2003 Legislative Update from the
NYS Assembly Committee on
Economic Development

Sheldon Silver, Speaker • Robin Schimminger, Chair • December 2003

Robin Schimminger
NYS Assembly Committee on Economic Development

Room 847 LOB
Albany, NY 12248

3514 Delaware Avenue
Kenmore, NY 14217

2003 Legislative Highlights

Self Employment Assistance Program
The Self Employment Assistance Program (SEAP) was reenacted. Created to allow eligible unemployed individuals to move from unemployment assistance toward starting a new business, SEAP encourages the creation of new businesses and new employment opportunities. (Chapter 413, Laws of 2003).

Commercial Claims Limits
Commercial claims courts, modeled on small claims courts in which actions can be brought by individuals and sole proprietors, have been authorized in city courts, district courts and New York City civil courts. Commercial claims courts provide a similarly informal and inexpensive means for partnerships, corporations and associations to pursue small claims. Legislation was enacted this year to increase the monetary limit for claims that can be brought in both commercial and small claims courts from $3,000 to $5,000. (Chapter 601, Laws of 2003)

Rule-making Comment Period
Due to the growing complexity of rules and regulations promulgated by state agencies, it is often necessary for businesses and other interested parties to engage in extensive research to determine their likely impact. Proposed rule-makings are printed in full in the weekly New York State Register, provided they do not exceed 2000 words; otherwise they must be obtained from the relevant agency. This new law increases the comment period for those proposed rules which are merely summarized in the State Register from the current 45-day requirement to 60 days to give the public time to obtain and analyze them. (Chapter 429 , Laws of 2003)

Indoor Pyrotechnics
After the tragic events caused by the use of indoor pyrotechnics at a night club in Rhode Island, legislation was enacted to prevent similar tragedies from occurring in New York State. To help ensure that such dangerous devices are handled properly, a permitting process was created to help govern the use of indoor pyrotechnics, and penalties were established for violation of the permitting process. (Chapter 584, Laws of 2003)

Minority & Women Business Enterprises (MWBEs)
Article 15-A of the Executive Law was enacted to ensure that a fair share of state contract dollars are spent with businesses that are owned and controlled by minorities and women. One measure passed this year extends this law to 2018 and expands it to include the Urban Development Corporation and its subsidiaries among those agencies that must comply with its provisions. Another measure adds MWBEs to the statute that requires state agencies and authorities which purchase over $2 million per year on state construction and services contracts to encourage small businesses to bid on state contracts. (A.7233-A/S.5684, Passed Both Houses, and A.9057/S.2697-A, Passed Both Houses)

Expanding Wineries Licenses
Many wineries have restaurants and tasting rooms to encourage tourism and market their product. However, wineries were previously limited to selling only wine on their premises, diminishing their ability to host a variety of functions, including weddings. In order to expand the marketing potential of New York’s wineries, legislation was enacted to also allow them to serve liquor and beer at their restaurants. (Chapter 206, Laws of 2003)

Tax Cuts Preserved

As in other state capitals, this year’s 2003-04 state budget process in Albany unfolded against the backdrop of a continued national economic downturn, that was coupounded here in New York by the lingering fiscal effects of the 9-11 terrorist attack in Lower Manhattan. While the final 2003-04 state budget contained temporary revenue actions, it also kept on track an array of previously enacted state tax cuts slated to take effect this year which total approximately $518 million. Among these scheduled tax reductions still being phased in are:

Personal Income Tax
Marriage Penalty
In an effort to help reduce the income tax penalty facing married couples, legislation was enacted in 2000 that increased the standard deduction over a three-year period. For the 2003 tax year, the standard deduction has been increased to $14,600.

College Tuition Deduction/Credit
To help make college more affordable for working families, legislation enacted in 2000 provides taxpayers with a choice of an itemized deduction or a refundable credit for qualified tuition expenses. When fully implemented, the itemized deduction will be 100 percent of qualified tuition expenses up to $10,000. For qualified tuition expenses of up to $5,000, the credit will be the lesser of $200 or tuition paid. For qualified tuition expenses between $5,000 and $10,000, the credit will be equal to four percent of tuition paid. The credit and deduction are currently being phased in over a four-year period, and will be fully effective in tax year 2004.

Earned Income Tax Credit
The Earned Income Tax Credit (EITC) benefits working families earning less than $34,692 annually. Taxpayers between the ages of 24 and 65 with no children may qualify for the credit. Legislation enacted in 2000 increased the EITC from 25 percent to 30 percent of the federal credit over a two-year period. In 2002, the State credit was increased to 27.5 percent. The credit has been further increased to 30 percent of the federal credit for the 2003 tax year.

Alternative Energy Fuel Cell Credit
Beginning in Tax Year 2003, a new tax credit will be available to taxpayers who purchase and install a fuel cell to supply power to the their home. The credit is equal to 20 percent of the cost of purchase and installation.

Business Taxes
Green Buildings Tax Credit
The Green Buildings Tax Credit is designed to encourage the construction of environmentally-friendly buildings. The credit amount is allocated each year based on a statutory schedule, with a maximum allocation of $5 million worth of credits in 2005.

Sales Allocation for Financial Services
To help make the financial sector of New York’s economy more competitive, the method by which financial services companies allocate receipts was changed from the location of the service performance to the location of the customer’s domicile. This change encourages financial services to expand both their payroll and their property holdings in New York State.

Small Business Rate Reduction
To provide assistance to small businesses, the Legislature reduced the Entire Net Income (ENI) rate of 7.5 percent that small corporations face under the Corporate Franchise Tax to 6.85 percent for businesses with ENI at or below $200,000. For businesses with ENI between $200,000 and $290,000, the rate would range from 6.85 percent to 7.5 percent. The rate reductions go into effect for tax years beginning on or after June 30, 2003.

Energy Taxes
In 2000, legislation was enacted to gradually eliminate the Gross Receipts Tax (GRT) on natural gas and electric utility bills. For commercial ratepayers, the GRT will be completely phased out as of January 1, 2005, with the original 2.5% rate now reduced to 0.85% for 2003. An Industrial or Manufacturing Business Tax Credit provides full GRT relief to such businesses. The Gas Import Tax is also being phased out as of 2005, with the 2000 rate of 4.25% also down to 0.85% for the 2003 tax year. In addition, beginning September 1, 2000, a four-year phase-out of the Sales Tax on the transportation, transmission or distribution of gas or electricity became effective. The remaining one percent Sales Tax on energy transmission and distribution was eliminated on September 1, 2003.

Creating New-economy Jobs. Chairman Schimminger, Assembly Members Crystal Peoples and Sam Hoyt, Governor Pataki, Assembly Member Paul Tokasz and Nobel Laureate Dr. Herbert Hauptman (left to extreme right) look on with other dignitaries as Assembly Speaker Sheldon Silver announces a $6 million state investment in the Hauptman-Woodward Medical Research Institute’s new Life Sciences Center in Buffalo. The research center is a key component of the state-sponsored Buffalo Center of Excellence in Bioinformatics, which is designed to turn laboratory research into new, bio-tech products, businesses and jobs. Centers of Excellence focused on different disciplines are in various stages of development in Rochester, Syracuse, Albany and Long Island, as well.

Updating Our Industrial Infrastructure. Chairman Schimminger congratulates Speed Transportation’s management team, Patrick Whalen, Michael Diati, President Carl Savarino, and Joseph Berti, on the completion of the trucking and distribution company’s rail access improvement project. The Assemblyman secured $200,000 in Assembly capital funding toward the work, which also received NYSDOT Industrial Access Program funding, to advance the first new industrial rail spur constructed in Erie County in several years.

Encouraging Entrepreneurship. Anna Curren (right), Owner of Endless Possibilities Custom-Made Gift Baskets, shows off one of her new company’s products to Maureen Pace, Director of Erie Community College’s Entrepreneurial Business Center, and Chairman Schimminger. Ms. Curren is a recent “graduate” of the center, which receives state funding through the Assembly-initiated Entrepreneurial Assistance Program to provide business assistance training to aspiring small business owners.

Doing Business with New York State
New York State agencies, authorities, universities and municipalities spend more than $8.5 billion a year on businesses like yours. To access information on New York State contracting opportunities, businesses can subscribe to the New York State Contract Reporter. Created by a law co-sponsored by Chairman Schimminger, the weekly Contract Reporter contains announcements for contracts of $15,000 or more with most state entities and local governments. Notices are published only once and, except for certain municipalities and other organizations not bound by the law, at least 15 business days prior to the date on which the bid or proposal is due. For more information and/or to subscribe, contact Contract Reporter Customer Service at 1-888-697-7787.

Revving Up New Business. Richard Shoemaker, Vice President of the United Auto Workers; Jeff Pietrzyk, Shop Chairman of UAW Local 774; Homi Patel, Vice President and General Manager of Manufacturing for General Motors; Keith Campbell, Plant Manager of GM’s Tonawanda Engine Plant; and Chairman Schimminger celebrated GM’s announcement this spring that its Tonawanda facility had won the competition with GM plants in other states for a $300 million investment in a new engine production line.

2003-2004 State Budget for Economic Development

Empire Zones Empire Zones promote economic and community development in designated areas within the State through encouragement of corporate investment and the creation of jobs. The Legislature provided funding for the local administration of Empire Zones. ($2.3 million)

Economic Development Fund
EDF provides grants and loans of varying kinds to help attract and retain business throughout New York State. These funds can be used for a variety of purposes. ($32.3 million)

Jobs Now Program
The Legislature provided funding for the “Jobs Now” Program, which includes a Local Assistance appropriation, and Capital Project appropriation to assist companies that create or retain 300 or more jobs. ($32.1 million)

Urban and Community Development Program
This program received funding to address the needs of main street corridors in New York, including funds for Downtown Development initiatives. ($3.47 million)

Minority and Women-Owned Business Development and Lending Program
Funding was sub-allocated for the Community Development Financial Institutions Program, the Entrepreneurial Assistance Program, and for linked deposits in federal and state-chartered credit unions for loans to minority and women-owned businesses. ($3.47 million)

N.Y.S. Office of Science, Technology and Academic Research (NYSTAR)
The Legislature provided a total of $67.8 million to NYSTAR, including continued funding for the Centers for Advanced Technologies ($15 million), regional Technology Development Organizations ($1.5 million), Industrial Technology Extension Service ($1 million), Manufacturing Extension Partnership Program ($8 million) High Technology Matching Grants Program ($5 million), James D. Watson Investigator Program ($2 million), Faculty Development Program ($7.5 million) and Science and Technology Law Program ($350,000).

Funding was also provided for the Hauptman-Woodward Medical Research Institute in Buffalo. Researchers at the facility study the causes and potential cures of many diseases at the molecular level. ($6 million)

Military Base Reuse and Redevelopment
As military bases are downsized within New York State, there is an increasing need to reuse and redevelop existing base infrastructure. In order to facilitate such activity, the Legislature has appropriated a total of $2.6 million as follows:

  • Griffith Air Force Base Redevelopment ($1.4 million)
  • Niagara Air Force Base ($100,000)
  • Plattsburgh Air Force Base Improvements ($1.4 million)
  • Seneca Army Depot Local Development Authority ($100,000)

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