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Government Affairs Albany Update

January 25, 2002

Regulatory Review Law Takes Effect
Staff Contact: Ken Pokalsky

State regulatory agencies in New York are now required to conduct five-year reviews of each rule they have adopted since January 1, 1997. This review requirement is based on 1996 amendments to the State Administrative Procedures Act (see SAPA section 207).

Starting January 1, 2002, agencies will have to publish an annual list of regulations subject to this review requirement. This listing published in the State Register as part of an agency's regulatory agenda must include a discussion of the legal basis of, and the need for, each rule subject to the review requirement. Agencies are also required to provide an opportunity for public comment on the continuation or modification of such rules.

If an agency decides to move forward with regulatory amendments based on this review process, they are required to justify the proposed modification and summarize public comments received in response to their request for input, in addition to meeting general SAPA procedural requirements. If an agency determines that a rule should continue without modification, it is required to publish a notice to that effect that provides a justification for their decision, along with an assessment of public comment.

A number of agencies of importance to Business Council members have already filed their five-year review notices, including Agriculture and Markets, Education, Environmental Conservation, Health, Labor, Public Service, State and Tax and Finance. The Business Council is developing a summary of key regulations that are subject to the review requirement, and will make it available to GAC members once completed.

Unfortunately, the contents of the State Register are not yet available on-line. If you would like a hard copy of the State Register notices for any of the agencies listed above, or for any additional information regarding this program, please contact Ken Pokalsky.

Governor Pataki Proposes Executive Budget

On the home page of our web site, you'll find a general overview of the Governor's proposed Executive Budget for 2002-03. Included are links to the Governor's web site if you are interested in the Governor's press release. Also, there is a link to the State Division of the Budget where you can download many of the documents that make up the Executive Budget.

Fiscal hearings will begin Monday, January 28 at 10:30 a.m. in Hearing Room B at the LOB. The hearing will focus on Local Government Officials and General Government. Tuesday, January 29 at 10:00 a.m. is Transportation. Fiscal hearings on Economic Development and Taxes is February 26 at 10:00 a.m.

Fiscal Year 2003 Executive Budget Released
Governor George Pataki released his Executive (proposed) Budget yesterday. Very few tax law changes were proposed. They included the following:

Alcohol Beverage Control License Fees
Increase fees to raise $8M in FY3.

Alcoholic Beverage Tax
Stricter enforcement provisions to "protect" $1M in FY2003 and $3M in subsequent fiscal years.

Cigarette & Tobacco Tax (already enacted last week)
Increase of the tax rate from $1.11/pack to $1.50/pack effective 4/3/2. Tax collections will total some $1.25B in FY3 -- up 23%.

Corporation Franchise Tax

Motor Vehicle Fees
Doubling of boat registration fees effective 10/1/2 raising $1.3M in FY3.

Personal Income Tax
Tightening of withholding parameters to yield $155M in FY3.

Sales and Use Tax

Article X Project Update

Besicorp-Empire State Development Company, LLC has formally submitted its Article X application for a 505 megawatt combined-cycle natural gas-fired generating facility in Rensselaer County. The project is unique in that it will also be a recycling center for newsprint. The application, filed in late December, brings the total to ten (10) projects currently in the application phase under Article X of the Public Service Law (siting law).

In addition to these projects, five (5) applicants have already been approved by the Siting Board. These projects are; SCS Astoria Energy (Queens), Athens (Greene County), East River Repowering (Lower Manhattan), Heritage (Oswego County) and Ravenswood (Queens). Five (5) other are have filed preliminary scoping statements and should file applications in the future while two (2) projects have filed pre-application reports but have not submitted formal applications. The total number of projects, both approved and pending under Article X, stands at twenty-three (23).

In mid-December Sithe Energies announced that it was withdrawing its Sentry Station (formerly Torne Valley Station) application. That 300 megawatt project was to be located in Ramapo, Rockland County.

One additional Article X project has been announced recently; Indian Point Peaking Facility. This 400 megawatt project is to be located in Buchanan, Westchester County. The project developer is Entergy who operates the nuclear powered electricity generating facilities in Buchanan.

The Business Council has filed for party status in each of the last five cases that have applied under Article X. These projects include; Bethlehem, Brookhaven, Wawayanda, Astoria (Orion), and Besicorp.

With the scheduled expiration of the Article X siting law at the end of 2002, The Business Council will be carefully examining the siting process and law to see where problems have developed. The Council will dedicate much of its February 25th Energy Committee meeting to Article X and the law's renewal. We are currently reaching out to our members in the generating and electricity industries for their input. While the issue is of great importance to our generating and utility members, the siting of new power plants is also needed for the overall reliability of the energy markets in New York State and therefore all segments of the economy.

For more information on Article X projects access the Department of Public Service web site at:
http://www.dps.state.ny.us/articlex.htm

Proposed Fee Increases
Staff Contact: Ken Pokalsky

The following is a summary of business-related fee increases included in the Governor's Executive Budget, based on our initial staff review of Article VII bills. Note that these bills have not yet been introduced, so we cannot provide you with the related bill numbers. Please contact the appropriate GAC staff person for additional information.

AGRICULTURE AND MARKETS

ALCOHOL AND BEVERAGE CONTROL

ENVIRONMENTAL CONSERVATION

PUBLIC SERVICE COMMISSION

MISCELLANEOUS