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Government Affairs Albany Update

June 22, 2001

Legislative Session Nearing End?

The New York State legislature adjourned last night after passing a bill that contained extender provisions on medical malpractice insurance, the Loft Law, and the state Lottery Quick Draw game. These programs were set to expire on June 30, 2001. The legislation provides that the medical malpractice insurance program will continue through July 31, with the Loft Law and Quick Draw extended until August 31. The Senate is expected to return the week of July 15 and the Assembly is scheduled for session on Monday, June 25.

Assembly Brownfield Legislation
The Assembly has introduced two new "brownfield" bills, that will likely be approved in that house next week.

The first, A.9265 (Brodsky), addresses cleanup requirements and liability issues at brownfield sites in economically distressed areas. The Business Council has opposed this legislation. We believe it establishes unreasonable cleanup requirements, does not provide adequate liability protection, imposes excessive citizen participation requirements, and is too limited in scope. The Business Council continues to work toward a more comprehensive bill that address superfund refinancing and reform, in addition to a statewide voluntary cleanup program. Our legislative memo in opposition

The second, A.9023-B (Lopez), requires Empire State Development Corporation to create and fund nine new grants and loan programs, mostly targeting municipal and "citizen organization" efforts to investigate, cleanup and redevelop brownfield sites. Since the bill contains no funding, it is difficult to gauge the potential effectiveness of this bill. The Business Council has not taken a position.

"Light Pollution" Prohibited

Legislation was approved in both houses that is intended to cut back on "light pollution" - see S.3386-B (Balboni)/ A.5352-B (Grannis).

The bill would:

While The Business Council has not yet taken a position on this bill, we are concerned about the impact on electric utilities and other businesses that maintain outdoor lighting for business, security and other purposes.

Hand-held Cellular Phone Ban Passes Senate

The Senate passed a bill Thursday, S.5400-a (Marcellino), which bans the use of hand-held cellular phones while driving. A three way agreement has been reached on this issue. The Assembly is expected to pass the measure when it returns to Albany on Monday. If enacted into law, the statewide ban would take effect on December 1 of this year.

Taxpayers Should File for GIPT (Sec.189) Refunds

As we have previously reported, the Gas Importation Privilege Tax (Section 189) was found facially unconstitutional by the Court of Appeals on May 1, 2001; that the Department of Taxation & Finance had drafted legislation to restore the constitutionality of the GIPT retroactive to the tax's enactment in 1991; that the Division of the Budget has sought since May 1 to have the drafted legislation included in the various Budget extenders enacted to continue State government operations and payments including last night's (June 21's) extender; and that the Senate Majority has balked at re-levying the GIPT on taxpayers and extinguishing taxpayers' rights to refunds.

The Business Council urges its taxpayer members to consider filing for refunds in order to preserve their rights to refunds. In this regard, Christopher Doyle of Hodgson Russ LLP, the successful attorney for Tennessee Gas Pipeline Company in the May 1 case addressed our members at the annual Conference on State Taxation on June 21. Speaker Doyle distributed the following writing by the Department of Taxation & Finance; Please pay particular attention to the directional import of the final two sentences.

"At this juncture, the Tax Department is awaiting developments. The Court of Appeals concluded that the gas import tax was a valid compensatory tax, but was unconstitutional solely because it failed to provide a credit for payment to another state of a franchise tax similar to that imposed by section 186 of the Tax Law. As you know, the Legislature is considering a measure to provide a credit against the gas import tax for the appropriate franchise tax paid to another state, thereby curing the constitutional infirmity identified by the Court. We can not predict whether the legislation will be enacted. In deciding how to respond to the Court's decision, we can only advise that, if the legislation is enacted, taxpayers will be liable for the gas import tax in the interim. Taxpayers who have paid the tax should file for a refund with the Department in order to preserve their rights. The refund may be requested on Form CT-189-WR.

Business Council files comments on State Energy Plan

The Business Council submitted detailed comments for consideration in the 2002 New York State Energy on Friday, June 15th. The comments were filed with NYSERDA, the agency charged with compiling the plan with the assistance of the four other state department that comprise the State Energy Planning Board (Public Service Commission, Environmental Conservation, Transportation, Economic Development).

Comments were broken down into ten sections; electrical generation, electrical transmission, natural gas pipeline, fuel diversity, distributive generation, Article X siting law, energy efficiency and energy conservation, tracking the overall cost of energy, improving forecasts; evaluating the previous plan, and the state energy plan.

The Business Council is advocating for an increase in electrical generation by 10,000 megawatts at a minimum. Significant upgrades in the state's electrical transmission infrastructure and natural gas pipeline are also suggested by The Council. Key to satisfying the state's increasing energy needs is the ability to transport natural gas into the state as well as a transmission infrastructure able to ship electricity from generators to end users around the state. Currently, there are significant bottlenecks where transmission upgrades are needed in order to allow the transmission of additional electricity into load pockets (areas that do not produce all of the electricity needed to satisfy demand).

The Council has also suggested a careful study of a number of issues including; fuel diversity (in regards to the fuels used to generate electricity), the role of distributive generation, the problems associated with the Article X process, the issues that need to be tracked in the 2002 plan such as energy taxes and the projections of future energy needs, and the role of the plan itself.

The State Energy Planning Board is currently reviewing comments that have been submitted by the public. The Board will hold a series of public forums around the state this fall to discuss the plan and to gather public input. After the public hearings the Board's staff will develop a final draft for adoption early in 2002.

The Business Council's comments to the State Energy Planning Board

Merchant Transmission Line Under Long Island Sound

On June 21st the New York State Public Service Commission (PSC) granted a Certificate of Environmental Compatibility and Public Need to the Cross Sound Cable Company (New York) LLC (CSCNY) to construct a 24-mile long, 300-megawatt (MW) electric transmission cable and a companion fiber optic cable under Long Island Sound from New Haven, Connecticut, to the Town of Brookhaven, Suffolk County.

The electric transmission line would be capable of providing 300MW to Nassau and Suffolk Counties. The company hopes to eradicate some of the impact of the island's geographic isolation from the state's electric transmission grid as well as the greater Northeast. CSCNY has indicated that it hopes to complete construction in time to make the line operational in 2003. No party opposed the conditions and the proposed guidelines for an Environmental Management and Construction Plan. The project will require authorizations from other public entities, including the Connecticut Siting Council. There have been hold ups on the Connecticut side to date. The Connecticut authorities originally turned down the application this spring due to the project's impact on shellfish beds in the sound. Objections have also been raised on the Connecticut side because power will be shipped (largely) from Connecticut to Long Island. The company is expected to resubmit the plan, with some alteration, to the Connecticut Siting Board.

According to the PSC, the line will originate in New Haven Harbor and enter New York waters at about the 11- to 12-mile mark in Long Island Sound. The line will continue south to the intake canal of the former Shoreham Nuclear Power Facility in Brookhaven eventually linking with an existing Long Island Power Authority substation.