Government Affairs Albany Update - May 30, 2003

Workers Comp Reform Bill Introduced

Senator Libous introduced the "workers' compensation equity act" this week. The bill, S.5320, provides fundamental reforms to the workers' compensation system in New York state. We expect a same-as version to be introduced in the Assembly early next week.

The bill provides a 500 week duration of benefits for claimants that have been classified by the Workers' Compensation Board as having a permanent partial disability. 46 states currently place a duration on permanent partial disabilities. New York state does not. The legislation does not address total disabilities which are those injuries where the claimant is seriously injured and unable to work. It only affects permanent partial disabilities.

The legislation also provides for workers' compensation offsets against 50% (employer's contribution) of old-age social security and 100% of employer funded pension benefits.

The bill proposes that the balance of scheduled awards be paid at one-half the maximum benefit rate. In New York there are scheduled benefits and non-scheduled benefits. This legislation would pay the balance of schedules at one-half the maximum benefit rate. In other words, if a claimant receives a scheduled benefit award of 20 weeks and returns to work after 10 weeks, the remaining 10 weeks would be paid at half the maximum rate.

The legislation requires the Workers' Compensation Board to promulgate and implement objective medical guidelines to determine functional impairments. These guidelines will be based upon recommendations made by a committee of no more than three or less than eight medical experts. The committee is also to meet with representatives of employers and employees and report their findings to the Board.

Creosote Ban Bill Advancing

Legislation that would ban the use of creosote as a wood preservative has advanced in the state legislature. Specifically, S.4975 (Marcellino) / A.5930 (Brodsky), would ban the manufacturer, sale or new use of creosote-treated wood in the state by 2005. Creosote-treated wood already in-use in the state would not be affected. The bill would also place restrictions on the disposal of creosote-treated wood. The Senate EnCon Committee approved the bill this week, and S.4975 is currently on third reading in the Senate. The Assembly version is still pending in committee.

Creosote is the most widely used industrial wood preservative in the United States. If approved, this bill would have a significant impact on industries that use creosote-treated wood in their operations, including railroads and utilities. Some of New York's regional and shortline railroads have argued that the cost of alternative materials would make routine track upgrades cost prohibitive. Likewise, the impact of moving to alternative products would be significant for utilities as well, since many power and telephone poles are creosote-treated wood. The bill would also have an impact on the cost of rail shipments (impacting the electrical generation, industrial and agricultural sectors) and on the cost of utility services.

The Business Council has reached out to its railroad, telecommunication and utility members to gauge the impact of this bill and we will be issuing a memo in opposition to this legislation.

Senate Bill Introduced on Mental Health Parity

Senator Tom Libous, Chairman of the Mental Health and Developmental Disabilities Committee, has introduced a bill that mandates mental health parity benefits on health insurance policies. The bill is S.5329. The Assembly introduced mental health parity earlier in the session -- A.8301, same as S.5329. The Assembly bill was reported and referred to Assembly Rules on 5/27. The Senate bill was referred to Senate Rules on 5/29.

A recent study by NovaRest Consulting highlights the high cost of state mandates.

The study concludes that New York's current three dozen mandates add over $1,000 per employee to the cost of health insurance. Some studies have estimated the cost of mental health parity to be as high as 3 to 3.5% increases in premiums. Also, new mandates drive small employers away from purchasing health insurance for their workers.

The Business Council has written a memo in opposition to the bill.

Chinatown Zone Legislation

In a move that may reinvigorate discussions on Empire Zone expansion this session, Assembly Speaker Sheldon Silver introduced legislation this week that would add a new zone in the "Chinatown" district of lower Manhattan. The new bill, A.7520, authorized the creation of one new Empire Zone, and provides a detailed, street-by-street outline of the area to be designated. In February, Senate Majority Leader Joe Bruno proposed the creation of eighteen additional zones, which would result in a county-level zone in each county outside of New York City. However, the Senate has not introduced a specific legislative propose to implement this plan, and there has been little movement on the issue to date, with reports that the Assembly has been willing to consider only a limited expansion of the zone program. The Business Council has supported the Senate plan.

Assembly "Chemical Security" Legislation

Assemblyman David Koon will be introducing a revised version of his "chemical facility security" bill, and the "A" print may be on the Assembly EnCon Committee agenda as early as next week. The bill, A.8124, would require facilities that manufacture, store and/or use larger volumes of specific chemicals to complete facility vulnerability assessments, and to implement security upgrades, with the intent of preventing terrorist attacks on the facility, or the theft of materials that could be used in a terrorist act. The revised bill will focus on facilities regulated under the state's chemical bulk storage program (ECL Article 40), and chemicals listed in the state's CBS regulation (6 NYCRR Part 597), but allows the state to identify "priority" and facilities that will be subject to new assessment and planning requirements. The Senate passed a different version of a chemical security bill (S.4156-B/Balboni) last week. The Business Council has raised a number of concerns about both proposals, and has been working with the sponsors to address them. If you are interested in this issue, but havee not yet reviewed these proposals and provided us with your comments, we urge you to do so ASAP.

Buy Your Clothing Before June 1

The Sales and Use Tax increases recently enacted by Legislative overrides of Governor Pataki's vetoes dramatically will make their appearance this weekend when New Yorkers purchase clothing.

The Legislature raised the State Sales and Use Tax rate by one-quarter percentage point, abolished the State's exemption for clothing items costing under $110, revoked the authorization permitting localities to exempt clothing items costing under $110, and -- in conjunction with New York City Council -- raised the City of New York's local Sales and Use Tax rate by one-eighth percentage point. All increases are effective on June 1, 2003.

Thus, for example, clothing that currently costs $100 in Rensselaer County (a county which centered its retail economic development efforts on adoption of the clothing exemption) will cost $108.25 starting Sunday, June 1. Clothing that currently costs $100 in the City of New York will cost $108.63.