or reduce pollutants,  including
    44  permanent  or  pilot  demonstration  wastewater  treatment  projects, or
    45  equipment or furnishings thereof.   In the  case  of  individual  septic
    46  system  projects,  the  funding of the operation and maintenance of such
    47  projects shall be included in the definition of "water quality  improve-
    48  ment  projects".   Such projects shall have as their purpose the remedi-
    49  ation of existing water quality to meet specific water quality standards
    50  consistent with the SWP. Projects consistent with or listed in  the  SWP
    51  that are part of a plan adopted by a local government resulting in a net
    52  nitrogen  reduction  shall be eligible for consideration by the board of
    53  trustees, established in accordance with subparagraph (i)  of  paragraph
    54  (c) of this subdivision.
    55    (ii)  Of  the  annual  collections  [of the fund] from the tax imposed
    56  pursuant to section one thousand two  hundred  ten-F  of  the  tax  law,

        S. 8473                             4
     1  administration  of  the  county wastewater management district shall not
     2  exceed ten percent.  [Not less than seventy-five] The cost  of  prepara-
     3  tion  of  an annual SWP implementation action plan to protect, preserve,
     4  and rehabilitate groundwater, surface water, and drinking water shall be
     5  included  as  part  of  such administrative costs. After first deducting
     6  such administrative costs, fifty percent of the [remaining annual  funds
     7  after  administration]  net  revenue  from such tax shall be used toward
     8  funding individual septic [systems] system projects and fifty percent of
     9  the net revenue from such tax shall be used for funding projects related
    10  to wastewater  treatment  facilities.  [In  addition  to  water  quality
    11  improvement  projects,  other  eligible expenditures from the fund shall
    12  include the preparation of an annual SWP implementation action  plan  to
    13  protect,  preserve,  and  rehabilitate  groundwater,  surface water, and
    14  drinking water] All revenue transferred to the water quality restoration
    15  fund from the tax imposed pursuant to section one thousand  two  hundred
    16  ten-A  of  the tax law, as required by paragraph (iv) of subdivision (d)
    17  of such section, shall be used solely to fund individual  septic  system
    18  projects.
    19    (iii)  Other  than  for  the  payment  of  indebtedness or obligations
    20  incurred as set forth in paragraph (a) of this subdivision,  and  except
    21  for the preparation of the SWP implementation plan itself, no monies may
    22  be  expended  until  the  SWP  implementation plan has been prepared and
    23  approved as provided for in this section.
    24    (iv) Any expenditure from the fund  for  a  purpose  other  than  that
    25  expressly permitted, herein, shall be prohibited.
    26    (c) (i) Within the local law, ordinance or resolution establishing the
    27  Suffolk  county water quality restoration fund, [pursuant to section one
    28  thousand two hundred ten-F of the tax law,] the county shall establish a
    29  board of trustees of twenty-one members to prepare, review  and  approve
    30  the  SWP  implementation plan for submission to the county executive and
    31  county legislature and shall specify the powers and duties of the  board
    32  of  trustees, including the procedures for appointment of a chairperson.
    33  Such approval shall be in addition to all other  approvals  required  by
    34  law.  The  board of trustees shall consist of: (A) a representative from
    35  the department of environmental conservation; (B) a representative  from
    36  the East End supervisors and mayors association; (C) a representative of
    37  the  Suffolk  town  supervisors association; (D) a representative of the
    38  Suffolk County Village Officials Association; (E) a town  representative
    39  from the State Central Pine Barrens Joint Planning and Policy Commission
    40  to  be designated by the commission; (F) a municipal representative from
    41  the Peconic Estuary Partnership; (G) a municipal representative from the
    42  State South Shore Estuary Reserve; (H) a municipal  representative  from
    43  the  Long  Island Sound Estuary; (I) a representative of the Long Island
    44  Federation of Labor; (J) a representative of Building  and  Construction
    45  Trades Council of Nassau & Suffolk counties; (K) a representative from a
    46  regional environmental organization; (L) the chair of the Suffolk county
    47  planning  commission;  (M)  the  county  executive  or designee; (N) the
    48  presiding officer of the county legislature or designee; (O) the minori-
    49  ty leader of the county legislature or designee; (P) the county  depart-
    50  ment of public works commissioner or designee; (Q) the county department
    51  of health services commissioner or designee; (R) a representative from a
    52  regional  economic  development  organization; (S) a representative from
    53  the liquid waste industry; (T) a representative from the Suffolk  County
    54  Alliance  of  Chambers,  Inc.;  and  (U)  a representative from the Long
    55  Island Contractors Association.

        S. 8473                             5
     1    (ii) The powers and duties of the board of  trustees  shall  [oversee]
     2  include  overseeing  the  annual audit pursuant to paragraph (e) of this
     3  subdivision, making prudent recommendations for resource allocations for
     4  county-approved  alternative  wastewater  treatment   technologies   not
     5  contemplated  in  the  Suffolk  county subwatersheds wastewater plan and
     6  long-term progress monitoring of the implementation of the Suffolk coun-
     7  ty subwatersheds wastewater plan regarding achievements of nitrogen load
     8  reductions and ecological endpoints.
     9    (d) Annual SWP  implementation  plan.  The  board  of  trustees  shall
    10  prepare,  review  and approve and submit to the county executive the SWP
    11  implementation plan within one  year  of  the  effective  date  of  this
    12  section,  and in every five years thereafter in a like manner. The board
    13  of trustees shall conduct a public  hearing  on  said  plan  before  its
    14  adoption or subsequent amendment. Said plan shall list every water qual-
    15  ity  restoration project which the county plans to undertake pursuant to
    16  the fund and shall state how such project would improve  existing  water
    17  quality.  Funds  may  only  be  expended  pursuant to this   section for
    18  projects which have been included in  said  plan.  Said  plan  shall  be
    19  consistent  with  state,  federal, county, and local government land use
    20  and wastewater management plans. After submission and  approval  by  the
    21  county  executive,  such  plan shall be submitted to the county legisla-
    22  ture.  Upon review, the county legislature  shall  determine,  by  local
    23  law,  whether  to  approve the proposed plan, if the plan is denied, the
    24  plan shall be remanded to the board of trustees for further study.  Such
    25  plan shall not become effective until approved by  local  law.  Projects
    26  may  be added or removed from the currently effective SWP implementation
    27  plan in a like manner.
    28    (e) Annual audit. The county shall annually commission an  independent
    29  audit of the fund. The audit shall be conducted by an independent certi-
    30  fied public accountant or an independent public accountant.  [Said] Such
    31  audit  shall  be  performed by a certified public accountant or an inde-
    32  pendent public accountant other than the one that performs  the  general
    33  audit  of  the  county's finances. Such audit shall be an examination of
    34  the fund and shall determine whether  the  fund  has  been  administered
    35  consistent  with the provisions of this section and all other applicable
    36  provisions of state law. Said audit shall be initiated within sixty days
    37  of the close of the fiscal year of the county  and  shall  be  completed
    38  within  one hundred twenty days of the close of the fiscal year.  A copy
    39  of the audit shall be submitted annually to the  state  comptroller  and
    40  the  county  comptroller. A copy of the audit shall be made available to
    41  the public within thirty  days  of  its  completion.  A  notice  of  the
    42  completion  of the audit shall be published in the official newspaper of
    43  the county and shall also be posted on  the  internet  website  for  the
    44  county. The cost of the audit may be a charge to the fund.
    45    (f)  Annual  report.  In addition to any other report required by this
    46  section, the board of trustees, through its chairperson,  shall  deliver
    47  annually  a  report to   the   county legislature.  Such report shall be
    48  presented by May fifteenth of each year. The report  shall  describe  in
    49  detail the projects undertaken, the monies expended, and the administra-
    50  tive  activities  of  the water quality fund and district established in
    51  accordance with this section, during the prior year. At  the  conclusion
    52  of  the  report,  the  chairperson  of  the  board  of trustees shall be
    53  prepared to answer the questions of the county legislature with  respect
    54  to  the projects undertaken, the monies expended, and the administrative
    55  activities during the past year. Any costs associated with preparing the
    56  annual report shall be a charge to the fund.

        S. 8473                             6
     1    § 3. Subdivision (d) of section 1210-A of the tax law, as  amended  by
     2  section  4-a of part TT of chapter 58 of the laws of 2023, is amended to
     3  read as follows:
     4    (d) Notwithstanding any other provision of this article to the contra-
     5  ry, the net collections from the tax imposed pursuant to subdivision (a)
     6  of  this  section  for  the  period  beginning  December first, nineteen
     7  hundred eighty-eight and ending November thirtieth, two  thousand  sixty
     8  shall,  upon payment to the county of Suffolk, be deposited in a special
     9  fund, to be designated as a drinking water protection reserve  fund,  to
    10  be  created  by  said  county therefor separate and apart from any other
    11  funds and accounts of the county. Moneys in such fund shall be deposited
    12  in one or more of the banks or trust companies designated, in the manner
    13  provided by law, as a depository of the funds of  such  county.  Pending
    14  expenditure from such fund, moneys therein may be invested in the manner
    15  provided  in  section  eleven of the general municipal law. Any interest
    16  earned or capital gain realized on the moneys so deposited  or  invested
    17  shall accrue to and become part of such fund. Moneys in said fund may be
    18  appropriated from and transferred to or expended in any fiscal year only
    19  for the purposes of making payments pursuant to subdivisions (b) and (c)
    20  of  this  section  for  the  period  beginning  December first, nineteen
    21  hundred eighty-eight, to the extent that moneys in said fund are remain-
    22  ing, and if authorized by local law, for the following purposes:
    23    (i) for the purposes of specific environmental protection (acquisition
    24  of: farmland development rights; open space, wetlands,  woodlands,  pine
    25  barrens  and other lands for passive recreational uses; lands for hamlet
    26  greens, hamlet parks, pocket parks, historic parks, cultural  parks  and
    27  other  lands  for active/parkland recreational uses; lands necessary for
    28  maintaining and protecting the quality of surface water, groundwater and
    29  coastal resources);
    30    (ii) for  a  water  quality  protection  and  restoration  program  or
    31  programs and land stewardship initiatives;
    32    (iii) for the purposes of county-wide property tax protection; and
    33    (iv)  for  the  purpose  of  sewer taxpayer protection (25% of the net
    34  collections from the tax). Beginning with the first  fiscal  year  after
    35  the adoption of the water quality restoration fund, a portion of the net
    36  collections  of  such  tax  apportioned for this purpose as provided for
    37  herein, shall be transferred to  the  water  quality  restoration  fund,
    38  established  pursuant  to  subdivision  eleven  of  section  two hundred
    39  fifty-six-b of the county law. Said revenues shall be  dedicated  solely
    40  to funding individual septic system projects as defined in such subdivi-
    41  sion. The portion of net collections of the tax transferred to the water
    42  quality restoration fund each year shall be as follows:
    43  Year                                                   Percentage
    44  1                                                          5%
    45  2                                                          5%
    46  3                                                          5%
    47  4                                                          5%
    48  5                                                         20%
    49  6                                                         30%
    50  7                                                         40%
    51  8                                                         50%
    52  9                                                         70%
    53  10                                                        70%

        S. 8473                             7
     1  For  all subsequent years, the portion of net collections transferred to
     2  the water quality restoration fund shall be fifty percent.
     3    Notwithstanding  any  special  or  local  law,  resolution  or charter
     4  provision to the contrary, moneys in  said  fund  which  have  not  been
     5  appropriated  from and transferred to or expended in any fiscal year for
     6  the purposes of making payments pursuant to subdivisions (b) and (c)  of
     7  this  section,  may  alternatively  be  appropriated for the purposes of
     8  paying debt service on any new indebtedness incurred after the effective
     9  date of the chapter of the laws of two thousand one  that  enacted  this
    10  paragraph  pursuant  to the local finance law in order to effectuate the
    11  purposes described in paragraph (i) or (ii) of this subdivision. For the
    12  purpose of allocating moneys in said fund pursuant to  local  law  among
    13  the  purposes  described in paragraphs (i), (ii), (iii) and (iv) of this
    14  subdivision, moneys applied to the payment of  debt  service  under  the
    15  authority of the previous sentence shall be considered by said county to
    16  have  been  expended  for  the  purposes for which such indebtedness was
    17  incurred.
    18    § 4. After January 1, 2030, the Suffolk county executive shall prepare
    19  a report to be submitted to the governor  and  the  legislature.    Such
    20  report  shall  make  recommendations regarding any modifications to this
    21  act, if any, with regard to the future distribution of revenue for water
    22  quality improvement projects based upon the future  demand  for  funding
    23  for wastewater treatment projects and individual septic system projects.
    24    § 5. This act shall take effect immediately.
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