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Government Affairs Albany Update

March 30, 2001

Small Business Day Re-Cap

It was another successful Small Business Day on Tuesday, with four hundred people filling the convention center. Participants had the opportunity throughout the day to hear from Governor Pataki, Senate Majority Leader Joseph Bruno, Senator Jim Alesi, and Assemblyman Bob Sweeney, chairs of the Senate and Assembly small business committees respectively, and a number of agencies that were there to help small businesses improve their business. In addition, Mr. Dennis Ross, President of Mitchell Ross Associate Architects, was presented the Small Business Advocate of the Year award.

To read more about what took place at Small Business Day, please visit the following links:Governor Pataki's remarks:
www.bcnys.org/whatsnew/2001/0328gep.htm

Small Business Advocate of the Year Award:
www.bcnys.org/whatsnew/2001/0327ross.htm

New Commissioners Named

Northeast Regional Electricity Markets Move Closer

On March 29th the New England Independent System Operator (ISO-NE) and PJM Interconnection, LLC (the Independent System Operator for parts or all of Pennsylvania, New Jersey, Maryland, Delaware, Virginia, and the District of Columbia) announced their intention to formalize an agreement to standardize their electricity markets by agreeing to universalize certain aspects of their wholesale market operations. The ISO-NE and PJM are responsible for the maintenance of their respective wholesale electricity markets and the reliability of the transmission grids in their territories.

In a report delivered to the Federal Energy Regulatory Commission (FERC) on March 29th the ISO-NE outlined its proposed comprehensive wholesale market program. The program combines certain features of its own system with those of PJM's. The amalgamation will create a standardized wholesale market structure entitled the Standard Market Design. The system is being developed with the aid of the ALSTROM ESCA Corporation, a systems developer for electric utilities. Together with the two ISOs, the developer will create, through software exchanges and the mutual sharing of practices, a standardized market design. The two ISOs (PJM and New England) operate the wholesale electricity markets to the east and south of the New York Independent System Operator (NYISO). The coordinated effort by PJM and ISO-NE represents a great step towards the elimination of trading barriers across the markets and promotes the FERC's goal of creating a seamless electrical marketplace. Earlier in the year, the New York Independent System Operator (NYISO) and the ISO-NE issued a joint resolution establishing a task force on inter-control area market coordination to enhance interregional coordination and reduce barriers to transactions between the two wholesale electricity markets. That resolution was passed on January 16, 2001 when both bodies made their Regional Transmission Organization (RTO) filings with the FERC. The RTO is designed to achieve a conformed market across the northeastern control area. The conformity in standards brings the four regional wholesale electricity markets (New York, New England, PJM, and Ontario (Independent Market Operator)) closer together in the development of a seamless regional electricity market. In a statement issued on the same day (March 29th), NYISO President/CEO lauded the steps taken by the ISO-NE and PJM stating that this will further the goal of a "virtual regional transmission organization". Copies of both press releases (PJM/ISO-NE and NYISO) are enclosed, and can also be found at: www.iso-ne.com/iso_news/newnews.html, and click here

New Superfund Fee Legislation
Senator Kenneth LaValle (R-Selden, LI) has introduced legislation that would impose more than $200 million per year in new fees, primarily on the state's manufacturing sector. The revenues would be used to refinance, and greatly increase the size of, the state's superfund program. This legislation is the companion bill to A.3609 (Grannis). The Assembly legislation was first introduced in 1999 at the urging of a coalition of environmental groups.

The Senate bill is in sharp contrast to the Senate's budget resolution, which rejected the Governor's proposal for about $20 million in new fees on manufacturers and waste management facilities.This bill would impose the first-ever material use fees on New York State business. They would apply to businesses that produce, use or import any of more than 150 listed materials, and cost nearly $100 million per year. For example, the bill would impose a $2 per ton fee on steel and copper. For commonly used chemicals, fees range from just over $10 per ton for sodium hydroxide, sulfuric acid and chlorine; to nearly $50 per ton for sodium hypochlorite and hydrochloric acid; and to more than $70 per ton for eighteen different substances, including methylene chloride and phenol. The bill also provides for automatic annual increases based on the consumer price index.In addition, the bill would quadruple the state's existing hazardous waste permit fees, hazardous waste program fees, and special assessments on the treatment and disposal of hazardous wastes. It would also quadruple the existing 4 ½ cent per barrel fee on petroleum products.The Business Council has vigorously opposed this legislation in the past. If this proposal would affect your operations, it would be appreciated if you could provide us with a rough estimate of its impact. The bill text is available at the following site. The chemical fee proposal starts on page 25 of the bill text.

Tis The Season
The vast majority of industrial and manufacturing businesses are calendar year taxpayers. As such a great many taxpayers are seeing the "Claim for Industrial or Manufacturing Business (IBM) Credit" for the first time this month. The IMBC claim form --DTF-623 -- with instructions on the reverse is available on the web at: www.tax.state.ny.us/pdf/2000/misc/dtf623_2000.pdf.

As a reminder, Chapter 63 of the Laws of 2000 requires your utility providers to provide you with the dollar amount information on the section 186-a Gross Receipts Tax, section 189 Gas Importation Privilege Tax, and their respective Metropolitan Commuter Transportation District surcharges (sections 186-c and 189-a) paid by your firm. The credit against Articles 9-A and 22 is FULLY REFUNDABLE if your tax liability is at a non-reducible minimum amount. The credit and future PSC rate settings combine effectively to repeal the GRT and GIPT for industrial and manufacturing businesses as of 1/1/0.