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Government Affairs Albany Update

March 26, 2004

PSC Issues Commendations to Telephone Companies

The Public Service Commission announced that it will issue letters of commendation to 36 local telephone companies or telephone company operating divisions throughout New York State for providing excellent service to customers in 2003.

The commendations for excellent service are based on telephone companies' performance in relation to service quality standards established by the Commission. The criteria to measure the condition of each company's infrastructure includes an evaluation of "customer trouble report rates" (CTRR) and the number of consumer complaints received by the Commission. Measurements are taken monthly for each of 912 central office switches in the state. The measurement may be supplemented by staff inspections, if necessary.

Among the companies receiving awards are:

Construction 240/241 Lobby Day - March 30th

The New York State Construction Industry Council (NYSCIC), the construction related affiliate of The Business Council, will participate in a March 30th industry-wide lobby day focusing on 240/241 repeal. This is a reminder to all members that have registered - the lobby day will commence at 10am in the Empire State Plaza, meeting room 6 and continue throughout the day with visits to members of the Legislature. The event will be followed by a reception later that night.

NYSCIC will join a number of industry groups and construction entities including representatives from the New York State Builders Association (Home Builders), the General Building Contractors (GBC), Empire State Subcontractors Association (ESSA), the Building Industry Employers of New York State (BIE), Associated Builders and Contractors (ABC), and a host of others, in efforts to educate legislators and staff as to the 240/241 crisis hitting New York's construction industry.

The issue of 240/241 is the key problem underscoring the crisis being experienced by the construction and construction-related industries in New York. Sections 240/241 of the Labor Law create an unfair and indefensible situation under which contractors are absolutely liable for certain construction related injuries - even if they bear none of the blame. The rising cost of general liability insurance directly related to coverage for 240/241 has driven the construction industry into one of its worst crisis in decades.

The importance of reform of 240/241 was highlighted at The Business Council's Small Business Day on March 23rd. Presentations were given by the Phil LaRocque of NYS Homebuilders and Mike Misenhimer of the Empire State Subcontractors on the impact of 240/241 on insurance rates, availability of insurance and the high cost of doing business in the construction industry - all due to 240/241. The figures reflecting rising premiums and potential losses for businesses - and the impact on taxpayers, were staggering.

NYSCIC has heard similar problems from many members who are struggling to find carriers to underwrite them and many times the coverage they can obtain is at rates 300% to 500% higher than past premiums. Over the last several Legislative sessions NYSCIC and other construction associations have lobbied the Legislature for repeal of this unjust law. In December 2003 NYSCIC submitted testimony to the State Superintendent of Insurance seeking repeal of 240/241. NYSCIC remains committed to changing this situation and is supporting A.7213 (Morelle) / S.1710 (Volker) in an effort to curb this crisis. NYSCIC will be lobbying for this bill on March 30th.

2003 School Report Cards

School report cards for the school year 2002/2003 recently became available and can be accessed from the State Education Department web site from the link below.

The overall state numbers show that the number of students graduating each year is stable, despite higher graduation standards. Also there continues to be a gap between achievement of minority students and white students, and a gap between low-needs school districts and districts with higher needs.

New York's middle schools and elementary schools scored higher in math over 1999. Elementary schools also saw greater achievement in English, while middle schools did not.

Workers' Compensation Reform

On Tuesday at The Business Council's Small Business Day, Governor Pataki proposed a workers' compensation reform package that would increase benefits while enacting reforms that would ultimately cut employers' costs by 15 percent.

Some of the provisions contained in the bill include:

In other workers' compensation related news, Daniel B. Walsh, President of The Business Council, testified before the Senate Labor Committee on Wednesday of this week to stress the need for fundamental cost saving reform.

Outsourcing Executive Orders

Over the past several weeks, a number of state Governor's have issued Executive Orders, or program proposals, in response to concerns about the "outsourcing," or offshoring of jobs. They include:

Missouri - EXEUCUTIVE ORDER 04-09

The most onerous was issued by Governor Matt Blunt, whose Executive Order affected that state's service procurement process. It requires bidders to identify the location where services would be performed; whether any services under the contract are being considered for offshore locations; and prohibits state agencies from entering into contracts where services would be performed overseas, unless either a) there is no comparable domestic service available, b) the vendor is hired to market Missouri services or products to a foreign country, c) failure to use a foreign contractor would result in economic hardships to the state, due to cost differentials, or d) the vendor maintains a significant business presence within the state and performs only a trivial portion of the contract work overseas. In addition, the Executive Order requires all current state contractors to disclose whether any work done pursuant to existing contracts is being done overseas. Finally, any contractor that certifies that state work will be performed in the U.S., and shifts such work to an overseas location, will be deemed to be in breach of contract.


Governor Jennifer Granholm of Michigan issued two Executive Orders. The first directs state agencies to develop policies to prohibit the use of state financial incentives to support the shifting of domestic jobs to foreign nations or the shifting of Michigan jobs to any out-of-state locations, or for activities that would contribution to the violation of "internationally recognized workers' rights. The preamble to this Executive Order also states that "the state and federal government must do everything possible to discourage the relocation of Michigan jobs overseas (emphasis added).

The second adopts a state purchasing preference for products manufactured and services provided by Michigan-based firms (i.e., a "Michigan-based job provider with a significant business presence in the state".) It also requires that, in assessing contract bids, the state will consider whether the performance of state contracts by vendors using non-U.S. citizens would be detrimental to the state. It also requires all bidders to submit information as to where work performed under a state contract would be performed. Finally, the Executive Order would allow the debarment of vendors based on factors including the use of foreign workers or businesses to service the state contract; whether the vendor is "an expatriated business located in a tax haven country," or if the vendor fails to provide any of the information required under this executive order.


Governor Tim Pawlenty issued an Executive Order that directs the Commissioner of Administration to begin considering the use of U.S. workers as a factor when making "best value" determinations in awarding state contracts. Further, for all service contracts with the state, the order requires that bidders must identify the state and/or nation in which the services would be provided and agree to not shift the location of contracted work, without written consent of the state. In addition, the Commissioner is directed to produce an annual report on the extent to which state government service contracts are performed in foreign countries, addressing the number of such contracts, and the comparative costs of contracts involving domestic and foreign workers.


In a move that certainly bucks the national trend, Governor Jeb Bush issued what can be described as a "pro-outsourcing" bill with regard to state government services. This Executive Order addresses the issue of "outsourcing" or privatization of Florida government jobs by creating an "open and fair process for the purpose of encouraging and managing competition for state government services." The order creates a five person review panel, to oversee the delivery of services to residents of the state, and a new process for reviewing opportunities to privatize state government functions that could be done more efficiently in the private sector.


Rather than attempting to restrict state contracting or trade, Governor Mitt Romney of Massachusetts is proposing to address the "offshoring" issue by incentivizing in-state investments. His proposal includes: $8 million in capital loans to MA companies to remain and/or expand in state; $10 million in grants to support an "insourcing initiatives," providing support for companies that create 250 or more jobs within the state; and another $11 million, to be disbursed in $2,000 increments, for grants to companies to hire MA residents that have been unemployed for more than a year.