BILL NUMBER: S8917
SPONSOR: COMRIE
 
TITLE OF BILL:
An act to amend the public authorities law, in relation to prohibiting
certain charges to finance water infrastructure
 
PURPOSE:
To prohibit the passing of "rental payment" charges or analogous levies
imposed by New York City on water authorities or water boards through to
consumers as part of water and sewer rates. This bill will ensure that
essential water and sewer services remain affordable and that ratepayers
are not burdened with indirect taxes through their utility bills.
 
SUMMARY OF PROVISIONS:
This legislation amends the Public Authorities Law by adding a new
subdivision 10 to section 1045-j to absolve New York City authority to
impose rental payments or similar charges on water authorities or boards
for the use of municipal infrastructure. The act takes effect imme-
diately and applies to all rate schedules, billing structures, and
rental payment agreements executed, renewed, or modified on or after the
effective date.
 
BACKGROUND AND JUSTIFICATION:
Water and sewer services are essential public necessities. In New York
City, the longstanding practice of requiring rental payments from the
water system has had material consequences for ratepayers.
Under a lease agreement dating back to 1985, the New York City Water
Board may charge a "rental payment" to the City to lease the city-owned
water and wastewater infrastructure. In recent years, these payments
have been reintroduced and expanded. In Fiscal Year 2024, the City
requested a base rental payment of approximately $145 million, and in FY
2025 the requested payment more than doubled to approximately $289
million, with the current projection of $303 million for FY 2026.
Analyses by the New York City Independent Budget Office show that from
2024 through 2028, the City plans to charge the Water Board more than
$1.4 billion in rental payments: amounts funded ultimately through rate-
payer bills. In some years, the inclusion of the rental payment in water
rate calculations has been identified as a key driver of overall bill
increases accounting for several percentage points of total rate hikes.
While proponents of the rental payment argue it compensates the City for
the use of public assets, the reality is that these funds are largely
transferred to the City's general fund and not reinvested directly into
the water and sewer system's operation, repair, or maintenance. As a
result, ratepayers are effectively subsidizing municipal budgets for
services unrelated to water infrastructure. This represents a regres-
sive outcome that disproportionately impacts low-income households who
spend a higher share of household income on utilities.
By explicitly prohibiting such pass-through charges, this bill preserves
the integrity of "user pays" rate structures, ensuring that water and
sewer bills reflect the true costs of providing essential services rath-
er than functioning as a hidden tax to finance unrelated municipal
activities.
 
PRIOR LEGISLATIVE HISTORY:
This is a new bill.
 
FISCAL IMPLICATIONS:
None to the state. New York City stands to lose water board rental
payment revenue.
 
EFFECTIVE DATE:
This act shall take effect immediately and apply to all rate schedules,
billing structures, and rental payment agreements executed, renewed, or
modified after such date. Any inconsistent rate or fee structure in
effect on the effective date shall be amended to comply with this act no
later than 180 days thereafter.

Statutes affected:
S8917: 1045-j public authorities law