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Overview of Senate and Assembly Budget Bills

 

Construction

Make “design-build” contract authorization permanent; extend its authorized use to local governments on non-Wicks Law projects. Unfortunately, the 30 day amendments reversed course, and imposed unworkable PLA requirements, which remains our most significant concern regarding this issue in the Article VII bill. The 30 day amendments also changed this to a 6 year extension, and eliminated the expanded use by municipalities. 

Contract Procurement

Includes $250,000 to conduct a disparity study on state contracting with disabled-veteran owned small business owners, which will serve as the basis for a set aside goal of 5% state contracts. Additionally, the executive introduced a separate budget bill, S.6609/A.8768 “The Service-Disabled Veteran-Owned Business Act” that sets a 5% state contract goal.

Local governments would be authorized to access the State's data center and other IT services (PPGG, S.6355-B/A.8555-B, Part F).

Provisions allowing the state to make aggregate energy purchases for state agencies, local governments, public authorities, public benefit corporations, and institutions which are set to expire in 2015 are extended to 2020 (PPGG, S.6355-B/A8555-B, Part G).

The Assembly's also proposes the following:

Includes language to require a cost comparison to be conducted for any contract worth
more than $250,000 in a year for consulting services (PPGG, A.8555-C, Part O)..

Economic Development - NEED

Provides an additional $150 million in capital funding and $70 million in Excelsior Job tax credits to be disbursed through the ten regional economic development councils (extending current state support levels.)

Provides $680 million in additional capital commitments under the “Buffalo Billion” program.

Funding initiatives include: $180 million for equipment at Nano Utica; $110 million for NYSUNY and CUNY 2020 grants; $105 million to support the NY Genome Center and University of Buffalo; $50 million to continue the NY “Open for Business” marketing campaign; $46 million for ongoing ESDC programs including the Economic Development Fund and M/WBE programs; $31 million for NYSTAR program grants;  $30 million for Onondaga Lake regional redevelopment; $24 million for community redevelopment related to closure of an additional four corrections facilities; $12 million to support a Clarkson University/Trudeau Institute partnership; $5 million for competitive funding for tourism marketing plans; and $3.75 million to support the “Innovation Hot Spot” and state incubator programs.

Reforms several business tax credit programs, including the investment tax credit, brownfield remediation tax credit, and others.

Education / Higher Education / Workforce Development

Education
The budget provides an increase of $807 million in education aid for the 2014-15 school year, $608 of which is provided as formula-based school aid.

P-TECH program(S.6353-B/A.8553-B)
Another round of funding for P-TECH partnerships ($5 million)

Smart Schools Initiative (S.6354-B / A.8554-B – Capital Projects)
Proposes a $2 billion general obligation bond act, to be on the ballot in November; use of funds is restricted to certain technology upgrades and construction of pre-K classrooms and after-school program space as needed.

Statewide universal full-day pre-k
Commitment for $1.5 billion over 5 years for universal pre-k

After school programs (funded through casino and gaming revenue fund)
$720 million over five years for statewide after-school programs.

Teacher Excellence Fund
$20 million for awards to “highly effective” teachers; eligible districts would submit an application to request funding; funding focused on schools with the greatest academic need; difficult-to-staff subject or certification areas and/or grade levels; and those at critical points in their career.

School district reorganization and real property tax rates
When two or more districts propose reorganization that would result in impacted school tax rates in the areas served by the districts, the boards of education or trustees of the districts may opt to have the impact deferred for a one-year period and/or phased in over a period of up to 10 years.

Higher Ed
New York State Science, Technology, Engineering and Mathematics Incentive Program
A new financial assistance program for undergraduates matriculated in an approved undergraduate program leading to a career in STEM at a state public university; requires a commitment to work in a STEM field within New York State for 5 years; program funding of $8 million.

Provides $110 million for another round of NYSUNY2020 and NYCUNY2020 grants ($110 million)

College-specific funding programs include:

Workforce Development/Enhanced Youth Works Tax Credit
(S. 6359-B / A. 8559-B – Part U)


Employers will be eligible for an additional $1,000 credit for every at-risk youth employed full-time for an additional year ($500 for part-time status), and the annual credit allocation will increase from $6 million to $10 million.

Election and Campaign Finance Reform

(S.6353-B, Public Protection and General Government, Part H) Executive budget proposal includes the following:

Reduce corporate and LLC contributions to an aggregate total of $1,000 per year.

Reduce contribution receipt limits for candidates for all offices.

Limit party transfers and direct campaign expenditures to candidates

Institute a voluntary matching funds system at a $6 to $1 rate for the first $175 of eligible contributions received. The system would be funded by a voluntary taxpayer check-off, from the abandoned property fund, private contributions from individuals and organizations, and transfers from thegeneral fund.

Expand the definition of electioneering activities and require greater disclosure of independent expenditures.

Create an independent enforcement board within the State Board of Elections, the Chief Enforcement Counsel of which will be appointed by the Governor.

Create new crime of corrupting the government and increase penalties for corruption, bribery and official misconduct.

Increase required disclosure of outside business relationships, including client names and duties performed.

*Prior to the Senate introducing their budget resolution the Senate Rules committee introduced four bills identical to the four subparts of the Governor's campaign and election reforms contained in Part H. The Senate's budget resolution says they will modify the Executive's proposal, but Part H is omitted in its entirety from the bill. As more information is made available details will be provided on our website.

The Assembly modifies the Executive proposal replacing it with the Fair Elections Act 2014; specifics will be available on our website.

Energy

Appropriations

Senate Budget - Rejects all of NYSERDA's All Funds, The Senate concerns with the Executive's proposed funding levels for the Public Service Commission.

Assembly Budget - The Assembly does not amend the All Funds appropriation of $28.33 million for NYSERDA. The Assembly provides $505,000 for the Public Utility Law Project in the Department of State's Budget. The Assembly provides an All Funds appropriation of $89.32 million, unchanged from the Executive proposal.

Authorize NYSERDA to finance DEC Climate Change Office (TED Part K)

NYSERDA to Transfer $913,000 to the General Fund (TED Part L)

PSC Administrative Efficiencies (TED Part R)

18-A (TED Part S)

Executive Budget - In accordance with the recommendations of the New York State Tax relief Commission, Part S of the TED Article VII legislation, would reduce the Public Service Law § 18-a(6) Temporary State Energy and Utility Service Conservation Assessment (Temporary Assessment) by a total of $200 million per year by eliminating the assessment on industrial utility customers and accelerate the phase out for all other customers. Specifically, the bill would eliminate the assessment for electric customers with a monthly peak demand of one thousand kilowatts or more in the last preceding calendar year and gas customers of one hundred thousand dekatherms or more, and all customers of municipal electric and gas utilities and water works corporations.

New Assembly Proposals

TED Part CC: Directs not less than fifteen million dollars from the Green Bank to cover costs associated with installing any improvement to a heating or cooling system which will increase efficiency by at least ten percent or reduce fuel usage by at least ten percent and lead to a significant reduction in carbon emissions. Such improvements shall include, but shall not be limited to, the installation of a high efficiency boiler or furnace, an improvement to and/or replacement of a burner in a boiler, and any other improvement to a heating system that satisfies the criteria set forth in this section.

PPGG Part N: amends the public service law to create the state office of the utility consumer advocate. This proposal is substantially similar to A. 6239-a (Dinowitz) / S.4550 (Savino).

New Senate Proposals

TED Part II: The Senate advances language to establish a Northern New York Power Proceeds Allocation Board, similar to the Western New York Power Proceeds Allocation Board, to allow unallocated power from the FDR hydropower facility in Massena to be monetized and used for economic development purposes within the local region.

TED Part KK: The Senate proposes language to request that the Long Island Power Authority enter into no power purchase agreements with any new base load generating facility until every reasonable attempt has been made to have repowered sites serve Long Island's energy needs, and that financials for all proposed facilities be made available to the Senate and the Assembly.

TED Part QQ: The Senate adds language to direct the New York State Energy Research and Development Authority to make payments on grants to farm operations no later than ninety days after notification of any funding award.

TED Part RR: The Senate adds language to direct the Public Service Commission to conduct a study of the economic and environmental costs and benefits of the State's net energy metering programs, similar to S 5149 ( Maziarz) / A 7679 (Simotas).

TED Part VV: The Senate adds language to lay out a repowering plan for the existing generating facility in the Village of Port Jefferson, and includes an incentive package to aid in the remediation of the footprint for the new plant.

TED Part YY: The proposes a sweep of $165.6M in NYSERDA clean energy funds, and a $52.9 M in RGGI proceeds to the general fund.

Senate Proposals that appear in the Resolution without language.

Environment

Appropriations

Assembly Budget – Includes a proposed $10 million increase in Environmental Protection Fund (EPF) allocations over the Executive proposal for a total of $167 million. The following programs would be increased over the Executive proposal by the following amounts:

In addition, the Assembly proposal includes $1 million in EPF resources for Children's Environmental Health Centers of Excellence. A report issued by the Mount Sinai Children's Environmental Health Center, in December recommended the creation of a statewide network of Centers of Excellence in Children's Environmental Health and that this network should be funded on a permanent and sustainable basis and coordinated through the New York State Department of Health.

Senate Budget - The Senate provides to $200,000 to DEC to analyze significant risks to the public health and the environment from leaking, large-scale, heavily contaminated, hazardous waste landfills. The Senate provides $2,000,000 for priority dredging and invasive projects, $400,000 in funding for the Beacon Institute, and $500,000 in funding for a “Sewage-Right-to-Know” program. Additionally, the Senate Health Budget provides $1 for Children's Environmental Health Centers of Excellence.

Furthermore the Senate increases the EPF by $43 million in the following manner:

Pesticide Product Registration (TED Part H)

Requires Emergency Back-up Power at Gas Stations (TED Part M)

Brownfield Cleanup Program (REV Part Q)

Superfund Program (PPGG Part I p.145)

New Assembly Proposals

REV Part LL: Biofuel tax credit. The Assembly proposes to require all heating oil sold in New York State to contain at least two percent biodiesel after July 1, 2015, and will change the existing tax structure to incentivize the use of at least five percent biodiesel.

TED PART FF Drug Disposal: The Assembly includes legislation to require DEC to expand the existing collection program for unwanted pharmaceuticals to nursing homes and to institutions located in Long Island.

New Senate Proposals

TED Part UU: The Senate adds language to extend by two years the deadline for heavy-duty diesel vehicles to be retrofitted with diesel particulate filter devices as currently required by the Diesel Emission Reduction Act (DERA).

Financial Services

Enhance consumer protection through no-fault automobile insurance fraud reform (TED S.6357/A8557 Part T).

This proposal gives the Superintendent of DFS the power to prohibit health providers from requesting payment for health services rendered after a determination of fraudulent activity on behalf of the provider and to levy fines of up to $10,000 per fraudulent offense. This provision also gives the Superintendent the authority to examine and audit health providers at any time. No funding allocation was included.

Establish new licensing requirements for title insurance agents, closers, and solicitors in New York State (TED S.6357/A8557 Part V).

These entities would be required to get licensed to practice in this state. The Superintendent of DFS would be empowered to revoke or suspend any license of any agent who violates the Insurance Law or is untrustworthy or incompetent. The State would collect $80,000 annually in licensing fees.

Health Care / Health Insurance

Out of Network (S.6357/A.8557 PART U)

Expands some health insurance plan network adequacy requirements and requires insurers to provide access to out-of-network providers if there is not an in-network provider with appropriate training or experience or within a reasonable geographic area.

Sets forth levels of reimbursement for plans that offer out-of-network coverage to 70% of UCR (the 80th percentile of FairHealth).

Requires multiple disclosures of anticipated costs for both insurers and provider. These include requiring insurers to disclose anticipated out-of-network costs for insured and prospective customers and requiring physicians to disclose real and anticipated costs when requested by patients.

Establishes a dispute resolution process to adjudicate out-of-network claims disputes including balance billing and creates “hold harmless” protections for consumers where required disclosures are not made.

Senate

Assembly

Health Infrastructure Improvement

Establishes a $1.2 billion capital bonding program over the next seven years for improvements to infrastructure such as primary care facilities, expands health facility restructuring loans for not-for-profit health centers and nursing homes and creates a pilot program authorizing up to five businesses to expand the use of private investment in health care projects. The budget language additionally streamlines the Certificate of Need processes for some providers of health care, authorizes limited services clinics within retail operations and defines the term “urgent care.” (S.6358/A.8558 PART A, Sections 8-22)

Senate

Assembly

HCRA reauthorization

Extends HCRA taxes through 2017 and allows for the use of $65 million of the Covered Lives Assessment for the support of the Statewide Health Information Network (SHIN NY), so long as the assessment raises in excess of $1.045 billion through 1/31/17. (S.6358/A.8558 PART B, Section 17)
Senate

Assembly

Medicaid Redesign

Eliminates “prescriber prevails” provisions in Medicaid fee-for-service and managed care programs. (S.6358/A.8558 PART C, Sections 1-3)

Senate

Assembly

Authorizes the Commissioner to require further supplemental rebates from name-brand drug manufacturers that provide for Medicaid fee-for-service pharmacy programs. (S.6358/A.8558 PART C, Section 7)

New Senate Items

New Assembly Items

Labor / Human Resources

For higher income State Retirees, the State will eliminate reimbursement of Supplemental Medicare Part B premiums but will continue reimbursement of the regular Medicare Part B premiums of $104.90 per month in 2014.

Racing and Gaming

Executive budget proposal includes the following:

Extend Monticello VLT rates, certain Pari-Mutuel Tax Rates and Simulcast provisions, and video lottery gaming vendor's capital awards program for one year (Revenue, S.6359-B/A.8559-B, Part BB).

Increase the regulatory racing surcharge on handles 0.5% to 0.6% to cover the cost of regulation (Revenue, S.6359-B/A.8559-B, Part D).

The Assembly's proposed budget includes additional legislation to allow:
The Catskill regional Off-Track Betting Corporation to operate in New York City (TED, A.8557-C, Part HH)

The Senate's proposed budget also includes legislation to allow:

Taxation / Revenues / Tax Credits

Corporate Tax Reform (Part A) - This proposal largely tracks prior draft legislation. The following provides an overview of key provisions of these corporate franchise tax reform provisions, and a separate, more detailed review of the Article 9A reforms will be available soon. Key provisions include:

The Article 32 Bank Tax is repealed, Article 32 taxpayers are subject to the corporate franchise tax.

The ENI rate is reduced to 6.5% effective 1/1/16; the capital base cap is increased to $5 million for all non-manufacturing taxpayers; the 1.5% alternative minimum tax is repealed; and a new fixed dollar minimum tax schedule is adopted for sub-C taxpayers, with a maximum payment of $200,000, and for “qualified NY manufacture” taxpayers with a top payment of $4,500.

Combined reports are required to include: businesses with more than 50% stock ownership and engagement in a unitary business; captive REITs/RICs not combined under Article 33; and certain alien corporations treated as domestic corporations under the IRC. Taxpayers are allowed a seven year non-revocable election to combine based on ownership only.

The current subsidiary capital exemption is replaced with an exempt investment income/taxable business income regime.

An economic nexus standard is imposed for the corporate franchise tax and the MTA surcharge; Article 9-A single sales factor apportionment method is adopted for determining the MTA surcharge.

Pre-reform net operating losses are converted into credits to be applied against ENI-based tax liability, with a 20 year carry forward.

ITC and Manufacturers' Credit (Part R)

Defines “manufacturer” as a taxpayer or combined group with more than 50% of gross receipts from the sale of goods produced by manufacturing; excludes power generation and distribution, natural gas extraction and distribution, co-generated steam, film/TV/commercial production and fuel blending.

Defines “qualified New York manufacturer” as a taxpayer or combined group that is a manufacturer with either at least $10 million or 100% of its manufacturing property in NYS; or a taxpayer with 2,500 manufacturing employees and $100 million in manufacturing property in-state.

Limits the Article 9-A investment tax credit to “qualified NY manufacturers” and to qualified agri- and mining business;” defines qualified agri-business and mining as taxpayer/combined group with at least 50% of gross receipts from such in-state activity; eliminates the ITC for air and water pollution control equipment, security broker/dealers, investment advisory services, and film production; prohibits the ITC for property that had already served as the basis for the ITC or EZ-ITC;

Creates a new refundable credit under Articles 9A and 22 equal to 20% of real property taxes paid by a qualified NY manufacturer; excludes PILOT payments, any RPTs deducted from ENI or federal AGI calculations, and RPTs used to calculate another tax credit. Recaptures credits if RPTs are subsequently lowered after a legal challenge or other actions.

Reduces the Article 9-A entire net income tax rate to zero, effective 1/1/14, for a qualified NY manufacturer with a MTCD property and wage apportionment factor of zero (the bill also proposes the adoption of single sales factor apportionment for purposes of the MTCD surcharge.)

Estate Tax Reform

Increases the Estate Tax exclusion threshold to $5.25 million (and future indexing); phases down the tax rate to 10% by FY 2017; subjects certain gifts to be added back for estate tax purposes (Part X).

The bill also closes the so-called “resident trust loophole,” to impose state income taxes on distributions from certain non-resident and exempt trusts (Part I).

Tax Credits

Extends the 20% credit for TV commercial production through 12/31/16; it is currently set to expire at the end of 2014 (Part O).

Extends and reforms the Brownfield Cleanup Program and its redevelopment tax credit. Tax credit changes include: limits tangible property credit eligibility to vacant or tax delinquent properties and other “priority” sites and limits the availability of the credit to five years after completion of cleanups; terminates sites in program not completed on a timely basis; repeals the environmental insurance credit. Other reform issues discussed under “Environment” above.(Part Q).

Amends the Excelsior Jobs credit program to provide participants with a credit against their payment of telecommunications excise tax (Part T).

Conforms Tax Law provisions to recent Labor Law amendments to the Youth Works Tax Credit; provides an additional credit(s) for extended employment of eligible youth (Part U).

Extends the alternative fuel use credit (for E85, CNG and hydrogen) for two years through 9/1/2016 (Part V).

Other Provisions

Repeals the state tax on agricultural co-operatives (Part S).

Repeals the stock transfer tax, which under current law is collected and fully rebated to taxpayers with no net revenues to the state (Part CC.)

Allow self-employed individuals to file MTA mobility tax returns with their personal income tax returns (Part DD).

Additional Proposals

The Senate revenue bill included:

The Assembly revenue bill included:

Technology / Telecommunications

Allows the PSC to forgo application of certain regulatory provisions to telephone corporations if such provisions are not necessary to ensure just and reasonable rates, charges and practices (TED S.6357/A8557 Part R).

Such provisions include the requirements to: post rates and schedule with PSC; PSC approval to construct telephone lines; PSC permission for company reorganization; and PSC permission to own and issue telephone company stock PSC streamlining of telecommunications regulation, shared metering and Cable Franchising

Reduces the punitive assessment on landlords where a shared metering condition follows a customer complaint or is discovered by a utility. Reduces the additional assessment to 25% of the charges for service measured by the shared meter for 12 months.

Streamlines the confirmation of cable franchises and renewals by establishing a process that subjects franchises to the PSC's minimum franchising standards, rather than requiring PSC approval.

Directs the Public Service Commission to undertake a comprehensive examination of telecommunication services to underserved areas in New York State (TED S.6357-C Part ZZ)
PSC could compel telephone corporations to make available records, documents, and reports necessary to assist in commission's study.

PSC will issue a report on its findings, conclusions and recommendations to the governor, and the Senate and Assembly leadership.

Transportation

Funding for local highway and bridge programs under the Consolidated Highway Improvement Program (CHIPS) and Marchiselli program is maintained at last year's level of $477.8 million.

DOT interstate commerce vehicle registration fees and the railroad safety fees will now be deposited into the special reserve and obligation account of the dedicated Highway and Bridge trust fund.

For the NYS Thruway Authority, continuation of $86 million in funding for the financing of Troop T that patrols the Thruway, offsetting the need for a commercial toll increase.

Provides $155 million in new state funding under the New York Works Program to fast track highway and bridge projects; $45 million for essential project engineering and $25 million to enhance transit, rail and aviation programs.

MTA operating support to increase by $85 million to $4.3 billion; Non-MTA transit systems' operating support to increase by $7.9 million to $761 million.

Appropriate $2.5 million for feasibility study of the Northern Tier Expressway (Route 98) between Watertown and Plattsburgh.

Travel and Tourism

Market-NY program to provide competitive grants for regional promotion of events and tourism would receive $5 million (S.6353-B/A.8553-B Aid to Localities, Department of Economic Development)

Taste-NY which, in 2012, was funded under the Market-NY program to help market NYS food and food products, would receive $1.1 million (S.6353-B/A.8553-B Aid to Localities, Department of Agriculture and Markets)

New York Wine and Grape Foundation's funding is the same as last year, $713,000 (S.6353-B/A.8553-B Aid to Localities, Department of Agriculture and Markets).

Implement the “Open for Fishing and Hunting II” initiative which would create a NYS Adventure License for things such as lifetime hunting and fishing licenses, and boating certifications as well as for the Empire Pass. Provisions in the Executive budget would also create new 3 and 5 year hunting, fishing and trapping licenses, reduce the cost of 7-day fishing licenses and allow promotional discounts on designated days and six additional free fishing days (TED, S.6357-B/A.8557-B, Part I

Limit liability of landowners who make open their properties for public recreation (TED, S.6357-B/A.8557-B, Part I)

Repeal the boxing and wrestling exhibitions tax (Revenue, S.6359-B/A.8559-B, Part Y).

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