PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following action:
Action taken:
Addition of sections 606.126 through 606.134 to Title 6 NYCRR.
Statutory authority:
Environmental Conservation Law, art. 15, title 21, sections 15-2109(1) and 15-2121(5)
Finding of necessity for emergency rule:
Preservation of public safety and general welfare.
Specific reasons underlying the finding of necessity:
Adoption of the proposed rule pursuant to the traditional SAPA rulemaking process could take months to complete. During the pendency of such rulemaking process, the Board may be in a position to issue a new apportionment and, upon approval of that apportionment by DEC, a new assessment. Such assessment is necessary to secure revenue or, absent immediate collection of such revenue, to support a tax anticipation note. Revenue is necessary to the Regulating District's continued operation and, absent some other agency's adoption of the Regulating District's mission, the maintenance of the high-hazard impoundments under its control. The efficient conduct of the apportionment grievance hearing is central to the successful collection of the assessed amounts following the reapportionment effort. Further, because the Regulating District's available reserves will be exhausted before the final adoption of the proposed rule pursuant to the traditional SAPA process, the Regulating District does not have time to adhere to that process.
Based on the foregoing, and upon the approval granted by the Governor's Office of Taxpayer Accountability; and the NYS Department of Environmental Conservation, the Regulating District Board finds that adoption of the apportionment grievance hearing rule proposal as an emergency rule at the same time that the Regulating District submits the rule to the Governor's Office of Regulatory Reform (GORR) for consideration pursuant to the traditional SAPA process, will afford the Regulating District the opportunity to put the apportionment grievance hearing rule into immediate effect for a period of 90 days. Further, upon such basis the Board finds that Emergency Adoption is necessary for the preservation of public safety or the general welfare and that compliance with the regular rulemaking process would be contrary to the public interest. The Board finds that such circumstances exist in that, without an immediate infusion of cash pursuant to a new assessment, the Regulating District will not be in a position to maintain staff nor perform routine maintenance necessary to protect the high hazard dams under its control.
Subject:
Apportionment Grievance Hearing Procedure.
Purpose:
To establish a simplified due process procedure for contesting the apportionment of Regulating District costs.
Text of emergency rule:
PART 606
Review of Apportionment
Section 606.126 Apportionment Purpose. Pursuant to statute, the board of the Hudson River-Black River Regulating District must prepare an estimate of the cost of the reservoirs operated by the regulating district and then apportion such cost, less the amount which may be chargeable to the state, among the public corporations and parcels of real estate benefitted, in proportion to the amount of benefit which will inure to each such public corporation or parcel of real estate by reason of such reservoir. The regulating district board shall certify such apportionment to the department of environmental conservation for approval. Upon department approval, the apportionment shall be served and filed as required by statute.
Section 606.127 Apportionment date. The regulating district shall by resolution determine the apportionment date. The value, condition and ownership of parcels of real estate benefitted by the operation of the reservoir shall be determined as of the apportionment date. Unless directed to modify the apportionment by the department, the regulating district may not unilaterally modify the apportionment until after the conclusion of the apportionment grievance hearing.
Section 606.128 Publication of the Apportionment. Upon approval of the department, the regulating district board shall place a notice in the regulating district's official newspapers detailing when and where the apportionment roll and the data upon which it is based will be available for review. The notice shall specify:
1) The apportionment date;
2) The address and telephone number for the regulating district office at which aggrieved persons may make an appointment with regulating district staff to review the apportionment;
3) The address and telephone number for the regulating district office at which formal complaints may be filed;
4) The last date for the filing of formal complaints;
5) The date upon which aggrieved parties must notify the board regarding the basis for the complaint and approximate time required to present written and/or oral testimony in support of the complaint, and;
6) The date, time and place for the apportionment grievance hearing at which the regulating district board shall hear formal complaints.
Section 606.129 Apportionment Grievance Hearing. Following department approval, service and filing, the regulating district board shall, upon not less than 45 days notice, conduct a public hearing at which all public corporations and owners of parcels of real property interested in or aggrieved by the apportionment shall be afforded an opportunity to present documentary and/or oral testimony contesting such apportionment.
Section 606.130 Notice to Board of Intent to Seek Modification. Following the board's publication of notice that it will conduct a public hearing, and at least seven days prior to the commencement of that public hearing, any public corporation or person deeming themselves to have been aggrieved shall notify the Board in writing regarding the basis for the requested modification to the apportionment. The aggrieved party's written complaint shall provide an estimate of the time necessary to present evidence at the apportionment grievance hearing and must be received by the board, at the address indicated on or before the date and time indicated in the board's published notice. The Board shall cause to be published on its website a copy of each such written complaint.
Section 606.131 Complaint Procedure. The complaint should include statements, records and other relevant information to support the requested apportionment modification. The aggrieved party may appear at the apportionment grievance hearing in person to present oral and written testimony, and may appear with or without an attorney or other representative. Authorization for appearances by counsel or other representation must be put in writing and bear a date within the same calendar year in which the complaint is filed. A quorum of the regulating district board will preside at the apportionment grievance hearing. The Board may require an aggrieved party to submit additional evidence and, should the party willfully refuse to submit such evidence, or should the aggrieved party refuse to answer any material question, the aggrieved party will not be entitled to an apportionment modification or subsequent judicial review.
Section 606.132 Conduct of Apportionment Grievance Hearing. There is a presumption that the apportionment determined by the regulating district and approved by the department is correct. The burden to prove otherwise, by substantial evidence, lies with the public corporation or owner of a parcel of real property interested in or aggrieved by the apportionment. Only the current apportionment may be aggrieved. A separate complaint must be filed for each parcel or public corporation.
Section 606.133 Modification of Apportionment following Apportionment Grievance Hearing. If, after examining documentary evidence and hearing testimony, the regulating district board shall modify such apportionment, the revised apportionment shall not become effective until approved by the department of environmental conservation and a copy thereof is served and filed in the same manner as upon the completion of the same in the first instance at which time the apportionment shall be final and conclusive. If the regulating district board adopts a resolution approving the apportionment without modification, the apportionment shall be final and conclusive.
Section 606.134 Judicial Review. Parties dissatisfied with the final apportionment determination may elect to challenge such apportionment pursuant to Article 78 of the New York Civil Practice Law and Rules.
This notice is intended
to serve only as a notice of emergency adoption. This agency intends to adopt the provisions of this emergency rule as a permanent rule, having previously submitted to the Department of State a notice of proposed rule making, I.D. No. HBR-19-10-00004-EP, Issue of May 12, 2010. The emergency rule will expire August 15, 2010.
Text of rule and any required statements and analyses may be obtained from:
Glenn A. LaFave, Executive Director, Hudson River-Black River Regulating District, 350 Northern Boulevard, Albany, New York 12204, (518) 465-3491, email: hrao@hrbrrd.com
Regulatory Impact Statement
1. Statutory Authority
The Hudson River – Black River Regulating District (“the District”) is a public corporation created pursuant to Environmental Conservation Law (ECL) Article 15, Title 21. ECL Section 15-2103 declares, “…river regulating districts may be created…” pursuant to ECL Title 21 of Article 15 “…to construct, maintain and operate reservoirs within such districts…” ECL section 15-2105 sets forth direction and criteria for the organization of the boards of river regulating districts and pursuant to ECL section 15-2109(1), “The board shall have the power to make all necessary rules and regulations which shall be effective when approved by the department.”
2. Legislative Objective
The Regulating District was created to regulate the flow of the Hudson River and Black River, primarily for the purposes of flood control and augmentation of low flows. Pursuant to NY ECL 15-2121, the legislature directed the Regulating District Board to apportion the costs to construct and operate the necessary reservoirs, less the amount chargeable to the state, among the public corporations and parcels of real estate benefitted thereby. Embodied within that mandate is a requirement that the Board meet at a time and place specified to hear all persons and public corporations interested in or aggrieved by such apportionment and that upon approval or modification of the apportionment, such person or public corporation aggrieved may upon notice to the Board review the determination of the Board in the same manner as a review is had of the determination of a board of assessors in making an assessment. The proposed rule establishes a grievance hearing procedure including notice provisions, complaint parameters, hearing conduct standards and imposing the burden of proof.
The Regulating District’s current Rules and Regulations, which govern the use, operation and maintenance of the Great Sacandaga Lake, 6 NYCRR Part 606, were approved on July 13, 1992 by the New York State Department of Environmental Conservation (NYSDEC), adopted October 19, 1992 by Resolution of the Board of the Hudson River-Black River Regulating District, and became effective January 27, 1993. The current rules do not establish a procedure for interested and/or aggrieved parties to exhaust administrative remedies before challenging the statutorily mandated apportionment in a court of law.
The proposed rule additions are consistent with the current rules and regulations previously approved by the NYSDEC to administer the Access Permit System, but will themselves be subject to Department approval as required by NY ECL 15-2109(1).
3. Needs and Benefits
Needs:
The Proposed Rules are required to allow for the efficient administration of the apportionment grievance process. By statute, the Regulating District is required to prepare a statement showing each public corporation and a description of each parcel of real estate benefitted by the Regulating District’s reservoirs and the percentage of the Regulating District’s costs to be borne by each. This “apportionment” statement is to be filed with the clerk of each county, town, village, or city affected or containing any real estate which is benefited. NY ECL 15-2123(3) requires that the legislative body of every such county, town, village or city levy and assess such costs upon the relevant public corporation. The statute further requires that such assessments be collected in the same manner and by the same procedure as general taxes are collected. In short, the Regulating District’s costs are to be assessed upon benefited public corporations and parcels based on an apportionment of those costs among those benefited public corporations and parcels. The proposed rules articulate the process through which the counties, towns, villages and cities, as well as the owners of individual parcels, can challenge the Regulating District’s determination regarding who should bear the cost to maintain the reservoir facilities which prevent flooding and provide low flow augmentation to the communities benefited.
Benefits:
These Proposed Rules will improve the efficiency, predictability, understanding and fairness of the process by which those public corporations and owners of parcels of real estate chosen to share in the cost to operate the Regulating District’s facilities can assure themselves that those costs are appropriately allocated among those who benefit from such facilities. Providing an efficient, transparent, forum through which affected parties can advocate for modifications to the apportionment of costs will serve to limit unnecessary effort and expense by the Regulating District and those affected parties.
4. Costs
Cost to Regulated Parties
As stated above, the Proposed Rules are being developed to provide predictability and finality to the statutorily mandated apportionment grievance process. The public corporations and parcels of real estate benefited by the maintenance and operation of the Regulating District’s reservoirs and related facilities have, to a great extent, received those benefits for decades without shouldering the full burden of providing those benefits. In light of the shift in responsibility occasioned by a federal court decision, many of those municipalities will, for the first time, be faced with collecting and paying assessments for benefits their constituents have taken for granted.
The Regulating District’s enabling statute requires that the Regulating District Board apportion the costs to operate the Regulating District’s facilities, less the amount which may be chargeable to the state, among the public corporations and parcels of real estate benefited by such facilities in proportion to the amount of benefit which shall inure to each, NY ECL § 15-2121. The United States Court of Appeals’ Albany Engineering v. FERC decision, (2008, 548 F.3rd 1071), has forced the Regulating District to reapportion most costs from the FERC licensed merchant power plants along the Hudson and Sacandaga Rivers to the public corporations in that area. NY ECL § 15-2121 also requires that the Regulating District Board allow persons and public corporations interested in or aggrieved by the Board’s apportionment determination to review such determination in the same manner as a review is had of a determination of a board of assessors in making an assessment. The proposed rule establishes a grievance hearing procedure to facilitate the efficient administration of the determination review required by NY ECL § 15-2121(5).
The Proposed Rules implement the statutory requirement for a cost effective, non-judicial, forum through which interested and aggrieved parties can raise concerns and have those concerns addressed. Municipalities will realize cost savings by being able to direct individual constituents to participate in the Regulating District’s apportionment grievance hearing process rather than face administrative and court challenges themselves. The Proposed rules will provide the municipalities with definite timeframes, clear direction regarding complaint process and content, and a transparent open meeting at which to rebut established presumptions by meeting the proscribed burden of proof. It is anticipated that public corporations will utilize existing resources to present their concerns, in writing and through oral testimony at hearing, without the need for consultants and/or specialized models or evidence. Non-public interested or aggrieved parties will face costs similar to those faced when mounting an assessment challenge.
Cost to Agency
The Regulating District has developed the Proposed Rules utilizing existing staff as an in-house project. The Proposed Rules are not expected to result in additional costs for implementation beyond what the District currently incurs for administration of its typical monthly meeting schedule. The Proposed Rules are expected to facilitate the efficient collection of the Regulating District’s periodic assessment. A transparent, open grievance process is less costly than defending Article 78 challenges.
Cost to Local Governments
The Regulating District will be solely responsible for administering the apportionment grievance hearing process. The municipalities have no responsibility for administration. It is important to note that the District pays approximately $2.6 million in property taxes annually to the municipalities and other taxing jurisdictions around Great Sacandaga Lake and the payment of those taxes will not be affected by this rulemaking.
5. Local Government Mandates
This rule making will not impose any program, service, duty or responsibility upon counties, cities, towns, villages, school districts, fire districts or other special districts.
6. Paperwork
This rule will not impose any reporting requirement, including forms or other paperwork.
7. Duplication
No rules or other legal requirements of either the State or federal government exist at the present time which duplicate, overlay or conflict with the Proposed Rules.
8. Alternatives
The first alternative is the “null alternative” or the “do nothing” alternative. For decades, the Regulating District utilized an apportionment completed in 1925 to allocate its costs among the parcels of real estate and public corporations benefited by the flood control and flow augmentation provided by the Regulating District’s facilities. As such, the statutory provisions which derive from legislation enacted at the turn of the 20th century have remained untested for more than 80 years. In addition, the advent during the 1970’s of modern procedures for municipal tax assessment challenges have obscured the procedures used as a guidepost by the Regulating District’s enabling statute. Establishing streamlined, transparent procedures through which parties can ensure that they, and their constituents, are assessed only for their appropriate share of the Regulating District’s costs weighed against the use of the null alternative.
The process for establishing new grievance hearing procedures resulted in multiple drafts. The first Draft was subject to analysis by the Regulating District’s sister state agencies, such as the Department of Environmental Conservation and the Office of Real Property Services.
9. Federal Standards
The federal government has set no standards for the same or similar subject areas addressed by the Proposed Rules. Pursuant to Article 408 of the license issued to the Regulating District by the Federal Energy Regulatory Commission (FERC) the District is required to notify FERC during any rulemaking process affecting Title 6, Part 606 of the New York Code of Rules and Regulations.
10. Compliance Schedule
Upon publication of the Notice of Adoption in the State Register, all regulated parties shall be required to comply with the Proposed Rules.
Regulatory Flexibility Analysis
Pursuant to SAPA § 202-b(3)(a)(ii), the Hudson River Black River Regulating District (the “District”) is not required to prepare a Regulatory Flexibility Analysis for Small Businesses and Local Governments (RFASB/LG)) because the Proposed Rules will not impose adverse economic impacts or recordkeeping compliance requirements on small businesses or local governments. Pursuant to the requirements of SAPA, the following represents the statement of findings and the reasons upon which the finding was made that the Rules would impose no adverse economic impacts.
Small Businesses
The affected parties will include both commercial and non-commercial parties with property or interests lying within designated floodplains in either the Hudson River Area or the Black River Area. The majority of the affected parties will include non-commercial parties. The commercial parties primarily include non-FERC licensed hydropower entities and retail outlets, marinas, restaurants, warehouse and industrial facilities located within the floodplain adjacent to the Sacandaga and Hudson Rivers and similar commercial parties within similar floodplains for the Black, Beaver and Moose Rivers. These non-commercial and commercial parties own property within one or both of the Regulating District’s two River Areas. The Regulating District anticipates preparation of maps and/ or property descriptions which clearly delineate those parcels in a given municipality falling within the designated floodplain. The Proposed Rules will provide property owners with 45 days to view such map or description and will guide interested or aggrieved parties in the preparation and submission of written complaints.
The Proposed Rules are not expected to result in an increased need for small businesses to hire professional consultants for compliance. The Proposed Rules will not require small businesses to purchase or lease new computer equipment, hardware or software. The Proposed Rules will not require small business to prepare any additional reports or keep additional records. As stated in the RIS, the Proposed Rules are being developed to provide predictability and finality to the apportionment grievance process.
Local Government Mandates
There will be no costs to local governments for the implementation of the Proposed Rules because the Regulating District will fully administer and fund the apportionment grievance process. Local governments will have the option to contest, but need not contest, an apportionment which affects the municipality and/or its constituents. The Regulating District pays approximately $2.6 million in property taxes to the municipalities and other taxing jurisdictions around Great Sacandaga Lake, and the payment of these taxes will not be affected by this rulemaking.
This rule making will not impose any program, service, duty or responsibility upon counties, cities, towns, villages, school districts, fire districts or other special districts.
Rural Area Flexibility Analysis
Pursuant to SAPA § 202-bb(2), in developing a rule, agencies must consider utilizing approaches to accomplish the objectives of a statute while minimizing any adverse impact on public and private sector interests in rural areas. For the purposes of this SAPA evaluation, a rural area is defined as a county having a population less than 200,000. The eight counties with corporate boundaries within the Hudson River area include: Albany; Rensselaer; Hamilton; Fulton; Washington; Warren; Essex; and Saratoga counties. The five counties with corporate boundaries within the Black River area include: Jefferson; Lewis; Herkimer; Oneida; and Hamilton counties Of the twelve counties within the two river areas, Essex, Rensselaer, Hamilton, Washington, Warren, Fulton, Jefferson, Lewis, Herkimer and Oneida counties each have a population of less then 200,000 persons, and therefore, the potential impacts on these counties must be considered.
Pursuant to SAPA § 202-bb(4)(a) a Rural Area Flexibility Analysis (RAFA) is not required because the Proposed Rules will not impose adverse impacts or reporting, recordkeeping, or other compliance requirements on public or private entities in rural areas. Pursuant to the requirements of SAPA, the following represents the statement of findings and the reasons upon which the finding was made that the rule would impose no adverse impacts or recordkeeping compliance requirements:
Small Businesses
The affected parties will include both commercial and non-commercial parties with property or interests lying within designated floodplains in either the Hudson River Area or the Black River Area. The majority of the affected parties will include non-commercial parties. The commercial parties primarily include non-FERC licensed hydropower entities and retail outlets, marinas, restaurants, warehouse and industrial facilities located within the floodplain adjacent to the Sacandaga and Hudson Rivers and similar commercial parties within similar floodplains for the Black, Beaver and Moose Rivers. These non-commercial and commercial parties own property within one or both of the Regulating District’s two river areas.
The Regulating District anticipates preparation of maps and/ or property descriptions which clearly delineate those parcels in a given municipality falling within the designated floodplain. The Proposed Rules will provide property owners with 45 days to view such map or description and will guide interested or aggrieved parties in the preparation and submission of written complaints.
The Proposed Rules are not expected to result in an increased need for small businesses to hire professional consultants for compliance. The Proposed Rules will not require small businesses to purchase or lease new computer equipment, hardware or software. The Proposed Rules will not require small business to prepare any additional reports or keep additional records. As stated in the RIS, the Proposed Rules are being developed to provide predictability and finality to the apportionment grievance process.
Local Government Mandates
There will be no costs to local governments for the implementation of the Proposed Rules because the Regulating District will fully administer and fund the apportionment grievance process. Local governments will have the option to contest, but need not contest, an apportionment which affects the municipality and/or its constituents. The Regulating District pays approximately $2.6 million in property taxes to the municipalities and other taxing jurisdictions around Great Sacandaga Lake, and the payment of these taxes will not be affected by this rulemaking.
This rule making will not impose any program, service, duty or responsibility upon counties, cities, towns, villages, school districts, fire districts or other special districts.
Job Impact Statement
Pursuant to SAPA § 201-a(2)(a), a Job Impact Statement for the Proposed Rule additions is not required because it is apparent from the nature and purposes of the Proposed Rules that they will not have a substantial adverse impact on jobs and employment opportunities. The Proposed Rules are required to allow for the efficient administration of the apportionment grievance process.
The affected parties will include both commercial and non-commercial parties with property or interests lying within designated floodplains in either the Hudson River Area or the Black River Area. The majority of the affected parties will include non-commercial parties. The commercial parties primarily include non-FERC licensed hydropower entities and retail outlets, marinas, restaurants, warehouse and industrial facilities located within the floodplain adjacent to the Sacandaga and Hudson Rivers and similar commercial parties within similar floodplains for the Black, Beaver and Moose Rivers. These non-commercial and commercial parties own property within one or both of the Regulating District’s two river areas. The proposed rules do not affect the Regulating District’s authority to impose assessments upon affected parties, but rather provide clarity to the process necessary to successfully contest such charges. Therefore, there will be no impact on jobs.
Assessment of Public Comment
The agency received no public comment since publication of the last assessment of public comment.
