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Government Affairs Albany Update

December 18, 2003

Empire Zone Program Reform

Staff Contact: Ken Pokalsky
In anticipation of next year's legislative interest in Empire Zone extension, expansion and reform issues, The Business Council is looking for input on the program in general, as well as any input you may have based on your direct experience with your local Empire Zones.

The Empire Zone program will be the subject of competing "reform" initiatives in 2004. The Senate will continue to push for the creation of additional zones, with the goal of giving county-wide (rather than municipality-specific) zone designation authority to all county in the state. The Assembly, on the other hand, will push legislation that would drive zone acreage - and zone benefits - back into a limited number of economically-distressed areas, and to impose more strict rules for disqualifying beneficiaries that fail to meet job creation and retention targets. The Assembly passed their "reform" bill (A.9012/Silver) in June. The Governor is expected to introduce his own reform package before the end of the year, with a focus on controlling program costs - which are nearing $250 million per year. Earlier this year, the Governor proposed cutting state support for local zone administration, and requiring municipalities to finance fifty percent of the program's enhanced real property tax benefits.

Specifically, we are looking for comments on: overall Empire Zone policy issues; local zone administration, including appropriateness of local decisions on allocating zone acreage and accepting businesses into the program; assessment of the impact of the zones on the local economy, based on the nature of businesses taking advantage of the program, and the level of investments and new jobs in the zone; as well as any suggestions you have regarding overall zone program reforms.

Feel free to submit comments either by email, phone, or fax. Thanks in advance for your assistance.

(Note also that Assembly hearings on the Empire Zone program originally scheduled for this Monday in Syracuse and Tuesday in Buffalo have been postponed. The Assembly intends to reschedule these hearings, plus add several additional hearing sites, in the new year.)

Council Asks EPA to Accept DEC Suggestion on Classifying Emissions in NYC

The Business Council has asked the U.S. Environmental Protection Agency (EPA) to exclude data from the Ocean County, New Jersey, area in assessing how well metropolitan New York City complies with a key federal environmental standard. In a December 8 letter to Michael O. Leavitt, EPA administrator, Business Council President Daniel B. Walsh said that considering Ocean County emissions in evaluating New York City's compliance with the new federal 8 hour ozone standard "would subject New York State businesses and residents to millions of dollars in additional expenditures that will have no practical impact on air quality at the Ocean County monitoring site."

These additional costs for New York businesses and residents "are unnecessary to meet the downstate area's legitimate ozone attainment obligations," the letter added.

The letter urged the EPA to accept the recommendation of the state Department of Environmental Conservation (DEC) to revise the EPA's proposed classification approach by considering Ocean County part of the Philadelphia area. This would make metropolitan New York City a "moderate non-attainment area." That ranking would accurately reflect "the aggressive efforts taken by New York State toward [volatile organic compounds] and [nitrious oxides] reductions since the 1990 Clean Air Act amendments." That law, and additional state requirements, have improved air quality significantly - but at "a significant price in terms of direct expenditures and reduced cost-competitiveness for New York State businesses," the letter said.

If the EPA proposal takes effect, New York City would be considered a "serious non-attainment area" for ozone. This would trigger even more stringent and costly emission-control strategies, additional restrictions on business operations, and increased costs for businesses and residents alike, the letter noted.

Input Requested on Call Centers

As part of our legislative program development effort, The Business Council is looking into the need for specialized economic development and/or tax incentives for call centers and service centers. Several Business Council members already have major call center operations in New York, and they are major employers for the local economies. Recent announcements regarding the potential siting of a GEICO call center in Western New York has raised questions about the appropriateness of existing state economic development programs in fostering the continued expansion of this sector in New York. If you presently have call center facilities in New York State, or are looking to site or expand call center activities, we would appreciate hearing your thoughts on this issue.