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Government Affairs Albany Update

June 21, 2002

Issues Snapshot

Following is a brief snapshot of issues being worked on by The Business Council:

Sole proprietors -- Passed both houses(S.7360/A7413-D). Allows sole proprietors to buy health insurance off the small group price. Governor Pataki issued a press release last evening announcing he will sign the bill into law.

Medical Necessity -- Assemblyman Colman and Senator Stafford have been pushing a bill (A.5048/S.2744) to have a statutory definition of what constitutes "medical necessity". Passed Assembly / Remains in Senate Health. Business Council is strongly opposed because of the dramatic impact on costs.

Sub-prime lending / Predatory Lending -- Senate and Assembly still apart on agreement. Business Council is against lowering the threshold from the Banking Department's regulations.

Accounting / Auditing -- There were numerous bills introduced that would affect the existing relationships of publicly traded corporations with their auditing and accounting firms. These proposals would, to varying degrees, prohibit the provision of non-audit services to firms for whom audit services are already being provided. Among the bills introduced were A. 9831-A (Brodsky); S. 6164 (Skelos)/ A.11325 (Rules); A.9768 (DiNapoli) /S.6269 (LaValle). None saw action this week.

Superfund/Brownfields -- The Governor and Senate have agreed to legislation (S.7798), although Senate did not pass it before breaking yesterday. The bill includes $20 million in new hazardous waste and petroleum fees, and extends the superfund to hazardous substance sites. However, it also drops many of the most objectionable provisions of the Budget bill (e.g, "treble damages," natural resource damage claims); creates a statutory voluntary cleanup program with use-based standards and financial incentives; and adopts federal liability reforms. The Assembly continues to look for more superfund dollars, and opposes the cleanup process included in S.7798. Other than the fees, the bill is largely positive for our members.

Power for Jobs -- The Senate has passed legislation (S.6425/Wright) that extends all year 2 and 3 power allocations for three years, or until December 31, 2005, whichever comes first. The Assembly has introduced companion legislation (A.11806/Tonko) and has committed to doing the extender. The Business Council supports this legislation

Workers Comp -- The Assembly bill, A.11763, would increase maximum workers comp benefits in steps to $475 per week (on December 1, 2002 ), to $550 per week (on December 1, 2003), and to $625 per week (on December 1, 2004). This bill would permanently index comp benefits to equal two-thirds of the statewide weekly wage beginning on December 1, 2004. We oppose any such automatic increases in benefits.

The Senate bill, S.7744, would increase maximum benefits in two steps to $500 per week (on Oct. 1, 2005), and to $600 per week (on October 1, 2007). The Senate version also establishes a task force which will study the feasibility of indexing and the type of indexing to be applied. The task force must issue their report to the Governor and legislature by December 31, 2005. The Senate bill provides only for modest reforms.

The Governor's office is drafting a bill to raise benefits to $600 per week over a five year period, while also enacting reforms that will offset said benefits.

The Business Council will strongly oppose any proposal that increases benefits without providing equal cost-saving reforms. For further information and regular updates you may access our web site.

Minimum wage --After heavy lobbying several weeks ago against the "original" minimum wage bills, S4749-A (Spano)/A5132-B (Nolan), which included a one-time increase of $1.60/hr. and annual indexing, both the Senate and Assembly responded with 5 new bills since the first week of June. None of the new bills contains an annual indexing provision.

S7548 (Velella) introduced on June 6th splits the $1.60/hr. over 2 years and charges the Labor Commissioner to study minimum wage adequacy to support a family of three.

S7722 (Velella) introduced on June 17th splits the $1.60/hr. over 2 years, adds a youth training wage and calls for a task force on indexing.

S7742 (Velella) introduced on June 17th is the same as S7722 with the youth training wage removed.

A11762 (Rules) introduced on June 17th includes a one-time $1.60/hr. on 1/1/03 plus a temporary commission to study the minimum wage.

A11805 (Rules) introduced on June 19th splits the $1.60/hr. over 2 years and requires a one-time report by the Labor Commissioner on the adequacy of wages by March 31, 2004.
So, while similar, none are identical and as we go into what we hope to be the final session week, this issue remains in the air.

Labor non-neutrality -- would require state contractors and others receiving state & municipal funding to agree not to resist union organizing by adopting neutrality, majority authorization, binding arbitration, fair communication, non-intimidation and reasonable access agreements as part of the state contract or funding agreement. No action taken by the Legislature. The Business Council opposed this bill.

Divisible Load "R" Permits
There are two sets of "same as" bills dealing with increasing the number of "R" permits in both houses of the legislature. Both bills would increase the number of permits and could very well complement each other. The Business Council supports the additional permit provisions in these bills.

S.7640 (Stafford) / A. 11713 (Gantt) would increase the number of permits by 1,500 this year. It has passed the Senate and is in the Assembly Transportation Committee.

S. 7755 (Trunzo) / A. 11809 (Smith) would exempt government entities from the overall count of those issued. This could add about 650 "new" permits. That bill passed the Senate, and is in the Assembly Transportation Committee.
The New York State Rail Infrastructure Investment Act of 2002

"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). It was passed in the Senate; it is in the Assembly Rules committee. The Business Council has issued a memo in support.

Prompt payment on private construction
S. 7724 (Velella) / A. 11526-A (P Rivera). We strongly oppose this legislation that would greatly alter the way privately contracted construction is performed. A similar bill was vetoed by the Governor last year. It passed the Senate, in Assembly Rules. We have issued a memo in opposition.

Article X
There are several bills relating to the re-authorization of the state siting law for electricity generation.

A. 11755 (Tonko) is the Assembly's version. It would lower the threshold to 30 MWs, add more intervener funding, and create a number of additional studies to the process. In Assembly Rules.

S. 7597 (Wright). A clear extender of Article X for 5 years. Senate Rules.

S. 7296 (Duane) / A. 10363 (Tonko). A proposal to lower the threshold to 15 MWs, expand the siting board, increase intervener funds. It is sponsored by NYPIRG. In Senate and Assembly Energy Committees.

S. 6230-B (Wright) / A. 9826-A (Tonko). Sponsored by IPPNY and supported by The Business Council, AFL-CIO, The Energy Association. Streamlines the siting process. Third Reading in the Senate; Assembly Energy Committee. We are supporting this proposal.

S.7596 (Wright). Governor's program bill for Article X. Creates a state advocate, allocates some intervener funding for legal fees, adds fast tracking for repowering. Senate Rules.

Hours of Service for Utility Drivers
S. 6182-E (Morahan) / A. 9747-E (Gromoack). Creates exemption for utility truck drivers under emergency conditions. Passed both houses. We had issued a memo in support.

Nuclear Whistleblower
Governor's Program bill #132R would greatly impact nuclear facilities by adding additional conditions regarding whistleblower protections. The legislation provides for increasing the time period under which a claim for relief needs to be made for retaliatory personal action from 1 to 2 years; increases damages awarded; increases civil penalties to $100,000; and increases the State Disaster Preparedness Commission fee paid by each company from a floor of $550,000 to $1,000,000 annually.

Unemployment Compensation
Both Houses of the Legislature passed Senate bill number 4161 which would create three special exceptions to the requirement that the first eight weeks of a claimant's unemployment compensation benefit checks be charged to the separating (last) employer. [The remaining eighteen weeks of a claimant's benefit checks are charged against employers in proportion to the compensation paid by each employer in the base period.] The legislation's newly created special exceptions are where the separating employer is 1) the Federal government, 2) an out-of-state employer, or 3) a certain educational institution.

The main reason for the thrust of this legislation is that federal unemployment compensation conformity requirements do not permit benefit charges against the federal government or out-of-state employers to be on a non-pro rata basis. The legislation creates the special exceptions and THEN charges the first eight weeks of benefit checks to the General Account.

The Business Council opposes charging the excepted eight weeks of benefits to the General Account. The General Account is funded by a subsidiary tax on private sector, for-profit employers; none of the three excepted employers pay the subsidiary tax that is the General Account's funding source. The legislation's scheme of charging the first eight weeks of benefits (where the separating employer is the federal government, an out-of-state employer, or a certain educational institution) to the General Account is akin to ordering gifts for one person, but charging the cost of the gifts to another person's credit card.

Moreover, while the subsidiary tax is levied at its maximum set of rates, years of largesse in gratuitously charging benefits to the General Account has placed the General Account balance several billions dollars in the negative. That red ink has emasculated the several billions of dollars of positive balance in the aggregated private sector employer account balances resulting in a New York Unemployment Compensation Trust Fund balance of some $800 million currently. This $800 million is fully pledged and necessary to meet the UC benefit check payout projected through the end of 2002 and, in most economic scenarios, will fall short of meeting the payout projection. It runs counter to prudent public policy to further charge a fund awash in red ink whose funding is already levied at the maximum.

Rather than charging the excepted eight weeks to the General Account, it is respectfully suggested that the excepted eight weeks be charged as the later eighteen weeks are, namely, in proportion to the amount of compensation paid by employers in the base period. Legislation drafted in this revised manner would enhance and assure, rather than diminish and jeopardize, the pool of funds available to fund the Unemployment Compensation benefit checks that are forthcoming to former workers in New York.

Accordingly, The Business Council of New York State, Inc. urges that Senate bill number 4161 be rejected in its current version and, instead, be amended to strengthen the funds available to pay the unemployed of our state.

Final State Energy Plan Released

The New York State Energy Plan and Final Environmental Impact Statement (SEP) was released this week. The new state Energy Plan calls for an increase in New York's energy capacity and a reauthorization of the state's power-plant siting law—two essential steps toward a secure energy future. But the plan also recommends strict new limits on some existing power plants that imperil their continued operation. Released on June 19 by the State Energy Planning Board of which the State Energy Research and Development Authority (NYSERDA) is the lead agency, the 2002 State Energy Plan is supposed to offers policy guidance for energy-related decisions by government and private market participants for the next four years.

The plan recommends, among other things:

The Council has some concerns with the final plan related to the level of electricity needed to fuel the state in years to come. In strong testimony on the plan and in other reports, The Council has consistently argued that New York must add at least 9,200 megawatts of new generating capacity within five years to sustain growth, foster competition, and ensure reliability. The demand figures (in megawatts) sited by the SEP seem on the "low end." Moreover, conservation is valuable and necessary but cannot take the place of essential new sources of power. The Council has reminded policymakers that prosperity and growth are powered by power, and inattention to new needs for capacity created by growth led to California's recent energy crisis. Reducing consumption does not eliminate the ongoing need for more baseline generating capacity.

Regarding: the plan's emphasis on new energy infrastructure: The Council strongly supports increases in New York's natural gas pipeline infrastructure, especially interstate "mainline" capacity. The Council also strongly supports an approach to re-authorization of Article 7 and X of the Public Service Law that govern the siting of energy projects - both generation and transmission. The renewal of these laws should emphasize a streamlining of the process.

The Council has also argued that fuel diversity in New York must include a balance of power plants fueled by natural gas, oil, coal, and nuclear power. The state Energy Plan mentions those priorities and also emphasizes reliance on indigenous and renewable energy sources as well as energy efficiency and demand-management programs.

However, while certain state initiatives make sense, such as energy conservation incentives, we oppose state-mandated CO2 reductions on utilities or manufacturers. They are too costly, given their limited impact on addressing the global issue of climate change, and their significant impact on the state's economy.
For a copy of the SEP access the NYSERDA web page at:

New 'Policy Points' from PPI

Check the Public Policy Institute web site,, for monthly "Policy Points" opinion articles examining issues important to employers in New York. Each article is available in a one-page format that can be reproduced in newsletters and other publications. In the latest addition to the site, Bob Ward argues that New York's experience during the 1990s proves JFK was right: A rising tide does lift all boats.