Government Affairs Albany Update
June 11, 2010

Tax Credit Deferrals

The Administration proposal to defer 50 percent of most business tax credits that otherwise would be claimed during 2010, 2011 and 2012 tax years continues to be discussed in legislative negotiations on a final budget. This proposal would erode key economic development incentives, such as the investment tax credit, which is widely used to support new capital investments in New York State’s manufacturing sector, Empire Zone credits, brownfield redevelopment credits and others. Importantly, this proposal impacts tax incentives already earned by businesses for investments they have already made in New York State, such as the Empire Zone real property tax credits and carry-forward ITCs. The Division of Budget projects this proposal will cost business $100 million in Fiscal 2011, and $650 million per year once fully implemented. This proposal is actually a double hit on business, an “out of pocket” cost resulting from increased tax payments over the next three years, and an adverse balance sheet impact caused by reduced values of deferred tax assets. The Business Council strongly opposes this proposal, and we urge you to contact your legislative representatives to express your concern regarding tax credit deferrals.

Prior Approval of Rates Reinstated; Autism Coverage Mandate Next?

Earlier this week the Legislature passed, and the Governor signed into law, legislation  requiring health insurance plans to get from the Insurance Department prior approval on rates for small group plans and sets a medical loss ratio (MLR) standard of 82 for these plans . Included in the Governor’s budget “extender” bills, the proposal claims to produce state savings that would offset deeper Medicaid cuts. The bill is effective immediately and requires plans to get prior approval from the Insurance Department on plans in the current year.

In addition, an autism coverage mandate bill moved quickly this week through committee to unanimous passage on the Senate floor. The bill has been the subject of intense lobbying from advocacy groups interested in having broad-based coverage for a variety of therapies and treatments not typically considered health care, and not all based on sound clinically proven, evidence based medicine. The Business Council opposes this coverage mandate bill, as it lacks some of the standards set in other states with mandatory autism coverage requirements and does little to coordinate between education funding and health care requirements. More broadly, with weak definitions of habilitative care, the coverage mandate has the potential to categorize certain types of services as health care, when in fact it is not related to a legitimate health care expense. Legislative sponsors acknowledge this bill will likely increase premiums by at least 2 percent.

Abusive Workplace Bill Stalls

Legislation that would establish a new civil cause of action for employees who claim that they are subject to an abusive work environment was held in the Assembly Labor Committee meeting this week after extensive advocacy by The Business Council and other business groups. S.1823-B (Morahan)/A.5414-B (Englebright). The Business Council’s opposition memo is available here. This bill had previously passed the Senate.

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