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Government Affairs Albany Update

April 16, 1999

TBC's Main Sales Tax Proposals in Senate Majority's Budget

Senate bill number 2 - which incorporates the Senate Majority's tax provisions for the 1999-2000 Budget - contains The Business Council's leading Sales and Use Tax proposals from its 1999 Legislative Program.

S. 2 would align New York with the norm of its brethren states in calculating the use tax due from registered New York Sales and Use Tax vendors who both produce (manufacture) and use (in-house) a product. Under TBC and Senate proposal the use tax would be based on the material cost of the product -- not (as New York law currently provides) on the sale price of the product.

S.2 would also enact TBC's perennial proposal to exempt from local (outside New York City) taxation RIM (Repair/Installation/Maintenance) services on manufacturing equipment whose purchase already is exempt from taxation. The proposal would close a loophole; current law exempts the purchase of manufacturing equipment from State, local, NYC, and MCTD Sales and Use Tax and exempts RIM services on manufacturing from State, NYC, and MCTD Sales and Use Tax.

S.2 would match Connecticut and New Jersey in exempting broadcasters' investment in new machinery and equipment mandated by the Federal government for the transition to HDTV (High Definition Television) and digital format as well as the maintenance and repair of current and new broadcasting equipment.

Assembly Moves Comparable Worth Legislation

On Monday, April 12, 1999, the Assembly passed seven bills advancing the concept of comparable worth under the banner of pay equity.

Two bills affected the public sector by amending the Civil Service Law, one affected the private sector by amending the Labor Law while two had implications beyond only employers by affecting the Executive (Human Rights) Law, one amending the New York State Constitution and finally, one in the form of a Congressional Resolution.

Several of these have Senate companion bills but there has been no Senate committee action.

Senator Spano sponsors "Small Business Support Act of 1999"

This week Senator Spano introduced S.4587 entitled "Small Business Support Act of 1999". The bill contains several legislative priority issues of The Business Council's Workers' Compensation Committee and Small Business Council. The bill addresses inequities within the workers' compensation system in an effort to ensure continued growth and employment opportunities for small businesses in New York.

Among other provisions, the bill expands the for-profit corporate officer exemption from two to three or four officers; provides that there shall be no liability for workers' compensation where an injury or occupational disease was sustained in the course of a criminal offense in which he or she has been convicted; provides that the rates for workers' compensation for officers of a corporation, a self-employed person, or a partner shall be based on the actual compensation paid to such individual; and provides that premium rates for workers' compensation shall be determined on the basis of the compensation actually paid to each employee.

Bell Atlantic Moves Closer to Entry Into Long Distance Market

The New York State Public Service Commission (PSC) has outlined a schedule to review the final phase of Bell Atlantic's plans to enter into the long distance telephone market. Bell Atlantic has been working with regulators since 1997 to gain entry into the long distance market and compete with other carriers in New York. In a notice issued by the PSC this week, two technical conferences with administrative law judges have been scheduled to review whether Bell Atlantic has met necessary requirements to compete in New York's long distance market. Oral arguments before PSC Chairman Maureen Helmer will follow the two technical conferences. According to previous orders by the PSC and requirements included within the Federal Telecommunications Act of 1996, Bell Atlantic must satisfy a 14 point checklist before gaining approval to compete for New York's long distance customers. The technical review conferences and oral arguments are expected to be completed by May 19.

PSC Approves ConEd / Orange & Rockland Merger

The New York State Public service Commission (PSC), last week, approved the merger of Consolidated Edison of New York, Inc. (ConEd), and Orange & Rockland Utilities, Inc. (O&R). Under the terms of the merger, ConEd will act as the parent company of O&R and purchase O&R's stock at $58.50 a share. Both companies will continue to operate under their original corporate names. According to the PSC, the merger will not adversely affect either company's approved rate cut and restructuring plans under competition. O&R customers should realize an additional $26.7 million in savings over the first five years of the merger while ConEd's gas and steam customers should receive additional savings of $10 million and $2.7 million respectively over five years.