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Government Affairs Albany Update

February 3, 2006

SBC Implementation Plan

Last December, the Public Service Commission elected to extend the "system benefit charge" program (SBC III) by five years (thru June 2011) and increase annual program assessments and spending from $150 million to $175 million. Under this order, NYSERDA is required to submit an "operating plan" to the PSC by February 15. Within the broad spending parameters established by the PSC, the operating plan will outline specific spending levels on a program by program basis for the five year period. This week, NYSERDA's SBC Advisory Committee was given a broad overview of NYSERDA's draft plan, but few details. Since the implementation plan is considered as a "compliance report" mandated by a PSC ruling, it is not subject to Commission approval, nor will there be a formal public notice/comment process. Even so, comments or recommendations can be submitted directly to NYSERDA staff prior to the finalization of the program plan. You can direct comments to Brian Henderson at NYSERDA at bmh@nyserda.org. The SBC Advisory Committee members (including TBC) will receive a copy of the final draft plan once submitted to the PSC. NYSERDA staff stressed, however, that it has flexibility to adjust this spending plan after it is finalized.

Overall, the PSC directed that the largest spending increase go to programs related to energy efficiency efforts in low income housing ($190 million over the five year period); commercial and industrial programs received a slight increase (about $280 million); R&D expenditures remain flat. For their industrial/commercial sector programs, NYSERDA is giving the largest increase to their "new construction" program (efforts to incorporate energy efficiency into new construction), and a lesser increase to programs for reinvestments in existing facilities.

We would be interested in any recommendations from Business Council members regarding specific SBC-related programs or funding levels.

Contract Restictions

Two bills imposing restrictions on state contracts are receiving legislative action again this year. These bills are being pushed by PEF, the state's Professional Employee Federation, in an effort to restrict the state's ability to “outsource” personal services.

S.6479 (Robach) / A.9421 (Lupardo) is near identical to legislation that passed both houses in 2005, but was vetoed by Governor Pataki. This legislation requires state personal service contracts to require contractors to submit annual employment reports documenting the number of employees, total hours worked and total compensation related to performance of the state contract. The state is required to compile annual reports on this data. This legislation has passed the Assembly, and is on the Senate Calendar.

S.6575 (Spano) / A.1259 (John) - This legislation was just introduced this week in the Senate; it passed the Assembly in January, and was previously approved by the lower house in 2005. It requires state agencies, prior to entering into a contracts for personal services, to determine that one of nine justification criteria has been met (e.g., services are not currently available within a state agency or cannot be performed satisfactorily by civil service employees; the services are incidental to a contract for the purchase lease of real or personal property; the services are of such an urgent, temporary or occasional nature that the delay incumbent in implementation under civil service would frustrate the purpose; the agency demonstrates that the contract will achieve actual cost savings as specified in subdivision three of this section.)

The Business Council has opposed both measures.

Small Business Energy Tax Credits

This week, the Senate announced legislation (S.6566, sponsored by Senator Mary Lou Rath) that would provide a tax credit/rebate to help small businesses deal with energy costs. Under this proposal, businesses subject to taxation under either Article 9-A (corporate franchise tax) or Article 22 (personal income tax) are eligible for a credit or rebate of two cents per Kwh of electric power used in business operations. While the credit is subject to the state's alternative minimum tax, any unclaimed benefit will be treated as a refundable overpayment for the tax year in which it was earned. Eligibility is limited to businesses with fewer than 20 employees that receive neither Empire Zone nor Power for Jobs benefits. Sole proprietorships working out their residence would also be ineligible. The Senate estimates that this legislation would provide up to $350 million per year in benefits to 386,000 eligible small businesses across the state. It is estimated that these businesses employ about 1.4 million New Yorkers.