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Government Affairs Albany Update

May 4, 2001

Government Affairs Council to Meet at Empire State Plaza - May 14

This is a reminder that the meeting of the Government Affairs Council scheduled for Monday, May 14 will be held in Meeting Rooms 2 & 3 of the Empire State Plaza. The meeting will begin at 10:00 a.m. and will feature speakers highlighting the status of The Business Council's priority agenda. No advance registration is required to attend the meeting.

Wayne Osten to Speak at Health Committee

Wayne Osten, Director of the Department of Health's Office of Health Systems Management will be a featured speaker at the May 22nd meeting of The Business Council's Health Committee.

Mr. Osten will discuss implementation of the Health Information and Quality Improvement Act, more commonly referred to as the physician profiling system. It is important to note that the act goes beyond physician profiling to include hospital report cards and the creation of a new Patient Safety Center designed to combat medical errors.

Also, Bruce Boissonnault, Executive Director of the Niagara Health Quality Coalition will speak on their efforts to reshape the health care delivery system in Western New York.

Federal Training Dollars Available

The Employment and Training Administration of the U. S. Department of Labor recently announced it will distribute $180 million for training projects for American employees. The money comes from a federal visa program under which employers pay a fee to bring in temporary foreign workers to fill job vacancies.

Funds collected this way will be distributed as grants to local communities and states to support training programs to raise skills to enable people to fill new high-tech jobs.

Seventy-five percent of the funds will be awarded to local workforce investment boards (WIB) or consortia of such boards. The WIB's must match 50% of the grant funds received.

Twenty-five percent of the funds will be awarded to business partnerships that consist of at least two businesses or a business-related non-profit organization that represents more than one business such as a chamber of commerce. This type of partnership may also include any educational, labor or community organization or local board. This type of partnership requires a 100 percent match.

Businesses, higher education institutions or other members of The Business Council should consult with their local workforce investment board or chamber of commerce regarding the feasibility of their benefiting from this program.

Instructions for submitting proposal for the seventy-five percent funds have been released and are available from the Employment and Training Administration's Web site at Proposals are currently being accepted, and the review process should begin in June 2001. The solicitation does not have a closing date and is open until further notice. Applicants may submit proposals at any time throughout this process. Instructions for the twenty-five-percent funds should be released next month.

The Center for Workforce Success at the National Association of Manufacturers can provide some guidance on navigating this process and Phyllis Eisen (202-637-3101) is willing to answer any questions you may have about it.

Northeast Power Coordinating Council Release Reliability Report

The Northeast Power Coordinating Council (NPCC), the organization that oversees the international electric grid reliability for Northeastern North America (which includes New York State), has released its system reliability assessments stating that this area is expected to have a reliable supply of electricity for the summer of 2001. The report comes two weeks after the New York ISO (NYISO) released its market evaluation report in which the NYISO stated that New York's electricity markets are competitive but are in need of additional electrical generating capacity.

The NPCC is an international electric regional reliability council which was formed shortly after the 1965 Northeast Blackout to promote the reliability and efficiency of the interconnected power systems within the northeastern region of North America. NPCC is one of ten coordinating councils that together form the North American Electric Reliability Organization (NAERO) encompassing all of the United States. One of the key objectives of the NPCC is to promote the reliability and efficiency of electric service on the bulk power system of the members of the Council by extending the coordination of their system design and operations. The NYISO as well as most of New York State's public utilities belong to the NPCC.

The NPCC study has found that New York State should have an adequate supply of electricity this summer although New York may be forced to import significant amounts during peak demand periods. This could be remedied, according to the NPCC, by increasing the amount of installed capacity within the state and, more specifically, inside New York City. The report specifically mentions the installation of new generation in New York City (the NYPA generators) as a contributor to reliability and capacity which can alleviate the needs for imports. Also mentioned were the addition of demand response programs as a means to reducing load and meeting reliability standards. Several of these demand response programs in the Con Ed territory were approved by the PSC last month. These programs fit under the Emergency Demand Response Programs (EDRP) developed by the NYISO this Spring.

In addition to stating reliability of supply, the NPCC report mentions a number of preventative actions taken by the NYISO including emergency energy provisions in the interconnection agreements between the neighboring ISO's (Pennsylvania-New Jersey-Maryland [PJM], New England and Ontario) to insure imports in time of need and the addition of better communication systems between the NYISO dispatch system and generators. The full text of the report can be found on the NPCC web page:

Court of Appeals Invalidates Gas Importation Privilege Tax (Section 189)

The New York Court of Appeals this week (May 1) voted 7 - 0 to declare the Gas Importation Privilege Tax -- GIPT (§§ 189, 189-a, and 189-b) unconstitutional as violative of the Commerce Clause of the United States Constitution.

The case involved one Appellant: Tennessee Gas Pipeline Company (hereinafter "Tennessee"). Interestingly, Tennessee brought the case - not in its transporter capacity, but, rather - as a consumer who has imported gas into New York for its own consumption. [The consumer status comes about because Tennessee uses pumping facilities along its pipeline that increase the pressure in the line; ten pumping facilities are located in New York. Rather than purchasing energy from local vendors near the pumping facilities, which would be akin to throwing apples into the orchard, Tennessee powers the pumping facilities' compressors with natural gas drawn off the pipeline. Well, how else would you power them?] Tennessee did not pay any GIPT on the compressor fuel consumed in New York for the period at issue: November 30, 1991 through November 30, 1996 -- $1.6 million plus interest and penalties.

After writing the majority (11) of the pages in its 14-page decision rejecting all but one of Tennessee's challenges to the GIPT, the Court of Appeals embraces a portion of Tennessee's last challenge, namely, that the GIPT runs afoul of the "internal" consistency test in determining whether the GIPT raises the threat of malapportionment. The Court states: "If consumers buy gas in a State with a provision identical to Tax Law § 186, they would pay a pass-through tax even though they exported the gas to New York and consumed it here. Because the import tax contains no credit for taxes assessed on the purchase of gas out-of-State, a double tax occurs; the statute crosses over from a permissible exercise of the State's taxing powers to an unconstitutional burden on interstate commerce."

The Court then rejects the savings provision attempted in the GIPT's enactment language which essentially said a court which determines that the GIPT is infirm should craft an appropriate off-setting credit as the court sees fit. On this point the Court of Appeals stated: "we find the savings provision invalid here because it requires the Court to define the parameters of the credit and the manner in which it will be implemented. This violates fundamental separation of powers principles. The savings provision would require us to rewrite the statute and create quasi-judicial tax regulations. We are not well suited as an institution for such a task."

It is noted that the Court rejected the GIPT solely because the GIPT was created to compensate for the § 186 tax -- NOT because it also compensated for the §186-a tax. The source of this unconstitutionality (as seen in the Court's eyes) was removed when §186 was repealed effective January 1, 2000.

New Privacy Legislation

Senator Nozzolio has introduced two new bills addressing consumer privacy. S.4971 and S.4972, which are linked below, may have a direct impact on your company.

S.4971 - Would require any organization that collects personal information to have a policy regarding the use of such information, ensure its reliability and security and provide guidance to consumers who's information is being collected, as to the method of preventing their information from being shared.

S.4972 - Would prohibit any organization to sell, share, lease or trade an individual's social security number without informed written consent of the individual who's social security number it is, except where required by state or federal law.

Mercury Legislation Moving in Senate

Two weeks ago, we told you about new legislation that would prohibit the sale of certain mercury-containing products in New York State, including but not limited to electrical equipment, lighting, medical equipment, thermostats, gas regulators, and apparel. The bill would also require the labeling of mercury containing products; prohibit the disposal of most mercury-containing products; and require manufacturers to set up product collection and "take-back" programs.

The Senate bill - S.3084 (Balboni) - is now moving. It is on the Senate Water Resources Committee agenda for next Tuesday, May 8. The committee is also chaired by Senator Balboni. Note that a similar bill has also received action in the Assembly. A.4209 (Brodsky) has already advanced to Codes Committee in the lower house.

The Business Council opposes this legislation. While we support efforts to promote source-separation and recycling of mercury, we strongly oppose the imposition of state-level product bans. If you would like a copy of The Business Council's bill memo in opposition, please contact Ken Pokalsky at 800-358-1202 or at:, and he will send it to you when it becomes available. If this bill affects your business, I urge you to contact Senator Balboni and your local representatives TODAY!

State Energy Plan

Members should be aware that the New York State Energy Plan (SEP) is currently being reviewed and updated by the State Energy Planning Board. According to the State Energy Law (Section 6-104, 106) the State Planning Board, comprised of the heads of the Departments of Economic Development, Transportation, Environmental Conservation, Public Service, and the New York State Energy Research and Development Authority (NYSERDA), will update the plan every four years. The last published plan was in November of 1998. The findings provide guidance for energy-related decisions to be made by public and private sectors within the state.

The Energy Plan provides the state with in-depth energy information, facts, figures, forecasts, and projections for all major fuels and their uses. For example, the SEP by law includes studies and reports on;

The SEP projects the demand for electricity, natural gas, coal and petroleum products for a twenty year period. It also projects electricity needs, long range and emerging energy trends, security and diversity of fuel supplies, and a myriad of pertinent energy strategies.

The SEP is being conducted by the staffs of the Energy Planning Board with NYSERDA's serving as the coordinating agency. This is an important opportunity for The Business Council and its member companies to submit testimony and or suggestion to the State Energy Planning Board for inclusion in the State's Energy Plan. The Business Council is currently compiling suggestions for inclusion in the SEP and initial meetings have been held.

The Public Notice soliciting comments was published in the New York State Register on April 18th. June 18th is last day for the submission of comments.