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Government Affairs Albany Update

March 5, 2004

PSC Issues Preliminary "Blackout" Report

On March 1st the Public Service Commission released its initial report on the August 14, 2003 blackout. It stated that New York State's power grid did not contribute to the August 2003 blackout, but utility companies need to secure more backup power in the future. The report listed a number of recommendations based on the over 900 requests for information, interviews with regulators and utilities, and thousands of industry documents.

The report stated that although the power surges from the Midwest cascaded through New York and the surrounding region, there is no evidence of any significant failures in the operations of New York's electric system. The report supports earlier findings that there was no warning to New York utilities or the NYISO as to the magnitude of the problems originating in the Midwest that might have allowed New York's utilities and regulators to take actions to prevent or minimize the impact on New York's electric system.

Despite the impact of the blackout on New York State the report determined that, under the circumstances, electric, telecommunications, gas and water systems generally performed well. Total restoration was accomplished in 30 hours. The PSC stated that a number of recommendations should be implemented including national reliability standards. However, it should be noted that New York already operates under mandatory, and more stringent, reliability rules than those required by NERC and NPCC.

TEA-21 Extended Again

With time running out on the previously extended TEA-21 program, the Senate passed an additional extender - this one effective until May 1, 2004 - to keep the federal TEA-21 program in place. The House had passed an extender, prior to the Senate, when it became apparent that the omnibus re-authorization of TEA-21 (or TEA-3) could not be reached before the February 29, 2004 deadline. The President promptly signed the bill after Senate approval, effectively continuing the program for an additional two months. The Congress had passed extender legislation last fall that kept TEA-21 in place until February 29th. Recently both Houses considered TEA-3 bills but could not agree on funding levels. The President threatened to veto any bill to renew the program that would cost more than $256 billion over six years.

Minimum Wage Continues to Move

Minimum wage action was seen in both houses this week. On Monday, March 1st, A.9710 (John) passed the Assembly on a 127 to 19 vote. This bill raises the minimum wage in three steps to $7.10 by 1/1/06, raises the tip employee minimum wage and authorizes unions to file complaints with the labor commissioner on behalf of non-union employees. Our memo in opposition.

In the Senate, S.3291B (Velella) went to a C print. The incremental increases now match those contained in A.9710 but the effective dates remain different. S.3291 also continues to call for a task force to study indexing.

Update on Outsourcing Bills

It was a busy week for the outsourcing issue. A handful of new bills or proposals were introduced, and the Spano/Brodsky bill (S.6040 / A.9567) was amended to establish new economic incentive tracking requirements. Details are as follows:

New Legislation - Three new bills were introduced this week.

S.6338 (Velella) - Requires the Commissioner of Labor to report on issues relating to offshore outsourcing of information technology jobs and the future of New York's job market; the report due February 1, 2005. This bill was introduced with no co-sponsors, no Assembly companion at this time.

A.10070 (Nolan) - Authorizes the Superintendent of Banks to "audit the international administrative offices of banking organizations doing business in this state which process personal information from customers for purpose of enforcing privacy protection." This bill was introduced with 32 co-sponsors; no Senate companion at this time.

A.10114 (Nolan) - Requires employees of banking organizations answering customer calls on a toll-free number to identify the location of the banking organization's call center by city and state, or if international, by city and country. This bill was introduced with 30 co-sponsors; no Senate companion at this time.

Senate Democrats Announce Broad Outsourcing Proposal - On Wednesday, Senator Minority Leader David Paterson announced a broad anti-outsourcing proposal (bill text not yet available). Key provisions will be to:

A number of advocacy groups were listed as being in support of the bill, including NYPIRG, the AFL-CIO, Civil Service Employee Association, Professional Employee Federation, and the Communication Workers of America.

The bill has yet to be introduced, and we have not yet received a copy of the draft bill from Senator Paterson's office.

Spano/Brodsky Legislation Amended -- The sponsors of S.6040/A.9567 have amended their legislation to add new requirements that:

The Hidden Tax - Gross Receipts on Energy Purchases - Continues Downward

New York's Gross Receipts Tax (GRT) on energy purchases - buried in your gas and electric cost - continues to spiral, and in one case, drift, downward. On January first of this year:

The GRT reductions are part of the 2000-enacted (Chapter 63 of the Laws of 2000) overhaul of energy firm taxation where taxation shifted away from taxation of energy firm receipts and, in return, energy firms' net income became taxable - immediately and fully - under the State's Corporation Franchise Tax (Article 9-A).

Also, as part of the 2000 Chapter of Law, the Gas Importation Privilege Tax (Section 189) rate - imposed on out-of-State purchases of gas for use in-State - dropped from 0.85 percent to 0.4 percent on January 1, 2004.

Assembly Passes Mental Health Parity Mandate

The state Assembly passed A.8301, a bill to mandate greater mental health benefits on policies governed by New York State Insurance Law. The vote was 131-10. No votes were cast by Assemblymembers Bacalles, Hooker, Kolb, Mills, Oaks, Townsend, Winner and Young. Assemblyman Robin Schimminger was the only Democrat to cast a no vote. The Republicans offered up two amendments - one, for a cost-benefit analysis and another for a small business exemption - but, those were overwhelmingly defeated.

The bill would require insurance policies to provide full coverage for the diagnosis and treatment of mental disorders, including nervous disorders, emotional disorders, and dependency on alcohol or other drugs. One study estimates the cost of the mandate could be another 3 percent on health insurance premiums.

The companion bill, S.5329 is in the Senate Insurance Committee.

The Business Council has long supported the creation of a health-benefit cost commission. The commission would study the cost and effectiveness of all proposed health care mandates, prior-to, consideration by the legislature.

Nearly 5400 Faxes Sent Urging Workers' Compensation Reform

Nearly 5400 faxes have been generated by our E-Advocacy campaign on workers' compensation. Almost 1100 supporters have participated in the web-based electronic-advocacy campaign to show lawmakers the strong statewide support for cost-cutting workers' compensation reform.

This initiative offers business leaders and others to send letters to elected officials voicing concerns about high workers' compensation costs in New York State and asking them to support reform legislation that would rein in those costs.