Bill Text: NY A01204 | 2021-2022 | General Assembly | Amended


Bill Title: Enacts the "Long Island water utility reform act"; relates to the assessment of property owned by water-works corporations; establishes the Nassau county water authority.

Spectrum: Bipartisan Bill

Status: (Introduced - Dead) 2021-06-04 - enacting clause stricken [A01204 Detail]

Download: New_York-2021-A01204-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         1204--A

                               2021-2022 Regular Sessions

                   IN ASSEMBLY

                                     January 7, 2021
                                       ___________

        Introduced  by  M. of A. LAVINE, MONTESANO, RA -- read once and referred
          to the Committee  on  Corporations,  Authorities  and  Commissions  --
          committee  discharged,  bill amended, ordered reprinted as amended and
          recommitted to said committee

        AN ACT in relation to the assessment of property  owned  by  water-works
          corporations;  and to amend the public authorities law, in relation to
          creating the Nassau county water authority

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section  1.  Short  title. This act shall be known and may be cited as
     2  the "Long Island water utility reform act".
     3    § 2. The taxable assessed valuation of any water system special  fran-
     4  chise  property, as defined in subdivision 17 of section 102 of the real
     5  property tax law, that is used for conducting water, including, but  not
     6  limited  to,  such replacement property in form, function and utility of
     7  the property being replaced on assessment rolls required by  law  to  be
     8  completed,  and  filed  on or after January 1, 2021 shall be exempt from
     9  taxation as water system special franchise property as defined in subdi-
    10  vision 17 of section 102 of the real property tax law.
    11    § 3. The provisions of this act shall only apply to water-works corpo-
    12  rations that are subject to the jurisdiction  of  the  New  York  public
    13  service  commission  and  operating in a county with a population of one
    14  million or more and that have a four-class property tax system.
    15    § 4. Article 5 of the public authorities law is amended  by  adding  a
    16  new title 4-A to read as follows:
    17                                   Title 4-A
    18                        NASSAU COUNTY WATER AUTHORITY
    19  Section 1092-a. Short title.
    20          1092-b. Definitions.
    21          1092-c. Nassau county water authority.
    22          1092-d. Powers of the authority.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03780-03-1

        A. 1204--A                          2

     1          1092-e. Miscellaneous requirements.
     2          1092-f.  Additional powers of the county of Nassau and towns and
     3                    villages within Nassau county.
     4          1092-g. Acquisition by eminent domain.
     5          1092-h. Charges by authority; method of collection.
     6          1092-i. Survey of water resources.
     7          1092-j. Bonds.
     8          1092-k. Notes of the authority.
     9          1092-l. Bonds as legal investments.
    10          1092-m. Bonds and property of the authority  exempt  from  taxa-
    11                    tion.
    12          1092-n. State, county and municipalities not liable on bonds.
    13          1092-o. Agreements of the state.
    14          1092-p. Contracts for sale of water wholesale.
    15          1092-q. Audit of authority; annual report.
    16          1092-r. Interest in contracts prohibited.
    17          1092-s. Contracts.
    18          1092-t. Actions.
    19          1092-u. Expenses of hearing.
    20          1092-v. Severability.
    21    §  1092-a.  Short title. This title may be cited as the "Nassau county
    22  water authority act".
    23    § 1092-b. Definitions. As used or referred to in this title, unless  a
    24  different meaning clearly appears from the context:
    25    1.  The term "authority" shall mean the corporation created by section
    26  ten hundred ninety-two-c of this title;
    27    2. The term "municipality" shall mean any county, city, town, village,
    28  town water district, fire district, fire protection district, fire alarm
    29  district, school district, and any other political  subdivision  of  the
    30  state;
    31    3.  The  term  "bonds"  shall  mean  the bonds issued by the authority
    32  pursuant to this title.
    33    § 1092-c. Nassau county water authority. 1. The corporate existence of
    34  the Nassau county water authority shall be a body corporate and politic,
    35  constituting a public benefit corporation. It  shall  consist  of  seven
    36  members  all of whom shall be residents of the county of Nassau and whom
    37  shall be appointed as follows: four members, including the  chairman  or
    38  chairwoman  of  such authority, to be appointed by the county executive;
    39  two members to be appointed by the majority leader of the county  legis-
    40  lature;  and  one  member  to be appointed by the minority leader of the
    41  county legislature. All initial appointments of members of such authori-
    42  ty shall be made by December thirty-first, two thousand twenty-one.  All
    43  members shall  continue  to  hold  office  until  their  successors  are
    44  appointed  and qualify.   Vacancies, occurring otherwise than by expira-
    45  tion of term of office, shall be filled by appointments made  for  unex-
    46  pired terms. Members of the authority may be removed from office for the
    47  same  reasons  and  in the same manner as may be provided by law for the
    48  removal of officers of the county. The members of  the  authority  shall
    49  receive such compensation for their services as shall be fixed as speci-
    50  fied  by  the  county  legislature  and  be  reimbursed for all expenses
    51  incurred in connection with the carrying out of  the  purposes  of  this
    52  title.  The  powers of the authority shall be vested in and be exercised
    53  by the members at a meeting duly called and held and five members  shall
    54  constitute  a  quorum.  No  action shall be taken except pursuant to the
    55  favorable vote of at least four members. The authority may  delegate  to
    56  one  or  more  of its members, officers, agents or employees such powers

        A. 1204--A                          3

     1  and duties as it may deem proper.    The  corporate  existence  of  such
     2  authority  shall  continue  until  its liabilities have been met and its
     3  bonds have been paid in full. Upon ceasing to exist, all its rights  and
     4  property shall pass to the county of Nassau.
     5    2.  Neither  the  public  service  commission  nor  any other board or
     6  commission of like character, shall have jurisdiction over the authority
     7  in the management and control of its properties  or  operations  or  any
     8  power  over  the  regulation  of rates fixed or charges collected by the
     9  authority.
    10    3. It is hereby determined and declared that  the  authority  and  the
    11  carrying  out of its powers, purposes and duties are in all respects for
    12  the benefit of the people of the county of Nassau and the state  of  New
    13  York,  for  the  improvement of their health, welfare and prosperity and
    14  that the said purposes are public purposes and that the authority is and
    15  will be performing an essential governmental function in the exercise of
    16  the powers conferred upon it by this title.
    17    4. In the event that the authority does not commence  supplying  water
    18  to  retail or wholesale customers within the county of Nassau within ten
    19  years of the effective date of this title, the authority shall cease  to
    20  exist  and the provisions of this title shall be of no further force and
    21  effect, subject to the terms of any bonds, notes  or  other  debt  obli-
    22  gations then outstanding.
    23    5.  Until  the authority commences supplying water to retail or whole-
    24  sale customers within the county of Nassau, the  authority  may  request
    25  and  shall  receive  such  technical  assistance  from the department of
    26  public service as will enable the authority to carry out its powers  and
    27  duties under this chapter.
    28    §  1092-d.  Powers of the authority. 1. Except as otherwise limited by
    29  this title, the authority shall have the power to:
    30    (a) sue and be sued;
    31    (b) have a seal and alter the same at pleasure;
    32    (c) in the name of the authority, acquire, lease, hold and dispose  of
    33  property  or  any interest therein for its corporate purposes, including
    34  the power to purchase prospective or tentative awards in connection with
    35  the exercise of the power of condemnation hereinafter granted;
    36    (d) (i) purchase, in the name  of  the  authority,  any  water  supply
    37  system,  water  distribution system, including plants, works, instrumen-
    38  talities or parts thereof and appurtenances thereto,  lands,  easements,
    39  rights  in  land and water rights, rights-of-way, contract rights, fran-
    40  chises, approaches, connections, dams, reservoirs, water mains and  pipe
    41  lines,  pumping stations and equipment, or any other property incidental
    42  to and included in such system or part thereof,  and  any  improvements,
    43  extensions  and  betterments,  situated wholly within the county for the
    44  purpose of supplying water for domestic, commercial and public  purposes
    45  at  retail  to  individual  consumers  within the county of Nassau or at
    46  wholesale in the manner provided by paragraph (g) of this subdivision as
    47  a means of so acquiring for such purposes, and subject to  the  approval
    48  of  the public service commission, the authority may purchase all of the
    49  stock of any existing privately owned water corporation or company,  and
    50  thereafter,  within a reasonable time, such water corporation or company
    51  shall be dissolved;
    52    (ii) condemn, in the name of the authority, except  where  located  in
    53  another  county,  any  water  supply  system, water distribution system,
    54  including  plants,  works,  instrumentalities,  or  parts  thereof   and
    55  appurtenances  thereto,  lands,  easements,  rights  in  land  and water
    56  rights,  rights-of-way,   contract   rights,   franchises,   approaches,

        A. 1204--A                          4

     1  connections,  dams,  reservoirs,  water  mains  and  pipe lines, pumping
     2  stations and equipment, or any other property incidental to and included
     3  in such system or part thereof, and  any  improvements,  extensions  and
     4  betterments  for the purpose of supplying water for domestic, commercial
     5  and public purposes at retail to individual consumers within the  county
     6  of  Nassau  or  at  wholesale in the manner provided by paragraph (g) of
     7  this subdivision.  The authority shall exercise the power  of  condemna-
     8  tion  hereby granted in the manner provided by the condemnation law.  In
     9  the exercise of such power of condemnation, the property being condemned
    10  shall be deemed, when so determined by the authority, to be for a public
    11  use superior to the public use in the hands of any other person, associ-
    12  ation, or corporation, provided, however, that the authority shall  have
    13  no  power  to  condemn  property the legal title to which is vested in a
    14  municipality unless such municipality shall consent thereto;
    15    (iii)  construct, develop and operate any water supply  system,  water
    16  distribution  system,  including  plants,  works,  instrumentalities, or
    17  parts thereof, and appurtenances thereto, dams, reservoirs, water mains,
    18  pipe lines, pumping stations and equipment, or any other property  inci-
    19  dental  to  or included in such system or part thereof within the county
    20  of Nassau, and to acquire, by condemnation in  the  manner  provided  by
    21  this  title,  or by purchase, lands, easements, rights in land and water
    22  rights and rights-of-way in connection therewith within such county; and
    23  to own and operate, maintain, repair, improve, reconstruct, enlarge  and
    24  extend,  subject  to the provisions of this title, any of its properties
    25  acquired or constructed under this title, all of  which,  together  with
    26  the  acquisition  of  such  properties  are hereby declared to be public
    27  purposes;
    28    (iv) acquire, hold, use, lease, sell,  transfer  and  dispose  of  any
    29  property,  real,  personal or mixed, or interest therein, for its corpo-
    30  rate purposes;
    31    (e) purchase water in bulk from any  person,  private  corporation  or
    32  municipality  when  necessary  or  convenient  for the operation of such
    33  water supply and distribution system. To sell water in bulk to any  not-
    34  for-profit  corporation,  public  corporation,  private  corporation  or
    35  person at its regular retail rates;
    36    (f) fix, alter, charge and collect rates and other charges for the use
    37  of water by the inhabitants of the county or other consumers thereof, at
    38  reasonable rates to be determined by the authority for  the  purpose  of
    39  providing  for  the  payment  of  the  expenses  of  the  authority, the
    40  construction, improvement, repair,  maintenance  and  operation  of  the
    41  water  supply  and  distribution system of the authority, the payment of
    42  the principal of and interest on the obligations of the  authority,  and
    43  to  fulfill  the  terms  and  provisions of any agreements made with the
    44  purchasers or holders of any such obligations;
    45    (g) sell water by volume to any or  all  municipalities  or  privately
    46  owned  public  water supply and distribution systems in such county. The
    47  fact that any municipality has procured or is about to procure an  inde-
    48  pendent  source of water supply shall not prevent such municipality from
    49  purchasing water from the authority;
    50    (h) make contracts and execute all instruments  necessary  or  conven-
    51  ient;
    52    (i)  make by-laws for the management and regulation of its affairs and
    53  the regulation of and the charges made for water sold;
    54    (j) appoint officers, agents and employees;
    55    (k) enter upon any lands, waters  and  premises  for  the  purpose  of
    56  making surveys, soundings, drillings and examinations;

        A. 1204--A                          5

     1    (l)  enter  into  a  contract  or contracts with Nassau county for the
     2  acquisition, construction and development of a water supply and distrib-
     3  ution system, or any part or parts thereof, on behalf of a county  water
     4  district, and to contract for the operation and management of such coun-
     5  ty  water  district, all as provided in article five-A of the county law
     6  and article five-B of the general municipal law.  Such  water  authority
     7  shall  be  deemed the agent of Nassau county under any such contract. If
     8  such contract shall authorize the water authority to  purchase  supplies
     9  or  equipment  or  to  construct  public  works, such authority shall be
    10  subject to all provisions of law to which Nassau county would be subject
    11  in relation to advertising and awarding any such contracts for supplies,
    12  equipment or public works; and
    13    (m) do all things necessary or convenient  to  carry  out  the  powers
    14  expressly given or necessarily implied in this title.
    15    2.  (a)  In exercising the powers granted by this title, the authority
    16  shall not sell water in any area which is served by a water system owned
    17  or operated by a municipality unless the governing board of such munici-
    18  pality shall adopt a resolution requesting the authority to  sell  water
    19  in  such area. Notwithstanding any other provision of law, the authority
    20  may not approve by resolution or otherwise make  a  final  determination
    21  regarding  a  construction  project  for any new structure which exceeds
    22  thirty feet in height unless it holds a public hearing  in  the  munici-
    23  pality where the construction will take place not less than fifteen days
    24  after  notice  has  been  given  as hereinafter provided. Notice of such
    25  public hearing shall be published once a week for two consecutive  weeks
    26  in  a  newspaper  of  general  circulation  in  the area affected by the
    27  proposed construction project, and for  two  consecutive  weeks  on  the
    28  website maintained by the authority.
    29    (b) The board shall, when considering any purchase pursuant to subpar-
    30  agraph  (i)  of paragraph (d) of subdivision one of this section, or any
    31  condemnation pursuant to subparagraph (ii) of paragraph (d) of  subdivi-
    32  sion  one  of this section, of any assets owned by the New York American
    33  Water Service Corporation as of January first, two thousand twenty, hold
    34  a public hearing to solicit public comments no less  than  fifteen  days
    35  prior to the approval of such action by the board. Notice of such public
    36  hearing  shall  be  published once a week for two consecutive weeks in a
    37  newspaper of general circulation in the area  and  for  two  consecutive
    38  weeks on the website maintained by the authority.
    39    §  1092-e.  Miscellaneous requirements. The authority shall not refuse
    40  to sell water service to residential tenants for the  sole  reason  that
    41  the  premises  of  such  tenants  receiving water service are rented. No
    42  discontinuance or disconnection of any supply of water shall be  carried
    43  out  except in the manner and upon the notice as is required of a water-
    44  works corporation pursuant to subdivisions three-a, three-b and  three-c
    45  of  section  eighty-nine-b and section one hundred sixteen of the public
    46  service law. The authority shall meter service to its  customers  within
    47  two years of the effective date of this title.
    48    §  1092-f.  Additional  powers  of  the county of Nassau and towns and
    49  villages within Nassau county. 1. (a) In addition to any powers  granted
    50  by  any general or special law, the county legislature, acting on behalf
    51  of the county, and any town board or village board of  trustees  of  any
    52  town  or  village  within the county of Nassau, acting on behalf of such
    53  town or village, either separately or pursuant to agreements among them-
    54  selves, may, from time to time, appropriate by resolution sums of  money
    55  to defray costs and expenses of the authority associated with the exten-
    56  sion  of  authority mains to areas in the county within which the county

        A. 1204--A                          6

     1  department of health services has documented that private wells  provid-
     2  ing  water  to  home  owners have become contaminated with pollutants in
     3  concentrations greater than recommended by any drinking water guidelines
     4  or standard established by the federal government or this state, and may
     5  enter  into  a  contract  or  contracts  with the authority to so extend
     6  authority mains.
     7    (b) In areas of documented  groundwater  contamination  where  potable
     8  water  may be more economically supplied by a municipal water authority,
     9  special district or improvement area  established  to  provide  a  water
    10  improvement, or by a village, than by the authority, the county legisla-
    11  ture and any town board or village board of trustees within Nassau coun-
    12  ty  may  appropriate  sums  of  money to said municipal water authority,
    13  special district or improvement  area  or  village,  and  enter  into  a
    14  contract or contracts, in accordance with this subdivision.
    15    2.  Persons  wishing  to  connect  to mains that have been extended to
    16  areas of documented groundwater contamination with financial  assistance
    17  by the county, or any town or village as provided herein, shall be sole-
    18  ly responsible for costs and expenses associated with connecting to said
    19  mains.
    20    3.  Appropriations  of  money  by  the county legislature and any town
    21  board or village board of trustees  in  the  county  of  Nassau  to  the
    22  authority  or  to  a  municipal  water  authority,  special  district or
    23  improvement area or village within Nassau county, and  any  contract  or
    24  contracts entered into with said authority or municipal water authority,
    25  special  district  or improvement area or village prior to the effective
    26  date of this section that  are  consistent  with  the  authorization  in
    27  subdivision  one  of this section are hereby legalized, validated, rati-
    28  fied and confirmed.
    29    § 1092-g. Acquisition by eminent domain. Notwithstanding any provision
    30  of the eminent domain procedure law to the contrary, in  any  proceeding
    31  brought  by  the authority pursuant to such law, title shall vest in the
    32  authority and compensation shall be paid only (i) upon a decision by the
    33  supreme court that compensation for the real property so condemned shall
    34  be determined solely by the income capitalization method  of  valuation,
    35  based  on the actual net income as allowed by the public service commis-
    36  sion, and (ii) upon such court's determination of  the  amount  of  such
    37  compensation,  based upon the income capitalization method, entry of the
    38  final judgment, the filing of the final decree, and  the  conclusion  of
    39  any  appeal  or  expiration of the time to file an appeal related to the
    40  condemnation proceeding. If  any  court  shall  utilize  any  method  of
    41  compensation  other  than  the  income  capitalization method, or if the
    42  proposed compensation is more than the rate base of the assets taken  in
    43  condemnation  as  utilized  by  the public service commission in setting
    44  rates and as certified by the public service commission,  the  authority
    45  may  withdraw  the condemnation proceeding without prejudice or costs to
    46  any party.
    47    § 1092-h. Charges by authority; method of collection. All rates,  fees
    48  and  other  charges  for  the  use  or availability of the facilities or
    49  services or commodities provided or made available by the authority  and
    50  billed directly by the authority to the user or service recipient pursu-
    51  ant  to  a  classification  of person adopted by the authority as herein
    52  provided shall be a lien upon  the  real  property  upon  which,  or  in
    53  connection  with  which, services are provided or are made available, as
    54  and from the first date fixed for a payment  of  such  rates,  fees  and
    55  other charges. Any such lien shall take precedence over all other liens,
    56  or  encumbrances, except taxes or assessments. The chief financial offi-

        A. 1204--A                          7

     1  cer of the authority shall prepare  and  transmit  to  the  receiver  of
     2  taxes,  on  or  before the first day of November in each year, a list of
     3  those properties using such facilities or  for  which  such  facilities,
     4  services  or  commodities were provided or made available and from which
     5  the payment of rates, fees and other charges are in arrears for a period
     6  of ninety days or more after the last day  fixed  for  payment  of  such
     7  rates,  fees and other charges without penalty. The list shall contain a
     8  brief description of such properties, the names of the persons or corpo-
     9  rations liable to pay for the same, and the amount chargeable  to  each,
    10  including  penalties  and  interest, as applicable, computed to December
    11  thirty-first of that year. The county shall levy such sums  against  the
    12  properties  liable  and  shall  state  the  amount thereof in a separate
    13  column in the annual tax rolls of the county under  the  heading  "water
    14  charge".  Such  amounts, excluding penalties and interest imposed by the
    15  county when collected by the receivers of  taxes  or  county  treasurer,
    16  shall  be  paid  over  to  the chief financial officer of the authority.
    17  County imposed penalties and interest shall be retained  by  the  county
    18  treasurer  or receiver of taxes which shall become a part of the general
    19  funds of the county. All of the provisions of the real property tax  law
    20  of  the  state  or the nassau county administrative code, as applicable,
    21  governing enforcement and collection of unpaid taxes or assessments  for
    22  special  improvements  not  inconsistent  herewith  shall  apply  to the
    23  collection of such unpaid rates, rentals, fees and other charges.
    24    § 1092-i. Survey of water resources. The legislature of Nassau  county
    25  may, by resolution, appropriate a sum of money to defray the preliminary
    26  expenses  of  such  authority  so created and may thereafter appropriate
    27  such sums as may be required, for the purpose of making a survey of  the
    28  water resources of the said county, and the preparation of a map or plan
    29  for  the  development thereof. The authority shall, as soon as possible,
    30  make a survey of the water resources of the county, and  prepare  a  map
    31  and  plan for the development of the same showing in detail the proposed
    32  sources of water to be developed, and the municipalities and areas which
    33  may be served thereby. Application for approval  of  the  project  shall
    34  then be made to the department of environmental conservation as provided
    35  by  title  fifteen  of article fifteen of the environmental conservation
    36  law. If so approved, the authority shall enter into  such  contracts  or
    37  agreements  as  may  be necessary to carry out the plan of such develop-
    38  ment. The authority may, however, acquire by  purchase  or  condemnation
    39  any  existing  water  supply and distribution system without making such
    40  survey and except after first obtaining the approval of the  legislature
    41  of  the  county; provided, however, that the authority shall not acquire
    42  any existing water supply and distribution system  owned  by  a  munici-
    43  pality  unless  the  governing  board  thereof  shall adopt a resolution
    44  requesting the authority to make such acquisition.
    45    § 1092-j. Bonds. 1. The authority  shall  have  power  and  is  hereby
    46  authorized from time to time to issue its negotiable bonds in conformity
    47  with  applicable  provisions  of the uniform commercial code. Such bonds
    48  shall be authorized by resolution of the authority and shall  bear  such
    49  date or dates, mature at such time or times in not exceeding forty years
    50  from  their  respective date or dates, subject to such option or options
    51  of redemption, as may be provided in  the  resolution  authorizing  such
    52  bonds, at par or at a price not exceeding one hundred five per centum of
    53  their  face value, together with accrued interest, bear interest at such
    54  rate or rates that the cost to maturity of the money for  any  issue  of
    55  such  bonds  shall not exceed six per centum per annum, payable annually
    56  or semi-annually, be in such denominations, and  in  such  form,  either

        A. 1204--A                          8

     1  coupon  or registered, and be executed in such manner, and be payable in
     2  such medium of payment, at such place or places, and be subject to  such
     3  terms and conditions as such resolution or resolutions may provide.
     4    2. All bonds of the authority shall be sold at public sale upon sealed
     5  bids  in  an  electronic format to the bidder who shall offer the lowest
     6  interest cost to the authority to be determined by  the  authority.  The
     7  notice  of  sale  shall be published at least once not less than ten nor
     8  more than forty days before the date of sale in a  newspaper  designated
     9  by the authority and shall call for the receipt of sealed bids and shall
    10  fix the date, time and place of sale.
    11    3. Notwithstanding the foregoing provisions requiring public sale, any
    12  bonds of the authority may be sold by the authority upon the approval of
    13  the comptroller at private sale at such price or prices as the authority
    14  shall determine not exceeding the interest cost herein provided, and the
    15  authority  also may sell at private sale for such price or prices as the
    16  authority  shall  determine  not  exceeding  the  interest  cost  herein
    17  provided,  any  bonds  authorized  for the purpose of paying the cost of
    18  acquiring by condemnation a privately  owned  public  water  supply  and
    19  distribution system, provided such bonds are sold within one year of the
    20  date  of  completion  of  such condemnation and the proceedings for such
    21  condemnation were commenced prior to or not more than two years from the
    22  effective date of this title.
    23    4. Any bonds of the authority, whether sold at public or private sale,
    24  shall be sold for a price not less than ninety-six per centum of the par
    25  value thereof, plus accrued interest provided always that  the  interest
    26  cost  to  maturity  of  the  money for any issue of such bonds shall not
    27  exceed six per centum per annum. Such bonds may be issued for any corpo-
    28  rate purpose of the authority.
    29    5. Any resolution or resolutions authorizing  any  bonds  may  contain
    30  provisions,  which  shall  be a part of the contract with the holders of
    31  the bonds, as to:
    32    (a) pledging the revenue or water rents charged by  the  authority  to
    33  secure the payment of the bonds;
    34    (b) the setting aside of reserves or sinking funds, and the regulation
    35  and disposition thereof;
    36    (c) limitations on the right of the authority to restrict and regulate
    37  the  use of water and to alter or reduce rates or charges for the use of
    38  water;
    39    (d) limitations on the issuance of additional bonds;
    40    (e) the application of funds and the safeguarding of funds on hand  or
    41  on deposit, including the requiring of the giving of security for depos-
    42  it  of  such funds by depository banks or trust companies. Unless other-
    43  wise provided in said resolution, all deposits of funds of the authority
    44  shall be secured in the manner provided by law for securing deposits  of
    45  county  moneys.    All  banks and trust companies are authorized to give
    46  such security for such deposits; and
    47    (f) defining the acts or omissions to act  which  shall  constitute  a
    48  default  in the obligations and duties of the authority to the bondhold-
    49  ers and providing the rights and remedies  of  the  bondholders  in  the
    50  event of such default, including as a matter of right the appointment of
    51  a  receiver;  provided,  however, that such rights and remedies shall be
    52  not inconsistent with the general laws of this state.
    53    6. The authority shall have power from time to time whenever it  deems
    54  refunding  expedient,  to refund any bonds by the issuance of new bonds,
    55  whether the bonds to be refunded have or have not matured, and may issue
    56  bonds partly to refund bonds then outstanding and partly for any of  its

        A. 1204--A                          9

     1  corporate purposes. Refunding bonds may be delivered by the authority to
     2  the  purchasers  thereof  at  any  time prior to the date of maturity or
     3  redemption date of the bonds proposed to be refunded, if  the  authority
     4  shall determine that such action shall be financially sound and advanta-
     5  geous  to  the authority. The rate or rates of interest of the refunding
     6  bonds shall not be limited by the rate or rates of interest borne by any
     7  of the bonds to be refunded by such bonds, but all of the provisions  of
     8  this  section  with reference to the sale of bonds of the authority, and
     9  the interest cost of the money raised by the sale thereof,  shall  apply
    10  to such refunding bonds.
    11    7.  Except  as  may  be otherwise expressly provided by the authority,
    12  every issue of bonds by the authority shall be general obligations paya-
    13  ble out of any moneys, earnings or revenues of  the  authority,  subject
    14  only to any agreements with the holders of particular bonds pledging any
    15  particular moneys, earnings or revenues.
    16    8.  Neither  the members of the authority nor any person executing the
    17  bonds shall be personally liable on the  bonds  or  be  subject  to  any
    18  personal  liability or accountability by reason of the issuance thereof.
    19  The authority shall have the power, out of any funds available therefor,
    20  to purchase (as distinguished from the power of  redemption  hereinabove
    21  provided) any bonds issued by it at a price of not more than the princi-
    22  pal  amount  thereof  or  the redemption price at which the bonds may be
    23  redeemed at the next ensuing redemption date and accrued  interest.  All
    24  bonds so purchased shall be cancelled.
    25    9.  Any  provision  of  the  uniform  commercial  code to the contrary
    26  notwithstanding, any pledge of or other security interest  in  revenues,
    27  moneys, accounts, contract rights, general intangibles or other personal
    28  property  made  or  created by the authority shall be valid, binding and
    29  perfected from the time when such  pledge  is  made  or  other  security
    30  interest  attaches  without  any  physical delivery of the collateral or
    31  further act, and the lien of any such pledge or other security  interest
    32  shall  be valid, binding and perfected against all parties having claims
    33  of any kind in tort, contract or otherwise against the  authority  irre-
    34  spective  of whether or not such parties have notice thereof. No instru-
    35  ment by which such a pledge or security  interest  is  created  nor  any
    36  financing statement need be recorded or filed.
    37    §  1092-k.  Notes of the authority. The authority shall have the power
    38  and is hereby authorized to issue negotiable bond anticipation notes  or
    39  revenue  anticipation  notes in conformity with applicable provisions of
    40  the uniform commercial code and may renew the same from time to time but
    41  the maximum maturity of any such note, including renewals thereof, shall
    42  not exceed five years from the date of issue of such original note. Such
    43  notes shall be paid from any moneys of the authority available  therefor
    44  and  not  otherwise pledged or from the proceeds of sale of the bonds of
    45  the authority in anticipation of which they were issued, or, subject  to
    46  the  contractual  rights  of  the  holders  of  any  bonds or notes then
    47  outstanding, from the proceeds of the sale of any  other  bonds  of  the
    48  authority. The notes shall be issued in the same manner as the bonds and
    49  the  resolution  or  resolutions  authorizing  the  same may contain any
    50  provisions, conditions or limitations which the bonds or a  bond  resol-
    51  ution  of the authority may contain. Such notes may be sold at public or
    52  private sale at not less than par and shall bear interest at a rate  not
    53  exceeding six percent per annum. The provisions of sections one thousand
    54  ninety-two-l,  one  thousand ninety-two-m, one thousand ninety-two-n and
    55  one thousand ninety-two-o of this  article  relating  to  bonds  of  the
    56  Nassau  county  water authority shall apply with the same full force and

        A. 1204--A                         10

     1  effect to bond anticipation notes and revenue anticipation notes of  the
     2  authority herein authorized to be issued.
     3    §  1092-l. Bonds as legal investments. The bonds herein authorized are
     4  hereby made securities in which all public officers and bodies  of  this
     5  state  and  all municipalities and municipal subdivisions, all insurance
     6  companies and associations and other persons carrying  on  an  insurance
     7  business, all banks, bankers, trust companies, savings banks and savings
     8  associations, including savings and loan associations, building and loan
     9  associations, investment companies and other persons carrying on a bank-
    10  ing  business,  and  all other persons whomsoever, except as hereinafter
    11  provided, who are now or may hereafter be authorized to invest in  bonds
    12  or other obligations of the state, may properly and legally invest funds
    13  including  capital in their control or belonging to them, provided that,
    14  notwithstanding the provisions of any other general or  special  law  to
    15  the  contrary,  such  bonds  shall not be eligible for the investment of
    16  funds including capital, of trusts, estates or guardianships  under  the
    17  control of individual administrators, guardians, executors, trustees and
    18  other  individual fiduciaries. The bonds are also hereby made securities
    19  which may be deposited with and may be received by all  public  officers
    20  and  bodies  of this state and all municipalities and municipal subdivi-
    21  sions for any purpose for which the deposit  of  bonds  or  other  obli-
    22  gations of this state is now or may hereafter be authorized.
    23    §  1092-m.  Bonds  and property of the authority exempt from taxation.
    24  It is hereby determined that the  creation  of  the  authority  and  the
    25  carrying  out of its corporate purposes is in all respects for the bene-
    26  fit of the people of the county,  and  is  a  public  purpose,  and  the
    27  authority shall be regarded as performing a governmental function in the
    28  exercise  of the powers conferred upon it by this title and shall not be
    29  required to pay any taxes, special ad valorem levies or special  assess-
    30  ments  upon  any property owned by it or under its jurisdiction, control
    31  or supervision or upon its  activities,  or  any  filing,  recording  or
    32  transfer taxes in relation to instruments filed, recorded or transferred
    33  by  it  or  on  its behalf.   Any bonds or notes issued pursuant to this
    34  title, together with the income therefrom shall be exempt from taxation,
    35  except for transfer and estate taxes. The  revenues,  monies  and  other
    36  properties  and  the  activities  of  the authority shall be exempt from
    37  taxes and governmental fees or charges, whether imposed by the state  or
    38  any  municipality, including real estate taxes, franchise taxes or other
    39  excise taxes. The state of New York covenants with  the  purchasers  and
    40  with all subsequent holders and transferees of bonds and notes issued by
    41  the authority pursuant to this title, in consideration of the acceptance
    42  of  and payment for the bonds and notes, that the bonds and notes of the
    43  authority issued pursuant to this title and the  income  therefrom,  and
    44  all  moneys,  funds and revenues pledged to pay or secure the payment of
    45  such bonds and notes, shall at all times be free  from  taxation  except
    46  for transfer and estate taxes.
    47    §  1092-n.  State,  county and municipalities not liable on bonds. The
    48  bonds of the authority shall not be a debt of the state of New  York  or
    49  of  the  county  or  of  any municipality in the county, and neither the
    50  state nor the county nor any municipality in the county shall be  liable
    51  thereon,  nor shall they be payable out of any funds other than those of
    52  the authority.
    53    § 1092-o. Agreements of the state. The state of New York  does  pledge
    54  to and agree with the holders of the bonds that the state will not limit
    55  or  alter  the  rights  hereby  vested  in  the  authority  to  acquire,
    56  construct, maintain, operate, reconstruct and improve the properties, to

        A. 1204--A                         11

     1  establish and collect the  revenues,  rates,  rentals,  fees  and  other
     2  charges referred to in this title and to fulfill the terms of any agree-
     3  ments  made  with  the  holders  of  the bonds, or in any way impair the
     4  rights  and  remedies of the bondholders, until the bonds, together with
     5  interest thereon, interest on any unpaid installments of  interest,  and
     6  all costs and expenses in connection with any action or proceeding by or
     7  on behalf of the bondholders, are fully met and discharged.
     8    §  1092-p.  Contracts for sale of water wholesale. Any municipality is
     9  hereby authorized to contract with the authority  for  the  purchase  of
    10  water  from the authority at wholesale for a period not exceeding thirty
    11  years except that, in the case of a fire protection district or  a  fire
    12  alarm  district such period shall not exceed five years, and in the case
    13  of a fire district,  such  period  shall  not  exceed  ten  years.  Such
    14  contract  shall  provide  that  the  liability of such purchaser for the
    15  payment of any sums pursuant to such contract shall arise only  at  such
    16  time  as  such water has been actually delivered to such purchaser. Such
    17  contract shall state the rates, fees or charges  to  be  paid  for  such
    18  water,  shall  provide  for the adjustment thereof either by increase or
    19  decrease from time to time by mutual agreement of the  parties  thereto,
    20  subject  however  to  any  provisions contained in any resolution of the
    21  authority authorizing obligations relating to the imposition  of  rates,
    22  fees  or  charges  and  the revision or adjustment thereof. Prior to the
    23  execution of such contract the governing board  of  any  such  purchaser
    24  shall  call  a  public  hearing  to  consider the subject matter and the
    25  desirability of the execution of the proposed contract and shall publish
    26  notice thereof in a newspaper of general circulation in the  territorial
    27  boundaries  of  such  purchaser, at least once and not less than fifteen
    28  days before the date of such public hearing.  Such notice shall  briefly
    29  state  the  terms  of  the  proposed contract, the date and place of the
    30  public hearing and further state that at such time and place the govern-
    31  ing board will hear all persons interested. If,  after  considering  the
    32  evidence  adduced  at  such  hearing, such governing body shall conclude
    33  that the execution of such contract is in the public  interest,  it  may
    34  authorize  the execution thereof by the adoption of a resolution to such
    35  effect.
    36    § 1092-q. Audit of authority; annual report. In  conformity  with  the
    37  provisions  of  section  five  of  article  ten of the constitution, the
    38  accounts of the authority shall be subject to  the  supervision  of  the
    39  state  comptroller and such state comptroller and his legally authorized
    40  representatives are hereby authorized and empowered from time to time to
    41  examine the accounts and the  books  of  the  authority,  including  its
    42  receipts,  disbursements,  contracts, leases, sinking funds, investments
    43  and any other matters relating to its financial standing. The  authority
    44  shall  annually  submit to the governor and to the state legislature and
    45  also to the legislature of Nassau county a detailed report  pursuant  to
    46  the provisions of section twenty-eight hundred of this chapter.
    47    §  1092-r. Interest in contracts prohibited. It shall be a misdemeanor
    48  for any of the members of the authority, or any officer, agent,  servant
    49  or  employee thereof, employed or appointed by them, to be in any way or
    50  manner interested directly or indirectly  in  the  furnishing  of  work,
    51  materials,  supplies  or  labor,  or  in any contract therefor which the
    52  authority is empowered by this title to make.
    53    § 1092-s. Contracts. All contracts, or orders, for work,  material  or
    54  supplies performed or furnished in connection with construction shall be
    55  awarded  by  the  authority  pursuant  to resolution. Such contracts, or
    56  orders, for work, material or supplies needed for any particular purpose

        A. 1204--A                         12

     1  involving an expenditure of more than five  thousand  dollars  shall  be
     2  awarded  only  after  inviting  sealed  bids  or proposals therefor. The
     3  notice inviting sealed proposals shall be published at least once  in  a
     4  newspaper  or  trade  paper  selected by the authority for such purpose,
     5  such publication to be at least ten days before the date for the receipt
     6  of bids. If the authority shall not deem it  for  the  interest  of  the
     7  authority  to reject all bids, it shall award the contract to the lowest
     8  bidder, unless the authority shall determine that it is for  the  public
     9  interest that a bid other than the lowest bid should be accepted. In any
    10  contract  for work, material or supplies, there shall be inserted in the
    11  discretion of the authority a provision that additional work may be done
    12  or material or supplies furnished for the  purpose  of  completing  such
    13  contract at an expense not exceeding fifteen per centum of the amount of
    14  such  contract  if  such  additional work, material or supplies shall be
    15  ordered by the authority. The bidder whose bid is  accepted  shall  give
    16  security  for  the  faithful performance of the contract, and such other
    17  security as the authority may require, and may be required  to  maintain
    18  for  such  period as shall be stipulated any construction done under the
    19  contract, all in the manner prescribed and required  by  the  authority;
    20  and  the  sufficiency  of such security shall, in addition to the justi-
    21  fication and acknowledgment, be approved by the authority. All  bids  or
    22  proposals  shall be publicly opened by the authority or its duly author-
    23  ized agent. If the bidder whose bid has been accepted after  advertising
    24  shall  neglect  or  refuse to accept the contract within five days after
    25  written notice that the same has been awarded  to  him  on  his  bid  or
    26  proposal,  or,  if he accepts but does not execute the contract and give
    27  proper security, the authority shall have  the  right  to  declare  such
    28  bidder's  deposit  forfeited, and thereupon it shall be readvertised and
    29  relet as above provided. In case any work  shall  be  abandoned  by  any
    30  contractor,  the authority may, if the best interest of the authority be
    31  thereby served, adopt on behalf of the authority any or all subcontracts
    32  made by such contractor for such work and all such subcontractors  shall
    33  be  bound  by  such  adoption  if  made; and the authority shall, in the
    34  manner provided herein, readvertise and relet the work specified in  the
    35  original  contract exclusive of so much thereof as shall be provided for
    36  in the subcontract or subcontracts so adopted. No bid shall be  accepted
    37  from  or  any  contracts  awarded to any person or corporation who is in
    38  arrears to the authority, or the county  of  Nassau  upon  any  debt  or
    39  contract,  or  is a defaulter as surety or otherwise upon any obligation
    40  of the authority, or the county.  Every contract involving  an  expendi-
    41  ture  of  more  than five thousand dollars when made and entered into as
    42  herein provided for shall be executed in duplicate, one  copy  of  which
    43  shall  be held by the authority and one copy of which shall be delivered
    44  to the contractor. Upon the adoption of a resolution by a vote  of  two-
    45  thirds  of all the members of the authority stating that, for reasons of
    46  efficiency or economy,  there  is  need  for  standardization,  purchase
    47  contracts  for  a  particular  type  or  kind  of equipment, material or
    48  supplies of more than five  thousand  dollars  may  be  awarded  by  the
    49  authority to the lowest responsible bidder furnishing the required secu-
    50  rity after advertisement for sealed bids therefor in the manner provided
    51  in this section. Such resolution shall contain a full explanation of the
    52  reasons for its adoption.
    53    §  1092-t.  Actions.  In any case founded upon tort, a notice of claim
    54  shall be required as a condition precedent to  the  commencement  of  an
    55  action  or  special  proceeding  against  the  authority or any officer,
    56  appointee or employee thereof, and the provisions of section fifty-e  of

        A. 1204--A                         13

     1  the  general  municipal  law  shall  govern  the  giving of such notice.
     2  Except in an action for wrongful death, an action against the  authority
     3  for  damages  for  injuries  to  real  or  personal property, or for the
     4  destruction  thereof,  or  for  personal  injuries, alleged to have been
     5  sustained, shall not be commenced more than one  year  and  ninety  days
     6  after the cause of action therefor shall have accrued. An action against
     7  the  authority  for wrongful death shall be commenced in accordance with
     8  the notice of claim and time limitation provisions of  title  eleven  of
     9  article nine of this chapter.
    10    §  1092-u.  Expenses of hearing. The expenses of any hearing, determi-
    11  nation or other action which the provisions of this title require of the
    12  department of environmental conservation shall be paid by the applicant.
    13  Bills for such expenses shall be certified by  said  department  to  the
    14  applicant  and  paid  by  the  applicant directly to the claimant within
    15  thirty days of the date of such certification.
    16    § 1092-v. Severability. If any section, clause or  provision  in  this
    17  title shall be held by a competent court to be unconstitutional or inef-
    18  fective  in  whole  or in part, to the extent that it is not unconstitu-
    19  tional or ineffective it shall be valid  and  effective,  and  no  other
    20  section,  clause or provision shall on account thereof be deemed invalid
    21  or ineffective. Insofar as the provisions of this title are inconsistent
    22  with the provisions of any other act, general  or  special,  or  of  any
    23  local  law  of  any city, the provisions of this title shall be control-
    24  ling. Nothing contained in this title shall be held to alter or  abridge
    25  the  powers  and duties of the department of health or of the department
    26  of environmental conservation over water supply matters.
    27    § 5. Any reduction in the taxable assessed value or removal of proper-
    28  ty in any taxing jurisdiction resulting from section  two  of  this  act
    29  shall  not  be  reflected  in  any adjusted proportions or adjusted base
    30  proportions established pursuant to article 18 of the real property  tax
    31  law or adjusted homestead and non-homestead base proportions established
    32  pursuant to article 19 of the real property tax law.
    33    §  6.  Any  tax  relief  realized  by this act shall be used to reduce
    34  current water rates and offset future water rate increases.
    35    § 7. This act shall take effect immediately.
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