Government Affairs Albany UpdateMarch 18, 2005
- Budget Negotiations Continue
- Single Sales Factor Apportionment on Center Stage
- Assembly Weighs in on “Vapor Intrusion” Issue
Senate and Assembly Budget Subcommittees continued to meet throughout the day Friday with all sides expressing the goal of an on-time budget. A couple of the Budget Subcommittees have finished, or are nearly finished, with their work. The General Government/Local Assistance Subcommittee has finished their work. The Transportation Subcommittee continues to discuss a Transportation Bond Act to be put to the voters in November. The Environment subcommittee is largely done, with the remaining open issue the size and use of the Environmental Protection Fund. The more onerous industry fee proposals are off the table. The Health Subcommittee made little progress in their Thursday meeting, with the Assembly unwilling to make Medicaid cost-containment choices before knowing the ramifications of the federal Medicaid waiver the Governor announced in Washington. Another Health Subcommittee meeting was scheduled for Friday at noon. The Economic Development Subcommittee continues to meet and discuss the extension of the Empire Zone Program -- they have NOT been charged with discussing tax cuts. The Economic Development subcommittee is also addressing major differences regarding funding for "technology" and other targeted development programs, with the Senate and Assembly having proposed competing packages (NY-EXCELL in the Senate, NY@Work in the Assembly). Those discussions are with the General Budget Committee co-chaired by Senator Bruno and Speaker Silver.
The Business Council is urging Single-sales factor (SSF) as part of the final budget (see next item by Rich Schwarz on SSF).
Legislation to adopt an 100% receipts factor formula (that is, Single Sales Factor Apportionment) has passed the Senate as Part C of S.995C - the Budget Revenue Bill. S.995C's stature as part of the Senate's overall balanced 2005-2006 Budget package places Single Sales Factor Apportionment (SSFA) on center stage for discussion and negotiation within the General Conference Committee (commonly known as "The Mother Ship").
SSFA would remove the current benefit given out-of-State firms when allocating income for taxation under New York's Corporation Franchise Tax by removing the payroll and property factors from the CFT's apportionment formula. Current Law's inclusion of the payroll and property factors raises a firm's New York tax liability for every job and every facility placed within New York while concurrently lowering a firm's New York tax liability for every job and every facility placed outside New York and for every job and every facility removed from New York. For every $2 of this adverse benefit given under current law to out-of-State-based firms that use New York as a marketplace, New York-based firms suffer $5 of adverse tax increase.
That is why states have been correcting their corporate franchise apportionment formula to remove or extremely limit the payroll and property factors so as not to punish firms from locating jobs and facilities within their borders and not to reward firms that either remove jobs and facilities from their states and/or locate jobs and facilities outside their states. Thirty-six of the forty-six states that have a corporate franchise (income) tax have abandoned the equally weighted 33.3% receipts, 33.3% payroll, 33.3% property apportionment formula - with Alabama posed to make it 37 out of 46 under HB436. Moreover, 15 states have removed the payroll and property factors beyond New York's 50% removal of payroll and property from its apportionment formula (Arizona, Minnesota, Michigan, Ohio, Oregon, Pennsylvania, Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, Missouri, Nebraska, Texas) and 9 states (Connecticut, Illinois, Iowa, Maine, Maryland, Massachusetts, Missouri, Nebraska, Texas) have gone to SSFA by totally removing the payroll and property factors - with Georgia poised to join the SSFA states under HB191 which has passed both houses and is sitting on the governor's desk.
The General Conference Committee is jointly chaired by Senate Majority Leader Joseph Bruno and Speaker Sheldon Silver. Now is the time to contact these leaders, as well as your local senator and assembly member, and stress the importance of SSFA and its effect on your retention/location of jobs and facilities within New York.
Assembly EnCon Chairman Tom DiNapoli released a position paper this week on the issue of assessing and abating vapor intrusion impacts (indoor air contamination caused by vapors emanating from soil and/or groundwater contamination.) It called on the state to develop a comprehensive vapor intrusion policy that:
- adopted the “most conservative assumptions about toxicity and exposure.”
- provided, upon request, indoor air testing of any resident living near a contaminated site with a potential for vapor intrusion
- once direct exposures are mitigated, require “quick and aggressive” cleanup of sites causing vapor intrusion impacts
- measures to protect ambient air quality at vapor intrusion sites, including the adoption of requirements that would limit the emission of contaminants from indoor air mitigation systems.
Click here to view the press release.
As you may know, the Departments of Health and Environmental Conservation have already released for public comment a draft technical guidance document to govern the investigation and remediation of vapor intrusion impacts. It is available on the DOH web site. The public comment period extends through April 23, 2005.
The Business Council has established a vapor intrusion work group as part of its standing Environment Committee to review and prepare comments on the DOH proposal.