Government Affairs Albany Update

July 3, 2002

Senate Action of July 2

The State Senate came to Albany on July 2nd and worked from 2:00 p.m. to 7:00 p.m. They took action on a number of issues of concern to the business community.

To view the text for any bills mentioned below, just click on the bill number. They are also available on the Senate web page: http://www.senate.state.ny.us/

  • Sub-prime / Predatory Lending
    The Senate passed a bill which passed in the Assembly last week (A.11856), which re-defines what constitutes a high cost loan in New York State. While the bill increased rate thresholds from a previous Assembly version, it kept in place a number of troubling provisions, including an expansive definition of points and fees, a new private right of action and severe damages for violation of the new rules. The Business Council opposed the bill. Separately, the Senate passed
    S.7840, a "Chapter Amendment" to A.11856. S.7840 provides for more reasonable damages and other moderations of
    A.11856. It is unclear whether the Assembly will pass the chapter amendment. The Business Council will urge Governor Pataki to veto A.11856.

  • Superfund/Brownfield
    Staff Contact: Ken Pokalsky
    The Senate merged a modified version of the Governor's superfund/brownfield bill with his late-session proposal on waste tire management, and passed the combined bill largely on party lines and with minimal debate.

    This new legislation (S.7686-A/Marcellino @ request of Governor) incorporated the unmodified bill text from S.7798, which was last week's "two-way agreement" bill between the Senate and the second floor.

    Last week, The Business Council met with the Governor's staff, DEC staff, and Senate staff, to discuss proposed amendments to S.7798.

    For a copy of our recommended changes (which only addressed our most significant concerns), please contact Ken Pokalsky.

    The good news is that many of the worst features of the Governor's original proposal (i.e., treble damages, state cause of action for natural resource damage claims and state cost recovery) have been eliminated.

    However, the Governor's proposed $18 million in hazardous waste surcharges, (and combined $138 million remediation budget), "residential presumption" language (giving preference to residential-level cleanups on certain industrial sites that border residential property), and restrictions on the use of site-specific cleanups remain in the bill. We also pointed out several significant deficiencies in the bill, including gaps in liability protection for lenders and municipalities that foreclose on contaminated property, improperly drafted language regarding project certifications and others. Despite these problems with S.7798 – and its provisions that were transferred over to S.7686-A – the Senate approved the measure without amendments.

    Indications are that there is little chance that the Assembly will pass the bill as is, and any additional negotiations will again focus on cleanup levels, brownfield program eligibility, and funding levels.

  • Insurance Codification
     The Senate passed a bill (S.7790 Seward / A.11821 Grannis), previously passed by the Assembly, that would enable insurance companies to revise the manner in which deferred tax assets are treated under the Insurance Law by allowing insurers to count them as admitted assets under certain circumstances and within certain limitations. The proposal, modeled after National Association of Insurance Commissioners recommendations, would bring New York more in line with other states in their accounting of certain assets by insurers.

  • Union Organizing
    Staff Contact: Tom Minnick
    The union organizing bill passed the state Senate by a 55 to 1 vote. Senator Mary Lou Rath from Western New York was the sole Senator to vote no. The bill had already passed the Assembly on June 26, 2002 on a 122 to 24 vote in that house. The Governor is expected to sign it.

    The bill, S.7822 / A.11784-A, prohibits a recipient of any state funds from using those funds to encourage or discourage union organizing and provides a mechanism for the Attorney General to require three years of financial records from an employer "sufficient to show" they did not use state funds in any anti-union efforts.

    The Business Council opposed this bill and organized a press conference with other employer trade organizations to explain to Legislators the downside of this bill to businesses across the state.

    The Business Council also sent a memo in opposition to the bill to all State Senators on July 1.

  • "Right to Forestry" Bill
    Staff Contact: Ken Pokalaky

    The Senate approved legislation – S.5574-C (Stafford) / A.9190-D (Rules @ request of Parment) – designed to help promote the practice of forestry. The bill – pushed for the last five sessions by the state's forest product industry – establishes a process for DEC review of local forest harvesting ordinances, which are often seen as having adverse impacts on the industry. Under the provisions of this bill, an affected landowner, who is deemed to be conducting accepted forestry practices, is allowed to petition the Department of Environmental Conservation for a review of the town's proposed or existing restrictions, with the municipality subject to a 45-day waiting period before enacting or implementing its ordinance. The Department would then work with the municipality to provide professional forestry advice and assistance, but the town would have the discretion to accept or ignore the DEC's advice.

    The bill also requires towns that develop a comprehensive plan to "facilitate the practice of forestry." This will assure that forestry is considered in a towns' planning and zoning effort similar to agriculture and other land uses.

    On the enforcement side, the bill increases civil penalties for theft from public lands and requires that any permanent or substantial damage to the land or improvements thereon be repaired. Finally, it also provides for additional damages payable to the affected landowner in the case of a successful criminal prosecution for timber theft.

  • NYC Publishers/Broadcasters Allocation of Receipts

    The Assembly has passed S.6553-A, Padavan - which had passed the Senate on May 20. S.6553-A amends New York City's Administrative Code (among other technical changes) to conform the City's General Corporation Tax (GCT) and Unincorporated Business Tax (UBT) allocation provisions for receipts of broadcasters and publishers - a conformity advocated by the Committee on Taxation of The Business Council.

    Special rules enacted in 1996 provided that income from subscriptions, broadcasting and advertising is sourced according to the number of listeners, viewers or subscribers. The 1996 provision gave the Commissioner of Finance authority to apply a different method if the audience method does not fairly and equitably reflect the activities of the taxpayer. Because subscription rates, for cable television for example, may differ from one location to another, sourcing such receipts directly according to the location of the subscriber more accurately reflects the activity of the taxpayer than would an indirect method based on the number of subscribers nationwide. These amendments specifically provide that subscription receipts will be treated as derived from the location of the subscriber. S.6553-A's amendments are not expected to have any revenue impact.

    The 1996 amendments to the UBT were intended to conform the rules for broadcasters and publishers to those applicable under the GCT. However, the 1996 amendments apply to more types of activities and more types of income than the existing GCT rules. These amendments bring the UBT and GCT rules into full conformity. These amendments also are not expected to have any revenue impact.

    These provisions are effective for taxable years commencing on or after January 1, 2002; S.6553-A now awaits transmittal by the Senate to the Governor's Desk for his expected signature.