TUESDAY, JUNE 20, 2023 12:24 P.M.

ACTING SPEAKER AUBRY: The House will come

to order.

In the absence of clergy, let us pause for a moment of

silence.

(Whereupon, a moment of silence was observed.)

Visitors are invited to join members in the Pledge of

Allegiance.

(Whereupon, Acting Speaker Aubry led visitors and

members in the Pledge of Allegiance.)

A quorum being present, the Clerk will read the

Journal of Monday, June the 19th.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Mr. Speaker, I move to

dispense with the further reading of the Journal of June -- Monday,

NYS ASSEMBLY JUNE 20, 2023

June the 19th and that the same stand approved.

ACTING SPEAKER AUBRY: Without objection, so

ordered.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, sir.

Colleagues and guests that are in the Chambers, I want to start today

with a quote from Steve Jobs, remember us -- most of us know of him;

probably some of us even carry around an Apple product. But his

words for us today is, If you're working on something that you really

care about, you don't have to be pushed. The vision actually pulls

you. Again, these words from Steve Jobs.

Mr. Speaker, the members have on their desk a main

Calendar, we also have a debate list. And after housekeeping and

introductions, we're going to be working off that debate list, beginning

with Calendar No. 32 by you, sir, Mr. Aubry. And then we're gonna

go to Rules Report No. 850 by Ms. Hunter; followed by Rules Report

No. 735 by Ms. Bichotte Hermelyn. Later today we're gonna be

calling for a Rules Committee to meet. That Committee is gonna

produce an A-Calendar. We are going to announce further floor

activity as we proceed, but you might imagine that that A-Calendar

will be at some point taken up.

So, that's the general outline of where we are, Mr.

Speaker. If you have housekeeping or introductions, now would be a

perfect time. Thank you, sir.

ACTING SPEAKER AUBRY: No housekeeping,

NYS ASSEMBLY JUNE 20, 2023

thank you, and -- but Ms. Giglio has a introduction. I wouldn't forget

you, Ms. Giglio, don't worry.

MS. GIGLIO: Thank you, Mr. Speaker. I would like

to introduce a dear friend of mine from Suffolk County, Town of

Southold, her name is Dawn Jacobs. She's here with us today. She is

a public safety dispatcher and has saved many lives, including the --

giving CPR over the phone of a baby that was not breathing. So she

has an honorable job, she's a great friend and is happy to join us today.

If you would please extend all the cordialities of the

House and the floor to her. Thank you.

ACTING SPEAKER AUBRY: Certainly. On behalf

of Ms. Giglio, the Speaker and all the members, we welcome you here

to the New York State Assembly, extend to you the privileges of the

floor. Congratulations on the great work that you're doing, keep that

work up and know you are always welcome here in the New York

State Assembly, and happy summertime. Good to see you.

(Applause)

(Pause)

ACTING SPEAKER ZEBROWSKI: Page 21,

Calendar No. 32, the Clerk will read.

THE CLERK: Assembly No. A02878-A, Calendar

No. 32, Aubry, Kim, Taylor, Forrest, Burgos, Reyes, Hevesi, Fahy,

O'Donnell, Mitaynes, Anderson, Mamdani, Jackson, Clark, Simon,

González-Rojas, Seawright, Carroll, Gallagher, Darling, Burdick,

Cruz, Epstein, Hunter, Meeks, Weprin, Kelles, L. Rosenthal, Otis,

NYS ASSEMBLY JUNE 20, 2023

Cook, Dinowitz, Septimo, Gibbs, Dickens, Glick, Davila, Hyndman,

Pretlow, Ramos, Tapia, Lunsford, Ardila, Simone, Raga, Shimsky,

Alvarez, De Los Santos, Bores, Levenberg, Walker. An act to amend

the Criminal Procedure Law, in relation to motions to vacate

judgment; and to repeal certain provisions of such law relating thereto.

ACTING SPEAKER ZEBROWSKI: On a motion by

Mr. Aubry, the Senate bill is before the House. The Senate bill is

advanced.

An explanation has been requested, Mr. Aubry.

MR. AUBRY: Thank you, Mr. Speaker. This bill

amends Article 440 of the Criminal Procedure Law, which governs

the judgment motions to provide people previously convicted of

crimes the opportunity for a meaningful review to -- to assure redress

of wrongful convictions, including in cases where the person has pled

guilty. An early print of this bill passed the Assembly in March,

which was subsequently amended by the Senate and recalled to the

Assembly as an A-print. The A-print of this bill makes some

amendments to the bill. It clarifies that only the conviction that has

been decriminalized is vacated, not the entire judgment. It clarifies

that the Federal courts referred to in 440.10(i)(l) are those with

jurisdiction over the New York State laws that has issues. While this

would include the Southern District of New York as a Federal court

whose holdings could be the basis of a lawful (inaudible), an opinion

out of the U.S. 9th Judicial Court would not. Amends the section

related to assigned counsel so that a pro se applicant can file an

NYS ASSEMBLY JUNE 20, 2023

application for assignment of counsel. While this already happens in

practice, this is intended to create a uniform standard for all

judgments. Eliminates the one-day protect New Yorkers felony

expansion language, limits the discovery requirement for the

prosecutors and -- excuse me, and law enforcement, among others.

ACTING SPEAKER ZEBROWSKI: Mr. Morinello.

MR. MORINELLO: Thank you, Mr. Speaker. Will

the sponsor yield for a couple of questions?

MR. AUBRY: Certainly, Mr. Morinello.

MR. MORINELLO: Thank you.

ACTING SPEAKER ZEBROWSKI: The sponsor

yields.

MR. MORINELLO: Are there currently provisions

in the Criminal Procedure Law protecting defendants from wrongful

convictions?

MR. AUBRY: Yes.

MR. MORINELLO: Okay. That would be Section

440 of the Criminal Procedure Law, correct?

MR. AUBRY: Yes.

MR. MORINELLO: And within that, there are

various categories. After trial, new evidence being included can be

appealed by 440.10(1)(g); is that correct?

MR. AUBRY: Yes.

MR. MORINELLO: Okay. Defendants who pled

guilty but are exonerated by DNA evidence, is that already in the

NYS ASSEMBLY JUNE 20, 2023

CPL?

MR. AUBRY: No.

MR. MORINELLO: Pardon?

MR. AUBRY: I said no.

MR. MORINELLO: I would ask your counsel to

look at 440.10 subdivision 1 (g-11).

What about defendants who did not understand their

guilty pleas or were coerced into pleading guilty?

MR. AUBRY: Hold one minute while I confer with

learned counsel.

MR. MORINELLO: Sure.

(Pause)

MR. AUBRY: So yes, but the Court of Appeals

overturned that component part in, I believe, People vs. Tiger, if you'd

refer to that.

MR. MORINELLO: What about those who didn't

understand their guilty pleas or were coerced into pleading guilty?

MR. AUBRY: Again, those who did not understand

their guilty plea?

MR. MORINELLO: Yes. Or coerced.

MR. AUBRY: So we say yes to that.

MR. MORINELLO: Convicted of -- because of

misconduct by police or prosecutors?

MR. AUBRY: Yes.

MR. MORINELLO: Convicted because of

NYS ASSEMBLY JUNE 20, 2023

ineffective assistance of counsel?

MR. AUBRY: Yes.

MR. MORINELLO: Defendants who are entitled to

the benefit of a retroactive change in the law?

MR. AUBRY: Yes.

MR. MORINELLO: Defendants who were not

warned of immigration consequences of a guilty plea?

MR. AUBRY: Once again, yes.

MR. MORINELLO: Okay. So, it would just seem

that all the areas that need to be addressed for someone who has the

ability to ask for reconsideration are addressed already in the Criminal

Procedure Law.

MR. AUBRY: I'm sorry, you'll have to say it again.

MR. MORINELLO: Well, currently it appears that

under the Criminal Procedure Law, every opportunity for a reopening

or an appeal after the conviction some time later, it appears that there's

already provisions in the Criminal Procedure Law to afford those that

were wrongfully convicted of the ability to reopen theirs.

(Pause)

MR. AUBRY: So again, so for people who are

actually innocent, we're trying to expedite their ability to seek justice

in these cases. And as we said in the previous debate, we listed any

number of cases in the State of New York where innocence was

determined years and years after imprisonment was -- the sentence

that they served, and we, as the State, paid dearly for that because

NYS ASSEMBLY JUNE 20, 2023

those people were due restitution. And so in assisting and expediting

this process and making sure that people have their ability to seek

justice where they have been convicted and/or pleaded guilty to

crimes they did not commit, I think what we do is provide further faith

in our justice system that will not be so long deterred. And, of course,

we've named a number of cases where that has happened, and we've

seen what has occurred in our State in this manner.

MR. MORINELLO: But once someone realizes that

they were wrongfully convicted and there is some sort of proof, do

they not have the immediate right to then make this request to

exonerate?

MR. AUBRY: Well, we clearly have people who

have contended that they were innocent all the way through the

process until the conviction and still went to jail and ended up later on

being proved that they were not guilty of the crime they were

convicted of. And so we think that this bill as it now amended assists

in that process and assists those individuals to seek justice in a way

that is more reasonable.

MR. MORINELLO: It seems that this bill would

never make a conviction final, that something would always be there

so that it would always seem to be an open issue; am I correct in that?

MR. AUBRY: I don't agree. I think what the bill

does is gives an opportunity for people to seek the truth when that

truth may have been deterred in the criminal justice process that they

underwent. And so any -- you know, this is not an automatic, they

NYS ASSEMBLY JUNE 20, 2023

still have to seek approval and file for it and be reviewed to determine

whether or not they have enough basis to proceed. So it isn't simply a

open-ended process that has no end to it. It is a process that allows

the court to look at these kinds of circumstances, regardless of how

the judgment was made.

MR. MORINELLO: And this would be the trial

court would have the right to look at it, correct?

MR. AUBRY: I can't -- we can't hear you. Say it

again, I'm sorry.

MR. MORINELLO: The trial court would have the

authority to look at this?

MR. AUBRY: The trial court or a court otherwise

designated if the judge was no longer around to make the judgment.

MR. MORINELLO: And then this would also allow

the defendant or those convicted to file an app -- a request to the trial

court even if the Appellate Division has -- had ruled against that

particular point.

(Pause)

MR. AUBRY: We're trying to determine if that's true

or not. One moment, if you please.

MR. MORINELLO: Thank you.

On the bill, please.

ACTING SPEAKER ZEBROWSKI: On the bill.

MR. AUBRY: On the bill, Mr. Morinello.

MR. MORINELLO: Thank you.

NYS ASSEMBLY JUNE 20, 2023

(Laughter)

MR. AUBRY: As I -- as I said in the last one, old

dog, new tricks. Thank you.

(Laughter)

MR. MORINELLO: All right.

On the bill, please.

ACTING SPEAKER ZEBROWSKI: On the bill, Mr.

Morinello.

(Laughter)

MR. MORINELLO: It just seems that as admirable

as the purpose of this is, it just seems that it is not needed. It'll

overburden the system. But one -- one of the issues, then, is victims

will have to be on their pins and needles, will have to await forever for

justice because this opens the door where this could be done -- there's

never any finality, and so there's not finality for the victim. In

addition, in fact as written, the bill would allow trial-level courts to, in

effect, review the decisions of Appellate Courts, an issue that has been

previously decided by an Appellate Court could be raised again on a

motion to a trial-level court to vacate the judgment by the defendant.

Simply alleging one fact has not been an issue on the previous appeal.

Issues that could be raised in that way could have nothing to do with

the wrongfulness of the conviction but can involve any issue in the

case, whether raised at the initial trial level or not. As a result, if the

bill becomes law, not only will convictions never be final, no issue

will ever be final. Furthermore, the hierarchy of our court system

NYS ASSEMBLY JUNE 20, 2023

would be turned on its heads as trial-level courts second-guess

Appellate Courts on essentially the same issues that the Appellate

Courts had previously decided.

Also, during this debate it was stated that the State

has paid out moneys to those that may have been wrongfully

convicted. But in order to be eligible for that, there would have had to

have been an exoneration or an overturn of that conviction. So that in

and of itself shows that the procedure is there, it is working, and that

those that were wrongfully convicted that have new evidence or have

reason to bring it up are already protected.

Thank you very much.

ACTING SPEAKER ZEBROWSKI: Read the last

section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER ZEBROWSKI: A Party vote

has been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. For the reasons

mentioned by my colleague, the Republican Conference will be

generally opposed to this bill. Those who support it are certainly

welcome and encouraged to vote yes here on the floor. Thank you,

sir.

ACTING SPEAKER ZEBROWSKI: Thank you.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

NYS ASSEMBLY JUNE 20, 2023

Speaker. The Majority Conference is going to be in support of this

progressive piece of legislation; however, there may be a few that

would decide to be an exception, they should do so at their seats.

ACTING SPEAKER ZEBROWSKI: Thank you.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Mr. McGowan to explain his vote.

MR. McGOWAN: Thank you, Mr. Speaker. I rise to

explain my vote. I'll be voting in the negative on this bill. It's

certainly a laudable goal, no one wants wrongful convictions. But

under our law currently, there are numerous -- a number of

mechanisms that can allow someone to challenge a conviction based

upon the determination or learning later that the evidence was, in fact,

false. I feel that -- that this bill is -- is too broad, and really, I think the

-- the people who are gonna like this bill the most are probably

criminal appellate attorneys because they're gonna be able to go

through the record of virtually any case, including a plea or certainly

after trial, and examine this much broader standard of -- of evidence

that was likely relied upon the fact finder at trial, or that was likely

relied upon by any party as a basis for a plea agreement. That's very

broad. And that doesn't mean that the evidence, looking at it as a

whole, in the totality of the circumstances, didn't match the standard

by which the defendant is held, which is guilt beyond a reasonable

doubt. I think this is not good for crime victims, this is not good for --

for the finality of -- of the case, of -- of the parties being able to move

NYS ASSEMBLY JUNE 20, 2023

forward, as my colleague mentioned. And again, while a laudable

goal, certainly not done the right way and -- and way too broad.

So, respectfully, Mr. Speaker, I will be in the

negative on this bill. Thank you, sir.

ACTING SPEAKER ZEBROWSKI: Mr. McGowan

in the negative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 18, Rules Report No. 850, the Clerk will

THE CLERK: Senate No. S07549-A, Rules Report

No. 850, Senator Thomas (Assembly No. A07763, Hunter). An act in

relation -- relating to a temporary in rem foreclosure moratorium; and

providing for the repeal of such provisions upon the expiration

thereof.

ACTING SPEAKER ZEBROWSKI: An explanation

has been requested, Ms. Hunter.

MS. HUNTER: Yes, thank you. The purpose of this

bill is to institute an in rem foreclosure moratorium to ensure that the

New York State tax districts comply with the recent SCOTUS ruling.

This is just to ensure we have legislative clarity until we get

legislation in relative to Article XI. The Tyler decision did put in a de

facto moratorium, this would codify that. There is an exemption for

those that are already in compliance, and Article XI cannot be

changed without our State action.

NYS ASSEMBLY JUNE 20, 2023

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you, sir. Would the sponsor

yield?

MS. HUNTER: Sure.

ACTING SPEAKER AUBRY: Ms. Hunter yields.

MR. GOODELL: Thank you, Ms. Hunter. So, the

general purpose of this law, as I understand it, is to impose a

moratorium on any tax sales with a couple of exceptions; is that

correct?

MS. HUNTER: Yes.

MR. GOODELL: And so the Supreme Court ruling

said that if you have a tax sale and the proceeds from the tax sale

exceed the amount the taxpayer owed, the surplus had to be returned

to the owner, correct?

MS. HUNTER: Correct.

MR. GOODELL: But the Supreme Court did not in

any way question or challenge the right of the municipality to keep all

the money up to the full amount that was due on the taxes, correct?

MS. HUNTER: They -- they would give back

surplus minus the taxes owed, plus any fees or penalties.

MR. GOODELL: So, a simple example. Let's say

there was 25,000 in back taxes, they had a tax sale, the property sells

for 35,000, they keep the 25,000 that was owed in taxes and then the

Supreme ruling would return the $10,000 surplus, correct?

MS. HUNTER: Yes.

NYS ASSEMBLY JUNE 20, 2023

MR. GOODELL: Now, with a couple of exceptions,

which we'll talk about, this bill would put in a one-year moratorium

on any tax sales, correct?

MS. HUNTER: Any taxes?

MR. GOODELL: Yes.

MS. HUNTER: You still have to pay your taxes.

MR. GOODELL: The tax foreclosure sale, since --

MS. HUNTER: Oh, tax foreclosure.

MR. GOODELL: -- we're putting a moratorium,

right, for a year on any tax foreclosure sales.

MS. HUNTER: Yes.

MR. GOODELL: With a couple of exceptions, right?

MS. HUNTER: Yes.

MR. GOODELL: So using that example that I had

just a moment ago, rather than sell the property for 35,000 and return

the 10,000, this bill would prohibit the municipality from even having

a tax sale and collecting the first 25,000 that was owed to the

municipality, correct?

(Pause)

MS. HUNTER: Yes. It would hold any of the

exceeds surplus in a trust.

MR. GOODELL: Well, this actually says no tax

district shall convey to any person a title to any tax-delinquent parcel

which has been the subject of an in rem tax foreclosure proceeding,

with a couple of small exceptions, correct?

NYS ASSEMBLY JUNE 20, 2023

(Pause)

MS. HUNTER: So, anything --

(Pause)

-- funds post-sale would be held in a trust until the

moratorium has expired.

MR. GOODELL: Well, it bars the tax sale

completely, right? Now, there is, by the way --

MS. HUNTER: If it's in an Article XI jurisdiction.

MR. GOODELL: Right. So there is a couple

exceptions; one exception is if the taxing district, the municipality,

acquired a tax title between May 25, 2023 and prior to June 1st. Why

is there a one-week window where you could acquire a tax lien and go

ahead with a tax foreclosure, but we ban all the rest of them? I mean,

impose a moratorium on all the rest of them.

MS. HUNTER: It's May 25th to July 1st.

MR. GOODELL: Right, that's one week, right? Oh,

I'm sorry, a month and a -- a little over a month, right? It's five weeks,

why do we have a five-week window?

MS. HUNTER: That was just for the municipalities

that were already in the process post-title.

MR. GOODELL: Well, as you know, a lot of

counties get titled maybe in January and schedule the tax sale in June

or July. Those counties would not be protected by that exemption,

this only applies to counties that acquired title in that five-week

period, correct?

NYS ASSEMBLY JUNE 20, 2023

(Pause)

MS. HUNTER: If they acquired title within that

five-week period.

MR. GOODELL: Right. And everyone else is just

out, right? They have a moratorium.

MS. HUNTER: Yes, if they are in an Article XI

district.

MR. GOODELL: And how many counties qualify

for that exception? Am I correct it was hand-drafted for a couple of

individual counties?

MS. HUNTER: No, this was not hand-drafted for

individual counties.

MR. GOODELL: Then which counties can qualify

for that exemption and which of the other 64 counties are out in the

cold?

MS. HUNTER: I -- I don't have that exact number,

but just as point of reference relative to the draft of this piece of

legislation, we did hear from relevant parties like the Association of

Counties, Pacific Legal Foundation, my own county who is having

this issue, and the Association of Towns, as well.

MR. GOODELL: Now, you're which county?

MS. HUNTER: Onondaga.

MR. GOODELL: And did Onondaga take tax title

between May 25th and July 1st of this year?

MS. HUNTER: Did they or have they?

NYS ASSEMBLY JUNE 20, 2023

MR. GOODELL: Have they, yes.

MS. HUNTER: I don't know. I don't know.

MR. GOODELL: My guess is they did.

MS. HUNTER: Okay.

MR. GOODELL: So this law wouldn't apply to

them. Have you heard from the County Executives Association?

Because I've heard from my County Executive who said this will blow

a $5 million gap in his budget this year. Have you heard about -- from

the County Executives (inaudible/cross-talk) --

MS. HUNTER: Well, I've heard from my County

Executive.

MR. GOODELL: -- all the others.

MS. HUNTER: My County Executive, who is part

of, obviously, the Association of Counties who is asking for this

because they would like clarification on what to do relative to this

decision. And mind you, if we're going backwards before, talking

about how we got to this point, you know, for those counties who

have been taking properties and -- and selling them and keeping the

surplus, we found that to be the Supreme Court said that was

unconstitutional. So we're just trying to give clarity and codify to

make sure that the process is done appropriately, and those counties

who haven't been doing it, all right, and have been taking people's

property and not giving surplus that they have the amount of time

necessary and that they become in compliance during the moratorium

then they can move forward. But we need to make sure we're

NYS ASSEMBLY JUNE 20, 2023

responsible for Article XI --

MR. GOODELL: Well, let's talk about coming into

coming into compliance, because I know you've been saying that if

they take the surplus and hold it in a trust, then they would be in

compliance with the Supreme Court, right? And we all agree, I think

we're all in agreement, Supreme Court decisions never barred

municipalities from collecting the taxes that were due, it only talked

about what was surplus, correct?

MS. HUNTER: Correct.

MR. GOODELL: Now, you do correctly note that if

you have a methodology for returning the surplus, this moratorium

wouldn't apply. But looking at page 2, starting on paragraph 2, that

exception only applies if you had those provisions in place since 1993

or 1994, right?

MS. HUNTER: Correct.

MR. GOODELL: So this moratorium would not

allow a municipality to adopt a surplus proceeds trust fund tomorrow,

they still wouldn't qualify. Because there's no way they can do it

tomorrow and still have done it in 1994, right?

MS. HUNTER: Well, yes, but Article XI can only be

changed with State action. It will be up to us to make sure that the

process is in place appropriately relative to this Tyler decision. So we

don't want to make sure that counties are picking and choosing how

they implement to become in compliance, it's our responsibility to

make sure that they are.

NYS ASSEMBLY JUNE 20, 2023

MR. GOODELL: Now, I mentioned that in my

county, which is roughly, by the way, 150th of the State, no surprise

since I represent just a county and a little sliver of a nation, another

nation, the Seneca Nation. For our county, it was a $5 million hole.

What is it Statewide? Am I correct it would be in the range of a $750

million gap in county budgets?

MS. HUNTER: We don't have that number right

now.

MR. GOODELL: I mean, we're talking about a

moratorium on all property tax foreclosures and we don't know how

much it's going to cost our local governments?

MS. HUNTER: Right, but we're talking about a

one-year moratorium where this will be remedied. And -- and I -- I

understand what you're saying relative to having a deficit, but we're

also talking about the fact that they were having, and I don't want to

say it's ill-gotten gains, but they were taking monies that all weren't

allowed for them to -- to keep and receive. So we want to make sure

that that is rectified appropriately.

MR. GOODELL: All right. Now, of course, you

know, a lot of times these tax foreclosures involve properties that are

vacant. I mean, when somebody lets their property go for taxes,

they're not usually on top of maintenance and repair and everything

else. Isn't it true that if we have a moratorium with only a five-week

exemption that might apply to a couple of special counties, those

properties when they go up will not only owe another full year of

NYS ASSEMBLY JUNE 20, 2023

taxes, but they will have deteriorated another full year, correct?

MS. HUNTER: Well, I suppose in that instance that

could be true, but every county may be different. My county might be

two years before they do a tax seizure, yours might be three years.

And, again, this is just for one year, they'd become in compliance,

they could be doing it, get this done more quickly. And also, there are

people responsible to upkeep of the property. And I believe we did

pass something here saying if properties weren't up to code that

municipalities could add that on to their tax bill.

MR. GOODELL: Yes, I know we keep adding more

and more on. But where in this language does it say that if they come

in compliance within the year they can move forward? Because I

didn't see it.

(Pause)

MS. HUNTER: It's not specified.

MR. GOODELL: Okay. So this is a hard

moratorium for one year with the exception of a couple special

counties, which may include yours, we're not sure, a five-week

carveout in the middle for some unknown reason, we don't know why,

right, every other county who foreclosed earlier or later is nailed, they

can't get anything. Let me ask you this: A lot of the counties

reimburse towns or villages or cities within their jurisdiction for

unpaid taxes. Does this bill do anything to address that situation or

are counties still required to reimburse the towns, villages and cities

even though this bill prohibits them from foreclosing and collecting

NYS ASSEMBLY JUNE 20, 2023

that money?

MS. HUNTER: Right. That's not included in this.

And my county does that. They front all of the towns and villages,

minus the City of Syracuse, the property taxes and they're the ones

who are responsible to do the tax foreclosures. But again --

MR. GOODELL: But just to be clear, we're not sure

if this bill even applies to your county, right?

MS. HUNTER: What's that?

MR. GOODELL: Just to be clear, we're not sure this

bill even applies to your county, right, because your county may have

acquired title between May 25th and July 1st, right?

MS. HUNTER: Again, but that was -- that five-week

period was put in place to give time for those that were already in the

process, that short window post-Tyler.

MR. GOODELL: But just to be clear, if you

foreclose, say, on May 24th, so you're still in the process, this ban

would apply, correct? If you were already in the process and you

foreclosed two weeks earlier, this ban still applies, right?

(Pause)

MS. HUNTER: Well, we don't want to make

guesses. This --

MR. GOODELL: So we're -- just to be clear, this

only excepts that particular county that might have foreclosed after

May 25th, an arbitrary date pulled out of the air, and before July 5th,

and the rest of them can't collect any of their outstanding unpaid taxes,

NYS ASSEMBLY JUNE 20, 2023

correct, for a year?

MS. HUNTER: Again --

MR. GOODELL: Right? That's what this says,

right?

MS. HUNTER: This is for a one-year moratorium --

MR. GOODELL: One-year moratorium, we're on

that, yup.

MS. HUNTER: -- based on a decision by the

Supreme Court that said it was unconstitutional to take people's homes

and not give them the excess proceeds. We are just allowing one year,

one simple year to allow counties to get themselves within compliance

to allow us time, as the State who is responsible, to codify and get

everything corrected within Article XI.

MR. GOODELL: Except for whatever one county

might be within that five-week period. For them, apparently we don't

care about it. Thank you.

On the bill, sir.

ACTING SPEAKER AUBRY: Right. And --

MR. GOODELL: Can you imagine if someone came

to us and said, We think it'd be great if we had a one-year moratorium

on your salary, but don't worry, next year you'll get paid. Really?

This says to every one of our counties across this great State, You

cannot foreclose on any of your tax liens and collect anything that's

due to you for a full year, with one exception. If you happen to

foreclose after May 25th and before July 1st, then you can go ahead.

NYS ASSEMBLY JUNE 20, 2023

Supreme Court be damned if you happen to fall in that little window.

Now, is there an alternative? Absolutely. No one

here today is arguing that counties are entitled to what they're owed,

everyone agrees. Everyone in this Chamber recognizes the Supreme

Court decision that says if the county is paid more than they're owed,

they have to return this surplus to the owner. We agree. So why aren't

we debating a bill here that requires counties to return the surplus and

let counties proceed with a tax foreclosure? Instead, we're talking

about a multi-, multi-, multi-million-dollar hit on counties. Just tell

the county, Hey, it's 750 million that we're taking out of your pockets

because you can't do any foreclosures this year. How are they

supposed to cover that, a line of credit? Their budgets are already

done. Their budgets already include these funds. We're smarter than

this. We can pass legislation that says keep the surplus in trust until

we figure out how to deal with it. That's easy, isn't it? And isn't that

the right solution? But instead, we blow a hole through every county

budget, with the exception of one that happens to foreclose after May

25th and before July 1st. But with everyone else, we nail the counties.

This is not the right approach. We should be simply

telling the counties, Keep the surplus so that you can return it to the

seller in accordance with the Supreme Court. They can read the

Supreme Court decision. They don't need us to shut down the entire

system so that they can read the Supreme Court decision, they can do

it on their own.

Now, if you don't think waiting a year to be paid

NYS ASSEMBLY JUNE 20, 2023

means anything, as you watch the property deteriorate, as you get

more and more zombie properties because these properties are not on

the tax roll and not being taken care of, then we're missing the point

here, aren't we? We should be helping municipalities, not hurting

them. For that reason, I can't support it.

Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Will the sponsor

yield?

ACTING SPEAKER AUBRY: Ms. Hunter, will you

yield?

MS. HUNTER: Certainly.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. RA: Most -- mostly just some points of

clarification, but -- but let me start with the exception and, in

particular, those dates. So, my understanding is the May 25th date

comes from when this decision was handed down by the Supreme

Court, correct?

MS. HUNTER: Correct.

MR. RA: And where does the July 1st date come

from? Is there a particular reason for that date?

(Pause)

MS. HUNTER: The -- this was in conversation with

our stakeholders to try to allow time for us to come up with a

NYS ASSEMBLY JUNE 20, 2023

mechanism to be able to move forward so that it wasn't just on that

May 25th date.

MR. RA: And if, say, you know, this has passed the

Senate I believe, if this passes here, the Governor signs it, suppose the

Governor signs it six months from now, which isn't, you know, un --

unheard of in -- in this Chamber as we get out of Session and usually a

lot of stuff waits until later in the year, no -- nothing would change

there, right? It was still be that period of time, which I would think is

a little bit of uncertainty because the local governments wouldn't

necessarily know prior to that July 1st date whether this bill is going

to get signed into law or not.

MS. HUNTER: So if we do nothing, there is still this

de facto moratorium that, again, we're trying to codify with this, and if

we do nothing and the Governor doesn't sign it until December 31st --

(Pause)

-- oh yeah, there's still the moratorium if you're not

being compliant. And again, it would still be us. But a member had

mentioned why can't we just, well, we're on the last days of a -- a

Session that was supposed to be an ending, we still have to change this

Article XI in order for all of us to be in compliance.

MR. RA: Okay. So let's -- let's get into that part of

this now. For clarification, to be in compliance, for -- for a

municipality to be in compliance, what do they need to do?

MS. HUNTER: The mechanism in place in order for

them to return the surplus funds.

NYS ASSEMBLY JUNE 20, 2023

MR. RA: Okay. And if a municipality were to do

that, come into compliance as you're saying, they would still be

subject to the moratorium, correct, unless it applies where Mr.

Goodell brought up back -- all the way back into the early '90s?

MS. HUNTER: Well, nothing stops them from

changing their local laws now to come into compliance.

MR. RA: But if they were to do that tomorrow or a

month from now or at any point during this moratorium, they're still

subject to the moratorium under the language of this bill, correct?

(Pause)

MS. HUNTER: So, based on Section 2 where -- and

maybe it's not explicitly stated to, you know, our -- our liking, that it

states that - glasses on here - if the municipality becomes in

compliance, then they would be exempt just like these other

municipalities that are already in compliance.

MR. RA: Sorry, say that again. Section 2, you're

saying line 10 on, on the first page?

(Pause)

MS. HUNTER: This -- this bill provides us clarity

relative to what -- I know it doesn't seem like that, but this bill does

provide us clarity with the moratorium, one year, in order for these

counties to be able to get this right. Those that opted out in 1994 are

already in compliance, they're exempt, this doesn't apply to them.

MR. RA: Correct.

MS. HUNTER: This is for a county like mine who

NYS ASSEMBLY JUNE 20, 2023

were taking properties, keeping these excess funds, and we want to

make sure they are all following the exact same process, that there is

no room for error so if they miss steps in the process that they have to

start all over again at the beginning. Again, we're just trying to codify

Tyler's ruling, one year to make sure that these municipalities that

weren't in compliance now are in compliance.

MR. RA: Okay. Got -- got it. But, again, if a

municipality were to come into compliance during this moratorium

period, are they still subject to the moratorium through the end of the

one year?

MS. HUNTER: No.

MR. RA: Okay. And where -- what language

provides for that in this bill? Because I see the language in Section 3

that talks about what you just mentioned, having come into

compliance back -- back in the '90s, but where in the bill does it say

that they would not be subject to this?

(Pause)

MS. HUNTER: Section 2.

MR. RA: So now --

MS. HUNTER: Page 2, Section 2 where we're

talking about those --

(Pause)

MR. RA: So again, that -- you're talking about the

language on page 2, from -- starting at line 7? I guess --

MS. HUNTER: Yes, yes.

NYS ASSEMBLY JUNE 20, 2023

MR. RA: -- subsection 2 of Section 3 of the bill.

MS. HUNTER: Yes.

MR. RA: But again, that talks about, you know, on

January 1st, 1993, adopt a local law no later than July 1st, 1994, and

then August 1st, 1994. That does not seem to me to describe the

circumstances that would exist for a municipality that were to come

into compliance, put this process in place tomorrow or a month from

now or six months from now. How does it apply to that municipality?

MS. HUNTER: If they're not under Article XI, they

can fix it themselves. If they are, we must act, hence, codifying this

Tyler decision and the moratorium in order for us to take another step

when we come back to make sure that we take care of Article XI.

MR. RA: Okay. I'm -- I'm going to ask again, a

municipality who comes into compliance who doesn't -- this section

does not apply to them, they did not have any of this in place. They --

they can come into compliance and move forward with these types of

foreclosures, or they cannot?

MS. HUNTER: If they're not subject to Article XI.

MR. RA: If they're not subject to Article XI, the

moratorium applies to them for the full year, or...

MS. HUNTER: Yes.

MR. RA: Okay, thank you.

My -- my last question, I guess, is -- is this, and, you

know, I agree -- I agree with this court decision. I think it's a -- a

rarity these days that we would see something that is a 9-0 decision in

NYS ASSEMBLY JUNE 20, 2023

anything in any way controversial, but it certainly makes sense, you

know, that the government can't take the excess value of -- of a

property. So I agree with that completely, and I think that if we were

adopting a piece of legislation here to just provide to say to the

municipalities, You cannot do this, you need to put procedures in

place to make sure that's returned, I think would be fine. This -- this

language is more broad in terms of the prohibitions on the

municipality.

Now, my other question is really relative not just to

the municipality, but to the property owner that has this, I'll call it

equity, value, whatever, in that piece of property, that if we delay this,

right, aren't we going to have another year of property tax

delinquency, other things that may be on the property that are now

eating up what monies would have otherwise been able to be returned

to that homeowner?

MS. HUNTER: We want to make sure we're getting

this right. I mean, there are municipalities that are exempt already

who are good players and who have been doing the right thing. We're

just trying to make sure, given that this decision just came. Had this

decision not come, there were bills already in play in front of this

Legislature to have conversations. The Governor had actually put

something in her budget relative to this very thing, which we, you

know, did not take up a single bill this -- this Session. But we are

where we are right now because of this Tyler decision. So we're

wanting to make sure -- and again, we're -- we're talking about, well,

NYS ASSEMBLY JUNE 20, 2023

if the municipalities don't get their money, and if the people don't get

their money. We want to make sure uniformly that the municipalities

are working in good order, that they are in compliance with a process

that is set forward, that we have time to act relative to Article XI, or,

yes, Article XI, and it's just one year. And not wanting to rush

something forward gives us time to actually work through with these

municipalities to make sure they get it right. Put proceeds in the bank,

keep it there for -- for them to be able to give out these exceed --

excess surplus, you know, later. But again, we're talking about one

year based on something that just happened. We're just trying to make

sure, working with stakeholders. This didn't come out from the sky,

this piece of legislation, this came from stakeholders who were saying,

Hey, we want to make sure we have a process to work through. Can

we just have a brief pause while we work through in codifying this

decision.

MR. RA: Understood. And I -- I'm not sure, you

know, there'd be any mechanism to put any proceeds in the bank

because the -- the county can't move forward with any type of

foreclosure. And -- and I understand the need to pause here, but I

think what we're essentially doing is saying we need more time as a

State, and if a county is able to move much more quickly than the

State, we are preventing them from doing that.

So I thank you for taking the time to answer my -- my

questions.

Mr. Speaker, on the bill.

NYS ASSEMBLY JUNE 20, 2023

MS. HUNTER: I don't agree with that.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. RA: So, just -- just back to the prior concern I

just raised, suppose -- I'll give you, you know, some round numbers

here. Suppose a -- there was a property who [sic] would get

foreclosed on, and because of this under -- prior to this decision,

maybe the county would end up with $25,000 in excess of -- of what

was owed and now that's money that the Supreme Court has said

would be a taking from the homeowner, that $25,000. Okay? Now,

let's suppose there's, I don't know, $12,000 a year in property taxes on

-- on that piece of property, which maybe for some people in the State

that seems excessive -- not at all for us on Long Island -- maybe with

some interest that goes up a few thousand dollars more. Because

there's a moratorium, you have a whole nother year of that

delinquency, of late costs on prior payments that are owed, as well as

new tax bills that are going to come due, which might end up at the

end of the day the difference between that homeowner getting

returned that $25,000 and maybe them getting, I don't know, $4- or

$5,000 when you factor in new bills that have come due and late fees.

So in addition to the concern at the local government

level, and again, I think we're basically telling the counties, If you're

able to move faster than the State, I'm sorry, we need more time to

figure this out. But there's a concern at the homeowner level as well

that we should be looking to bring these types of things to a

conclusion, they take long enough as it is. And like I said, I agree

NYS ASSEMBLY JUNE 20, 2023

with the Court's decision, but I think that it would make more sense

for us just to make explicit in the law, you can't hold this money, you

have to set something up, and just once you set that up and make sure

you can return those funds, move forward with -- with things as you

would in the past.

For those reasons, I'm gonna be casting my voting in

the negative. Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you.

Mr. Manktelow.

MR. MANKTELOW: Thank you, Mr. Speaker. Will

the sponsor yield?

ACTING SPEAKER AUBRY: Ms. Hunter, will you

yield?

MS. HUNTER: Certainly.

ACTING SPEAKER AUBRY: Ms. Hunter yields.

MR. MANKTELOW: Good afternoon, Ms. Hunter;

how are you?

MS. HUNTER: Very good, thank you.

MR. MANKTELOW: Good. Just a -- just a

question. How will this affect abandoned properties or zombie

properties that we're in the process of cleaning up across the State?

And I know a lot of our local municipalities are pushing for that as

well as the State, and I know our land banks have done a great, great

bit of work with this. How with this affect those properties?

(Pause)

NYS ASSEMBLY JUNE 20, 2023

MS. HUNTER: The process will be put on hold,

obviously, until the municipality comes into compliance. And I just --

I just want to reiterate, again, there is a de facto moratorium from the

Supreme Court ruling. This would codify that. If we do nothing, the

moratorium still would be there and it would still be up to us, the

State, to act relative to those municipalities under Article XI. So it's

our responsibility to take care of this.

MR. MANKTELOW: All right. And -- and just so I

understand, there -- there are no carveouts for the abandoned

properties or the zombie properties, correct?

MS. HUNTER: No.

MR. MANKTELOW: All right. Thank you for

answering the question, much appreciated.

MS. HUNTER: You're welcome.

MR. MANKTELOW: Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, sir.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. I -- I do want to ask the sponsor one quick question if she

will yield.

ACTING SPEAKER AUBRY: Ms. Hunter, will you

yield?

MS. HUNTER: Yes.

ACTING SPEAKER AUBRY: Ms. Hunter yields.

MRS. PEOPLES-STOKES: I want to say it's in the

NYS ASSEMBLY JUNE 20, 2023

very last section where you talk about this being applicable in most in

rem foreclosures. Are there any exclusions at all?

(Pause)

MS. HUNTER: The in rem foreclosures that were

for the municipalities that are already in compliance. For example,

your county.

MRS. PEOPLES-STOKES: Yeah, well, that's a good

one. I thought you might be speaking of that one. But doesn't this

apply to the county, it also applies to municipalities like cities, too,

right?

MS. HUNTER: All tax -- all tax districts.

MRS. PEOPLES-STOKES: Good. And I only say

good because there are literally thousands of people who have already

had their properties sold in foreclosure, and the equity that they should

have gotten out on it was kept by the municipality. Now, I -- I'm not

going to hold anybody accountable for that because it's not the right

thing to do. But I do have to agree with my colleague on the other

side who said I agree with the Supreme Court decision. That was

absolutely the right decision. And I do also think it's the right decision

for us to say to counties and taxing authorities, You cannot do it in this

manner. You have a year to help us understand why you were doing it

that way and what you could do differently. And I think that's

reasonable.

I also think that, you know, some of these taxing

authorities can use this time to actually work with the person or the

NYS ASSEMBLY JUNE 20, 2023

people or the company that is in foreclosure to figure out how to keep

their property. There are -- there are things that local governments

can do to provide an advantage to their citizens, and I would hope that

they would do that.

So I want to thank you very much for sponsoring this,

and on the bill, Mr. Speaker.

I know this -- this seems like, just by the previous

debate that we've heard that this is the wrong thing for the State to be

doing. I think it's absolutely the right thing for the State to be doing.

Somebody needs to say, because everybody that's a property owner is

not necessarily very wealthy. Everybody that's a property owner,

quite frankly, in many cases, sometimes have these properties for,

like, 30 years and they've been passed on to them by their families

before them. It should not be taken when you know that assessed

evaluation of these properties have gone up without giving them the

benefit of having access to that surplus. And I think we start there by

saying, We're gonna give you a year to figure out how you never do

this again, and then we're gonna see what happens and hopefully at

the end of that time, these municipalities, including my own, the City

of Buffalo, will understand that you can do foreclosures, you can. If

people are unwilling to pay and you've done whatever you can to try

to help them understand that they have a responsibility and they have

to -- if they can't do it, you can take some action, but you can't take all

the benefit from it. You can take what you've lost in your taxes and

you can give them the rest and that's it. And I'm hopeful that this

NYS ASSEMBLY JUNE 20, 2023

leads us towards that process, and I want to thank the sponsor for

submitting this legislation because I was actually looking at

sponsoring something similar myself. So thank you, Madam Hunter.

ACTING SPEAKER AUBRY: Thank you.

Mr. Gray.

MR. GRAY: Thank you, Mr. Speaker. Will the

sponsor yield for a few questions?

ACTING SPEAKER AUBRY: Ms. Hunter, will you

yield?

MS. HUNTER: Yes.

ACTING SPEAKER AUBRY: Ms. Hunter yields.

MR. GRAY: Thank you very much. So just -- just

quickly, what's the uncertainty of the Tyler decision that we're

addressing here? Because the -- the legislation, the bill, says we're

gonna deal with a certain --

MS. HUNTER: Article XI and those municipalities

that didn't opt out.

MR. GRAY: But some municipalities right now

under the Tyler decision have to return the surplus funds, correct?

MS. HUNTER: Right.

MR. GRAY: Okay. So they're really -- they can --

they can enact a local law without a moratorium; is that correct?

(Pause)

MS. HUNTER: Right. Well, in addition, as I stated,

we have to act relative to Article XI, we, the State Legislature. So this

NYS ASSEMBLY JUNE 20, 2023

would give us enough time to put something forward in order to

rectify, you know, the situation that there were bills out there that

there was no agreement on with all of those amendments. So we're

just trying to get to the point in this short amount of time to ensure

that all municipalities come into compliance.

MR. GRAY: What -- what is the short amount of

time?

MS. HUNTER: There's a one-year moratorium.

MR. GRAY: Okay. And do you think that -- and,

first of all, so who's going to address the legal uncertainty here? Who

-- who is actually doing -- finding the solution?

MS. HUNTER: We are.

MR. GRAY: Okay.

MS. HUNTER: We -- we're responsible for Article

XI. We are responsible to make an amendment. Again, as I said, the

Tyler decision puts together a de facto moratorium, and so

municipalities would be in the same position. We're codifying, giving

them enough time to get their acts together, and it will be essential for

us when we reconvene to make sure that we take care of Article XI.

MR. GRAY: But municipalities right now are going

to be bound by the Tyler decision, so we could act simultaneously. I

mean, there's -- the reason for the moratorium, they're gonna be --

they're gonna be foreclosing, returning properties. By actually

delaying the foreclosing, they're gonna be re-levying taxes, school

taxes, local -- the town water and water sewer district taxes, all things

NYS ASSEMBLY JUNE 20, 2023

like that. So really, it's gonna diminish the surpluses; is that correct?

MS. HUNTER: No. That would still happen under

this de facto moratorium. This is trying to make sure we're giving

legislative clarity to municipalities as we move forward. Again, I can

understand we're talking about for those municipalities who have been

taking excess funds, they're not theirs to keep. And so we need to

make sure that they have a process in place to give funds back to those

legal owners.

MR. GRAY: Right. And I think all the

municipalities understand right now that they have to -- they have to

comply with the Tyler decision, correct?

MS. HUNTER: Right.

MR. GRAY: So, we --

MS. HUNTER: And they're looking for clarity from

the --

MR. GRAY: We can figure out --

MS. HUNTER: -- State.

MR. GRAY: We can figure out Article XI while --

while municipalities are going through the foreclosure process and

complying with the Tyler decision, correct?

(Pause)

MS. HUNTER: Right, if they're not subject to

Article XI they can move forward and do that.

MR. GRAY: They can pass a local law. So -- so

really, the point of the moratorium is moot.

NYS ASSEMBLY JUNE 20, 2023

MS. HUNTER: Article XI counties cannot act on

their own. We must do something in order to --

MR. GRAY: Those are -- those are non-charter

counties, correct?

MS. HUNTER: Correct.

MR. GRAY: Correct, okay. And -- so let's go back

to Onondaga, because Onondaga -- I happened to read their -- their

charter yesterday -- it says taxes levied, so levied shall include an

amount to be known as a reserve for uncollected taxes. So they're

actually leveling -- levying to people for uncollected taxes, correct?

So -- so we'd be better off if we're just letting the foreclosures proceed

and then the surpluses which they're bound by Tyler to continue

forward, right?

MS. HUNTER: We -- I can keep saying the same

thing over, which I'm happy to keep saying the same thing, you know,

over, but this comes from having conversations with those

stakeholders who did not opt out of Article XI who want to make sure

they will in the future be in compliance. And so this is not for the

folks who already opted out in the '90s and who are moving forward

and doing what -- that they're supposed to do. This is for those

counties, municipalities who did not opt out, who are in the position

that they put themselves in. We're trying to work with them in order

to move this process forward, codify this de facto moratorium that's

already in place by the Supreme Court so that we can come together

and rectify this Article XI issue, the State Legislature. And while I,

NYS ASSEMBLY JUNE 20, 2023

you know, can understand the -- the situation about, you know,

millions of dollars and not being able to collect from -- the counties

not being able to collect, they were keeping monies that weren't theirs.

So we can go back and forth about that, you know, all day. We're just

trying to make sure, the Supreme Court did something, there were

bills in place before the Supreme Court decision that were out here,

we weren't agreeing on, we couldn't come to an agreement on. Here

comes the Supreme Court codifying unconstitutional taking. We want

to make sure that we move forward this process appropriately for

municipalities, that the guidance is very clear going forward relative

to Article XI.

MR. GRAY: Right, okay. Thank you very much.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. GRAY: So, the Tyler/Hennepin decision is very

clear that they have to return the funds, and a moratorium is just going

to -- just going to add to additional taxes that residents are going to be

-- or people that have failed to pay their taxes are going to be

responsible for, thereby -- thereby really diminishing what the surplus

is available to them. So this does not effectively help anybody. It

certainly doesn't effectively help the counties or any municipality that

has to make other jurisdictions whole. So I will be voting in the

negative.

Thank you.

ACTING SPEAKER AUBRY: Thank you, sir.

NYS ASSEMBLY JUNE 20, 2023

Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this legislation, but those who

support it are certainly encouraged to vote yes here on the floor.

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. The Democratic Conference is generally going to be in favor

of this piece of legislation; however, there may be some that would

choose to be an exception, they should feel free to do so at their seat.

Thank you, sir.

ACTING SPEAKER AUBRY: Thank you, both.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Ms. Hunter to explain her vote.

MS. HUNTER: Yes, Mr. Speaker, thank you for

letting me explain my vote. We're talking today about righting

actually a -- a wrong. When we're talking surplus funds, surplus

equals money that's not a municipality's. So we need to be very clear

about that. And we are working with these municipalities to provide

them time and guidance in order to get it right, to give the money back

to those folks who -- as the Majority Leader had mentioned and many

NYS ASSEMBLY JUNE 20, 2023

others, you know, have stated before, this could be property that

someone owned for 40, 50 years and whatever the circumstances are,

were not able to pay taxes. We used a $25,000 example. What if the

house was $400,000 and the surplus was $300,000? That's a

significant amount of equity that could go back to a homeowner.

We're not telling people not to take your -- pay their taxes, but we're

also saying let us codify what the Supreme Court decision was, let us

make sure that we have parameters in place, let us come back and take

care of Article XI and give people's property back to them because the

Constitution says it belongs to them, Mr. Speaker.

Thank you.

ACTING SPEAKER AUBRY: Ms. Hunter in the

affirmative.

Mr. Gray to explain his vote.

MR. GRAY: Thank you, Mr. Speaker, to explain my

vote. Count -- you know, jurisdictions, tax enforcement juris --

jurisdictions that foreclose on properties usually do it, obviously, for

nonpayment of taxes. This will further people's indebtedness in terms

of their tax obligations. And taxing jurisdictions also use that money

to remediate blighted property, abandoned property and zombie

properties within their jurisdiction. So it is going to do nothing in

terms of property improvements and taxing jurisdictions, and it's

going to do nothing for, you know, the -- the rightful owner of the

property who is entitled to the surplus. And the Tyler decision already

provides for that, so there is no need for this moratorium.

NYS ASSEMBLY JUNE 20, 2023

So thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, sir.

Ms. Fahy to explain her vote.

MS. FAHY: Thank you, Mr. Speaker, to explain my

vote just very briefly. While I look forward to continuing to work

with the sponsor on this, my county of residents has raised a number

of concerns, and whether -- and although it affects only a small

number of cases, they're wondering if this may be necessary for

compliance. And while we continue to work on a constitutional

replacement in light of the Supreme Court case, a replacement for

Article XI on these tax lien foreclosures, I am concerned that any

delays in proceedings could end up leading to -- to more demolitions

here in Albany, which has been a problem in the past.

So with that, I'm going to vote in the negative and,

again, look forward to the sponsor knowing her intent was to be of

assistance in light of this recent Supreme Court case. Thank you, Mr.

Speaker.

ACTING SPEAKER AUBRY: Ms. Fahy in the

negative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 16, Rules Report No. 735, the Clerk will read.

THE CLERK: Assembly No. A07334, Rules Report

No. 735, Bichotte Hermelyn. An act to amend the New York City

NYS ASSEMBLY JUNE 20, 2023

Charter, in relation to the procurement limit for businesses owned by

women and minorities.

ACTING SPEAKER AUBRY: On a motion by Ms.

Bichotte Hermelyn, the Senate bill is before the House. The Senate

bill is advanced.

An explanation is requested, Ms. Bichotte Hermelyn.

MS. BICHOTTE HERMELYN: Yes, this -- this bill

would amend the New York City Charter to increase the City's

discretionary spending threshold to 1.5 million for noncompetitive

contracts, which also includes construction.

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you. Would the sponsor

yield?

ACTING SPEAKER AUBRY: Ms. Bichotte

Hermelyn, will you yield?

MS. BICHOTTE HERMELYN: Yes.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. GOODELL: Thank you, Ms. Bichotte. What is

the normal threshold where you have to have competitive bidding for

municipal contracts?

MS. BICHOTTE HERMELYN: So, the threshold

currently right now is at $1 million.

MR. GOODELL: No, I mean absent MWBE status,

what's the threshold for competitive bidding?

MS. BICHOTTE HERMELYN: There aren't any

NYS ASSEMBLY JUNE 20, 2023

thresholds, like...

MR. GOODELL: Well, I mean a municipality, if

they go over a certain threshold, has to use competitive bidding, right?

They don't do it for small purchases, but for larger purchases --

MS. BICHOTTE HERMELYN: Well -- well,

according to the PPB rules, to be exempt from the competitive

bidding, initially years ago in the City of New York it was at 25k to

30k, and that was for -- for -- it was for small businesses, MWBE.

And since then, we have increased the threshold from that small

amount to 150,000, and then to 500,000, then to a million, and now

we're doing it to $1.5 million.

MR. GOODELL: And how high do you think this

will go? I mean, it started at 25,000, right, then it went, as you

mentioned, 25,000 then higher, then higher. Two years ago it was a

half-million, last year it was a million, this year it's a

million-and-a-half. Do you have any projection on how high the

exemption from competitive bidding will go in the future?

MS. BICHOTTE HERMELYN: I would hope it goes

to maybe 10 million soon, or 15 million, and that's because that 1.5

million that we're discussing is crumbs compared to the billions and

billions of dollars of procurement that has been excluding minorities

and women historically over the course of the years. So that 1.5

million is nothing, it's just a drop in the bucket. We are dealing with a

$20 billion procurement opportunity, 30-, 40 billion. Whatever way

you want to slice and dice the number, billions. And we're just talking

NYS ASSEMBLY JUNE 20, 2023

about 1.5 million. And I should tell you, Mr. Goodell, that that's just a

cap. Many of the MWBEs are not even bidding for that 1.5 million

threshold. It's not necessarily a -- a -- a giveaway thing, as well.

There is a process in obtaining that $1.5 million threshold.

MR. GOODELL: Now, under current law, MWBEs

also have a competitive advantage, right? If they're bidding in a

competitive bid situation a municipality can award it to an MWBE

even though they are not the lowest responsible bidder, correct?

MS. BICHOTTE HERMELYN: Yeah, that was the

best value because -- and -- and oftentimes, a smaller business, it's not

only MWBEs, but a smaller business can provide a much valuable

product, much valuable service; however, they may not have the -- the

capacity to provide a lower bid in the same way a bigger company, a

larger company can.

MR. GOODELL: And what is that -- the existing

advantage in terms of how much higher? I think we just raised it,

didn't we, from 5 to 10 percent?

MS. BICHOTTE HERMELYN: Yes, it's about

10 percent. And it's still, again, that's just crumbs. It's still, you know,

we're inching our way.

MR. GOODELL: So just as an example, let's say

under the current procedure a $1.5 million contract, without raising

this, an MWBE could bid $150,000 more and still get the contract,

right, under current law?

MS. BICHOTTE HERMELYN: Under current law,

NYS ASSEMBLY JUNE 20, 2023

an MWBE can bid 150,000 more, exactly, if -- yes.

MR. GOODELL: And then in addition to having a

10 percent advantage over the lowest responsible bidder, isn't it true

that a lot of our contracts also require a certain percentage of a public

work, typically 30 or 35 percent be MWBE, correct?

MS. BICHOTTE HERMELYN: Correct. But I

should say that a vast majority of these promises are not met. They

say that it's -- it's a goal, it's not mandated. Very often, a lot of these

large contractors are given waivers, which is a problem because we do

have Minority- and Women-owned Businesses that can perform, but

very oftentimes these companies are stating that they don't have --

they don't -- they don't see anybody who can do that particular job. So

yes.

MR. GOODELL: Last year, or maybe it was a

couple of years ago, the New York City Comptroller came out with a

report citing the MWBE program and noted that there were, in his

estimate, over 900,000 MWBEs in the State of New York, but at that

time there were like 6,000 that were certified. Is that still your

understanding that there's a huge, huge gap between the number of

MWBEs that are certified compared to the total number that are

women or minority-owned businesses in New York City?

MS. BICHOTTE HERMELYN: Well, the gap has

definitely decreased, okay? So many years ago it was 6,000, but the

City has implemented programs to expedite the process. It takes

about an average of three months to certify a Minority- and Women

NYS ASSEMBLY JUNE 20, 2023

Business Enterprise. Very different from the State, the State takes

about two years, it's a problem. And since then, they have reached

over 10,000 MWBEs. Now, when you said 900,000 or 900 -- I -- I

don't know where you're getting that number. We do have a number

of potential women-owned and minority-owned businesses that are

willing and able to work. Sometimes, you know, it's -- the onus is on

them where they have to get their paperwork prepared to -- to -- to be

certified.

MR. GOODELL: The 900,000 was the number that

was cited in that Comptroller's report. So if we're now up to 10,000,

that means --

MS. BICHOTTE HERMELYN: We're probably

more than 10,000, so don't quote me.

MR. GOODELL: Okay. But if we're -- let's say

we're 20,000, that would be just over 2 percent, right? I mean, if the

-- if those numbers are right, which --

MS. BICHOTTE HERMELYN: Well, I don't know

how the Comptroller was defining the 900,000 --

MR. GOODELL: Okay.

MS. BICHOTTE HERMELYN: -- okay? But I can

certainly say that, you know, the City of New York, the composition

of the working cohort, or working group of people of minority and

women makes over 61 percent. Those are tax dollars that are

contributing to our billion, billion dollars of procurement opportunity.

And even with that, I would say for MBEs [sic], it's only 10 percent

NYS ASSEMBLY JUNE 20, 2023

who gets access to that $25 billion procurement. That's tiny and --

MR. GOODELL: Yeah, I would agree.

MS. BICHOTTE HERMELYN: -- and that's bad.

That's a big disparity.

MR. GOODELL: Absolutely. Thank you very

much, I appreciate your comments.

MS. BICHOTTE HERMELYN: Mm-hmm. Thank

you.

MR. GOODELL: On the bill, sir.

ACTING SPEAKER AUBRY: On the bill, Mr.

Goodell.

MR. GOODELL: To be honest with you, the MWBE

program has been extraordinarily frustrating for many of us. I am

delighted to hear that the City of New York can now evaluate an

application in a matter of months. Upstate, it's years, and it is

unbelievably difficult to become certified as an MWBE Upstate. And

I've had companies that have been run by women, they're owned

entirely by women who can't get certified. It takes them years to get

certified. And so at the same time we want to have these programs to

help MWBEs, what's happening is that the State recognizes that

MWBEs have a huge statutory preference. If you're involved in a

contract Upstate, unless you can get a waiver, 30, 35 percent of the

work has to be done by an MWBE. If you're bidding in New York

City or anywhere else, you can bid 10 percent higher on any contract

and still be awarded. Because the rewards are so high, the State

NYS ASSEMBLY JUNE 20, 2023

apparently takes the view that their mission is to be a gatekeeper and

restrict the number of people who are certified, apparently in the

misguided view that MWBEs are all out there to lie and cheat to get

these huge advantages. It's a horrific disservice to all the MWBEs.

And unfortunately, every time we increase the financial advantages

without opening the door for legitimate businesses to become certified

in a timely manner, we continue to create this huge gap where if

you're one of the few that's certified, happy days. If you're not, you're

out of the market.

And think about this: If in New York City they've

certified 2 percent of the MWBEs and we have these huge benefits,

but only if you're certified, the net effect is these advantages,

ironically not the other 98 percent of MWBEs that are not certified,

out of the bidding, which is exactly the opposite of what we want,

right? We want all the MWBEs to be able to compete on a fair and

open basis, but with the current system, the irony is this legislation

actually hurts them because they no longer can be the lowest

responsible bidder unless they bid more than 10 percent lower than the

certified MWBE.

Ugh, it's so frustrating when we see the economics

work counter to our objective to increase MWBE opportunities.

Thank you, again, to my colleague.

ACTING SPEAKER AUBRY: Thank you, sir.

Ms. Giglio.

MS. GIGLIO: Yes. Thank you, Mr. Speaker. Will

NYS ASSEMBLY JUNE 20, 2023

the sponsor yield?

MS. BICHOTTE HERMELYN: Yes.

ACTING SPEAKER AUBRY: Ms. --

MS. GIGLIO: Okay. So if Turner Construction or

(inaudible) Construction for LaGuardia Airport, JFK, any big project

in New York City, there's a lot of housing projects that are going on

right now, and these are $20-, $30 million projects, or $50 million

projects. Will that -- will that contractor be able to consider the

MWBE for one-and-a-half million of that contract and then -- or is

this a contract directly between the MWBE and the City of New

York?

MS. BICHOTTE HERMELYN: It's a -- it's -- it's a --

it will be part of the PPB rules, the procurement rules where a City

agency can have a noncompetitive bid process and select -- this is

discretionary, that's why it's called discretionary -- for that particular.

So it's not a conversation between the MWBE and the contractor. So

those like the Turner Constructions and so forth, they have their own

(inaudible), which is 30 percent.

MS. GIGLIO: Yes.

MS. BICHOTTE HERMELYN: Okay? And they

have to go out and seek MWBEs to fulfill those promises.

MS. GIGLIO: Yes. Or get waivers.

MS. BICHOTTE HERMELYN: Right. And a lot of

times they get waivers, which is something that we have to change,

because they say, Oh, we can't find people, which is not true.

NYS ASSEMBLY JUNE 20, 2023

MS. GIGLIO: Yeah. Well, a lot of the problem is

bonding, too. So if you're a big contractor and you're hiring an

MWBE, they have to be bonded for the work that they're doing and

then also, which is difficult --

MS. BICHOTTE HERMELYN: Very difficult.

MS. GIGLIO: -- for MWBEs, especially with a $1.5

million contract is finding a bonding company.

MS. BICHOTTE HERMELYN: Right. So the

one-and-a-half -- so I -- I would like for you to think of it as a separate

thing, okay? The $1.5 million is typically for smaller projects, smaller

services, and it could fit in any of the categories whether it's

construction services, professional, standard, what have you. And I

would not want you to kind of mix the two. You can have a company,

an MWBE who's eligible for the 1.5 million discretion and also

participate in a 30 percent goal contract, subcontract with Turner

Constructions. So let's -- let's try to keep those two separate.

MS. GIGLIO: Okay. And then my next question

would be, on the -- the bidding, so you can procure a contract for 1.5

million or less --

MS. BICHOTTE HERMELYN: Mm-hmm.

MS. GIGLIO: And is there a minimum number of

bids that has to be received, not necessarily -- not necessarily

competitive, but if -- if, you know, one person bids it because one

person knew about it and there aren't two other companies -- like,

normally when we do a -- being from local government in a

NYS ASSEMBLY JUNE 20, 2023

noncompetitive bid, it's an emergency situation, you need to get

something done immediately so you have to get at least three bids and

then figure out who the most qualified bidder is and whether or not

they would, you know, be eligible to do that work.

MS. BICHOTTE HERMELYN: Yes. So I believe

that there are some safeguards that are in place. We have -- agencies

are required to solicit at least three MWBEs --

MS. GIGLIO: Okay.

MS. BICHOTTE HERMELYN: -- to ensure the

competition and the best value for the City. So yeah, so -- so within

that process, there is a process within the process.

MS. GIGLIO: That would be great -- that's great;

that's good news, I like that. So it's -- it kind of gives you an idea as to

what the contract should actually cost, if you have a minimum of three

bids that you've taken in.

MS. BICHOTTE HERMELYN: Exactly.

MS. GIGLIO: Otherwise you rebid it, right?

MS. BICHOTTE HERMELYN: Exactly.

MS. GIGLIO: Okay. Okay, great. And then the

other question that I had was the, you know, MWBEs, I happen to be

one and my last contract was New York --

ACTING SPEAKER AUBRY: Shhh.

MS. GIGLIO: -- University Hospital on 30th

between 3rd and Lex where I was doing that under Turner

Construction. And, you know, it was a great opportunity for a woman

NYS ASSEMBLY JUNE 20, 2023

business enterprise to get into the City, but there are compliance

officers. Does the City of New York have a compliance officer to

make sure that the WBE is compliant with the WBE outline? Because

most of the time, you know, you're doing a great job in the MWBE

office, and it's gotten a lot better over the years and the time frames

have shortened in order to get people qualified. But the -- a lot of the,

like, New York-New Jersey Port Authority and the City of New York

depend on the State's qualification process to fill out and have a

secondary license either with New York City or with the MTA. So

I'm just wondering if New York City has a compliance office that

would go out and make sure that if the person supplying, you know, a

million-and-a-half worth of material, that they have a warehouse that

has that material in it that they can sell to the City of New York, or is

it going directly from the manufacturer to the City, which then the

WBE would just be a pass-through and a broker.

MS. BICHOTTE HERMELYN: Right. So -- so I

think both the State and the City has a compliance unit that checks

everything that you have talked about. There have been some

concerns with what they call "men with skirts," so very often White

men will just give, you know, say, Hey, my wife is the owner. And so

they -- there's some checks and balances to make sure that White

women are actual owners. As you -- as you talk about warehouse and

pass-throughs and distribution channels and so forth, there are

compliance regulations put in place to see if that particular woman or

minority-owned business enterprise is actually holding those assets,

NYS ASSEMBLY JUNE 20, 2023

that they own those assets, are they manufacturing those assets. And

if they are a pass-through, there is a percentage, there's -- there's a

sliding scale-type thing where that pass-through middle person would

be -- would probably only get 30 percent credit as an MWBE.

So there's things in place right now currently in -- in

the State and in the City. And I have to tell you, the City has done a

great job. They have lifted their personal net worth, which is

something that the State still has. They have increased their ways of

assuring that MWBEs are certified within a three-month period, which

the State is still struggling. You know, it takes two to three years,

which is why, to our colleague, we need more funding and manpower

to help escalate the certification process. I'm very happy that one of

our colleagues here just passed a certification reciprocity bill which

would allow the State to open their arms to those who've been

certified in the City. So if the City takes only three months than the

State, they don't have wait to be certified for two years in order to get

State-certified. So to, again, our colleague's point in terms of having

all of these MWBEs out there waiting for certification, that's another

way that we can expedite the process.

MS. GIGLIO: So this doesn't preclude a company

that is not a MWBE from bidding on the process, but if it's $1.5

million or less, the City would automatically give that to the MWBE

and not necessarily a company that's not certified.

MS. BICHOTTE HERMELYN: Well, it's -- it's their

choice. They could -- they could give it to a White business, a White

NYS ASSEMBLY JUNE 20, 2023

male business, but it's the choice where the MWBE doesn't necessarily

have to go through this, you know, this massive bidding process to get

access to that 1.5. There will be a smaller pool of small businesses

who will be competing amongst themselves, which is another issue

because, again, as you mentioned, a lot of the MWBEs and small

businesses are too small to get -- to have capacity, access to capital, as

well as getting bonding qualified. And so this is just another route to

allow small businesses, MWBEs to do work with the government and

build capacity.

It showed that as we've been increasing the threshold,

we've been seeing a -- a participation of about 20 to 33 percent

increase in MWBE's participation, that's a huge thing.

MS. GIGLIO: It's great.

MS. BICHOTTE HERMELYN: It's great. So the

1.5, you know, we can -- we can go to the courts, we can continue to

fight on crumbs, but the reality is it should be a lot higher, because we

have a lot more way to go.

MS. GIGLIO: So anybody can bid on a contract with

the State for 1.5 million or less and -- or I mean the City and then the

City can decide if it's an MWBE or if it's just a company that's not

certified who to give the contract to. So it's not mandatory that it has

to go to a MWBE if it's 1.5 million or less.

MS. BICHOTTE HERMELYN: It's a discretion. It

-- it -- it just allows that they can also consider MWBEs and that the

MWBEs don't necessarily have to go through a competitive process

NYS ASSEMBLY JUNE 20, 2023

that includes a larger universe.

MS. GIGLIO: Okay. Thank you very much.

MS. BICHOTTE HERMELYN: Mm-hmm. Thank

you.

Ms. GIGLIO: Thank you, Mr. Speaker.

On the bill.

ACTING SPEAKER AUBRY: On the bill.

MS. GIGLIO: I -- I -- I voted against this last year

when it was increased to $1 million because I wasn't really

understanding the full process but the sponsor has answered my

questions and this year I will be supporting it because anybody can bid

on it and the City can decide who they're going to give the contract to,

including who is most qualified to fulfill the contractual obligations.

Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you.

Mr. Ra.

MR. RA: Will the sponsor yield?

MS. BICHOTTE HERMELYN: Yes.

ACTING SPEAKER AUBRY: Ms. Bichotte

Hermelyn yields.

MR. RA: Just quickly, you gave some data in terms

of participation increases by MWBEs as the, you know, procurement

limit has gone up. Do you have that data, you know, broken down at

all, is that over the last few years because I know we did, as was

mentioned earlier, we just made this go just a year ago and I assume

NYS ASSEMBLY JUNE 20, 2023

it's been in effect for less than a full year going from 500,000 to a

million.

MS. BICHOTTE HERMELYN: Right. So -- so just

so you know that the data as it relates to the increase from 150,000 to

500 million --

MR. RA: One hundred thousand.

MS. BICHOTTE HERMELYN: One hundred and

fifty thousand to 500 million, we have some data that shows that the

average size of contract awarded to MWBEs grows by 20 percent.

Then, when we went from 100 -- 500k to 1 million, again it's very

new, but so far the City has awarded 12 new contracts totaling 10.5

million and has amended 34 contracts with amendments totaling over

14.7.

Now, what -- what we can forecast potentially is that

within the universe of the contracts in fiscal year 2022, the City had

awarded contracts with a total of 83 million in amount of 1 million

and 1.5. Most of these contracts involved professional services,

construction services with the same universe of eligible contracts

described in the under 1 million range. And they were contracts that

were worth a total of 254 million. This increased from 1 million to

1.5. So the increase of the 1 million to 1.5 as we forecast, would then

result in a 33 percent increase.

MR. RA: So give me that again because you said 84-

and then 220-, 220- -- what was the number you gave?

MS. BICHOTTE HERMELYN: I gave you 83

NYS ASSEMBLY JUNE 20, 2023

million.

MR. RA: Okay. And then that's contracts under 1

million or that's between the 1 and 1.5?

MS. BICHOTTE HERMELYN: Between 1 million

and 1.5.

MR. RA: Okay. And then what was the --

MS. BICHOTTE HERMELYN: The 250 million

was contracts that were under 1 million range.

MR. RA: Under 1 million, okay.

MS. BICHOTTE HERMELYN: Mm-hmm.

MR. RA: So we're talking about eligibility for about

$84 million, at least based on last year's numbers, obviously. I would

think that would --

MS. BICHOTTE HERMELYN: Crumbs, crumbs.

MR. RA: We -- you can call it crumbs, that's great

but, you know, it's still taxpayer money. We've done set-asides --

MS. BICHOTTE HERMELYN: It's taxpayer money

from the majority of --

MR. RA: We've done set-asides over the years.

We've done all kinds of different things.

MS. BICHOTTE HERMELYN: It's not set-asides.

MR. RA: We've done all kinds of different things

over the years. You can call it crumbs but it's still -- there's a reason

why we have bidding in public contracts. So I -- I understand what

you're trying to accomplish.

NYS ASSEMBLY JUNE 20, 2023

MS. BICHOTTE HERMELYN: And the reason why

-- there's a reason why it was found in the City of Richmond vs.

Croson that we -- if we provide data that shows that discrimination is

existing -- still in existence, then we can provide programs to remedy

that. The reason why we have these programs is because you know

there's economic injustice. You have 61 percent of the total

population who's contributing to a tax pool billions of dollars in just a

small percentage, a drop in the bucket gets to benefit from the tax so

we're saying the same thing. Tax dollars are going into a procurement

budget. And you have women and minorities who have built the City,

also and not getting their economic fair share. So we're putting in

program -- it's allowed to do that, it's under the 14th Amendment

equal protection, okay. It's allowed.

MR. RA: I don't think the debate is whether we're

allowed to do that. I'm not -- I'm not in any way arguing that this is

not a constitutional action. I think we have -- the ability we have

obviously a law in place with regard to procurement and -- and we're

modifying that and that -- and that's fine. But there may be MWBEs

as well. There's -- there's small entities, there's large entities. There

may be some -- I don't know that it's necessarily the case that none of

them could ever win a contract under competitive bidding. I'm sure

many have and can, but what we're trying to determine here --

MS. BICHOTTE HERMELYN: It's very few, it's

very few.

MR. RA: -- what we're trying to determine here is

NYS ASSEMBLY JUNE 20, 2023

what the appropriate level is here because, as was stated earlier, you

could have a -- a contract that's $100,000, $150,000 higher than

another bidder that -- that it's going to be able to be awarded here.

And obviously as that number goes up in what the limit is, the more of

the chance that that gap could get bigger.

MS. BICHOTTE HERMELYN: Okay.

MR. RA: So, Madam Speaker, on the bill. Thank

you.

ACTING SPEAKER WALLACE: On the bill.

MR. RA: So, you know, last year like I said, less

than a year ago we upped this from 500,000 to 1 million. At the end

of the day I think we all understand what the intention is here. I think

we want to help not just MWBEs but all of our small businesses be

able to access the ability to get contracts. I -- I still think to this date

there's probably a lot more stuff that goes out-of-state that shouldn't.

A lot more opportunities should be there for in-State businesses and

certainly our MWBEs and we've taken all kinds of actions over the

years to help these Minority- and Women-Owned Businesses get

contracts, that's great. But we can't completely lose sight of the fact

that what we're talking about is in public contracts, in public

procurement we have laws related to competitive bidding. Why do we

do it? Because taxpayer funds are being expended and we want to

make sure that government is getting the best possible price, the best

responsible bid. Somebody that's going to do the work, whatever it is,

but they're going to do it in the most cost-effective manner because

NYS ASSEMBLY JUNE 20, 2023

that's what we owe the taxpayers of the State. Now there's certainly

benefits that are accrued from -- from trying to help different types of

businesses in the State and I have no problem with that, but when we

just up this -- we went from 150- and we just keep going up and I

think it was a good question. Where is the endpoint? Are -- are we

going to be next year saying 3 million and then 5 million the year after

that? I don't know. But I -- I think that the higher this number gets

the more the gap could be between -- you know, if -- if you're talking

about a bid coming in for $100,000, chances are any different bids are

going to be within maybe 10,000, $20,000. As you get higher and

higher there's more of a likelihood that you could have several

hundred thousand dollars in difference in -- in the cost of the bid. So

that's my concern and that's why I'm going to be voting in the

negative. Thank you.

ACTING SPEAKER WALLACE: Ms. Bichotte

Hermelyn on the bill.

MS. BICHOTTE HERMELYN: On the bill, thank

you. Thank you, Mr. [Sic] Speaker for allowing me to speak on this

bill. You know, I often ask the same question, where's my 40 acre and

a mule? Until this day I'm asking, where's my 40 acre and a mule?

The reasons why we have these programs in place is because they're

still discrimination practices. I can tell you that in my district we

fought for $141 million to build a recreational center in the name of

Shirley Chisholm, in a predominantly Black neighborhood and guess

what? It went to a White firm. Where's the economic justice on that?

NYS ASSEMBLY JUNE 20, 2023

Where's my 40 acre and a mule? And those tax dollars, in those

districts, were predominantly by people of color.

One of the most important battles I've fought since

I've arrived in the Assembly in 2015 was to make it easier for

Minority Women-Owned Businesses or MWBEs to succeed. And I'm

continuously to ardently fight this uphill battle today while we have a

chance to help level the playing field and ensure historically

disenfranchise MWBEs get their fair share of the economic pie.

MWBEs are playing a slow catchup for the decades and decades of

being disproportionately stripped from our economic resources.

Previous years I was proud to have sponsored a law that passed which

doubled this threshold from 500,000 to 1 million, and there was a

significant change in the participation and the contracts awarded. By

increasing the threshold even further, the participation level of

MWBEs will increase substantially and have a direct positive impact,

economic impact. It will offer capacity to higher and have the tools to

be successful without the barriers of competitive bidding process. A

process that has been discriminatory. Let's remember, that insurances

of cost-prohibitive barrier to entry and industries of construction and

construction-related services. And in FY21 alone, if only half of the

100 prime contractors valued between 500,000 and 1 million had gone

to MWBEs, an additional 37 million could have been awarded to

MWBEs. So if I could raise the threshold to $10 million I would.

The evidence is clear, that raising the cap keeps bolstering MWBEs'

success while benefiting New York.

NYS ASSEMBLY JUNE 20, 2023

After the State legislator [sic] raised the City's

discretionary cap from 150k to 500k in 2019, the average size of

contractors awarded to MWBEs rose by 20 percent. This change as

advanced by New York City Mayor Eric Adams creates opportunity,

increases to access to capital for MWBEs so that they can enter New

York City awarding MWBEs higher value contracts through the

non-competitive process. The 1.5 million increase, as mentioned, is

not a big step forward. It's crumbs. Again, if we could increase this

dollar amount to more millions of dollars it will probably have a

bigger effect. It's time to keep leveling the playing field and sparing

the success of Minority Women-Owned Business to uplift all New

Yorkers.

Mr. Speaker, I'm very proud that this is a historic year

in passing a number of MWBE bills such as the mentorship program

which would allow the City to offer capacity billing for small

businesses including MWBE by going to various training with various

government agencies. A City and State MWBE certification

reciprocity bill allow unsuccessful MWBE bidders to know why they

didn't make a bid so that they can have a second chance next time.

Changing the maximum number of employees during a disaster

issuing -- issuing issues to 300 employees. Expanding the scope and

requirements of the annual report from the division of MWBEs.

I want to thank, once again, the Speaker for making

this historic, my colleagues, the Mayor of the City of New York and

all the advocates for pushing the economic justice agenda. I will be

NYS ASSEMBLY JUNE 20, 2023

voting in the affirmative and I will ask my colleagues to join me in

voting for this bill. Thank you.

ACTING SPEAKER WALLACE: Ms. Bichotte

Hermelyn in the affirmative.

Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER WALLACE: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, Madam Speaker. The

Republican Conference is generally opposed to this legislation.

Although we do have members that certainly support it and will be

voting in the affirmative here on the floor. Thank you, Madam

Speaker.

ACTING SPEAKER WALLACE: Mrs.

Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Madam

Speaker. The Majority Conference is going to be in favor of this piece

of legislation. There could be a few of us that would desire to be an

exception. They should feel free to do so at their seats. Thank you.

ACTING SPEAKER WALLACE: The Clerk will

record the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

NYS ASSEMBLY JUNE 20, 2023

The bill is passed.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Madam

Speaker. We're going to continue on our debate list. All of these next

few bills are coming from the Rules Report. We're going to begin

with Rules Report No. 84 by Ms. Joyner, followed by Rules Report

No. 824 by Ms. Paulin, then Rules Report No. 497 by Ms. Jackson,

then Rules Report No. 664 by Mr. Weprin. And then we're going to

take up Rules Report No. 574, that one is by Ms. Reyes. We're going

to take them in that order, Madam Speaker.

ACTING SPEAKER WALLACE: Page 10 of Rules

Report No. 484, the Clerk will read.

THE CLERK: Assembly No. A01278-B, Rules

Report No. 484, Joyner, Bores, Burdick, Simon, Ardila, Reyes,

Taylor, Gibbs, Lunsford, Walker, L. Rosenthal, Wallace. An act to

amend the Labor Law, in relation to prohibiting non-compete

agreements and certain restrictive covenants.

ACTING SPEAKER WALLACE: On a motion by

the Senate -- I'm sorry. On a motion by Ms. Joyner, the Senate bill is

before the House. The Senate bill is advanced.

An explanation has been requested.

MS. JOYNER: Thank you. This bill would prohibit

employers from seeking, demanding, requiring or accepting

non-compete agreements.

ACTING SPEAKER WALLACE: Mr. Ra.

NYS ASSEMBLY JUNE 20, 2023

MR. RA: Thank you, Madam Speaker. Would the

sponsor yield?

MS. JOYNER: Yes.

MR. RA: Thank you. So this bill, as you said,

prohibits employers from seeking, requiring, demanding on

non-compete agreements. There are currently a couple of things

going on in this area, one of which is potential action by the Federal

Government so let's start -- start there. There was talk of the Federal

Government banning these types of agreements. My understanding is

they have not move forward with that but is it correct that that was the

impetus for this legislation?

MS. JOYNER: That is correct. So this piece of

legislation mirrors what the FTC is doing. They currently have not

finalized any rules, but again, you know, states are authorized to take

more restrictive approaches, if necessary, but this bill is in line with

what the FTC is also proposing.

MR. RA: Okay. And my understanding is that the

FTC at this point has pushed this off into next year?

MS. JOYNER: I'm not sure of the deadline but

there's no -- there are no proposed rules as of today.

MR. RA: Okay. Are you aware of any other state

that has adopted this wide-ranging a ban on non-compete agreement?

MS. JOYNER: Yeah. So California has this piece of

legislation; North Dakota, Oklahoma, Washington, D.C., Illinois,

Virginia, Maine, Maryland, Rhode Island and New Hampshire has

NYS ASSEMBLY JUNE 20, 2023

similar non-compete bans but just for lower wage workers.

MR. RA: Just for... I'm sorry.

MS. JOYNER: Lower wage workers.

MR. RA: Okay. And -- and I think, you know, that

point is an important one because I think many of us would agree with

regard to lower wage workers that we should be acting to protect

those workers and, you know, make sure that they're not being in any

way exploited by their employers and I think that is really the point of

us taking action in this area is -- is to protect employees. But I -- I

want to talk about the current state of the law in New York because

it's not currently the case that, you know, these can just be done just

for the sake of -- of doing it by a business, right? We currently do

have a standard that I think has come through the courts in New York

State by which the courts determine whether or not a non-compete

agreement is enforceable in New York State, correct?

MS. JOYNER: That is correct. They have a three-

prong test on what courts generally disfavor non-compete agreements.

So there's nothing to prohibit or allow these non-compete agreements

but many people are entering into these agreements unknowingly or

after they are employed and hired, they are being forced to sign these

non-compete agreements and then it becomes a whole litigation

process where people have to spend thousands of -- thousands of

dollars to defend themselves against, you know, these -- these

agreements that are not necessarily favored by the courts.

MR. RA: Yeah. So -- just so -- and -- and they're not

NYS ASSEMBLY JUNE 20, 2023

-- and -- and as you said, you know, we do a current three-prong test.

So I -- I think it is helpful, though, that everybody understand what

that is right now. So right now a non-compete agreement needs to be

narrowly-tailored to protect legitimate business interests, right? And

it has to be no broader than necessary to protect those legitimate

interests. It has to impose no undue hardship on the employee and not

be injurious to the public, correct?

MS. JOYNER: That is correct.

MR. RA: Okay. Now, this instead basically puts

forth a blanket ban on the use of these types of agreements.

MS. JOYNER: That is correct.

MR. RA: Are there any exceptions or situations

under which an employer would still be able to utilize such an

agreement if this were adopted?

MS. JOYNER: So the current law protecting trade

secrets, proprietary information, confidential lists or confidential

information agreements can still be insert into to protect those -- those

legitimate business interests, but as of right now this bill would create

a blanket non-compete agreement.

MR. RA: Okay. And those would be really under

other types of laws or theories of law --

MS. JOYNER: Correct, yes.

MR. RA: -- you know, a non-disclosure agreement or

something with affect to that. Now, my understanding, though, is that

many entities do -- or I'm sorry, other states that have adopted these

NYS ASSEMBLY JUNE 20, 2023

type of laws do have different type of exceptions. They may be for

certain high-tech workers or financial services workers, you know, an

industry like that being highly regulated. Why have a blanket ban as

opposed to maybe some exceptions for -- for the type of workers that

might be in those type of circumstances that they have access to

sensitive information or trade secrets?

MS. JOYNER: So we believe that there are enough

current safeguards and mechanisms in place right now to protect for

those legitimate business interests. As far as having a salary threshold

requirement or limiting it to certain industries, we do not feel like that

is the best route so this is why we have the current bill as it is. But,

no. There's no exceptions in terms of specific industries or certain

salaries, no.

MR. RA: Okay. And -- now when we -- well,

assuming we pass this, the Governor signs it. We wouldn't be able to

-- our employers wouldn't be able to enter into these types of

agreements going forward. What about any that are currently in effect

that have been signed a contractual agreement between an employee

and an employer?

MS. JOYNER: It's -- it's not retroactive.

MR. RA: So if --

MS. JOYNER: So it's going to apply to any

agreements going forward after the effective date of this -- the passage

of this bill.

MR. RA: So currently if somebody -- if an employer

NYS ASSEMBLY JUNE 20, 2023

and an employee had entered into this type of agreement and say it

gets challenged in court, the courts would apply the three-part test we

talked about earlier.

MS. JOYNER: Correct.

MR. RA: Correct. And then going forward, these

would not be permissible to be able to use between an employee and

employer. I guess lastly really is again, I get the intention, especially

with regard to lower wage workers and -- and really industries where

-- where there really isn't that type of sensitive information that might

be a concern. But when you get into, you know, more sophisticated

relationships where there may be trade secrets or there may be, you

know, complex things that employee is trained on, I -- I -- I guess why

not have some type of exceptions so that those -- that employee or

employer currently, right, they can discuss and enter into an

agreement with -- with both eyes open. Why not look at it more in

terms of some level of transparency to make sure that a worker knows

exactly what they're getting into and what restrictions might be on

them but that the employer in a particular field or industry that needs

to can protect their business interest?

MS. JOYNER: So we believe that there is enough in

the law currently to help protect against those issues with dealing with

sensitive or confidential information, but we are seeing that this is a

problem that is pervasive and impacting lower wage workers and

higher income workers. Physicians, we're seeing it in all industries at

this point. Healthcare, engineering, technology, food services, temp

NYS ASSEMBLY JUNE 20, 2023

services, janitors, fitness companies, tattoo artists, hairstylists,

Chipotle workers. We're seeing it run the whole gambit here. So, you

know, New York is a state where we have higher income earners,

right, and they may not necessarily be privy to confidential or

secretive information but they're being held back from, you know,

shopping their skills, having mobility to increase their salary because

they're bound by these non-compete agreements. So that's why we did

not pick a salary threshold or specifically narrow down it to a specific

industry because we believe that there's enough protections in the

current law that would address that issue.

MR. RA: And I -- I think there are as we said other,

you know, theories of law and sections of law that would protect it but

I don't think they do as directly as something like a non-compete is. I

guess my last question, you mentioned -- you mentioned a number of

different industries and workers which I would agree are not

appropriate places for there to be a non-compete agreement, but I -- I

can't imagine those would pass that test we talked about earlier. Now

I certainly understand, right, that we -- you know, a Chipotle worker

shouldn't have to go into court to throw out a non-compete agreement.

I mean, I don't know, maybe -- maybe there's some magical formula

on guacamole or something that they -- that the company thinks

they're going to reveal. I would assume it would be something like

that, some recipe or something, which seems a little silly to me, but I

-- I -- I don't think that would pass this -- this test and certainly I

would -- I would, you know, chastise any business that tried to do that

NYS ASSEMBLY JUNE 20, 2023

to a low wage worker knowing that they would have to go into court

to throw it out and I think they are certainly opportunities that we can

be more strict with regard -- with regard to this. But again, my

problem is the blanket prohibition, because there are industries that I

don't think that just, you know, a non-disclosure agreement or some

other statutory or theory of law is going to be enough to protect that

legitimate business interest.

MS. JOYNER: I agree with you. I agree. A

Chipotle worker should not be prohibited from working across the

street at a Taco Bell because of these non-compete agreements that

many are unknowingly signing and entering into but there's an

unspoken threat by employers, used by employers of listen, you sign

this, you're going to be prohibited from working somewhere else. And

people do not have the money to go into court to even fight and, you

know, defend with this three-prong test so that's why -- that's another

reason for this bill in terms of having that unspoken threat is also

discouraging workers from challenging these agreements and also

even entering into court. So this is why it's a blanket rule that will

apply to all industries.

MR. RA: Thank you.

Mr. Speaker, on the bill.

ACTING SPEAKER ZACCARO: On the bill.

MR. RA: You know, one of the things I was just

thinking about is, you know, a worker shouldn't have to go into court,

you know, for -- for that certainly, but I find it kind of funny. I -- I

NYS ASSEMBLY JUNE 20, 2023

can't imagine the amount of times in this House in the recent years

we've made sure that we made it impossible to have lower cost ways

of -- of hearing disputes by banning arbitration and those types of

things in every place under the sun, which -- which are cheaper ways

that they've had in contracts like this for years to -- to be able to have a

dispute come to a -- a quick, you know, resolution as opposed to

somebody having to go into court. So I think there's some irony there.

But -- but I just want to reiterate, you know, many of the -- the

industries mentioned are not appropriate places for -- for a

non-compete clause, but we are a state that is a capital for financial

services industry that is continuing to try to reinvigorate our tech

industry. And there are certainly situations in which those

non-disclosure-type agreements and other types of laws are not

sufficient.

Now employees, you know, have the opportunity to

negotiate with a perspective employer, and if they are aware of what

they're entering into, I think that is an arm's length transaction with

both parties going into it with eyes wide open. With regard to

companies, you know, trade secrets, processes. If employees leave

and take those somewhere else, we have many employees --

employers struggle in this State. And if some small business were to

lose, you know, what is, you know, one of the main things they do,

that may be enough to drive them out of business. And then lastly as I

said, a blanket prohibition is too strong an action here. Each industry

is not the same. They have different needs. They should have the

NYS ASSEMBLY JUNE 20, 2023

right to contract it in a way that protects them and helps them grow.

And as we talked about earlier, I'm going to repeat this.

Narrowly-tailored to protect legitimate business interests has to be no

broader than necessary to protect those interests. Impose no hardship

on the employee and not be injurious to the public. So I think that a

blanket ban goes too far in terms of allowing New York employers the

ability to protect sensitive information and particular trade secrets,

trade information that allow them to be successful. Thank you, Mr.

Speaker.

ACTING SPEAKER ZACCARO: Mr. Ari Brown.

MR. A. BROWN: Thank you, Mr. Speaker. Will the

sponsor yield?

MS. JOYNER: Yes.

MR. A. BROWN: Thank you, Madam Sponsor. I

think there may be an unintended consequence, a negative

consequence towards the employee. This is something that happens

quite often that you may want to remedy in some way. Quite often an

employee buys a business from his employer, I saw many businesses

in that regard and part of that contract is actually a non-competition

clause, it happens all the time. So we can't always look at what the

intention is, we have to actually look what the written law is and what

the contract is developed. At the time that the contract is signed, he's

still the employee and he's still with the other person, he or she is still

the employer. This particular bill, possibly law, may cause a conflict

where the -- the owner of the current business, the former employer,

NYS ASSEMBLY JUNE 20, 2023

can actually end up competing with the person that he sold the

business with, end up hurting the employee, and that's very common,

it happens every day of the week. It happened to me four times. In

other words, I can sell a business, not allowed to sign a

non-competition clause because we think it'll benefit the employee,

but at the end of the day, I can just reopen that same business again

because I wasn't allowed to sign a non-competition clause. Maybe we

need a little adjustment here.

MS. JOYNER: There's nothing to prohibit

confidentiality agreements or, you know, if it's a specific confidential

list, those are still protected business interests that you can still

enforce those types of agreements.

MR. A. BROWN: I appreciate that but what I'm

getting at, is if someone owns a kitchen showroom and he's selling it

to his employee, very common. And he's not allowed to sign that

non-competition clause, forget about trade secrets. They commence

with the sale, the next day the former owner opens up the same exact

business once again because he wasn't allowed to sign the

non-competition clause, because at the time one was the employee

and one was the employer.

MS. JOYNER: I understand your argument. The bill

does not address for sale companies, but under my reading of this bill

any confidential lists, confidentiality agreements are still

unenforceable under the law.

MR. A. BROWN: Thank you.

NYS ASSEMBLY JUNE 20, 2023

MS. JOYNER: Mm-hmm.

ACTING SPEAKER ZACCARO: Mr. Novakhov.

MR. NOVAKHOV: Thank you, Mr. Speaker.

Would the sponsor yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MS. JOYNER: Yes.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. NOVAKHOV: Thank you. So just coming

from -- from my experience and I used to be a radio station owner. So

a radio personality who didn't sign the such agreement and the radio

station is investing a lot of money and effort to make this radio

personality a star. Now, in a few years after investing all this money

and effort, this radio personality leaves the station and goes to a

different station and this will harm this radio station. How do you

see -- I mean doing the blanket bill, how do you see this being solved?

MS. JOYNER: So, under Section 202 under the bill,

it does speak about radio stations, networks. Currently in law there

are protections already for the broadcast industries, which is very

similar to this bill in terms of non-competes and banning

non-competes. So this bill would just basically mirror what's already

happening in practice. So that issue, yes, it's already been addressed

and under this law, current law will still stand.

MR. NOVAKHOV: So you want to say that

NYS ASSEMBLY JUNE 20, 2023

entertainment companies and broadcast companies are the exception?

MS. JOYNER: They already are covered under

non-compete agreements already. So this bill mirrors whatever

protections that are currently available to that industry, and -- and to

also answer your question, like there are inherent talents and skills

that -- that truly belong to the worker, right? And we have to separate

that from what's a legitimate business interest. So radio personality,

again, that's already covered under current law, and this bill included

that industry as well and it's very similar and mirrors what's already

currently in law.

MR. NOVAKHOV: Okay. Thank you so much for

answering the question. Thank you.

MS. JOYNER: Yes.

ACTING SPEAKER ZACCARO: Read the last

section.

THE CLERK: This act shall take effect on the 30th

day.

ACTING SPEAKER ZACCARO: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, Mr. Speaker. The

Republican Conference is generally opposed to this legislation for the

reasons mentioned by my colleague. Those who support it can

certainly vote in favor of it here on the floor. Thank you, sir.

ACTING SPEAKER ZACCARO: Mr. Benedetto.

NYS ASSEMBLY JUNE 20, 2023

MR. BENEDETTO: Mr. Speaker, I suggest this will

be a Party vote for the Majority in the affirmative. If anybody cares to

vote differently, they are free to do so.

ACTING SPEAKER ZACCARO: The Clerk will

record the vote.

(The Clerk recorded the vote.)

Mr. Goodell to explain his vote.

MR. GOODELL: Thank you. Under current law it's

very clear that non-compete agreements must be narrowly-tailored,

they cannot impose an undue hardship on the employee, they cannot

harm the public, they have to be reasonable in terms of length of time

and geographic scope. All of this is well-established rules. What we

haven't heard today is any reasons why the current rules don't work.

But let me tell you why the current rules are needed. And why we

need non-compete clauses. If you are a business in New York State

and you deal with confidential information, you need a non-compete

in addition to the non-disclosure, because a non-disclosure agreement

or even a trademark protection only goes part way. If you have

employees and you're introducing them to your primary customers,

you want to make sure they don't meet the customer, turn around,

undercut you the next day by leaving and opening a competing

business. If you're selling a business, the buyer wants to make sure

the seller isn't going to turn around and undercut him and destroy him

and destroy the value of what he just paid for. I've had actual

experience with this where I had a customer who ran a trucking

NYS ASSEMBLY JUNE 20, 2023

company and of course his dispatchers knew inside and out the

methodology and the approach they use for calculating the charges.

One of his dispatchers left, went to work for a competitor, undercut

him unfairly, put the first company out of business. What this will do

is hurt New York businesses, make it harder for them to be successful

and encourage them to relocate sensitive operations out-of-state to the

detriment of our State and its employees. For that reason I do not

support it. Thank you, Mr. Speaker.

ACTING SPEAKER ZACCARO: Mr. Goodell in

the negative.

Ms. Bichotte Hermelyn.

MS. BICHOTTE HERMELYN: Thank you, Mr.

Speaker, for allowing me to explain my vote. This bill is certainly

close to me because I just took a class on trade secrets at Brooklyn

Law School and it was taught by Professor Kayman, and we

understood the purpose of non-competes. I certainly support the

notion of non-compete bill as it supports and encourage employment

mobility and also competition. I also understand why we do need to

protect businesses, especially when there's an economic advantage.

We certainly wouldn't want Popeyes to get access to KFC's secret.

However, we do have other states that includes a local hybrid where

we have Massachusetts that have an exemption for certain industries

like physicians, nurses, psychologists, social workers, broadcasting

industries and lawyers. And I would just say that maybe we could

consider having a salary threshold for COs, CFOs and key scientists.

NYS ASSEMBLY JUNE 20, 2023

Mr. Speaker, I will be supporting this bill because I

do believe an employee should be able to move freely to their choice

of employment and should not be a slave. I also believe that we

should consider certain non-compete clauses and restrictive

convenance for high-ranking executives, scientists, and certain

industries with very high salary threshold. Thank you very much.

ACTING SPEAKER AUBRY: Ms. Bichotte

Hermelyn in the affirmative.

Ms. Walsh to explain her vote.

MS. WALSH: Thank you very much, Mr. Speaker.

So I understand where I believe the sponsor is coming from and I do

think that there is a need for some reform in this area. Having done

plaintiff side Labor Employment Law for several years at the

beginning of my practice, I remember that there were a lot of, I don't

want to say low level because everybody's job is important, but people

that you wouldn't necessarily think would be subject to a non-compete

agreement that were or confused, didn't -- signed it at the beginning of

their employment, would come to me at the end and say I guess I

signed this, my former employer's now putting this in front of me, I

want to be able to work, what do I do. We don't want to have all of

those people have to go into court or have the anxiety about not

knowing what they can and can't do. I do think that there is a pretty

strong body of case law that everybody's talked about that really do

narrowly construe these types of provisions. Where the sponsor kind

of loses me and for the reason why I can't support this legislation is

NYS ASSEMBLY JUNE 20, 2023

and has been stated, that I do think that a blanket ban is not the best

solution. I think that there be a way to rework this legislation to make

it a little bit more narrowly-tailored to try to address those individuals

that I'm talking about that consulted with me while still at the same

time recognizing that employers and employees make investments in

each other during the course of employment and that they should be

able to openly contract with each other about what they're going to be

allowed to do and not do with their close of employment. So I'll be

voting in the negative but I do appreciate where the sponsor is coming

from and I would hope that in the future we could maybe work on this

legislation a little more. Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you. Ms.

Walsh in the negative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 17, Rules Report No. 824, the Clerk will read.

THE CLERK: Senate No. S04907-A, Rules Report

No. 824, Senator Rivera (Paulin, Seawright, Ardila, McDonald,

Forrest, Septimo, González-Rojas, Simone, Solages, L. Rosenthal,

Benedetto, Simon, Epstein, Glick, Zaccaro, Thiele, Aubry, Colton,

Levenberg, Reyes, Zinerman, Dinowitz, Steck, De Los Santos, Raga,

Otis -- A6275A). An act to amend the Public Health Law and the

General Business Law, in relation to prohibiting medical debt from

being collected by a consumer reporting agency or included in a

NYS ASSEMBLY JUNE 20, 2023

consumer report.

ACTING SPEAKER AUBRY: An explanation is

requested, Ms. Paulin.

MS. PAULIN: Thank you so much. The bill

prohibits medical debt from being collected by a consumer reporting

agency or included in a consumer report and also prohibits medical

service providers from reporting medical debt to a consumer reporting

agency.

ACTING SPEAKER AUBRY: Mr. Jensen.

MR. JENSEN: Thank you very much, Mr. Speaker.

Will the sponsor yield for some questions?

ACTING SPEAKER AUBRY: Ms. Paulin, will you

yield?

MS. PAULIN: I'd be happy to.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. JENSEN: Thank you very much, Ms. Paulin. I

want to look at the definition of medical debt in the legislation.

Medical debt meaning an obligation or alleged obligation of a

consumer to pay any amount whatsoever related to the receipt of

health care services, products, or devices provided to a person by a

hospital licensed under Article 28 of the chapter, a health care

professional authorized under Title 8 of the Education Law, or an

ambulance service certified under Article 30 of the chapter. Medical

debt does not include debt charged to a credit card unless the credit

card is issued under open-ended or close end plan offered specifically

NYS ASSEMBLY JUNE 20, 2023

for the payment of healthcare services, products or devices or persons.

So I just want to narrow in on that last part about credit cards. What

does it mean by open-ended or close end plan?

MS. PAULIN: So, one plan would be where there

was an amount of money on it. And then the other one would be

open-ended which someone could just charge.

MR. JENSEN: So would that mean like a CareCredit

credit card where it's exclusively used for a customer to charge

different points of care for services rendered?

MS. PAULIN: Yes. The point of care determined by

the credit card issuer.

MR. JENSEN: So would that be -- under this

legislation, would the any debts incurred and not paid for with that

type of credit card would not be reportable to a credit agency or listed

on a credit report?

MS. PAULIN: Anything on there that was for a

person, as the earlier definition includes and has been deemed medical

in nature by the issuer of the credit card, yeah.

MR. JENSEN: So with CareCredit being an

example, they have to go to the website, they have a laundry list of

different things that you can use the credit card for. For Urgent Care,

for your general practitioner. But also things like spa care, weight

loss, cosmetic surgery. So would any debts, medical debts incurred,

using this type of credit card, not be able to be reported to a collection

agency or to a credit reporting?

NYS ASSEMBLY JUNE 20, 2023

MS. PAULIN: I would suggest that those areas or

those things that care -- that care company or that issuer has decided

to include, they may either decide that they no longer want to include

or they certainly could exclude those that are not within the earlier

definition.

MR. JENSEN: So would they have to essentially

create two separate offerings to customers; one for simply their

medical services and for ancillary medical needs like the veterinarian

services that you can pay for using that type of credit card?

MS. PAULIN: It's really up to them or any issuer to

determine. You know, I've been on that website as well. You put in

your zip code and it tells -- it pops up, you know, what you can take

advantage of. It certainly would be up to them to narrow that, if that

makes their lives easier, since it's under their control.

MR. JENSEN: But under right now and the service

that they offer, no part of that medical debt whether it be Urgent Care,

surgical care or spa care or cosmetic surgery would be able to be

reported if there's a large debt that's unpaid by the consumer.

MS. PAULIN: It -- again, it would be up to the issuer

to determine whether or not they were going to limit themselves from

the ability to collect the money.

MR. JENSEN: But I'm saying under right now they

would not be able to work with a credit reporting agency or a

collection agency to ensure payment of the debt that's been rendered.

MS. PAULIN: Go -- going forward they can make

NYS ASSEMBLY JUNE 20, 2023

different decisions about either isolating those services that would be

deemed a medical debt, or they can certainly limit the use of the card

to those things that would include the definition of medical debt.

MR. JENSEN: Okay. So sticking with the idea of a

credit card and debts being paid for by that. So if you use your Visa,

Mastercard, American Express to pay for medical services, would the

medical provisions of that credit card debt be able to be reported as it

is currently under the terms of this legislation?

MS. PAULIN: No, because they owe it to the credit

card company, not to the medical provider once they use that credit

card to pay the medical provider.

MR. JENSEN: So what about instances with a

pharmacy; CVS, Walgreens, maybe your local neighborhood

pharmacy. They may not have their own credit card company but

maybe they're part of a larger group. If they use that affiliated credit

card, which could be both classified as one of these open-ended plans

as well as a standard credit card, would they be able -- would that

debt, that may not be paid, would that be able to be reported?

MS. PAULIN: So if it was a -- you mean a -- a CVS

or a Walgreens credit card or something like that, I've never seen

those but if they existed, they're not included in here because you can

at a pharmacy buy a lot of things including green cards and batteries

and orange juice and toys. So no, I would not think that they were

solely devoted to health products.

MR. JENSEN: Okay. So currently as of March,

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mid-March, the three largest credit reporting agencies in the country

have all voluntarily taken steps to limit the amount of medical debt

that they report on their credit reporting mechanisms, is that the case?

MS. PAULIN: Yes, $500.

MR. JENSEN: Correct. So anything under $500 is

not being reported. They also extended their time frame before

anything above 500 would be reported to 365 days. So you'd have to

have that debt outstanding for more than a year, correct?

MS. PAULIN: Yes.

MR. JENSEN: Okay. Do you know approximately

of New York how much existing medical debt is below that $500

threshold?

MS. PAULIN: I believe it's about 50 percent.

MR. JENSEN: My information says it's closer to 70

percent.

MS. PAULIN: Okay.

MR. JENSEN: So the vast majority of medical debt

that New Yorkers currently have is already not being reported by the

credit reporting agencies. So in that respect, if -- if the credit

reporting agencies are already taking these proactive steps to limit the

impact that unpaid medical debt is having on consumers, why is this

legislation even necessary?

MS. PAULIN: I -- I think that any of us could go and

have a procedure that we didn't expect, that wouldn't be covered

because the insurance company didn't cover it and it was a matter of

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life and death or a matter of great urgency for a family. That could

happen to anyone in this room. It could happen to anyone in our

families. And if it was immediately reported or even within 365 days

it wasn't paid off, it would mean that potentially that same family

couldn't buy a car, couldn't -- would have a credit score that would last

for seven years that would harm that family. So this is an attempt to

recognize that medical care is different than other debt. It

spontaneously could happen to anyone, and that we have to protect

families from that and from being included. It doesn't mean that the

hospital or the ambulance service can't collect. We're not saying they

can't collect. What we're saying is it shouldn't be included as part of

their credit rating.

MR. JENSEN: But don't we already have

mechanisms under State law? You bring up the example of somebody

having a procedure or care provided that falls outside of insurance

coverage, for example. You know, being out of network or something

in that respect. Isn't there already a mechanism within State law to

say -- to essentially protest that and say that it was a medical

necessity, life or death hung in the balance. So don't we already have

provisions in State law that protects New York's consumers allowing

them to get medical necessity treatment when they need it in ensuring

that there is a mechanism to remedy any outstanding costs? Whereas

this would essentially allow New Yorkers to potentially run up large

amounts of medical debt with limited ability for the providers who

incurred that debt to be able to get paid for services rendered.

NYS ASSEMBLY JUNE 20, 2023

MS. PAULIN: Well, I'm not the insurance Chair;

however, I have dealt with insurance companies. And in dealing with

insurance companies I can tell you sometimes it takes more than a few

months or a year to even get notified of a problem and then dealing

with them is an additional headache. So the concern is that yes, there

are remedies for many of these instances, but that they can take longer

than is being allowed by these consumer-rating companies and then

that lingers on someone's credit score and enable -- it doesn't enable

them to do so many things in our world.

MR. JENSEN: Well, but -- but what does it do for

the mechanism of when you have providers that may not be working

with one of these collection agencies? What would be the process for

them, you know, if they're not using, you know, an Equifax or

Experian or TransUnion, how would they go about, you know, they've

rendered these -- they've rendered care, they've incurred costs, you

know, they have staff to pay, they have supplies that need to be paid

for, and I guess how would we make the -- how would we make the

providers whole for the costs that they've incurred if there's not an

ability to go out and maybe not working with the credit agencies so it

goes out on a credit report, but even working with an agency to help

collect that debt that may be rendered, because in theory, this

legislation, while it takes away the credit reporting agency, it also

limits the ability to recoup the costs or into -- enter into a negotiated

settlement that there's at least a portion of that debt paid. This

essentially says that there's no -- there's no disclosure both on a credit

NYS ASSEMBLY JUNE 20, 2023

reporting or entering into an agreement to make sure that that is paid.

Isn't that problematic?

MS. PAULIN: I agree that it takes away one avenue

of collection; however, the avenue most used, especially by the

hospitals are lawsuits, they go to court, so that avenue would still be

available.

MR. JENSEN: But wouldn't that become -- wouldn't

that be more costly, though, to -- if that's the only avenue left,

wouldn't that be more costly to a consumer because now instead of

just entering into maybe a negotiated settlement, now they're having to

go to court, to trial, incurring a cost of hiring an attorney, potentially

having an attorney make that negotiation, that settlement or going to

trial. So now in addition to just any debts from the -- the service, the

care being rendered, now they've got that debt along with legal debts

from having to take care of a process that could have been done

through any of these agencies through the reporting process.

MS. PAULIN: So we're talking about the most

extreme where there's a dispute that can't be dealt with through

negotiated agreement in the lawsuit scenario. There are, as you said,

other avenues, for example, you know, fighting together with your

provider against the insurance provider. And there are, of course,

many, many opportunities for an individual to work out a -- a

settlement or a -- a long-term agreement with -- with the health

provider -- (coughing) -- sorry -- so there's other ways that they can do

it. The only thing that we would be limiting would be the ability to

NYS ASSEMBLY JUNE 20, 2023

actually threaten -- (coughing) -- sorry -- I'm sick, hopefully not sick

enough to incur all this cost, but -- but -- so hopefully, you know, we

-- we are only eliminating that process where we would be hurting an

individual for something that was an unexpected large cost on their

family that they had no prior ability to have dealt with in any other --

MR. JENSEN: But respectfully this -- this legislation

just doesn't cover emergency medical debt, it covers all medical debt.

So if I walk into a cosmetic surgeon and I want to get plastic surgery, I

can incur a substantial amount of medical debt, and I can just decide

well, I don't want to pay that debt and there's no mechanism for that

outstanding debt to ever be reported. So when I take out, you know,

potentially apply for another mortgage, I could have this huge

outstanding debt that I got because I wanted to get cosmetic surgery

and then there'd be no way for the lender for a different financial

institution to know that I'm carrying this huge debt because it's not

being reported.

MS. PAULIN: So, again, the provider can still sue,

the provider can still negotiate, the provider usually with cosmetic

surgery, especially I would imagine gets upfront payments for very

many of those reasons that you're suggesting. So the -- the only thing

the provider couldn't do would -- and they can even go to a collection

agency, but what they couldn't do is that collection agency couldn't

use that information to damage or harm the -- the person's credit

score. So I would suggest almost all avenues are still open to collect

these potentially large sums or small sums, you know, but large to the

NYS ASSEMBLY JUNE 20, 2023

individual that -- that has them. And -- but medical debt like no other

is recognizing that medical care is like no other. And that is that

health service is something that many people around the world just

enjoy and here we have a quasi system so-to-speak, but -- but that -- it

is something that people should have the ability to use.

MR. JENSEN: Okay. Thank you very much, Ms.

Paulin. I have more questions but I'm out of time. So thank you very

much, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Blumencranz.

MR. BLUMENCRANZ: Thank you, Mr. Speaker.

Will the sponsor yield?

MS. PAULIN: Absolutely.

ACTING SPEAKER AUBRY: Ms. Paulin, you will

yield she says.

MR. BLUMENCRANZ: So I just sort of want to

harp on some of the points we just heard. So I -- as you know you can

get cosmetic surgeries from a lot of these cards. So let's say I want to

go get, you know, a nose job and a facelift at -- at $50,000 that would

be -- it would not be reported under this statute, correct?

MS. PAULIN: It would not be reported if you owed

the money and you didn't pay it. It wouldn't get -- it would still be

obligated on that person but it wouldn't be reported to a credit agency.

MR. BLUMENCRANZ: So within a couple months

NYS ASSEMBLY JUNE 20, 2023

MS. PAULIN: Same if you had heart surgery or --

MR. BLUMENCRANZ: Of course. So if then I

wanted to go get veneers and that cost me another, you know, 20,000,

30,000, I can do that as well and they wouldn't see that previous

medical debt from that plastic surgery I just received.

MS. PAULIN: When you say "they see" --

MR. BLUMENCRANZ: When you go to take out

another financing loan either from the doctor's office or one of these

health credit -- health card -- health credit card companies, they would

not see the previous, the previous debt from that plastic --

(Inaudible/cross-talk)

MS. PAULIN: I would imagine if you're someone

who didn't pay for cosmetic surgery, you would probably be likely to

not pay for lots of things, so they would see that.

MR. BLUMENCRANZ: I'm -- I'm not saying that I

haven't been making my payments consistently. Let's just say I have,

you know, $50,000 in -- in cosmetic medical debt and now I've -- I've

gone to take on another 20,000 in dental. They would not see that

previous debt. And then let's say I wanted another surgery. So I can

-- I can really pile it on, correct?

MS. PAULIN: You could pile it on if that's what you

wanted to do for a cosmetic surgery that you were still obligated to

pay.

MR. BLUMENCRANZ: I'm -- I'm just trying to

understand because, you know, if I was a -- a -- a predatory loan

NYS ASSEMBLY JUNE 20, 2023

provider, right, and this becomes a really great sales tax, I can say

don't worry, just get this -- get this extra voluntary procedure and it

won't dim your credit. I know you already have that -- that medical

that you just discussed with me but this provider won't see it as well.

A lot of doctor's offices, especially cosmetic doctor's offices even

allow you to finance it through them and they -- they depend on this

credit reporting to see if someone's, you know, bouncing around

getting -- getting procedures in other places. I guess it comes back to

my -- my question which is where did you -- how did you arrive on

this definition of medical debt to include these card providers?

MS. PAULIN: These are the standard Article 28

providers, you know, hospitals, clinics, physicians and so forth. And

so these are the providers that care for us when we do more than just

cosmetic. I know that, you know, that's the category that's, you know,

the most interesting or the -- the most flamboyant to talk about, but I

don't know that that many people are -- I mean I guess there are some,

but I don't know them who might want, you know, a facelift, a nose

job, a chin lift and whatever else you can do to your body and pay lots

of money and have lots of debt. I read about those people in the

paper, but I don't know any. Most people I know, and that I would

argue that most of us know, are the people who unexpectedly had a

stroke or a heart attack and God forbid their insurance didn't pay for it

and they needed special treatment. They had cancer and their

insurance didn't pay for it and they wanted to go overseas for a special

procedure and their insurance didn't pay for it. Those are the people

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that I know and those are the people that I think are most people, and

those are the people that we're trying to protect in this bill.

MR. BLUMENCRANZ: And I'd say there is no

doubt that there is a (inaudible) bill like this because people do have

emergency surgeries and -- and that is very important to make sure

that they're not paying for that in more than one way for their lifetime.

But I -- I just find it very concerning because there is an industry or at

least a -- a sizable enough group of people who go on to get several

elective surgeries. They can do so by, you know, if someone -- I guess

my question is, if someone comes to New York, right, to get a

procedure, they're using one of these credit cards, they're signing up or

financing it through the doctor's office, they can spend a year doing

this in multiple locations and none of the other locations respectively

would know that they've already undergone procedures and have

financed those procedures, correct?

MS. PAULIN: I would say if -- you know, this bill

has already passed the Senate. If when it goes to the Governor's desk

they want to narrow it in some way to address cosmetic surgery, I

would be open to that.

MR. BLUMENCRANZ: Would you be open to

limiting the scope so that it may not necessarily encompass the -- the

Carecards in the way that it currently does in the definition now?

MS. PAULIN: So believe it or not, Colorado just

passed a bill and they used the exact same definition of credit cards.

So their experiment is going to be a little ahead of ours. So by the

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time this bill reaches the Governor's desk, we'll have a better sense of

how that flushes out. And again, if we have to narrow it to address or

deal with the fact that those credit cards, those Carecards currently can

pay for things that we would not consider medical debt in that true

sense, we'll have that experiment before us and know whether or not,

you know, again, we have to narrow the bill. I would be open to that

as well.

MR. BLUMENCRANZ: Okay. Yeah, and I mean, I

don't know if a couple of months will show us if someone's willing to

get a few plastic surgeries within a year, but I guess we'll certainly see

what happens in Colorado. Currently, in Federal law, are you aware

they've -- they've certainly made recent changes to medical debt --

(Inaudible/cross-talk)

MS. PAULIN: I am. And we believe we are not

included in the preemption.

MR. BLUMENCRANZ: So we're going to play a

wait and see -- I guess I'd love to see how that sort of affects the

consumer as well as what happens in Colorado before we start kind of

jumping the gun to see if we are sort of going above and beyond what

the Federal Government has thought was a -- was a -- a good solution.

MS. PAULIN: Or maybe what they can negotiate.

MR. BLUMENCRANZ: Sure. And what Colorado

is doing, I'd love to see how its implementation goes through before

we start seeing this definition in New York. But thank you very

much.

NYS ASSEMBLY JUNE 20, 2023

On the -- on the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. BLUMENCRANZ: I think it is important that

we don't necessarily take a -- a predatory approach when it comes to

medical billing and I think that the fact that a lot of these debts are not

reported to customer reporting is a good thing. But, what I will say is

that a lot of these doctor's offices are -- are trying to finance,

especially the plastic surgery offices are trying to finance these

procedures independently or through these card companies. And the

way that the language in this bill, the definitions in this bill would roll

out would be problematic, in my opinion. And I'm not sure if I'm

willing to see New York be the test case as this implementation comes

before us in the coming months or years. So I will be in the negative.

Thank you.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Slater.

MR. SLATER: Thank you, Mr. Speaker. Will the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Ms. Paulin, will you

yield?

MS. PAULIN: Absolutely, thank you.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. SLATER: I'll do my best to keep it as brief as

we can. Thank you for taking the questions. I wanted to focus

specifically on the ambulance services that are called out in this

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legislation. As you know, EMS services are problematic, especially in

our region in Westchester County where they're currently underway

with a study on EMS services. So could you explain to me what --

what exactly the ambulance services would be prohibited from doing

under your legislation?

MS. PAULIN: So, they would be allowed to collect

the moneys, as they do now. They would be allowed to negotiate, as

they do now. And in fact, very few of them actually report to a

collection agency that then reports it. So they probably wouldn't be

precluded from doing most. Some ambulance companies might report

it to a collection agency that intend -- that in turn puts it on a credit

rating, but I would argue that most do not.

MR. SLATER: And have you had the time to speak

with some of the providers, specifically in our region, about the

impact this legislation would have?

MS. PAULIN: This bill has been around for a while

and we haven't heard from the hospitals or any of the other providers

with any objections.

MR. SLATER: Right. But again, just going

specifically to the -- the ambulance and the EMS providers and the

ambulance services. It's my understanding having spoken to some of

the providers in my area that they do in fact utilize a billing company

and who then sends the bill to an insurance company, who then sends

it to the individual. And if they're unable to -- if that individual is

unable to pay, it does go to collections. So this bill -- I want to make

NYS ASSEMBLY JUNE 20, 2023

sure I'm accurate -- would short-circuit that process, correct?

MS. PAULIN: Well, they would do the whole first

part, right?

MR. SLATER: But not the last part.

MS. PAULIN: But not the last part.

MR. SLATER: And then I've heard from others who

are more regional in our area regarding indigent care. And I just want

to make sure I understand and confirm, there is currently no indigent

care pool in New York State specifically for ambulance services; is

that correct?

MS. PAULIN: No. And as someone who worked

very hard to get that community para/medicine bill that impacts all of

the EMS services, there's 62 of them around the State, I would say that

I have a deep concern for their survival. But I'm not -- I don't think

this bill jeopardizes that.

MR. SLATER: But in regards, again, to the original

question that I asked of indigent care, if there's no pool that allows for

ambulance services to tap into those dollars, are they currently forced

to use collection agencies to collect on their services they provide?

MS. PAULIN: They can still use collection agencies.

What can't happen is those collection agencies can't turn around and

post or report the -- that what is owed to the credit companies. They

can still use collection agencies, which I know tack on additional

percentages, which the consumer doesn't probably even know that

there's that other layer. They just know that the debt that they see in

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front of them is growing. So that many people just pay it knowing

that that's happening. So they can still use the collection agencies.

They just can't go that final step which, you know, which damages

their credit score.

MR. SLATER: Understood. I appreciate that. Now

what about the overall cost of care as it regards to ambulance

services? Does this help the overall cost of care? Does it help lower

the overall cost of care if you need an ambulance service?

MS. PAULIN: I don't think it does anything to the --

to the cost of care. It's -- I would say cost mutual.

MR. SLATER: Cost mutual, understood. Well,

thank you very much for taking my questions. I appreciate it.

Mr. Speaker, on the bill if I may.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. SLATER: Having heard from several

ambulance service providers from my region, they have grave

concerns over the bill. I think there is some clarity that needs to be

provided and engagement from local stakeholders. Many of our

ambulance corps are not-for-profits, right? They rely on the billing

process to be able to continue to be funded. And if they are unable to

collect on those funds for any reason and it's, again, seems like there's

some confusion here from their standpoint about what they're going to

be able to do, then that just gets passed on to those who are able to

pay, they're going to increase the cost. So you're actually potentially

raising the cost of care throughout the Hudson Valley, at least in my

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part of the Hudson Valley which raises significant concerns.

So I do want to thank the -- the sponsor for answering

my questions, but I do think that there's more I think engagement

that's needed for some of our local stakeholders. And so I appreciate

that, Mr. Speaker. Thank you very much.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Will the sponsor

yield?

ACTING SPEAKER AUBRY: Ms. Paulin, will you

yield?

MS. PAULIN: Happy to.

ACTING SPEAKER AUBRY: Ms. Paulin yields,

sir.

MR. RA: Thank -- thank you, Ms. Paulin. So just a

few questions and -- and they are, you know, largely technical in

nature in terms of the language of the bill. You've had a little bit of a

discussion regarding the definition section and the way that it's used.

So -- but let me -- let me start there, though. So the definition that's,

you know, uses the term in any way related as opposed to a definition

that would just say amount owed to one of the providers put in there.

I mean can you provide any example of what that would encompass as

opposed to a tighter definition that -- that just said any amount that

was owed to one of those providers that's listed in the bill?

MS. PAULIN: You know, again, you know, we

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thought that definition that we used was really very similar and it

allowed us to deal with a person thing, you know, as it pertains to the

credit card issue. And, you know, however, again, the bill is going to

the Governor, and if the Governor wants to narrow the definition as

such, and I know that was a definition promoted by one of the

opposition groups, we would entertain it. We just believe our

definition is better.

MR. RA: Okay. Now the bill exempts credit cards

as been said. But it doesn't exempt any other type of revolving debt,

correct?

MS. PAULIN: Such as?

MR. RA: You know, a home equity line of credit or

-- or some other line of credit that somebody might use to pay

something like this off.

MS. PAULIN: You know, I mean thank goodness

I've never been in that circumstance so I would have to need -- need

that, but I -- I would imagine that, you know, that if you're trying to

pay off your -- your debt and you could get a willing loan to do that,

then everybody would be would be -- would be happy, right?

MR. RA: Now, is the reason for exempting the credit

cards in particular that now the money is owed to the credit card

company or does it have to do with perhaps the difficulty in

necessarily knowing whether something is a medical debt at that

point?

MS. PAULIN: I think it's the difficulty of the credit

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card company knowing what is specifically medical debt. And

remember, if you use a credit card and you don't owe the medical

facility or practitioner any money, you now owe it to the credit card

company. So it's a little different. The practitioner or the medical

facility is already paid. So the thought was let's not make this overly

complicated, make -- make it hard for credit card companies and

banks, let's just exclude it.

MR. RA: Okay. Now I -- I -- I would say that

perhaps other -- those other types of lines of credit that somebody

might utilize or something we might want to look into as something

that is going to face that similar issue where they might just not know

that something is -- is medical debt in one of those situations.

Now I want to talk about just how this is going to be

implemented. The act takes effect immediately. And I assume that,

you know, agencies, providers, anybody who is doing this and I would

note, you know, to a prior point regarding people's credit reports, my

understanding is that most hospitals in particular do not report to the

three major credit bureaus. But assuming there might need to be some

software changes, policy changes, are we giving adequate time for that

to happen with this bill taking effect immediately?

MS. PAULIN: Well, I'll say a few things. First,

remember they have to make an adjustment for the Federal provision

which is $500. And they will have already figured out a way to decide

what is medical then, what isn't, it's the same thing as ours. So they

will already know that. And so there may be no time requirement at

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all. If there is a time lag, there's no penalty in the bill on purpose, so

that it does give an adjustment time if there's a problem so that

consumers can look at their credit score and figure out that there's an

issue and go back and make amends. And at the same time that, you

know, we adjusted to that time lag again with putting no penalty on

anyone participating in the system that could potentially be harmed

because they couldn't get it done in time.

MR. RA: Right. So what you just talked about,

though, is -- is what my other questions really are about. So one of the

things that I know some of the opponents of this bill have asked for is

perhaps some type of right to cure so that if they -- you know, the law

changes, they go and report medical debt, maybe somebody doesn't

realize the law change, whatever it is and they realize the mistake and

they want to change it, there's no - at least explicit in this legislation -

right to cure for -- for that entity, correct?

MS. PAULIN: No, as there is no right to cure for any

credit score follow-up, right? So, and yet people will all the time

when they want to buy a new home or get a loan or a car or what have

you, argue or see that their credit score, which they don't look at all

the time, is lower than they might have anticipated. So then they

would try to cure that problem as they would here.

MR. RA: And -- and you said that there's no penalty.

So can you clarify what is meant -- the enforcement provision which

is on page 2, line 21, 22 says: Any portion of a medical debt that is

furnished to a consumer reporting agency shall be void. So is that

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saying that the piece of data on the credit report is void or is it saying

that the debt owed is void?

MS. PAULIN: It's the data.

MR. RA: The data. So -- so we're not saying that the

debt itself would be void --

MS. PAULIN: No, no.

MR. RA: -- by the reporting --

MS. PAULIN: No, no.

MR. RA: The data just should not --

(Inaudible/cross-talk)

MS. PAULIN: Absolutely. The debt is still owed,

it's still collectable, you know, we have to be cognisant of our -- our

medical providers and so forth. And again, a lot of them are not --

you know, when you -- you -- when you look at what's happening out

there, most of them are not using collection agencies and reporting

this. So, you know, we're not changing that much, in the real world.

We're just acknowledging that, you know, this debt is unique and this

debt is something that we have to help people with.

MR. RA: Okay. And I just -- to reiterate that, just I

mean the way the language is written to say any portion of a medical

debt that is furnished to a consumer reporting agency shall be void.

That -- that to me very much reads like we're talking about the debt

itself being voided. And so I think that's an important thing to have on

the record --

MS. PAULIN: We're salvaging the legislative record

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that that's not the intent.

MR. RA: Yes. I think that's an important piece of

the legislative record here. So -- so thank you for answering that

question.

One second here. Oh, so just lastly with regard to

that piece. Well, actually, I guess it's less of a concern with that

clarification because my question was going to be that the

enforcement provision seems to somewhat be written in an even

broader sense than -- than the definition in terms of it doesn't

necessarily say who has to have sent that information, right? It could

be -- my understanding was it could be some other entity, maybe the

hospital, provider, whoever, didn't send that information and there was

a concern that they would be subject to voiding the debt. So that's

much less of a concern assuming that that is not the case.

MS. PAULIN: Right.

MR. RA: So lastly, I know there was a brief

discussion of the Federal Credit Reporting Act and any potential

preemption, which you don't think is -- you said, I believe, that you

don't think is an issue here, that this would not be preempted, correct?

MS. PAULIN: That's correct. I -- I have it here if

you want to look with the specificity. But no, we don't believe it -- it

-- that it precludes us from doing this bill.

MR. RA: Okay. Now one of the things that

obviously already exists would be, you know, any entity that does

violate, you know, we talked -- you talked about it earlier, the $500

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change, some of the other changes that have been made. So there

would be penalties for any entity currently if they were to violate

those, correct? If they reported that amount under $500 say, they

would be responsible for whatever penalties are provided for under

the --

(Inaudible/cross-talk)

MR. RA: Okay. Thank you. I think that's all I have.

Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you. Would the sponsor

yield?

ACTING SPEAKER AUBRY: Ms. Paulin, will you

yield?

MS. PAULIN: Now I know I'm at the end.

ACTING SPEAKER AUBRY: Ms. Paulin.

MR. GOODELL: We can always hope. Thank you,

Ms. Paulin. So who uses these credit reports?

MS. PAULIN: Who uses them?

MR. GOODELL: Yeah. Who are the major users of

the credit reports?

MS. PAULIN: I know that, you know, for example,

when I've gotten loans or bought homes for me or my children frankly,

they're checked. So I -- I'm assuming lenders, for the most part.

MR. GOODELL: Okay. And I would agree with

you. And assuming this passes and becomes law and we no longer

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report medical debt, that means then that anyone who's lending

money, whether it's for buying an appliance or a new credit card or

buying a car or house or anything like that or renting an apartment,

those people would no longer have this information, correct?

MS. PAULIN: That's correct.

MR. GOODELL: Would they, as part of the

application for a mortgage, be allowed to ask the borrower, do you

have any outstanding medical debt?

MS. PAULIN: Yes.

MR. GOODELL: And could they then ask the

borrower, is your medical debt current?

MS. PAULIN: Yes.

MR. GOODELL: And but this would eliminate their

ability to verify what the person said, correct?

MS. PAULIN: Well, it would be -- you know, what

would not be available, because I don't know that the score is broken

down, you know, it's usually a score, you know.

MR. GOODELL: Well, the score isn't broken down

but the credit report most assuredly is.

MS. PAULIN: I see.

MR. GOODELL: And the credit report shows every

bill, you know, whether it's the utility company or whatever.

MS. PAULIN: So that the lender could obviously ask

those questions and make it as part of their calculation, yes.

MR. GOODELL: But this would eliminate their

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ability to verify of whether the person seeking their money or their

product was telling the truth, correct?

MS. PAULIN: That's correct, but lenders could also

ask for verification from other sources as well.

MR. GOODELL: I see. So it would be okay for the

lender then to contact the hospital, the ambulance, healthcare agencies

and say, hey, is there any outstanding debt with this particular

customer? Of course there's HIPAA rules, right?

MS. PAULIN: There are, and I think that it's unlikely

that they would do it, right? But if someone is self-acknowledging,

you know, on their -- on their form, they would have to take that into

the calculation.

MR. GOODELL: Now, of course, if you never pay

that medical debt, sometimes the provider brings a lawsuit and gets a

judgment. Is the judgment reportable to the credit agencies under this

bill?

MS. PAULIN: That is a good question.

MR. GOODELL: Thank you.

MS. PAULIN: I don't know.

MR. GOODELL: If you ask enough eventually you

get one that's good.

MS. PAULIN: What?

MR. GOODELL: What's your -- what's your sense?

MS. PAULIN: What's my sense. Whether the

judgment is reportable.

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MR. GOODELL: Correct. This would be like a

Supreme Court judgment or a small claims judgement --

MS. PAULIN: Right.

MR. GOODELL: Those are always --

MS. PAULIN: So I would say --

(Inaudible/cross-talk)

MR. GOODELL: -- picked up by the credit report.

MS. PAULIN: -- that if it's coming from one of the

excluded providers that are not allowed to report the information to

the credit agency, then no. They would not be able to report that

information to the credit agency.

MR. GOODELL: Now the credit agencies

independently check for judgments. So they would not be getting the

information from the hospital or the ambulance corps. They would

get it from the County Clerk, because they contact the County Clerk

and say, are there any judgments against this individual? Am I

correct, then, that those judgments that they get directly from the

County Clerk or the Court Clerk would still be reported?

MS. PAULIN: Hmm. Let me look. You always ask

challenging questions, thank you.

(Pause)

So we prohibit them in contracts.

(Pause)

You might have found a loophole. I don't know. I

know that it would be the intent of the bill, but I don't know whether

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we say that in the bill.

MR. GOODELL: I see. Thank you for helping me.

On the bill, sir.

ACTING SPEAKER AUBRY: On the bill, Mr.

Goodell.

MR. GOODELL: So the credit reports are a tool

used by lenders and landlords and others to verify the likelihood that

they will be paid on time if they advance credit, and that credit might

be for a new credit card. It might be for a personal loan, it might be

for a home equity line of credit, it might be for any number of things.

So all the lenders who rely on this, we're saying you can no longer rely

on this. You can no longer rely on a credit report because it might, by

law, not report debt owed by the consumer that's in default. So what's

that mean? Well, it means that a bank in processing a loan might not

realize that the borrower is facing a $100,000 judgment. Or the car

salesperson or any other entity. Why does that affect all of our

neighbors and -- and friends? Well, because if you can't rely on a

credit report what happens is the cost of borrowing goes up for

everybody because the lenders have to account for that risk. But it has

an unintended consequence as well to the borrower, because I can

assure you that as soon as this bill goes into effect every lender is

going to add a couple of questions to their -- their application, right,

and the questions are going to say, do you have any medical debt,

because they can no longer rely on the credit report. And they'll say,

is your payments on that medical debt current? And what happens if

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the consumer lies? Answer: Bank fraud. The problem is when you

commit fraud on a lender, that advance of money or credit or whatever

is not discharged in bankruptcy. Bankruptcy will not discharge any

credit that's been advanced based on fraud. Now if it shows up in

your credit report and you say nothing about it and the bank doesn't

ask you about it because they don't need to because it's in your credit

report it's not bank fraud. But with this bill, they will ask. And if

you're not honest, that debt will burn through bankruptcy. So even if

you declare bankruptcy to get rid of the medical fraud, you won't get

rid of any of the other loans. The credit reports serve a valuable

purpose. They help those who are engaged in extending credit to you

and I and all of our friends and neighbors to know what the interest

rate ought to be and how risky the investment is. And when we

remove their ability to easily determine the credit rating, it will result

in higher costs to each of us and all of our neighbors and friends. It's

that simple. We keep talking about transparency, let's believe in

transparency. And transparency means, put the facts that are true on

the table. Let's not by law try to hide facts. That's the opposite of

transparency and it will cost us dearly.

For that reason I can't support it. Thank you, Mr.

Speaker and, again, thank you to my colleague.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

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Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference will be generally opposed to this legislation, but those

who support it can certainly vote yes here on the floor. Thank you,

sir.

ACTING SPEAKER AUBRY: Mr. Benedetto.

MR. BENEDETTO: The Majority will generally be

in the affirmative on this particular vote, but we will entertain anyone

who would like to vote no.

ACTING SPEAKER AUBRY: Thank you both.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 10, Rules Report No. 497, the Clerk will read.

THE CLERK: Senate No. S01419, Rules Report No.

497 Senator Comrie (Jackson, Tapia, Cunningham, Taylor, Dickens,

Septimo, Epstein, Kelles, Forrest, Raga --A03861). An act to amend

the Executive Law, in relation to requiring agencies to provide

unsuccessful bidders that are certified minority and women-owned

business enterprises with a written statement articulating the reasons

for such rejection.

ACTING SPEAKER AUBRY: Ms. Jackson, an

explanation is requested.

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MS. JACKSON: All right. So this bill would require

agencies to provide unsuccessful bidders that are certified and already

an Women-Owned Business Enterprise - MWBE - with a written

statement of the completion of the procurement selection process and

that such enterprise was not selected.

ACTING SPEAKER AUBRY: Ms. Walsh.

MS. WALSH: Thank you, Mr. Speaker. Will the

sponsor yield?

ACTING SPEAKER AUBRY: Certainly. As soon

as we all settle down a little bit. We are on debate. Gentlemen in the

back, take your conversations under the eave or out of the Chamber,

please. Folks.

MS. JACKSON: I yield.

ACTING SPEAKER AUBRY: You're quite

welcome. Ms. Jackson yields.

MS. WALSH: Thank you, Mr. Speaker. So, this is

our second MWBE bill that we're taking up this afternoon so I wanted

to just run through exactly how this bill would work. So, first of all,

just by way of background, do you know approximately how many

MWBEs we've got in this State right now?

MS. JACKSON: I don't.

MS. WALSH: Okay. I was looking at some research

that said that in 2020 we had about 8,300. And I don't know whether

that includes the New York City MWBE program or just -- or

everybody in the State, I'm not sure, but somewhere -- we're over --

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over 8,000 I think is fair to say. So if one of those MWBE enterprises

bids on a piece of work, it doesn't get it, what does this bill then

require them to receive?

MS. JACKSON: So, as of right now, if you're a

MWBE and you are -- are not selected, you can request a written

statement, as of right now.

MS. WALSH: Okay.

MS. JACKSON: This bill would require it to happen

regardless of if you are making the request or not, that you be

provided with the written statement. So it's already in practice. It's

just that the difference will now be that it's a requirement to receive --

for any MWBE to receive this written statement.

MS. WALSH: So under -- and so that written

statement, does it -- does the -- under current law, does the current

statement encompass the five different things that under this

legislation they would get? So disclose the identity of the successful

bidder/bidders; second, advise the enterprise, to the extent practicable,

of the reasons for not being selected; three, include, to the extent

practicable, guidance concerning methods of improving future

proposals or bids; fourth, advise the enterprise, if applicable, of the

opportunity to request a debriefing; and five, inform the enterprise of

the services available through the Division of Minority Women's

Business Development and the Office of the Minority and Women-

Owned Business Enterprise statewide advocate. So all -- all five of

those things, are they currently at the option of the MWBE who didn't

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get the work? Is that what that notice in -- includes?

MS. JACKSON: So, as of right now the MWBEs can

request a debriefing at any point, so it already exists.

MS. WALSH: And that debriefing would include

those -- those --

MS. JACKSON: Right.

MS. WALSH: -- aspects of whatever --

MS. JACKSON: Whatever -- whatever they choose

to talk about, yes.

MS. WALSH: So -- so what I'm hearing from you

then that it's just taking something that is optional right now of the

election of the non-prevailing MWBE enterprise to request and it's

making it a mandatory thing; is that fair?

MS. JACKSON: Right. And remember, this is

already happening. So this is just saying that it's required to happen.

MS. WALSH: What's the rationale for making it

mandatory in happening in every instance versus at the election of the

MWBE enterprise?

MS. JACKSON: Well, if you think about opting in

and opting out of certain things, right, like if some people may know

they have the option and some don't, but once you -- what we realize

is that when you are already supposed to receive maybe notification

for something, you're more likely to have it, more likely to read it and

more likely to utilize it. And this also will tell them why they -- who

was selected and why they weren't selected, which I think is helpful

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information for any business to have.

MS. WALSH: Mm-hmm. No, it could be very

advantageous to have the information. I just -- I was -- in thinking

about the legislation, I was thinking about we've had the MWBE

program for a while and it encompasses a -- a wide range of different

kinds of business and different levels of business. I mean some

MWBEs are -- are huge, very successful, have been around for, you

know, years. It might not require the level of assistance as maybe a

start-up newly-certified MWBE enterprise. So to me an opt-in, if you

want to get that additional information, to me makes more sense than

making it like blanket across the -- across the board. But I was just

thinking about that in terms -- trying to prepare for, you know, talking

to you about this. But who -- who exactly has got to give this

notification? It talked about the contracting agencies. So would --

would the notification be coming from MWBE itself or is it coming

through the agencies?

MS. JACKSON: It's the State agencies, it's the

agencies itself. And just so -- and just to back up, if you have a larger

MWBE that's pretty successful, they're more than likely getting the

bids in which they are applying for. But the ones who are not, this is

the ones that it's going to more -- more helpful for. I know that earlier

in the debate, you know, in the other debate about the MWBE bills,

there was discussion around how many -- we know businesses are

MWBE but they're not certified, right, and there's a reason for that.

And so this bill wants to close the loopholes and stop making it so

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hard for people to receive information so they can be better at their

business.

MS. WALSH: Mm-hmm, yeah, I understand. I -- I

guess I'm kind of relieved to know that it's the contracting agencies in

a way that have to provide this information rather than the MWBE

program itself, because as we had discussed in the earlier debate, the

MWBE program itself has got some issues and is in some respects

kind of widely understood that it's overburdened in some respects as

far as being able to respond in an efficient manner to request for

MWBE certification and then recertification. So has there been any

consideration of the cost or any idea of the cost in terms of time or

manpower or however you measure it on these contracting agencies to

respond each and every time an MWBE is not the prevailing bid?

MS. JACKSON: Yes, so there's no -- there's no

thought that there would be an additional cost because this is

something that they're doing already. It's just changing the

requirement to make sure it's done always, but there's no thought that

this will be an additional cost.

MS. WALSH: Okay. Thank you very much. I

appreciate it.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, Ms.

Walsh.

MS. WALSH: I appreciate the -- the sponsor's

answers. I think that -- and I -- I hadn't been aware that this

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information was available already if asked for by the MWBE that

didn't get the -- didn't get the work, didn't get their bid accepted. I

kind of think that that program, the way it's already set up, makes

more sense to me than doing it for every single one. I think that when

-- when you're talking about over 8,000 New York State certified

MWBEs and that was three years ago to -- so we could be up quite a

bit higher than that, I don't know how many failed bids there would be

in the -- in the course of a given year, but that could be a lot of

additional paperwork put on these contracting agencies. I think that

the MWBE program overall needs a -- a lot of work and I was -- I'm

glad that we're taking up two bills today but I don't know that they're

the bills that I would choose to be -- to be working on. I think that we

have to do a better job, I think, as a -- as a Body here to really try to

work on this program because it really -- it comes from such a good

place and a very laudable place to try to help these businesses to

flourish, but I think that right now - and I mean and it was said earlier

- I think that particularly the Upstate area that I -- I represent, I've got

a pretty long list of women who are having a terrible time getting

certified and recertified. And they include, among others, women

who are running what I would call legacy businesses where perhaps

their father, uncles, grandfather had owned a business that's in a very

traditional contracting field and then they -- the woman has taken over

the business and is legit running it but is being turned down. And it's

-- it's very insulting in a -- a lot of ways to say to a woman that's

running, you know, a quarry or a concrete factory or, you know, a -- a

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manufacturing facility that the work that they're doing can't really be

done by them. It's very insulting. And I think that -- that to have it go

on for years before they actually find out whether they are approved or

certified or not certified and then the process for appeal is terribly

burdensome and they always have to get attorneys to represent them

which is costly. I think that the MWBE program needs a lot of help. I

think that this type of information about, you know, why you didn't get

a bid to the extent that, you know, that they can tell you who got the

bid, I mean that could provide really important information and I -- I

think it could be very beneficial to MWBEs. I just think that it should

-- that they should just ask if -- if they have the ability right now to ask

and it's known that they can ask, then if they want to know, they'll ask.

And I think that -- I think we could leave the program the way it is

with all respect to the sponsor who's brought this forward. I'm not

going to support this because of that. I think that -- I think that the

MWBE program really needs work in other areas. I think that the --

the current state of the law in this issue is sufficient and so I'll be in

the negative but I appreciate the sponsor bringing this forward. Thank

you.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect on the 90th

day.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

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MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed, but those who support it are

certainly encouraged to vote yes on the floor. Thank you, sir.

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. The Majority Conference is in favor of this piece of

legislation; however, there may be a few that would decide to be an

exception, they should vote at their seat. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you both.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Mr. Novakhov to explain his vote.

MR. NOVAKHOV: Thank you, Mr. Speaker. I'm in

the affirmative, and just recently my constituents contacted my office

to get help to get a registration, the MWBE registration that she was

trying to get for about a year. And she was complaining that the

documents that that the -- that were requested for the registration were

asked three times, the same, the very same documents, three times,

which I think is unacceptable. Thank you to my colleagues in the

Assembly and -- and the City of New York and the State Senate only

with their help she finally got her certification just a couple of weeks

ago. But I think that we -- we have to do -- there's a lot -- too much

bureaucracy with that, and it is very important that it is not only

explained why the organization didn't get the funds, it should be

clearly explained why the organization is not being certified and why

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it takes so much time for the organization to get certified and why

they're asking for it, you know, just a regular simple document, three

times in a row. I think that's a shame. Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Are there any other

votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Mr. Speaker, would you

please call the Rules Committee, Rules Committee to the Speaker's

Conference Room.

ACTING SPEAKER AUBRY: Rules Committee,

Speaker's Conference Room immediately, please.

Page 13, Rules Report No. 664, the Clerk will read.

THE CLERK: Assembly No. A07542, Rules Report

No. 664, Weprin. An act to amend the Insurance Law, in relation to

exempting certain public construction projects from certain

restrictions.

ACTING SPEAKER AUBRY: On a motion by Mr.

Weprin, the Senate bill is before the House. The Senate bill is

advanced and a explanation is requested.

Mr. Weprin.

MR. WEPRIN: Thank you, Mr. Speaker. This bill

amends Section 2504 of the Insurance Law to allow the City of New

York, the City School District of the City of New York, the New York

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City Industrial Development Agency, the New York City Health and

Hospitals Corporation and the New York City Housing Authority to

use owner-controlled insurance programs, OCIPs, and contracted-

controlled insurance programs, CCIPs, where a single insurance

policy covers all contractors on a project in one wrap-up insurance

program in connection with a contract, the principle purpose of which

is construction. Under an OCIP, a single policy held by the owner

covers the owner and contractors of all levels for the entire project or

group of projects. Under a CCIP, the insurance policy is held by the

construction manager or general contractor and covers the owner as

well. OCIPs and CCIPs save money, are more efficient, lead to safe

work sites and will level the playing field so that MWBEs and small

contractors can be more competitive when bidding for contracts.

Currently, the New York City School Construction

Authority, the Port Authority, the MTA and the public sector all use

OCIPs and CCIPs and have proven their effectiveness. This

legislation will extend the ability to use OCIPs and CCIPs bringing

parity to construction projects throughout New York City.

ACTING SPEAKER ZACCARO: Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Will Mr. Weprin

yield?

ACTING SPEAKER ZACCARO: Mr. Weprin, will

you yield?

MR. WEPRIN: I'd be happy to.

ACTING SPEAKER ZACCARO: The sponsor

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yields.

MR. RA: Thank you. So this adds to these new

entities (inaudible) being able to use the OCIPs and CCIPs. If you can

just elaborate on the need for it. I'm assuming these types of entities

that would engage in these contracts, you mentioned MWBEs, you

mentioned small businesses, are otherwise having trouble getting

coverage for these projects?

MR. WEPRIN: That is true. And this would make it

cost-effective for small business enterprises and MWBEs to -- to bid

because the insurance, if you have to do it on an individual basis, it

could be cost- prohibitive.

MR. RA: Okay. And in -- in doing so you said --

actually, can -- you just go through the -- the difference again, the

OCIP and the CCIP in terms of the coverage? It starts -- it -- it just

covers all of the subcontractors under one owner plan for an OCIP,

correct?

MR. WEPRIN: Yes.

MR. RA: Okay. And then the CCIP?

MR. WEPRIN: Well, same thing; with contracted

and controlled insurance programs.

MR. RA: Thank you. Why -- I guess why these

particular entities? Why -- does this now encompass any and all

entities that would be engaging in these types of projects within New

York City or (inaudible) that wouldn't?

MR. WEPRIN: I --I believe so.

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(Pause)

Well, there -- there may be other entities, but this bill

applies to these entities. The City of New York particularly requested

these entities, but there may be other entities that may have a -- a

similar problem but this certainly makes sense to put them on parity

with the other government agencies that are allowed to do this.

MR. RA: And -- and one of the pieces of this also

requires an annual -- a report be -- be issued by next September 30th

regarding these projects, correct?

MR. WEPRIN: Yes.

MR. RA: Okay. And what is -- is the purpose of the

report just basically to see how this is working? What are we looking

to find out from this report?

MR. WEPRIN: We want to make sure it' working

and there aren't any problems.

MR. RA: So the report as it's put together, it's my

understanding it needs to include description of the project,

information regarding the procurement process, the list of entities that

demonstrated the capability of performing the contract, the extent the

contract was awarded on a best value basis, the total award value and

an explanation of the estimated savings from using owner-controlled

or contractor-controlled insurance in conjunction with such contracts.

So, how is that calculated? I mean would be it be based on them just

going out or the -- the owner of the contractor going out and trying to

get an insurance quote and then comparing that to what they could do

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under their OCIP or CCIP?

MR. WEPRIN: That would be part of it. I would

imagine that would be a major part of it.

MR. RA: You know, because it's asking for, right,

that estimated savings. So I -- I would assume that would be a -- a big

part of it.

MR. WEPRIN: Correct.

MR. RA: I -- I think -- well, I mean my -- my last

question is, you know, I think that many entities, like you stated and

as is the impetus for this bill, do have trouble getting coverage, the

smaller entities, and it adds to the cost of the project and -- and adds to

or -- or might diminish their ability to get -- to get an award of a

contract. But what about the general, you know, issues that we have

in the insurance market? I know that, you know, all kinds of entities

are having trouble with insurance. There are a lot of regulations, there

are a lot of laws out there that do contribute to that cost being so high.

Do you envision that perhaps some of the information from the report

might be something we can look at to talk about some of those

underlying issues within the market itself that may be as much of the

problem as -- as is whether or not a certain entity could use an OCIP

or a CCIP?

MR. WEPRIN: That's a good suggestion, Mr. Ra. I

-- I think that would certainly be something that could be included in

that report.

MR. RA: Okay, that's a deal. Thank you very much,

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Mr. Weprin.

MR. WEPRIN: Thank you.

MR. RA: Mr. Speaker, on the bill.

ACTING SPEAKER ZACCARO: On the bill.

MR. RA: So, you know, one of the concerns that was

raised as this was going through committee is -- is exactly that, as to

whether or not this really hits the problem itself, you know, we're

definitely -- the problem we're trying to address is insurance

availability and cost for smaller contractors and sub -- subcontractors.

But New York State commercial general liability insurance market is

really for a lot of these entities where the problem lies. So I thank the

sponsor for -- for, you know, understanding and -- and mentioning that

that might be something we want to look at in this report so that we

can look at the market, look at some of the obstacles that are out there

that prevent these small entities from getting insurance and -- and fix

the opportunities which is going to open up opportunities for all of

these small businesses, MWBEs and others. Thank you, Mr. Speaker.

ACTING SPEAKER ZACCARO: The Clerk will

read. Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER ZACCARO: A Party vote has

been requested.

Ms. Walsh.

MS. WALSH: Thank you, Mr. Speaker. The

Republican Conference will be generally in the negative on this piece

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of legislation. If there are members that wish to vote in the

affirmative they can do so at their desks. Thank you.

ACTING SPEAKER ZACCARO: Ms. Solages.

MS. SOLAGES: Thank you, Mr. Speaker. The

Majority Conference will be voting in the affirmative. Those who

wish to vote against this provision can do so by coming to the

Chamber and casting their vote.

ACTING SPEAKER ZACCARO: The Clerk will

record the vote.

(The Clerk recorded the vote.)

ACTING SPEAKER AUBRY: Are there any other

votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 18, Rules Report No. 833, the Clerk will read.

MRS. PEOPLES-STOKES: Mr. Speaker --

ACTING SPEAKER AUBRY: Oh, I'm sorry.

MRS. PEOPLES-STOKES: Mr. Speaker, apologies,

sir. If we can make one pivot we're going to go to Rules Report No.

833 by Ms. Levenberg.

ACTING SPEAKER AUBRY: Let's do that again.

Page 18, Rules Report No. 833, the Clerk will read.

THE CLERK: Senate No. S06893, Rules Report

No. 833, Senator Harckham (Levenberg, Burdick, Otis, Barrett,

Zaccaro, Epstein, Sillitti, Sayegh, Jacobson, Shimsky, Eachus,

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Shrestha, Simone, Thiele, Colton, González-Rojas, Zebrowski,

McDonald, Simon, L. Rosenthal, Kelles, Paulin, Carroll, Lunsford,

Woerner, Taylor, Steck, Cunningham, Novakhov, McDonough, De

Los Santos, Fahy -- A7208). An act to amend the Environmental

Conservation Law, in relation to decommissioning nuclear power

plant discharges into the Hudson River.

ACTING SPEAKER AUBRY: An explanation is

requested.

MS. LEVENBERG: Surely. So the purpose of this

bill is to help prevent adverse impacts including decreased real

property values for the Hudson River communities in relation to the

dumping of radioactive waste into the Hudson.

ACTING SPEAKER AUBRY: Mr. Palmesano.

MR. PALMESANO: Yes, Mr. Speaker. Will the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Certainly. Ms.

Levenberg, will you yield?

MS. LEVENBERG: I will yield.

ACTING SPEAKER AUBRY: Sponsor will yield.

MR. PALMESANO: Thank you very much.

Currently the authority in responsibility to regulate the effluent from

our nuclear power plants right now is split between two Federal

agencies; the Nuclear Regulatory Commission and the Environmental

Protection Agency which sets and monitors discharge of radiological

waste, correct?

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MS. LEVENBERG: But there is additional authority

that the State also has.

MR. PALMESANO: Okay. Well, this was all part of

the decommissioning plan that was put in place with the closure of

Indian Point several years ago, correct?

MS. LEVENBERG: Yes.

MR. PALMESANO: And you're aware that there's

been obvious communications between the Public Service

Commission. And basically in that communication they cited several

facts that all (inaudible) radiological discharges from nuclear power

plants we're exclusively regulated by the U.S. Nuclear Regulatory

Commission. And New York State regulates discharges as they relate

to non-radiological substances, correct, in that communication from

the Public Service Commission to the --

MS. LEVENBERG: I -- I'm not aware of that

particular --

MR. PALMESANO: Okay.

MS. LEVENBERG: -- communication, but while the

Federal Nuclear Regulatory Commission does have substantial control

over the decommissioning of nuclear plants, New York still has a right

to protect its waters in the interest of surrounding communities

without running into issues of Federal preemption.

MR. PALMESANO: All right. And all the

discharges from Indian Point right now are allies treated, monitored

and controlled and bound by conservative, Federal radiological

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standards in New York State non-radiological standards. That's what's

going on right now, correct?

MS. LEVENBERG: I mean right now there isn't any

discharge because the plant is not operational.

MR. PALMESANO: Well, that's how the process

works so, it's all monitored, it's all analyzed, it's all treatable before

there's any discharge.

MS. LEVENBERG: During the --

MR. PALMESANO: And that's the process that's

used in -- in nuclear power plants. That's what was used in Indian

Point when it was active, correct?

MS. LEVENBERG: During when it was active,

correct.

MR. PALMESANO: Sure. So, also there are annual

reports to the Federal Government and New York State independent

analysis that verify that all discharges of treated water that have

occurred are well -- have to be well below the Federal exposure

standard and drinking water standard at the point of discharge from

Indian Point, correct? That's what they analyze, that's what they do,

that's what they have to report each and every time, correct?

MS. LEVENBERG: But this is about

decommissioning.

MR. PALMESANO: I'm sorry. I didn't hear you.

MS. LEVENBERG: This is about decommissioning.

Can you just repeat what you just said?

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MR. PALMESANO: Yeah. I said that right now all

discharges of treated water that occur have to be below both the

Federal exposure standard and drinking water standard at a point of

discharge from Indian Point, correct?

MS. LEVENBERG: True. But there's no discharge

right now because --

MR. PALMESANO: I know that but --

MS. LEVENBERG: -- the plant isn't operational.

MR. PALMESANO: I know that but -- but that's all

part of the process, the discharge is part of the process of what the

decommissioning that they have to meet and that's all set under

Federal regulation from the U.S. Nuclear Regulatory Commission and

the (inaudible). They have to meet those standards that are in place,

correct? So, where does --

MS. LEVENBERG: And also DEC. There's --

there's another piece of the process that you're not discussing which is

the -- this regulated by a SPDES permit and the DEC --

MR. PALMESANO: I'm sorry. I can't hear you,

please speak up.

MS. LEVENBERG: There's also another part of the

-- the process that you're not mentioning which is part of the DEC also

regulates effluent into the Hudson. That's part of a SPDES permit.

MR. PALMESANO: Yeah, on a non-radiological

site because --

MS. LEVENBERG: And there's also some pieces of

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radiological that -- radiological material or matter that they have

oversight.

MR. PALMESANO: Okay. Was there not in a

meeting recently on April 27th between the NRC, the US EPA and the

State Attorney General's Office dealing with -- meaning talking about

the radiological discharges from the nuclear power plants and the

water bodies expressly again, fall under that control in regulation of

the NRC. And that was the understanding between those three parties

including the Office of Attorney General, correct?

MS. LEVENBERG: I don't understand the question.

MR. PALMESANO: Well, in August -- on April

23rd there was a meeting between the Nuclear Regulatory

Commission, the US EPA and the Office of the State Attorney

General's Office to discuss how the radiological discharges from

nuclear power plants in water bodies, they're expressing again under

that auspice of the Nuclear Regulatory Commission to the Attorney

General acknowledging that as well for the State of New York.

MS. LEVENBERG: I'm not familiar with the

meaning that you're speaking of, but we are not preempted from --

from what this bill would do.

MR. PALMESANO: And so you don't -- you don't

feel there's any Federal preemption issues with this legislation at all?

MS. LEVENBERG: I don't, no.

MR. PALMESANO: No? I think that will be

remained to be seen on that. Also, there was not -- an -- an exhaustive

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analysis done by the Department of Budget's independent technical

nuclear aspect expert. Basically I know the issue they talk about is

dealing with tritiated water and basically setting -- determined that

any method of handling this water, including storage on site will result

in environmental exposure. And they concluded that discharge to the

Hudson imposes the -- the lowest risk to public health and safety

versus trying to handle that on site and causing problems from that

perspective. These are the nuclear experts saying that.

MS. LEVENBERG: So this bill actually deals with

economic impact of discharging nuclear waste into the Hudson.

MR. PALMESANO: I'm sorry. What was that last

part?

MS. LEVENBERG: This bill deals with the

economic impacts of discharging nuclear waste into the Hudson.

MR. PALMESANO: I understand that, but again,

there's a process that's in place. They follow the Federal guidelines,

the Federal regulations who have -- have authority over the

radiological waste and -- and certainly everything you can look at can

have a radiological impact. I mean so what does -- you know, there's I

think a part of the March 23rd presentation from the individuals who

did this presentation said even a banana can emit 0. -- .01 millirams

(phonetic) or five times the maximum dose for liquid releases at

Indian Point. That's part of the presentation they make. So when we

look at this, again, and I know we were saying we're trying to monitor

from economic impact but the fact of the matter is this still, this

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release, this discharge has to meet those specific criteria that we talked

about before. And I just think that that's something that's kind of

being overlooked here and I think needs to be addressed.

MS. LEVENBERG: So the -- so the -- so the -- so

the radiological waste does not have to be discharged. As you

mentioned there are other options. And while some of the options that

were pointed out may have different impacts, the point is that the

discharge of radiological waste into the Hudson River would have a

negative economic impact on the Lower Hudson Valley and all of the

regions that are impacted by it in the -- in the area. And that's what

this bill is seeking to address.

We're concerned that all of the -- the outcry, the

public -- the -- the psychological impact on the public knowing that

there's been radiological discharge into the Hudson would dampen

tourism, would certainly dampen property values along the Hudson

and I think that I have a 2012 report on tritium leaks by the Associated

Press detailed decreased public confidence and adverse impacts on

property values after a nearby tritium leak at a nuclear power plant

southeast of Minneapolis and homeowners were unable to sell their

property with one homeowner's highest offer being $10,000 for their

18 acre property.

MR. PALMESANO: And -- and I -- I understand

what you're saying there but, again, I just want to get back to the fact,

wasn't there an agreement put in place when they went -- when Indian

Point was closed down and went through the decommissioning

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process and then when this legislation as written, wouldn't that be

basically an abrupt reversal of the terms of the agreement New York

State entered into with Holtec Decommissioning International to

oversee the decommissioning of the site and any change from that,

isn't that obviously going to lead to a -- a -- a lengthy legal dispute?

Also, in the meantime, you would have to stop the decommissioning

activity and would certainly possibly result in a large scale of layoffs

from union workers, trades, carpenters, operating engineers. There's

certainly an economic impact from that as well. And we also got --

seen a letter from the Town of Buchanan who -- mayor, who

expressed some concerns. He's a part of the commission -- indepen --

Indian Point decommissioning plan and said that some of the

information that's being brought forward is not really accurate. So I

mean how -- how do we address those concerns? And I think what

just seems -- it's my concern is, you know, from this a process, there's

a process that's in place, there's a Federal regulatory Body and you

also again have that stat being stated over and over again that these

discharges, when they happen, are not just radiological discharges out

into the community. They're analyzed, they're treated, they're

monitored, they're controlled and they're bound by certain criteria.

And I know you've brought up the -- the -- the -- tritiated water again

and that's again where that analyst said that the safest way out for

public safety and health would be through the monitor and the

discharge rather than trying to handle it including an out-of-state

source. So there's those who had to be taken into consideration on the

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safety side. Isn't that what the Federal regulatory authority's of the

Nuclear Regulatory Commission, the EPA in conjunction with the

State are doing right now? So I don't understand why we -- and -- and

I know -- I know what you're trying to do with the legislation but it

just seems like we're kind of going off in a different direction.

MS. LEVENBERG: So the -- a couple of things that

you mentioned, one of which was related to jobs. And of course we're

all very concerned about jobs, nobody --

MR. PALMESANO: Of course.

MS. LEVENBERG: -- would want to negatively

impact jobs.

Most recently at a meeting of the decommissioning

oversight board which I sit on, the -- the issue of is this discharge part

of the critical path to decommissioning? And the answer from Holtec,

which is the company that's doing the decommissioning was no. As

far as jobs, they're told us there are plenty of jobs for 12 -- to the 12 to

the 15 years in which they plan to continue the decommissioning.

They actually have up to 60 years but within the contract or the

agreement with New York State they reduced that and sped it up to 12

to 15 years. And there's going to be plenty of work we were told for

that time. Not all of the unions feel the same certainly about the -- the

promises that have been made by the company that's doing the

decommissioning. And certainly, again, they've told us there's plenty

of work, even if we were to approach this differently to find a different

method for getting rid of the tritiated water, that would involve more

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work. There's nothing that wouldn't involve a lot of work to continue

decommissioning this plant. And to not listen to the public outcry

about this and to not be very considerate and thoughtful about how we

go forward with decommissioning what was obviously a major energy

producer for the region just doesn't make sense.

MR. PALMESANO: Okay. And I understand that.

But, again, I mean from 2005 to 2019, I guess some 50.6 million

gallons of processed wastewater were treated and discharged in the --

in the Hudson River from Indian Point. So -- and that's a lot more

volume. So it's my understanding of the analysis of the amount of

water that will be discharged from here is much less in volume and

not as -- not as much (inaudible). Why is that any different than how

Indian Point activated over the past, you know, years -- for 60 years

when in operation, why wouldn't that be taken into account? It's

going to be the same operation from that perspective but less water,

less impact but still the same process with the same oversight from the

Federal Government.

MS. LEVENBERG: And absolutely you're -- you're

correct that this has been happening for a long time. The public really

wasn't aware that this was happening and that is obviously one of the

largest pieces of this, as mentioned, is what is the economic impact

going to be to the region for this discharge.

Right now while we know that this has been

happening for many years and we know that it was monitored, there's

many who doubt the actual, you know, information that -- that the

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public had been receiving because it was not out in the open. Even if

it was available it's not something that was actually advertised. So

now that the public has more information, there's certainly more of a

perception that this is something that could have a negative impact on

the region.

MR. PALMESANO: Okay. Thank you very much

for your time.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, Mr.

Palmesano.

MR. PALMESANO: Certainly, Mr. Speaker, and my

colleagues, I can understand the intentions of the sponsor and her

concerns that she's trying to address. The point I'm trying to address

and I think some of my other colleagues might want to address on this

issue is the fact that this issue really falls squarely in the laps of the

Federal Government under the US Nuclear Regulatory Commission,

the EPA. Again, there was just a meeting with the Office of Attorney

General from New York State in April verifying that all this process --

Indian Point has operated there for, you know, 60-plus years, had a

process that worked in, they -- as far as the discharge. All discharges

that come from Indian Point are analyzed, will be analyzed, were

analyzed treated and monitored and controlled under strict Federal

regulations and guidelines. And I think this really gets to the point of

when Indian Point was shut down, which was a big mistake in my

opinion, you took away 25 percent of reliable base load generation

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from the City of New York, a 2,000 megawatt facility coming off the

books for no valid reason. So now -- now what happened when that

happened. Greenhouse gas emissions, fossil fuel generation increased

from 75 percent in New York City to 87 percent in New York City.

So I just think this is going to have an impact across the board and I

think we're really basically sending a message that was put in place

when this contract that was entered in New York State for

decommissioning will throw open arms at agreement. We'll leave it

open to a great deal of legal activity, put -- put the brakes on the

decommissioning process in and of itself and lead to massive layoffs

of union members who work a very important job and provide for

their families.

For that reason, Mr. Speaker, I'm going to be voting

in the negative and I encourage my colleagues to do the same. Thank

you.

ACTING SPEAKER AUBRY: Mr. Slater.

MR. SLATER: Thank you, Mr. Speaker. Will the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Ms. Levenberg, will

you yield?

MS. LEVENBERG: Surely.

ACTING SPEAKER AUBRY: Sponsor yields.

MR. SLATER: Thank you very much,

Assemblymember Levenberg, and I know how passionate you are

about this issue and we've had many conversations about it. I just had

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a couple of questions that I just wanted to go through so we can have a

better understanding of what we're trying to achieve here.

In regards to the radiological substance that the

legislation is seeking to prohibit, can you just explain again to

everybody what specifically we're trying to achieve?

MS. LEVENBERG: Absolutely. So right now there

is a plan to discharge 1.3 million gallons of tritiated water, that's water

with tritium in it, into the Hudson River. That's it.

MR. SLATER: And so can you explain to us what

tritium is?

MS. LEVENBERG: Okay, yes, I can. I know that it

is - hold on for one second. Let me just get my notes, thank you. It is

a radioactive isotope of hydrogen that is the by-product of energy

production from nuclear power. Tritium has a physical half life of

12.3 years, meaning that it takes over 12 years for half of a given

volume of tritium to decay and no longer be radioactive.

MR. SLATER: And can we find tritium in other

places, international environment?

MS. LEVENBERG: Yes.

MR. SLATER: In places like groundwater?

MS. LEVENBERG: We can find tritium in other

places.

MR. SLATER: Places like groundwater. And is it

true that tritium can't even penetrate skin?

MS. LEVENBERG: I don't think that is the case. I

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don't believe that to be true. I think tritium can penetrate a human

body in -- in certain ways and can get -- can actually attach itself to

other --

MR. SLATER: High doses I'm sure, right?

MS. LEVENBERG: No, I think any dose. That's not

-- absolutely not clear. I've read studies where it -- it -- that is not the

case so...

MR. SLATER: Understood. Does the Federal

Government set Federal regulations that limit how much tritium can

be in the air and water?

MS. LEVENBERG: Yes.

MR. SLATER: And in that regard that comes from

the EPA I'm guessing? And the EPA drinking water standard of

tritium, they have a limitation on that, correct?

MS. LEVENBERG: From 1976.

MR. SLATER: Great. And what would the tritium

concentration the plan discharges at Indian Point as proposed are?

MS. LEVENBERG: I think that the total number that

-- the total amount of curies that is left is 400 curies that's left in the

remaining water, and that's just an estimate. That hasn't been

confirmed. That's a number that's been given by the plant, it's the best

guess.

MR. SLATER: So thank you for that. And I know

that we've mentioned the decommissioning oversight board, the DOB

that I know you're an active participant and I appreciate that. In

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March, correct me if I'm wrong, that there was an expert who

appeared at the March meeting; is that accurate?

MS. LEVENBERG: There are experts that appear at

every meeting.

MR. SLATER: A David Lochbaum who appeared as

the DOB's --

MS. LEVENBERG: He sits on --

MR. SLATER: -- independent technical and nuclear

expert?

MS. LEVENBERG: Yeah, he's a member. He's a

member. He sits on the -- on the decommission oversight.

MR. SLATER: Great. And -- and I believe in March

he compared the maximum annual radiation dose from Indian Point to

common sources of radiation and explained that in fact a banana can

emit about five times the maximum dose from liquid releases than

Indian Point. And I believe that's a quote that was provided at the

DOB meeting.

MS. LEVENBERG: He -- he did say that and there

was a -- a considerable amount of public pushback, I can tell you that.

And not -- not the least of which was from -- from health -- health --

public health sources who do not believe that that is an accurate

depiction of what the potential is for tritium released into water --

MR. SLATER: But he does sit on the -- on the --

MS. LEVENBERG: -- to have an impact.

MR. SLATER: -- I'm sorry. But he does sit on the

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DOB, correct?

MS. LEVENBERG: He does.

MR. SLATER: Okay, thank you. And the

legislation, again, since it specifically targets Indian Point, the only

entity that discharges any radiological substance into the Hudson

River presently. Is that accurate or are there others?

MS. LEVENBERG: Associated with

decommissioning of a nuclear power plant, true.

MR. SLATER: Are there others that are not

associated with decommissioning that currently do the same?

MS. LEVENBERG: I believe there are, yes.

MR. SLATER: Okay. And can you tell me where

those are?

MS. LEVENBERG: No.

MR. SLATER: Okay. And let me ask you about

wastewater treatment plants. Do wastewater treatment plants

discharge any radiological substances into the Hudson River?

(Pause)

MS. LEVENBERG: I've heard that they could. That

it's low level, not planned releases.

MR. SLATER: But if wastewater treatment plants

are discharging radiological substances into the Hudson River, I guess

my question is, why are we only limiting this piece of legislation to

just Indian Point?

MS. LEVENBERG: Right. So -- so the wastewater

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treatment plants, the result of people taking medical tests. That would

be what -- what would be coming out in through the water. So this is

something that we can actually measure and contain where is that

probably is not. I don't really know, I'm not familiar with wastewater

treatment plants and discharge (inaudible).

MR. SLATER: But if we're working off the premise

that we're trying to prevent radiological substances from being

discharged into the Hudson River again, why would we not expand

the bill to include wastewater and not just focus on the current process

at Indian Point?

MS. LEVENBERG: I agree with you that they're

probably lots of cases that we should continue to address. Right now

this is in our immediate future that we know of in large quantities.

And we believe that we have the potential of a negative impact on our

local economies. And therefore believe that this is the time to

introduce this particular bill addressing this particular nuclear

discharge into this water body.

MR. SLATER: Understood. Thank you for that. I'm

curious if Holtech, the company that is in charge of the

decommissioning, have they obtained the necessary permits for their

discharge?

MS. LEVENBERG: They're in a renewal process for

their SPDES permit from DEC and some of the permits were carried

over from the operating nuclear power plant.

MR. SLATER: And in regards to that SPDES permit

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from DEC, did they have one before the decommissioning process

started?

MS. LEVENBERG: Well, they didn't but Entergy

did and that was a carryover.

MR. SLATER: So there was -- there was a SPDES

permit in place for Indian Point center is my question.

MS. LEVENBERG: There was a SPDES permit in

place, yes.

MR. SLATER: Right. And so that -- so that SPDES

permit again, as you stated, is issued by New York State DEC so they

obviously reviewed that permit application.

MS. LEVENBERG: At the time when it was

operational. Again, it was in the renewal process so it's continuing to

be reviewed.

MR. SLATER: And considering I think operationally

that the canal, as my understanding as explained to me, the canal that

discharges the -- the wastewater being used to cool the rods is the

same canal that discharges basically all products from the center; is

that accurate?

MS. LEVENBERG: I didn't hear the last sentence.

MR. SLATER: The canal that is used to discharge

the -- the substance in question is the same canal used to discharge

basically all the runoff and wastewater as well.

MS. LEVENBERG: That's my understanding, yes.

MR. SLATER: Okay. Just wanted to make sure we

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understand that. The legislation states to the extent that not -- to the

extent not subject to preemption by Federal law. What State entity

would make the determination that this bill is preempted under

Federal law?

MS. LEVENBERG: Ultimately a court would make

that determination but the DEC would determine the discharge.

MR. SLATER: Through the SPDES permit?

MS. LEVENBERG: Presumably, yes.

MR. SLATER: But they also would need to have the

Federal regulatory approval as well, correct?

MS. LEVENBERG: I mean not necessarily. I --

MR. SLATER: My understanding is that a SPDES

permit is more of a general permit, a general discharge permit?

MS. LEVENBERG: No. A SPDES permit is for just

specific other elements that are in that are going to be discharged as

part of the water that's being discharged --

MR. SLATER: So if that's the case, then DEC

previously reviews, since this has been going on for so long, they've

reviewed and approved the application that allowed that to continue.

MS. LEVENBERG: They do, but because the plant

is being decommissioned it isn't the same. The effluent that's actually

in the pool is different. It's not the same because as they're

decommissioning and taking apart the plant piece by piece, other

materials actually get into the spent fuel pool and other materials

emerge and need to be dealt with differently. So they have to look at

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what the current effluent is which is different than what it was during

the operations.

MR. SLATER: Okay. The -- I just want to go back

to the DOB if we can. It's my understanding that the DOB discussed

the discharges of water from Indian Point as part of a larger

examination of possible alternatives; is that fair and accurate?

MS. LEVENBERG: Yes.

MR. SLATER: Now -- and so the DOB did review

all the options? And is it true that the DOB expert validated that this

particular process was the one that posed the least public risk and

that's what was presented to that working group.

MS. LEVENBERG: This was -- yes. This was what

was recommended as the least of the worst,

MR. SLATER: The least of the worst.

MS. LEVENBERG: The least of the bad options.

And at the time and right now while that is that -- the recommendation

from that particular expert, there are many questions that have

continued to emerge from the public. And as part of this public

oversight process essentially, we continue to look at -- the

decommission oversight board continues to look at and question all of

the information that we have before us to make sure that whatever is

done is done in the safest --

MR. SLATER: Of course.

MS. LEVENBERG: -- the safest way and the best

way for the entire region.

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MR. SLATER: And so if that being the case, so what

is the alternative being proposed if they are not able to go through

with what they -- what the expert from DO -- from the DOB

determined to be the method that would pose the least risk to the

public?

MS. LEVENBERG: So some of the suggestions that

have been made are to allow the water to remain in the spent fuel

pools, to move it to dry cast storage, to transport it and bury it, to

solidify it and/or to find other ways to evaporate it off site and capture

the evaporation. There continue to be studies of this type of

decommissioning that have been done on Fukushima and while they

also plan to release a lot of effluent into the Atlantic, there is -- the

Pacific, there is no -- there's not a lot of agreement that that is actually

the safest and best way to get rid of that effluent either. They're

talking about much larger amounts. So there continue to be studies, I

guess. The -- I don't think that the answer right now is before us. But

I do believe what is before us is the issue that this bill deals with,

which is what is the economic impact going to be on the region if we

continue to move forward and discharge this effluent with radiological

matter into it into our beautiful Hudson River --

MR. SLATER: Yep.

MS. LEVENBERG: -- where we have so many

businesses. People kayaking, boating, swimming, recreating, so much

tourism, I think it's like $4.4 million -- billion, $4.4 billion of tourism

in the region, and people are looking to build and just, you know,

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again looking at that one example of the impact of knowing a little bit

of nuclear waste was released in Minneapolis --

MR. SLATER: Right. No, I understand.

MS. LEVENBERG: -- to see what the -- the

diminishing property values are. Again, much of this I agree is

psychological. And while we have heard from the experts, we don't

have all of the answers yet.

MR. SLATER: Can I just --

MS. LEVENBERG: -- and not having all of the

answers is exactly what this bill is looking to deal with which is

making sure that we don't move forward swiftly with a bad idea

because it's the most expedient and will really end up giving the

owner of the plant the most money from the trust -- the $2 billion trust

fund that's been set aside for this decommission.

MR. SLATER: Thank you. And just quickly if I can

just going back two more questions. So you gave me all those

alternatives. Were they examined before the expert said that the

current process would propose the least risk to the public?

MS. LEVENBERG: They were examined.

MR. SLATER: They were examined.

MS. LEVENBERG: I don't think -- I don't think

what was examined was the psychological impact.

MR. SLATER: And this was still, though,

determined by the expert to be the least -- the least threat -- pose the

least threat to the public.

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MS. LEVENBERG: Again --

(Inaudible/cross-talk)

MR. SLATER: Thank you. And just quickly if I

could in my remaining time. I just want to touch base on -- on the

labor force, because I know that there's been a lot of questions

surrounding labor force. And so if -- if we're going to suspend the

decommissioning of the plant, it's my understanding that Holtech has

told the labor organizations that have a number of jobs there that

they're no longer going to be needed. And so how are we supplanting

that loss of employment for people like the carpenters and the

operating engineers and IBEW?

MS. LEVENBERG: So those are your words that the

decommissioning would be suspended. That is -- those are not our

words and that's certainly not the words of this bill. This bill only says

that you cannot discharge --

MR. SLATER: Just to be clear --

MS. LEVENBERG: -- radiological waste --

MR. SLATER: -- that was Holtec's words.

MS. LEVENBERG: -- and Holtec has said that this

is not part of the critical path, as I mentioned earlier, to decommission

the plant. There's still plenty of work to be done, they haven't even

come up yet with the plan for the first reactor, reactor number one. So

there's so much work still to be done as mentioned. They've said that

there's easily 12 to 15 years of -- of work. The more creative that we

can come up with our human ingenuity, the more jobs we're going to

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have for carpenters and all the other experts that are still needed at

that plant to make sure that the safety commission of the plant does

continue.

MR. SLATER: Thank you very much. I appreciate

you answering my questions.

If I can, Mr. Speaker, quickly on the bill.

My clock was off there so I apologize.

ACTING SPEAKER AUBRY: You --

MR. SLATER: Thank you very much, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you.

Mr. Durso.

MR. DURSO: Thank you, Mr. Speaker. Would the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Ms. Levenberg, will

you yield?

MS. LEVENBERG: Yes.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. DURSO: Thank you, sir. Just to go over a

couple things and I don't want to act like I'm an expert on this and I'm

sure I'll repeat some of my questions, but the decommissioning

process. Was that voted on by the Legislature?

MS. LEVENBERG: Yes.

MR. DURSO: Okay.

MS. LEVENBERG: I'm sorry, I'm sorry. No. The

decommission oversight board. Not the decommissioning project --

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process, no.

MR. DURSO: So the decommission oversight board

you said was --

MS. LEVENBERG: Yes. The decommission

oversight board was established by the Legislature.

MR. DURSO: Okay. So that's the only vote that the

Legislature took in regard to the de -- de -- decommissioning of Indian

Point.

MS. LEVENBERG: As far as I'm aware, yes.

MR. DURSO: Okay. Now, do you know, by any

chance, just off the top of your head, what the vote was on the floor or

if there's any members here that voted in favor or against the bill?

MS. LEVENBERG: I do not know and I was not a

member at the time.

MR. DURSO: Okay. So why if this commission was

formed and a plan was approved, why are we deviating from it now?

In other words, if it was -- if the whole plan was approved regardless

prior, why is it changing now? Has something changed?

MS. LEVENBERG: I think more than anything

what's changed is public perception. And this bill deals with that

issue in particular. This bill deals with economic impacts to the

Hudson River Valley, and that is something that is intrinsically

impacted by public perception.

MR. DURSO: Okay. So well, in regards to that

you're saying public perception. In -- in what regard? Meaning is it

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perception or did the actual health concerns or anything change to

what we originally had voted on to now?

MS. LEVENBERG: So, again, what was voted on

was the decommissioning oversight board. The plan that was in place

didn't actually include specifics about how this particular effluent was

going to be discharged. It allowed for the safety commissioning of the

power plant. As part of the decommissioning oversight board there

are many public meetings and during those public meetings, much

information is shared. When the information was shared by Holtec

that the decommissioning part of the plan would involve the discharge

of the radio (inaudible) into the Hudson specifically. Originally they

told us it was 1 million gallons and then a couple weeks later they

changed it to 1.3 million gallons. I think that the public trust was

eroded and it continues to be eroded because of other information that

arises. So while it may have seemed okay, well, we've been doing it

for 60 years so let's just keep doing it, that isn't really a good enough

explanation for the public who didn't even know that this was

happening. So as we have more and more information about the

process about what is actually going into again our beautiful Hudson

River, we have more feedback from the public. And as we have more

feedback from the public, it's our duty, as you know, to respond to our

constituents. There were 500,000 people who signed a petition saying

they don't believe we should be discharging nuclear, you know,

radiological waste into the Hudson. I think if you asked anybody on

the street, as my colleague mentioned earlier today, if you stopped

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anybody and said should we put nuclear waste into the Hudson,

they're not going to say yes.

MR. DURSO: Under -- understood. My -- my

question with that, though, is that now this plan that was put in place

was obviously approved by New York State, the EPA, so on and so

forth. So it was approved by New York -- if it was not approved by

New York State.

MS. LEVENBERG: I don't think the EPA has an

oversight of this. They're the ones who established certain regulations

related to -- to drinking water, but they don't have an approval in this

process. I think only it's the NRC and the DEC that really are the ones

issuing permits for this -- pieces of this process to continue. So NRC

has -- has oversight, PSC has oversight and DEC has oversight and

then there's also PHMSA that has a little bit of something to do with it

because there are gas pipelines running underneath that you probably

heard about at some point in the past.

MR. DURSO: Sure. So if -- if all those entities had

approved it, right, the permit, right, they obviously approved the

permits for it. What's changed since they approved it to now? As you

said just the public perception, correct?

MS. LEVENBERG: Well, a combination. So the --

the per -- the permits that were initially approved by the NRC were

approved for the operating power plant. And again, as I mentioned,

many of those permits just were carried over to the decommissioned

power plant so we're now in a different phase of the plant itself. It's

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no longer operational. It's now in this decommissioning mode. So

while they may have permits that were carryovers like the SPDES

permit I mentioned from DEC and -- and okayed by the NRC, again,

that is part of the process and they could also get a permit to dispose

of the waste differently. This is how they've decided to do it and this

is where the pushback is coming from and this is where our many,

many constituents across New York State are calling for us to do

something about it.

MR. DURSO: Okay. So with that being said,

though, as you just said, so the current permits, right, that are -- that

are approved for the -- the decommissioning, right, they were

approved with this plan in place. But my question is we're only --

we're not changing it because permits weren't approved, the process

wasn't approved, we're changing it because of, again, as you said of

public perception, what were worried about the economic impact in

the areas is what you said, correct?

MS. LEVENBERG: Yeah. I mean I would argue

that we're actually not changing anything. What we're doing is we're

putting legislation in place to protect the economic volatility of the

Hudson River.

MR. DURSO: Well, we are changing it. If the

process was approved by the NRC of New York State --

MS. LEVENBERG: I mean the process wasn't

approved. As I said, there are different pieces of the process that the

NRC allows and permits and that the DEC allows and permits. It's not

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the -- the entire process as a whole. That's not what was permitted.

MR. DURSO: Okay. So in that regard, what's -- and

I know you explained it but if we could maybe go over it a little bit

more, what's the plan currently if this legislation is to go through to

remove the wastewater that's at Indian Point?

MS. LEVENBERG: Again, there are number of

different plans, there are a number of different options and there are

some that have been done elsewhere. Right now there's a plan, there's

a pilgrim, Vermont Nuclear that I think has buried the waste. And

then that you can transport it, you can bury it, evaporation, offsite,

long-term storage and for a short-term -- I'm just going to actually go

back to one thing.

MR. DURSO: Sure.

MS. LEVENBERG: Recently when we introduce

this legislation, Senator Harckham and I introduced this legislation,

the -- Holtec had originally said they were going to discharge as early

as -- originally they said as early as August, they were going to give

30-day heads up to the decommissioning oversight board. Right after

we introduced this legislation, they actually changed that and said, oh,

we're now want to do that in June. As you can imagine there was

incredible pushback and many people very upset that they had moved

up the date to June. The reason they said was because they wanted to

clean the spent fuel pools and they wanted to release some of the

water so they could get six feet down so that they could scrub the

sides of the spent fuel pools of the boric acid that it accumulated.

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When that -- when they agreed to -- to wait to do the discharge and

continue to discuss what the decommission oversight board and others

and the PSC, that they came back recently and told us that they had

managed to clean the sides of the spent fuel pools anyway without the

discharge. Recently, I also read another article --

MR. DURSO: And I don't mean --

MS. LEVENBERG: -- yeah, so the answer is --

MR. DURSO: -- (inaudible) not answering the

question.

MS. LEVENBERG: -- there are creative ways that

we can find to do something differently that hasn't been discovered

yet.

MR. DURSO: Sure. You said --

MS. LEVENBERG: Right now we said we can leave

the -- we can leave the effluent in the spent fuel pools for a period of

time while we continue to study better methods to discharge of this

waste.

MR. DURSO: I mean, and I don't mean to -- that's

not answering the question.

MS. LEVENBERG: Yeah, so the answer is there are

creative ways that we can find to do something differently that hasn't

been discovered yet.

MR. DURSO: Sure, you said --

MS. LEVENBERG: Right now, we said we can

leave the -- we can leave the -- the effluent in the spent fuel pools for

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a period of time while we continue to study better methods to

discharge of this waste.

MR. DURSO: Okay. So one of them that you'd

mentioned that I just want to touch on, you said bury it.

MS. LEVENBERG: True.

MR. DURSO: Right? So wouldn't -- burying it

where, in the ground?

MS. LEVENBERG: That's an option --

MR. DURSO: Well, so there's a --

MS. LEVENBERG: -- and, again, in casks in

ground, the not just discharging it into the ground.

MR. DURSO: Oh, so just in casks in the ground

you're saying.

MS. LEVENBERG: Correct.

MR. DURSO: Okay. So --

MS. LEVENBERG: And solidifying it, putting it

into casks, burying it, and that's something that's been done elsewhere.

MR. DURSO: Okay. So we don't -- okay, so --

understood. Just touching on a couple things with the time I have left.

Again, as we talked about, the labor force that is working there, I

know you'd mentioned that Holtec is saying that people aren't going to

be out of work, or you were saying that people aren't going to be out

of work but they could do other jobs. Is there a plan for the people if

-- if the decommissioning process stops or it changes, right, they may

not need some of the labor force that is there. So is there a plan in

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place, since this plan was already put in place and many of our union

workers have a job and had really were planning on working there for

years as the decommission process took place. Do we have a plan in

place to take care of them and their families, give them gainful

employment because they were planning on this job that was

approved?

MS. LEVENBERG: So it's interesting that you

should mention the promise of jobs. I mean, Holtec had promised to

keep many jobs and then they laid off many. I had a conversation the

other day with some of the carpenters who, again, I said to them, just,

you know, similar to like Holtec is promising them these jobs, but

there are also pieces of the contract that are in place that are

downsizing many jobs from I think 250 to 50 as part of Phase 3. So

they already have told us they only have 50 employees left, I think,

that are part of UWA. And when I talked to the union representative

from UWA, you know, they're not happy because of the layoffs that

have taken place, or the downsizing that have taken place.

MR. DURSO: Well, I'm sure none of the union

members that work there are happy.

MS. LEVENBERG: There are many union members

that are not happy with what has happened --

MR. DURSO: Sure.

MS. LEVENBERG: -- and even the carpenters,

when I suggested that, in fact, Holtec had said that there were many

jobs that will be available for 12 to 15 years to come, they said, Well,

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we don't trust them.

MR. DURSO: So there's no plan in place. That was

my question.

MS. LEVENBERG: I -- I don't think that there's a

plan in place at all for -- for anybody from Holtec right now, and I

certainly think that by Holtec, you know, using labor to put a wedge in

the discussion and stifle public comment on this issue is not a

productive way to move forward with decommissioning a major

power plant.

MR. DURSO: To be -- to be honest, ma'am, I mean,

listen. Carpenters, for one, and other labor unions have certain

jurisdictions, so they can't just be moved around constantly.

MS. LEVENBERG: Well, the carpenters actually I

don't believe work directly for Holtec. They work for some of the

other -- the other companies that Holtec hires. So there's many jobs

that are available. They've had job fairs, they talked to us about how

they've been able to find jobs for all -- for people in other -- on other

projects. So in other words, if Champion is the company that's doing

the work for Holtec that's hiring carpenters, and Champion has a lot of

other facilities that they're working at, they're actually able to -- to

place their workers at other places.

MR. DURSO: Okay. Well, again, according to most

of the -- the labor force that I've spoken to with this, they can't just be

moved around from job to job, they can't just be put somewhere else.

But something else that you had mentioned saying that labor is using

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themselves as a wedge to --

MS. LEVENBERG: No, Holtec is using them as a

wedge.

MR. DURSO: Oh, Holtec, excuse me, is using labor

as a wedge to stifle public comment, I think that's a little disingenuous

when --

MS. LEVENBERG: Really?

MR. DURSO: -- most of the people that were there,

and -- not most, excuse me, a lot of people that were there, whether

they were protesting (inaudible) had out-of-State license plates. So I

mean, if -- if you have people that are coming in from out of State that

are protesting this, who is really putting the wedge into this? That's

my question.

MS. LEVENBERG: I mean, I -- I can't talk about if

the -- if the workers were coming from out of State, but I know --

MR. DURSO: I didn't say workers.

MS. LEVENBERG: -- a lot of workers were -- were

showing up to protest outside my office, so I don't know, does that

mean that there wasn't enough work for them at the plant that day and

they were just being paid to protest outside my office? I know for a

fact that, you know, that they were certainly paid to protest and my

guess is that they're either being paid by Holtec or one of its

subsidiaries.

MR. DURSO: Oh, you think they were being paid by

one of the subsidiaries of Holtec to, again, you're saying, go against

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what your -- your bill.

MS. LEVENBERG: Absolutely.

MR. DURSO: Was there any money put into

protestors on the other side in favor of your bill?

MS. LEVENBERG: Absolutely not. And I have no

idea -- not certainly -- the -- the -- all -- all of these people are

constituents that -- that we are meeting with and we can care about

every one of them. So we want make sure that there are jobs, we

believe there are jobs. We believe that this is -- again, when asked

specifically at the last Decommissioning Oversight Board if there

were jobs for people for 12 to 15 years to come, we were told under

no uncertain circumstance by Rich Burroni, who happens to be the

person who sits on the Decommissioning Oversight Board

representing Holtec, that there was plenty of work for everybody for

the next 12 to 15 years. And something has to be done with the waste,

all of the waste, all of the waste from the decommissioned plant. And

there's so much work that needs to be done by skilled labor, I cannot

imagine that we can't find work for all of these people.

MR. DURSO: I -- I agree with you and I hope we

can. I thank you for your time, I appreciate it.

MS. LEVENBERG: Thank you.

MR. DURSO: Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you.

Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Will the sponsor

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yield?

MS. LEVENBERG: Yes.

ACTING SPEAKER AUBRY: Ms. Levenberg

yields.

MR. RA: So, I have a couple of things I wanted to

discuss, but I wanted to start with your -- your conversation with my

colleague earlier talked about an individual who was part of the --

who was part of the, I forget what it's called, what's the --

MS. LEVENBERG: Decommissioning Oversight

Board.

MR. RA: Decommissioning Oversight Board, thank

you, and some of the comments that he had made and you alluded to

them not being well-received. But my understanding is this individual

is a retired nuclear engineer, former director of the Nuclear Safety

Project for the Union of Concerned Scientists, so certainly has some

credentials. Was any of the, you know, disbelief or opposition to what

he represented from people with similar scientific credentials?

MS. LEVENBERG: Yes.

MR. RA: Okay. Can you cite anybody who -- who

disputed this?

MS. LEVENBERG: I don't -- I don't have that at my

fingertips, but there was definitely pushback by -- by other nuclear

experts who have been studying this issue and looking at other power

plants. And certainly, other power plants have come up with other

options. And the one particular one that I can mention is from

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Fairewinds Associates and they -- Arnie Gunderson is the Chief

Engineer and I believe he worked at a number of nuclear power plants

in -- over the -- over -- in the past and basically said that there's no site

in the U.S. that is economically or environmentally ready for the

necessary cleanup to decommissioning -- to decommission all these

leaking, old reactors.

MR. Ra: Okay. Well, I -- I think, you know, to -- to

that statement and to the general point, I think we would all agree, in

an ideal world we're not dealing with any of this, but we are -- we are

left with choosing the best alternative from an environmental

standpoint of what's available. Now, one of the things Mr. Lochbaum

said in a presentation earlier this year, he identified four of what he

felt were feasible options, controlled and treated discharge to the

Hudson River; evaporation into the air; ship -- shipment offsite for

burial; or long-term storage on the site, and -- and he concluded that

none of these would -- no method of handling tritium water at Indian

Point will prevent tritium from entering the environment, including

maintaining it at the site. But he concluded that while all four of the

options would meet Federal standards, discharge to the Hudson River

possesses the lowest risk to public health and safety. So did any of

those other, you know, experts or anybody else come to a different

conclusion that one of these other options was a better one?

MS. LEVENBERG: Well, certainly Vermont

Yankee did, and I do believe that other experts have -- had suggested

that we shouldn't rush the process and, in fact, we should take more

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time to come up with other alternatives. One of the -- again, I'm citing

the expert Arnie Gunderson that I mentioned, Chief Engineer for

Fairewinds Associates, who said that their review of techniques, data

and submission to the NRC make it clear that there are no verifiable

records of how much and how many different radioactive isotopes

were previously released into the Hudson River, and that no details

fully analyzed the toxic, radioactive isotopes in the effluent that the

decommissioning corporation Holtec hopes to release. So there are

certainly questions coming from other nuclear experts, and that, again,

has put pressure on public perception which is what we're talking

about with this bill, the economic impact of discharging radioactive

effluent into the Hudson River.

MR. RA: Okay. Okay. That -- that calls to mind a --

a different question in a second, but, again, so was there then a

recommendation on one of those options or was it some option that

somebody may come up with in the future or something that hasn't

been tried in the past?

MS. LEVENBERG: Again, as mentioned, there have

been other options that have actually been put into place, similar to

Vermont Yankee where there was transportation and burial. I have

heard from other experts that burial is the preferred option, while this

particular expert didn't agree with that. And, again, I will mention

that this is an unpaid volunteer from the Union of Concerned

Scientists, Dave Lochbaum, that he has himself also said that there is

no -- agreed that there is no safe level of tritium release. So right now,

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this suggestion that this is the best way to go is the best of the worst,

and if we take more time to study this we're hopeful that, again, as I

mentioned, that human ingenuity can come -- come in and come up

with a better plan not only that would impact us here in the Hudson

Valley, but across all of the decommissioning nuclear power plants

here in this area as well as in the United States --

MR. RA: Okay.

MS. LEVENBERG: -- as well as internationally, I

guess.

MR. RA: Now, with regard to, you know, taking

some time to figure out what the best option is, all right, what this

piece of legislation does, though, it doesn't say stop the discharge, it --

it actually bans discharging this type of effluent -- it puts it into New

York State law. It's not for a time certain, correct? It bans --

MS. LEVENBERG: True.

MR. RA: -- utilizing that type of procedure.

MS. LEVENBERG: Yes.

MR. RA: So it's not as if we're saying, Hey, we're

gonna put a pause on this and then maybe down the line we decide,

you know what, this is the best option, we would have to come back

and change this law if they were to decide that was, in fact, the best

option.

MS. LEVENBERG: True. This puts a stop to it right

now and it's -- we're in a time frame that is heightened, again, and

sped up for a variety of reasons, and right now we believe that this is

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the best path forward to disallow the discharge into the Hudson

River --

MR. RA: Okay.

MS. LEVENBERG: -- during decommissioning.

MR. RA: So getting into this provision and that we're

banning this, it was mentioned briefly earlier regarding a potential

Federal preemption, all right, and there's a case, Train v. Colorado

Public Institute -- Public Interest Research Group, I'm sorry, that went

into basically, you know, the Federal Water Pollution Control Act and

how it might apply in the situation of something that was subject to

the regulation of the Atomic Energy Commission. And basically, it

concluded that, you know, the Federal prohibitions related to clean

water and all of that did not apply in those type of situations. It really

explicitly did not apply in -- in terms of radio -- radiological waste

that was governed by those Federal statutes dealing with nuclear

energy and the Atomic Energy Act. So why is this not Federally

preempted?

MS. LEVENBERG: Because it has to do with the

economic impacts of the action. We don't believe that it -- it will --

that it is Federally preempted because it specifically has to do with the

economic impacts of the discharge.

MR. RA: Okay, so -- so --

MS. LEVENBERG: And because the Supreme Court

agreed with the 9th Circuit that the State has the ability to regulate if it

would have a negative impact on the economy.

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MR. RA: So are we then talking about a situation

where if we were trying to regulate environmental impacts it might be

prevented, but not if we're regulating economic impacts?

MS. LEVENBERG: This bill doesn't talk about

environmental impacts.

MR. RA: Because, I mean, it would seem to me,

then, that we're having a conversation that is certainly, I would think,

anybody who, you know, looks at this and -- and looks at our votes

afterwards is going to make a case that this was about environmental

impacts. I know you talked about property values and all those types

of things. But, I mean, at the end of the day we have lots of Federal

regulation that is involved in this. So are we really just dealing with

people's perception and concern that this is going in, or are we dealing

with actual environmental concerns that might be there?

MS. LEVENBERG: We're dealing with the

economic impact, and that is a combination of public perception and

what that has to do with environmental or health impacts. So even

though this bill doesn't discuss environmental health impacts, the

public perception is tied to what they believe -- the public believes

could -- could actually happen to them if they were to swim, boat,

paddle or live on and dip their toes into the Hudson River.

MR. RA: Okay. Now --

MS. LEVENBERG: The people aren't going to come

here, we are worried that this is gonna depress tourism in the area, and

also depress building values.

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MR. RA: Okay. Now, in terms of economic

impacts, because I think if we're talking about economic impacts,

right, all that stuff is part of it, tourism and -- and home values and all

of that. But certainly, I think that makes very, very legitimate part of

this conversation the concerns that have been raised by many

regarding union labor that is working at the site. Because there's no

doubt that if you're talking about jobs in the hundreds of those

individuals, that is certainly an economic impact on the region as well.

MS. LEVENBERG: Again, you're talking about

specific jobs for a specific plan and there are going to be other jobs for

another specific plan. And we're also talking about jobs that would be

involved with building, jobs that are involved in tourism, there's so

many jobs, what was it, 65 -- 65,000 jobs in the region. There's so

many jobs on so many different levels. We heard recently about job

fairs, and obviously we know people are trying to hire across the

region and they're looking for skilled labor. The folks who are, again,

have basically been used to put this wedge in between the process and

the public to claim that they're -- that they're -- they're going to be at a

loss, I'm not going to say that these particular jobs, I can't say exactly

what's going to happen with those particular jobs, but I know for a fact

because Holtec has told us, has promised that there are gonna be jobs

for the next 12 to 15 years. And I know that the plant has to be

decommissioned, that there's going to be a lot of work that's just part

of the decommissioning process, not to mention all of the other jobs

that are gonna be available for people who work in other -- in other

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industries, related industries. And we would hate to see any of those

building or construction jobs lost, either, because of a negative impact

on the Hudson River Valley.

MR. RA: Okay. Let me lastly say as we talk about

the economic impacts, my understanding, and you can tell me if I'm

incorrect, is that business groups within Westchester have expressed

opposition to this, and in addition, the local village that is the host site

of Indian Point has also expressed opposition to this bill because, you

know, they were operating under the understanding that they were

going to get this plant decommissioned and be able to move on as a,

you know, as a village, as a region, as soon as possible and that this is

going to delay that.

MS. LEVENBERG: Well, the Town of Cortland has

come out asking at the very least for a moratorium. They're the local

municipality. Yes, the Village of Buchanan has complained about the

slowdown. And so many others, though, have said, Well, it's bigger

than the Village of Buchanan, this is the entire Hudson Valley region

that's going to be impacted, and we also have a say. There are

certainly the PTA and all the parents who are concerned about air

quality from the decommissioning plant -- the decommissioning

process whose kids go to the Blue -- Blue Lantern, Buch -- and

Buchanan-Verplanck. And there are so many other schools that are

nearby, they're concerned about the process. Parents and, again, local

constituents are concerned about fishing, they've been fishing on the

river forever. I have one person who worked at Indian Point for many

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years is, in fact, a carpenter himself, fishes on the Hudson and

absolutely believes that this is the wrong way to go. I've gotten many

letters from past employees and people who are concerned that -- that

the wool is being pulled over our eyes and this is not -- this is just a --

a large corporation trying to get the most money out of the process.

So again, I think what we're -- what we're obligated to do is to make

sure that our constituents are represented in this process and that we

make sure that the entire Hudson Valley is in good stead -- that we

leave it in good stead instead of worse.

MR. RA: Thank you. My -- my time's running short,

so I thank you for taking the time to answer my questions.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. RA: Thank -- thank you. Just quickly. If this

legislation were to pass as currently written, it'd be an abrupt reversal

of the terms of the agreement New York entered with Holtec

Decommissioning International to oversee decommissioning activity

in the State and would likely result in a likely legal dispute. In the

meantime, all decommissioning activity at the site would shut down,

resulting in large-scale layoffs to union members. That's a concern. If

were talking about economics, we certainly have to be thinking about

the men and women of labor who are working at that site. And we

also, when you think about the dispute, have to think about the

Federal issues and the preemption issues that also might be subject to

litigation. So we've done all kinds of things in the last few years as a

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result of the decommissioning in terms of labor, in terms of, you

know, taxing different assets, all these types of things for something

that we shouldn't even be dealing with to begin with, because -- well,

I'm out of time. I'm going to be voting in the negative.

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you, Mr. Speaker. Would

the sponsor yield?

MS. LEVENBERG: Yes.

ACTING SPEAKER AUBRY: Ms. Levenberg

yields, sir.

MR. GOODELL: Thank you. I -- I just had some

questions that -- on some of your prior comments that I was hoping

you would clarify them. What you indicated to me is we're talking

about over a million gallons of water?

MS. LEVENBERG: Tritiated water.

MR. GOODELL: Tritia --

MS. LEVENBERG: 1.3 million gallons of tritiated

water.

MR. GOODELL: I see. And the tritium is a

byproduct of the fact that this water was used to cool the reactors; is

that correct?

MS. LEVENBERG: It was the spent fuel rods that

were sitting in the pool.

MR. GOODELL: But we're not talking about any of

the uranium or any of the nuclear components of this nuclear power

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plant, correct?

MS. LEVENBERG: Other components can actually

be treated out, but tritium cannot.

MR. GOODELL: I see. And am I correct, it seemed

to me that you were saying that there was a prior SPDES permit when

this plant was operating. Was this water then being pulled from the

Hudson, used to cool the rods and then sent back into the Hudson in

the past?

MS. LEVENBERG: I believe -- I don't know if it

was used to cool the rods, but it was definitely used -- there was water

that was pulled from the Hudson and put back into the Hudson and I'm

not 100 percent sure how that process worked. But certainly, tritiated

water, yes, was put back into the Hudson.

MR. GOODELL: I see. And how many years has

that been occurring?

MS. LEVENBERG: For 60.

MR. GOODELL: Sixty years.

MS. LEVENBERG: Correct.

MR. GOODELL: So after 60 years of this process,

do we have any documented correlation between the discharge that's

occurred for the last six decades and any documented health effects?

MS. LEVENBERG: We do have cancer maps, but

that's pretty much all that we have that -- that can be correlated, or that

has been correlated. There are certainly other issues that have -- that

have arisen that put into question other impacts of tritium besides just

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cancer.

MR. GOODELL: So it's your view that even though

we've been doing this for 60 years, we can't do it again as part of the

decommissioning; is that correct?

MS. LEVENBERG: As mentioned, over those 60

years it wasn't at all clear that the public was aware that this was

happening, and now they are.

MR. GOODELL: You mean for six decades nobody

understood what was going on?

MS. LEVENBERG: I would say yes.

MR. GOODELL: That's interesting.

MS. LEVENBERG: Did -- did you know?

MR. GOODELL: Well, Indian Point is not even on

my half of the State, and I'm about as far --

MS. LEVENBERG: Just saying.

MR. GOODELL: -- from Indian Point as you can get

and still be in the same state.

MS. LEVENBERG: Yeah, but -- yeah, but you are

smart so I thought maybe you'd have known.

MR. GOODELL: No, I haven't been studying the --

the discharge or the operations aspect of this plant. You mentioned

that there was a concern that might affect people who go fishing,

boating or -- or swimming?

MS. LEVENBERG: A perception, correct. I said the

perception of people who are boating or swimming or recreating on

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the Hudson. There are seven communities that actually get their

drinking water from the Hudson. And again, while all of these studies

do point to the low impact, the overall perception of the public is that

we're dumping radiological waste into the Hudson and that is not

acceptable after years of trying to clean up the Hudson from the PCBs

that GE put in to the Hudson from -- from paint and other -- other

sources. This is yet another example of using our Hudson basically as

a brownfield cleanup site so we can just say, Okay, we're gonna clean

up this non-operational nuclear power plant and just dump the waste

right in our backyard.

MR. GOODELL: So, you know, I've been involved

in this actually for decades, not involving Indian Point, but in other

contexts, and as you know, there's a lot of public confusion about

radiation. If you were to ask a general person, Are you radioactive,

they would probably say, incorrectly, no. But in reality, every one of

us is radioactive, correct?

MS. LEVENBERG: And it's cumulative, too.

MR. GOODELL: Yes. And, in fact --

MS. LEVENBERG: Don't forget that.

MR. GOODELL: -- we use radioactivity to date

things. That's how carbon-14 works, that's exactly how it works. We

monitor how much carbon-14 is in whatever we're trying to date. So

if you were to ask people, Well, what about my farm, is the dirt

radioactive? And the answer is, yes, everything's radioactive. What

about my drinking water, is that radioactive? Yes, everything in the

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world is radioactive. But the real question is how radioactive. So my

question to you is, how does the radioactivity of this water compare to

the naturally-occurring groundwater in that community?

MS. LEVENBERG: I don't think I have the answer

to that.

MR. GOODELL: How does it compare to the dirt in

that community?

MS. LEVENBERG: So again, we're talking about

the economic impact. As I mentioned --

MR. GOODELL: No, I understand.

MS. LEVENBERG: -- public perception --

MR. GOODELL: No, I'm just trying to get a nice

sense of how radioactive.

MS. LEVENBERG: I -- I don't actually know how it

compares to the groundwater or the dirt.

MR. GOODELL: Well, we heard earlier --

MS. LEVENBERG: But I do know that it's 400

curies of radiological -- of tritiated -- of tritium that would be in the --

the dump of 1.3 million gallons. And, again, this does not feel right. I

mean, I'm not gonna throw my microwave into the Hudson when I'm

done with it.

MR. GOODELL: So I'm just trying to get an

understanding. Do we have any information other than the fact that

it's 1/5th as radioactive as a banana, do we have any other information

that gives us an idea of how radioactive this is?

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MS. LEVENBERG: Mostly what we have is

comparisons to what had been dumped before. And, again --

MR. GOODELL: But no comparison to, like --

MS. LEVENBERG: -- the public wasn't even aware

of that dumping before.

MR. GOODELL: But no comparison to, say, the

effluent from treated sewage, right? Because --

MS. LEVENBERG: I don't have that at my

fingertips, sorry.

MR. GOODELL: Okay. Great.

Again, thank you very much, I appreciate it. It's been

a long day, you've done a great job. Thank you very much.

On the bill, sir.

MS. LEVENBERG: Thank you.

ACTING SPEAKER AUBRY: On the bill, Mr.

Goodell.

MR. GOODELL: We wrestle with all the time the

difference between fact and fiction, between perception and reality.

The fact is that everything in the world is radioactive; that's a fact.

When people talk about being radioactive, though, they're really

wanting to talk about how radioactive. And we wrestled with this in

my county. I mentioned I had some -- a little bit of experience

because my county operates a landfill, and 30 years ago we took the

waste paper from a nuclear power plant, and there were some

members of the public who said, OMG - I'm not quite sure what that

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means - OMG, we're taking waste from a nuclear power plant. Well,

that news -- that paper, you know, the -- the waste paper had a lower

level of radioactivity than the naturally-occurring radioactivity in the

ground. In other words, when we brought that waste in from that

nuclear power plant - whoo, that's scary - when we brought that waste

in, the level of radioactivity in our landfill when down because it was

lower than the background radiation.

And so we're told that a banana has five times more

radiation than a comparable volume of this water. So instead of

getting people excited and causing economic harm, let's focus on fact,

not fiction. Let's correct the perception so that people know that the

discharge of this water is not gonna create any more problem than it

did for the last six decades. It didn't create a problem then, it's not

going to create a problem now. The nuclear experts say this is the

best environmental approach, we should recognize their expertise.

Thank you, sir.

ACTING SPEAKER AUBRY: Thank you, sir.

Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this bill, although we may have

some members that support it, in which case they can vote yes here on

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the floor.

ACTING SPEAKER AUBRY: Thank you.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. Our conference, the Democratic Conference, is generally

gonna be in favor of this piece of progressive, environmental

legislation. There may be some who want to be an exception, they

could feel free to do so at their seat.

ACTING SPEAKER AUBRY: Thank you, Mrs.

Peoples-Stokes.

Ms. Levenberg to -- oh.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Ms. Levenberg to explain her vote.

MS. LEVENBERG: Thank you, Mr. Speaker.

Thank you to all of my colleagues for this discussion. The

decommissioning of Indian Point is the number one issue that

residents write to me about. My office and Assembly offices around

the State have heard from thousands, hundreds of thousands of

constituents on this issue. The overwhelming majority of the

comments from people with a broad range of political views express

feelings ranging from discomfort to dismay to outrage. People are

having a lot of difficulty understanding why a company is allowed to

discharge radioactive wastewater into a river from what is essentially

a brownfield cleanup, regardless of the wishes of those who live near

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it. We cannot move forward without the public's trust in this process.

Public perception of a polluted, hazardous river will undermine our

local economy in various ways, harming property values, business

interests and much more.

The Hudson River has come a long way in the past

few decades. So many people have worked incredibly hard to make

the Hudson Valley a premier destination to live, work, and play.

People are concerned about returning to the bad old days of treating

our rivers like industrial dumping grounds. We cannot ignore these

concerns.

More than 30 municipalities represented by elected

officials on both sides of the aisle, including five county executives,

have passed resolutions or spoken out in support of this legislation,

urging New York State to take more control over this process. Our

constituents want the State to have more say over what can and cannot

go into our rivers and when. I, along with my colleagues, care deeply

about all of our constituents, including our local and State workforce.

I hear the concerns predominantly of one labor union, fearful of

layoffs if this bill passes. As I've mentioned, at the most recent

meeting of the Indian Point Decommissioning Oversight Board, I

specifically asked about the labor implications of different waste

management options. Based on what we were told, layoffs are not an

inevitable result of this legislation; if anything, pursuing alternatives

should increase the number for experienced workers which these

unions represent. In the absence of this legislation, the elected

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officials on the DOB have had difficulty standing up for those who are

fearful of the impact that the proposed wastewater releases will have

on our region's economic development, which ultimately impacts all

of New York. This bill gives us the power to protect our interests.

I will be voting in the affirmative and I urge my

colleagues to do the same. Thank you so much.

ACTING SPEAKER AUBRY: Thank you. Ms.

Levenberg in the affirmative.

Mrs. Peoples-Stokes to explain her vote.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. I just want to quickly rise to commend the sponsor of this

legislation and for the manner in which she handled the debate. It's

really kind of critical when people are listening to their constituents

who -- it may not be your perception, but it is her constituents'

perception and, quite honestly, it's mine, too. The Hudson River is

one of the longest rivers in the world, 315 miles long. I'm not even

sure what spot it's in. I know it ends in New York City, but I don't

know if the mileage is left between where my colleague lives and

where it goes into the Atlantic. But I believe if the people who live

there are concerned about hazardous waste being put into the source

that we need for life, you can't even live life without water, if they're

concern is -- is about what is happening and she wants to fix that, I

admire her for doing so and I'm pleased to be voting in the affirmative.

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes

in the affirmative.

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Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 11, Rules Report No. 571, the Clerk will read.

THE CLERK: Senate No. S01066-B, Rules Report

No. 571, Senator Mayer (A01709-B, Reyes, Paulin, Otis, Dinowitz,

Burgos, Raga, Shrestha, Forrest, Dickens, O'Donnell, Levenberg,

Simon, Ardila, González-Rojas, Kelles, McDonald, Cunningham,

Carroll, Seawright, Fahy, Shimsky, Glick, Gibbs, L. Rosenthal,

Burdick, Cruz, De Los Santos, Bores, Hevesi, McMahon, Epstein,

Wallace, Lavine, Thiele, Sillitti, Aubry, Weprin, Clark, Septimo,

Simone, Jacobson). An act to amend the Criminal Procedure Law, the

Executive Law, the Civil Practice Law and Rules, the Insurance Law

and the Education Law, in relation to legally protected healthy activity

providers.

ACTING SPEAKER AUBRY: An explanation is

requested, Ms. Reyes.

MS. REYES: This bill would establish protections

for providers performing legally-protected health activity in the State

of New York. It precludes State and local government entities from

complying with or facilitating enforcement actions under the laws of

other states, where the actions are based on conduct that is lawful in

New York State and is performed within the State.

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you, sir. Would the sponsor

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yield?

ACTING SPEAKER AUBRY: Ms. Reyes, will you

yield?

MS. REYES: Yes.

ACTING SPEAKER AUBRY: The sponsor yields,

sir.

MR. GOODELL: Thank you, Ms. Reyes. I was

hoping you could give us some insights on how to deal with

jurisdictional issues when there's cross-border issues. For example,

we know if somebody in New York illegally fires a gun and kills

somebody in Pennsylvania, Pennsylvania, where the person was

killed, has jurisdiction and can seek extradition even though the

person who fired the gun was in New York. I mean, that's pretty well-

established, right? So how does this bill relate where a New York

physician prescribes medication to kill an unborn child in a state

where that medication is illegal? Isn't the state where the child is

killed, don't they have the same jurisdiction under their criminal laws

MS. REYES: The doctor is not killing a child.

MR. GOODELL: Unborn child isn't -- isn't that the

purpose of abortion?

MS. REYES: But the physician is not present in the

(inaudible).

MR. GOODELL: Right, I understand. Likewise, the

shooter in New York, using that example, who kills somebody in

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Pennsylvania, Pennsylvania has jurisdiction to seek extradition. No

one's challenging that, that's been the law for decades. So if a New

York physician prescribes medication that kills an unborn baby in

another state where that's illegal, doesn't the other state have

jurisdiction to seek extradition?

MS. REYES: The physician is not in that state. And

the Interstate Rendition Clause says that the person has to commit a

crime -- which, again, this is not that, nobody's committing a crime --

in another state and then have to flee.

MR. GOODELL: Well, there's multiple, multiple

examples where a person never leaves New York State but most

clearly commits a crime in a different state, right? For example, let's

say you have someone who's engaged in a telephone scam. They

never leave New York State, they call a resident in a different state,

they scam them out of money. Am I correct the other state has

criminal jurisdiction, correct?

MS. REYES: Correct, but we're providing that New

York State is protecting the provider for performing lawful practices,

health-protected activity in the State of New York.

MR. GOODELL: So --

MS. REYES: -- within their scope of practice and

licensure.

MR. GOODELL: Right. And, likewise, my first

example was someone fires a gun across the border, kills somebody in

a neighboring state, the neighboring state has criminal jurisdiction,

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correct?

MS. REYES: Correct.

MR. GOODELL: So there are multiple situations

where an individual never leaves New York State ever -- born here,

raised here, never leaves -- but commits a crime that hurts somebody

in a different state, correct?

MS. REYES: Correct.

MR. GOODELL: And that other state has then

criminal jurisdiction to seek extradition, correct?

MS. REYES: Correct.

MR. GOODELL: Okay, so --

MS. REYES: Except that the physicians are not

committing a crime.

MR. GOODELL: Well, so if the other state says it's a

crime to prescribe this medication --

MS. REYES: But it's not a crime in New York and

they --

MR. GOODELL: I understand, but if it's a crime in

the other state, the fact that the person who is committing that crime is

doing so using a telephone or Zoom or telehealth, they are still

committing the crime in the other state, correct?

MS. REYES: Not necessarily. They're not in the

other state.

MR. GOODELL: So how is that different than

someone who uses a telephone or Zoom or some other means to fleece

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somebody from the other state?

MS. REYES: Because it's a legally-protected health

activity of the State of New York.

MR. GOODELL: So your view is even though

they're violating the law of the other state, maybe even knowingly and

intentionally violating the law of the other state, we are not going to

honor the New York -- the United State Constitution as it relates to

extradition?

MS. REYES: Correct, because they are not in

another state. They are still in New York and they haven't fled said

state who may seek --

MR. GOODELL: So are there other crimes that a

New Yorker can commit that would be a crime in the other state, or

the injury occurs in the other state where it violates the other state's

criminal law where we say, We don't care, we're not going to honor or

respect the other state? Are there other situations other than just, you

know, killing an unborn baby?

MS. REYES: This is for legally-protected health

activity under the --

MR. GOODELL: Well, we're talking about abortion,

right?

MS. REYES: -- scope of practice of a physician.

MR. GOODELL: Yeah, we're talking about abortion,

right?

MS. REYES: Yes.

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MR. GOODELL: And abortion involves killing an

unborn baby.

MS. REYES: Not -- but not just abortion, this could

be the management of a miscarriage, this could be --

MR. GOODELL: No, I understand, but let's focus on

abortion because that has very clear --

MS. REYES: Because you want to, but that's not just

what this is about.

MR. GOODELL: Well, I understand there may be

other issues as well, I just want to look at this for the moment. Are

there other situations where a New York physician or anyone else in

New York can violate a foreign and other states' laws, criminal laws,

and avoid extradition?

MS. REYES: I'm not certain, but the activity that

we're referring to in this bill is lawful in the State of New York.

MR. GOODELL: And illegal in other states, correct?

MS. REYES: For now, presumably. And the

physician is present in our State -- the physician is never present in

another state, they're doing it while they're here.

MR. GOODELL: Now, let me reverse that a little

bit. New York has its own Board of Health, you know, the State --

State Department of Health, and New York State has certain things

that we allow, right, and certain things that we don't allow. So let's

say another state, let me step back five years, if I may, and the other

state legalizes marijuana and we are not there yet. Was it your view

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that the other state -- residents in the other state can then sell

marijuana to New Yorkers in New York and New York could not

have enforced it?

MS. REYES: That's not germane to this bill, and

neither is my view.

MR. GOODELL: And neither is what?

MS. REYES: My view. You're asking me about my

view.

MR. GOODELL: Oh, okay. So are there other

situations where people who are outside of New York can violate New

York law without New York being able to do anything about it?

MS. REYES: I don't have an answer for that.

MR. GOODELL: Okay. I don't either. I'm not

aware of any others.

Thank you very much, I appreciate your comments.

Sir, on the bill.

ACTING SPEAKER AUBRY: On the bill.

MR. GOODELL: You know, we have 50 states in

the United States, and we recognize that not every state is identical to

New York. That New York, for example, authorizes abortion right up

until the day before the child is born under certain circumstances. We

authorize late-term abortion. We advertise it. Well, we want to be the

abortion capital of the world, apparently. And I -- I've opposed those

views and I voted against them, but I recognize that the Majority has

passed them. But other states place a much greater value on the

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unborn child. Other states take the view that the unborn child is

probably -- needs the protection of the state. And they limit abortion.

Sometimes they only allow abortion until there's a heartbeat, and once

there's a heartbeat they say, You know, it better be a special condition.

Not New York, but other states.

And we have always, over the decades, over the

centuries, have acknowledged that if somebody who's in New York

violates another state's criminal laws and does so knowingly and

intentionally, the other state can extradite the person. But this bill is

astounding because it says a New Yorker using telehealth can violate

another state's criminal laws and do so with impunity. And that's

wrong. We need to respect the sovereignty and the independence and

the -- and the right of other states to pass their own criminal laws.

And, by the way, we want them to respect us, too, don't they? We

want them to respect us. So if we ban a product, let's say we ban

GORE-TEX because it has chemicals that make it waterproof, we

don't want other states just to thumb their nose at us and send us all

their GORE-TEX. And we routinely, don't we, we routinely pass laws

banning certain products in New York, don't we? And don't we want

the other states to respect our decision? We should respect their

jurisdiction, as well. That road goes both ways. And for that reason, I

cannot support this because I believe it is an unconstitutional attempt

to allow New York physicians to knowingly and intentionally violate

the law of other states with impunity. That's bad public policy.

Regardless how you feel on the abortion issue, it's bad public policy

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and we should not embrace it.

Thank you, sir.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed. Certainly, those who support this

legislation can vote in favor here on the floor. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

Mr. Vanel.

MR. VANEL: Thank you, Mr. Speaker. This will be

a Party vote, the Majority will be in favor of this legislation. If those

that are opposed may do so at their desk.

ACTING SPEAKER AUBRY: Thank you, sir.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Ms. Walsh to explain her vote.

MS. WALSH: Thank you, Mr. Speaker. So, I just

rise to add emphasis to the comments that were made during the

debate of this bill. I think that this is an extremely -- wow, worrisome

doesn't even cut it. I think this is a really troublesome bill for all the

reasons that have been stated. You know, I support telehealth because

I -- I think particularly in some of the rural areas that I represent, I

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think telehealth is an important way to -- to provide help to people

who can't get it in other ways in person. But I think that it creates,

really, a slippery slope that we're going to have to confront as a

Legislature, and I don't like this bill because I think it's addressing it in

the wrong way.

You know, we didn't see it this year, but we know

that the Medical Aid in Dying bill is something that might be

considered. You know, we're talking about abortion services here.

Are we next going to be talking about the end-of-life services being

done through telehealth potentially? I think that -- I think that it's very

elitist of us in New York to think that it's our way or the highway,

we're right and anybody else who is -- in other states is wrong. I think

that that really does really run afoul of -- of the way that we have

approached our republic since it was created.

So I think that this is a real problem bill and I would

encourage a no vote. I'm going to be voting in the negative. Thank

you, Mr. Speaker.

ACTING SPEAKER AUBRY: Ms. Walsh in the

negative.

Ms. Glick to explain her vote.

MS. GLICK: Thank you, Mr. Speaker, to explain my

vote. I thank the sponsor for this measure, and I'm proud of New

York State. Just because other states are denying women their right to

control their own bodies, I'm proud that New York is standing up for

women across the country.

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I withdraw my request and vote in the affirmative.

ACTING SPEAKER AUBRY: Ms. Glick in the

affirmative.

Ms. Reyes.

MS. REYES: Thank you, Mr. Speaker. I just wanted

to correct the record. Nothing in this bill would handcuff another state

from legally prosecuting a physician who is negligent or who actually

does commit a crime. We are just affirming that in New York State

we protect the rights of physicians to perform, again, legally-protected

health activities. And in that case it means providing services to

women who, in other states, may not have options because they were

taken away from them.

The physician -- the New York Academy of Family

Physicians really requested this. There is a cohort of doctors, a very

small one at that, that already provides these services and they are

fearful that their licenses are in jeopardy and just want to assure them

that in New York, we protect them. So I want to thank them, I want to

thank Planned Parenthood and the NIRH, NYCLU and the Medical

Students for Choice for all their advocacy around this, as well as my

colleague, Senator Shelly Mayer for her partnership, and the

Committee Chairs that helped push this through; the Health

Committee, the Codes Committee, the Higher Ed Committee and the

Insurance Committee for helping move this bill through. And I of

course vote in the affirmative.

Thank you, Mr. Speaker.

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ACTING SPEAKER AUBRY: Ms. Reyes in the

affirmative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. If we could now turn our attention to Rules Report No. 668

by Ms. Cruz, followed by Rules Report No. 694 by Yours Truly, Mrs.

Peoples-Stokes.

ACTING SPEAKER AUBRY: Thank you very

much.

Page 14, Rules Report No. 668, the Clerk will read.

THE CLERK: Senate No. S02832-A, Rules Report

No. 668, Senator Breslin (A00154-A, Cruz, Aubry, DeStefano,

Dickens, Cook, Fall, Epstein, Williams, McMahon, Weprin, Vanel,

McDonough, Ramos, Jacobson, Steck, Lupardo, Brabenec, Burgos,

Dinowitz, Colton, Rozic, Reyes, Lucas, Carroll, Thiele, González-

Rojas, Bores, Hevesi, Woerner, Burdick, Buttenschon, Benedetto,

Santabarbara, Tapia, Anderson, Simone, Zaccaro, De Los Santos,

Cunningham, Pheffer Amato, Raga, Gibbs, Chandler-Waterman,

Durso, Sillitti, Alvarez, Ardila, Lee, Davila, L. Rosenthal, Glick,

Simon). An act to amend the Penal Law, in relation to wage theft.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect immediately.

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ACTING SPEAKER AUBRY: The Clerk will record

the vote.

(The Clerk recorded the vote.)

Ms. Cruz to explain her vote.

MS. CRUZ: Thank you, Mr. Speaker. This bill was

actually born 24 years ago when my mother, who was a domestic

worker, was the victim of wage theft. So I'm a little bit emotional, so

bear with me if I go over my two minutes; please, John, my apologies.

We are not going after the good guys. What we want to do is make

sure that the people who made a mistake, they don't have to face the

law in the way that people who are purposely stealing for workers

would have to do it. We want to make sure that kids who are 16 years

old like I was never have to watch their parents make a decision

between food, a roof over their heads or the money that is needed for

the -- for the family. Employers should not be using stealing wages as

a way to do business, and we need to hold them accountable. I want

to thank the Speaker who, several years ago, began down the road of

combatting wage theft. And now we get to do so in this way. I want

to thank the carpenters who helped us create a coalition that led us to

today. I want to thank our Attorney General, several of the district

attorneys who have supported this effort. What we want to do is make

sure that employers know if they come purposely and steal the wages

of workers, we are going to hold them accountable. The day that you

are stealing wages from workers is gone. We are no longer going to

let you do this, and I cannot be prouder. I want to thank, also, 32BJ,

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the Mason Tenders Council, and I want thank my dear friend Diana

Florence who's a former District Attorney in Manhattan who helped us

write this bill. The idea is that if you work a day in New York, you

should receive your wages. That is wage theft and that ends today.

Thank you.

ACTING SPEAKER AUBRY: Ms. Cruz in the

affirmative.

Mr. Goodell to explain his vote.

MR. GOODELL: Thank you, sir. This bill is the

latest in a series of bills that try to make it very difficult, even

criminal, to work in New York State. And what it does is it says that

if an employer for some reason shorts an employee their wage, we can

add up all those little -- little shortages in order to make a big crime.

And so think about this, if you're a shoplifter and you shoplift $200 a

day and over the week you shoplift, you know, $1,200 or $1,500, we

don't aggregate them, it's separate misdemeanors for each one. But

this says that if over a time period, over a length of time for some

reason the employer makes a mistake on the wages and is short, we'll

add it all up so instead of being a misdemeanor we can make it a

felony. That's an amazing thing, isn't it? New York has the

distinction of making employers felonies on wage mistakes.

Now, you might think, well, why would anyone ever

short a wage, because it talks about wage theft. Well, let me give you

some simple examples. If you think what you have to pay your

employees is simple, think again. Let's say you run a restaurant and

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your servers share their tips with the kitchen, because they know when

you serve a great steak that's perfectly made, they get a better tip. Is

that legal? Not in New York. Could it result in a felony under this

bill? You bet. Or what about this? You tell your employees, It's

really important that you show up on time. We open the doors at 9

o'clock, we run a busy business, a retail, and they show up at five of

and clock in. Do you have to pay them that five minutes? Answer is,

yes, and if you didn't, wage theft. And this bill would allow them to

add up all those little times and make it a felony.

So, I don't support this bill because I don't think we

need to make businessmen who make mistakes on a small level into

felons by adding up all their small mistakes into a large mistake.

Thank you, sir.

ACTING SPEAKER AUBRY: Mr. Goodell in the

negative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 15, Rules Report No. 694, the Clerk will read.

THE CLERK: Senate No. S07505, Rules Report No.

694, Senator Bailey (A04618-B, Peoples-Stokes, Lupardo, Zinerman).

An act to amend the Criminal Procedure Law, in relation to making

technical corrections regarding the unlawful possession and sale of

cannabis.

ACTING SPEAKER AUBRY: An explanation is

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requested, Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, sir. This bill

makes technical corrections regarding the unlawful possession and the

sale of cannabis. The bill fixes incorrect cross-referenced -- incorrect

information that was cross-referenced in the Criminal Procedure Law

that was enacted in 2021 by the Marihuana Regulation Taxation Act.

The error in law has resulted in certain convictions that are eligible for

a lower-level resentencing based on MRTA have not been able to

proceed. And so we need to make this technical correction so that

those people who want to access this opportunity can do so.

ACTING SPEAKER AUBRY: Mr. McGowan.

MR. McGOWAN: Thank you, Mr. Sponsor --

excuse me. Thank you, Mr. Speaker. Will the sponsor yield for a few

questions?

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes,

will you yield?

MRS. PEOPLES-STOKES: Yes, sir. It would be my

pleasure.

ACTING SPEAKER AUBRY: The sponsor yields,

Mr. McGowan.

MR. McGOWAN: Thank you, sir, and thank you,

ma'am. I just have a -- a few questions about this bill. Could you --

could you explain in any more detail why this change is necessary?

MRS. PEOPLES-STOKES: Well, as I just

mentioned, the error in the original law has resulted in certain

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convictions that are ineligible for the lower resentencing based on

MRTA. And these folks have been unable to proceed, their attorneys

have been unable to protect them. And so we need to make this

technical change because the intent of the legislation was to allow

folks who had low-level marijuana crimes under those that were

passed in MRTA to have their records expunged. We would like to

see them have that done, there are people who would like to take

advantage of it.

MR. McGOWAN: When was this technical error

that you mentioned discovered?

MRS. PEOPLES-STOKES: What exactly was the

wording? The incorrect references means the defendant must

demonstrate a severe and ongoing consequence from their original

conviction. That's not necessary.

MR. McGOWAN: So -- so my question, ma'am, is

when was that technical error that you've described discovered?

MRS. PEOPLES-STOKES: When it was brought to

the attention of an attorney who was representing their client.

MR. McGOWAN: And when you say essentially that

there were consequences that were, I guess, not intended with the

present language, right, so you're talking about the original legislative

intent of the bill?

MRS. PEOPLES-STOKES: Exactly.

MR. McGOWAN: Okay. And so some convictions

resulted that ultimately were not able to -- to be vacated under current

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law; is that -- is that accurate?

MRS. PEOPLES-STOKES: In drafting this --

drafting this error has resulted in many individuals not being able to

take advantage of the relief of resentencing provisions. The intention

of the legislation was to allow people who were eligible for that to be

available to them. Those words prohibit some people from being able

to do it, and so we would like to remove them.

MR. McGOWAN: Do we have an approximate

number of these individuals who have been negatively impacted as a

result of the current language which you say is in contrast to the

legislative intent of the bill?

MRS. PEOPLES-STOKES: Well, I think my last

count that I've heard is something like over 400,000 people had had

their records expunged or...

MR. McGOWAN: Four hundred thousand who were

expunged?

MRS. PEOPLES-STOKES: New Yorkers.

MR. McGOWAN: Okay. So my question is,

essentially you're saying that there are more individuals who -- who

should have had their records expunged --

MRS. PEOPLES-STOKES: Exactly.

MR. McGOWAN: -- but for this, as you described, a

technical error in the drafting of the bill, correct?

MRS. PEOPLES-STOKES: Right. So it's like it

would be automatic --

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(Pause)

Okay, so we actually don't know how many people

have taken advantage of the resentencing piece of this, but I do know

that there are some 400,000 New Yorkers who have had their records

expunged and/or cleared as a result of MRTA. And we could add to

that number by technically cleaning up this language in this bill.

MR. McGOWAN: Okay. So I guess my question is,

and maybe you don't know, but if -- if you do know, is there any

anticipation of how many more individuals would qualify under this

change that's being proposed here?

MRS. PEOPLES-STOKES: Actually, I don't know

that. I do know of at least three people because I know of their

attorney who contacted me and needed support.

MR. McGOWAN: Okay, so you were contacted by

an attorney for three individuals.

MRS. PEOPLES-STOKES: Exactly.

MR. McGOWAN: Okay. Is this -- we talk about and

what's here in the sponsor's memo and you mentioned it today, that

this is a -- a technical error and you talk about an error in the drafting.

Isn't this really just a change afterwards rather than talking about an

error or some type of technical issue with the drafting? I'm not sure I

see that distinction, I'm just trying to understand --

MRS. PEOPLES-STOKES: I wish you were right

about that, because I know it would make you feel better and make

other people feel better, but no, this bill is doing exactly what it's

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asking to do, to correct an error that was made.

MR. McGOWAN: Okay. I guess what I'm hung up

on is why we say it's an -- a drafting error and not just we want change

it after the fact. I just -- I'm trying to understand that distinction.

MRS. PEOPLES-STOKES: Well, because if it had

been drafted appropriately it would not have excluded or added this

language, it wouldn't have been there. And the fact that it was found

after the fact says that it was an error in drafting and that's why we

have to fix it.

MR. McGOWAN: My review of the change, it's --

it's actually very minor, right? We're -- we're swapping out

subparagraph 1 for subparagraph 2 of paragraph A of subdivision

440.46-a. So we're swapping one section.

MRS. PEOPLES-STOKES: Okay, so that's -- that's

what we need to change in order to provide this opportunity for New

Yorkers who would like to avail themselves of it.

MR. McGOWAN: I'm just, again, I guess it's -- it's

still not clear to me how the current law is not consistent with the

legislative intent of the law enacted in 2021, and not just a, Hey, you

know what? We want to change this.

MRS. PEOPLES-STOKES: Well, sir, I wish

everything in -- in life was perfect. I know I try to be, but sometimes I

make an error and I made an error that time so I need to correct it.

MR. McGOWAN: Okay. I -- I respect what you're

saying, ma'am, I -- I'm still not sure that it really -- it -- it answers my

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question, but I'm going to move on to another point. And I -- I think

we can infer this, but essentially what this does is it broadens the

number of qualifying offenses that would be eligible for an application

to vacate a conviction; is that correct?

MRS. PEOPLES-STOKES: No, that is -- that's your

interpretation. The -- again, the intent of this bill is to fix incorrect

cross-references in the Criminal Procedure Law that was enacted in

2021 by the Marihuana Regulation Tax Act.

MR. McGOWAN: I understand that and I -- and I

respect that is the stated intent of the bill, I guess. But by doing this,

we are broadening the number of offenses that qualify for this type of

vacature, correct?

MRS. PEOPLES-STOKES: Well, we intended these

number of offenses to be included, and if we had not made this error

they would have been. So that's why we're here to correct it.

MR. McGOWAN: Okay. Thank you, ma'am. I

appreciate your time.

Mr. Speaker, on the bill.

MRS. PEOPLES-STOKES: You are very welcome,

sir.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. McGOWAN: I certainly appreciate what the

sponsor has indicated as the intent of this bill. It's been enacted as of

2021. I -- I really don't see, though, how this was a -- we can toss this

up to a drafting error, and I think the concern there is that when we

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say that, Oh, it's just a drafting error, it sounds like it's -- it was

actually described as a technical change, and I'm not sure that it is.

This seems much more substantive. This is going to enhance and

broaden the number of offenses that qualify. Although, when you

look at the bill and the proposal here, the actual change is relatively

minor, we're swapping out subsection 1 for subsection 2. So that

looks minor. But the effect I believe is much more significant.

So I think it's, you know, I'm not -- I'm not gonna say

it's -- it's disingenuous, I'm not gonna say that, but it almost, in my

opinion, leads to that type of a conclusion by merely referring to it as a

-- a drafting error and a technical error. I think it's a change. I think

it's a change in the law. I think that perhaps, you know, as -- as the

sponsor indicated, there was a -- an attorney who had clients who --

who perhaps was not able to get the relief that he or she was intending

for his client so brought this -- and here we are. But I -- I think that

we have to call it what it is. This is a substantive change, this

broadens the qualifying offenses and that's what this bill does. It's not

merely a technical error. From my interpretation and my analysis of

the bill as well as the responses -- and I appreciate the sponsor for

answering my questions, but I think it's a little more than what's been

described today, sir. So I appreciate your time.

Thank you, Mr. Speaker.

MRS. PEOPLES-STOKES: Mr. Speaker, while I do

appreciate the gentleman's comments --

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes.

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MRS. PEOPLES-STOKES: -- his opinion is

important. But I will say we have been here the entire day listening to

someone else tell us what the intent of our legislation is. This

legislation actually will cover people who should have already been

covered. The 400,000-some-odd people who already have been -- had

their records sealed and/or expunged, their -- their sentencing levels

were higher than the ones that we're trying to add now. It was clearly

an error that was made. And again, I mean, I don't mind apologizing

for making this error. But those people who have lower sentencing

and less time that they have to spend in jail, they still have not had

access to MRTA and we want them to have access to it. And so no

matter what anyone else thinks the purpose of this is, I'm telling you,

this is the purpose of it: To give people an opportunity that we

designed for them to have in 2021 that they have not been eligible to

have. And so I respectively [sic] hear the gentleman's opinion, but I

totally disagree with it and I think it's disingenuous for him to suggest

why I would put in a piece of legislation.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this. Those who support it are

certainly welcome to vote yes on the floor. Thank you, sir.

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ACTING SPEAKER AUBRY: Thank you.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. The Democratic Conference is generally gonna be in favor

of this piece of legislation that actually allows people to have an

opportunity to have a second chance at life; however, there may be

some who would desire to not be supportive, they can feel free to vote

at their seat. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Mrs. Peoples-Stokes

MRS. PEOPLES-STOKES: Mr. Speaker, members

now have on their desk an A-Calendar. I would like to move to

advance that A-Calendar.

ACTING SPEAKER AUBRY: On Mrs. Peoples-

Stokes' motion, the A-Calendar is advanced.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, sir. If we

can call our attention to page 3 and we're gonna take up Rules Report

No. 865 and then 866, followed by 863 and 864. If I could attach

names to that, Mr. Speaker, 865 is by Ms. Rosenthal; 866 is by Ms.

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Paulin; 863 is by Mr. Dinowitz and Ms. Rosenthal; and 864 is by Ms.

Rosenthal.

ACTING SPEAKER AUBRY: Thank you.

MRS. PEOPLES-STOKES: Thank you.

ACTING SPEAKER AUBRY: On the A-Calendar,

page 3, Rules Report No. 865, the Clerk will read.

THE CLERK: Assembly No. A06655-A, Rules

Report No. 865, L. Rosenthal. An act to amend the General

Municipal Law, the Local Finance Law, the Private Housing Finance

Law and the New York City Charter, in relation to enacting the

"Housing Affordability, Resiliency and Energy Efficiency Investment

Act of 2023."

ACTING SPEAKER AUBRY: On a motion by Ms.

Rosenthal, the Senate bill is before the House. The Senate bill is

advanced.

Mr. Goodell? Thank you, sir.

Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: The Clerk will record

the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 3, Rules Report No. 866, the Clerk will read.

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THE CLERK: Assembly No. A07338, Rules Report

No. 866, Paulin. An act to amend the Public Health Law, in relation

to newborn screening for glucose-6-phosphate dehydrogenase

deficiency.

ACTING SPEAKER AUBRY: On a motion by Ms.

Paulin, the Senate bill is before the House. The Senate bill is

advanced. Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: The Clerk will record

the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 3, Rules Report No. 863, the Clerk will read.

THE CLERK: Assembly No. A04047-B, Rules

Report No. 863, Dinowitz, L. Rosenthal. An act to apply for [sic] the

Housing Stability and Tenant Protection Act of 2019 to rent

calculations and rent records maintenance and destruction.

ACTING SPEAKER AUBRY: On a motion by Mr.

Dinowitz, the Senate bill is before the House. The Senate bill is

advanced.

An explanation is requested.

MR. DINOWITZ: Okay. This will probably take a

few minutes but I'm sure after I finish you'll not only want to support

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the bill, but you may even want to cosponsor it.

(Laughter)

So, this bill relates to how the legal regulated rent is

determined in overcharge cases for rent-stabilized apartments. The

bill provides that for the portions of an overcharge claim involving

rents paid prior to June 14th, 2019 -- that's pre-Housing Stability and

Tenant Protection Act, that's HSTPA -- the legal rent is determined

based on changes enacted in the -- in the HSTP -- blah, HSTPA.

Where a legal rent has already been calculated for prior to June 14th,

1919 [sic], nothing limits a recalculation for what the rent should be

post-HSTPA.

So let me -- let me just give a little explanation since

you asked for an explanation. Part F of the HSTPA was intended to

ensure that tenants were not left paying more for their rent-stabilized

apartments than they rightfully should. For many reasons, tenants did

not challenge rent overcharges within four years under the prior law.

The four-year rule created a rigid and artificial base date and

prevented tenants from examining more than four years of their

apartment's rent history to prove that their rent was improper, except

in limited circumstances. So in practice, what this meant was that

once four years had passed, the landlords could use the base-date rent

to continue to collect illegally-inflated rents with impunity unless the

tenant could show that fraud had occurred. But unfortunately, if the

landlord simply illegally doubled the rent, for example, without

engaging in any sort of scheme over and above that to evade detection

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of its illegal activity, that wasn't considered fraud. The result was that

many landlords' illegal rent increases were shielded from review,

leading to a loss of affordability. So what Part F of the HSTPA did

was it removed the strict limits placed by the four-year rule and the

base date, and instead allowed tenants, courts and DHCR to examine

the entire rental history as necessary to determine the last reliable rent,

and it also changed the statute of limitations for collecting rent

overcharges to six years. Part F operated in two distinct ways; one, it

-- retroactivity in terms of establishing the rules for the refund of rent

overcharges that had occurred in the past and prospectively in terms of

settling -- setting the rent that a landlord could lawfully charge in the

future. But in each case, the legal rent is -- is set based on the rent in

the last reliable annual registration statement.

So what happened is this law was challenged, and in

April of 2020 the Court of Appeals found in the case of Regina

Metropolitan Company v. New York State DHCR that the retroactive

application of Part F was unconstitutional. But it also said that in -- in

its decision that, and this is a quote, "Our narrow holding here

determining that the newly-enacted overcharge calculation provisions

may not be applied retroactively constitutes nothing more than an

appropriate exercise of this quintessential judicial authority." So, the

Court of Appeals found that the retroactive application was

unconstitutional for two connected reasons; one, forcing landlords to

pay back rent that they had lawfully collected in the past based on

prior overcharge rules was not rationally related -- rationally related to

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any of the rent stabilization's policies goals. In other words, it would

not deter illegal rent increases or return apartments to rent

stabilization. Also, landlords could not be penalized for the absence

of records that they had lawfully discarded under the prior rules. So

the Court of Appeals stated on numerous occasions in their decision

that it was not ruling on the prospective application of Part F, it

acknowledged that prospective application (inaudible) the HSTPA's

legislative goals by deterring future overcharges. It also noted that

retroactive imposition of overcharges was different than requiring

landlords to, quote, "shoulder a new payment obligation going

forward." And what that meant was that the Court explicitly did not

place any limitation on Part F's impact on rent, rents charged and

collected after June 15th, 2019, and that was about the time that the

HSTPA was passed by this Body.

And I could go on, but I'm sure -- I'm sure, Mr.

Fitzpatrick, you might have a question or two.

ACTING SPEAKER ZACCARO: Mr. Fitzpatrick.

MR. FITZPATRICK: Thank you, Mr. Speaker. Will

the sponsor yield for some questions?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. DINOWITZ: I will.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. FITZPATRICK: So Mr. Dinowitz, can you

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explain why common -- common law fraud needs to be replaced by

the presumption of fraud? Why are we doing that?

MR. DINOWITZ: Why what? Why do we have to

do that?

MR. FITZPATRICK: The alleged fraud with the

presumption of fraud. Why is that being done?

MR. DINOWITZ: I -- I think what we want to do in

this bill is to make sure that there's no question what -- what -- what

the rules are here, whether it's in terms of fraud or in general, the

application of the prospectivity of the law that we passed in June of

2019. So in the past, common law fraud was -- may have been raised

as an issue in the court but that's not part of this bill.

MR. FITZPATRICK: So -- so how is a building

owner supposed to, you know, calculate an accurate rent roll when,

you know, in a couple of years cases can be filed and you're going

back beyond six years to find, you know, to get this information. Prior

rent increases were, you know, were handled under the old set of laws,

and now we're, you know, we're just pushing that aside. We're saying

you can go back even farther. Some of these records may not even be

available, you know, to come to what you believe would be an

accurate calculation for a new base rent.

MR. DINOWITZ: Well -- well, first of all, records

aren't always available. Of course we would want to know that the

records weren't made unavailable for bad reasons which sometimes

happens, but let -- let me just tell you how -- how this came about in

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the first place.

MR. FITZPATRICK: Mm-hmm.

MR. DINOWITZ: Some years ago, and I don't

remember what year but I had several people come to my office with

-- and it became apparent that the rents they were being charged were

not necessarily accurate. So what we did, we helped them get a -- a

rent history from DHCR and --

MR. FITZPATRICK: May I ask what lead them to

believe that those rents were not accurate? What were they accusing

the landlord of?

MR. DINOWITZ: They were out of whack with --

with other tenants in their buildings, for example, with similar

apartments, so it became clear to me --

MR. FITZPATRICK: Define out of whack, what

does that mean?

MR. DINOWITZ: Well, if -- if one tenant is paying

let's say for a rent-stabilized apartment $1,200 and another tenant was

paying $2,000 and there was no other major differences, you know

when an apartment turns over more the rents can be higher --

MR. FITZPATRICK: Sure.

MR. DINOWITZ: But if borrowing something

different, there's no reason why two similar apartments in the same

building that are rent-stabilized should have radically different rents.

And so after --

MR. FITZPATRICK: Could one have had an IAI or

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MR. DINOWITZ: What?

MR. FITZPATRICK: Could one have had an IAI,

you know, a building of an improvement or to contribute to that

difference --

MR. DINOWITZ: Well, how --

MR. FITZPATRICK: I mean how are tenants --

(Inaudible/cross-talk)

MR. DINOWITZ: IAI could have --

MR. FITZPATRICK: -- know exactly --

MR. DINOWITZ: -- could have contributed to --

MR. FITZPATRICK: -- how would one tenant --

MR. DINOWITZ: Well, let me -- let me finish

answering your question --

MR. FITZPATRICK: Sure.

MR. DINOWITZ: -- that you asked and interrupted

me a few times. It was -- it was clear to me that something strange

was afoot and what -- what was clear to me is that at some point in

time somebody, either the landlord or perhaps the previous landlord if

there was a previous landlord, raised the rent inappropriately, that was

my conclusion. But because of the rule at the time, if -- if the landlord

lied, cheated, or even made a mistake - and I'm not saying it could

have been one over the other but in either case and four years had left

there wasn't a thing the tenants could do about it. So not only was the

tenant paying a higher rent than that tenant should've been paying, but

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in addition, that rent -- that higher rent was going to continue forever

and future rent increases over and above that were going to compound

the injustice that took place. So what I did is I put in a bill to change

that. And that bill was incorporated into the legislation that we passed

in June of 2019 in the HSTPA. And that particular provision or I

guess other provisions, too, but that particular provision was

challenged in court, and at least on a narrow point part of the

challenge was successful. And the part that was successful was that

under certain circumstances the retroactivity clause in the -- the

legislation was overturned by the Court of Appeals, the previous Court

of Appeals, yes, a few years ago.

MR. FITZPATRICK: Okay. So -- so going back,

allowing -- allowing this recovery to go back prior to the six years

over this presumption of fraud, you know, going back, possibly back

to the early '70s when the rent stabilization law was enacted, how --

where is the fairness to the building owner to allow such an egregious,

you know, lookback period when this information may not be

available, you know, successive turnover in ownership, things like

that, records, a belief that records are no longer needed to be retained

and they're discarded. Where is the fairness for the building owner

when they followed the rules as they were under the previous set of

laws and now we are moving the goal posts, which is so common in

housing legislation, as -- as we all know. So where -- I mean, how do

you -- how do you explain the fairness aspect of this? I mean, I know

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MR. DINOWITZ: Are you putting a question mark

and ending your sentence at any time soon?

MR. FITZPATRICK: You know, I know we, you

know, you like to vilify the building owner as the root of all evil in --

in any housing problem. But there are building owners who follow

one set of rules, now the goal posts have been moved and now they

are unfairly exposed to, you know, restoring a former rent that was

legitimate.

MR. DINOWITZ: Well, well, first of all, we're not

talking about cases going back to the 1970s --

MR. FITZPATRICK: But they're --

MR. DINOWITZ: Let me --

MR. FITZPATRICK: -- (inaudible/cross-talk) the

records.

MR. DINOWITZ: Let me -- well, let me ask you a

question, please. But secondly, we're not talking about landlords who

follow the rules. We're talking about -- and I'm sure most landlords

do follow the rules. We're talking about landlords who did not follow

the rules either by way of making a mistake, which could happen, or

by way of not making a mistake but deliberately putting --

MR. FITZPATRICK: Right.

MR. DINOWITZ: -- putting in bad information,

misinformation, lying --

MR. FITZPATRICK: Right.

MR. DINOWITZ: -- and that's what we're talking

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about here. We're not talking about landlords who follow the rules.

Landlords who follow the rules should have no problem, nobody is

talking about any of that in this legislation --

MR. FITZPATRICK: Right.

MR. DINOWITZ: -- whatsoever. With the fraud

exception, you can't go back that far anyway. Based on case law

alone you can't go back that far.

MR. FITZPATRICK: So, you know, there's a legal

principle called res judicata. So the doctor claims that preclusion that

protects individuals from endlessly litigating the same issue over and

over again once it has been properly decided by the proper authority.

So here we have a Court of Appeals decision, and now you're trying to

do an end run around that -- that Court of Appeals decision, and here

we have, again, building owners being subject to, you know, the same

harassment from the Legislature, you know, again and again.

MR. DINOWITZ: Well, my heart bleeds for the

building owners --

MR. FITZPATRICK: I know, I know.

MR. DINOWITZ: -- and I mean that very sincerely,

but that's not what we're talking about here. We're not -- we're not

talking about that at all. This legislation does not, does not attempt to

do an end run around the Regina case. It does not attempt to overturn

it. The Regina case was a very nuanced narrowly-based case and the

part that you're talking about dealt with the issue of retroactivity, but

the -- the rest of part F of the HS -- those five initials, the Housing

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Stability and Tenant Protection Act, HSTPA, did not deal with the

retroactivity part alone. It dealt with other stuff and that part was not

overturned by the court.

MR. FITZPATRICK: Right.

MR. DINOWITZ: The court upheld or -- upheld that

part, so it overturned a little piece of it and that's -- we're attempting to

correct that. We have legislative intent in here to make sure that it's

clear what's being done here, and I think that you're talking about

things that have nothing do with the bill or are relevant to the court

case.

MR. FITZPATRICK: I would disagree, but, you

know, were tenants ever prevented from filing charges under the

DHCR before the housing -- the new housing act in 2019?

MR. DINOWITZ: You know, you know something?

It's -- it's like talking about a person on whom -- I shouldn't bring this

up because you don't like it. If -- if -- if there was like let's say

medical malpractice done on you but you had no reason to be able to

know that and only were able to discover it many years later, that --

that's how I look at this. There's no reason most tenants would know

that a -- a -- a deception was committed by a particular landlord until

they somehow discover it because why would they know it. They

may not have even been the tenant against who the perception was --

MR. FITZPATRICK: But they --

MR. DINOWITZ: -- was done.

MR. FITZPATRICK: -- they -- they had four years

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under the old law to discover this.

MR. DINOWITZ: But what --

MR. FITZPATRICK: (Inaudible/cross-talk) -- that

four years --

MR. DINOWITZ: -- what are they supposed to send

out a search party? There's no way to discover in most cases.

MR. FITZPATRICK: -- they probably had -- let me

finish. Within that four-year period they had a renewal of that lease

more than likely, maybe two. So they had more than ample time to

discover if they had something wrong. And in four years they have

lots of conversations with their neighbors, you know, over rent, et

cetera, et cetera. So expanding it to six years, we oppose that, but in

four years there was nothing preventing tenants from going to DHCR

with this issue before the HSTPA.

MR. DINOWITZ: See, that's the thing about a

deception. You don't always easily discover it. And the mere fact that

some time has gone by doesn't mean that the onus should be on an

innocent tenant to know about a deception that was -- was done

against them or even against their predecessor tenant.

MR. FITZPATRICK: But the tenant has at least one

lease renewal in that four-year period, maybe two --

MR. DINOWITZ: Maybe.

MR. FITZPATRICK: -- and maybe they consult with

an attorney. I'm sure many do. But if they're reading their lease, they

had more than enough time with four years, that's a long period of

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time to go to DHCR. It wasn't necessary to do this. Now, you're

allowing, you know, to find -- to go back to that base rent, you're

allowing -- you know, you're giving permission to go much back

much, much farther, you know, than six years to find, you know, with

documentation. And again, that documentation may not be available.

MR. DINOWITZ: So it sounds like you're saying -

and tell me if I'm wrong, but I'm sure I'm not, it sounds like you're

saying if a landlord does something illegal and the tenant doesn't

discover it, then the landlord should be able to profit from that

illegality. If -- if a landlord, and again, I want to just say that I don't

think most landlords do that, so nobody should have their heads

explode when I say this. If a landlord does something wrong, lying

about the -- the appropriate rent, for example, and then the tenant or

the next tenant doesn't discover it, the landlord shouldn't be rewarded

for that because he got away with it, and that's what -- I think that's

what you're kind of suggesting --

MR. FITZPATRICK: No.

MR. DINOWITZ: -- should happen.

MR. FITZPATRICK: No. No, that's not what I'm

saying at all is that there, you know, you're assuming that every case

there's an act of deception involved --

MR. DINOWITZ: No. I just said most landlords are

not doing that.

MR. FITZPATRICK: And, you know, maybe it does

happen, all right, maybe it does happen, all right. Not every landlord

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is perfect, not every tenant is perfect, we -- all know that, but there --

it wasn't broke and there was no need to fix it, I would argue under the

prior rules. But the due process for the property owner here is being

discarded. It's being, you know, I think with mistreatment of, you

know, a building owner in this case. They're already dealing with

rent-stabilization, the inability to charge enough rent to cover the cost

of running their buildings, all right, pay their taxes and their water and

their solid waste removal, et cetera. It's already very difficult in most

cases for building owners to do that. Now, you have a situation where

somebody thinks they were overcharged, maybe legitimately, maybe

not, but now the due process that's afforded to the landlord is -- is not

being respected.

MR. DINOWITZ: Well, I -- I look at that a little

differently. First of all, I don't accept your contention that most

landlords are like struggling to survive. I -- I don't doubt that there are

some landlords that are not necessarily swimming in money, but I can

assure you that a huge number of landlords, probably the vast

majority, are doing fine, they just want more, they just want more.

But if they -- if they did do something wrong they shouldn't profit

from it. And I'm really shocked that anybody would suggest that if

somebody does something wrong that -- I mean some people here are

-- are very much in favor of strong enforcement of laws. Well, putting

in the wrong amount on the rent that -- that is being charged to

somebody, that's kind of -- to me it's a criminal act, but aside from that

I would think we would want to do the right thing. For the small

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number of landlords who are engaging in these deceptions, they

shouldn't continue forever and ever 'cause that's what it would amount

to. If they can't challenge, they shouldn't forever and ever be profiting

or windfall profit, but again, this bill -- this bill is a narrow bill meant

to address the issues raised by the court in the Regina case and it deals

with the fact that part of the retroactivity portion of the bill was

overturned by the court, but certainly not the part of the legislation --

of the law that deals with prospectivity.

MR. FITZPATRICK: Correct, very good. Mr.

Dinowitz, thank you very much.

Mr. Speaker, on the bill.

MR. DINOWITZ: Anytime.

ACTING SPEAKER ZACCARO: On the bill.

MR. FITZPATRICK: You know, housing -- you

know, housing legislation, you know, the issue of housing in New

York, especially New York City has always been a very difficult issue.

We don't have enough housing. We need to construct more. The

Governor is now trying to push the State forward in that regard. I

know a --

(Buzzer sounded).

MR. DINOWITZ: Oh, darn.

MR. FITZPATRICK: Okay. I know a number of

municipalities --

ACTING SPEAKER ZACCARO: You're on your

second 15, Mr. Fitzpatrick.

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MR. FITZPATRICK: Okay. So, the -- again, the --

the problem over the years in all the years I" ve been dealing with

housing here is, you know, the Majority likes to continue to move the

goal post every time it sees a potential problem. The issue of fairness

for the landlord, the property owner, the person who's providing the

service of housing is always the villain, in every single case always the

villain. Oh, not all of them, but, you know, there's a presumption that

the -- the property owner is always the villain. And I get that, you

know, there are more tenants equaling votes than there are landlords,

much more, far few. But the -- the issue of fairness here has been just

thrown out the window. Landlords that follow the law under -- under

DHCR, all right, have now as a result of this case or this legislation,

their due process is being just tossed out the window. It is not fair.

This presumption that every landlord is doing something wrong or

ripping off the tenant I think is -- is wrong. It's -- you know, it -- it

seeks to kind of create an environment in the debate that, you know,

we're on the side of the good guy and the landlord is always the bad

guy. It's -- it's not helpful. Yes, there may be one or two landlords

that -- that are a problem, I'll give you that. But we have a lot of -- we

have a lot of tenants that create many, many problems in these

buildings as well, far more of those than there are bad landlords, by

the way. So, this bill it is believed is unconstitutional. It will more

than likely be challenged, and I think probably successfully. But in

the end, due process is important and moving the goal post is never a

good thing. It's -- it's wrong to do this and that what's happening here,

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and for that reason I'll be voting no. Thank you.

ACTING SPEAKER ZACCARO: Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Will the sponsor

yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. DINOWITZ: Yes.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. RA: Just really one question. Can you clarify --

so it would be on page 2 at the bottom, Section 2, subdivision B, those

last few lines. It says, the legal regulated rent for the portion of any

overcharged claim involving rents paid prior to June 14, 2019 shall be

determined under pre-HSTPA law including the default formula in

cases of fraud is codified herein. Is the intention that that standard

that is in use where fraud is established could be used even where

fraud is not established?

MR. DINOWITZ: Well, either fraud is established or

it's not established.

MR. RA: Well, I'm saying would that -- my

understanding was that the standard that is there is different for -- for

the, you know, calculating on the past rent when there's fraud

established, but would that be in use in either case?

MR. DINOWITZ: You're looking at like line 49

through 53?

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MR. RA: Yes.

(Pause)

So it says, including the default formula in cases of

fraud. So, are we saying that the formula we're using in cases of fraud

is applicable whether there was or was not fraud?

MR. DINOWITZ: No. No. I didn't say that.

MR. RA: Okay. So your intention is that the prior

standard, prior to the HSTPA, what was in law at that point, would be

applicable if there's not fraud, that standard as was the case at the time

would be applicable.

MR. DINOWITZ: Yes.

MR. RA: Okay. Thank you.

Thank you, Mr. Speaker.

MR. DINOWITZ: Welcome.

ACTING SPEAKER ZACCARO: Mr. Tannousis.

MR. TANNOUSIS: Will the sponsor yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. DINOWITZ: Yes.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. TANNOUSIS: Thank you. I don't want to be

too repetitive, Mr. Dinowitz, but I do have some questions and it goes

off of what Mr. Ra just said. Now, I want to clarify something in your

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bill. Now, previous to obviously to this bill's current enactment, right,

there was a common law fraud that would have to be proven, correct?

Isn't that correct?

MR. DINOWITZ: No, not for these purposes.

MR. TANNOUSIS: Okay. So what -- then what

exactly would you have to prove in regards to fraud?

MR. DINOWITZ: Let me consult my notes.

(Pause)

If there was a -- a fraudulent scheme to deregulate the

apartment such as raising the rent improperly such that at the time it

exceeded the -- the level, which I guess we call that luxury decontrol

at the time, which would have deregulated the apartment.

MR. TANNOUSIS: Okay, thank you. Now, just one

or two more brief questions and I just want to thumb this down as

much as possible, right? So there was a court case, Regina

Metropolitan v. New York State Division of Housing Community

Renewal, correct?

MR. DINOWITZ: Yes.

MR. TANNOUSIS: Okay. And in that case, the

court found, the Court of Appeals, which is the highest court in the

State, found that imposing previsions of the HSTPA retroactively

directly violates due process, specifically holding that although the

Legislature appears to have intended that the retroactive period be

bounded only by the length of the apartment's rental history, such a

vast period of retroactivity upends owners' expectations of repose

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relating to conduct that may have occurred many years prior to the

recovery period. Would that be a fair statement to say it was a

decision in the Regina case?

MR. DINOWITZ: Well, I have a copy of the 80 page

decision here I can consult, but I will take you at your word that that's

an accurate quote.

MR. TANNOUSIS: I appreciate that, especially

since I'm reading exactly from the case, thank you. And just to be

clear, with this legislation that you are now introducing to pass today,

now they are allowed to go back, correct, and collect from the

landlord? Is that my understanding of your law here or is there -- is

there another interpretation that maybe I'm misunderstanding here?

MR. DINOWITZ: This -- this legislation takes into

account and attempts to conform with the ruling in Regina as it

applies to retroactivity.

MR. TANNOUSIS: Okay. So is it your testimony

here today that this law is constitutional? Does it violate a landlord's

due process rights with the enactment of this law?

MR. DINOWITZ: Well, I'm not testifying but it will

be my statement that I'm not a judge, nor are you, that would be for a

court to decide and a judge to decide should the law be challenged,

but I don't believe that this violates the bill. That is, I don't believe it

violates anything. Otherwise I wouldn't have introduced it.

MR. TANNOUSIS: Okay. Thank you, Mr.

Dinowitz.

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On the bill.

ACTING SPEAKER ZACCARO: On the bill.

MR. TANNOUSIS: Thank you. Mr. Speaker,

another day in the State of New York, another day where we are

chasing landlords out of the State. And I'm not talking about big

landlords, I'm not even talking about medium-sized landlords, I'm

talking about small landlords, immigrants that came here for the

American Dream now will not and continuously are not able to afford

to be landlords, and they are leaving for greener pastures. The State

of the Florida, for example, where they have more rights. This Body

continuously assumes that landlords are greedy and commit illegal

acts, and that is an unfair assumption. And if we continue to do this,

we will continue to chase business and tax money out of New York

State. I am against this piece of legislation. Thank you very much.

ACTING SPEAKER ZACCARO: Mr. Goodell.

MR. GOODELL: Thank you, sir. Would the sponsor

yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. DINOWITZ: Of course.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. GOODELL: Thank you, Mr. Dinowitz. And I

appreciate someone who is trying to explain the complex housing

laws in New York City to someone who fortunately lives on the

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opposite end of the State. But I'm looking --

MR. DINOWITZ: Did you say fortunately?

MR. GOODELL: Yes, fortunately, yes. In my -- in

my community we don't have a housing crisis, in my community the

market is allowed to work effectively, in my community landlords can

make a profit by building housing and so they build housing to meet

the needs, in my community we don't regulate every aspect of rent,

and so it's been very successful in my community. But I understand

that since the 1940s you've had temporary rent control in New York

City and it's a whole different market and so I appreciate your

expertise in that area. My question relates on page 3, lines 43 through

47. And normally when we're dealing with fraud it's the obligation of

the person who is asserting the fraud to prove it beyond a

preponderance of evidence. Am I correct that if the records are

missing, going back years, there's a presumption of fraud and that you

then automatically kick into the default formula?

MR. DINOWITZ: I don't think there's a presumption

of fraud if the records are missing.

MR. GOODELL: But it -- it goes into the default

formula, correct?

MR. DINOWITZ: If the records --

(Pause)

-- no, that -- that -- that -- that's just not true. Now, I

-- I think I mentioned this earlier or I alluded to it, if a landlord

deliberately destroys the records, well that's a whole nother story, but

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no. Otherwise what you're saying is -- is not the case. But by the

way, I -- I -- tell me if I'm wrong, but of your 130 some-odd-thousand

constituents, I'm pretty sure not a single constituent is directly

impacted by this bill.

MR. GOODELL: No, thank God, they aren't.

MR. DINOWITZ: So why do you care then?

MR. GOODELL: Well, surprising as it may sound, I

actually have relatives that live in New York City and I'm -- I'm

concerned about their well-being, even though they're not able to vote

for me. Would you address the issue; how does this process work

when you have sequential owners?

MR. DINOWITZ: When you have -- I'm sorry, when

you have what?

MR. GOODELL: When you have sequential owners.

In other words, when a landlord who owned the apartment say in 2019

sells it to a new owner. The new owner may not necessarily have all

those prior records, correct?

MR. DINOWITZ: That's correct.

MR. GOODELL: And so how does this address that

situation?

MR. DINOWITZ: I -- I don't -- as I'm sure I

mentioned earlier, whether or not there have been -- there's been one

landlord or a series of landlords and the same thing is true with tenants

is not necessarily relevant. What's -- what's relevant is whether or not

the rent was illegally jacked up by somebody in the past, whether it's

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the current landlord or a prior landlord. And of course, in most -- in

many cases, a tenant wouldn't know anything about it and there are

many tenants, for one reason or another, who are frightened of -- of

making claims against landlords, sadly.

MR. GOODELL: So if you're a new owner and let's

say you bought the -- the apartment building in 2022.

MR. DINOWITZ: Mm-hmm.

MR. GOODELL: And in order to finance it you

would use a rent roll in order to get the loan from the bank, no doubt

and the bank would make the loan based on what the current rents are

on that rent roll. Is there anything to indicate that the new owner

would have any notice or knowledge of any impropriety of a prior

owner?

MR. DINOWITZ: Well, not necessarily, but as -- as

Mr. Fitzpatrick mentioned earlier when he suggested that a tenant

should be able to know whether something wrong was done some

years earlier, a landlord probably is even in a better position to figure

that out --

MR. GOODELL: Well, no doubt --

(Inaudible/cross-talk)

MR. DINOWITZ: -- being a good business person.

MR. GOODELL: But as I think we all recognize that

as Mr. Fitzpatrick pointed out, there's no question whatsoever the

tenant knows what the rent is, right? When they sign the lease

renewal --

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MR. DINOWITZ: The tenant --

MR. GOODELL: -- they should know what the rent

is.

MR. DINOWITZ: -- should know what their own

rent is.

MR. GOODELL: Yeah. And so they sign on that,

they obviously are not hoodwinked over what the monthly rent is.

And this is all designed to give them the opportunity after they've

already knowingly, intentionally, voluntarily with full knowledge

signed off on the lease agreeing to pay a certain rent. This allows

them to go back and challenge the rent that they already agreed to,

right? I mean that's the whole purpose of this, correct?

MR. DINOWITZ: It allows a challenge if there is

some impropriety. It just doesn't willy-nilly say, oh, you can all

challenge the rent, you have to have some evidence to do that. And in

terms of the landlord, I'm sure that a new landlord would want to do

his or her due diligence in terms of investigating the rental history of

that building or buildings.

MR. GOODELL: Now, as -- as you correctly noted,

this only applies to New York City for which I'm thankful. I'm

correct, right, there is a well-recognized housing crisis in New York

City?

MR. DINOWITZ: I believe, according to the

Governor, that there's a housing crisis Statewide.

MR. GOODELL: The Governor's mistaken on that

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belief, by the way, as it applies --

MR. DINOWITZ: I don't know.

MR. GOODELL: -- to much of Upstate --

MR. DINOWITZ: I trust the Governor on that.

MR. GOODELL: -- but certainly, certainly it's your

belief she's correct as it relates to New York City, correct?

MR. DINOWITZ: Well, I -- I'm not going to deny

that we need more housing, but I also believe that the bigger crisis lies

in affordability. That if we were able to resolve the affordability crisis

that that would be much more helpful of the -- of the two, but yes. I

do believe we need to have more housing, and maybe there's room in

your district for more housing.

MR. GOODELL: Certainly any residents in New

York City would like to come and --

MR. DINOWITZ: (Inaudible)

MR. GOODELL: -- get affordable housing. They are

certainly welcome to come. But how does this or doesn't it? Does

this address the availability of housing? Does this encourage more

housing, for example?

MR. DINOWITZ: This -- this is a veryily -- very-

narrowly drawn bill dealing with a -- a -- specific subject. This bill

does not address that issue. That's an issue which perhaps we should

address and I think we should, but that would be another bill, not this

bill.

MR. GOODELL: Now is it your belief, then, that if

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you expand the ability of tenants after they have signed the lease with

a designated rent and know exactly what they agreed to pay, is it your

belief that expanding the ability of tenants to then challenge that rent

and try to get a lower rent will somehow encourage more housing or is

that just completely irrelevant?

MR. DINOWITZ: Well, it might discourage certain

of -- of the small group of landlords who are committing, you know,

fraud or whatever. It might discourage them from doing that if they

knew that there was a decent chance that that would be challenged

and overturned, but in terms of housing, I'm pretty sure what you're

talking about now is totally irrelevant to this particular bill.

MR. GOODELL: Again, thank you, Mr. --

MR. DINOWITZ: Which is often the case, by the

way.

GOODELL: Again, Mr. Dinowitz, thank you very

much for trying to explain the complex New York City housing

market to me.

MR. DINOWITZ: You're welcome.

MR. GOODELL: Sir, on the bill.

ACTING SPEAKER ZACCARO: On the bill.

MR. GOODELL: In Upstate where I am, the private

sector market addresses housing issues, and it's really quite, quite

remarkable. It's a process that's been going on for hundreds or

thousands of years but the way it works in a nutshell is that when

there's a shortage and demand exceeds supply, the prices go up, the

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profitability of building new housing also goes up. New housing is

then built or made available. The supply then increases. As supply

increases the prices come back down and stabilize. Now despite the

fact that economists have recognized the supply and demand law for

centuries, in New York City we tried a new experiment, a temporary

rent control starting in the 1940s where we artificially reduced the

price through rent control. And not surprisingly when we did,

investors left the market, because if you have money and you have

two options; one, where you lose money or make very little and the

second where you make a lot, you go where you can make the most

money. And so New York successfully has created a massive housing

crisis, congratulations. And after 70 or 80 years of a failed experiment

we want to double down with this legislation. Now maybe a better

approach would be to encourage more housing to be built in New

York City. Maybe more housing would help the housing crisis rather

than forcing the existing landlords to have to defend lawsuits that go

back, in this case, six years or more that may involve prior landlords

all in an effort by the tenant to pay less than they agreed to in a written

contract. Fundamentally unfair. Fundamentally increasing the

housing crisis in New York City. And thankfully, anyone who is

looking for affordable housing is welcome to come to my community

where the housing is very affordable and readily- available because

we still believe in the private sector market and the law of supply and

demand. Thank you, sir.

ACTING SPEAKER ZACCARO: Mr. McGowan.

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MR. McGOWAN: Thank you, Mr. Speaker. Would

the sponsor yield for just a few questions?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. DINOWITZ: I will.

ACTING SPEAKER ZACCARO: He will.

MR. McGOWAN: Thank you, Mr. Dinowitz. Just

trying to understand the -- the process here. I've been listening to the

debate and -- and your responses. Essentially if -- if enacted, this

would allow a recalculation of -- of qualifying apartments for -- for

the rent, correct?

MR. DINOWITZ: In certain situations.

MR. McGOWAN: Okay. So how does that certain

situation begin?

MR. DINOWITZ: If the landlord put the wrong rent

into the forms that the landlord files with HCR, then that could be

challenged.

MR. McGOWAN: And when you say the "wrong

rent," can you explain that, how that process would work and that

trigger event?

MR. DINOWITZ: Yes. If you're rent-stabilized, the

rents can go up through each lease by a certain specified amount as

determined by the Rent Guidelines Board in June of a particular year.

And so, for example, it's -- it's coming up like now, and that -- that'll

affect leases that run starting October 1st of this year, either for a year

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or two years. They'll determine what the allowable percentage

increases for rent-stabilized apartments. There are other potential

reasons why rent in those apartments can go up. Now that happens

over -- it could happen over several successive leases, but if it's

determined after being challenged that somehow the -- the -- the

landlord filed information with HCR that was just not correct and

therefore future rent increases - so let's say the rent should've been

$1,500 back in, you know, five years ago, for example, or four years

ago, make it four years since we're talking about 2019. If the landlord

filed misinformation regarding that which then allowed that landlord

to get a higher rent and then base future increases on that higher rent,

that's -- I mean to me that's stealing, but I don't know if that's exactly

how the law would describe it. But in any case, that could be undone

based on the law that's already in effect. We're not talking about

creating that now because the HSTPA provided for that, that rent

increases occurring after June of 2019 can be challenged as a result of

the law. What changed between when we passed the law and now is

this Regina court decision which indicated that in certain cases it can't

be applied retroactively before that time.

MR. McGOWAN: So this law creates a -- a

lookback, a retroactive period to -- to look back and see if there was

some type of really wrongdoing we're talking about on the part of the

landlord, right?

MR. DINOWITZ: No. This bill, we're not talking

about retroactivity in the sense of -- of the original bill. We're -- we're

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correcting that based on other results of the court decision.

MR. McGOWAN: This bill will permit recalculation

of legal regulated rent from June 14th, '19 forward, correct?

MR. DINOWITZ: Yes.

MR. McGOWAN: But in order to do that the

triggering event, essentially the -- the tenant has to -- has to do what in

order to -- to question or challenge the rent saying that it was

artificially increased previously? What -- what does a tenant have to

do to start this process?

MR. DINOWITZ: Well, if I was advising a tenant

and our office advises tenants and sometimes landlords all the time.

The first thing I would do is tell that tenant to get a -- a rent history

from HCR. If -- if it appears that there was something irregular in that

rent history, then the tenant can file with -- with HCR, with the State

Housing Agency.

MR. McGOWAN: So if just the tenant takes a look

at that rent history and you said something appears irregularly, I mean

what -- what standard is that? What's the -- I mean what subjectively

what one tenant views as perhaps that looks irregular, you said

yourself a few moments ago there could be circumstances legally

when the rent could be increased above the standard. So I mean, can

any tenant just get the rent history and then say that looks irregular

and start this process?

MR. DINOWITZ: They can start a process but it

won't be well-founded if there's no fraud or anything else. But I'll give

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you a -- a very specific example of how it could work. So the tenant

gets the rent history and they noticed that the rent in 2020 was $1,500

and then in 2022 suddenly under the next tenancy it was $3,000.

Under the current rules, I -- I cannot imagine how the -- and I don't

think you can -- how the rent can go up that radically in such a short

period of time. But if the next tenant in 2022 signed the lease for

$3,000, then this tenant could challenge that on the basis that it

shouldn't have gone up by that much, that the normal rent increase for

a rent-stabilized apartment determined by the rent-stabilization board

is done in June and it's a certain percentage and there might be other

potential reasons why there's an increase. You know, we changed the

rules with H -- with -- with -- with improvements in the apartment

whether it was, you know, inside the apartment increases or there was

an MCI, but in -- in no case could the rent have gone up legitimately

so radically, so yes. Sometimes on the face of it you could see that

something irregular was done and that should be very challengeable.

MR. McGOWAN: Okay. But the tenant doesn't

necessarily know that from just looking at the rent history, right?

There has to be some type of really discovery or -- or -- when does the

-- the shift or is the burden ever shifted to the landlord to then defend,

right? If a tenant feels that perhaps there's an irregularity and you said

yourself has to be fraud or some type of wrongdoing, does the tenant

-- is the tenant able just to say, well, that doesn't look right to me, it's

probably some type of fraud and then is it on the landlord to then

defend themselves in this challenge or does -- is there any type of

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minimal showing that the tenant would have to meet some type of

minimal standard to be met in order to start this process to go

forward?

MR. DINOWITZ: Well -- well, there's no guilty until

proven innocent if that's essentially what you're asking.

MR. McGOWAN: Well, that's my question.

(Inaudible/cross-talk)

MR. DINOWITZ: Let me finish. If the tenant

challenges that, then it's up to HCR to investigate that and to look into

the history and to see if there's any reason to believe that something

irregular was done.

MR. McGOWAN: So I guess my concern, sir, is that

this could perhaps open the flood gates to -- to challenges, right? And

we're looking back and now we can recalculate. They might as well,

let me see if I can recalculate my rent. You talked about fraud, you

talked about wrongdoing, some type of impropriety, right? Are these

-- are those really the limited circumstances generally, right, some

type of wrongdoing that would allow this recalculation to be done?

MR. DINOWITZ: I -- I would imagine that such

recalculations would not happen terribly often because I don't think, I

hope, but I -- I don't think that -- that there are -- there are so many

cases where a -- a landlord is committing such a terrible fraud on a

tenant where they're imposing higher rents. I mean I -- I can't quantify

that, but I don't believe the majority of landlords are doing it, but

certainly a tenant should be in a position to challenge wrongdoing. I

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don't think anybody would want to argue with that. And if it can be

shown that there was wrongdoing, then the tenant should not have to

pay a higher rent than the tenant would otherwise be required to pay.

And certainly any time since June of 2019, any rent that they

overpaid, they -- they should be made whole again.

MR. McGOWAN: So let's start -- let's -- let's take it

from that premise, right? Yes, I agree with you. I don't think a

majority of landlords are comitting any type of wrongdoing in this

situation. Let's put that kind of to the side, right. And I don't think

perhaps, you know, a majority of tenants are looking to take

advantage of this new law. But what are the, you know, parameters or

any minimal qualifications that has to be established? I mean, my

concern here is that you're opening through this bill, right, we're

opening the flood gates to allow more of these challenges that are

going back in time and there has to be -- I mean if you bring a -- a

civil suit in an alleged fraud, there's a heightened pleading standard in

a civil action. Here, we're talking about whether there has to be fraud,

but I don't see, you know, any -- discussion or anything in the bill

talking about what has to be shown by the tenant. And my concern is

that, you know, this could just be something that's -- that's challenged

and I don't think there's any downside to the -- to the tenant. Why not

challenge? Right? Let's see if there's some fraud. Let's open up --

(Inaudible/cross-talk)

MR. DINOWITZ: Well, let me leave you at your

concerns because the law, even though it's been partially overturned,

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has been in effect for several years. There has been no flood gate of --

of -- of challenges, so there's no reason to assume at this point when

there's not even retroactivity that there would be a flood gate. Keep in

mind that this bill is essentially not new stuff. We passed the law in

2019. No flood gate, no -- no huge number of challenges, hasn't

happened.

MR. McGOWAN: But you don't have to establish

fraud in order to have your rent calculated under this bill; is that

correct?

MR. DINOWITZ: You can prove the landlord made

a mistake. Not every mistake is fraud. Sometimes a mistake is a

mistake.

MR. McGOWAN: Okay. So before we were talking

about, I believe you used the word impropriety, fraud's been tossed

around. Some type of wrongdoing which to me infers some type of,

you know, kind of malice or some type of, you know, intent to -- to do

wrong, right? Intent to --

MR. DINOWITZ: I don't see (inaudible/cross-talk)

implies that at all.

MR. McGOWAN: Well, you're talking about a

mistake. So a landlord makes a mistake. That could be challenged.

MR. DINOWITZ: A landlord makes a mistake,

should he profit from that mistake? Should a tenant have to suffer

because a landlord made a mistake? Of course not. You wouldn't

want that to happen to you.

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MR. McGOWAN: So what is the standard? What --

what is -- it's not just fraud, it's -- it's really any type of recalculation.

And there's no -- and if it's purely a mistake, you're talking about a

profit, I'm not sure if there's a profit. I think that's -- it's easy to say

but I'm not sure that that can be quantified.

MR. DINOWITZ: The standard is either the numbers

are correct or they're not correct, whether it's because of fraud or a

mistake. To -- to a tenant it probably doesn't matter.

MR. McGOWAN: So it (inaudible/cross-talk)

liability.

MR. DINOWITZ: What -- what matters to the tenant

is that because of that mistake, that tenant has suffered a financial loss

and would continue to do so indefinitely.

MR. McGOWAN: So it's essentially strict liability.

The numbers are wrong, that's it. But you said there are exceptions

when the numbers could be higher, right?

MR. DINOWITZ: Well, I'm -- I'm not sure what you

mean.

MR. McGOWAN: Okay. So it's essentially whether

it's a mistake or something worse, some type of intentional

wrongdoing, we'll call it fraud. It doesn't matter, it's the same thing

under this bill, right?

MR. DINOWITZ: Well, it's the same thing in terms

of whether the tenant should be made whole because of the mistake or

fraud. From the tenant's perspective they -- they -- they lost money

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and they may want their money back and they should be entitled to it.

If there was no mistake, if there was no fraud, which I'm sure is the

case in the vast majority of cases, then nobody gets hurt here. This is

not meant to hurt anybody. This is -- this is just about justice and

equity about a tenant not having to suffer a financial loss because bad

information, whether deliberately or not, was -- was put out there by

the landlord in terms of what the rent is or was in the past. Because

once the mistake is made in the past and the rent is raised, all future

rent increases are based on that mistake compounding the injustice

that's committed on the tenant.

MR. McGOWAN: So I -- I think the issue I have,

though, is we're -- we're talking about fraud and -- and mistakes is

really the same thing. I'm not sure where -- where else we do that in

the law. I'm not sure, right, in the housing context where else we do

that. I mean we've been holding landlords to that standard, a mistake

is going to be the same thing as fraud. You might as well just say it's

a mistake and it doesn't matter fraud, it's all the same thing and the

landlords are going to be put in the same situation.

MR. DINOWITZ: Well, I know you're not

suggesting that a mistake by the landlord should cause a tenant huge

amounts of money anymore than I would suggest that if the tenant's

rent is $1,500 and they send in a $1,000 every month and then five

years later the landlord discovers it, I mean the landlord might have

some redress because that's how it's dealt within this particular bill,

but the point being, if -- if a landlord makes a mistake, the landlord

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shouldn't profit from that mistake. I can't imagine anybody who

would think that's a fair and just outcome to -- to any situation.

MR. McGOWAN: But these are essentially leases

that are entered into freely by private parties, correct?

MR. DINOWITZ: A landlord sent a tenant a lease,

the tenant signs the lease, the tenant agrees to the lease, that doesn't

mean the tenant should be the victim of either fraud or a mistake.

And simply because somebody signs a lease for an amount that's

wrong, doesn't mean they shouldn't be able to recover financially from

that. Why would you think -- why would you think they shouldn't get

money back?

MR. McGOWAN: Well, I'm -- I'm just trying to

understand the situation here, right. So two parties are free to enter

into a contract, right? Private parties enter into this lease, and the

tenant has every opportunity to research and do this analysis before

signing that lease, correct?

(Inaudible/cross-talk)

MR. DINOWITZ: That's true, but the -- the

information isn't always readily available. And simply because a

tenant signs a lease and then discovers the mistake, doesn't mean that

the tenant shouldn't be able to recover those damages.

MR. McGOWAN: So I guess my final question is,

has there been any analysis as to -- my concern is flood gates, my

concern is an expansion based on this legislation. Any -- any analysis

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(Buzzer sounded)

I guess not. Well, any analysis about the effect of this

and how many apartments or how many tenants can make this new

application for recalculation?

MR. DINOWITZ: Well, as -- as I've already said,

we've had a few years since the underlying law which covers this was

passed and there have been no flood gates opened. So there's no

reason in the world to assume that suddenly the flood gates will be

open now 'cause nothing is going to change in terms of -- of -- of

tenants being able to go back to look at those rents after 2019.

ACTING SPEAKER AUBRY: Thank you, Mr.

McGowan.

MR. McGOWAN: Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Mr. Blumencranz.

MR. BLUMENCRANZ: Thank you. Will the

sponsor yield?

MR. DINOWITZ: Yes.

ACTING SPEAKER AUBRY: Mr. Dinowitz yields.

MR. BLUMENCRANZ: Just a few questions. So

regarding somebody who lived in one of these apartments, they agreed

to pay a certain amount before they lived there, they live there for a

few years, they move out. Now can they sue asking for their money

back for the percentage they felt they were wronged by the housing

provider?

MR. DINOWITZ: I don't know that they can but let

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me double-check.

(Pause)

Okay. Have to be a current tenant.

MR. BLUMENCRANZ: Only current, okay. Just to

go back to the point that my colleague made here. So the information

is not available how much other listings have rented for within your

building in the past when you're looking to rent an apartment in New

York City right now?

MR. DINOWITZ: I think you can get information on

the rent history of your own apartment. I'm not sure that information

on other peoples' apartments are readily available to you. Now

somebody else can do their own rent history and then give that

information to you, but essentially if it's not readily available.

MR. BLUMENCRANZ: So you can't go on

StreetEasy and see what listings were listed for or what they rented

for?

MR. DINOWITZ: Not as far as I know.

MR. BLUMENCRANZ: Pretty sure -- pretty sure

you can but I -- I could be -- could be wrong at least the last time I

checked.

Now as far as the J51, the -- the tax abatements that

the buildings received. Let's say I owned a building, I received that

tax abatement and then maybe some mistake had happened and -- and

the rent was changed in a way that you may have disagreed with.

Now I sold the building, someone else owns it. Who is going to be

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sued in that instance if there was either a mistake or an impropriety on

the -- on the side of the landlord or missing documentation?

MR. DINOWITZ: I -- I would think and, once again,

not addressed in the bill, that the current landlord would be the one

that would be challenged, but I would also think that the current

landlord could institute an action against the previous landlord as

well.

MR. BLUMENCRANZ: All right. And then just

one more question. Generally, do you believe that this will -- that this

change in legislation will have a different outcome in the courts than

the original portion of the bill that you had amended? I mean will the

courts will -- will rule differently that this won't create an undue

burden on the landlords or in the way of due process --

MR. DINOWITZ: Well, on -- on the -- the part that's

covered by this legislation I think the courts would rule the same way

in that they upheld the portion of the original law except as it

pertained to retroactivity. So this is -- this is not doing that. So I -- I

am certain, not being a judge of course, but I'm certain that this would

be upheld by the courts.

MR. BLUMENCRANZ: All right. Thank you very

much.

MR. DINOWITZ: You're welcome.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

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been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this legislation. Certainly those

who support it can vote in favor here on the floor. Thank you, sir.

ACTING SPEAKER AUBRY: Mr. Ramos.

MR. RAMOS: Mr. Speaker, this will be a Party vote.

We'll be generally in the affirmative. If anybody wishes to vote in the

negative, please let -- let us know.

ACTING SPEAKER AUBRY: Thank you both.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 3, Rules Report No. 864, the Clerk will read.

THE CLERK: Assembly No. A06216-B, Rules

Report No. 864, L. Rosenthal. An act to amend the Administrative

Code of the City of New York and the Emergency Tenant Protection

Act of Nineteen Seventy-Four, in relation to establishing the legal

regulated rent for the combination of two or more vacant apartments;

to amend the Public Housing Law, in relation to defining permanently

vacated; to amend the Emergency Tent Protection Act of Nineteen

Seventy-Four, in relation to exemptions from rent stabilization on the

basis of substantial rehabilitation; and to repeal paragraph (d) of

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Subdivision 4 of Section 14 of the Public Housing Law, in relation

there to (Part A); to define clearly the scope of the fraud exception to

the pre-HSTPA four-year rule for calculating rents (Part B); and to

amend the Administrative Code of the City of New York, the

Emergency Tenant Protection Act of Nineteen Seventy-Four and the

Public Housing Law, in relation to the failure of owners to file rent

registration statements and the enforcement powers of the

commissioner of housing and community renewal (Part C).

ACTING SPEAKER AUBRY: On a motion by Ms.

Rosenthal, the Senate bill is before the House. The Senate bill is

advanced.

And an explanation is requested.

Ms. Rosenthal.

MS. ROSENTHAL: This bill provides parameters

for setting a new legal regulated rent when a regulated unit has been

combined with regulated or unregulated units. It provides a definition

of permanently vacated related to succession rights. It also requires an

owner claiming an exemption from the ETPA on the basis of

substantial rehabilitation to seek approval from DHCR within one

year of completion of the substantial rehabilitation and provides

grounds for denial of substantial rehabilitation exemption. The bill

codifies the standards for the fraud exception to the four-year

lookback period for overcharges prior to the HSTPA by providing an

owner is deemed to have committed fraud. If they committed material

breach of any duty to disclose truthfully rent or lease information for

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claiming an unlawful rent or claiming to have deregulated a unit

regardless of its fraud under common law or if the complaining tenant

specifically relied on untruthful or misleading statements. The bill

also provides conduct presumed to be the product of fraud is unlawful

deregulation. The bill provides an increase penalty for delinquent rent

registration statements of $500 per unit per month and the bill

provides DHCR with enforcement mechanisms including the power to

issue orders for the rent regulation laws.

ACTING SPEAKER AUBRY: Mr. Fitzpatrick.

MR. FITZPATRICK: Thank you, Mr. Speaker.

Would the sponsor yield for --

ACTING SPEAKER AUBRY: Ms. Rosenthal, will

you yield?

MR. FITZPATRICK: -- a conversation?

MS. ROSENTHAL: Yes, I will.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. FITZPATRICK: Thank you, Linda. So --

MS. ROSENTHAL: Ms. Rosenthal to you.

MR. FITZPATRICK: I'm sorry?

MS. ROSENTHAL: Ms. Rosenthal.

MR. FITZPATRICK: Ms. Rosenthal, that's fine. All

right, Ms. Rosenthal.

MS. ROSENTHAL: Yes.

MR. FITZPATRICK: Okay. So, let's begin with

reconfiguration of apartments. So, you have a, you know, one

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bedroom and maybe a -- a studio and the building owner would like to

combine them to provide a larger apartment for a family. And we

know there's a very real shortage of larger apartments for families.

MS. ROSENTHAL: No, that -- that's debatable.

MR. FITZPATRICK: I'm sorry?

MS. ROSENTHAL: That's debatable, but go ahead.

MR. FITZPATRICK: Well, okay. As -- as you say, I

would argue there is a -- a shortage for larger families. So the new

legal rent is the rent stabilized unit one, plus unit two, all right. So

and if there's the rent stabilized unit and a free market unit, the new

legal rent equals the percent increase in -- let's see, the increase in

space, the percentage of space, plus the RGB increase, plus an IAI, all

right. So they're not able to calculate the legal rent the way that

follows decades of HCR precedent. So this was the last -- with all the

changes that were made, this was one of the last opportunities for, you

know, a landlord to, you know, merge -- you know, merge units to

create a new unit in the hopes of trying to, you know, charge a higher

rent, you know, given that all the other units are rent stabilized, and

they are struggling to try and, you know, keep their heads above

water, especially the smaller landlords. So why -- why are we

breaking with all of these years of DHCR precedent?

MS. ROSENTHAL: So, first of all, a landlord could

combine two studios under that scenario and that would not be

suitable for a family. So there are different -- a landlord could

combine two studios under the same assumption as you said --

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MR. FITZPATRICK: Right.

MS. ROSENTHAL: -- and that would not be suitable

for a family. In fact, that is an attempt to circumvent the rent laws.

MR. FITZPATRICK: Well, you could argue that

point, but you are -- do you believe that's the case in every situation or

if he only has two, you know, two studio apartments and you can

merge them and create an opportunity, you have two bathrooms with

two merged studio apartments and you have two rooms that could

accommodate a family of three or four people.

MS. ROSENTHAL: They -- they --

MR. FITZPATRICK: So why -- it -- it isn't always

the case of trying to skirt the rent laws.

MS. ROSENTHAL: No, it's not always the case, it's

often the case.

MR. FITZPATRICK: But is that the assumption you

make every time?

MS. ROSENTHAL: However -- however, the

landlord can combine them, but then if one of them was rent regulated

then the new apartment would be rent regulated.

MR. FITZPATRICK: So then --

MS. ROSENTHAL: Let me give you an example

from the Upper West Side.

MR. FITZPATRICK: Sure.

MS. ROSENTHAL: A landlord combined two

apartments and decided that they were $13,500 a month.

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MR. FITZPATRICK: Mm-hmm.

MS. ROSENTHAL: Now they were originally both

rent regulated so they were nowhere near that amount. Thirteen

thousand, five hundred is an outrageous rent for where -- where the

building was located and what the two previous apartments fetched.

So this is an attempt to make sure that the rent -- the apartments that

are rent regulated do not disappear through what we call

Frankensteining.

MR. FITZPATRICK: Mm-hmm, okay.

MS. ROSENTHAL: Yeah. And it also previously --

it wasn't specified in law in the regulations, so this is an attempt as

well at clarification on what happens when a landlord combines

regulated and non-regulated.

MR. FITZPATRICK: But even still, if you combined

two units and even if the rent is a -- a figure you don't approve of, that

is still the amount of rent that the landlord is taking in. It is improving

the assessed value, the value of the property. It is allowing the

landlord by, you know, taking in more rent to spend more on the

upkeep and improvement of the property. So why -- why is that a bad

thing?

MS. ROSENTHAL: No, this is -- this is an attempt

to circumvent the rent regulation law. As you know, we passed in the

HSTPA the end of vacancy decontrol.

MR. FITZPATRICK: Right.

MS. ROSENTHAL: So units that are rent regulated

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will stay rent regulated in perpetuity. So you can't remove them

simply by combining them. And that is one of the attempts by

combining them.

MR. FITZPATRICK: Well, you know, all of -- all of

the many years that you and I have debated these housing proposals, it

has created a system where landlords were trying to find opportunities

to, you know, to bring in more money. And at every opportunity, the

Majority here has moved the goal posts, you know, to make sure that

didn't happen. And what has suffered? We don't see an increase in

the production of housing, we don't see -- you know, we see the

quality of services in these building suffer because there's not enough

income coming in to cover some of these. I remember when my

daughter, you know, lived on the Upper East Side and there were, you

know, rats infested in the building and she called me up and says, you

know, daddy, you know, you know, do something. And I said, well,

sweetheart, you know, there's not enough money coming in, what's

your rent? It was very, very low. And I said, well, this is why you

have rats because there's not enough money to cover --

MS. ROSENTHAL: And actually rats -- rats are

everywhere.

MR. FITZPATRICK: They are everywhere. They

are everywhere.

MS. ROSENTHAL: They are in the most expensive

and in the cheapest.

MR. FITZPATRICK: Okay. But the City -- the City

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gains when you have a merger of these two units creating a market

rate unit. The City gains additional tax revenue, the building is in

better shape because there's more money coming in, all right. You

know call it Frankensteining if you want, but it is the last opportunity

for a building owner to try and produce more income, improve the

quality of his or her building. And you're taking this away from them.

And I just wonder what -- you know, who gains --

MS. ROSENTHAL: Actually who gains is the

system of rent regulation and two different families that will now be

able to rent a rent stabilized apartment. This is also for, as you said,

one of the last ways that a landlord will be able to raise their income.

MR. FITZPATRICK: So there's no --

MS. ROSENTHAL: No one said -- wait, let me

answer.

MR. FITZPATRICK: Okay.

MS. ROSENTHAL: No one says that the additional

income they get by illegally deregulating an apartment will go toward

building improvements.

MR. FITZPATRICK: It's not illegal --

MS. ROSENTHAL: I mean this is money the

landlord wants to collect. They can't circumvent the rent regulation

system in this manner.

MR. FITZPATRICK: But they're not illegally

deregulating the apartment, they're simply merging two units to create

a larger unit. You know, what I think you're saying to me is that a

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studio apartment is just fine for a family. So a family is what --

MS. ROSENTHAL: I'm not deciding who lives in a

studio. Some families unfortunately only can afford to rent a studio,

but saying that the -- the reason behind this is to provide apartments

for families is as relevant as me saying it's to combine two studios.

You know, it -- it doesn't specify the size of either apartment, but what

it does do and what it has been doing is having us lose many rent

regulated apartments. And there are other complications with this.

For example, many landlords, not all, some, keep units vacant in the

hope that the tenant next door will leave. And there are ways to

harass that tenant making their life very uncomfortable so they will

leave, then you can combine apartments. You know, there are many,

many tactics to arrive at the combining of apartments and some of

them involve tenant harassment. In addition --

(Inaudible/cross-talk)

-- when you leave -- let me just finish this -- when

you leave units vacant, it contributes to a deterioration of the building

and that has happened and that also chases tenants out.

MR. FITZPATRICK: I would argue it's a potential

improvement. But can you give me an example of what harassment,

what -- how do they harass?

MS. ROSENTHAL: Well, first of all, there are many

ways to harass, not provide heat or hot water. Have -- make

consistent requests to pay a tenant off to leave, and that happens a lot.

You know, file lawsuits against them. I have -- I have a tenant in my

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-- in my district who -- who's dragged to court by the landlord every

chance he can get.

MR. FITZPATRICK: Mm-hmm.

MS. ROSENTHAL: There's a bicycle in the hallway,

lawsuit. You made too much noise, lawsuit. It's -- that's a form of

harassment. Not everyone does that, of course, but those that do have

the intention of chasing tenants out.

MR. FITZPATRICK: Well, in a case like that the

tenant is harassing, you know, their fellow tenants with their behavior.

So how -- you know, if the landlord is cracking down on behavior like

you're not supposed to leave your bicycle in the hallway, you know --

MS. ROSENTHAL: Okay. That's not worth a

lawsuit, okay?

MR. FITZPATRICK: Well, maybe it's a problem. I

don't know the details of that case but maybe --

MS. ROSENTHAL: Maybe you could just ask him

but he prefer to send his team --

MR. FITZPATRICK: -- it might be a chronic,

persistent problem.

MS. ROSENTHAL: -- to send his team --

MR. FITZPATRICK: -- for which a lawsuit might be

required.

MS. ROSENTHAL: -- was -- in this case it was not a

persistent problem.

MR. FITZPATRICK: Okay.

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MS. ROSENTHAL: It was another reason in the

landlord's mind to bring the tenant to court when the tenant could not

afford a lawyer and the landlord had a whole set of lawyers. So that's

just some examples of what harassment is.

MR. FITZPATRICK: Okay. So all right. Let's -- let

me move on to the succession issue. And, you know, the -- when you

say permanently vacated, all right, so we have this problem of, you

know, family members, people trying to save a unit, you know, for --

for a relative, and that unit should go back on the market for someone

else to rent that unit. And they are -- so you're redefining vacating the

apartment to physically leaving? How do you-- how are you

redefining this?

MS. ROSENTHAL: To physically leave it. And

there were two -- there were two different rulings on this matter.

MR. FITZPATRICK: Right.

MS. ROSENTHAL: One in the First Department and

one in the Second Department. And so HCR thought this isn't fair that

someone who lives in the Bronx has to follow a certain rule and

someone who lives on Staten Island has to follow a different rule. So

HCR wrote in regulations that this is how we should do it. When -- if

someone's living with their mother and their mother moves out but the

-- the son, let's say, has been living with her for 30 years. There's no

reason that he should be kicked out. And so this just simplifies and

fixes the two different opinions in the way that HCR recommends and

that's to state when the person leaves the apartment is when the

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succession can happen.

MR. FITZPATRICK: Look. Any son who lives with

his mother for 30 years deserves to be, you know, booted out quite

frankly. But in reality --

(Laughter)

MS. ROSENTHAL: Actually, if you've read so many

college-educated kids come back and live with their parents.

MR. FITZPATRICK: Yes, they do but they're not the

lease holder.

MS. ROSENTHAL: No, but they are entitled.

MR. FITZPATRICK: I think what you're -- what

you're --

MS. ROSENTHAL: They're entitled to be the lease

holder.

ACTING SPEAKER AUBRY: Hello, hello, hello.

You've been doing this a long time, the two of you. We ask a

question, we answer it. We don't talk over each other because we get

nowhere when we do that, right? So ask the question, answer the

question, you know, and you can go on the bill any time you want.

MR. FITZPATRICK: Sure, thank you, Mr. Speaker.

Ms. Rosenthal?

MS. ROSENTHAL: Yes.

MR. FITZPATRICK: I -- I think what -- what an

attempt here is being made to got -- play fast and loose here with some

of these regulations to allow the succession where succession should

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not be allowed to occur. That, you know, that mother who lives there,

her son may have lived there for 30 years. That's irrelevant.

MS. ROSENTHAL: Well, it's not.

MR. FITZPATRICK: No, it is irrelevant because the

mother is the leaseholder and if she decides to leave, you're playing a

game here, in my opinion, in trying to facilitate succession by

allowing this nexus -- you know, this nexus to continue when -- when

that -- when that lease expires, all right, that apartment should be

vacated. But well, yeah, yeah, my son lived here for 30 years. Well,

if he can afford the lease, so be it. But if he can't, the family is going

to move out and it opens that apartment for another family.

MS. ROSENTHAL: But we -- we are not changing

the law. We're just clarifying when the succession rights kick in, and

that is when the original leaseholder moves out. That's all.

MR. FITZPATRICK: Okay, okay, very good. All

right. So when we get -- get, you know, substantial rehabilitation,

again, the issue of denying due process to owners by, you know,

seeking documents from, you know, many, many years ago beyond

the, you know, the six years, we -- we went over that on a prior bill

but, you know, why using a -- why does this statute propose using a

different method, you know, to calculate rent when it was used

elsewhere -- than what was used elsewhere in the State, was that your

rent stabilization law? Why are we using this new methodology?

What -- what was -- what was wrong with the old set of regs?

(Inaudible) takes change here.

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MS. ROSENTHAL: It -- it doesn't really change

anything. Currently landlords can claim an exemption from rent

stabilization if they replace at least 75 percent of a building's systems

and can show the building was in substandard or deteriorated

conditions.

MR. FITZPATRICK: Okay.

MS. ROSENTHAL: Often certain landlords use that

as a way to get out of rent regulation, once again.

MR. FITZPATRICK: Okay.

MS. ROSENTHAL: HCR proposed these changes

and we are codifying it. We're codifying that they would have to seek

approval for HCR and they have one year after the substantial

rehabilitation has been accomplished --

MR. FITZPATRICK: Right.

MS. ROSENTHAL: -- to just notify HCR. Here's

what we did, we want to take these units out of rent regulation and

HCR, if -- if -- if they've done the 75 percent substantial rehab, HCR

will say okay. So it just clarifies.

MR. FITZPATRICK: Okay, okay, very good. I've

used up enough time. Ms. Rosenthal, thank you very much for your --

MS. ROSENTHAL: Thank you, Mr. Fitzpatrick.

MR. FITZPATRICK: You're welcome.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, Mr.

Fitzpatrick.

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MR. FITZPATRICK: I -- I have colleagues who

want to ask further questions but, you know, again, as you said before,

we've been doing this for many years now. And, you know, the goal

posts have moved so often and so rapidly, I'm dizzy after doing this

for, you know, 19 years. And it does get tiresome but, you know, the

bottom line is, you know, any opportunity -- you know, the -- the --

the landlord, the property owner, always the villain, always the villain,

never given a fair shake here. You're presumed guilty and they make

it very hard for the landlord to prove him or herself innocent in -- in

housing legislation in New York State. It's an unfair process. It's --

it's, you know, constant moving of the goal posts as I mentioned.

Housing, we need to increase the supply so that we can stop playing

these games and stop harassing landlords because they're the ones

getting harassed by this Legislature with this constant change of the

rules. What the Governor is proposing by bypassing local -- local

zoning and SEQRA requirements is not the best way to do this, but we

need to do a better job in this Legislature to create more carrots and

use fewer sticks to create more housing for the people of New York

State, and especially in New York City. This problem is only getting

worse. We are discouraging -- every time we do this we undertake,

you know, this moving of the goal post. We discourage the -- the

construction of new housing, we make it more difficult for people who

own property to provide the service of housing for their fellow

citizens, we make it much more difficult for them. We increase the

cost, but we don't let them recoup that cost because we keep the rent

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artificially low. And because of that, they will keep units off the

market because they can't recover their costs. That further

exacerbates the housing problem. And if we don't deal with this soon,

we are going to create a very real problem. We're going to have

landlords that are just going to walk away from their buildings and

we're going to go back to what things were like in the '70s. And I don't

think any of us want to go back to that -- to that era. But we better

start treating property owners more fairly and be more respectful of

the law of supply and demand. If we don't increase the supply, you

know, demand is -- is still growing but the supply is not. And scarcity

equals pricing power in economics. And you can only keep things

artificially low for so long before you create these very real distortions

in the marketplace, and we have that in abundance in the City of New

York.

So I would advocate a no vote on this bill and we

need to implement more market-oriented solutions to solve our

housing prices here in the State of New York, because this Legislature

is responsible for much of the problem in my humble opinion. Thank

you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, Mr.

Fitzpatrick.

Mr. Ra.

MR. RA: Thank you, Mr. Speaker. Would the

sponsor yield?

ACTING SPEAKER AUBRY: Ms. Rosenthal, will

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you yield?

MS. ROSENTHAL: Yes.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. RA: Thank you, Ms. Rosenthal. I -- I want to

concentrate on part B with regard to this bill and its attempt to define

the scope of the fraud exception to the pre-HSTPA four year rule.

Can you explain what the scope of the exemption that this bill is

attempting to put into statute is?

MS. ROSENTHAL: Well, this part of the bill is

really just clarifying the rule and the law that has been in place since

2005. Through the -- through the Thornton and Grimm. Grimm has

been in place since 2005. And so this part of the bill just clarifies that

that has been the law pre-HSTPA and now post-HSTPA.

MR. RA: Okay. Now this is being read to -- to

essentially, you know, create a per se fraud presumption that we're

going to presume that a landlord has -- is -- is guilty of fraud if they,

you know, really the burden, I guess, would be on them to show

reliance on some type of regulation; is that correct? Or some type of

ruling?

MS. ROSENTHAL: No, well, I -- I wouldn't agree.

MR. RA: Okay. How -- how would you characterize

it then? Who -- who is the burden on to show that there was some

level of fraud then?

MS. ROSENTHAL: If the landlord did perpetrate

fraud, then I guess they would have to show it, yes.

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MR. RA: Who -- well, who would be "they" there?

MS. ROSENTHAL: Okay. So conduct that's

presumed to be the product of fraud, would be unlawful deregulation

including deregulation from claiming an unlawful increase bringing

the rent above luxury deregged threshold unless the owner can prove a

good faith reliance on the directive from HCR is one example.

MR. RA: Correct. So doesn't that essentially mean

that the burden is on the landlord to show that reliance? So -- so they

-- really it's not on somebody else in proving that the landlord is guilty

of fraud, it's on the landlord to show that it was not fraud.

MS. ROSENTHAL: Well, it's on the -- the tenant has

to request the rent history and then DHCR, ask DHCR to -- to research

what the rent was set initially.

MR. RA: Okay. So let me give you a scenario. A

landlord --

MS. ROSENTHAL: I mean that -- sorry. The tenant

has to make a colorable claim that there is fraud going on.

MR. RA: Okay. So a landlord who deregulated

during the J51 tax abatement period, right? Meaning basically by

virtue of they -- having received the J51 tax abatement and

deregulating an apartment once the rent reached over the threshold

that was permitted for luxury high-rent deregulation. Would that

landlord be presumed guilty of fraud?

MS. ROSENTHAL: Well, that's the Roberts decision

and -- and if the landlord relied on an erroneous interpretation by

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DHCR, you know, that's not their fault; however, they do have to

MR. RA: Okay. I'm glad you got into that. So the

registration - and, you know, I see at the bottom of page 5, it talks

about, right, the following conduct shall presume to have been the

product of -- of such fraud; the unlawful deregulation including such

deregulation as results from claiming of an unlawful increase. And

then it goes on and says, or beginning October 1st, 2011 failing to

421A benefits.

Now the concern that has been brought to my

attention is that a landlord in that circumstance, as a result of how

some of this has changed over time, may not have registered or known

to register because they wouldn't know what to base the rent on.

MS. ROSENTHAL: They -- they have to register the

rent based on a directive or ruling from HCR. And there have been

numerous rulings that say that landlords have to register their rent

regulated apartments.

MR. RA: Correct. And under this, though, right,

there is -- I -- I don't know if we've had this previously, there is now a

fine for the failure to register each unit?

MS. ROSENTHAL: In this -- in this bill, yes.

MR. RA: And that's $500 per month?

MS. ROSENTHAL: That is $500. And the reason

for that is because at least since 1984, landlords have been required to

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cases that say you must register and some landlords have continued to

refuse to register. So in order to keep rent regulated apartments in the

system, they have to register them and this is often a way to charge

them -- charge them market rate by simply not registering. So, you

have to register by April 1st. You have until July actually to register.

Then DHCR has to notify you. This could take months and months,

so there's ample opportunity for a landlord to follow the law, which is

you must register your rent regulated apartments. I don't -- I don't

really see why repudiation and ignoring that -- that law should not

result in a fine.

MR. RA: Well, I -- I'm not advocating for ignoring --

ignoring the law, but -- but as I stead -- said, if you look at that

language that's at the end of -- of page 5 here, right, there's been a

number of cases over -- over the years, right? So there's Roberts from

2009, going forward at the time DHCR and the court permitted

deregulation during the J51 tax abatement period. There was no

guidance provided at the time as to calculate -- how to calculate the

legal regulated rents that had been deregulated under the law as it had

existed prior to that decision. And then the question on how to

calculate the legal regulated rents for those apartments. Over the

years there's been guidance, there's been other decisions like the

decision. That creates certainly uncertainty for the landlord as to what

the proper rent would be and I -- and I think that that has been an

impediment to landlords registering who did not know what the

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proper legal rent was because of this mish mosh of -- of different cases

and directives from DHCR that have come about over the years.

MS. ROSENTHAL: Well, that -- that may be your

assumption. I -- I ascribe different motives because they have been

told over and over and over again you must register. If there's a

problem with what the actual legal rent is, they can discuss it with

HCR, but they knew that they had to register.

MR. RA: Okay. So now, what -- what about a

landlord that after Roberts, right, registered their regulated apartments,

did their best under the information that was available to them to

figure out what the proper rent would be, but their calculations were

incorrect. And it seems under this bill now that incorrect calculation

now becomes an indicia of fraud.

MS. ROSENTHAL: It could be, yes.

MR. RA: So -- so again, that's why I believe that this

bill imposes a per se fraud presumption that if the landlord has failed

to register the legal regulated rent that was impermissibly deregulated

during J51 period, the failure is really automatically fraud regardless

of the prior elements that we would have looked at such as material,

factual misrepresentation, reliance injury, even without those being

met.

MS. ROSENTHAL: No, no. It -- it would have to be

a colorable claim. The tenant can't just assert that there's fraud. There

has to be a -- you know, a legit reason for suspecting fraud.

MR. RA: Okay. Well, my -- my -- my reading here

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is that this -- this does make things a -- to continue to be a bit unclear,

you know, for -- for the landlords.

Now as we look at some of the other issues in this,

right, I -- I wanted to get back to a issue that Mr. Fitzpatrick brought

up regarding the combination of apartments.

MS. ROSENTHAL: Right.

MR. RA: So the language looks very general here in

terms of how it's written. We talked about combining two rent

regulated apartments or a regulated apartment or a free market

apartment. Is there any intention that that would apply if it was two

free market apartments that were combined?

MS. ROSENTHAL: No. If it's two free market then

the combined one is free market.

MR. RA: Okay, great. Thank you. Thank you, Ms.

Rosenthal.

Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. RA: Thank you. So, again, my concern here is

that, you know, a landlord trying to really, you know, do the right

thing complying with the law still has the potential of being essentially

accused of and really being under the standard here, you know, guilty

of fraud. There are clear, you know, instances of common law fraud

that we're familiar with in the past that would meet this exception

under this four year lookback, but it essentially under this is on the

landlord to prove that there is no fraud. If they have, you know,

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violated some provisions because they believed or even understood

under law at that time that a unit could get -- could be deregulated and

then it turns out later that changed, they're guilty of fraud. If they

failed to register because they didn't know how to calculate the rent,

which as I said, there's several court decisions and other regulatory

determinations that have made that difficult to determine, they're

guilty of fraud. If they went ahead and registered because we want

them to register and they did their best under the information that was

available to them to come up with what the number was but made a

mistake because they incorrectly understood the standard which as I

said is not all that clear, they're guilty of fraud. So, once again, I think

we're putting more and more obstacles in the way for landlords to try

to invest in and keep up good housing stock in cities and -- and

counties where rent control applies, and it's not going to help increase

housing stock, it's going to continue to decrease it. So I'm going to be

casting my vote in the negative. Thank you.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Slater.

MR. SLATER: Thank you, Mr. Speaker. Will the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Ms. --

MS. ROSENTHAL: Yes, I will.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. SLATER: Thank you, Assemblymember

Rosenthal. So I'm going to do my best not to ask what's already been

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asked before me by my colleagues, but I'm curious if you can explain

to me the current methodology when it comes to setting rent levels on

rents when units are combined. I know that's something we keep

talking about when you're combining units. So can you explain the

methodology that's currently in place to do that?

MS. ROSENTHAL: Currently -- currently the

landlord combines units and decides what they want to charge.

MR. SLATER: Even for rent regulated units?

MS. ROSENTHAL: Yes.

MR. SLATER: Okay. And approximately can you

tell me how long that methodology has been in place?

MS. ROSENTHAL: You know, because the -- the

HSTPA was a little unclear, at least -- at least since then.

MR. SLATER: At least I'm sorry?

MS. ROSENTHAL: At least since then. It's

probably been going on for years but I don't have an exact number.

MR. SLATER: Okay, no problem. Can you tell me

if there are other programs in place that would incentivize our

property owners in New York City to make the necessary investments

in their properties? What other options do they have if they're looking

to invest?

MS. ROSENTHAL: There are MCIs, there are IAIs,

those are just some of the...

MR. SLATER: Okay. And I'm just curious because

we keep hearing about a housing crisis across the State, and I also

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hear that there's approximately 45,000 vacant units in New York City.

Have -- have you heard the same?

MS. ROSENTHAL: I've heard a varying number.

Forty-five, 60, 5,000, it's -- it's hard to determine.

MR. SLATER: Well, I keep hearing 45,000 but

hopefully we can get a clearer picture on that. And I've heard from

property owners who say that the rent regs that are in place make it

cost-prohibitive for them to reinvest in their units to bring those

vacancies up to code so that they can be used. So I'm curious if your

proposed legislation will solve that problem.

MS. ROSENTHAL: This legislation was not

intended to solve an issue that some people doubt is a serious issue as

some would say.

MR. SLATER: Okay, all right. Well, again, if --

respectfully I might disagree with that but --

MS. ROSENTHAL: You can.

MR. SLATER: Other questions that I'm thinking of

here. As it relates to the owners who have made substantial

rehabilitations --

MS. ROSENTHAL: Yep.

MR. SLATER: -- and who've qualified for their rehab

exemption, will now be required to apply to DHCR for the very

exemption that they already obtained; is that correct?

MS. ROSENTHAL: Well, if they obtained it already

then there's no need to reapply.

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MR. SLATER: So they don't have to reapply?

MS. ROSENTHAL: Not if they've already obtained

it.

MR. SLATER: And for those who didn't apply and

they have to submit that application, what -- what's the time frame for

them --

MS. ROSENTHAL: They have one year.

MR. SLATER: One year, not six months?

MS. ROSENTHAL: No, one year.

MR. SLATER: Okay. Very good, I appreciate that.

If we can pivot, I know Mr. Ra just asked several questions regarding

fraud, but I just want to dive into that a little deeper if we can. I'm just

curious if property owners are entitled to due process, because it

sounded to me like it's a bit backwards in the sense that they've

already -- under the legislation, they have to disprove the fact that

they've committed fraud rather than the other way around. So I'm just

curious if property owners have that right to due process.

MS. ROSENTHAL: They do, but they don't have a

right to not be truthful when they charge a certain rent.

MR. SLATER: And I agree with you on that a

hundred percent. And I'm just curious if the bill -- so the bill

establishes a per se fraud presumption when an owner has received a

J51 tax abatement and deregulated an apartment once the rent reached

over the threshold at that time that was permitted for high rent

regulations, is that accurate?

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MS. ROSENTHAL: I mean this is old -- od cases

under Roberts, yeah.

MR. SLATER: Right, but that's -- but that's correct,

right, as I -- as I just explained? I'm just making sure I understand

what -- what you're trying to accomplish.

MS. ROSENTHAL: Yeah, but I mean but it's old,

yeah.

MR. SLATER: Okay. So forcing landlords to

defend themselves when they do not have access to evidence -- to the

evidence to defend themselves. So I guess I'm curious, though,

because if you purchase a piece of property and it says that you need

four years worth of files.

MS. ROSENTHAL: Right.

MR. SLATER: So what happens if I purchase a

piece of property but I don't receive the four years worth of files or the

four years worth of records on that piece of property?

MS. ROSENTHAL: Well, I've -- I've had cases -- I

had a case where a new landlord said he didn't have the files. In fact,

the tenant knew where the files were because they were in a storage

unit.

MR. SLATER: Mm-hmm.

MS. ROSENTHAL: So in general, a landlord -

unless they've destroyed the files for some reason - would convey

those to the new owner.

MR. SLATER: But you've seen examples where that

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didn't happen.

MS. ROSENTHAL: No. He said he didn't know

where they were but they were there. He just said he didn't know

where they were.

MR. SLATER: Understood. Understood. In your

opinion, does -- does this condition -- and I want to go back to that

number again, does it encourage the investment in those 45,000

vacant units?

MS. ROSENTHAL: That's not the subject of this

bill.

MR. SLATER: The 45,000 vacant units. I'm just

trying to understand what we're trying to accomplish because, again,

we keep talking about housing. And so does your legislation help

encourage property owners to invest in their properties and reinvest in

their properties so that we can bring those vacant units up to code? Or

is it going to make it more -- are you putting more obstacles in their

way is my question.

MS. ROSENTHAL: No. Actually, a landlord is free

under IAI, MCI to make repairs and to apartments and to the building

as a whole. Nothing would stop them. And in fact, some would

prefer to take the tax write-off than actually repair some of the

apartments that they can.

MR. SLATER: And I've heard from property owners

who respectfully disagree with that. They'd like to reinvest in their

properties but the way the system's set up, it's cost-prohibitive.

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In 2016 DHCR issued guidelines directing landlords

on how to calculate legal regulated rent; is that correct, in 2016?

(Pause)

MS. ROSENTHAL: I believe so but I have to look

that up.

MR. SLATER: Okay. And then in -- in 2020 the

Regina case invalidated that guidance; is that also correct?

MS. ROSENTHAL: Well, you -- you heard the

whole debate about -- about Regina.

MR. SLATER: So that's a yes.

MS. ROSENTHAL: Mm-hmm.

MR. SLATER: Thank you. And would this bill

make an end-around establish a precedent from our State's highest

court if that's the case?

MS. ROSENTHAL: Can you clarify?

MR. SLATER: So would the bill make --

MS. ROSENTHAL: Wait, wait, one second.

MR. SLATER: -- establish a precedent from our

State's highest court?

MS. ROSENTHAL: I'm sorry. It's hard for me to

hear because people are talking. Thank you. I can't hear.

MR. SLATER: I'm sorry. Give me one second here

just to make sure we covered everything I wanted to ask. Well, I do

think that we've covered most of it and I appreciate your time. I know

it was noisy, but thank you,

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MS. ROSENTHAL: Okay, thank you.

MR. SLATER: Mr. Speaker, on the bill if I may.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. SLATER: Thank you. I just continue to have

reservations because as I stated, we keep hearing about a housing

crisis in the State and I'm not seeing us take any meaningful action

that's going to help our property owners, especially in New York City

reinvest in their properties to create more units or to renovate their

units to bring them up to code. I do think there are significant issues

that have been raised on this particular bill, specifically when it

regards to the fraud portion and it makes me wonder really what we're

trying to accomplish. Again, I completely agree that those landlords,

those bad actors do need to be held accountable, but I don't think we

should be painting with a broad brush in that respect, and I feel that

this piece of legislation is not going to be the answer to solving the

housing problems that we're facing here in New York State. And I

don't think it does -- I don't think it really provides the type of

incentive and confidence in our property owners in New York City to

encourage them to reinvest in the properties that they currently have.

So I'll be voting in the negative on this bill. I

appreciate the sponsor for her time. Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Blumencranz.

MR. BLUMENCRANZ: Thank you. Will the

sponsor yield?

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ACTING SPEAKER AUBRY: Ms. Rosenthal?

MS. ROSENTHAL: Yes.

ACTING SPEAKER AUBRY: Ms. Rosenthal yields,

sir.

MR. BLUMENCRANZ: Thanks, Ms. Rosenthal. So

does -- in your opinion, do you believe that this bill comports with the

established judicial precedent in Regina? And before you answer, I

just want to read the precedent in the -- in the -- in the case on page

370. They state that, citing established precedent, it states retroactive

legislation is viewed with great suspicion and that this deeply rooted

presumption against retroactivity is based on the elementary

considerations of fairness that individuals should not have the

opportunity to know what the law is and conform to their conduct

accordingly.

MS. ROSENTHAL: I don't -- I don't have that

particular page in front of me.

MR. BLUMENCRANZ: So, just to sum it up, they

believe that this -- this -- these retroactive rulings, which is what they

found before, was not comported by the law. Do you believe that that

-- these retroactive regulations that you --

MS. ROSENTHAL: The rules -- the rules -- the rules

create STPA were discussed in the post-HTPA are discussed, so I

think it's fine.

MR. BLUMENCRANZ: All right. And just to

clarify again, the -- the way this is going to be deliberated will be in --

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I'm presuming in our -- our court system in the City, correct?

MS. ROSENTHAL: In the State it could be.

MR. BLUMENCRANZ: All right. And then just to

ask one more. So the Supreme Court has cautioned the careful

consideration of retroactive statutes is warranted because the

Legislature's unmatched powers allow for it to sweep away the settled

expectations suddenly and without individual consideration and that

its responsivity to political pressures posed a risk that may be tempted

to use retroactive legislation as a means of retribution against

unpopular or unpopular groups or individuals. Is that not exactly

what this bill seeks to do?

MS. ROSENTHAL: No. It actually is not, and this

bill is merely stating what the law has been since 2005. It's almost 20

years that the law has been established, and this just clarifies it. It

doesn't -- it doesn't go retroactively. It just states what the law is. It

makes it more understandable for those who might misinterpret it.

MR. BLUMENCRANZ: So this bill in no way will

function retroactively.

MS. ROSENTHAL: This bill doesn't deal with

retroactivity.

MR. BLUMENCRANZ: Not at all?

MS. ROSENTHAL: I said what the bill does. It -- it

clarifies what law has been, what the law is.

MR. BLUMENCRANZ: So it doesn't -- so it clarifies

without changing what --

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MS. ROSENTHAL: It doesn't change the law

because the law has remained the same since 2005.

MR. BLUMENCRANZ: Okay. All right. Thank

you so much.

MS. ROSENTHAL: Thank you.

MR. BLUMENCRANZ: On the bill, please.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. BLUMENCRANZ: So I think my colleague

made a very valid point and so did the sponsor when they said there

are many vacant units and there are many landlords that see the

burdens in place in New York City, provide a situation where it is

more cost-effective and more efficient to take a tax deduction than to

reinvest into our housing stock. We are now faced with a situation

where we're going to make that process even worse. Part of this bill

will allow for the continuum of family members to have greater clarity

that they can stay in units and that expand the definition of family

continues to -- continues to get seemingly bigger and bigger. So not

only will fixing a unit potentially create a four or five generation

tenant that is virtually impossible to remove, but it incentivizes again,

to leave the units vacant until you can do away with the apartment as

it exists as a rent regulated unit, because it's much easier and much

more cost-effective than actually providing new housing stock. Once

again, I know the sponsor doesn't believe that there is that much

available housing stock, but I think if you talk to anyone in the

industry they'll tell you that there is plenty of empty apartments and

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under no circumstances under the legislative environment we've

created would they consider creating new housing stock, especially

affordable housing stock considering the way that we treat our

small-time housing providers, our new New Yorkers who hope to one

day be housing providers. It really -- it's -- it's another sad day but we

continue to dismantle the housing environment in the City of New

York and thus, we hurt the State and its economy.

So I simply cannot support a bill that furthers a

downward spiral and affordability in our cities in New York and I

hope that my colleagues will do the same. Thank you.

ACTING SPEAKER AUBRY: Thank you, sir.

Mr. Goodell.

MR. GOODELL: Thank you, sir. Would the sponsor

yield?

ACTING SPEAKER AUBRY: Ms. Rosenthal, will

you yield?

MS. ROSENTHAL: Yes.

ACTING SPEAKER AUBRY: Ms. Rosenthal yields.

MR. GOODELL: Thank you, Ms. Rosenthal.

Looking at page 4 of the -- of the bill, I see there's new language

added starting on line 32 through 36. What's the purpose of that new

language?

MS. ROSENTHAL: Let me first get there.

(Pause)

Okay. Got it.

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MR. GOODELL: What's the purpose of that new

language?

MS. ROSENTHAL: It -- it clarifies when the -- the

tenant of record has vacated the apartment.

MR. GOODELL: And that vacating the apartment by

the tenant then triggers the family succession provisions; is that

correct?

MS. ROSENTHAL: Yes.

MR. GOODELL: And then family members defined

as anyone that is related to mother, father, aunt, uncle, cousin, son,

daughter, daughter-in-law, son-in-law --

MS. ROSENTHAL: Various other categories, yeah.

MR. GOODELL: Yeah. And it also includes people

that aren't related to you at all, correct?

MS. ROSENTHAL: Yes, if they are -- well, a spouse

is not related to their spouse, that's by marriage. So it could be a

domestic partner, um... um, yeah. One of the -- one of the conditions

is that there is an emotional and financial commitment and

interdependence between the two.

MR. GOODELL: So just going back to this

language. So you have a tenant that has a rent stabilized apartment,

right, that's what we're talking about, and that tenant say retires to

Florida and stops visiting.

MS. ROSENTHAL: Stops what?

MR. GOODELL: Stops visiting. No longer comes to

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New York State at all, lives in Florida.

MS. ROSENTHAL: They can -- they can visit.

MR. GOODELL: And this provision says that for the

purposes of their kids or relatives, when they move to Florida that's

when the kids or relatives became entitled to, if you will, inherit the

lease, is that correct?

MS. ROSENTHAL: Well, I wouldn't say inherit, but

they would be eligible to succeed.

MR. GOODELL: Eligible to succeed. And then is it

the intent that these rent regulated apartments would be almost like an

inheritance, that once you got one, your extended relatives into

perpetuity would have the opportunity to succeed to you?

MS. ROSENTHAL: Well, you know, it's not

inheritance because you don't own the apartment, but if you meet the

-- the legal conditions, then you are eligible to succeed.

MR. GOODELL: Now, under the original law when

the apartment was vacant, the landlord had an opportunity to raise the

rent, correct?

MS. ROSENTHAL: Well, that -- that's not relevant.

We're talking about when someone lives there with someone else.

MR. GOODELL: Right, I understand, but we're

talking about vacancy. So when the apartment --

MS. ROSENTHAL: No, we're -- we're not talking

about vacancies. This is talking about when someone leaves an

apartment if they lived with someone else for two years.

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MR. GOODELL: I understand that. So I want to try

to get clarity on what impact this has on the rent. So if an apartment is

vacated and nobody wants to succeed to that apartment, no relative,

then the landlord can raise the rent, correct? I mean there's

restrictions but they can raise the rent.

MS. ROSENTHAL: Well, when a new tenant moves

in they can apply the -- the rent guideline's board numbers, yeah.

MR. GOODELL: But if one of your relatives, say a

grandchild or maybe a grandchild of an in-law or whatever or maybe

not even somebody who's related that might have an emotional or

financial connection to the apartment, they then succeed to the same

rent that the prior owner had, correct?

MS. ROSENTHAL: Yes.

MR. GOODELL: So this expansion that you have on

terms of when that --

MS. ROSENTHAL: I mean, you know, when the --

when the lease is then put in the successor's name, they can have the

usual one year or two year increase.

MR. GOODELL: I see, thank you for that. When an

owner combines two apartments, obviously that can entail a

substantial expense. I mean you're opening holes in the wall, you

want to finish it, refinish it, you're going to change it out, you don't

need two kitchens --

MS. ROSENTHAL: Right.

MR. GOODELL: -- all that. Does this allow for the

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owner to recover those costs by increasing the rent?

MS. ROSENTHAL: No. They can apply the IAI and

any IAI that's left over from either apartment, and they can use that

money, but that's how they can increase the rent.

MR. GOODELL: But it doesn't -- it doesn't translate

it --

MS. ROSENTHAL: When a -- when a new lease is

offered, it has to be rent stabilized lease. And, um... and there's a --

there's a new rent set when you combine a rent regulated with a

non-regulated.

MR. GOODELL: I understand, but that new rent,

under this law, does not take into account the cost of those changes,

correct?

MS. ROSENTHAL: The what?

MR. GOODELL: The new rent on a combined unit

MS. ROSENTHAL: Yeah.

MR. GOODELL: -- does not take into account the

cost of combining them under this statute, right?

MS. ROSENTHAL: As I said, you get the individual

apartment improvement increase from both apartments from what's

left. If they haven't used it, you would get all of it. If they've used

some of it, you get what's left.

MR. GOODELL: And one last question, I think, I

hope. When an owner does a substantial rehabilitation --

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MS. ROSENTHAL: Right.

MR. GOODELL: -- and presumably we want to

encourage that, right?

MS. ROSENTHAL: Wanted to what?

MR. GOODELL: Presumably we want to encourage

owners to make substantial rehabilitations, correct?

MS. ROSENTHAL: If -- if -- if their -- if their

building is in bad shape then yes, they can do that.

MR. GOODELL: Now this imposes a new

requirement that after they've made the investment --

MS. ROSENTHAL: Right.

MR. GOODELL: -- after they've spent the money --

MS. ROSENTHAL: Yes.

MR. GOODELL: -- they have to then seek approval?

MS. ROSENTHAL: They have to seek approval to

take the units out of rent regulation.

MR. GOODELL: I see. And if DHCR disagrees,

then even though the landlord made that investment, can the landlord

increase the rent to cover the amortization of those expenses?

MS. ROSENTHAL: But A, you're supposing that

DHCR will say no, and I don't know what that's based on. But they

can use -- they have MCIs, they could -- they could use -- MCIs.

MR. GOODELL: I see. Thank you very much.

MS. ROSENTHAL: Thank you.

MR. GOODELL: Mr. Speaker, on the bill.

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ACTING SPEAKER AUBRY: On the bill, Mr.

Goodell.

MR. GOODELL: I -- I must confess, I'm

continuously confused over what New York City is trying to do to

address its housing crisis. And maybe it's just because I'm from

Upstate and -- and we do it -- do things differently. Upstate, you

know we have a tenant comes in and they sign a lease. It's great. You

know, they agree to the rent, landlord agrees to the rent, tenant moves

in, life is good. At the end of the lease, if the tenant wants to stay

longer the tenant signs a new lease, maybe a new rent, maybe not,

tenant signs a new lease, landlord signs a new lease, life is good.

Apparently in New York City, you can sign a written lease and you

and your kids and your grandkids and your relatives into perpetuity

have the right to a rent stabilized apartment. That's astounding to me.

It's like signing a permanent lease with kids that aren't even born yet

having a right to succession. But then this bill takes it one step

further. I didn't think that was possible until I read the bill. It takes it

one step further. It says if a landlord takes two units, spends money,

combines them, makes them into a new unit, looking for a new

opportunity for a larger family to rent it. This one says you can't

recover the money that you spent to bring it together. The rent is the

same rent as the two separate. Why would any landlord ever do that?

Now if our objective is to make sure we don't have

larger units and that we don't have major renovations, then I

understand this, because that's what this does. But it takes it one step

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further and says, we all hate these -- these run-down apartments but if

the landlord makes substantial renovations, this bill says he might not

even be able to recover it, because after he's made the renovation he

has to go to DHCR and convince them that the renovations were

needed. Now just imagine for a moment that you are a landlord. And

I come to you and say hey, wouldn't it be great if you renovated these

apartments. And you're going to say, let's just get this straight. You

want me to make the investment, you want me to borrow the money,

you want me to spend all the money that needs to be -- you want me to

renovate this apartment so it meets the current modern standards and

it's a beautiful apartment. But you're telling me I might not be able to

raise the rent? And I might not even be able to recover my

investment? That I have to go in front of DHCR and convince them

that the substantial renovations were needed.

My friends, this is a great bill if we want to make sure

we don't do substantial renovations. It's a great bill if we want to

make sure we don't combine units and make them available for larger

families. It's a great unit if we want to make sure that you can have a

rent controlled apartment available to your unborn relatives because

they might be grandkids of grandkids because that's how long this

perpetuity goes. But if you want to address the housing crisis, this is

the wrong approach. And for that reason I won't be able to support it.

Thank you.

ACTING SPEAKER AUBRY: Thank you.

Read the last section.

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THE CLERK: This act shall take effect immediately.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Party is generally opposed to this legislation, but those who support it

can certainly vote yes, or their grandkids could vote yes as the case

might be. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. I think the grandkids would have to get elected first to vote

here. But the Democratic Conference is going to be in favor of this

piece of legislation; however, there may be some exceptions, folks

should feel free to vote at their seat. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Mrs. Peoples-Stokes

MRS. PEOPLES-STOKES: Mr. Speaker, if we could

continue our progress we're making on this debate list, we are now

going to turn our attention to Rules Report No. 387 by Ms. Weinstein;

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followed by Rules Report No. 689 by Mr. Jacobson; and then Rules

Report No. 772 by Ms. Clark; followed by 753 by Ms. Gallagher. In

that order, Mr. Speaker. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

Page 8, Rules Report No. 387, the Clerk will read.

THE CLERK: Assembly No. A06656, Rules Report

No. 387, Weinstein, Hyndman, Epstein, Wallace, Tapia, L. Rosenthal,

Thiele, McDonald, Gunther, Otis, Dinowitz, Cruz, Hunter, Kelles,

Sayegh, Colton, Glick, Zebrowski, Reyes, Lee, Gibbs, Cunningham,

Raga, Anderson. An act to amend the Real Property Actions and

Proceedings Law, the Real Property Law, the Criminal Procedure Law

and the civil Practice Law and Rules, in relation to the theft of real

property and protections for victims of real property theft.

ACTING SPEAKER AUBRY: On a motion by Ms.

Weinstein, the Senate bill is before the House. The Senate bill is

advanced.

Mr. Goodell.

MR. GOODELL: Thank you, sir.

On the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. GOODELL: This is an interesting bill because

it states that a governmental entity, Federal, State or local government,

that's conducting an investigation over whether or not there might be a

theft or fraud in a real estate transaction, including the financing of it,

can, just by showing that they're doing an investigation, obtain a stay

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of a court-issued warrant of eviction or a court-issued judgment.

Now, think about that. They can -- they can stop a court-ordered

eviction and they can stop -- or they can stop the enforcement of a

judgment as long as the investigation continues. So it's an indefinite

stop, even though the court has already examined the issue and issued

a court order.

Now, normally in a civil proceeding, if you get -- if

you're applying for a stay, a TRO, a temporary restraining order or a

permanent injunction, you have to show several things. You first have

to show likelihood of success on the merits. This bill doesn't require

any showing of success on the merits. Second, in order to get a stay,

you have to show to the satisfaction of the court that you are likely to

win, and you'll have irreparable harm if you don't, if there's not an

injunction. This doesn't require any showing of irreparable harm.

Third, normally in order to show up in a court and seek an injunction,

you have to establish that you yourself have standing, that you have a

stake in this issue. Not in this case. This can be brought by a

government agency that has no stake in the proceeding at all.

Now, typically if a court issues an injunction, because

it's a preliminary remedy, they typically -- in fact, they're required by

law to require a bond so that if they were wrong, the party whose

transaction was stopped can get reimbursed for the damages. No bond

here. No bond requirement at all. And then last, normally if you seek

an injunction and you're wrong, you pay damages. But not here. So

think about the due process issues that are involved with this

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legislation. You have the ability of a government agency to stop the

enforcement of a court-issued eviction, to stop the enforcement of a

court-issued judgment without establishing a likelihood of success on

the merits, without showing irreparable harm if the injunction is not

granted, without having any standing, without having any stake in it,

without being liable for any damages. And you can get the injunction

forever as long as you claim without judicial review that you have

good faith belief that there might be a problem with the financing or

some other aspect.

This bill, I think, is misnamed. It should be named

"The Destruction of All Due Process Rights to Private Property

Without Any Judicial Review." I think that's a catchier title. But

that's what this bill does and I cannot support it. And anyone who's

got any ounce of civil libertarianism in them should be outraged, as I

am. Thank you, sir.

ACTING SPEAKER AUBRY: Read the last section.

THE CLERK: This act shall take effect on the 30th

day.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you. The Republican

Conference is generally opposed to this, but those who support it can

certainly vote yes here on the floor. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

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Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. The Democratic Conference is generally in support of this

piece of legislation; however, there may be some folks that would

desire to be an exception, they should feel free to do so at their seats.

Perhaps when we hear from the lead sponsor, we'll know what the real

name of the bill is. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Ms. Weinstein to explain her vote.

MS. WEINSTEIN: Despite Mr. Goodell's kind offer,

I think I'll reject his -- the name that he would like to -- the renaming

of this bill. And let me just clearly state that the purpose of this bill is

to increase protections against deed theft by providing homeowners

and prosecutors tools to assist in restoring title to the rightful

homeowners, extending certain consumer protections to homeowners

in distress and preventing deed theft scammers from utilizing the

courts and the law to their advantage in carrying out the fraud.

In New York City from June 2014 to April 2021,

there were over 3,400 complaints of homeowners, most often elderly,

often Black or Brown, often in gentrifying neighborhoods being --

having their homes stolen out from under them by unscrupulous real

estate brokers, unscrupulous individuals claiming, claiming to be able

to help them satisfy their debts. These are people who -- homeowners

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who are what we like to say are house rich and cash poor, and they're

taking -- been taken advantage of over the years. The Attorney

General has had over 291 complaints sent to her. There are DAs, it is

not -- that have had complaints. It is not only a New York City issue.

And this is -- we -- we've had some -- two debates earlier about

keeping people in their homes, this is a critical measure to give tools

to both homeowners so they can stay in their home, and to prevent

them from having the courts evict them.

And with that, I would urge my colleagues to vote in

the affirmative.

ACTING SPEAKER AUBRY: Ms. Weinstein in the

affirmative.

Ms. Walker to explain her vote.

MS. WALKER: Thank you, Mr. Speaker. I request

the opportunity to abstain in order to explain my vote. There are a

few glaring problems with this bill. First, the language in the bill adds

additional provisions to RPL 266 which (inaudible) protection for

people who commit fraud against homeowners, couched as

expectations to a rebuttable presumption of notice of fraud in Section

5 of the bill. This would effectively absolve fraudsters and every

person or entity participating in the deed fraud or facilitating the deed

fraud with them from culpability and liability once the fraudster

simply gets his or her coconspirator in the deed theft ring to record a

statement that the fraudster simply paid off or assumed the victim's

mortgage. Then after the stay is granted and a criminal proceeding is

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taking place, there is now another case where the civil case can

continue, and the -- the burden of proof there is not beyond a

reasonable doubt as in a criminal case, but it is a much lower

presumption that the litigant would have to overcome. And once this

fraudulent by preponderance of the evidence is found, which is, of

course, a much lower -- a much lower standard of proof, a person,

once they've been convicted in the criminal offense has this lower

standard and if they are convicted or they're found guilty in the civil

defense -- in the civil case, one of the defenses that they have for that

is to file a assumption of the mortgage, in -- in -- in essence, absolving

that person or the original owner of any title to the property. And

we're watching in a number of cases in Brooklyn where there are a

number of people who are coming to folk and then helping them come

-- come out of their mortgage by saying, Let me assume your

mortgage, I'll give you this money, pay off the underlying mortgage.

They don't have to go through any in rem proceedings or foreclosure

proceedings, the property just passes by operation of law.

And so we want to ensure that people are not being

defrauded of their property based on this bill, so we hope that maybe

there could be some changes that can be considered because we don't

want people who are fraudsters to become bona fide purchasers for

value.

Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: And how do you

vote?

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MS. WALKER: I vote in the negative.

ACTING SPEAKER AUBRY: Thank you. Ms.

Walker in the negative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 15, Rules Report No. 689, the Clerk will read.

THE CLERK: Senate No. S04234-A, Rules Report

No. 689, Senator Hinchey (A04055-A, Jacobson, Eachus, Gunther,

Shrestha, Gallagher, Ardila, Buttenschon, Colton, Shimsky, Thiele,

Seawright, Clark, Dickens, Miller, Brabenec, K. Brown, Simon, Raga,

Santabarbara, Otis). An act to amend the Public Service Law, in

relation to the finality of certain utility charges and the contents of

utility bills.

ACTING SPEAKER AUBRY: An explanation is

requested, Mr. Jacobson.

MR. JACOBSON: Thank you, Mr. Speaker. This

bill will address the issue of late billing by utilities by requiring the

utility to bill within two months of the date that the bill was originally

due. If they do not bill within the two-month period, they cannot

back-bill. Currently, the state of the law is that for residential

customers, the utility has four months, and for non-residential, they

have six months. Unfortunately, some utilities, notably Central

Hudson, has -- have ignored the rules and they've billed six, eight, 12

months or more for residential, and also later -- late for nonresidential.

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Also, this bill requires that with each billing sent to the customer,

there are records of the utility billing at that address for the past two

years. That is so that the consumer will be able to have something to

compare their bill with, so this way they will have some concept

whether the bill is correct or not and whether they have to try to

contest the bill or get an explanation from the utility.

ACTING SPEAKER AUBRY: Mr. Palmesano.

MR. PALMESANO: Yes, Mr. Speaker. Will the

sponsor yield for some questions?

ACTING SPEAKER AUBRY: Mr. Jacobson, will

you yield?

MR. JACOBSON: Yes.

ACTING SPEAKER AUBRY: The sponsor yields.

MR. PALMESANO: Thank you, Mr. Jacobson, and I

know we talked a little bit about this in the past. The first question I

want to ask you, so now you're saying if there's not a bill that's not

received within two months, there could be no back billing, so that --

there would be no obligation for the -- the customer to pay back that

obligation that they used, energy, electric, gas. Now they would not

have to pay that, so the debt would be wiped away, correct?

MR. JACOBSON: That's right. Right now, it's four

months and if they do later than four months then they wouldn't have

pay either. So what we're doing is we're changing it from four to two

for residential and from six to two for nonresidential.

MR. PALMESANO: And -- and you would

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recognize the fact that there's a lot that goes into billing, we have a lot

of -- you know, energy bills have changed with net metering, you

know, other types of things out there on the bills that are changing

things. That has a factor in that. Also, you know, one of the issues

during COVID is being able to get into -- to the -- into the property to

read the meters if they're inside. That could be a problem because I

know talked about smart meters, which would be an ideal thing to

have. But not all have smart meters, not all the times the customers

can get in there, the -- the service can't get into those places to check

those meters, so that can have an impact on that as well, correct? If

they don't -- if the -- if the person reading the meter can't get into the

house, which does happen, it happened a lot during COVID, they have

to be able to get in. And there's been times, I have people come to my

house to read and I'm not there and they don't read it for several

months unless you call it in. So that has -- that has an effect on the

meter. And I think what I'm getting at is how do you get to the point

where you tell someone they're not going to be able to bill for charges

that they've accrued?

MR. JACOBSON: Well, if the problem of the delay

in billing is due to the culpability of the customer or it's due to the

non-neglect of the utility, then it wouldn't apply. That's what the law

says now.

MR. PALMESANO: All right. But like in your bill

on page 2 you said, well, I guess it goes over to page 2, it said unless

the failure of the corporation or municipality to bill sooner was not

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due to the neglecage [sic] or the neglect of the corporation or

municipality. What about if -- some -- some companies, they have

third-party resources that bill, how does that work? Or some go

through the post office. In that case, does that mean that the utility or

the --

MR. JACOBSON: If someone what? I -- it's a little

-- Mr. Speaker, it's a little noisy in here.

ACTING SPEAKER AUBRY: Certainly.

One minute.

Shh. Members.

MR. JACOBSON: Thank you. Would you ask the

question again?

MR. PALMESANO: Yes, sure. In some instances,

like these utilities might use a third party consultant to do the billing.

What if there's problems there? What if there's problems with the

mail? In that case, does that mean the utility or whoever may be

absolved from the -- from this issue, or no?

MR. JACOBSON: I think two months is plenty of

time. If -- if the bill is due June 1st, I think somehow the utility can

get the bill there by August 1st. I -- I don't think that if they -- that the

mail will delay it for a two-month period.

MR. PALMESANO: How would it relate to an

e-mail? I mean, because sometimes in the bill says mail. Is e-mail

acceptable? Would that two-month period start when the e-mail hits,

or does it got to be a paper copy or what, as far as definition?

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MR. JACOBSON: Well, the consumer would have a

copy of the bill and they would -- they would know when they got it

and go from there.

MR. PALMESANO: Okay. How about with

ESCOs? We know well -- very well, ESCOs, most ESCOs are billed

by the utility, because ESCOs don't do their own billing, they're on the

utility bill. Now, say there's a delay. Does that mean the ESCO

doesn't get paid, or who would -- if the utility doesn't bill it out, how

would that work and how -- how would that work for that process?

Does that mean that the ESCO would not be entitled to payment, or

the utility would get paid, or how would that work?

MR. JACOBSON: They're under the same rules, and

I don't see the problem. For example, most of the water companies

use smart meters. That would be very easy. And when I spoke to the

CEO of Central Hudson, the one that was fired, or quit, I should say,

and the -- and the new one, it would come out to $2.50 a month per

customer. So I -- the utilities can find a way. I think two months is a

tremendous time, and they need an incentive. They need an incentive

because obviously four months wasn't enough.

MR. PALMESANO: And are you aware of any other

situation where a bill is late and the customer does receive the

commodity, the services, and the payment is waived? Or is it just in

this situation?

MR. JACOBSON: I think by having this penalty on

the utility, it'll give them an incentive to get their act together. And I

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think that also that a customer should have the right to have a bill on a

timely basis that is transparent.

MR. PALMESANO: I'm not disputing that, but isn't

there other alternatives to re -- remediate that problem rather than

saying, Okay, you don't have to pay your bill all of a sudden. I mean,

isn't there a better way to do that? We can -- you could look at -- give

them more time to pay the bill, making sure it's accurate, making sure

there's no penalties or late fees. But just to say now you don't have to

pay your -- the power that you're using in your household just because

the bill came after two months now instead of four months or six

months, that's very problematic and you're basically -- it's a statutory,

regulatory process for reimbursement.

MR. JACOBSON: This bill doesn't prohibit an

estimated bill if the circumstances arise that they can use an estimated

bill. This is to get the bill out the door, and then obviously, the

consumer can deal with it then. I don't think it's too hard to ask that

60 days to get a bill out the door.

MR. PALMESANO: And the other part of this bill,

as you said, now a lot of energy bills, utility bills, they have one year's

worth of data, they might have a graph. Like, I have NYSEG, I've got

a graph, I'll see the uses. Why now to double that and say you need

two years worth of data, two years worth of information. Wasn't one

year enough to get an accurate read when you're comparing your

usage from July of 2023 to July of 2022?

MR. JACOBSON: No, I don't think so because if

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you have just recently purchased a house, I think you -- or an

apartment, a condo, you would then want to have -- go back more than

a year so you know -- you have something to compare it to. And --

and the bill provides that you do it in graphic and in written form so

that people can compare, it'll have amount that's done, that's being

used and what the rate was then.

MR. PALMESANO: What -- why are the

commercial customers, including large businesses included in this?

Because with commercial customers when you're talking about rates, I

mean, you've got off peak, peak, peak demand. I mean, that makes it

more -- much more complicated in putting that together, as well,

doesn't it, and how would that --

MR. JACOBSON: Well, I think that commercial

customers -- and we all in this room talk about how we like to

promote business -- should also be entitle -- entitled to a timely and

transparent bill, and there's no reason they should be six months. A

meter is a meter, it's on a street. They can get it, I guarantee you. If

the utility wants to get the bill out the door, they can do it. I have

complete confidence; in fact, I would say that most of the time, this

bill would not apply because the utility will get their act together.

MR. PALMESANO: So, now, a utility can't bill and

can't collect. So who picks up -- isn't that cost absorbed that's gonna

have to be spread out over rate -- there's gonna be cost recovery on

this that ratepayer -- the utility is gonna have to come back and go

before the PSC to recover cost for losses, I mean, or do you just

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expect -- is that just expected that the utility has to eat that? I mean,

because there is a cost recovery mechanism in this, and if you're not --

even if you're telling customers they don't have to pay for their bill

because it -- the bill came two or three months or four months later,

and I understand what you're trying to do with this, but the end of the

day, that customer used that energy. They used that commodity, they

should be paying for it. And we -- if there's problems, they can look

at ways to ameliorate it versus saying now you don't have to pay your

bill.

MR. JACOBSON: Well, if the utility decides they --

or in the course of their neglect ends up ignoring the law, they should

pay a penalty. And this -- this would not be -- the cost of what they

lose would not be passed along to the consumer, it would go to their

profits. And I think that the utility, very simply, would -- would come

to the realization that they should send the bills out on a timely basis.

MR. PALMESANO: Also, I know there's been

concerns relative to sharing of data. I mean, is there -- does your

legislation do any -- have any specific measures that address privacy

concerns that could be due about -- about sharing data and

information that would be used in providing this information?

(Pause)

MR. JACOBSON: Yeah, well, like -- like they do

now in some places on a limited basis, there's -- there's no identity

revealed of the prior owner. It doesn't say in -- in the -- in the -- in the

bill that there's gonna be a -- you have to give the name -- name of the

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person, it just says the bills at that address.

MR. PALMESANO: Okay. Another question I

wanted to ask, when we talked about the two year -- going back to the

two year's worth of data, obviously that's gonna be more data, more

information, more paper, which is -- there's -- there's always costs

associated. I know every time we bring up bills like this you say,

Well, it's just a little bit here, a little bit here, and there's been a

number of utility bills that have come through this House and we say

it's a little bit here, a little bit here. But that all little bit always adds

up and it's ultimately borne by the ratepayer. This bill will be borne

by the ratepayer, too. How do you justify that and how do you justify

that to make sure, obviously, with the mandates that are coming in

place for the CLCPA on the utility as well on the cost side?

MR. JACOBSON: It's not gonna be borne by the

ratepayer.

MR. PALMESANO: How do you assure it's not

gonna be borne by the ratepayer when they're trying to operate in a

situation from that perspective, that they have to -- they have a

statutory authority to provide this service and to be paid for, but now

you're saying they're not gonna have to pay for it because the bill

might have been two months late versus four months or six months.

MR. JACOBSON: Well, you can justify it because

you -- because you want to have a timely bill. And if having a law

there without -- if four months isn't enough, maybe two months will

be. And that isn't that hard. That isn't that hard. It could even be an

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estimated bill under the circumstances under the statute now. So let's

just get the bill out the door, people can see what's there and it's

simple.

MR. PALMESANO: I understand. And I understand

that those changes Long Island has been problems. Is there any means

test to this? I mean, what about a, you know, anyone -- a -- a

multi-millionaire, if their bill comes three months late, now they don't

have to pay their bill? Is there any means test? And is -- is there

really harm to that customer, you know, if they're making a million

dollars that they're -- now they're getting a bill that's three months and

they're using a lot of energy because (inaudible) --

MR. JACOBSON: It -- it applies to all residential

and all nonresidential and it'll make it easy. That way everybody gets

their bill and they can get on with their lives.

MR. PALMESANO: I -- I appreciate how you

always say it will make it easy, but this is not an easy industry. This is

-- there's a lot of complexities to it that have to be addressed, and I

think I'm just concerned in the direction you're heading with this.

MR. JACOBSON: Most utilities give the bill on a

timely basis, all right?

MR. PALMESANO: Yes.

MR. JACOBSON: So they found a way. So those

that don't, maybe they can ask others and maybe they'll realize if they

-- if they have to (inaudible) penalty they'll get their act together.

MR. PALMESANO: So your problem is with one

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utility. That's what you're hearing from, that you talked about. You

talked about -- I mean, so if it's one utility, I mean, now you're

changing the rules for everybody instead of like when we say, why not

address issues with one -- one provider if that's what needs to be

addressed. But you're changing the game all across the board for

every utility now when it's, as you said, most do it -- do it the one way,

now you're saying you've gotta pay two years of data when one year of

data worked fine, now you're saying two years of data. But your --

your issues are with one utility versus all of them. That's -- that's a

concern, don't you think?

MR. JACOBSON: Well, we can't write laws just to

target an individual provider. And I think that by having this

requirement, everyone will get their act together and then we go from

there. I -- I don't -- I haven't had the personal experience of other

utilities, but I am sure that everybody in this room would like to get

their bills on a regular basis and know, have something to compare it

to to see whether they're getting ripped off.

MR. PALMESANO: And I did want to -- one -- I did

really want to go back to the ESCO utility billing question, because I

know we talked about it. But just to clarify, most ESCOs do not do

their own billing. Most of the billing is done by the utility. So the

ESCO is the contractor for the supply, the utility does the billing for

them. So if the utility doesn't -- say there's a delay on the utility side,

does that mean the ESCO who didn't send out the bill now will not get

paid, or are you saying -- is there's a penalty that's gonna be in place,

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or how is that gonna be worked out now?

MR. JACOBSON: Well, if they send out an incorrect

bill, it can be corrected, the same way that if they sent out a bill that's

too high, that can be dealt with.

MR. PALMESANO: I'm -- I'm not asking about a --

an incorrect bill, I'm asking, the utility -- the -- the ESCO doesn't send

out its own bill. They say how much energy they're using and then it

goes to the utility and then the utility sends out the bill on behalf of

the ESCO.

MR. JACOBSON: Oh, you're saying they're using a

third party to send it out?

MR. PALMESANO: Yeah, it's like -- it could be --

in some -- in some cases there are third parties, so who is responsible

for the third-party billing? Is that -- I mean, they don't recoup the

payment, and what happens if the utility is sending it for the ESCO?

Does that mean the ESCO doesn't get the payment?

MR. JACOBSON: If the third party doesn't -- if the

third party doesn't send it out then the utility suffers. I would think

that the utility would go after the third party because they didn't live

up to their obligation to them.

MR. PALMESANO: Or vice-versa because --

(Buzzer sounds)

I know we're getting into this and it's, you know, I

know you keep saying it's easy, easy, but obviously it's not as easy as

we're saying. So I kind of -- I'm not -- I don't have a ton more, Mr.

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Jacobson, but I did want to ask a couple of other things, if I could.

Where was I? Okay. So, how do you feel with examples that you

might have, that with the historic data that is out there, how can --

how can we empower informed decisions about energy consumption

and costs and how will this extended information contribute to

improving the overall customer experience if we're not sure we're --

what specific claims we're having to say that this is going to be

beneficial?

MR. JACOBSON: So that when the consumer gets a

bill and they think it's outrageous, or they want to know whether it is

or not, they can compare it to the past record and see. And if all of a

sudden their bill is five times or seven times the amount that it usually

is, then they can see what they're being charged per unit, they can

make an intelligent decision and take the appropriate action.

MR. PALMESANO: Okay. I just have a couple

other quick questions here, if I may. So with this, and now, obviously,

they're gonna say that there's more -- from a cost perspective you're

gonna need more meter readers, you're gonna need smart meters,

which there are gonna be costs to that. And you're saying if there's

issues with that then obviously they still can't recoup those costs if the

losses are beyond two months. That's how this bill would act now

compared to what we have on the books right now, correct?

MR. JACOBSON: Well, if it's not negligence on the

part of the utility, then that is a reason for them not to, but they can't

get out from a bill because they put in faulty property -- I mean, faulty,

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and they could get -- look. All they have to do is get a bill out the

door. It's not that hard.

MR. PALMESANO: I hear ya. I understand, Mr.

Jacobson, and I -- I do appreciate your time, Mr. Jacobson. I try to --

MR. JACOBSON: Thank you.

MR. PALMESANO: Mr. Speaker, on the bill.

ACTING SPEAKER AUBRY: On the bill, sir.

MR. PALMESANO: Yes, Mr. Speaker. I understand

the intention of the sponsor, we've talked about this issue. I know

most of his issues involve one specific utility. I think there's problems

here from a number of perspectives; number one, I think a lot of the

legislation we continue to bring in this House, this is one of them, we

continue to get in the areas of where the PSC would have jurisdiction,

they could address these issues if they thought there was a need to

address it. I think that's one of the areas we look -- look at. I think

also, I think this is something that's ultimately gonna shift costs. I

don't know how you can say it's not gonna shift costs, because if -- if it

becomes more expensive for different things, that's gonna be borne by

the ratepayer. You know, higher utility costs are gonna come about

when they don't have the revenues if now we're saying to the utility

company, Oh, you don't have to -- you don't -- now you don't have to

pay your utility bill if it comes two months later -- more than two

months. And this is kind of in violation of the statutory agreement

right now that we have in the law for prudent costs that must be

reasonably recovered. And I think the individual's getting the benefit

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of the commodity to heat their home, to power their lights, they know

they're getting it. And if there's a delay and a problem not getting a

bill, there are ways we can address this issue. We can look at figuring

a payment issue that could be addressed, making sure there's no late

payments or penalties. There are things we can do. But it should not

absolve a customer for having to pay for the -- for their utility usage

that they acquired. It can be an exorbitant amount. We talked about it

earlier. There's no means test on this, so if a multi-millionaire or a

business that's making a lot of money just because maybe they didn't

get their -- they got their bill a little late, now they don't have to pay

their bill to NYSEG or RG&E or National Grid or whatever it may be,

and then who pays the balance of that? That cost will get shifted to

other ratepayers. I don't see how we can sit here and say it's not gonna

happen because there are -- there are loss recovery -- cost recovery

recoupment stats in process with PSC law and Public Service Law that

they're gonna have a right to go to the PSC to petition for higher -- for

those costs recoveries that's gonna be borne by the ratepayer. And

time and time again we see legislation in this House, we say, Well, it's

a little bit here, a little bit here, and we fail to continue to address the

main driver that continues to drive up our energy bills.

I mean, I -- I love when bills like this come forward,

but when we talk about the -- the Green New Deal, CLCPA policies

that continue to put in place, those are the things that are driving up

bills for New Yorkers. National Grid said a 17 percent increase is due

because of the CLCPA mandates. This is gonna be more and more

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burdensome for New Yorkers. We don't put that on the bill. We don't

put how much are the green energy costs to meet these mandates and

these requirements are costing consumers. We should be putting that

on the bill, but we don't do that. And I just think this is just a step in a

direction I don't think is gonna be very helpful in solving a problem. I

think -- now we're saying they've got to put two years worth of

materials on a bill, when most probably do about a year, now we have

to provide two years worth of data in a graph form and in numeric

form. That's more paperwork, that's more pages, that's more costs that

must be borne by the ratepayer. And it just seems so easy that this

side of the aisle is always happy to bring forth legislation that just

continues to nick and nick and nick just with additional costs and they

say it's not so much, but it is. But then when you talk about the true

cost drivers that are driving up our utility bills, which is the

(inaudible) so-called green policies that are being advocated in this

State without any reference to affordability, without any concern to

reliability. And you talk about businesses, when we talk about --

when we talk about energy bills, businesses in New York can say,

because when we talk about energy policy they care about two things:

Affordability and reliability. And if they're not getting affordability

and reliability in New York State, they're gonna go someplace where

they can get it, and all it's gonna continue to do is putting in place

policies that only affects New York. It doesn't compete with other

states, it doesn't compete with other states. Our country's the one

that's driving up global emissions. We've said it over and over again,

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and I'll say it again, New York only contributes 0.4 percent of global

emissions. China contributes 29 percent, has 1,000 coal plants and

building more. India and Russia on top of it, those three are 40

percent of global emissions, but here we are putting more and more

mandates that are gonna be costly retrofits for homes, 35-, 40,000-plus

to convert your homes. And I know the Governor says she's not

coming after your gas stove; yeah she is. That's what the policies in

this -- in the C -- Climate Action Council plans are advocating. Come

2030, if it goes the way they want, when your gas boiler or furnace

goes you will not be able to replace it with a natural gas boiler or

furnace.

This all goes hand in hand with the utility bills, the

energy bills that continue to come out of this House. It's all about

raising costs to consumers. And I understand what the sponsor is

trying to do, I understand we want try to address, and we should do.

Smart meters would be a good thing, but not everyone is receptable

[sic] to smart meters. We need more staff out there to get there, we

need to make sure the doors are being opened. If someone comes and

knocks on your door and no one opens the door, you can't get a

reading if the meter's inside. It's happened to me month after month

after month. Yes, you can try to do estimates, but something better

has to be done on this process and I just don't think this is the right

approach to do it and I think there's a better way we could be looking

at this. I think our overall energy policy and I just think there's just

too much here. And I think telling a company that is providing a

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valuable service to keep your lights on, to keep your heat on, to keep

your gas on, deserves to be paid for those services they are providing.

And I just think this sends a very kind of suspectful [sic] mess --

suspect message that we're saying, you know what? Just because

there could be problems and with the com -- the complexities of our

energy bills these days and the process with net metering, a whole host

of issues out there, that makes it more and more difficult, more and

more challenging. But at the end of the day if there are problems, we

can address those problems without saying, Oh, by the way, you're

absolved of paying your bill. It shouldn't work like that. We see more

and more issues with legislation, whether it's housing, it doesn't

matter. We just don't want to say you don't have to pay, don't pay the

rent, don't pay the energy bill, don't pay your gas bill. It doesn't matter

what it is, and I just think it sends the wrong message. And

ultimately, these costs have to be made up. The utilities are gonna go

before the PSC, they're gonna petition for the cost recovery and they

have a right to do that because they have a right to get paid for the

services they are providing to the customers, the businesses, the

manufacturers, the residential users. And to think that there's not even

some means test to this, that a multi-millionaire can make -- use

excessive energy and maybe if their bill's late, now they don't have to

pay their bill? It sends the wrong message and I just don't think this is

right approach.

I think this is a bad bill. It's my hope if it goes

forward it doesn't get acted upon, but I'm going to be voting no on this

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bill, Mr. Speaker, and I encourage my colleagues to do the same and I

just want to say thank you to the sponsor for his time. Thank you.

ACTING SPEAKER ZACCARO: Mr. Goodell.

MR. GOODELL: Thank you, sir. Will the sponsor

yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MR. JACOBSON: Yes.

ACTING SPEAKER ZACCARO: Mr. Jacobson

yields.

MR. GOODELL: Thank you, Mr. Jacobson. I'm

looking at the bill language on page 1, and this two-month period

starts when the electricity, for example, is first provided, correct?

MR. JACOBSON: Yeah.

MR. GOODELL: So just to make sure I understand

the time frame, January 1st, your power's on, the utility company

normally bills for the whole month of January, that bill typically

comes out a week later. Certainly in my case. So you're saying if

they're three weeks late on the bill they can't collect?

MR. JACOBSON: If the bill is due January 1st --

MR. GOODELL: But -- but it's not measured from

when the bill comes out, it's measured from the date the power's first

provided.

MR. JACOBSON: The statute now says that we're

changing from the amount of months. It says for, in this case it'll be

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two months prior to the mailing of the first bill to the customer for

such service, unless the failure of the corporation or municipality to

bill sooner was not due to the neglect of the corporation, municipality

or utility, or was due to the culpable conduct of the customer.

MR. GOODELL: Well, normally the bill comes once

a month, right?

MR. JACOBSON: Yeah.

MR. GOODELL: So normally the utility company is

billing five or six weeks in arrears from the time the --

MR. JACOBSON: Yeah, normally it comes once a

month, and so if they're late by a little bit and it's two months, up to

two months, that's fine.

MR. GOODELL: So using my example, starting out

the new year, let's say I'm a new customer, I sign up, I get power

January 1st. My normal bill would come the first or second week in

February, right, and if that bill is two or three weeks late and arrives in

March, I don't have to pay for what I was using in January, correct?

MR. JACOBSON: Well, I think on your hypothetical

you're changing the facts. If the bill was supposed to be on the first,

which would include service before the first, then they have 'til the

end of February to get the bill out. That's all.

MR. GOODELL: Okay. Is there any exception that

if there's like a major storm, like Superstorm Sandy or anything like

that?

MR. JACOBSON: Yeah, I don't think that a storm

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would delay it for two months.

MR. GOODELL: Well, actually, we're only talking

about less than a one-month delay, right?

MR. JACOBSON: The storm would not be

negligence or a neglect of the utility. On the other hand, they could

still issue -- if they couldn't get there, if they didn't have the smart

meters, if they didn't have any way of doing it, they could still,

perhaps -- they could always do an estimated bill because that would

be a circumstance that would be allowed.

MR. GOODELL: Thank you, Mr. Jacobson. I

appreciate it.

MR. JACOBSON: Thank you.

MR. GOODELL: On the bill, sir.

ACTING SPEAKER ZACCARO: On the bill.

MR. GOODELL: So we keep hearing tonight that if

the bill is two months late, the utility customer wouldn't have to pay it.

But actually, when you start tracking it it's if the bill is less than

one month late they wouldn't have to pay because the measurement

starts not from when the bill is supposed to go out, but when the

power is first provided. So if you start getting utility service January

1st, under this bill, if that bill that you would normally get sometime

in February doesn't arrive until the beginning of March, you get

January free. It's not two months, it's three weeks because it's not

measured from when the bill is supposed to go out, it's measured from

when the power was first given to you. Now, why does it matter?

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Because if we pass a law that says if the bill is three weeks late from

its normal monthly billing, you get the power for free, it isn't free.

That charge is going to go on my bill and then your bill and then

everyone else's bill. That's the way it works. The utility company

doesn't have a money tree in the backyard.

So let's talk about some of the options. Why would

the bill perhaps be three weeks late? Well, maybe because the utility

company, to keep our utility rates low, trusts us enough to self-report.

But not everyone who self-reports is there on the very first of the

month. The self-reporter himself or herself might be a week or two

late. Now, we're told you can solve this with electronic meters. That's

cool. In my community, rural communities, we don't have them.

Why? Because we trust the residents to give us an interim reading

and then we correct it. The utility company comes by every two or

three months and checks it. So what's this bill do? It gives the

opportunity to people who are gaming the system to get free electricity

if the bill is three weeks late, and it forces us, everyone else who pays

on time, to pay more and it incurs more costs because the utility

system has to staff up.

Now, I've been in private practice for 40 years, I have

to tell you, I have yet to find a client complain when I said, I am sorry

I didn't send you a bill sooner. I will also tell you that when I send a

bill late, I still expect my client to pay it.

I appreciate my colleague's objective to have timely

bills, but just three weeks late from when it's supposed to be is too

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short of a time frame. I think the current standard is better. Thank

you, sir. And again, thank you to my colleague.

ACTING SPEAKER ZACCARO: Read the last

section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER ZACCARO: The Clerk will

record the vote.

(The Clerk recorded the vote.)

Mr. Beephan to explain his vote.

MR. BEEPHAN: Thank you, Mr. Speaker. You

know, after listening to this debate I understand the concerns of my

colleagues, but I share a district along with the bill sponsor and a

number of other colleagues in the room here today, and our residents,

as particular with the utility company that this all stems from went

months and months and months without a bill due to a billing system

upgrade that posed a severe impact to their quality of lives. And I'll

tell you how. That -- that utility company withheld bills for up to six

months, customers would call the utility company and say, Hey, I

don't have a bill, what should I do? They can't get in contact with a

call center because they're already understaffed, and by the time they

get a bill it's for $5,000. They're calling their elected officials saying,

What do I do? I can't afford to pay this. And when they finally get in

touch with someone from the utility company they're being told,

You're out of luck. You owe that full amount, otherwise we may have

to cut off your -- your -- your electricity. And I don't think that's fair.

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You know, this issue in our community started back when I was a

councilman. And as a -- as a at-large member for a small community,

we received hundreds and hundreds and hundreds of calls just on a

local level, and now that's -- that is completely exasperated across our

whole district.

So while I do have concerns about the bill, I -- I have

to support this for my residents and for the pain that they've gone

through over the past few years. Hopefully this will balance the -- the

impacts that they've had and maybe make it a little bit better in the

future. So thank you to the sponsor. I'll be in the affirmative.

ACTING SPEAKER ZACCARO: Mr. Beephan in

the affirmative.

Mr. Jacobson.

MR. JACOBSON: To explain my vote, Mr. Speaker.

Utilities have responsibility to send a timely and transparent bill.

That's what this would do. Now, despite what you might have heard

during this debate, and I appreciate my colleague's mentioning of all

the problems that we've had in the area and the complaints that we've

had, this bill doesn't say one week or two weeks or three weeks, it says

-- it says two months; two months to get a bill out the door. That's --

that's not too much to ask. There's many ways they can do it. And by

supplying the billing records for the past two years, customers will

have a chance to compare their bill to previous bills to see if the bill is

in the ballpark. And this is the least we can do. The utilities can do

this if they want, most utilities do. So then there should be no

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problem if those utilities that don't do it get -- so they can get their act

together.

So I appreciate those -- the support on this bill and I

vote -- proudly vote in the affirmative.

ACTING SPEAKER ZACCARO: Mr. Jacobson in

the affirmative.

Are there any other votes? Announce the --

announce the results.

(The Clerk announced the results.)

The bill is passed.

Page 16, Rules Report No. 772, the Clerk will read.

THE CLERK: Senate No. S01684-A, Rules Report

No. 772, Senator Hinchey (A06843-A, Clark, Bronson, Meeks). An

act to amend the Emergency Tenant Protection Act of 1974, in

relation to studies to determine vacancy rates.

ACTING SPEAKER ZACCARO: An explanation

has been requested, Mr. Goodell -- Ms. Clark.

MS. CLARK: This bill would require owners in

municipalities that are completing vacancy rate surveys to respond to

that survey and provide certain information about rent records and

occupied or vacant units.

ACTING SPEAKER ZACCARO: Mr. Fitzpatrick.

MR. FITZPATRICK: Thank you, Mr. Speaker.

Would Ms. Clark yield for a few questions?

ACTING SPEAKER ZACCARO: Does the sponsor

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yield?

MS. CLARK: Of course.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. FITZPATRICK: Thank you, Ms. Clark. The --

how would this -- how would your legislation encourage, cajole - pick

your term - to get cooperation from --

MS. CLARK: Sure. There's multiple ways. I think

the whole point was to give municipalities lots of tools that they can

use, but they don't have to use.

MR. FITZPATRICK: Okay.

MS. CLARK: What we saw in -- you know, there's

two case studies that we've had to look at, one in Kingston and one in

my city of Rochester. So when Kingston originally did it, they didn't,

you know, put any enforcement in it. The second time they put some

penalties, some financial penalties in it. They also didn't say that they

might show up there in person, and they also, in the second time they

said it, said it would count as 0 percent if you did not respond. So

what they did is they used a couple of different tools to really require

those who are landlords what could potentially be rent-stabilized

buildings to -- to answer these studies with more teeth, as you might

say, and got much different results. So we know in Rochester where

they didn't do any of those things, what the vacancy rate study showed

was something we don't think was quite accurate of what's actually

happening in our housing stock in the City of Rochester.

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MR. FITZPATRICK: So -- so did Rochester see an

uptick in cooperation or participation in that study because of it?

MS. CLARK: Kingston did. They ended up -- when

they did it the second time with a little more teeth in it --

MR. FITZPATRICK: Right.

MS. CLARK: -- they got way more respondents with

only 20 not responding out of over 1,200 units.

MR. FITZPATRICK: Could you repeat that, 20?

MS. CLARK: Twenty out of 1,200.

MR. FITZPATRICK: Twenty out of 1,200

responded.

MS. CLARK: Didn't respond.

MR. FITZPATRICK: Did not, okay. All right. So is

it not -- it would appear to me somewhat of a heavy-handed approach,

it's kind of a threat. If you don't cooperate, you're going to...

MS. CLARK: You don't have to use all the tools,

you can choose which ones you want to use.

MR. FITZPATRICK: I'm sorry?

MS. CLARK: You don't have to use any of the tools,

you can choose. I mean, the biggest one is if you're counting a

nonresponse as zero, if you're required to count a nonresponse as zero,

I think more landlords might be just by that motivated alone to answer

if they have vacancies.

MR. FITZPATRICK: Okay, sure. So was there

feedback from the landlords as to why they didn't -- chose not to

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participate?

MS. CLARK: Yeah. There -- I mean, if you read

some of their quotes, some just said they didn't like the study, some

said they didn't feel like they needed to answer it, it wasn't required.

You know, we got a lot of different quotes from some of our landlords

of why they didn't, but it doesn't help a municipality if they're not

actually getting accurate information about what's happening in their

rental properties.

MR. FITZPATRICK: Right. Did they offer any

suggestions on what might get them to participate, or --

MS. CLARK: Not that I saw. I think, you know,

much like many of the processes that landlords, particularly -- and

these are what we would consider potentially rent-stabilized, so

they're bigger units, buildings of six units or more. These are not

small doubles or -- or Upstate we have a lot of four-unit places. But

six is a fairly substantial building, so they're not necessarily our small

landlords. So they didn't -- they didn't necessarily give any feedback

as to why they didn't answer, but we need to figure out ways to

motivate to make sure that they are. That's the only way we get

accurate information. We only have 37 percent respondents in the

City of Rochester's study.

MR. FITZPATRICK: Right. So was any thought

given in Kingston maybe to use maybe more of an incentive approach,

a carrot rather than a stick approach?

MS. CLARK: Well, when Kingston went from a just

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a non -- a very neutral, no teeth, they got no response or very -- they

got a much less response rate. When they used a few more teeth they

got a very low, very, very, very low -- less -- almost less than 2

percent didn't respond.

MR. FITZPATRICK: Was there any feedback after

-- after the threat of sanctions were -- were used to encourage

participation? What was the feedback then? How did they...

MS. CLARK: I think that they understood that they

were getting a much more accurate picture. I mean, that's the whole

point, right, is to get the accurate picture of actually what's happening.

I mean, why wouldn't people want to respond, I guess, is the question

I would have back. Why wouldn't a landlord want to say --

MR. FITZPATRICK: Well, it's private property so

they --

MS. CLARK: It's private property, but you got to get

a C of O, you've got to clean up your trash, you've got to mow your

law. I mean, there's all these things that you have to do.

MR. FITZPATRICK: Yeah, when you hold a gun to

their head, you know --

MS. CLARK: Who's holding a --

MR. FITZPATRICK: Well, the sanctions are the gun

to force compliance. You're forcing compliance here --

MS. CLARK: To -- I mean, we still have 20 people

that didn't --

MR. FITZPATRICK: -- with the threat -- with the

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threat of sanctions.

MS. CLARK: -- respond, so there's no force. A fine

is a fine. I mean, you can choose to accept a fine or not.

MR. FITZPATRICK: Okay. Very good. Thank you,

Ms. Clark.

Mr. Speaker, on the bill.

ACTING SPEAKER ZACCARO: On the bill.

MR. FITZPATRICK: It -- it's, you know, getting an

accurate count of course is desirable to help the community. I think

the landlord community would just prefer that, you know, having a

gun held to your head to force compliance is no way to, I think, to run

a business or run a township. But understanding that we need to get

an accurate count, I think a more positive approach would have

worked. (Inaudible), you know, maybe offer incentives, maybe some

kind of a tax break. That would certainly, I think, get a desired

response. You know, make it worth their while. You know, taxes are

very high here in New York, maybe a tax break to get compliance

would a better route rather than threaten sanctions. After all, this is

private property. Nobody should be compelled, you know, to

participate against their will. But the government wants, you know, to

get this information and they will use these levers of power to force

compliance, as is their -- their prerogative. But it's one we disagree

with, it's a heavy-handed approach, and not one, maybe a tax break or

other incentive to get compliance would be better and help property

owners, landlords, building owners, lower their costs, their cost of

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doing business rather than threaten with sanctions.

So for that reason I oppose this bill and urge my

colleagues to consider doing the same. Thank you.

ACTING SPEAKER ZACCARO: Read the last

section.

THE CLERK: This act shall take effect immediately.

ACTING SPEAKER ZACCARO: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this bill for the reasons mentioned

by my colleague. Those who support it can certainly vote yes on the

floor. Thank you, sir.

ACTING SPEAKER ZACCARO: Ms. Solages.

MS. SOLAGES: The Majority Conference will be

voting in the affirmative. Those who wish to vote against this

provision can come to the Chamber and cast their vote. Thank you.

ACTING SPEAKER ZACCARO: The Clerk will

record the vote.

(The Clerk recorded the vote.)

Mr. Goodell.

MR. GOODELL: Thank you, sir. This is a very

simple bill. It imposes a $1,000 fine if a private landowner doesn't

respond to a government survey and disclose how much he's charging

a private client for rent. It's not necessary for New York to regulate

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every single aspect of every single landlord and impose huge fines if

they don't comply with a curiosity survey.

For that reason, I will not support it. Thank you.

ACTING SPEAKER ZACCARO: Mr. Goodell in

the negative.

Ms. Clark to explain her vote.

MS. CLARK: Thank you, Mr. Speaker. I think

we've all, through tonight and through actually this whole Session and

a couple years into this now, understand that we have a housing crisis

-- I think it's been mentioned actually a couple of times tonight --

across the State, and there is a lot of pressure on our municipalities to

figure out solutions. I agree, it's a multi-faceted approach from

building more housing, building more affordable housing, but also

understanding that in places like the City of Rochester, 60 percent of

those who live there are renters. And there are things and pressures in

the market that the city needs to understand before it can really come

up with a comprehensive plan. These aren't curiosity studies, these

are actually meaningful studies that give people a good understanding

of what's happening in their rental markets, what units are consistently

being rented, how many vacancies there are, if there are vacancies that

aren't being used for potentially things like short-term rentals or other

things that aren't even being considered. These are factors the city

needs to know to address this issue so that they can better help their

tenants who are really facing a crisis that is really making it hard for

them just to make ends meet. We know stable housing leads to better

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outcomes. And when it comes to the teeth in this, these are all just

options. It's not a fine of $1,000, it's a fine up to. But if cities are

working with their landlords and they're trying to figure out answers to

these vacancy studies so that they can make informed decisions and

informed policy, they have to have tools. They don't have to go up to

$1,000, they don't even have to use a fine. They can use the 0 percent

for non-response rate, they can use other teeth that are in the bill to

make sure that they're getting the answer. It is just an option, it is not

something that is mandated or making them do that to their landlords.

They can work with them to get however best responses they can, and

hopefully the cities and municipalities will do that.

So I vote in the affirmative. Thank you.

ACTING SPEAKER ZACCARO: Ms. Clark in the

affirmative.

Are there any other votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

ACTING SPEAKER ZACCARO: Page 16, Rules

Report No. 753, the Clerk will read.

THE CLERK: Senate No. S00995-B, Rules Report

No. 753, Senator Hoylman-Sigal (Gallagher, Mitaynes,

González-Rojas, L. Rosenthal, Epstein, Kim, Thiele, Mamdani,

Simon, Davila, Forrest, Carroll, Kelles, Shrestha, Glick, Magnarelli,

Rozic, Jacobson, Shimsky, Sillitti, Burgos, Gibbs, Benedetto,

Santabarbara, Simone, Steck, Brabenec, Bores, Slater, Reyes,

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Levenberg, Seawright, Raga --A3484A). An act to amend the Limited

Liability Company Law and the Executive Law, in relation to the

disclosure of beneficial owners of limited liability companies.

ACTING SPEAKER ZACCARO: An explanation

has been requested.

Ms. Gallagher.

MS. GALLAGHER: This bill amends the Limited

Liability Company Law to require disclosure of beneficial owners in

an effort to provide greater transparency in LLC ownership.

ACTING SPEAKER ZACCARO: Mr. Blumencranz.

MR. BLUMENCRANZ: Thank you, Mr. Speaker.

Will the sponsor yield?

ACTING SPEAKER ZACCARO: Will the sponsor

yield?

MS. GALLAGHER: I will yield.

ACTING SPEAKER ZACCARO: The sponsor

yields.

MR. BLUMENCRANZ: Ms. Gallagher, so could

you describe to me the purpose of an LLC, please?

(Pause)

MS. GALLAGHER: The purpose of an LLC is to

grant the investors and the owners limited liability.

MR. BLUMENCRANZ: Can you describe to me

what an S corp is, please?

MS. GALLAGHER: S corp?

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MR. BLUMENCRANZ: Yes.

(Pause)

MS. GALLAGHER: An S corp is a business that can

elect to have a pass-through form of taxation with fewer than 100

shareholders.

MR. BLUMENCRANZ: Can you describe to me

what an LLP is.

(Pause)

MS. GALLAGHER: That would be a Limited

Liability Partnership.

MR. BLUMENCRANZ: And what is the difference

between an LLP and an LLC?

(Pause)

MS. GALLAGHER: Partners have to be natural

persons.

MR. BLUMENCRANZ: Now, could you describe to

me why your piece of legislation specifies that LLCs would be subject

to this disclosure and not the other corporate entities?

(Pause)

MS. GALLAGHER: LLCs can be formed

anonymously and that is what we're looking to target.

MR. BLUMENCRANZ: So you couldn't have any

anonymity with the other -- you know, if you have an S corp that

purchases property, you'd know who the shareholders and benefactory

-- benefactors were for that -- that property?

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MS. GALLAGHER: That would be a different bill.

MR. BLUMENCRANZ: No, I'm asking -- I'm asking

the differences. So you -- there's -- there's no way of keeping your

name as being a benefactor as a corporation?

(Pause)

MS. GALLAGHER: This is the LLC Transparency

Act, not the S corp Transparency Act.

MR. BLUMENCRANZ: I'm trying to understand

why you chose just LLCs, but I'll move on.

MS. GALLAGHER: Thank you.

MR. BLUMENCRANZ: So as far as the bill is

concerned, how does it differ from the Federal piece of legislation that

was passed and introduced?

MS. GALLAGHER: The Federal legislation is -- is

held at the Federal level, and this particular piece would be held at the

Department of State. So it would allow for our State to use the

information to investigate crimes.

MR. BLUMENCRANZ: To investigate what?

(Pause)

MS. GALLAGHER: Potential crimes that are

committed or investigate actions of the LLC.

MR. BLUMENCRANZ: I'm -- I'm sorry. I'm a little

confused. I thought this bill specifically just forced the benefactors of

an LLC to report to a newly-created State database. Am I incorrect in

my understanding of the piece of legislation?

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(Pause)

MS. GALLAGHER: Putting this in this State entity,

in this State database, makes it easier to investigate on the State level

and it also makes it publicly accessible to members of the public,

obviously.

MR. BLUMENCRANZ: All right. So I'm just

curious, what about larger -- larger entity holders. So if I'm a large

business and I have an LLC that purchased property, will I be subject

to this law?

MS. GALLAGHER: Yes, if you're a beneficial

owner.

MR. BLUMENCRANZ: It is my understanding that

if you have over $20 million in gross receipts, have 20 full-time

employees and a physical presence in the United States you are

exempt from this piece of legislation. Am I incorrect in my

interpretation of the bill?

(Pause)

MS. GALLAGHER: That is one of the 23

exemptions.

MR. BLUMENCRANZ: Yes, there are many.

MS. GALLAGHER: But you didn't define what you

meant by "large" so...

MR. BLUMENCRANZ: I did not, you are correct. I

-- considering the price of property in New York, especially New

York City, I would say that that wouldn't even be very large but I

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digress. I'm just curious, what happens if I own an LLC and then I

have a subsidiary LLC that the only benefactor -- benefactor would be

the -- the original LLC? Would they be subject to the same reporting

guidelines?

MS. GALLAGHER: Yes. They -- you're -- you

would be the beneficial owner for both of those entities.

MR. BLUMENCRANZ: I am just the owner of one

entity which owns another entity. So that second entity --

MS. GALLAGHER: Because you own the first --

because you own the second entity, you are benefiting from that

ownership, then you are a beneficial owner.

MR. BLUMENCRANZ: Really? Okay, all right.

So...

MS. GALLAGHER: Direct or indirect beneficial

ownership.

MR. BLUMENCRANZ: But if I take that LLC and I

put it say into a trust or I allow my child to have -- be the beneficiary,

then I would not have to report any information, correct?

(Pause)

MS. GALLAGHER: Parents and guardians are

reported as the beneficial owner until the -- the child is of age.

MR. BLUMENCRANZ: Even if it's in trust?

(Pause)

MS. GALLAGHER: Can you repeat the question,

please?

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MR. BLUMENCRANZ: Will I have to report the

information you provide; name, date of birth, current business address,

identifying number from an acceptable identification documentation

as defined in the bill? Would I have to report that as a trust?

(Pause)

MS. GALLAGHER: Under the Federal law, trusts

are covered as a form of beneficial ownership and this is modeled

after that.

MR. BLUMENCRANZ: Okay, but you exempt it in

your writing -- in your writing of the bill, no? As one of your 23

exemptions you mentioned previously?

(Pause)

MS. GALLAGHER: We interpret that situation to

not be exempt.

MR. BLUMENCRANZ: So -- okay. So trusts are

not exempt from this piece of legislation. So I can have a piece of

property in trust for my children being the only beneficiaries and they

are not exempt from this. So trusts will have to show --

MS. GALLAGHER: Once they are --

MR. BLUMENCRANZ: -- who the trustees are.

MS. GALLAGHER: Once they are of age, once they

are of age, they will be listed as beneficial owners in the database.

MR. BLUMENCRANZ: So they won't be until they

turn a certain age.

MS. GALLAGHER: Until then you will be there.

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MR. BLUMENCRANZ: Ah.

MS. GALLAGHER: As their parent.

MR. BLUMENCRANZ: The parent?

MS. GALLAGHER: Yes.

MR. BLUMENCRANZ: Even those it's a trust?

MS. GALLAGHER: Correct, because it's an LLC.

MR. BLUMENCRANZ: I'm not sure if that's correct,

but okay. Now if -- again, if I create an LLP, same purpose, just

multiple partners, similar protections, I would not be subject to this

law.

(Pause)

MS. GALLAGHER: I'm sorry. Can you repeat the

question?

MR. BLUMENCRANZ: Would an -- would an LLP

be subject to the same regulations or I can just have a partnership, do

the same exact business operations I was planning on doing and not be

subject to this piece of legislation? I would not have to provide all of

the information you're asking for.

MS. GALLAGHER: This law only applies to LLCs

and I'd like to keep the questioning on LLCs, please.

MR. BLUMENCRANZ: Okay. So then why do you

choose to just include LLCs?

MS. GALLAGHER: Because LLCs can be created

anonymously.

MR. BLUMENCRANZ: You're aware that there are

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other ways of doing the same business practice and keeping yourself

anonymous without necessarily being an LLC. So it just creates a

burden, correct?

MS. GALLAGHER: Well, I invite you to write

another law that does just that.

MR. BLUMENCRANZ: Okay. Have you set aside

any appropriations for the creation of this very large database that will

have to house all of this important and sometimes private

information?

MS. GALLAGHER: The database in fact already

exists. We are just adding more information to it.

MR. BLUMENCRANZ: What are you -- I'm sorry. I

wasn't really -- I was unclear about your previous answer regarding

the benefit of providing all this information to the public in a way that,

in my understanding, Federal law and the Federal statute does not do,

which is allow it to be publically-available in the same level of access.

Why do you choose to have a further reaching version of the same

Federal piece of legislation?

(Pause)

MS. GALLAGHER: This information benefits the

public and the local governments in a way that the Federal law does

not and cannot.

MR. BLUMENCRANZ: So let's say I want to sue a

property owner, right? They're -- I'm suing the LLC because the LLC

owns the property.

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MS. GALLAGHER: Mm-hmm.

MR. BLUMENCRANZ: What will happen in that

case if I choose to - now that I know who owns that piece of property -

am I going to sue them as well?

(Pause)

MS. GALLAGHER: You will sue the LLC and we

will be able to direct that towards the owner, rather than spending

years searching for who the LLC is owned by.

MR. BLUMENCRANZ: Well, my main question is

why do you need to know? I mean the point of an LLC is to provide

that privacy protection for that business so that they don't have to

disclose that information for various reasons. A lot of it is security

and protection for property owners.

MS. GALLAGHER: Corporate anonymity is not

guaranteed to anyone and it is -- it is a public benefit for the local

government and civil society to be able to find out who is utilizing the

LLC to do a variety of businesses, and I can get into some examples if

you'd like.

MR. BLUMENCRANZ: Sure. Why don't you give

me some examples.

MS. GALLAGHER: Sure. So there are many

different kinds of ways that the anonymous LLCs have been used.

They have been used in -- they have been implicated in terrorists

financing, sanctions invasion, tax avoidance, narcotics trafficking,

human trafficking, insurance fraud, bid rigging, other acts of official

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corruption, housing violations, widespread labor violations and

keeping this information secret obstructs routine operation of local

government, such as code enforcement. It harms businesses, for

example, when banks or land title agents struggle to identify the

beneficial owners of parties to transactions in order to comply with

anti-money laundering rules.

MR. BLUMENCRANZ: All right. I -- I understand.

Thank you. So you --

MS. GALLAGHER: I could go on if you'd like.

MR. BLUMENCRANZ: I'm sure, I'm sure you can.

But what I'd like to point out is that for the vast majority of those elicit

operations that you described, they would probably fall into one of the

various categories and it wouldn't be so hard, especially considering a

lot of these are criminal organizations you're describing, for them to

conceal their identity in one of the many -- the scores of ways you

allow for exemptions in this bill. It seems to me that it only really

effects small businesses or relatively modestly-sized businesses and

especially law-abiding citizens. So I would just like to know in what

world do you think a bill that exempts pretty much everyone who --

those bad actors, that this would be an effective way of stopping crime

organizations that have under $20 million or under 20 employees or

can't simply find another way to hide their assets?

MS. GALLAGHER: The bill actually eases

significant burdens on small businesses such as difficulties identifying

beneficial owners of parties to certain banking, insurance, real estate

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transactions which can be made by anonymous LLCs and there's a

variety of other ways that small businesses are harmed by anonymous

shell companies. So this is going to do a great deal of good. And it

might not do every single good thing in the world for everyone, but

taking away one disguise is better than having more.

MR. BLUMENCRANZ: Is that why the Small

Business Council and other business groups have wholeheartedly

objected to the piece of legislation because it helps them so much?

(Pause)

MS. GALLAGHER: Okay. The small business

majority, the leading representative of 25 million small businesses in

the US, is that large to you, wrote to Congress in 2017 and wrote that

we have experienced the harms of anonymous companies first hand.

Shell companies have been used to undermine the integrity of supply

chains, disrupt local commerce and falsely underbid and win contracts

that they have no intention of fulfilling. Fraudulent business-to

-business companies, present incre -- present increased risks to honest

small businesses looking to subcontract to leverage opportunities to

grow their business. With -- and with anonymity there is less

accountability.

MR. BLUMENCRANZ: So you're aware those small

businesses are frustrated because large businesses, over $20 million,

are using these LLCs to operate covertly, which you exempt from your

bill. So I don't understand how it helps them. If it continues to protect

large corporations and continues to neglect protecting the small

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businesses, we'll then have to tell everybody who they are, where they

are, if their family members are also owners who they are. They'll be

able to find out, you know, what property they may own, especially

you, as a public official, if you were -- if you were aware that you

could purchase your property anonymously, now you cannot. Other

public figures --

MS. GALLAGHER: I would never do that.

MR. BLUMENCRANZ: -- other public figures will

fall into the same category. So, thank you and that's -- that's all.

(Buzzer sounded)

MS. GALLAGHER: You are so welcome.

ACTING SPEAKER AUBRY: Ms. Simon.

MS. SIMON: Thank you, Mr. Speaker. Would the

sponsor yield for a few questions?

MS. GALLAGHER: I yield.

ACTING SPEAKER AUBRY: The sponsor yields.

MS. SIMON: Thank you. I have a -- a few questions

about the intent of this legislation. A few years ago I passed a bill that

required that LLCs disclosed were not allowed to make court

donations to political campaigns beyond those of any other

corporation, and the reason for that was often because LLCs were

making donation contributions as if they were a person, an individual

and racking up meant people would start lots of LLCs. This bill

would help with that as well, wouldn't it, because it would identify the

beneficial owners; is that correct?

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MS. GALLAGHER: Yes. That's correct.

MS. SIMON: And this would -- actually LLCs could

be extraordinarily wealthy; isn't that correct?

MS. GALLAGHER: That's correct.

MS. SIMON: And LLC ownership, if somebody is a

-- is a trust under the Uniform Gift to Minors Act, would -- would be

-- actually, the trustee would be the entity that would be acting on

behalf of that child; would they not?

MS. GALLAGHER: Correct.

MS. SIMON: Thank you.

MS. GALLAGHER: Thank you.

MS. SIMON: And so this is really, it seems to me, a

method of protecting the public from corporate shenanigans, for lack

of a better term. Would that be an accurate representation?

MS. GALLAGHER: Absolutely. I think you truly

understand the -- the intent of this bill.

MS. SIMON: Thank you, Ms. Gallagher. And I -- I

might say, I think you did pretty well in your impromptu bar exam

review. Thank you.

MS. GALLAGHER: Thank you.

MS. SIMON: Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Mr. Goodell.

MR. GOODELL: Thank you. Would the sponsor

yield?

MS. GALLAGHER: Gladly.

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ACTING SPEAKER AUBRY: The sponsor yields.

MR. GOODELL: Thank you very much. I see that

one of the items that has to be disclosed for all the beneficial owners

is their date of birth. Why do we care what their birthday is and why

should that be reported to the government?

MS. GALLAGHER: Correct. So the date of birth

allows a simple way to submit the same form to both the Federal

program and the State program. It's already requested on the Federal

program. And it makes it easier to identify when it is a minor child

that's being put down as the beneficial owner, and make sure that that

-- that doesn't go forward and it also allows us to be able to see the

differences between 40 different John Smiths that apply for the -- the

LLC.

MR. GOODELL: Now, I see on page 3 starting at the

top of the page and subparagraph b, all personal or identifying

information is to be held confidential if it isn't otherwise required to

be disclosed in the business entity database. And it references Section

100b of the Executive Law, but 100b of the Executive Law deals with

the licensing of security officers. Can you help me here? What is it --

what is the correct reference --

MS. GALLAGHER: Sure.

MR. GOODELL: -- and what is not disclosed in the

business database?

(Pause)

MS. GALLAGHER: 100b of the Executive Law is

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what codifies the database.

MR. GOODELL: And are you looking at it?

MS. GALLAGHER: Page 5 of the bill, Section 9, the

Executive Law is amended by adding a new Section 100b to read as

follows. Would you like me to read it?

MR. GOODELL: No, that's fine.

MS. GALLAGHER: Okay, thanks.

MR. GOODELL: So it's a new section in the bill

itself.

MS. GALLAGHER: Right.

MR. GOODELL: Thank you, because obviously I

couldn't find it in the existing statute. And what has to be disclosed

under this new Section 100b? Or, more accurately, what is still

confidential?

(Pause)

MS. GALLAGHER: Only the legal name and

current business address are disclosed publicly.

MR. GOODELL: So we have all this data that has to

be reported to the Secretary of State, including names and dates of

birth and street addresses and everything else, and then the law goes

on to say, but it shall all be kept confidential; is that correct?

MS. GALLAGHER: Right. The name and the

current business address are what is accessible by the public. The rest

is available for State -- the State to be able to look at if they need to

and if they choose to in terms of a -- of a situation.

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MR. GOODELL: Thank you very much for those

clarifications.

MS. GALLAGHER: Thank you.

MR. GOODELL: Thank you, Mr. Speaker.

ACTING SPEAKER AUBRY: Thank you, sir.

Read the last section.

THE CLERK: This act shall take effect on the 365th

day.

ACTING SPEAKER AUBRY: A Party vote has

been requested.

Mr. Goodell.

MR. GOODELL: Thank you, sir. The Republican

Conference is generally opposed to this legislation. Certainly those

who support it can vote in favor of it. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Thank you, Mr.

Speaker. The Majority Conference is generally going to be in favor of

this piece of legislation; however, those who want to be an exception

should vote at their seat. Thank you, sir.

ACTING SPEAKER AUBRY: Thank you.

The Clerk will record the vote.

(The Clerk recorded the vote.)

Ms. Gallagher to explain her vote.

MS. GALLAGHER: Thank you so much. I am very

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thankful to the Speaker and to the conference for bringing this bill

forward. I became aware of this issue when I was working with the

mobilization against displacement and a group of tenant advocates and

I were trying to discover who a negligent landlord was and we found

that there were thousands of LLCs all going to the same address, and

it was very, very difficult for anyone to get justice. The more I looked

into the issue, the more I saw that this was happening at all different

levels and that's why we've been very proud to receive a lot of support

and -- and folks fighting for this bill including the Building

Construction and Trades Council [sic], the Carpenters Union, the

Hotel Trades Council [sic], Reinvent Albany, the FACT Coalition and

the New York Association of Land Title Agents [sic]. So I -- I'm

really grateful that we're able to take this first step. Passing this bill is

making history. It is the first publicly-accessible beneficial ownership

database in the country, and New York is setting a new standard for

transparency in the United States. Thank you.

ACTING SPEAKER AUBRY: Are there any other

votes? Announce the results.

(The Clerk announced the results.)

The bill is passed.

Mrs. Peoples-Stokes.

MRS. PEOPLES-STOKES: Mr. Speaker, do you

have any further housekeeping or resolutions?

ACTING SPEAKER AUBRY: Mrs. Peoples-Stokes,

we have neither one and I'm so pleased to answer that question.

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MRS. PEOPLES-STOKES: Thank you so much, sir.

And I move that the Assembly stand adjourned until 9:00 a.m.,

Wednesday, June the 21st, tomorrow being a Session day.

ACTING SPEAKER AUBRY: The Assembly stands

adjourned.

(Whereupon, at 10:04 p.m., the Assembly stood

adjourned until Wednesday, June 21st at 9:00 a.m., Wednesday being

a Session day.)

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