Government Affairs Albany UpdateMay 28, 2004
- Bridges to Excellence Launches in Capital District
- Farrell/Brodsky Empire Zone Proposal
- Revised Withholding Tax Field Audit Guidelines Previewed
The nation's largest employer-sponsored effort to reward physicians for delivering high-quality care added a new incentive program and a new city to the year-old initiative. The Bridges to Excellence coalition introduced the Physician Office Link (POL) program. The existing program focused on diabetes care. POL offers doctors an annual bonus payment for adopting information technology (IT) systems to help manage and improve patient care within their practices.
Bridges to Excellence also made its entire program, including Cardiac Care Link (CCL) available to physicians in New York's Capital District region, for the first time.
Bridges to Excellence was created last year to recognize and reward physicians who provide high quality care and/or adopt systems that promote quality. The coalition includes several national large employers such as General Electric, Procter & Gamble, Raytheon, Verizon, United Parcel Service and Ford. In addition to Boston and New York's Capital District, participating regions include Cincinnati, Ohio and Louisville, Kentucky.
The Capital region is the first region to have all three Bridges' programs - POL, Diabetes Care Link and for the first time, Cardiac Care Link (CCL). The CCL program is focused on improving the quality of care for patients with cardiovascular disease. The annual per patient bonus for being recognized by the Heart Stroke Recognition Program* is up to $160. This New York region is home to about 50,000 employees and dependents of companies involved in the BTE effort, including an estimated 2,000 people with diabetes and 1,000 individuals who have suffered a stroke or heart attack. Thus, the potential incentive pool for the area is nearly $3 million.
Assemblymen Denny Farrell and Richard Brodsky, who respectively chair the Ways and Means and Corporations Committees, have called on Empire State Development Corporation to make a number of immediate, administrative changes to the Empire Zone program. Their recommendations were laid out in a joint letter to ESD Chairman Charles Gargano. Farrell and Brodsky propose that ESD require:
- All Empire Zone beneficiaries to waive confidentiality of tax returns as condition for receiving tax benefits, arguing this would "put corporate recipients on a similar level to others receiving state benefits." (Note: the only such waivers with which we are familiar apply in instances where an agency other that Tax and Finance is administering the program, such as welfare and TAP).
- CPA audits of zone benefits when more than $500,000 is claimed over a "consecutive five year time period."
- Public hearings for any proposed zone boundary amendment.
- Decertification of businesses that are currently receiving Empire Zone tax benefits but would "not meet the employment test requirements" under 2002 program amendments.
- "Median industrial" wages be paid by businesses wishing to be zone certified. (Note: no specifics were provided).
- A showing of compliance with environmental and labor laws as requirement for initial eligibility for zone benefits.
- A limit on tax benefits to 1.4 times the average wage paid per job created (again, no specifics provided. Unclear whether this is an annual or aggregate limit).
- Reinstatement of pre-2000 ESD regulation that limited distribution of Empire Zone acreage to no more than 3 non-contiguous areas.
- Establishment of improved performance measures and annual program evaluations.
In addition, the Assemblymen issued a chart ostensibly illustrating the existing statutory authority for each of these proposed changes. For the most part, they cite general statutory authority to adopt regulations.
The Business Council is developing a detailed response to these new proposals.
At The Business Council's Conference On State Taxation (COST), the Department of Taxation & Finance previewed Revised Withholding Tax Field Audit Guidelines; the Department's current plan is to adopt the revised guidelines presently.
Proposed changes include:
- for non-resident employees who perform services both in and out of New York, employers would be able to rely on employees' estimated percentage of services performed in New York contained on form IT-2104.1 "New York State, City of New York, and City of Yonkers Certificate of Non-Residence and Allocation of Withholding Tax" as long as employers do not have actual knowledge or reason to know the form is incorrect or unreliable;
- for non-resident employees not assigned to a New York primary work location, employers would not be required to withhold New York tax for employees who work 14 or fewer days in New York -- exceptions to this rule are (1) athletes, (2) entertainers, and (3) employees who receive income in the current year for services performed in New York in a prior year;
- for non-resident employees who receive income from non-statutory stock options, employers would have the option to withhold based on form IT-2104.1 for current year wages if the stock option amount is below one million dollars per pay period; and
- regarding residency status of employees, employers would be able to rely on information provided by employees regarding residence, provided the information is: (a) accepted by employers in good faith and (b) employers do not have actual knowledge or reason to know the information is incorrect.