Government Affairs Albany Update
April 17, 2009
- Empire Zone Tax “Guidance”
- Energy Stimulus Funding
- Final Budget Summaries/Revenue “Road Map”
- TBC “Outsourcing” Work Group
- Expanding UI Eligibility Bills
- Senate Corporate Tax Reform Hearing
The NYS Department of Taxation and Finance issued a technical guidance memo this week regarding certain aspects of the Empire Zone changes adopted in the FY 2010 state budget. It is available on line at www.tax.state.ny.us/pdf/memos/multitax/m09_5c_4i.pdf.
Most important, the Department is saying that taxpayers must obtain a recertification certificate from ESDC in order to be eligible for any Empire Zone tax credits for tax years beginning on or after 1/1/2008 (see last paragraph on page 1 of the TSB-M).
The effective date for decertification of so-called “shirtchangers” and taxpayers that do not meet a “1 to 1” ratio of economic impacts over tax credits is not specified in the new statute, although it appears that the intent of the legislative agreement was to make these decertifications effective for tax years beginning on or after January 1, 2008. (The new statute does say that decertified taxpayers loose the ability to carry forward unused Empire Zone tax credits effective that date.)
ESDC has told us they were considering addressing this issue, and others related to new decertification language, in their implementation regulations. We continue to have discussions with ESDC on this rulemaking, and are looking for any input from member companies on issues that should be addressed through regulation.
Please contact me at email@example.com at your earliest convenience with any questions, comments or concerns.
Two large blocks of federal stimulus funds will soon be made available for energy efficiency, alternative energy and related projects in New York State. This includes:
- $123 million from the ARRA's state energy program funds. These funds will flow through NYSERDA, and will be allocated through a competitive RFP process. NYSERDA is developing its plan for use of these resources, which must be submitted to the US Department of Energy by May 12, 2009. NYSERDA has issued a preliminary list of “shovel ready” funding categories, including installation of PV capacity; clean energy programs in the commercial/industrial/institutional sectors; energy efficiency and renewables in the residential sector; energy efficiency and fuel diversity in the transportation sector; and updating of state and local energy codes.
- $175 million in “energy efficiency and conservation block grant” funding that is being distributed directly to municipalities in New York State, including $146 million allocated to 54 of the state's largest cities, counties and towns, and another $29 million that will be allocated by the state to other municipal entities. A summary of these funds is available here. To obtain these funds, municipalities must submit plans to the US DOE by June 25, 2009. These funds can be used directly by municipalities for public projects, and made available for energy efficiency and recycling projects by private entities. NYPA, LIPA and NYSERDA have been charged by Governor Paterson to help municipalities develop and implement EECBG spending proposals.
As you know, the state legislature has taken final action on the Governor's Executive Budget proposal. Overall, the final budget includes $6 billion in new state-imposed revenues, the bulk of which ($4 billion) comes from new upper income personal income tax brackets.
Our overview of the final budget is available on The Business Council's web site. In addition to an overview of key business-related revenue actions, we have posted a revenue “roadmap” indicating the location of revenue measures in the various budget bills. This “roadmap” provides bill number, section and page for each major business-related revenue item included in the final budget. All final budget bills cited in our overviews are available on-line at www.senate.state.ny.us/sws/budgetbills/index.html.
Please feel free to contact firstname.lastname@example.org regarding revenue measures or other issues in the FY 2010 final budget.
In addition to bills moving in the State Legislature seeking to enhance worker rights and pay equity, several bills have been introduced which, if enacted, will impose new restrictions on firms doing business with NYS and its public benefit corporations. Senator Adams is sponsoring S.3814, a bill once carried by then Senator David Paterson. Among its many provisions, the bill will require companies which are involved in the “practice of outsourcing jobs” to conspicuously post a disclosure to any consumer doing business with that firm; and prohibit the state from contracting with any firm which “engages in the practice of outsourcing jobs” when state funds are used for such jobs or services. The bill also prohibits any contractor that receives “developmental assistance” from the state from engaging in the practice of outsourcing jobs. Given the tight fiscal climate and increased pressure to limit the use of outside consultants (see Executive Order 6), Business Council staff will continue to work with members to ensure punitive bills which seek to impede business competitiveness are not enacted.
Several bills before the State Senate Labor Committee next week will expand unemployment insurance benefit eligibility, if enacted into law. Governor's Program Bill 8, which was introduced to ensure New York State receives the maximum amount of federal special transfers for unemployment compensation modernization (Section 2003 of the Federal Stimulus Act). New York State law already conforms with federal requirements to draw down one-third of the appropriation to which the state would be entitled. Federal law stipulated that the remaining two-thirds of the appropriation would be disbursed if a state's unemployment eligibility law met at least two of several different standards. Senate Bill 4110 seeks to put into state statute all of the federal eligibility standards set forth in the stimulus act, not just those which were in case law in NYS. In particular, The Business Council will be opposing provisions within S.4110 which seek to expand eligibility to include as a quit with good cause the “illness or disability of a member of the individual's immediate family”.Additionally, the Senate Labor Committee will be considering Senate Bill 4123, which expands unemployment insurance eligibility through clarifying that employees performing in a principal, administrative, research or instructional position at two-year and four-year colleges and universities in New York are presumed not to have reasonable assurance of continued employment when their positions are conditioned on enrollment,
funding or program changes.
The Business Council will be testifying at an upcoming hearing of the State Senate Select Committee on Budget and Tax Reform, focusing on the Corporate Franchise Tax. The hearing will be held Thursday, April 30th, at 12:30 to 5:30 p.m. at the Monroe County Office Building, Room 407, 39 West Main Street in Rochester.
The hearing notice requests testimony on a range of issues, including:
- the effectiveness of existing CFT tax “benefits” in job creation, economic development, and returning an “adequate return on investment” to the state;
- what tax benefits will help revitalize upstate urban areas;
- what provisions of the Empire Zone program should be preserved, modified or eliminated;
- what changes could be made to the CRF to make the state's business tax code more competitive;
- are businesses paying a reasonable share of the overall New York State tax burden?
In addition to oral testimony at the hearing, the Committee welcomes the submission of written testimony from any interested parties.
The hearing notice is available here. For additional information on the hearing, or to register to testify, contact James Schlett, Select Committee Administrator, Room 609, Legislative Office Building, Albany, NY 12247, phone (518) 455-2293; email email@example.com.
We welcome input from Committee members as we prepare our testimony. Contact firstname.lastname@example.org to provide input into our testimony.