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Government Affairs Albany Update

June 29, 2001

Brookhaven Energy Files Article X Application

On Monday, June 25th, Brookhaven Energy LC, a subsidiary of American National Power, has filed an application with the State Board on Electrical Generation Siting and the Environment for the siting and construction of a 580 megawatt electricity generating facility in Brookhaven, Suffolk County. The plant will be natural gas-fired. The plant developers hope to add to the wholesale competition in the Long Island electricity markets and add to the overall reliability of the market through the addition of their 580 MW plant.

American National Power (ANP) is a subsidiary of International Power plc. International Power is one of the world's leading independent electric generating companies with 8,360 megawatts (net) in operation, 3,200 MW (net) under construction and approximately 8,000 MW (net) in advanced development. An affiliate of ANP is also in the process of licensing the 1,100 MW Ramapo Energy Project in New York State (Rockland County).

The Brookhaven Energy Project is a state-of-the-art natural gas-fired, clean-burning, highly efficient, combined cycle power plant to be developed in an industrially zoned area in the Town of Brookhaven, Suffolk County, New York, capable of producing up to 580 megawatts (MW) of electricity. The Project site is located in central Long Island, in Suffolk County, near the hamlet of Yaphank in the Town of Brookhaven. The Project site is 28 acres, and is located in an industrially zoned area, near the North Bellport Economic Development Zone.

According to the developer, this site has been chosen because:

The filing on Monday starts a 60-day period for the Siting Board to determine whether the application is complete. After a determination of completeness the Siting Board has one (1) year to make a final decision on the application. Project construction is expected to begin in early 2002 and is anticipated to take approximately two years to complete.

Divisible Load Permits Bill Stalled

In May of this year the statutory limit on the number of divisible load permits allowed by law was unexpectedly reached. The need for additional permits is of grave concern to the shipping and trucking industries, the industrial and commercial customers they serve, and the private sector transportation system in New York State overall. Nearly 80% of all permits are used for local transport of construction materials such as asphalt, stone and concrete. About 10% of these permits are used in the transport of logs from the forest to rail sidings; the remaining 10% are used to transport products such as milk, oil and freight.

At The Business Council's June 4th Transportation meeting, the committee discussed the dire need for more divisible load permits for the transportation and trucking industries. After many meetings and talks with member companies, legislative staff, and industry representatives a bill was submitted in both houses of the Legislature.

The bill will increase the number of divisible load permits allowed under the vehicle and traffic law from the current level of 17,000 to 25,000 by 2007. The bill also provides a uniform and equitable statewide penalty schedule for violations of New York State weight laws, eliminates the wide disparities in weights and penalties between regions in the state, and strives to protect the local and state highway and bridge infrastructure through the addition of new axle requirements and safety equipment. The legislation is balanced and inclusive of many of the concerns of both the state and localities, as well as the trucking industry.

This legislation effectively provides a long term solution to this shortage of permits by gradually increasing the number available to the trucking industry in this state. The legislation is also cognizant of the state's highway and bridge infrastructure. The new system phases in an increase in the number of axles required on trucks that are issued a divisible permit. This bills also requires additional safety equipment on permitted trucks.

Senate bill S.5561 (Stafford) - Bill text, was passed on June 19th. It was reported from the Assembly Transportation Committee to the Codes Committee on June 20th. However, it was not reported to the Assembly floor before the Assembly left Albany on June 26th.

The Business Council supports these bills and the addition of more divisible load permits as a necessary means to maintaining healthy and vibrant trucking, transportation, and construction industries. We will continue to push for the addition of these provisions.

The Business Council's memo in support

Brownfield Legislation Package

The Assembly passed a "brownfield" legislation package on the last day of session. These included:

The Business Council is still advocating for a comprehensive bill that addresses superfund financing and reform, as well as state-wide incentives for the cleanup and redevelopment of contaminated properties.

Prompt Payment Bill Passes Both Houses

S.4318-B / A.7698-B - Establishes provisions requiring the prompt payment of all parties performing work pursuant to a construction contract.

Under this legislation a "construction contract" shall include all contracts providing for the construction, alteration, repair, maintenance moving or demolition of a building or structure, and the development or improvement to land. It also provides for the payment of progress payments on contracts with a duration in excess of 60 days; payments shall be made within 7 days of any billing or completion of work; requires the prompt payment of subcontractors and material suppliers; authorizes, upon written notice, withholding payment when work is not performed in a satisfactory manner only until defects are corrected; provides for the suspension or termination of such contracts and damages arising therefrom; prohibits provisions in construction contracts providing for the application of the law of another jurisdiction to such contract, or waiving any provision of this legislation.

Both the Senate and Assembly have passed this bill. The bill would require an extensive seven-page payment process for private owners to follow on any projects over $125,000 in value. Owners would have to pay contractors within certain time periods and contractors would have to do the same with subcontractors. Disputed work between owners and contractors and contractors and subcontractors would have to follow a stipulated process.

Section 189 Gas Importation Privilege Tax Refunds

The Assembly this week mirrored the Senate's action of last week by adjourning until the week of July 15 without introducing Division of the Budget's suggested legislation to retroactively restore constitutionality to Section 189 (found facially unconstitutional by the Court of Appeals on May 1, 2001 in the Tennessee Gas Pipeline Company case).

Thus, firms that have purchased gas out-of-State (Note: Section 189 applied to only gas purchased out-of-state which was imported into New York for consumption in New York.) are advised to heed the Department of Taxation & Finance's statement: "Taxpayers who have paid the tax should file for a refund with the Department in order to preserve their rights.

Whether the retroactive constitutionality restoration legislation is brought up again (either as part of the next Budget extender or otherwise) and the legislative fiscal committees' reactions thereto are open questions. Taxpayers who have a concern in this regard should contact their Assembly member and Senator and ask that they relate the concern to their respective fiscal committee Secretary -- Dean Fuleihan (Assembly Ways & Means Committee) and Abe Lackman (Senate Finance Committee).