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April 19, 2005

Council outlines post-budget legislative priorities that focus on reducing job-creation costs

Policy changes that would reduce the costs of workers’ compensation, health insurance, and liability insurance are high on The Business Council’s list of legislative priorities for
the remainder of the 2005 legislative session.

The first on-time budget in two decades will enable legislators to focus more attention than usual on non-budget issues, said Business Council President Daniel B. Walsh. The Council will highlight several legislative priorities in its dialogue with lawmakers.

The Council’s post-budget priorities include:

Workers’ comp reform: New York’s workers’ compensation costs on a cost-per-case basis are the nation’s second-highest, more than 70 percent above the national average. The Council will continue to urge lawmakers to enact a variety of reforms to cut these costs. A key reform would limit the duration of benefits given to workers with injuries for which benefits are not currently prescribed by schedule.

The Council is also urging lawmakers to reduce state assessments that support the workers' comp system's “Second Injury Fund,” and to change the assessment payment methodology for self-insured groups. Assessments are surcharges on comp premiums that pay the expenses of the state’s Workers' Compensation Board and finance special-purpose funds, such as the Second Injury Fund.

Liability reform: The Council is pursuing a number of reforms designed to rein in the costs of lawsuit abuse in New York State, including:

• Repeal of New York’s antiquated vicarious liability law, which holds that companies that lease cars to others can be sued for damages if the lessee gets into an accident—even if the company leasing the car is blameless.

• Repeal or reform of New York’s unique and notorious Scaffold Law, which holds that contractors and property-owners can be held absolutely liable for worksite injuries even if they have been in no way negligent and even if there is evidence that the injured worker is to blame.

Replacement power: The Council is urging lawmakers to extend a state statute that gives western New York industries access to 445 megawatts of power generated by the New York Power Authority (NYPA). This relatively inexpensive power is called “replacement power” because the allotment was originally made to replace power that had been generated in that region by a power plant that was destroyed in a rockslide in 1956.

The state legislature is considering a bill (S.1136-Maziarz/A.2715-Tokasz) that would do this.

Power for Jobs: The Council is supporting modifications to the state’s successful Power for Jobs program, which offers reduced-rate power to employers that pledge to use it to create or retain jobs. The Council is hoping to restore to the program the flexibility the New York Power Authority (NYPA) used to have to extend contracts.

Economic-development power: The Council is also urging lawmakers to explore other ways to offer reduced-rate power for economic-development purposes to encourage job creation in New York State.

Freedom Health Plans: The Council is also urging lawmakers to pass legislation authorizing insurers and HMOs to offer “Freedom Health Plans.” These plans would have higher deductibles and would be coupled with new health savings accounts (HSAs), accounts in which individuals can contribute pre-tax income to cover health-care expenses. The Senate has estimated that these policies would cost about 40 percent less than existing policies.

The legislature is considering a bill that would do this (S.1405-Seward/A.2688-Morelle).

Unemployment insurance fund financing: The Business Council and its members are exploring the possibility of supporting legislation that would automatically trigger bonding to repay the federal government money that New York State has borrowed to pay unemployment insurance (UI) benefits to out-of-work New Yorkers.

Such borrowing is routine, but in recent years, it has been heavy, and the cost of the borrowing has triggered increases in employers’ UI insurance costs. There is some belief that the fund is recovering and will be able to repay the federal government. Nonetheless, the Council is exploring legislation that would prompt bonding of the debt automatically if the fund balance fails to reach a certain threshold by a certain date.

Plant-siting law: The Council will again urge lawmakers to extend the former Article X of the state Public Service Law, which spelled out a mechanism by which proposed new power plants could be considered. The former law expired in December of 2002. The absence of a plant-siting law is widely acknowledged to signal uncertainty to energy markets and the world’s business community generally about New York's commitment to a stable energy future.

School standards: The Council again this year will urge lawmakers and the state Board of Regents to reject any and all efforts to weaken the state’s academic standards and standardized tests that measure students’ and schools’ achievements in meeting those standards.

Tax tribunal: The Council supports creation of a tax tribunal: a new, specialized court that would be charged with hearing significant disputes over real-property tax assessments involving businesses and local taxing entities. When litigation of this sort plays out in the mainstream court system, the cases can last for a decade or more, which hurts both employers and localities.

Outsourcing: The Council will continue to monitor legislative proposals that address the movement of jobs and investment across borders, and to staunchly oppose bills that would inappropriately limit the normal ebb and flow of commerce in the name of slowing “outsourcing” of jobs.

The Council has long maintained that lawmakers should focus on remedying state policies that have kept New York’s job-creation costs high and that have kept New York’s short- and long-term growth rate so far behind the national average for many decades.

Procurement: The Council will monitor bills that would alter the way the state buys goods and services with an eye to ensuring that no needless restrictions on normal commercial activities are imposed.

‘Breach of security’ bills: The Council is monitoring several proposals related to employers’ obligations if employers’ data bases are hacked for customer information. For example, the Council is opposing one bill (A.5487-Brodsky) designed to punish employers whose data bases are invaded even if there is no evidence of employer wrongdoing.

Licensing of occupational safety and professionals: The Council is supporting legislation (S.3583-Alesse/A.3309-Morelle) to require the licensing of these professionals. Licensing of individuals who perform industrial hygiene and safety services would make it harder for unqualified individuals to represent themselves as qualified to offer these services. Licensing can help ensure that individuals charged with protecting workers should have minimal training and experience.