New York State Assembly

1999 Annual Report

Committee on Corporations, Authorities and Commissions

Sheldon Silver, Speaker
Albert Vann, Chairman

Albert Vann Assemblyman 56th District Kings County

THE ASSEMBLY STATE OF NEW YORK ALBANY

CHAIRMAN Committee on Corporations, Authorities & Commissions COMMITTEES Education Health Ways and Means Rules

December 15, 1999

The Honorable Sheldon Silver
Speaker of the Assembly
State Capitol, Room 349
Albany, New York 12248

Dear Speaker Silver;

As Chairperson of the Assembly Standing Committee on Corporations, Authorities and Commissions, I am pleased to submit the Committee's 1999 Annual Report. Throughout the year the Committee has been involved in several important issues, including competition in telecommunications, investigation of the Consolidated Edison Company's blackout in New York City in July, performance of the New York City School Construction Authority and preliminary analysis and public hearings for the Metropolitan Transportation Authority's (MTA) proposed 2000-2004 Capital Improvement Plan.

The telecommunications industry is flourishing in New York State, and its continued growth must be nurtured and encouraged to benefit all New Yorkers. The Committee has worked with the Public Service Commission (PSC) and industry and approved a number of bills over the past few years that will further eliminate existing barriers to competition while ensuring that consumers are protected in the process.

The New York City Transit Authority (NYCTA) continues to make progress. Ridership levels are at their highest point since the early 1970's. The Assembly majority deserve much credit for being a proponent of eliminating two-fare zones and offering volume discounts to the ridership communities. These goals were realized last year and the Committee will work to further increase ridership and expand the system.

The Committee has continued its efforts to modernize the laws governing New York's business corporations and not-for-profit corporations. A new law allowing not-for-profit corporations to provide its members with electronic notices and voting for board meetings was enacted.

The 2000 Legislative Session is likely to result in important changes in the many areas under the jurisdiction of the Corporations Committee. Profound change is continuing in the telecommunications and energy fields, and the Committee is committed to protecting New York's utility consumers. In October, the MTA submitted its new Five Year Capital Improvement Plan and the Committee is in the process of carefully examining this document to ensure that the progress fought for by the Assembly majority in the field of mass transit over the past two decades is continued and expanded. It is expected that the New York State Bar Association Corporate Law Committee will be forwarding a proposal to modernize and improve New York's Not-for-Profit Corporation (NFP) Law.

In 1999, the Committee reviewed 342 bills, acting favorably on 58 of them. Ultimately, 30 of them became law. I am pleased with the success of the Committee's work in 1999 and look forward to the upcoming session. I wish to extend my sincere thanks to the members of the Committee, my staff, the staff of the Corporations Committee, and to you, Mr. Speaker, for your continued support and concern.

Sincerely,

Albert Vann, Chairperson
Assembly Standing Committee on Corporations,
Authorities and Commissions

As Chair of the Assembly Standing Committee on Corporations, Authorities and Commissions, I would like to express on behalf of all of those who worked with Michael J. White, Senior Legislative Associate to the Committee, our deep sadness at his loss. His long time commitment to this House, his dedication, his friendship and his humor will be missed.

Honorable Albert Vann

Albert Vann, Chairperson

Staff

Sabrina M. Ty, Principal Legislative Coordinator
Michael J. White, Senior Legislative Associate
Philip Fields, Senior Legislative Associate
Caroline Morris, Associate Counsel
Vincent Thomas, Economic Development Specialist
Rosaline Preudhomme, Chief of Staff
Adrienne Johnson, Committee Clerk
Laura Sawyer, Program and Counsel Executive Secretary

Unlike the names of other Assembly Standing Committees, the name of the Committee on Corporations, Authorities and Commissions does not immediately identify its jurisdiction. It is often referred to simply as the Corporations Committee. Many people, both inside and outside of government, believe that its primary focus is on laws which govern New York State's businesses and not-for-profit corporations. While these laws are part of the Committee's jurisdiction, they represent only one area of its wide-ranging responsibilities.

The Committee investigates the organizational framework and activities of the State's myriad public authorities. These include everything from the Power Authority of the State of New York (PASNY) and the Port Authority of New York and New Jersey (PANYNJ) to local water authorities. While these entities often perform vital public functions more efficiently than other governmental agencies, it is imperative that they be held accountable through the oversight of public officials.

The Committee also oversees the Metropolitan Transportation Authority (MTA) and the State's other transportation authorities. The Assembly and this Committee have fought for adequate financing for public transportation systems and have assured that money is spent wisely in improving and expanding these systems.

In addition, the Committee monitors the operations and policies of the State Public Service Commission (PSC). This is the five-person panel within the Department of Public Service that has the broad mandate to ensure that customers of the investor-owned electric, gas, telephone and water utilities in the State are able to obtain adequate service at the lowest reasonable rates and in a manner that has the least adverse effect on the environment. In the Assembly, it is the Corporations Committee that is charged with making sure that the interests of utility consumers receive a fair hearing before the PSC when the investor-owned utilities plead their cases.

A. MASS TRANSIT OPERATIONS AND FINANCE

Although the Assembly Transportation Committee has jurisdiction over a large portion of legislation affecting New York's highway and bridge network, the Corporations Committee oversees public authorities which provide mass transit services throughout the State. This Committee has historically been the Assembly's advocate for mass transit and has fought to see that these systems are adequately funded, widely accessible, and affordable.

The following bills were signed into law:

No Fare for Personal Care Attendants

A.3013-B, Lentol; Chapter 523 of the Laws of 1999 This law permits personal care attendants (PCA) to ride without cost when accompanying a paratransit eligible individual traveling on Metropolitan Transportation Authority (MTA) Systems. Prior to this law, some public transportation entities allowed PCA's to travel at no charge, i.e., NYC Transit, NYC Department of Transportation busses and Long Island Bus. This law allowing personal care attendants to travel at no charge when accompanying clients will provide additional opportunities to the disabled population as they pertain to education, employment, recreation, and other areas. A disabled person whose physical limitations require the assistance of a PCA will no longer be financially penalized when it comes to using those services which do not permit an accompanying PCA to ride at no cost.

Half-fare for Persons Suffering From Mental Illness

A.1807, Brennan; Chapter 442 of the Laws of 1999 Currently, the Metropolitan Transportation Authority (MTA) offers half fare to the disabled who receive supplemental security disability income. However, it had not been available to the individuals with mental illness who receives supplemental security income. This law requires the MTA to establish and implement a half-fare rate program for persons with serious mental illness who are eligible to receive supplemental security income benefits as defined pursuant to Title 16 of the Federal Social Security Act and Section 209 of the New York Social Services Law.

The following bills passed the Assembly but failed to pass the Senate:

Maintaining Confidentiality of E-Z Pass Records

A.1830-A, Kaufman This bill, if enacted, would establish reasonable uniform provisions for maintaining the confidentiality of E-Z pass records, while at the same time authorizing disclosure in cases of legitimate law enforcement need.

Promoting Alternative Fuel Buses

A.3985, Glick This bill, if enacted, would require the MTA to formulate and annually update a long-range strategic plan devised to convert its existing diesel bus fleet to an alternative fuel vehicle fleet in order to promote improved air quality, provide safe and efficient public transportation, advance environmental equity, support statewide transit industries and adopt alternative fuels as comparable energy sources for surface transportation.

Requiring NYCTA Performance Information on the Internet

A.8044, Vann This bill would require New York City Transit to post transit financial and operations information on the Internet. It requires that this information be posted within 10 business days of the date such data becomes available to NYC Transit and would include performance measures, the schedule, the regularity of service, schedule adherence, cleanliness, adequacy of announcements, levels of riderships and crowding, adequacy of ventilation, distance between failures and service interruptions and other pertinent information. The bill will also require NYC Transit to post financial figures, its debt, and its subsidies.

B. CORPORATIONS LAW

The Corporations Committee reviews, monitors, and examines proposed revisions to the laws pertaining to business and not-for-profit corporations. The Committee's goal is to attract and retain these vital entities in the State. Specifically, the Committee maintains jurisdiction over issues of corporate governance and structure as they relate to business corporations, not-for-profit corporations, cooperatives corporations, limited liability companies ("LLC") and other business entities.

The following bills were signed into law:

Making CPLR and LLC Law Consistent

A.1768-A, Schimminger; Chapter 341 of the Laws of 1999 This law amends the Civil Practice Law and Rules to make that law consistent with the Limited Liability Company law and the Limited Liability Partnership law with regard to service of process upon these entities.

LLC Law Technical Changes/Rules Regarding Dissolution

A.2844-A, Vann; Chapter 420 of the Laws of 1999 This law makes several changes relating to LLC's including correcting an oversight in the cure provision for the LLC publication requirement.

Currently an LLC member or partner may withdraw from the LLC or partnership with 6 months written notice without triggering dissolution, unless the operating agreement provides otherwise. The new law changes that default rule, allowing LLCs and partnerships to craft their own withdrawal rules. This change will only apply to entities formed after the legislation is enacted.

In addition, this law changes the dissolution default rules. The current rules were crafted to conform with now obsolete IRS requirements for tax treatment as a partnership. The new rules would give an LLC perpetual existence, allow dissolution by majority vote, allow continuation of the LLC by a legal representative of the last member, and eliminate certain events as triggers to dissolution.

The law also changes the current approval and consent requirements from 2/3 of members or partners to only a majority of members or partners. This change would only apply to entities formed after the legislation is enacted.

Disposal of Unused Cemetery Land

A.6557, Vitaliano; Chapter 292 of the Laws of 1999 This law clarifies under what conditions cemetery land may be sold or disposed of by a cemetery corporation where such land is not used or is not physically adaptable for cemetery purposes.

Allowing Chiropractors to Form University Faculty Practice Corporations

A.8023, Schimminger; Chapter 253 of the Laws of 1999 This law allows chiropractors teaching at New York's chiropractic college to form university faculty practice corporations.

Making it Easier for Corporations to Change to Not-for-Profits

A.8566, Rules/Vann; Chapter 485 of the Laws of 1999 This law provides procedures to consolidate one or more domestic business corporations into not-for-profit corporations. The new statute provides for filing of a certificate of incorporation of the new or merged corporation and requires approval of the plan of the merger by state supreme court.

Allowing Electronic Proxy Voting for Not-for-Profits

A.8629, Rules/Vann; Chapter 186 of the Laws of 1999 This law authorizes a member of a not-for-profit to execute a proxy by means of a facsimile signature, telegram, cablegram or other means of electronic transmission.

Tonawanda Firemen's Benevolent Association Charter

A.8645, Rules/Schimminger; Chapter 547 of the Laws of 1999 This law updates the 1893 charter of the Firemen's Benevolent Association of Tonawanda. It would also allow the professional fire fighters of the City of Tonawanda to join the association.

The following bill was vetoed by the Governor:

Eliminating Not-For-Profits' Property Limits

A.6673, Tonko This bill amends the Not-for-Profit Corporation Law to remove the limit on the amount of property that a not-for-profit corporation can hold and the yearly income that can be derived from that property. Currently, the statute provides for a $50 million limit on property and a $6 million limit on annual income generated by that property.

In vetoing this bill, the Governor argued that these limitations, which have their origin in 19th century provisions regulating the incorporation of charitable institutions, reflect a mistrust of the corporate form and a concern that not-for-profit corporations would accumulate and tie up property for indefinite periods of time. The Governor contended that while adjustment to the limitations may well be appropriate, the Department of State advised that this bill, which would lift the limitations entirely, may have unforeseen consequences for other corporations, their creditors, and their donors.

The following bill passed the Assembly but failed to pass the Senate:

Sale of Burial Facilities

A.7637-A, Vitaliano This bill protects consumers who purchase columbriums, law crypts, mausoleums, and crypts for burials. It sets up escrow accounts for the purchase funds and sets time limits on when a consumer may cancel a contract and when the building of such burial sites must be completed.

C. PUBLIC AUTHORITIES

All New Yorkers are affected profoundly by New York's network of public authorities. While public authorities play a significant and often beneficial role in providing essential goods and services to New York State residents, the authorities' autonomy and lack of accountability in certain cases have fostered growing concern about some of their operations, practices and governance. The Corporations Committee has been examining issues affecting the accountability and governance of public authorities operating in New York State and will continue to do so.

The following bills were signed into law:

DASNY Financing for Helen Keller Center

A.8349-A, Rules/DiNapoli; Chapter 130 of the Laws of 1999 This law amends the Public Authorities Law to provide for the construction and financing of facilities by the Dormitory Authority of the State of New York (DASNY) for the Helen Keller National Center for Deaf-Blind Youths and Adults.

Suffolk County Judicial Facilities Agency

A.8703-B, Rules/Harenberg; Chapter 200 of the Laws of 1999 This law establishes the Suffolk County Judicial Facilities Agency, for the purpose of purchasing from the Dormitory Authority, a portion of the Cohalen Court Complex.

DASNY Financing of Court Facilities

A.7700, Seddio; Chapter 237 of the Laws of 1999 This law expands the court facilities projects eligible for financing through the Dormitory Authority of the State of New York (DASNY). This law allows DASNY to 1) finance the rehabilitation, improvement or furnishing of a portion of an existing court facility owned by the participating municipality or of any system or component in such a facility, or 2) to finance the acquisition of fixtures, furnishings or equipment for use with such facilities, without taking title to the building or improvement while the bonds are outstanding.

DASNY Financing for Primary Care Providers

A.8551, Rules/Vann; Chapter 303 of the Laws of 1999 This law authorizes the issuance of bonds by the Dormitory Authority of the State of New York (DASNY), as successor to the New York State Medical Care Facilities Finance Agency (MCFFA), for the purpose of refinancing the capital indebtedness of certain health facilities covered under the MCFFA Health Facilities Improvement Program which has been used to secure tax-exempt capital financing for urgently needed primary care centers in New York City.

Renaming the Kingston-Rhinecliff Bridge to Honor New York State's First Governor

A.7626-A, Cahill; Chapter 332 of the Laws of 1999 This law renames the Kingston-Rhinecliff Bridge, of the New York State Bridge Authority, as the "George Clinton Kingston-Rhinecliff Bridge" to honor the first governor of New York State.

Reforming the Schenectady Metroplex Development Authority (SMDA) Act

A.8723, Rules/Tonko; Chapter 388 of the Laws of 1999 This law enacts technical and substantive amendments to the Schenectady Metroplex Development Authority (SMDA). The technical amendments to SMDA and substantive amendments to the law include: 1) the addition of commercial property adjoining Chrisler Avenue to the SMDA service area and removal of residential property in the Mont Pleasant area; 2) the provision for approval of SMDA bylaws by the County Legislature; 3) requiring public hearings prior to many SMDA projects; 4) requiring a five-year capital plan; 5) requiring reports by the SMDA and its board members; 6) requiring approval by the County Legislature of SMDA projects which exceed $10 million; and 7) quarterly disbursements of funds to municipalities within Schenectady County.

Requiring Financial Disclosures by SMDA Board Members

A.8869, Rules/Tonko; Chapter 402 of the Laws of 1999 This law provides that the filing of a Schenectady county financial disclosure statement with the Schenectady County Board of Ethics by a board member of the Schenectady Metroplex Development Authority shall constitute and be deemed compliance with certain financial disclosure requirements.

Extending NYC School Construction Authority Wicks Exemption

A.9024-A, Rules; Chapter 410 of the Laws of 1999 This law extends the sunset date for the New York City School Construction Authority (SCA) exemption from Section 101 of the General Municipal Law, also known as the Wicks Law, until June 30, 2002.

Improving Longshoreperson Hiring Practices in New York Harbor

A.7634-B, Millman; Chapter 431 of the Laws of 1999 This law streamlines and improves the process for adding individuals to the "deep-sea" dock labor force. This law will permit the Waterfront Commission of New York Harbor to make determinations to accept applications upon a petition filed by a Stevedore or other employers of longshorepersons who are not members of a management association.

It also protects against possible discrimination by requiring the sponsoring employer to certify that the selection of the sponsored persons was made in accordance with the requirements of the laws of the United States and the states of New York and New Jersey dealing with equal employment opportunities.

Finally, this law provides for employer sponsorship of new registrants by guaranteeing that each employer will receive its fair share of needed labor but will allow that employer to train its personnel so that they become skilled in operating that employer's particular equipment and knowledgeable in all aspects of that employer's specific operation.

Exempting DASNY Projects from Bond Fees

A.7968-C, Rules/Vann; Chapter 444 of the Laws of 1999 This law exempts certain bonds issued by the Dormitory Authority from certain fees in the Public Authority Law and continues to exempt these fees for Industrial Development Agency's (IDA). The law will allow the Dormitory Authority, in addition to IDAs, to finance projects consisting of dormitories at educational institutions, health facilities as defined in article twenty-eight of the Public Health Law and housing facilities primarily designed to be occupied by individuals sixty years of age or older, provided that the total cost of such projects does not exceed twenty million dollars. The Dormitory Authority and IDAs which undertake these projects are not subject to the fees imposed pursuant to sections 1678-a, 2975, and 2976 of the Public Authorities Law and are not required to obtain the approval of Public Authorities Control Board (PACB) except that the Dormitory Authority will remain subject to the PACB on all of its other projects.

Exempting the Onondaga County Water Authority From Taxes

A.8788, Rules/Bragman; Chapter 494 of the Laws of 1999 This law amends the Public Authority Law to clarify the Onondaga County Water Authority tax exemption language. It provides that the Authority shall not be required to pay any fees, taxes, special ad valorem levies or assessments of any kind, whether state or local, including but not limited to fees, taxes, special ad valorem levies or assessments on real property, franchise taxes, sales taxes or other taxes.

Creating the Clifton-Fine Health Care Corporation

A.8101-A, Rules/Scozzafavo; Chapter 507 of the Laws of 1999 This law creates a public benefit corporation known as the Clifton-Fine Health Care Corporation for the purposes of operating the Clifton-Fine Hospital. The towns of Clifton and Fine, through the operations of the Clifton-Fine Hospital have provided its residents with access to quality, affordable health care for many years. However, the health care industry in New York State, and throughout the nation, is evolving at a rapid pace and health care providers must increasingly participate in strategic networks, alliances, and affiliations in order to thrive in this new environment. The creation of a public benefit corporation will allow the Clifton-Fine Hospital the flexibility it needs to fully participate in critical health care alliances and networks while preserving effective control in the Towns of Clifton and Fine.

Mount Sinai Hospital - DASNY Financing

A.8071, Rules/Grannis; Chapter 554 of the Laws of 1999 This law amends the Public Authority Law to provide financing for facilities and equipment of the MSMC Realty Corporation, a support organization of the Mount Sinai Hospital, by the Dormitory Authority. This law was necessary to allow for the financing of critical equipment and facilities related to patient care through the MSMC Realty Corporation for the purpose of improving patient services at Mount Sinai Hospital.

Creating the Long Island Regional Market Authority

A.6130-A, DiNapoli; Chapter 605 of the Laws of 1999 This law establishes a Long Island Regional Market Authority for the sale of agricultural and seafood products in the Long Island region. The Authority board is comprised of seven members appointed by the Suffolk County Executive, and has a bond cap of $10 million dollars.

Long Island has experienced tremendous population growth in recent years and existing food distribution systems are proving to be inadequate. For this reason, support of a local major food distribution system is justified and warranted. The establishment of a central Long Island Regional Market would provide an enormous boost to the economy in Nassau and Suffolk Counties.

Expanding the Monroe County Water Authority's Distribution Area

A.8365-D, Rules/Gantt; Chapter 579 of the Laws of 1999 This law allows the Monroe County Water Authority to sell water and provide for the distribution of water in Genesee County. Genesee County and Western Monroe County are in need of a dependable and reliable system for the provision of clean drinking water throughout the area, and this law provides the means to improve Genesee County's water distribution system and infrastructure.

Increasing DASNY's Bond Cap

A.8886, Rules/Vann; Chapter 623 of the Laws of 1999 This law increases the authorization of the Dormitory Authority of the State of New York, as successor to the New York State Medical Care Facilities Finance Agency pursuant to the Health Care Financing Consolidation Act of 1995, to issue hospital and nursing home project bonds and notes from $10.75 billion to $12 billion.

Creates the County of Chautaugua Sports, Recreation and Cultural Authority

A.8651-A, Rules/Parment; Chapter 632 of the Laws of 1999 This law creates the County of Chautauqua Sports, Recreation and Cultural authority and provides for its powers and duties. The establishment of the Authority would enable the county to expand its ability to pursue regional sports, recreational and cultural projects and provides the necessary means to pursue large scale projects that the county is not able to support at this time. The Authority will not replace existing local mechanisms and municipalities, but will work in conjunction with these municipalities to further promote economic activity in Chautauqua county.

Creates the Troy Parking Authority

A.8968-B, Rules/Canestrari; Chapter 646 of the Laws of 1999 This law establishes the Troy Parking Authority and provides for it's powers and duties. This law will reestablish the Authority that ceased to exist a number of years ago. The City of Troy has begun to experience an economic revival due to the influx of state workers to the downtown area as well as the revitalization of the Central Business District. This law will help to satisfy the demands for viable parking in the City of Troy.

The following bills have passed the Assembly but failed to pass the Senate:

Recycled Paper Tickets

A.1289, Bragman This bill would require the Thruway Authority to use tickets made from recycled paper. The use of recyclable paper for Thruway tickets would further the state's environmental efforts and is consistent with state policy regarding state agencies.

LIPA Participation in "Power for Jobs"

A.1962-B, Sweeney This bill would ensure that the Long Island Power Authority (LIPA) may participate in the "Power for Jobs" program. This legislation modifies the requirement that LIPA pay the gross receipts tax (GRT) which would have been paid by Long Island Lighting Company (LILCO), if LILCO had continued in operation. The bill makes it clear that LIPA may reduce the amount of the GRT payment by the amount of a credit related to distribution of electric energy under the Power for Jobs program.

It was the intent of the Power for Jobs legislation to fund the low-cost energy program through such credits against the GRT. Since LIPA was not a "local distributor of electric service" at the time of the passage of the Power for Jobs legislation, this credit was not specifically made applicable to LIPA.This bill assures that LIPA gets the same benefits for cooperating in the Power for Jobs program that would apply to an investor-owned public utility.

Creates the Southern Tier West Railroad Authority

A.2492-A, Parment This bill would create the Southern Tier West Railroad Authority. This bill ensures the continued existence of the system of railroads serving the counties of Allegany, Cattaraugus, Chautauqua and Steuben. The creation of the Southern Tier West Railroad Authority will not only protect and strengthen this system of railroads, but is also essential to the long term viability of the economies, municipalities, and way of life in the counties involved.

PANYNJ Board Meetings

A.2581, Vann This bill provides a public speaking time at meetings of the Port Authority of New York and New Jersey (PANYNJ) and make meeting agendas and public documents available to the public at least five business days before every meeting. Presently, the public comment period is at the end of the meeting. This legislation would permit the public to receive notice of the items up for discussion on the agenda, and to comment before the vote is taken.

Complaint Review Procedure for New York City Water Board

A.3608, Brennan This bill would establish a comprehensive complaint review procedure for water and sewer customers in New York City. This bill provides for the New York City Water Board to establish a written procedure to process customer complaints which allows for the processing of such complaints within ten calendar days.

Ulster County Resource Recovery Agency Board Membership

A.7380, Cahill This bill would increase the membership of the Ulster County Resource Recovery Agency. Currently, all five members are appointed by the chairman of the county legislature, one of whom is recommended to the chairman by the minority leader. Under this bill, four would be appointed by the chairman of the county legislature, one of whom would be recommended by the minority leader. The remaining five would be appointed by the cities and towns of the county.

The following bill was vetoed by the Governor:

Jacob K. Javits Convention Center

A.7883-A, Rules/Gottfried This bill would have set the name of the Jacob K. Javits Convention Center in statute. It affirmed and sought to set in law a resolution approved by the board of the New York Convention Center Development Corporation, a subsidiary of UDC.

D. TELECOMMUNICATIONS AND UTILITIES

The Committee exercises responsibility for the development and evaluation of legislation concerning the management and regulation of the State's investor-owned utilities, publicly-owned utility systems, and telecommunications providers.

The Committee examines the extent to which the Power Authority of the State of New York (PASNY) is meeting its public power obligations in a rational, effective and efficient manner. It is the nation's largest state-owned power organization, providing more than a quarter of New York's electricity. Its primary mission is to provide economical power to New York's government agencies and electric consumers. Oversight of PASNY includes an ongoing evaluation of its policies concerning the allocation of power, the development of small power and alternate energy resources, the operation of its two nuclear plants, and what efforts it is taking to encourage conservation.

The Assembly Corporations Committee has worked with the Assembly Energy Committee, the lead committee in this area, to move the electric industry to adapt to today's competitive market. Electricity costs in New York State are significantly higher than the national average. This disparity hampers economic prosperity for all consumers, especially businesses. The high cost of electricity threatens to erode the utilities' customer base, resulting in further rate increases for residential and small business customers who will be forced to bear a higher proportion of the utilities' fixed costs.

Increasing competition in the electricity industry, with proper regulatory safeguards, can result in lower electricity costs. Competition must be implemented in a manner that does not jeopardize the safety or reliability of the electric system and provides benefits to all classes of customers.

The Assembly Majority's legislative package, known as Competition Plus/Energy 2000, would provide a blueprint for the implementation of competition in the electric industry. This package:

• provides mandated rate reduction,
• allows for customer choice of electricity suppliers,
• deregulates competitive power producers,
• reorganize PASNY,
• maintains reliability of the electric system and retention of a skilled workforce by the state's electric corporations and PASNY, and,
• provides for the election of PSC Commissioners.

In addition, as a component of comprehensive legislation establishing a competitive electric industry and with the appropriate conditions and restrictions, it has been argued that securitization has the potential to reduce electricity costs, if combined with cost reductions by power producers. The legislative package passed the Assembly but failed to pass the Senate.

Telecommunications is one of the most dynamic industries in today's economy. The benefits that this industry can bring our citizens in the areas of health, education and economic development are almost limitless. However, there are potential downsides in this telecommunications revolution which include: the potential threat to privacy from the unregulated dissemination of information; the continuation and development of monopolistic practices that could force out competition and hurt consumers; potential layoffs of skilled communication workers in cost-cutting measures that eventually affect service; and ever-increasing costs endangering universal service. It is against this backdrop of benefits and dangers that the Chairman, this Committee and the Assembly have attempted to promote this industry while ensuring that adequate protections be maintained for all New Yorkers. The Assembly Majority has sought to achieve these goals through legislation, public hearings and advocacy, and maintaining a dialogue with the New York State Public Service Commission (PSC) and the Federal Communications Commission (FCC).

The following bill was signed into law:

PSC Approval of Telephone Corporation Filings

A.8002-A, Rules/Morelle; Chapter 246 of the Laws of 1999 This law provides for the PSC's automatic approval of telephone corporation petitions filed under section 107, when written action is not necessary within 90 days of filing.

Under the former law, the PSC must approve the use of revenues outside the statutorily designated purposes. There is however, no established limitation on how long the PSC may take in approving or denying such a request under PSL section 107. This law establishes a 90 day period within which the PSC must act, or the petition under section 107 will be deemed approved.

Although the PSC customarily acts with expediency, companies are not able to plan without a definitive time-frame. This law will allow for better financial planning for telephone companies. At the same time, the proposed changes do not impede the PCS's ability to protect the public interest.

A. New York City School Construction Authority

On February 5, 1999 in New York City, the Assembly Standing Committee on Corporations, Authorities and Commissions, the Assembly Standing Committee on Education, and the Assembly Standing Committee on Labor held a public hearing to examine the New York City School Construction Authority (SCA).

Chapter 738 of the Laws of 1988 established the New York City School Construction Authority to manage the acquisition, design, construction, and major rehabilitation of New York City schools. Over the past ten years, the School Construction Authority has faced much criticism for its failure to operate efficiently and in the best interest of New York City's school children.

In 1998 a 16 year old girl named Yan Zhen Zhao was killed at PS 131, one of the School Construction Authority's sites. When an investigative report detailing the causes of this incident, prepared jointly by the NYC Department of Investigation and the SCA Office of Inspector General, was released, this hearing was convened to examine its significance. Specifically, the Committees invited several witnesses to discuss the current safety precautions of the SCA to ensure that contractors are complying with state and federal laws including the public works prevailing wage law, and what corrective measures had been taken by the SCA to prevent future tragedies and non-compliance. This hearing also examined the operations and operational structure of the SCA's Office of the Inspector General. Lastly, witnesses were requested to help elucidate the problems in the working relationship between the SCA and the Board of Education and how any difficulties in that relationship may contribute to the inefficiency of the execution of school repairs and construction.

B. Effects of the Year 2000 (Y2K) Computer Problem on the Reliability of Electric Service

On February 8, 1999 in Albany the Assembly Standing Committee on Corporations, Authorities and Commissions and the Assembly Standing Committee on Energy held a public hearing to ensure the reliability of New York's electric service on January 1, 2000.

The Public Service Commission has required electric utilities, among others, to take action to solve the Y2K problem. This hearing evaluated their progress and the adequacy of their contingency plans in the event that unanticipated consequences result. This hearing also examined the ability of non-utility power providers, energy service companies, municipal electric systems, rural cooperatives, the Power Authority of the State of New York, and the Long Island Power Authority to address the Y2K problem.

C. 911 Emergency Telephone Service

On March 2, 1999 in Albany, a joint pubic hearing was held by the Assembly Standing Committees on Corporations, Cities, Local Governments, Health, Governmental Operations, Ways and Means and the Legislative Commission on Science and Technology to examine 911 Emergency Telephone Service in New York State.

The hearing wanted to explore the causes of a number of reported failures in the 911 emergency telephone service that resulted in deaths or other significant consequences to persons relying on the service over the past year.

The existing systems are owned and operated by city and county governments and the State Police. They are at various stages of technological advancement. Planning is underway to upgrade various systems to take advantage of more effective and efficient systems. There are no state-wide standards with respect to operator training, standard operating procedures or performance goals.

With respect to funding, Article 6 of the County Law provides a funding mechanism for "Enhanced Emergency Telephone System" based on a telephone line surcharge. There is no state funding for basic 911 service. Several county government representatives have sought additional state funding of 911 services.

The Assembly Committees and the Legislative Commission heard testimony on all of the issues relating to the operations, staffing, technology and funding of 911 emergency telephone services in the state of New York both for the short term and for long range planning purposes.

D. New York City Power Black-Out of July 6 and 7, 1999

On July 6th and 7th over 200,000 of the Consolidated Edison Company's (ConEd's) residential and business customers experienced electric service disruptions during the recent record heat wave. As a result, the health and safety of customers was jeopardized, and many residents and businesses lost perishable foods. Subway, water, and hospital services also were impaired.

On July 15, 1999 a joint public hearing was held in New York City by the Assembly Standing Committee on Corporations, Authorities and Commissions and the Assembly Standing Committee on Energy to question ConEd officials and others about the adequacy of ConEd's preparation to provide electric service during hot weather peak demand and the adequacy of oversight by the Public Service Commission.

E. The Future of North Central Bronx Hospital

On October 5, 1999 a joint public hearing was held in New York City by the Assembly Standing Committee on Corporations, Authorities and Commissions and the Assembly Standing Committee on Health to examine the plans of the New York City Health and Hospital Corporations for the future of North Central Bronx Hospital.

This past year, concerns have been expressed regarding the future of North Central Bronx Hospital, operated by the New York City Health and Hospitals Corporation, and the possibility of its closure as a public hospital serving the Bronx community. Certain departments within NCBH have been closed. Services have been transferred to Jacobi Medical Center and patients were have been elsewhere. The committees heard conflicting testimony and will be monitoring the situation closely to ensure that this community's medical needs are met and provided for adequately.

F. The Metropolitan Transportation Authority's (MTA) proposed 2000-2004 Capital Program

On November 3, 1999 Speaker Sheldon Sliver, the Assembly Standing Committees on Corporations, Ways and Means, Transportation, Labor, the Subcommittee on Mass Transit, and the Commission on Critical Transportation Choices convened a joint hearing in New York City to examine the MTA's proposed 2000-2004 Capital Program.

The MTA is the parent agency for the New York City Transit Authority (NYCTA), the Long Island Rail Road (LIR), the Metro-North Commuter Railroad (MNCR), the Staten Island Rapid Transit Authority (SIRTOA), the Metropolitan Suburban Bus Authority (MSBA) and the Triborough Bridge and Tunnel Authority (TBTA). The MTA's proposed 2000-2004 Capital plan provides $17.462 billion to continue rebuilding the MTA'a facilities and to expand service to underserved areas within New York City's five boroughs and the surrounding suburbs.

The Assembly is in the process of examining the past performance of the MTA in implementing capital projects and looking for improved performance results. The Speaker and the Committees were particularly interested in the impact upon the riders and employees at the operating agencies in the wake of a very large projected deficit. The Assembly is also interested in the expansion program proposed by the MTA and its effects on all riders of the transit system.

G. Nuclear Power Plant Safety and Operations in a Competitive Electricity Market

On November 10th, 1999 in White Plains, a joint public hearing was held by the Assembly Standing Committees on Corporations, Energy and Environmental Conservation to examine the safety and operations of nuclear power plants in a deregulated electricity market and the effects of their sale on safe operation, the environment and localities.

Until now, the State's nuclear plants have been owned and/or operated by the Power Authority of the State of New York (PASNY), the Long Island Power Authority (LIPA), or public utility companies regulated by the Public Service Commission (PSC), as well as by the federal Nuclear Energy Regulatory Commission. Recently, as part of the implementation of rate agreements between various electric utilities and the PSC, some utilities are preparing to sell nuclear power plants to power companies that the PSC does not intend to subject to full state regulation.

AmerGen Energy Company is proposing to buy Nine Mile Point Unit 1 and the percentages of Nine Mile 2 owned by Niagara Mohawk Power Company (NiMo) and New York State Electric and Gas Corporation (NYSEG). NiMo and NYSEG would commit to purchasing much of the power generated at these plants for a three- to five-year period. After that, the plants would be operated as "merchant plants" that sell power to buyers of their choice.

On November 2, 1999 PASNY announced that it was negotiating to sell its two nuclear power plants, which would be one of the largest asset sales ever by the State, to the Entergy Corporation, an energy corporation based in New Orleans.

This hearing examined whether the sale of nuclear plants in New York State, their operation by companies less regulated by the PSC, and their involvement in a deregulated market for electric power would adversely affect the safe operation of the plants and whether potential adverse effects on the environment and on localities would increase.

A. MASS TRANSIT

The New York City Transit Authority has experienced steadily increasing ridership over the last few years. Ridership has risen due to a variety of factors, including: the improved economy, the elimination of two-fare zones, a decrease in crime on the transit system, the introduction of discounts for daily, weekly and monthly MetroCards (championed by the Assembly Majority) and the improved infrastructure that has occurred as a result of 19 years of extensive capital investment through the MTA Capital Plan. The Assembly and the Committee have fought to increase funds for the capital plans.

The Committee is determined that any surplus not be used as an excuse to further cut subsidies to the Transit Authority. Toward this end, the Committee will continue to insist that money be reinvested in improvements in safety, service and cleanliness.

In the coming months, the Committee will be examining the new Metropolitan Transportation Authority (MTA) Capital Plan for 2000-2004. The current five year MTA Capital Plan (1995-1999) is due to expire this December. The Committee will advocate for continued improvement in services, system expansion, and a promise to maintain the current fare structure for riders.

B. CORPORATIONS LAW

The Committee will examine a variety of business law issues in the coming session in continuance of its efforts to modernize these statutes. Further, with thousands of limited liability companies now in existence, further fine-tuning of the LLC law may also be expected next session. The LLC is a relatively new business entity in New York and elsewhere, and states are continuing to learn from each other's experiences and refining their statutes accordingly.

With respect to the Not-for-Profit Corporation (NFP) Law, the New York State Bar Association Corporate Law Committee formed a subcommittee to examine the NFP Law with an eye towards modernizing and improving the statute where necessary. The Assembly Corporations Committee will closely examine any proposals which may result from these efforts.

C. PUBLIC AUTHORITIES

The Committee will continue to examine methods to improve the accountability and governance of public authorities operating in New York State. While the creation of these entities has proven to be a valuable tool in delivering services to citizens, effective oversight by the Legislature is critical. The Committee has developed a model public authority statute which has been used to standardize and make more accountable newly created public authorities. The Committee will continue to monitor the management and expenditures of New York's public authorities in order to ensure that these authorities are fulfilling their statutory mission.

D. TELECOMMUNICATIONS AND UTILITIES

The Federal Telecommunications Act of 1996 continues to bring major changes to the field of telecommunications. The New York State Public Service Commission (PSC) has instituted major changes in the telecommunications field through its negotiated agreements with the former Rochester Telephone Corporation (now Frontier Telephone), New York Telephone (now Bell Atlantic) and Taconic Telephone. Ensuring that New York State is at the forefront of telecommunications is a priority for the Committee and the Assembly Majority. It is imperative that telecommunication services be universally available to all residents of New York State in a manner which is accessible and affordable.

The PSC is continuing with its "Second Network Elements Proceeding", the goal of which is to bring fair competition to local telephone service in New York State. This competition is expected to create a broader array of services as well as lower prices. The Committee will work with the Commission to ensure that New York retains its telecommunications edge while providing universal service for all New Yorkers.

In October, Bell Atlantic applied to the FCC to enter New York's long-distance market. The company, under the Telecommunications Act, has to demonstrate that it had opened up its local markets to competition before providing long distance service. The Committee is committed to seeing that this will result in more competition and lower prices in both the long distance and local markets for New York consumers.

In addition, the Committee will continue its efforts to monitor the business activities of the major telecommunications companies as they continue to merge and change with the enactment of the Telecommunications Act.

In the coming year the Committee will be examining a problem that has recently emerged in the telephone industry: the "cramming" of customer telephone bills. "Cramming" refers to the inclusion on consumers' local telephone bills of unauthorized, misleading or deceptive charges. The Committee will work with the PSC to see that the Commission and the FCC encourage local telephone companies to combat this practice expeditiously and aggressively while continuing to monitor this problem to determine if any legislative action will be necessary.

BILLS THAT BECAME LAW

BILLS THAT WERE PASSED BY THE ASSEMBLY
BUT WERE NOT ACTED UPON BY THE SENATE