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Government Affairs Albany Update

June 18, 2004

Assembly Extender Bills

Staff Contact: Ken Pokalsky
The Assembly has introduced two bills that would extend major state economic development programs.

A.11640 (Rules) - Would extend the Empire Zone program as is through February 1, 2005. Under current law, Empire Zone designations will expire on July 31, 2004. If allowed to expire, Zones would lose their ability to designate additional zone acreage, the state would not be able to certify any additional zone businesses, and certified businesses would lose their non-QEZE Empire Zone benefits. If approved, the bill would have an effective date of July 31, even if it were passed after that date, which would assure no gap in Empire Zone benefits for currently certified businesses. There has been considerable controversy regarding the performance and administration of the Empire Zone program. Both the Governor and Assembly have proposed broad zone reform legislation, but little progress has been made to date on a three way agreement. The major downside of a straight
extender is that, as long as the long-term future of the Zones program remains in question, the uncertainty provides a disincentive for businesses to make investment decisions based on Zone benefits.

A.11645 (Tonko) - Would extend the Power for Jobs program in its current form through December 31, 2008, and would allow the Power Authority to extend the contracts of all current Phase 4 and Phase 5 participants for up to 36 months past their current expiration date, or until 12/31/08, whichever date comes first. Further, the bill would retroactively provide PfJ savings to Phase 4 recipients whose contracts expire before the effective date of this bill. Under this legislation, the program would primarily be funded using New York Power Authority resources. The Governor's Executive Budget would extend Phase 4 and Phase 5 contracts that expire prior to the end of the new fiscal year, with these extensions lasting until March 31, 2005. Under the budget proposal, these extensions would also be done through a rebate program, rather than the current Power for Jobs power acquisition program.

Transportation Advisory Panel Appointed

On June 9th, DOT Commissioner Joe Boardman announced the creation of the New York State Advisory Panel on Transportation Policy for 2025.

The 12-member panel includes representatives of Business Council member companies Corning, Inc. and NOCO Energy Corporation and CANYS member Long Island Association. The panel will assist the state Department of Transportation in gathering information from the public, business, the transportation industry and other interested stakeholders during the development of the next statewide transportation master plan. The panel will hold nine hearings throughout the state during June, July and August.

The statewide transportation master plan was last updated in 1996.

Labor Bills Advance

S.772 (Marcellino)/A.8231 (John), a bill making it an unfair labor practice for employers to grant permanent status to employees hired to replace striking workers, passed the Assembly by a 136 to 3 vote on Thursday, June 17, 2004. The bill had passed the Senate on April 19, 2004 on a 41 to 0 vote. As a practical matter, the bill, if signed into law by the Governor, will only affect New York State employers who do not fall under the jurisdiction of the federal National Labor Relations Act. In labor relations matters, the federal labor laws generally apply over state labor laws.

S.4212 (Velella)/A.4193 (John), a bill that would waive the unemployment insurance benefit waiting period for striking workers if their employer hires replacement workers, passed the Senate by a 48 to 0 vote on Monday, June 14, 2004. The bill remains in the Assembly Ways and Means Committee.

S.7161 (Velella)/A.11582 (John), a bill that would permit designation of a collective bargaining representative through the use of "card check" rather than secret ballot at residential facilities for the disabled, passed the Senate on Monday, June 14, 2004. Up to that time, it had been a one house bill but Assemblywoman John introduced her "same as" bill on Tuesday, June 15, 2004 and referred it to the Assembly Labor Committee.

City of New York Revenue Bill Includes REIT Provision

The City of New York has had its revenue bill for implementing the City Administration's proposed Fiscal Year 2005 Budget introduced as Assembly bill number A.11372 (Rules, at the request of Farrell). The proposed legislation currently sits in Ways & Means Committee; there is no Senate companion as yet. Among other revenue-raising provisions is Part E which would amend the City's General Corporation Tax and Banking Corporation Tax to tax as (id est, include in) entire net income any part of a dividend received from a Real Estate Investment Trust (REIT), as defined in Internal Revenue Code Section 856, even if the dividend would be excludable as income from subsidiary capital.

The City anticipates increasing tax revenue by $10 million annually under the proposal and states that the change would "bring the treatment of dividends from REITs for City business income tax purposes into conformity with the treatment of REIT dividends for federal income tax purposes".

The tax increase would be retroactive to taxable years beginning on or after January 1, 2004.

Senate Passes Outsourcing Study Bill

The Senate approved legislation this week (S.6338/Mendez) that would require the Department of Labor to conduct a study of the impact of "offshore outsourcing" on the state's "information technology" sector in general, and customer services and technical service jobs in particular. The same legislation was also introduced this week in the Assembly by Susan John, who chairs the Assembly Labor Committee (A.11613). The Senate bill was originally introduced by Senator Guy Velella, from the Bronx. The bill passed the Senate Labor committee in March, and has been sitting on the Senate calendar since March 15. With Velella leaving the Senate, the bill was reassigned to Senator Olga Mendez, and passed as a Mendez bill.

The Business Council has opposed this legislation because of concerns that it would wrongly be used to promote restrictive legislation on the use of overseas contractors by in-state businesses. This concern is especially acute in the financial services industry, which is a major driver of the downstate economy. We've emphasized that the U.S. is a major beneficiary of international trade, with a $75 billion - and - growing service trade surplus, and that New York State captures a significant share of that international service trade.

The only other outsourcing bill that has moved is A.201 (Cahill). This bill would require gas, electric and municipal power utilities to maintain call service centers "within this state and within their service areas" to address billing, service orders, rate information , payment and other issues. This week, the bill was moved from Assembly Codes to Assembly Rules committee. The Senate version (S.6079, also a Vellela bill), has not moved out of the Senate Energy Committee.

Privacy and E-Commerce Update

Social Security Number bills have stirred a great deal of interest over the past couple of weeks. Senator Nozzolio continues to push for S.309 however, we have it on good authority that the Assembly has no interest in moving Assemblyman Abbate's version A.11470. The other two social security bills also do not appear to have legs. Those bills are:

S.6568 (Nozzolio)/A.11148 (Ortiz) - Assemblyman Ortiz held the bill at the sponsors request on 6/2/04.

S.7522 (Larkin)/A.9541A (Weisenberg) - Senator Larkin is not looking to move this bill at this time.

Breach of Security Bills

According to Senate central staff all three breach of security bills are dead for the session. However, we have heard that Senator Spano is putting on the pressure to move his version to Rules. These are the three breach of security bills.

S.6615 Spano/A.9431 Brodsky
S.6517 Fuschillo/A.9184 Klein
S.6739 Rath/A.11012 Stringer

Spyware

The Senate passed S.7141-A sponsored by Senator Balboni yesterday. Assemblyman Morelle introduced this bill in the Assembly earlier this week. It is our understanding that Assemblyman Morelle is not in a hurry to move this legislation. Assemblyman Morelle's office indicated that they wanted to give the bill further review and to provide an opportunity for companies to comment. However, now that the Senate has passed the bill it may add pressure for Assemblyman Morelle to move the bill. We have been asking our member companies to please review the bill and provide language to address the problems with the bill.

Workers' Compensation Update

The Senate amended its version of the AFL-CIO's bill to reflect the changes that were made a couple of weeks ago in the Assembly. This is significant because they also changed the main sponsor of the bill to Senator Olga Mendez. Senator Mendez was appointed chair of the Senate Labor committee when Senator Guy Velella resigned. Senator Velella was the former lead sponsor on this bill.

The Business Council remains opposed to this legislation. There have been no two-way or three-way meetings on workers' compensation at this point, and it does not appear that workers' compensation will be addressed before they break next week.