Government Affairs Albany UpdateJune 14, 2002
- "Anti-Jobs" Agenda will Dominate Last Week of Session
- The New York State Rail Infrastructure Investment Act of 2002
- Final State Energy Plan Adopted
- Superfund/Brownfields under discussion
- Labor Chairs Introduce New Additional UC Program
The Business Council has launched a final "e-advocacy" effort for the 2002 session, focusing on four anti-business issues that will receive serious attention next week in Albany. These include:
- a 50 percent increase in the maximum workers compensation benefit, without major reforms (e.g., limits on permanent partial benefits, AMA guidelines) necessary to offset significant rate increases;
- increasing – and possibly indexing – the state's minimum wage;
- bills pushed by the Trial Bar that would allow expanded tort claims and – for medical malpractice cases – allow for higher contingency fees; and
- a further extension of unemployment insurance benefits (beyond the already extended 39 week limit), that would impose more than $1 billion in unfunded costs on the state's UI system (resulting in increased UI rates for New York State employers).
We are sending out a "call to action" to all Government Affairs Council members; our local chambers and regional manufacturing associations; Workers Compensation Trust members, and others, urging them to weigh in with their local legislators, legislative leaders and the Governor in response to these measures.
Yesterday, Dan Walsh sent a similar message to Governor Pataki, Senator Bruno and Speaker Silver, urging them to reject these measures that could literally cost New Yorkers billions of dollars and thousands of jobs. Our e-advocacy program can be accessed from The Business Council's main web site.
"The New York State Rail Infrastructure Investment Act of 2002" - the railroad tax/investment legislation that was left out of the 2002-2003 New York State budget - has been reintroduced in both houses of the Legislature. The package has once again been sponsored by Assembly Majority Leader Paul Tokasz (A.11680) and Senate Finance Chair Ronald Stafford (S.7602).
The bill's goal is to change the way railroad taxation is calculated in New York State thus allowing for major capital improvements designed to greatly foster both passenger and freight rail service. The enactment of this legislation would also effectively end any federal legislation that has been pending as a result of the Conrail settlement expiration. That lawsuit, initiated by the three class one railroads (Canadian Pacific, Norfolk Southern and CSX), has already commenced and a trial is scheduled to begin during this fiscal year. Without this legislation, hundreds of localities who have railroad properties within their taxing jurisdictions would continue to be included in the lawsuit as defendants. Similarly, the railroad would be unable to initiate many of their planned upgrades and capital improvements.
The major provisions of the bill are as follows;
- Amends the Real Property Tax Law by adding three subsections that would change for intrastate/interstate railroads the "system reproduction cost" used for the purposes of determining railroad ceilings. These subsections would make "grading" a depreciable asset, eliminate the 10% add-on for "construction overhead" or other soft costs, and allow for increased depreciation for track up to 90% (up to 10 years) if standards for improved service are met (for both passenger and freight);
- Changes the exemption factor for interstate railroads from which railroad ceilings are calculated;
- Establishes procedures by which capital projects must be submitted to the Commissioner of Transportation for approval in order to qualify for a 10-year exemption;
- Provides for the exemption for 10-years of capital projects that improve freight service or provide new or improved passenger service that have been approved. The investments would then be excluded from the calculation of subsequent railroad ceilings;
- Provides transitional aide to local governments to hold them harmless from revenue loss for two years, and then would offset half the revenue loss for the next eight years. Railroad ceilings would be reduced 25% in 2003 and 2004; 50% in 2005 and 2006; 75% in 2007 and 2008; achieving the full phase-in in 2009; and
- Changes the economic factor for interstate railroads from which railroad ceilings are calculated.
The Business Council has been a strong supporter of the railroad reform legislation. This spring, The Council's research affiliate, Public Policy Institute, published On The Wrong Track, a report outlining the need for rail tax reform and infrastructure improvements in order to help New York's railroads and manufacturers. Rail provides a vital and necessary means of conveyance for the chemical, agricultural, manufacturing, and coal businesses as well as numerous others. Rail is a primary shipper of coal needed for electricity generation and many long haul commodities such as salt and chemicals. However, under New York's arcane tax laws, rail is penalized for capital improvements to their lines and must also bear the burden of an out-of-date system by which real property taxes are calculated. The corresponding tax burden discourages railroads from operating and/or expanding in New York and adds an additional burden to manufacturers who depend on rail service.
The legislation has come close to passage several times. It was almost passed on the last day of session in 2000 when it was a governor's program bill; it was contained in the executive budget in 2001 but was excluded from the final budget package; and it was added to the executive budget in the 30-day amendments in 2002 but was not included in the final budget. With the 2002 Legislative session coming to a close, it is hoped that the bill will be acted upon prior to adjournment. The Business Council's Transportation Committee will discuss the "The New York State Rail Infrastructure Investment Act of 2002" at its June 17th meeting. An active lobbying campaign to bring the issue to the Leaders' attention is planned for next week. The bill was introduced in both houses (A.11680 / S.7602) on June 12th.
On June 3, 2002 The New York State Energy Planning Board adopted the final 2002 State Energy Plan (SEP). The board is comprised of the President of the New York State Energy Research and Development Authority (NYSERDA), the Chairman of the Public Service Commission (PSC), and the commissioners of Transportation (DOT), Economic Development (ESD), and Environmental Conservation (DEC). NYSERDA's president serves as the chairman of the State Energy Planning Board.
The adoption of the plan is in conformity with sections 6-104, 6-106 of the State's Energy Law which mandates the formulation of a state energy plan every four years.
Paul DeCotis of NYSERDA discussed the outcome of the State Energy Planning Board meeting at the June 11th meeting of The Business Council's Energy Committee. The major topics discussed at the Energy meeting, as they related to NYSERDA's presentation, were; energy infrastructure maintenance, innovative growth in the markets, energy diversity, environmental issues, and consumer issues. Some of the more specific issues included the reauthorization of Article X (the siting law for electricity generation) and Article 6 of the Energy Law (which governs the SEP process), security issues, bio-fuels, distributive generation, the proposed reduction of greenhouse gases, the proposed increases in renewable energy sources, and regional electricity markets. NYSERDA' s representative stated that the final SEP document will be available by approximately June 19-20th. It will also be posted on the NYSERDA web site. For more information on NYSERDA and the SEP access: http://www.nyserda.org/
Now that the Governor has re-proposed his superfund/brownfield legislation as Program Bill #122, there has been renewed legislative discussion of remediation program reform and refinancing. However, there is no clear indication as to whether any compromises can be reached between now and the end of session.
The Governor's program bill is largely the same as the proposal included in the FY 2003 Executive Budget, with some minor adjustments to the sections dealing with financing and appropriations.
The Business Council continues to oppose many provisions included in the Program bill, including: onerous new enforcement provisions, including so-called "treble damages" for failure to agree to the state's proposed cleanup plans; new state-level mechanisms for recovering state expenditures and imposing natural resource damage claims; $18 million in new hazardous waste fees that largely impact upstate manufacturers; inadequate provisions regarding use-based remedy selection and post-cleanup liability releases; and others.
For a more detailed discussion of our concerns, see our memo in opposition (the original Executive Budget proposal).
The Business Council has provided the Administration and legislative leaders with an alternative proposal that would re-finance superfund using existing General Fund resources, adopt limited changes to the state's superfund program (e.g., adopt recent federal CERCLA liability changes), leave the state's oil spill program as-is, and focus on provisions encouraging the voluntary investigation, cleanup and redevelopment of contaminated properties.
The Chairs of the Senate and Assembly Standing Committees on Labor, Guy Velella and Cathy Nolan, respectively, introduced S.7593 / A.11624 this week.
The legislation creates a new and unfunded State Unemployment Compensation Program of an additional thirteen weeks of benefit checks for claimants that have collected both the 26 weeks of regular UC checks (fully funded by the State's employers) and the 13 weeks of extended UC checks (fully funded by the Federal government from the Federal UC tax on employers).
By not funding the new program, the legislation, by default, places
the cost of the new UC program on New York's UC Trust Fund which
is solely supported on the backs of New York employers -- a new
cost which has been calculated at
Among the reasons for rejection of additional benefit checks funded, not by the Federal government but, rather, solely by employers in New York - a program heretofore unheard of in the over sixty-year history of UC in New York - are as follows:
- An additional thirteen-week program of Unemployment Compensation benefits is currently in place. This program brings the maximum duration of benefits up to thirty-nine weeks and the program is fully funded by the Federal government using revenues raised by the Federal UC tax.
- If the economy were to worsen, yet another thirteen-week program of Unemployment Compensation benefits would be triggered bringing the maximum duration of benefits up to fifty-two weeks. This program also is funded by the Federal government using revenues raised by the Federal UC tax.
- The economy in New York is on the rise. The downturn peaked at an insured unemployment rate of 3.6% and has improved to 3.1%.
- The new, additional program proposed by this bill is unfunded. The estimate of the new, additional cost of this program is $1.45 Billion. There are no State funds provided from the State treasury in this legislation to meet this cost; moreover, the State Unemployment Compensation Trust Fund financed solely by private sector employers stands at some $800 Million and is fully committed and necessary to meet the State's Unemployment Compensation program of twenty-six weeks.