Dear Friend,

Enclosed is a report to date on the activities of the Assembly Committee on Economic Development, Job Creation, Commerce and Industry.

A number of important measures have been passed by both houses of the State Legislature thus far in 2004, and while some have been acted on by the Governor, others were still awaiting gubernatorial consideration at the time this report went to print.

For as long as I have been in Albany I have maintained that the very best state economic development program is to continue to reduce the costs of doing business in our state. We’ve certainly made progress, but much more remains to be done.

Knowing your thoughts is the best ammunition I can have, so please feel free to contact me with your comments on these or any other issues of concern to you and your business.

Sincerely,

Robin Schimminger
Chairman, Assembly Committee on Economic Development

Geico & Definity Are "Wins" For Tonawandas & W.N.Y.

Last December’s news that New York State had won a hard-fought competition with several other states for Geico Direct’s new Northeast U.S. customer service center was great news for Western New York. The Geico facility will be located in Amherst, but our entire region will benefit from the 2,500 new jobs that eventually will come from Geico’s $40 million investment in our area. Also, because incentives made available to Geico through the Tonawanda Empire Zone played a critical role in cementing the deal, Amherst will dedicate a portion of tax proceeds from the project back to the Town of Tonawanda for development of the North Youngmann Commerce Center.

The Town of Tonawanda has long sought to develop the vacant "Mud Flats" area just north of the Youngmann Highway off Military Road into a commercial and industrial park. The town’s plans for the North Youngmann Commerce Center envision up to 1.2 million square feet of building space occupied by companies employing as many as 1,200 people and generating $1.5 million in annual local taxes.

Another 600 jobs are coming to Tonawanda with help from the state’s Empire Zones Program. Definity Health Corp., a Minneapolis-based health insurer, recently announced plans to establish a service center in the new Colvin Woods Business Park along the Youngmann off Colvin Boulevard.

Committee Meeting. Assemblyman Schimminger chairs a morning meeting of the Assembly Committee on Economic Development, Job Creation, Commerce and Industry in the state capital. The committee’s jurisdiction encompasses oversight of the state’s economic development programs and policies; the licensing, registration and regulation of certain types of businesses; and the controlled sale of alcoholic beverages.

As with Geico, Empire Zone benefits were central to Definity’s decision to move to the area. Definity will temporarily locate in Amherst until the company’s new $10.3 million Tonawanda facility is built, so Tonawanda Empire Zone status will be temporarily "loaned" to Amherst but will revert to Tonawanda once Definity opens its new building in the town.

The state’s Empire Zones program played a critical role in securing these two economic development "wins" for New York State and Western New York. In fact, it’s likely that none of the major economic development deals in Upstate New York these past two years would have happened had this program not existed. While there has been some controversy over decisions made by a few local zones in drawing or reconfiguring their zone boundaries, it’s clear that this program is critical to revitalizing upstate’s lagging economy.

Linked Deposit Program. Lengthens the terms for low-interest Linked Deposit bank loans from two to four years and would extend the lowest allowable linked loan rate available to certain types of businesses to also include companies located in federally designated Renewal Communities. A.6035 (Schimminger), passed Assembly and Senate; A.6477 (Schimminger), passed Assembly

Micro Businesses. Authorizes local development agencies to establish revolving loan programs for micro businesses, with five or fewer full-time employees, relating to tourism, cottage and craft industries, agricultural and forest products, and any other products produced or grown in New York State. A.6679-A (Lifton), passed Assembly and Senate

Military Service. Would provide loans and other financial assistance to help small businesses that are adversely impacted by the military activation of owners, managers or other key employees serving in the Guard or Reserves. A.1884 (Sweeney), passed Assembly

SBIR. Would provide bridge financing to recipients of federal Small Business Innovation Research program Phase One contracts to enable them to advance to the next stage of SBIR-supported federal procurement. A.4766 (Schimminger), passed Assembly

Emergency Rulemaking. Restricts state agencies’ ability to adopt emergency rules, which allows public notice and comment requirements to be bypassed, to instances where there is an imminent and substantial threat to public health, safety and general welfare. A.2645-B (McLaughlin), passed Assembly and Senate

Regulatory Agenda. Extends the requirement that state agencies publish semi-annual regulatory agendas to give advance notice of rulemaking proposals. A.10083 (R. Diaz), passed Assembly and Senate

Installment Payments. Allows small businesses the option of making quarterly installment payments for a fee or civil penalty of more than $300 imposed by a state agency. A.345-A (Christensen), passed Assembly and Senate

Bed and Breakfasts. Provides for a reduced annual license fee - $200 plus $15 per guest room - for B&B establishments that have a license to sell alcoholic beverages to guests. A.10850-A> (Cahill), passed Assembly and Senate

Uncorked Wine. Permits restaurant patrons to take home an opened bottle of wine purchased with a meal and not fully consumed, provided the bottle is properly sealed by the restaurant. A.9512-B (Magee), passed Assembly and Senate

Dry Cleaners. Gives dry cleaners the option of donating to charity garments or other items left by customers for more than six months, provided that notice of this option is posted at the premises and printed on consumer receipts. A.7019-A (Gromack), signed into law as Chapter 38

Security Guards. Requires that security guard applicants be subject to FBI criminal background checks which, unlike the already required state background checks, will provide access to federal and other states’ criminal records. A.8650 (Schimminger), passed Assembly and Senate

Radioactive Materials. Would prohibit the distribution and sale of radioactive secondary materials, which can pose a threat to public health, safety and economic security. A.3887-A (DiNapoli), passed Assembly

Agricultural Cooperatives. Extends Empire Zone benefits available to businesses to also include agricultural cooperatives. A.7451-B (Aubertine), signed into law as Chapter 39

Farm Wineries. Allows farm winery licensees to sell New York State wines for later consumption at functions sponsored by charitable organizations and permits farm wineries to obtain a special license to sell liquor for on-premises consumption in restaurants, inns or hotels located in or adjacent to the winery. A.9448 (Magee) and A.9834 (Magee), both passed Assembly and Senate

Wine Industry Promotion. Authorizes the New York Wine & Grape Foundation to establish and operate the New York Wine Marketing Program to promote New York State wines. A.10977-B (DelMonte), passed Assembly and Senate

Boat Dealers. Creates statutory guidelines affecting the agreements under which boat dealers sell vessels, motors, equipment and accessories and make warranty repairs thereon. A.10358-A (Tonko), passed Assembly and Senate

Service Stations. Prohibits refiners from operating a retail service station within a specified distance, depending on the population of the municipality, from an existing service station operated by a franchisee dealer. A.8589-A (Abbate), passed Assembly and Senate

Canada is New York State’s largest trading partner, and the Peace Bridge linking Buffalo and Fort Erie, Ontario, is one of the busiest border crossings between the U.S. and Canada. As many as 6,000 trucks per day have been processed at the Peace Bridge, and the value of trade crossing at this one point of entry is about $220 million daily. However, the growing delays and traffic back-ups at this vital link in the international trade corridor between Toronto and the Eastern U.S. are threatening to send this cross-border trade – and related business and jobs – elsewhere unless bridge capacity is increased. Equally important is the tourist economy, which in Western New York is heavily dependent on the Canadian market.

Building a New Border Crossing. Paul Koessler, Vice Chairman of the Buffalo and Fort Erie Public Bridge Authority, and Assemblyman Schimminger review proposals for a new international bridge that will ease trade-related congestion at New York’s busiest border crossing with Canada. A new law granting the authority eminent domain power was sponsored by the Assemblyman to enable the project to move forward.

In the aftermath of a failed attempt in the 1990s to construct a "twin span" bridge adjacent to and mirroring the Peace Bridge to accommodate this burgeoning traffic, the Public Bridge Authority (PBA) launched a new Peace Bridge Expansion Project in 2001 in partnership with the City of Buffalo and Town of Fort Erie. During the initial scoping phase of the Peace Bridge Expansion Project (PBEP), 59 alternatives within seven different crossing corridors stretching along the river from downtown Buffalo to Niagara Falls were proposed by the public and studied by the project’s consultants. Last year, these were winnowed down to three alternative corridors – the current location of the Peace Bridge, another site between Fort Erie and Buffalo near the International Railroad Bridge and a site that I had proposed between Fort Erie and the Town of Tonawanda in my Assembly district – which then underwent further analysis.

This year, the PBEP recommended that the new crossing be located in the vicinity of the Peace Bridge and will be making a final recommendation on the location and design of the bridge and plaza to the Federal Highway Administration, which is the lead agency for the project, later this year. Currently, the PBEP is evaluating four bridge designs, including options for a new span to replace the 77-year-old Peace Bridge and others for a companion bridge to work in conjunction with the existing bridge. Also, the PBA recently announced plans to move all toll operations, currently located on the U.S. side, to Canada and open up more inbound Customs truck processing lanes to improve traffic flow on the congested U.S. plaza, but a lawsuit objecting to these interim improvements already has been filed.

Throughout the PBEP process, which has involved substantial public input and a series of public meetings, workshops and hearings on both sides of the border, the PBA has repeatedly stated the need to obtain eminent domain power as a means of last resort for acquiring property needed for the project through condemnation should efforts to negotiate purchases of individual parcels fail. The PBA requested that we enact the necessary state legislation in this regard last year.

The law we’ve enacted limits the PBA’s newly granted eminent domain power to the current project and limits the applicable time frame to ten years. Affected property owners will, of course, have all the protections afforded by the state’s Eminent Domain Procedure Law, and the PBA has committed to utilizing federal legislation which provides for additional relocation assistance. The PBA has also agreed to expend additional funds for special tenant hardship cases and for incentives to enable affected persons who wish to remain in the neighborhood to do so and to make ancillary improvements in the neighborhood such as buffers between the plaza and residential areas. The City of Buffalo’s role is already clearly spelled out in a Memorandum of Agreement signed by the city and the PBA and referenced in the legislation.

Even if the Peace Bridge Expansion Project proceeds without any further setbacks from this point forward, it could be another six or seven years before a new bridge is in place. But, giving the Buffalo and Fort Erie Public Bridge Authority the ability to acquire the property needed for this project is a crucial step toward finally getting a new bridge built.

Workers’ Comp & 240/241 Reform

Efforts to enact long-needed reforms to New York State’s workers’ compensation system were still in the balance as this report went to print.

While there is no question that maximum weekly comp benefits in New York rank among the lowest of the 50 states, it’s also the case that New York has the second highest average claim cost in the nation and comp premium rates that are eighth-highest. It’s become increasingly clear that New York State has major problems with its comp system and that fundamental reforms are needed to rein in costs without undermining essential benefits for injured workers.

I’ve introduced legislation (A.8162) that would bring about vital cost-saving comp reforms in four key areas; durational limits for permanent partial disabilities, objective medical guidelines, Social Security and employer-sponsored pension benefit offsets, and scheduled loss of use awards. The Business Council of N.Y.S. estimates that enactment of this measure would result in employer savings of 18.4 percent or some $840 million statewide.

More recently, the Governor submitted an omnibus workers’ comp bill (A.10975) that would cut employers’ costs by an estimated 15 percent while increasing maximum weekly benefits by 25 percent. It also includes a limit on the duration of benefits and a reduction in assessments imposed on employer’ premiums among other provisions.

It’s my hope that a comprehensive workers’ comp reform package can be enacted that balances the needs of employers and injured workers.

On a related matter, the construction industry has seen liability insurance costs skyrocket 500 to 600 percent over the past few years, and many contractors, builders and roofers are being refused coverage by insurers or are seeing their policies cancelled. The problem is complex and has many causes, one of which may be traced to Sections 240 and 241 of the Labor Law, known as the "Safe Place to Work" or "Scaffold" Act. This law is sometimes interpreted as providing an absolute liability standard for any gravity-related employees’ injuries — even if the worker was completely responsible for his or her own injury.

I am one of the sponsors of legislation (A.7213) to change the liability standard to "comparative negligence," so the employee would bear his or her share of responsibility for the injury. Every one of the other states that has had a similar law has eliminated it, and I hope we will soon follow suit.

Low-Cost Power in Limbo

The Assembly and Senate this year have passed differing versions of legislation to address electricity costs. Lowering the cost of energy is a major factor in maintaining a viable manufacturing sector, which remains a vital component of our economy. It’s critical that these differences be ironed out so these initiatives can keep on helping to grow and preserve jobs.

Power for Jobs
The Assembly-initiated Power for Jobs program offers commercial and certain non-profit customers a 10 to 25 percent savings on their electricity bills in exchange for a commitment to create or protect jobs. More than 300,000 jobs statewide are linked to Power for Jobs.

The Assembly-passed Power for Jobs legislation (A.11645) would continue this highly successful program for an additional three years. A bill passed by the Senate embraces the Governor’s budget proposal to revamp the program by replacing the discounted rates with a quarterly rebate program.

Replacement Power
Coinciding with the federal relicensing process for the New York Power Authority’s Niagara Power Project, a 445-megawatt block of discounted hydropower called "replacement power" that is currently reserved for manufacturers located within 30 miles of the Niagara Project could be lost. Replacement power is currently used by nearly 60 manufacturers which provide approximately 40,000 jobs in the Buffalo Niagara region.

The Assembly passed a bill (A.9633) to reauthorize the sale of this replacement power generated at Niagara, while the Senate amended its matching bill to add similar provisions for businesses located near the St. Lawrence Power Project that receive low-cost "preservation power" from that facility.

"NY SMART" Training Grants Aid Manufacturers

Under a new program administered by the N.Y.S. Workforce Investment Board in conjunction with the N.Y.S. Department of Labor, manufacturers now have the opportunity to apply for grants to help upgrade workers’ skills. As one of two Assembly representatives on the State Workforce Investment Board (SWIB), I have long felt that the state must do all it can to ensure that New York State has the very best trained workforce in order to compete successfully in our increasingly global economy.

Through the New York Skilled Manufacturing Resource Training program – NY SMART – $8.5 million is available for training new and incumbent manufacturing workers in the state. Companies with 99 or fewer workers can apply for SMART 17-K grants of up to $50,000. Applicants must be private and for-profit, and located in New York State. A group of two or more companies can apply jointly if they have the same training needs. Contracts will be awarded for a period of 12 months, and the funds can go toward on-site or off-site training in process improvement efforts such as lean manufacturing, Six Sigma and productivity enhancement. Applications are due by June 30, 2005.

Manufacturers and other types of businesses with other training needs may be eligible for grant funding through the SWIB/NYSDOL Building Skills in New York State (BUSINYS) program.

More information on NY SMART or BUSINYS training grants can be obtained at www.workforcenewyork.org or by calling 1-800-HIRE-922.