[Congressional Record Volume 142, Number 101 (Wednesday, July 10, 1996)]
[Senate]
[Pages S7630-S7631]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




      SEVERE ECONOMIC CONSE-QUENCES TO NEW YORK UTILITY RATEPAYERS

  Mr. D'AMATO. Mr. President, I rise to speak on another issue. 
Yesterday, the Senate gave overwhelming passage to H.R. 3448. Among 
other things, H.R. 3448 contained the Small Business Job Protection 
Act. That bill did a lot of good things for many Americans. For 
example, it extended the employer-provided education expenses for 
undergraduates and graduate students, something that had been allowed 
to run out.
  It helped provide volunteer firefighters with their service awards--
hundreds of thousands throughout this Nation. It brought about spousal 
IRA's for nonworking spouses, which is long overdue. Both Republicans 
and Democrats talked about this. And the tax provisions were provisions 
which were unanimously supported by the Finance Committee. Indeed, the 
distinguished senior Senator from New York, my colleague and ranking 
member of the committee, and I both supported this bill.
  But, Mr. President, we supported it with a caveat, as it came up for 
markup--before the markup. We pointed out to the committee and to the 
chairman and to the staff that there was a provision that would bring 
about very severe economic consequences to the State of New York and to 
the ratepayers, the utility ratepayers, because in this bill there was 
a provision that would require those utility companies, namely Brooklyn 
Union Gas, Long Island Lighting Co., and Con Edison to redeem their 
tax-exempt bonds within a period of 6 months. Let me tell you what that 
would mean, and let me tell you how much in the way of bonds that we 
have.
  We have outstanding $3.3 billion worth of tax-exempt bonds. Con 
Edison has $1.7 billion; LILCO, $950 million; Brooklyn Union Gas, $650 
million. If these utilities were required to redeem their tax-exempt 
bonds with ordinary bonds, it would mean that the taxpayers and 
ratepayers of Long Island, Westchester, and New York City would pay an 
additional $65 million a year over the life of those bonds. We are 
talking about $1.6 billion--more than $1.6 billion.
  Let me say, we already pay the highest electric rates in the Nation. 
This would cost Long Islanders alone more than $35 million a year.
  That is just unconscionable. Let me say here and now, we are not 
going to stand still for this. This Senator is not going to agree to 
conferees being appointed until or unless this onerous, ridiculous, 
confiscatory provision is dropped from the bill.
  Now, we were assured that it would be dropped from the bill, it would 
be dealt with, that technically they would take care of it. ``Don't 
worry,'' in between the time of the markup and bringing this bill to 
the floor and passage, ``don't worry about it. It will be taken care 
of.''
  We are not looking to disadvantage anybody. If my State and the 
taxpayers of my State have to pay $65 million a year more in order to 
save $80 million over a 10-year period of time, somebody's arithmetic 
does not add up, and it does not make sense. I am not going to stand by 
and have our ratepayers get hit with this unconscionable kind of 
nonsensical--nonsensical --legal gymnastics. It does not make sense.
  Understand, the Treasury will pick up $80 million--approximately $80 
million--over a 10-year period of time, but it will wind up costing the 
New York ratepayers and taxpayers and those

[[Page S7631]]

who pay their utility bills, because those costs will be passed on from 
the utility to the ratepayers, $65 million a year more. Over a 25-year 
life--and it is a minimum of 25 years--it is $1.6 billion.
  Let me tell you, Long Island already has the highest energy cost in 
the Nation. We are going to add another $30 to $35 million a year to 
that? We have jobs that are fleeing, industries that cannot compete, 
people who cannot use their air-conditioning in the summer because the 
rates are so high, the highest rates in the Nation.
  So it was not an idle threat when this Senator and my distinguished 
colleague, Senator Moynihan, indicated to the committee and to the 
chairman that this provision was not one that was acceptable. As a 
matter of fact, I assumed, given the promises that were made to us that 
it was taken care of, that it was dealt with in a way that would not 
create that burden, and that is what we were promised. That is not the 
case.
  Mr. MOYNIHAN. Will my distinguished friend yield for a question?
  Mr. D'AMATO. Certainly.
  Mr. MOYNIHAN. He used the word ``threat,'' but then said ``promise.'' 
The point here is that we had an understanding. Would he not agree we 
had an understanding?
  Mr. D'AMATO. That is correct.
  Mr. MOYNIHAN. Would he not agree that this can be changed, but that 
if the bill is to go to conference, since we cannot bring it back up, 
it is possible for it to go to conference with an understanding on the 
part of the conferees that they will not return without a correction 
having been made?
  Mr. D'AMATO. I believe that would be the only way in which we could 
handle this matter.
  Mr. MOYNIHAN. We would not be able to agree to conferees.
  Mr. D'AMATO. That is correct.
  Mr. REID. Will the Senator from New York yield for a question?
  Mr. D'AMATO. Certainly.
  Mr. MOYNIHAN. We have two here.
  Mr. REID. Whichever New York Senator has the floor. It appears this 
is a bipartisan statement. I want to make sure it is a nonregional 
statement, and covers the whole United States. We in Nevada have 
utilities extremely hindered by the result of what we did to you 
yesterday.
  Mr. MOYNIHAN. We would welcome associates and--I do not presume to 
speak for my colleague, I just think I can say that we would like to be 
of help to anybody on this question.
  Mr. D'AMATO. Let me assure my colleague from Nevada that it would not 
be my intent to have this deal just with New York. Indeed, all of those 
utilities that would be impaired and the ratepayers should not suffer 
regardless of what State they are in.
  Indeed, if your utilities have used tax-exempt bonds--and I imagine 
they have--they would find themselves in a similar position we find 
ourselves in.
  Mr. REID. I appreciate the answer of the Senator. Nevada Power is the 
utility that handles the power generation for 67 percent of the people 
in the State of Nevada and is affected very badly. Therefore, we stand 
by the New York delegation to assist you in whatever way we can.
  Mr. MOYNIHAN. If I may just say, with one last question, does the 
Senator agree we should speak with our distinguished friend, the 
chairman of the committee, and see if we cannot work out instructions 
to the conferees at the time they are appointed?
  Mr. D'AMATO. I agree with my colleague and friend, the distinguished 
senior Senator and ranking member of the committee. That is why I have 
a great deal of confidence in the Senator's suggestion that this would 
be a way in which we could work it out.
  I am sorry that we had to come to the floor. Let me say, this matter 
is now one that has been outstanding for approximately a week--more 
than a week--in which we have been attempting at the staff level to 
work it out. Then when we find that it has not been done, it gives me 
great cause for concern, because unless we can get that agreement prior 
to going to conference, I think we would be foolish to move to 
conference.
  So I hope we can get this agreement worked out. But, failing that, 
notwithstanding there are some magnificent provisions in this bill--
just take a look: giving to employers the educational expenses that my 
colleague and I have worked to restore, and I am very proud of the fact 
we worked to restore that. Our graduate students, our nurses who are 
required to get additional education, right now if the hospitals 
reimburse them, they have to pay income tax on their tuition. That is 
silly. We want to encourage education.
  The spousal IRA is a wonderful thing. We want nonworking spouses to 
be able to contribute to an IRA.
  Having said that, I do not believe that it is fair to the ratepayers 
of New York to be stuck with this onerous provision that does little in 
the way of raising revenue but creates a $1.6 billion hit on our 
ratepayers.
  Mr. President, I thank my distinguished colleague for joining with 
me, and I certainly hope we can resolve this matter, because I think 
the legislation is good, it is important, I want to see it passed, and 
I certainly hope we can work this out before this matter goes to 
conference.
  I yield the floor. Mr. President, I suggest the absence of a quorum.
  The PRESIDING OFFICER. The clerk will call the roll.
  The assistant legislative clerk proceeded to call the roll.
  Mr. REID. Mr. President, I ask unanimous consent that the order for 
the quorum call be rescinded.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  Mr. REID. Mr. President, I ask unanimous consent that the brief 
statement that I made will not consist of a second speech on the same 
issue. I am going to talk now on the underlying bill.
  The PRESIDING OFFICER. Without objection, it is so ordered.

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