Monday, January 31, 1994

1 2 3 4 5 6 7 8 ALBANY, NEW YORK 9 January 31, 1994 10 3:01 p.m. 11 12 13 REGULAR SESSION 14 15 16 17 SENATOR HUGH T. FARLEY, Acting President 18 STEPHEN F. SLOAN, Secretary 19 20 21 22 23 1 P R O C E E D I N G S 2 ACTING PRESIDENT FARLEY: The 3 Senate will come to order, Senators will find 4 their places. Will you please rise with me for 5 the Pledge of Allegiance to the Flag. 6 (The assemblage repeated the 7 Pledge of Allegiance to the Flag. ) 8 Today, in the absence of visiting 9 clergy, we'll bow our heads for a moment of 10 silence. 11 (A moment of silence was 12 observed. ) 13 ACTING PRESIDENT FARLEY: The 14 Secretary will begin by reading the Journal. 15 THE SECRETARY: In Senate, 16 Sunday, January 30th. The Senate met pursuant 17 to adjournment, Senator Farley in the Chair upon 18 designation of the Temporary President. The 19 Journal of Saturday, January 29th, was read and 20 approved. On motion, Senate adjourned. 21 ACTING PRESIDENT FARLEY: Hearing 22 no objection, the Journal will stand approved as 23 read. 1 Presentation of petitions. 2 Messages from the Assembly. 3 Messages from the Governor. 4 Reports of standing committees. 5 Reports of select committees. 6 Communications and reports from 7 state officers. 8 Motions and resolutions. 9 Senator Present. 10 SENATOR PRESENT: Mr. President, 11 in behalf of Senator Libous, on page 12, I offer 12 the following amendments to Calendar 104, Senate 13 Print 6490-A, and ask that said bill retain its 14 place on the Third Reading Calendar. 15 ACTING PRESIDENT FARLEY: The 16 bill is amended. The bill will retain its 17 place. 18 Senator Present. 19 SENATOR PRESENT: Mr. President, 20 I'd like to call an immediate meeting of the 21 Rules Committee in Room 332. 22 ACTING PRESIDENT FARLEY: There 23 will be an immediate meeting of the Rules 1 Committee in Room 332. 2 SENATOR PRESENT: And I ask that 3 the Senate stand at ease. 4 ACTING PRESIDENT FARLEY: The 5 Senate will stand at ease pending the Rules 6 Committee report. 7 (The Senate stood at ease from 8 3:04 p.m. until 3:24 p.m.) 9 ACTING PRESIDENT KUHL: The 10 Senate will come to order. 11 Senator Present. 12 SENATOR PRESENT: I believe we 13 have a report of a standing committee, please. 14 ACTING PRESIDENT KUHL: Clerk 15 will read a report of a standing committee. 16 THE SECRETARY: Senator Marino, 17 from the Committee on Rules, reports the 18 following bills directly for third reading: 19 Assembly Bill Number 9071-A - 20 excuse me, Assembly Bill Number 9071-A, Senate 21 Reprint Number 21006, an act -- the Omnibus 22 Consumer Protection and Banking Deregulation Act 23 of 1994. 1 Also Senator Skelos, from the 2 Committee on Aging, reports the following bills 3 directly for third reading: Senate Bill Number 4 6548, by Senator Skelos, an act to amend Chapter 5 208 of the Laws of 1992, relating to 6 establishing the Alzheimer's Disease task 7 force. 8 Both bills reported directly to 9 third reading. 10 ACTING PRESIDENT KUHL: Without 11 objection, third reading. 12 Senator Present. 13 SENATOR PRESENT: Mr. President, 14 can we return to motions and resolutions. 15 ACTING PRESIDENT KUHL: Senator 16 Farley. 17 SENATOR FARLEY: Thank you, Mr. 18 President. 19 On behalf of Senator Cook, on 20 page 10, Calendar Number 92, Senate Print 3026, 21 I ask -- I offer the following amendments, and I 22 ask that it retain its place. 23 ACTING PRESIDENT KUHL: So 1 ordered. 2 SENATOR FARLEY: On behalf of 3 Senator Cook -- Johnson, I'm sorry, on behalf of 4 Senator Johnson, on page 10, Calendar Number 91, 5 Senate Print 2999, I offer the following 6 amendments, and I ask the bill retain its 7 place. 8 On behalf of Senator Cook, on 9 page 5, Calendar 37, Senate Print 2640, I offer 10 the following amendments and ask that the bill 11 retain its place. 12 On behalf of Senator Levy, on 13 page 7, I offer the following amendments to 14 Calendar 73, Senate Print 324, and I ask that 15 that bill retain its place. 16 On behalf of Senator Skelos, on 17 page 8, I offer the following amendments to 18 Calendar 76, Senate Print 1605, and I ask that 19 that bill retain its place. 20 On behalf of Senator Johnson, on 21 page 8, I offer the following amendments to 22 Calendar Number 80, Senate Print 2802, and I ask 23 that that bill retain its place. 1 On behalf of Senator Velella, on 2 page 6, I offer the following amendments to 3 Calendar 59, Senate Print 2599-A, and I ask that 4 that bill retain its place. 5 On behalf of Senator Farley, on 6 page 9, I offer the following amendments to 7 Calendar 85, Senate Print 6183, and I ask that 8 that bill retain its place. 9 On behalf of Senator Johnson, Mr. 10 President, I move that the following bills be 11 discharged from their respective committees and 12 recommitted with instructions to strike the 13 enacting clause: Senate Print 909, Senate Print 14 1189, 5541, and 5654. 15 ACTING PRESIDENT KUHL: Without 16 objection, so ordered. 17 Senator Present. 18 SENATOR PRESENT: Mr. President, 19 I move that the following bill be discharged 20 from its respective committee and be recommitted 21 with instructions to strike the enacting 22 clause: Senate Print 1892-A. 23 ACTING PRESIDENT KUHL: Without 1 objection, so ordered. 2 THE SECRETARY: On page 11 of 3 today's calendar, Senator Farley moves to 4 discharge the Committee on Banks from Assembly 5 Bill Number 7782-A and substitute it for the 6 identical Third Reading 100. 7 ACTING PRESIDENT KUHL: 8 Substitution is ordered. 9 Senator Present. 10 SENATOR PRESENT: Mr. President, 11 I'd like to call up Senate Reprint 21006. 12 ACTING PRESIDENT KUHL: Clerk 13 will read. 14 THE SECRETARY: Calendar Number 15 110, by the Assembly Committee on Rules, 16 Assembly Bill Number 9071-A, with a Senate 17 Reprint Number of 21,006, an act to enact the 18 Omnibus Consumer Credit Disclosure and 19 Deregulation Act of 1994, to amend the Banking 20 Law. 21 SENATOR GOLD: Yeah, excuse me. 22 ACTING PRESIDENT KUHL: Last 23 section. 1 SENATOR GOLD: No. No. Will 2 Senator Farley yield to a question? 3 SENATOR FARLEY: Yes. 4 ACTING PRESIDENT KUHL: Senator 5 Farley. 6 SENATOR GOLD: Senator Farley, it 7 seems that as much as we try, we wind up with 8 this same silly predicament year after year. 9 Now, today is the last day, I believe, for this 10 issue to be resolved. It's my understanding 11 from what you said in the Rules Committee 12 meeting, that there is not as yet three-way 13 agreement on a bill. It's 3:30 in the 14 afternoon. What -- why at this point are we 15 passing a non-agreed upon bill? 16 SENATOR FARLEY: Let me give an 17 explanation of the bill, and then I think you'll 18 understand why we're passing this bill. 19 This is the omnibus banking bill 20 and consumer protection bill, one that we have 21 had under negotiation for over a year, and I 22 mean active negotiation. It is basically the 23 Governor's bill. It is 98.6 agreed to. There's 1 one point that is not agreed to by one house. I 2 believe the Governor agrees with us on this. I 3 don't want to speak for him, but that's what he 4 told me. 5 Let me just explain what this 6 bill does and what it is. Incidentally, when 7 you talk about a banking deregulation bill, it's 8 really a misnomer because it's the entire 9 Banking Law for the state of New York. We have 10 put it on a sunset and every now and then it 11 keeps expiring and we keep coming back. 12 This year we're trying to make it 13 permanent. Everybody wants to make it perman 14 ent, all two houses and the Governor, but in 15 order to make it permanent, we have put a lot of 16 things in it, and let me tell you some of the 17 things that are in it that have been -- all of 18 these things are agreed to. I'll tell you the 19 one thing that is not agreed to. 20 It prohibits geographic 21 restrictions. It prevents banks from refusing 22 to open a deposit account simply because the 23 depositor does not live in the same city or 1 county which is ever larger. 2 It has lifeline checking. It 3 requires banks to offer lower -- lower cost 4 checking accounts. The account will provide for 5 eight monthly checks or other withdrawal 6 transaction. The maximum monthly fee, the 7 minimum balance and deposit required will be set 8 by the Banking Board. 9 Small -- incidentally, on that, I 10 would suspect that they may follow this -- the 11 New Jersey lifeline checking rules and regs 12 which have been quite successful. 13 It also provides for credit card 14 information program. It establishes a toll-free 15 telephone number for the Banking Department for 16 consumer -- where consumers can compare the in 17 formation on credit cards. It requires current 18 issuers to provide notice to their customers of 19 this service. Notice will be provided on appli 20 cations, solicitation and monthly billing. 21 It also provides small business 22 loan figures. It collects and makes readily 23 available to the public information on aggregate 1 numbers and amounts of small business and small 2 farm loans being made by New York State 3 institutions. 4 It gives credit card parity. It 5 revises New York State's credit card laws to 6 provide New York issuers with greater parity for 7 competing with the out-of-state issuers who are 8 dominant in this market. 9 These four restrictions provide 10 specific authority for credit card introductory 11 rates and rate sales, authorizes certain limited 12 fees, provides flexibility in mailing 13 arrangements in order to prevent credit card 14 theft and fraud, and it strengthens New York's 15 law to ensure that the provisions of the New 16 York law can be exported to customers in other 17 states. 18 It also contains a provision 19 which the press has written much about, and 20 there's agreement on it, motor vehicle leasing. 21 It enacts -- what that has to do with banking 22 always befuddles me, but it is in here. It 23 enacts the Motor Vehicle Leasing Act which 1 provides provision for increased disclosures, 2 prompt refunds, a process for determining 3 liability for early termination and a process 4 for resolving any disputes over excess wear and 5 damages. 6 It also provides, which is a very 7 significant part of the bill, for small business 8 investment companies. It establishes two small 9 business investment companies, one general for 10 every small business in this state, for every 11 one, and one that is specialized for certain 12 disadvantaged persons. The banking industry, 13 over time, will contribute up to $23 million to 14 this. These funds will, in turn, leverage over 15 70 million, for a total of 93 million, to 16 provide loans and equity capital to the needs of 17 small businesses. 18 We're talking about two different 19 companies -- companies. One company, the Small 20 Business Investment Company, again, is open to 21 everyone. That is all agreed to. The one 22 disagreement in the bill is as to the New York 23 Specialized Small Business Investment Company. 1 That's where we have a disagreement. 2 The Governor, in his proposal, 3 said that -- used the federal language which 4 said -- let me find this here. Said that "*** 5 federal law provides that they may only invest 6 in small businesses owned by persons whose par 7 ticipation in the free enterprise system is 8 hampered because of social or economic 9 disadvantages. Although economically and 10 socially disadvantaged is not specifically 11 defined, federal guidance documents note that 12 consideration should be given to minorities, 13 handicapped persons, persons in economically 14 deprived areas and persons of *** income or 15 limited education." 16 The Governor's program bill, 17 which this bill is still the Governor -- at the 18 request of the Governor, was received early in 19 January, provided for the purposes of this 20 company they shall serve the needs of socially 21 and economically disadvantaged persons pursuant 22 to Section 301 (d) including minority-owned 23 business enterprises and small businesses 1 located in the neighborhood-based alliance 2 communities, economic development zones and 3 highly distressed areas, individuals with 4 disabilities, persons unable to compete 5 effectively in a marketplace because of 6 prevailing restrictive practices. 7 The Assembly bill, and this is 8 our area of disagreement, would provide only for 9 minorities, businesses, persons in highly 10 distressed areas and persons who reside in a 11 neighborhood-based alliance. 12 The Senate preferred the 13 Governor's language. However, we took the 14 Assembly list to broaden it -- that's what's in 15 this bill -- to include -- just broadened it, 16 used their language to include persons eligible 17 for the income tax credit, the working poor. 18 It's that simple. 90 percent of 19 the geography of this state is excluded from 20 participation in this company unless they are 21 minority under the Assembly language. 22 I think this is reasonable. I 23 think it's something that we can work out. The 1 Governor has proposed three different -- I don't 2 want to get into the negotiations too much here, 3 but he's proposed three different additions, 4 addendums to the language here, instead of 5 making it just for minority businesses. 6 You have to realize that minority 7 businesses have no means test, no means test at 8 all. He would like to include it and so would 9 we, to either the earned income tax credit being 10 added on there or the economic opportunity zone 11 added in there, one or any of them, or to use 12 his original language, which I prefer. 13 Let me share with you, I had 14 concern about their language, whether it would 15 meet the test of the federal legislation. My 16 director of the Banks Committee called the 17 deputy counsel. He said, "No way would we 18 approve that language. There would be 19 nothing." We told that to the Assembly in 20 negotiations. The next day a whole load of 21 calls were made. Guess what? Somebody said, 22 "We'll approve it." 23 I'm worried that we may be 1 jeopardizing the whole program. What we're 2 trying to do is to make it a little bit more 3 inclusive for the rest of New York State. That 4 simple. It's a bill that is 98 or 99 percent 5 agreed to. Yes, we are still in disagreement. 6 The Assembly, it's my understanding, has just 7 put out a three-year extender. I don't want an 8 extender. "Denny" Farrell has said to me a 9 thousand times he doesn't want an extender. The 10 Governor told me not more than two hours ago, No 11 way will I sign an extender. We should be doing 12 this; we should have done it a long time ago. 13 Let me say that we've had 14 agreement on scores of occasions and every time 15 something new pops onto the table from the other 16 house. They had to have the Comptroller on the 17 board. They had to have the Comptroller on the 18 board. Finally somebody said, "Has anybody 19 asked the Comptroller?" So they asked the 20 Comptroller. He says, "I don't want to be on 21 the board." 22 Then, well, they wanted one thing 23 after another, but let me say this and it was 1 concern too -- Senator Ohrenstein and the other 2 side and to the Minority, we have put in this 3 legislation giving the Minority of both houses 4 appointments on all the boards. That's a first, 5 something that I support and everybody. I know 6 that there was concern expressed in the Banking 7 Committee, and Senator Ohrenstein will have an 8 appointment on this board, on all the boards, 9 all three of them. 10 ACTING PRESIDENT KUHL: Senator 11 Gold, you still have the floor. 12 SENATOR GOLD: Senator - 13 SENATOR FARLEY: Yes, sir. 14 SENATOR GOLD: Is there a memo on 15 this bill, Senator Farley? 16 SENATOR FARLEY: Yes, there is. 17 SENATOR GOLD: The -- I realize 18 it's reported out of committee a few minutes ago 19 and limited to only 54 pages, but I thought it 20 would be interesting to see if there was a 21 memo. 22 SENATOR FARLEY: There certainly 23 is. Let me hand deliver a memo to the Acting 1 Minority Leader. 2 SENATOR GOLD: If the record 3 would reflect that we each walked halfway and he 4 hand delivered the message. 5 ACTING PRESIDENT KUHL: I thought 6 Senator Farley went three-quarters of the way 7 there, Senator Gold. 8 SENATOR FARLEY: I've gone 90 9 percent of the way on this. 10 SENATOR GOLD: Based upon the 11 merits of the bill, he should have gone 90 12 percent of the way. 13 Senator Farley, I appreciate 14 your giving me the memoranda and there 15 may be some other questions by other people, but 16 maybe we can cut through a little of it. You 17 say the bill deals with low cost checking. 18 How do you define "low cost checking"? You said 19 eight transactions or something? 20 How do you define "low cost 21 checking"? 22 SENATOR FARLEY: The Banking 23 Board will set the fees. Incidentally, in their 1 bill that we had to correct - 2 SENATOR GOLD: In other words, 3 low cost checking means where the Banking Board 4 sets the fees? 5 SENATOR FARLEY: That's correct. 6 SENATOR GOLD: So, in other 7 words, wherever they set the fees. 8 SENATOR FARLEY: You want to set 9 the fee in statute? 10 SENATOR GOLD: No, no, I'm asking 11 you what "low cost checking" is. You say that's 12 checking that the Banking Board - 13 SENATOR FARLEY: We have directed 14 the Banking Board to - 15 SENATOR GOLD: Can you get it 16 when we're both talking at the same time? 17 ACTING PRESIDENT KUHL: 18 Gentlemen, just so that we keep this so the 19 stenographer can take this all down, I'd ask 20 that you direct your questions and answers 21 through the Chair up here. Senator Gold, you 22 had a question. 23 SENATOR GOLD: Yeah, I'm trying 1 to get the whole question out so that we could 2 be more specific. 3 ACTING PRESIDENT KUHL: You 4 asking Senator Farley to yield to a question? 5 SENATOR GOLD: I'm asking what 6 you're defining as "low cost checking", as 7 opposed to high cost checking. 8 SENATOR FARLEY: That means a fee 9 for a checking account that would be 10 substantially lower than a monthly checking 11 account. The New Jersey plan for lifeline 12 checking has been very successful. I mentioned 13 that in my remarks and I suspect that the 14 Banking Board will set -- will follow the New 15 Jersey experience. 16 SENATOR GOLD: You -- you said 17 that there will be a credit card information 18 program. Is that the 800 number? 19 SENATOR FARLEY: That's correct. 20 SENATOR GOLD: And do you know 21 how that works? I mean we have a number of 800 22 numbers now in the state, and a lot of them are 23 useless because we don't fund them and you can't 1 get through on them anyway. One 800 number with 2 one phone and you've got millions of people 3 calling, and it doesn't do much good. 4 SENATOR FARLEY: That was not my 5 idea, Senator Gold, and I had trepidations about 6 it also, but it was an absolute insistence on 7 the part of the Assembly to have this 800 number 8 which would give you credit card information 9 which we hope is up to date and which we hope is 10 accurate and which we hope that they'll answer. 11 SENATOR GOLD: Well, I think it's 12 a great idea. I'm just trying to find out 13 whether we're funding it. I give the Assembly 14 credit for giving this great idea. Now, I want 15 to know whether the Senate gets any credit for 16 funding it. 17 SENATOR FARLEY: Yes, that 18 probably will be added in, in the budget, which 19 we're working on right now. 20 SENATOR GOLD: O.K. You said that 21 the bill has credit card parity so we get 22 greater parity with other states. How does that 23 work? 1 SENATOR FARLEY: How that works 2 is that basically I would venture to say that 3 the credit card that you have in your pocket is 4 not a New York-based credit card. I'll bet you 5 a nickel or more, whatever you wish. What this 6 does - 7 SENATOR GOLD: Who's got credit 8 cards? 9 SENATOR FARLEY: What this does 10 is allow the few -- and boy, are we few - 11 credit card companies that are still operating 12 in New York State and not in Delaware or South 13 Dakota, it allows -- it has four revisions 14 here. 15 They've had a lot of problems 16 with credit cards being stolen, fraud and 17 theft. It allows them to mail the credit cards 18 out to customers from different locations. It 19 also provides for certain limited fees. It's 20 similar to the score of other credit cards that 21 are issued out of state and it provides for 22 specific authority for credit card introductory 23 rates and rate sales. In other words, that's 1 where it -- they'll give you a very low interest 2 for a very short period of time or something 3 like that. In other words, you know how a home 4 equity line is that the first year you pay two 5 percent and after that it goes up. 6 There are basically four 7 revisions which all of the credit card companies 8 that do not operate in New York State have. 9 We've done that before. 10 SENATOR GOLD: Well, may -- if 11 the Senator will yield to a question. Does it 12 affect the interest rate that's put on it? 13 SENATOR FARLEY: Does it affect 14 the interest rate? No, it does not, as far as I 15 know. Does it affect the interest rate? No. We 16 do nothing about the interest rate. 17 SENATOR GOLD: All right. 18 SENATOR FARLEY: That's a very 19 competitive industry. 20 SENATOR GOLD: So when you say, 21 if I understand you -- when you say "parity," 22 are you saying that the parity comes from these 23 basically promotional ideas, the initial 1 starting rate and the lower interest, the short 2 period of time? 3 SENATOR FARLEY: Basically, what 4 it does in that area is gives them the same law 5 that -- it conforms the laws that are in the 6 other states, in Delaware and South Dakota 7 basically, where all the credit cards are issued 8 where their operations are. 9 SENATOR GOLD: Yeah, but, 10 Senator, that's what I'm talking about. You are 11 well aware, Senator Farley, and I know you're a 12 professor of law here, so you're doubly aware 13 that our Constitution does not allow us to pass 14 legislation just by referring to other states. 15 We have to put it in language. So I'm asking 16 you: What is the language; what is it that the 17 other states have statutorily that we are 18 conforming to? 19 SENATOR FARLEY: Hold on. We do 20 not reference other laws. 21 SENATOR GOLD: No, I know you 22 don't. 23 SENATOR FARLEY: Just a -- let me 1 finish. On page 13 of the bill, it spells out 2 the answer to your question. I -- this is a 3 summation, I won't read it to you, but the fees 4 and charges permitted under this subdivision are 5 interest under New York law and all terms and 6 conditions and provisions of a retail install 7 ment credit including that without limitation 8 credit card charges, and fees, and so forth. 9 SENATOR GOLD: What does that 10 mean? Senator, I don't want you to read it to 11 me; I want you to tell me what it means. 12 There's a reference to a section of the United 13 States Code. 14 SENATOR FARLEY: It says -- well, 15 if I can generalize, it says that credit card 16 rates are deregulated because that's what New 17 York State law says. It refers to New York 18 State law; isn't that correct? 19 SENATOR GOLD: Well, Senator - 20 SENATOR FARLEY: We know, the 21 interest rate in New York State is deregulated. 22 In essence, that's what it says. 23 SENATOR GOLD: Yeah, if the 1 Senator will yield to a question. 2 SENATOR FARLEY: Yeah. 3 SENATOR GOLD: Senator, you just 4 referred me to that page. I didn't pick the 5 page out and ask you what it meant. What I'd 6 like you to just tell me, when you say that 7 we're creating parity and doing what other 8 states do, what is -- what are other states 9 doing that this bill will now do? You pointed 10 me to the section, which makes no sense to me in 11 answer to that question. 12 SENATOR FARLEY: Basically, 13 Senator Gold, other states have deregulated the 14 entire banking industry. We're not an island 15 and we're deregulating -- deregulated also, 16 that's basically what it is. It's the -- it 17 means that it will conform to New York law. 18 Should we put -- should we put in 19 a ceiling on credit card rates, this bill - 20 this provision would -- would not negate that. 21 Excuse me. This provision just says it will 22 conform to New York State interest laws. 23 SENATOR GOLD: Senator, as I - 1 if the Senator will yield to a question, Mr. 2 President. 3 ACTING PRESIDENT KUHL: Senator 4 will. 5 SENATOR GOLD: Senator, I hear 6 the words. I do hear your words. I just don't 7 understand them in relationship to my question. 8 You said that the bill creates credit card 9 parity so that, when you deal with credit cards 10 in New York State, they'll be competitive. 11 Other states are getting all our credit card 12 business, and all I want to know - 13 SENATOR FARLEY: That's only - 14 all right. Go ahead. 15 SENATOR GOLD: Can I finish the 16 question, Mr. President? All I want to know, 17 Senator Farley, in plain English is what is the 18 parity; what does it actually do that they will 19 now be able to do in New York State that they're 20 allowed to do in the other states that will make 21 our credit card business competitive? That's 22 all I'm asking. 23 SENATOR FARLEY: O.K. Let me try 1 again. I thought I explained this when I 2 spoke. Incidentally, "credit card parity", 3 quote, is just a term that I used to try to say 4 that we want to conform the credit card issuers 5 that are in this state with the 90 percent of 6 the other credit cards that are around the 7 country. A lot of New York banks have their 8 operations in Delaware and South Dakota. 9 SENATOR GOLD: What do we have to 10 do that? 11 SENATOR FARLEY: Let me finish, 12 and then you can start reasking your question. 13 What we're trying to do here is to give our 14 credit card issuers, the employees that work in 15 these credit card industries in New York State, 16 a chance to keep working and not be 17 non-competitive. We have had a terrible problem 18 in New York State in certain areas in your city 19 where credit cards have been stolen, where 20 there's been terrific fraud, and we want to be 21 able to vary where they can mail it from. 22 That's one of the provisions in 23 this. All of these provisions that are in the 1 credit card, quote "parity", and I wish I hadn't 2 used the word if it gets you so upset, is that 3 we're trying to conform the laws or conform our 4 credit card industry with the 90 percent of all 5 credit cards that are issued around the United 6 States. 7 SENATOR GOLD: O.K. Great, Mr. 8 President, I want to thank him for that answer. 9 ACTING PRESIDENT KUHL: Senator 10 Gold. 11 SENATOR GOLD: I want the record 12 to indicate I'm in favor of that. Senator 13 Farley, will you yield to one question? 14 SENATOR FARLEY: Yes. 15 SENATOR GOLD: How do we do it? 16 How does this bill do that? How does this bill 17 conform it in 90 percent of the way? You're 18 telling me you want to do it. I'm not arguing. 19 You tell me you want to put people to work. I'm 20 not arguing. Aside from allowing them to mail 21 the cards from different locations, what else 22 does the bill do? It's got 54 pages. It must 23 do something. 1 SENATOR FARLEY: O.K. O.K. One 2 provision was that they could only mail 3 something from New York State, O.K.? 4 SENATOR GOLD: Yeah. 5 SENATOR FARLEY: They could only 6 mail something from New York State. That was in 7 our law. What this does, it gives them 8 flexibility. They can mail it from New Jersey, 9 a close neighbor of Senator Marchi's. They can 10 mail it from Connecticut, if they wish to. 11 SENATOR GOLD: I love that. 12 SENATOR FARLEY: They can vary 13 it. That's one of the changes. There's no 14 restriction, and I guess there's no restriction 15 on other credit card companies as to where they 16 have to mail the stuff. 17 SENATOR GOLD: I appreciate -- is 18 there any other conforming? 19 SENATOR FARLEY: Yes, there is. 20 SENATOR GOLD: The parity comes 21 from the mailing, or is there anything else? 22 SENATOR FARLEY: It allows them 23 specific authority for credit card introductory 1 rates. In other words, they can give you, and 2 we couldn't do that before, our issuers could 3 not. They now can have, if you want an intro 4 ductory rate for a credit card and they can give 5 you a very low interest for a short period of 6 time, I guess, or maybe a long period of time if 7 they wish to. They couldn't do that before. 8 Other credit card issuers can do that. 9 Let me just say something to my 10 colleagues, including you, Senator Gold. Last 11 July - 12 ACTING PRESIDENT KUHL: Senator 13 Farley, this is in response to Senator Gold's 14 question? 15 SENATOR GOLD: Yes. 16 SENATOR FARLEY: Well, it's a 17 little bit non-germane. 18 SENATOR GOLD: I don't mind. If 19 it's important for you to say, I'm willing to 20 hear it. 21 ACTING PRESIDENT KUHL: Senator 22 Farley. 23 SENATOR FARLEY: I would like to 1 thank my colleagues in this house, and Senator 2 Onorato and quite a few others. We passed in 3 July a bill, 54 to 5, that was just a clean 4 extension of the Banking Law. We had none of 5 these provisions in it, and I thank my 6 colleagues for that, because it helped us in 7 negotiation. 8 SENATOR GOLD: Good. Mr. 9 President. 10 ACTING PRESIDENT KUHL: Senator 11 Gold. 12 SENATOR GOLD: Will the Senator 13 yield to a question? 14 ACTING PRESIDENT KUHL: Senator 15 Farley, do you yield? Senator Gold. 16 SENATOR GOLD: Senator Farley, I 17 think we're making real progress on this parity 18 issue, and I know it's your word. We allow them 19 to mail from any place outside of New York and 20 we allow them to use introductory interest rates 21 and promotional interest rates. Is there 22 anything else in that area that we do that you 23 would put under this category of parity? 1 SENATOR FARLEY: Yes. There is. 2 To give you an example, if you lose three credit 3 cards -- and I know that you would never do that 4 -- if you lose three credit cards, they can 5 charge you to give you a fourth one. That's one 6 other item. 7 SENATOR GOLD: Anything else? I 8 mean let's get it all out so we know what we're 9 voting on. 10 SENATOR FARLEY: That's about it, 11 Senator. There's not an awful lot. We have - 12 I suppose you can come up with some more. If I 13 can find some more parity things, I'd be willing 14 to give it to our credit card issuers because we 15 need the jobs. 16 SENATOR GOLD: Yeah, I'm for 17 that. Will the Senator yield to one more 18 question? 19 ACTING PRESIDENT KUHL: Senator 20 will. 21 SENATOR GOLD: This also refers 22 to what you described as the Motor Vehicle 23 Leasing Act. How does that part of it work, 1 Senator? 2 SENATOR FARLEY: That is 3 something that I have not been enthusiastic 4 over, not because of regulating the leasing 5 companies is not a good idea. That's really a 6 bill that was in Consumer Affairs over there in 7 the Assembly. Basically it's the Assembly's 8 bill with a little -- with a couple wrinkles 9 that have been changed, and we have agreed to 10 allow it in the banking bill, and the change 11 basically is the disclosures that would be 12 involved. 13 Just a moment. The bill would 14 add a new Article 9 to the Personal Property Law 15 to require that every lessor to inform the 16 consumer of the monthly payment, the number of 17 months in the term, any payment due at the start 18 of the lease, the residual value of the vehicle, 19 the purchase option price formula, the 20 disposition fee, the number of miles assumed 21 under the lease, and the per mile charge for 22 exceeding the assumed mileage and the formula 23 under which a lessor would apply to determine a 1 consumer's early termination liability. 2 A consumer would also be informed 3 of the cost of the insurance, the administrative 4 fees, taxes, title charges and other fees. 5 These would be available in a sample lease which 6 would be made available to the consumer upon 7 request, so that the consumer could compare the 8 costs of the different leases. 9 If the lease application is 10 rejected, the payment that the consumer made 11 must be refunded within 15 days of rejection. 12 If a consumer withdraws their offer, any vehicle 13 that the consumer traded in and any payment that 14 might have been made must be returned promptly. 15 A lessor may not transfer any 16 vehicle offered in the trade until the lease is 17 executed. A consumer would receive a complete 18 and conspicuous notice separate from the lease 19 itself, setting forth the consumer's obligation 20 if the car is a total loss as a result of the 21 theft or damage. 22 The bill would also permit the 23 provision of gap insurance which would protect 1 consumers against financial liability for the 2 difference between what they owe and what the 3 car's insured worth is when it is deemed to be a 4 total loss through the theft or damage. 5 The bill also provides for a 6 dispute resolution process subject to the 7 regulation by the Attorney General and permits 8 consumers to bring suits in dispute. 9 SENATOR GOLD: Thank you. Will 10 the Senator yield to another question? 11 ACTING PRESIDENT KUHL: Senator 12 Farley will. 13 SENATOR GOLD: I'm trying, 14 Senator, to listen to you and also digest the 15 memo at the same time and do my best. On page 3 16 of your memo, it talks about -- it says Chapter 17 548 of 1987 provided that banking and other 18 financial institutions which offered checking 19 accounts shall offer an account on which 20 canceled checks are returned to the customer. 21 What -- what is that supposed to mean in 22 reference to it? I know there's some banks - 23 SENATOR FARLEY: I still - 1 SENATOR GOLD: There are some 2 banks where they have - 3 SENATOR FARLEY: That's the 4 current law, Senator Gold. 5 SENATOR GOLD: I understand it. 6 But what is the purpose of referencing it here? 7 Was there some reason? 8 SENATOR FARLEY: It says you have 9 to return checks. 10 SENATOR GOLD: What? 11 SENATOR FARLEY: You have to 12 return checks. Banks have to return your 13 checks. 14 SENATOR GOLD: That's not what it 15 says. They must offer you that kind of an 16 account. In other words, the bank can have that 17 kind and another kind, is that correct? 18 SENATOR FARLEY: No. I guess 19 they can have both, but don't they return 20 checks? 21 SENATOR GOLD: Well, what I'm 22 trying to understand, Senator, and as I say, I'm 23 going - 1 SENATOR FARLEY: Well, my point of 2 it is they can offer you an account where you 3 don't want the checks returned. You say don't 4 clutter up my house with canceled checks. If 5 that's what you prefer, they can do that to you, 6 but they have to offer to return your checks. 7 SENATOR GOLD: Right, but when 8 you say, Senator, it's in the law today, that's 9 what the memo says. The memo says Chapter 548 10 of 1987 voided that. What is -- why is the 11 reference in here? In other words, if we don't 12 pass this bill today, that would lapse, is that 13 correct? 14 SENATOR FARLEY: That's correct. 15 SENATOR GOLD: All right. That's 16 one of the provisions that would lapse. On page 17 4, it talks about authorizing the making of 18 variable rate closed end installment loans and 19 also I guess there's provisions for open ended. 20 Can you tell me what -- what is that difference? 21 I'm a layman on that. What is the difference, 22 and how does this law affect that? 23 SENATOR FARLEY: You know what 1 I'll do, Senator Gold. I can understand your 2 real interest in all of these specifics. That 3 is the current Banking Law which you voted for a 4 number of years ago. It's been on the books for 5 a long time. I'll be happy to send you a copy 6 of the entire Banking Law as it exists. 7 We're not changing any of that. 8 We're just allowing it not to expire and, of 9 course, if this keeps up, it may expire. 10 SENATOR GOLD: Yeah, it might. 11 Mr. President, at this point - 12 ACTING PRESIDENT KUHL: Senator 13 Gold. 14 SENATOR GOLD: -- if I could 15 yield to Senator Dollinger. You have some 16 questions? Yeah, I want to yield to Senator 17 Dollinger. I'll read the memo in the meantime. 18 ACTING PRESIDENT KUHL: Senator 19 Dollinger. 20 SENATOR DOLLINGER: Senator yield 21 to a question? 22 SENATOR FARLEY: I'd be happy to, 23 Senator Dollinger. 1 SENATOR DOLLINGER: First of all, 2 by way of reference, I'd like to commend the 3 chairman of the Committee on Banks. I know it's 4 quite frustrating to get to the Ivory soap point 5 where it's 99 and 44/100ths pure, but you don't 6 have the final. 7 SENATOR FARLEY: I took 98.6 but 8 I'll take - 9 SENATOR DOLLINGER: It sounds to 10 me like you're at the 99 and 44/100ths. What 11 I'd like do through you, by way of question, Mr. 12 President, is it my understanding that page 7, 13 lines 6 through 18, are the provision that the 14 chairman of the Banking Committee discussed that 15 are currently in dispute with our colleagues in 16 the Assembly, is that correct? 17 SENATOR FARLEY: 7, line 6. Just 18 a second. 19 SENATOR DOLLINGER: I'm trying to 20 make sure that I understand the provision that 21 is currently contested. 22 SENATOR FARLEY: Yes, yes. 23 SENATOR DOLLINGER: O.K. Through 1 you again, Mr. President, I just want to make 2 sure I understand the -- the way this works. 3 Dealing with section (b) starting at line 6, it 4 says, The purposes of the SBIC sheets are to 5 provide, in effect, to facilitate small business 6 ownership by minorities. Is the term 7 "minorities" defined in the act? 8 SENATOR FARLEY: It would be - 9 it's, Senator, that it's my understanding 10 applies to the federal law, what the federal law 11 allows as minorities. 12 SENATOR DOLLINGER: O.K., but 13 there's no reference in the act, is there, to 14 the federal definition of that term? 15 SENATOR FARLEY: No, there is 16 not. Incidentally, just for your information, 17 the federal law does not include women. 18 SENATOR DOLLINGER: Excuse me? 19 SENATOR FARLEY: It does not 20 include women. 21 SENATOR DOLLINGER: Does not 22 include women? 23 SENATOR FARLEY: The federal law 1 does not include women under the definition of 2 "minority". 3 SENATOR DOLLINGER: Again through 4 you, Mr. President, another question of the 5 speaker, if the speaker will yield. 6 ACTING PRESIDENT KUHL: Senator 7 Farley, will you yield? 8 SENATOR FARLEY: Sure. 9 SENATOR DOLLINGER: Where by 10 reference do we incorporate the definition 11 section of the federal law? 12 SENATOR FARLEY: Well, -- well, 13 here's the problem. I think -- the original - 14 the original language of the Governor's program 15 bill, which this is at the request of the 16 Governor, this particular bill, used the federal 17 language almost in total. The Assembly has 18 really changed that substantially. We have been 19 desperately trying to make it more inclusive. 20 SENATOR DOLLINGER: Right. 21 SENATOR FARLEY: And this 22 particular language, the only difference in this 23 and the Assembly bill is that it might include 1 persons eligible for the earned income tax 2 credit. That's basically the only thing that 3 we're plugging into the Assembly language. 4 SENATOR DOLLINGER: Correct. 5 Again through you, Mr. President. 6 ACTING PRESIDENT KUHL: Senator 7 Farley continue to yield? 8 SENATOR FARLEY: Sure. 9 SENATOR DOLLINGER: The purpose 10 of my question is, as I look downstream in this 11 particular language, and I've got several other 12 questions that deal with the particulars of it, 13 is just to try to clarify what the terms mean so 14 that, if this is some day challenged, that there 15 will be some sense among the members of this 16 body in passing this bill what those specific 17 terms mean. 18 Is it my -- correct in my 19 understanding that the intention here is to 20 incorporate the federal SBIC law definition of 21 the term "minorities"? 22 SENATOR FARLEY: Yes, and you 23 have to be licensed by the federal -- by the 1 fed's before you can participate. 2 SENATOR DOLLINGER: O.K. So we're 3 going to adopt, incorporate then federal 4 definitions; is that correct? 5 SENATOR FARLEY: That's correct. 6 SENATOR DOLLINGER: All right. 7 Through you, Mr. President, if the sponsor will 8 continue to yield. 9 ACTING PRESIDENT KUHL: Senator 10 Farley continue to yield? 11 SENATOR FARLEY: Yes. 12 ACTING PRESIDENT KUHL: He does. 13 SENATOR DOLLINGER: Senator, it's 14 my understanding that minorities will continue 15 to be eligible and then there's a second group 16 of people that reside in highly distressed areas 17 or highly distressed as defined in other 18 sections of the act. 19 SENATOR FARLEY: Correct. 20 SENATOR DOLLINGER: And then 21 through you, Mr. President. 22 SENATOR FARLEY: Of course, it 23 excludes almost all of your Senate District. 1 SENATOR DOLLINGER: I'll take the 2 chairman's word for that. 3 SENATOR FARLEY: The highly 4 distressed area excludes about 90 percent of New 5 York State. 6 SENATOR DOLLINGER: And then - 7 ACTING PRESIDENT KUHL: Senator 8 Farley continue to yield? 9 SENATOR FARLEY: I certainly do. 10 SENATOR DOLLINGER: Through you, 11 Mr. President. And then there's a third group 12 of people, and those are the people entitled to 13 an earned income tax credit, and it -- under an 14 act -- it says under an enactment under -- under 15 the Internal Revenue Code. What does that 16 mean? 17 SENATOR FARLEY: That's just a 18 reference to an act where that came from. 19 SENATOR DOLLINGER: O.K. 20 SENATOR FARLEY: Simply it allows 21 people, poor people, to participate and possibly 22 get into a small business. They're excluded 23 without that language. 1 SENATOR DOLLINGER: Again through 2 you, Mr. President. 3 ACTING PRESIDENT KUHL: Senator 4 Farley continue to yield? 5 SENATOR FARLEY: Yes. 6 SENATOR DOLLINGER: Would the 7 eligibility for the earned income tax credit 8 apply in a single year? 9 SENATOR FARLEY: Yes. 10 SENATOR DOLLINGER: Just through 11 you, Mr. President, for clarification, if you 12 had something - 13 SENATOR FARLEY: It's on an 14 individual return basis, yes. 15 SENATOR DOLLINGER: How long 16 would the period of eligibility last? 17 SENATOR FARLEY: Well -- it would 18 -- it would last in the year, let's hope that 19 after they get into business, they won't need 20 that, but I would presume it would be in the 21 year in which they're applying they would take 22 their earned income tax credit information and 23 apply for a loan. 1 SENATOR DOLLINGER: O.K. Again 2 through you, Mr. President. 3 ACTING PRESIDENT KUHL: Senator 4 Farley continue to yield? 5 SENATOR FARLEY: Yes. 6 ACTING PRESIDENT KUHL: He does. 7 SENATOR DOLLINGER: Senator 8 Farley, if I understand the purpose of this 9 provision, I may be in agreement with it. My 10 concern is you become eligible to apply for this 11 assistance when you qualify for the earned 12 income tax credit, is that correct? 13 SENATOR FARLEY: Yes. 14 SENATOR DOLLINGER: What happens 15 if the first year you're in business you make 16 enough money so you no longer qualify? 17 SENATOR FARLEY: You've already 18 got the loan. 19 SENATOR DOLLINGER: So you can 20 make repayments on the loan even though you 21 qualify for the tax credit. 22 SENATOR FARLEY: I assume so. 23 SENATOR DOLLINGER: Is that 1 correct? 2 SENATOR FARLEY: That's correct. 3 SENATOR DOLLINGER: Was there any 4 discussion during the deliberations on this bill 5 -- Mr. President, again through you, Mr. 6 President -- of the question of averaging on a 7 five-year period of the earned income tax 8 credit? They could - 9 SENATOR FARLEY: Good point. We 10 can't even get the Assembly to even discuss it. 11 The Governor thought it was a good idea. 12 SENATOR DOLLINGER: I'm not 13 suggesting that it isn't. I'm simply trying to 14 find out. The current language says that if you 15 qualify for the EITC one year, you're then 16 eligible to apply and regardless of your past or 17 future income, you would apply for a loan 18 through the SBIC or SSBIC and be able to qualify 19 for the loan, is that correct? 20 SENATOR FARLEY: That's correct. 21 SENATOR DOLLINGER: O.K. The last 22 question I have on that language, if Senator 23 Farley will continue to yield. 1 ACTING PRESIDENT KUHL: Senator 2 Farley continue to yield? 3 SENATOR FARLEY: For one last 4 question. 5 SENATOR DOLLINGER: For one last 6 question. 7 ACTING PRESIDENT KUHL: The 8 Senator does. 9 SENATOR DOLLINGER: There's a 10 language used immediately after the earned 11 income tax credit which states whose 12 participation in the free enterprise system is 13 hampered to compete effectively in a marketplace 14 because of prevailing restrictive lending 15 practices. 16 SENATOR FARLEY: That's federal 17 language. 18 SENATOR DOLLINGER: O.K. Is that 19 clause designed to apply to all three categories 20 of the people? 21 SENATOR DOLLINGER: Again through 22 you, Mr. President, if Senator Farley would 23 yield for one more question. 1 ACTING PRESIDENT KUHL: Senator 2 Farley continue to yield for one more question? 3 Senator does. 4 SENATOR FARLEY: The Board -- and 5 on the question, I know what your question is 6 going to be. Senator Ohrenstein will have an 7 appointment - 8 SENATOR DOLLINGER: My further 9 question, again through you, Mr. President, is 10 how do they make that determination; is it made 11 on the basis of each single application that 12 comes in? 13 SENATOR FARLEY: Sure. 14 SENATOR DOLLINGER: And if so, 15 again through you, Mr. President, what proof 16 would be considered in determining whether or 17 not an applicant who meets the EITC or a 18 minority applicant or an applicant in an 19 economically distressed area, what criteria 20 would be applied to trigger the language that 21 they have been denied effective participation in 22 the capital system because of past restrictive 23 practices? 1 I'm specifically making reference 2 to the fact that this creates a need for a 3 Richmond study to determine whether or not there 4 have been discriminatory and restrictive 5 practices sufficient to trigger the right of 6 government to intervene on these bases in making 7 these awards. 8 SENATOR FARLEY: That's 9 determined by the criteria that is given to the 10 board, somewhat of a judgment call, I would say, 11 wouldn't you? 12 SENATOR DOLLINGER: Well, I guess 13 I'm -- again through you, Mr. President. 14 ACTING PRESIDENT KUHL: Senator 15 Farley, you continue to yield? Senator does. 16 SENATOR FARLEY: Yeah, I'll 17 yield. 18 SENATOR DOLLINGER: So that my 19 understanding, again through you, Mr. President, 20 that the determination of whether or not a 21 specific individual who is attempting to qualify 22 for the earned income tax credit, the board in 23 making its determination would have to decide 1 that that person had been unable to compete 2 effectively for capital in the marketplace due 3 to prevailing or past restrictive practices. 4 SENATOR FARLEY: Senator 5 Dollinger, you're making my point. That is why 6 it was better off to start with the -- to use 7 the federal language in here because we're in 8 uncharted waters many times with these -- with 9 this language. 10 As I said earlier, I don't know 11 whether you were here, there was a deputy 12 counsel said that there's no way we would 13 approve this language. I -- that bothers me. 14 The Governor said to me that just, I guess 15 several hours ago now, that he -- that his 16 original language was the better way to go. It 17 followed -- it tracked the federal language. I 18 think that they may be gummin' up the works with 19 this, but we've got to have a banking bill. 20 SENATOR DOLLINGER: I 21 appreciate. Through you, Mr. President. 22 SENATOR FARLEY: How much do we 23 have to give? 1 SENATOR DOLLINGER: Through you, 2 Mr. President. 3 ACTING PRESIDENT KUHL: Senator 4 Dollinger. 5 SENATOR DOLLINGER: I'm not 6 disagreeing with Senator Farley. I'm simply 7 trying to elucidate if there's a point at some 8 time in the future as to what we intended in 9 passing this bill and whether or not we intended 10 to incorporate federal rules, whether or not we 11 intended to incorporate the concept of creating 12 a criteria, having to prove that you were a 13 victim of prevailing or past restrictive 14 practices as a criteria for eligibility on the 15 basis of either income status or minority 16 status. We may be required to do that as a 17 matter of law. The board may be required to do 18 it as a matter of law in order to justify it 19 under the Richmond case from the United States 20 Supreme Court. 21 If I could ask one more question 22 through you. 23 ACTING PRESIDENT KUHL: Senator 1 Farley, do you yield to another question? 2 SENATOR FARLEY: You're on your 3 third last question. 4 ACTING PRESIDENT KUHL: Senator 5 Farley yields, Senator Dollinger. 6 SENATOR DOLLINGER: Well, I'm 7 taking it from Senator Gold. Through you, Mr. 8 President, I am familiar with the operation of 9 small business investment companies under the 10 federal rules. Those operations under the 11 federal system have tended to try to leverage 12 private capital to achieve small business in 13 vestment goals. Do I understand correctly in 14 this bill that the goal is to bring bank capital 15 to work rather than private capital to work to 16 achieve the goals of the SBICs? 17 SENATOR FARLEY: Well, yes, bank 18 capital is private capital. 19 SENATOR DOLLINGER: Well, but - 20 SENATOR FARLEY: But they're 21 going to put up what, 23 million? 23 million and 22 will leverage about 70 million. 23 SENATOR DOLLINGER: Through you 1 again, Mr. President. 2 ACTING PRESIDENT KUHL: Senator 3 Dollinger asks Senator Farley to yield. Do you 4 continue to yield? 5 SENATOR FARLEY: Yes, I will. 6 ACTING PRESIDENT KUHL: Senator 7 does. 8 SENATOR DOLLINGER: Just explain 9 to me, if you would, how that 23 million 10 translates into 70 million; where does the other 11 47 million come from? 12 SENATOR FARLEY: Well, it's three 13 to one, isn't it? There's a federal matching 14 grant. Currently the SBIC can obtain a 15 three-to-one leverage, the first 15 million 16 obtained in private capital, the additional 17 leverage is obtained for any private capital 18 invested up to 45 million. The 45 million 19 private investment will leverage the maximum 20 amount of 90 million. We have asked -- we have 21 set this up so it can leverage the maximum 22 amount of money from the federal government. 23 SENATOR DOLLINGER: Now, so I 1 understand it, the other match is coming from 2 the federal government; it's not coming from 3 private sources? 4 SENATOR FARLEY: That's correct. 5 SENATOR DOLLINGER: O.K. Just one 6 final question. This will be my final 7 question. Did -- in the deliberations in the - 8 the deliberations of the Committee and the 9 discussions with our other colleagues in the 10 other house, was the concept of allowing 11 privately funded small business investment 12 corporations who do not have bank resources but 13 would use federal tie-in dollars in what I would 14 call truly private capital dollars, not a bank 15 coalition putting the cash in but instead 16 private investors putting the cash in, was that 17 considered as an option to take - 18 SENATOR FARLEY: Of course, you 19 can already do that, Senator Dollinger. You can 20 do that without this law. 21 SENATOR DOLLINGER: Well, I 22 believe under the federal system but not 23 necessarily under the state system. 1 SENATOR FARLEY: That's correct. 2 SENATOR DOLLINGER: Would there 3 be no advantage in doing that under the state 4 system? 5 SENATOR FARLEY: Because that can 6 already be done privately. For instance, a 7 small business person goes into a bank and gets 8 a small business loan. 9 SENATOR DOLLINGER: I'm - 10 SENATOR FARLEY: Maybe I'm mis 11 understanding you. 12 SENATOR MENDEZ: Mr. President. 13 SENATOR DOLLINGER: I have just 14 one more question, Olga, to clarify this. 15 SENATOR FARLEY: We're not 16 setting up a state system. We're just trying to 17 leverage some federal money. 18 SENATOR DOLLINGER: O.K. I 19 believe Senator Gold yielded. 20 ACTING PRESIDENT KUHL: Senator 21 Dollinger, you still have the floor. 22 SENATOR DOLLINGER: Mr. 23 President, I believe I took the floor from 1 Senator Gold. I will offer it back. 2 SENATOR GOLD: Yes, if you're 3 finished, I know Senator Montgomery, Senator 4 Mendez, whoever all, you've got it. 5 SENATOR DOLLINGER: If I could 6 ask you to yield for one split second. 7 ACTING PRESIDENT KUHL: Senator 8 Dollinger on the bill. 9 SENATOR DOLLINGER: I hope it's 10 clear my colloquy with Senator Farley was just 11 an attempt to elucidate the proposal that's in 12 the bill and that I see being advanced in this 13 house. 14 I generally favor the concept of 15 a broader reach of this bill. I think that 16 there are some technical problems with respect 17 to the EITC and when it's used, whether it's 18 averaged over a period of time which maybe could 19 have effected a more direct linkage between the 20 population attempting to be served and the funds 21 we wanted to put into this system to attack 22 these problems of under-development. 23 So I think there may be some 1 other options. I think this moves in a better 2 direction, but my hope is that further 3 discussion will produce a compromise with our 4 colleagues across the way. I know it's been 5 difficult. I commend the chairman of the 6 committee for his hard work. 7 ACTING PRESIDENT KUHL: Senator 8 Montgomery. 9 SENATOR MONTGOMERY: Thank you, 10 Mr. President. 11 I'd just like to ask the sponsor 12 a couple of questions. 13 ACTING PRESIDENT KUHL: Senator 14 Farley, do you yield? 15 SENATOR FARLEY: Yep. 16 ACTING PRESIDENT KUHL: Senator 17 Farley yields. 18 SENATOR MONTGOMERY: Thank you, 19 Senator Farley. 20 Senator Farley, I realize that 21 you are -- the purpose is directed specifically 22 at minority business entrepreneurs, and in 23 distressed areas, as you say, in particular. Is 1 there a definition that you have for small 2 businesses; the size in particular? 3 SENATOR FARLEY: Yes. This, 4 again, is a federal definition. 5 SENATOR MONTGOMERY: O.K. 6 SENATOR FARLEY: And it is one - 7 it is a business with a net worth of less than 6 8 million and an average net income which would 9 not exceed 2 million for the preceding two 10 years. 11 SENATOR MONTGOMERY: Would not 12 exceed 2 million. 13 SENATOR FARLEY: For the 14 preceding two years. 15 SENATOR MONTGOMERY: Is there - 16 and there is no indication of the size other 17 than that? In other words - 18 SENATOR FARLEY: Well, that's an 19 indication of the size. 20 SENATOR MONTGOMERY: It's 21 defined. 22 SENATOR FARLEY: It's the federal 23 Small Business Administration generally defines 1 it to mean those businesses with a net worth of 2 less than $6 million and an average net income 3 which did not exceed 2 million for the preceding 4 two years. 5 SENATOR MONTGOMERY: Do you know, 6 for instance, in New York State, how many small 7 businesses there are that fit into that 8 category? 9 SENATOR FARLEY: I have - 10 SENATOR MONTGOMERY: That are 11 minority in particular. 12 SENATOR FARLEY: I have no idea. 13 SENATOR MONTGOMERY: Do we have 14 any record of that? 15 SENATOR FARLEY: I have no idea. 16 I have no idea. I do know it's the only area of 17 growth really in this state. 18 SENATOR MONTGOMERY: In minority 19 businesses? 20 SENATOR FARLEY: No, small 21 businesses. 22 SENATOR MONTGOMERY: Small 23 business. 1 Senator, do you -- is there any 2 indication as to what categories of businesses 3 we would primarily be targeting this - 4 SENATOR FARLEY: No. 5 SENATOR MONTGOMERY: There's no 6 limit, in other words, any -- any small 7 business? 8 SENATOR FARLEY: Your imagination 9 is your opportunity. 10 SENATOR MONTGOMERY: Including 11 retail businesses, services. 12 SENATOR FARLEY: Retail, 13 wholesale. 14 SENATOR MONTGOMERY: Service 15 businesses? 16 SENATOR FARLEY: Yes, any 17 business you've got in mind. 18 SENATOR MONTGOMERY: That's good 19 to know. I didn't see that indicated in here. 20 Senator Farley, on the -- I see 21 where one of the areas that the Small Business 22 Investment Company, the investment company is 23 made up of two-thirds of the -- of the board of 1 people who will be, in fact, investing, putting 2 up the money? 3 SENATOR FARLEY: That's correct. 4 SENATOR MONTGOMERY: So those are 5 either individuals or institutions? 6 SENATOR FARLEY: That's correct. 7 SENATOR MONTGOMERY: O.K. And the 8 other third comes from where, did you say? 9 SENATOR FARLEY: Government; 10 comes from our friend, the government. 11 SENATOR MONTGOMERY: So the state 12 will be putting in another third of the money? 13 SENATOR FARLEY: That's correct. 14 SENATOR MONTGOMERY: And two 15 thirds of the board will consist of the 16 private. 17 SENATOR FARLEY: The private 18 sector. 19 SENATOR MONTGOMERY: And the 20 other third will consist of appointees by the 21 Majority Leader, the Speaker? 22 SENATOR FARLEY: The Governor, 23 the Majority Leader, Senator Ohrenstein -- the 1 Minority Leader, excuse me, Mr. Rappleyea. 2 SENATOR MONTGOMERY: All right. 3 Can we assume then that the two-thirds investors 4 will -- would primarily be people who are 5 already involved in -- in the banking community 6 by and large? 7 SENATOR FARLEY: It's going to be 8 banking institutions that decide to 9 participate. 10 SENATOR MONTGOMERY: So these - 11 in other words we're talking about people who 12 are part of the establishment banking industry 13 by and large? 14 SENATOR FARLEY: We're talking 15 about people who would be making a loan 16 probably. 17 SENATOR MONTGOMERY: O.K. All 18 right. 19 SENATOR FARLEY: They're anxious 20 to participate in this. It's very nice to be 21 able to lend the government's money. 22 SENATOR MONTGOMERY: You - 23 ACTING PRESIDENT KUHL: Senator 1 Farley, you continue to yield? 2 SENATOR MONTGOMERY: Oh, I'm 3 sorry, Senator Farley. Will you yield? 4 ACTING PRESIDENT KUHL: Senator 5 Farley, you continue to yield? 6 SENATOR FARLEY: Yes, I will. 7 ACTING PRESIDENT KUHL: Senator 8 does. 9 SENATOR MONTGOMERY: Senator, on 10 this page, the bill talks about -- I do have a 11 memo, I'm sorry. The bill talks about the fact 12 of the small business, this Small Business In 13 vestment Company will participate in 14 coordination with local -- with other state 15 agencies, and banking -- other banking 16 facilities, science and technology, UDC. Are we 17 -- do we, is that not what the Small Business 18 Centers do now? Is that -- that's what they do 19 primarily? 20 SENATOR FARLEY: Give me that 21 question again. 22 SENATOR MONTGOMERY: You have - 23 this refers to, on page 8, line 40, beginning at 1 line 40, 41, the investment companies will as 2 sist in coordination with assistance from local 3 bankers, local economic development corpora 4 tions, state Department of Economic Development 5 and Job Development Authority. 6 SENATOR FARLEY: That's called 7 spreading the word. 8 SENATOR MONTGOMERY: And do we - 9 we already do that, do we not? 10 SENATOR FARLEY: We like to think 11 we do. 12 SENATOR MONTGOMERY: Yes. 13 SENATOR FARLEY: But what the 14 purpose of that is to get that information out 15 there so the people can participate. 16 SENATOR MONTGOMERY: O.K. The - 17 Senator Farley, I'd just like to ask you 18 regarding -- Mr. President, if I may raise 19 another question with Senator Farley? 20 ACTING PRESIDENT KUHL: Senator 21 Farley, do you continue to yield? 22 SENATOR FARLEY: Yes, sir. 23 ACTING PRESIDENT KUHL: Senator 1 does. 2 SENATOR MONTGOMERY: It says on 3 page 10, Senator Farley, line 3, the corporation 4 may contact -- contract or otherwise affiliate 5 with local development corporations and other 6 local development organizations, including but 7 not limited to not-for-profit corporations 8 established pursuant to Article 9, so forth and 9 so on. Does that mean that, for instance, there 10 is a not-for-profit, and -- me rephrase that. I 11 don't know if it's not-for-profit. 12 There is a community credit union 13 that was recently chartered in my district and 14 one of the activities of that credit union is to 15 function as a local lending entity. It's -- and 16 its board is made up of people who live in the 17 area as well as who are -- who have various 18 areas of expertise, and they do some small 19 business lending primarily - 20 SENATOR FARLEY: Yes, I would 21 think that under that clause that what you speak 22 of, not knowing precisely the -- I think they 23 could work with that community -- with that 1 credit union. 2 SENATOR MONTGOMERY: In other 3 words, can the investment company make loans 4 through that -- that credit union or that 5 community credit union, or how would that work? 6 SENATOR FARLEY: No, they could 7 make it to that credit union, but not through 8 it. 9 SENATOR MONTGOMERY: But it is 10 itself a lending institution. 11 SENATOR FARLEY: Yeah, but I 12 don't think they're participating in it. 13 SENATOR MONTGOMERY: Does it - 14 SENATOR FARLEY: They could work 15 with it, but no, I don't think they could make 16 loans under this. 17 SENATOR MONTGOMERY: So does that 18 credit union now have to compete with the SBIC 19 in terms of access to funding which it then can 20 -- can make loans? 21 SENATOR FARLEY: I guess you 22 could - 23 SENATOR MONTGOMERY: Continue to 1 make loans? 2 SENATOR FARLEY: You could look 3 at it from that perspective, but these are, 4 generally speaking, providing funding to 5 businesses which are viewed too risky by banking 6 institutions. They're -- it's providing loans 7 to people and small businesses that generally 8 can't get loans. I mean if you mean that your 9 -- I think that's a positive thing. 10 I think that your credit union 11 that you're talking about would be delighted to 12 see some of your larger banking institutions 13 making loans to -- to poor people to start a 14 business, don't you? 15 SENATOR MONTGOMERY: Well, they 16 make loans to poor people too; that's the reason 17 for their being. That's what I'm concerned 18 about in terms of this bill. 19 SENATOR FARLEY: Well, I'll tell 20 you, we need more like your credit union then. 21 SENATOR MONTGOMERY: Senator - 22 ACTING PRESIDENT KUHL: Senator 23 Farley, you continue to yield? Senator does. 1 SENATOR MONTGOMERY: Yes, Mr. 2 President. Let me just make a statement on it. 3 Thank you, Senator Farley. 4 ACTING PRESIDENT KUHL: The floor 5 is yours, Senator Montgomery. 6 SENATOR MONTGOMERY: Let me just 7 say that I am very pleased, and I certainly hope 8 that this -- that the results of this bill will 9 be as -- as intended, once all of the small - 10 the minor disagreements are worked out. 11 I would just like to go on 12 record, being on record in saying that up until 13 this point, our attempts in the state have been 14 very, very disappointing to say the least as it 15 relates to trying to direct money, direct access 16 to resources to small businesses, minority 17 business in particular, and part of that is, as 18 I understand it, based on speaking to the state 19 agency people who have been charged with that 20 mission, as well as small business people 21 themselves. 22 Part of the problem is one that 23 the small businesses in our -- that we're 1 talking about, the small business that I'm 2 talking about, minority businesses in my 3 district, are one and two people oftentimes and 4 three people. It's the one guy who is 5 struggling desperately. He's a wonderful 6 designer of hats. He makes his own hats, and he 7 goes out and markets his own hats, and when he 8 sells that bunch -- that batch, then he has to 9 go back and make some more through his own 10 manufacturing entity and what have you. 11 He's -- granted, he needs a lot 12 of assistance, but certainly he does not often 13 fit into the small business category that we're 14 talking about when we say, you know, not more 15 than 6 million and not more than 2 million in 16 the last year. You know, he doesn't begin to 17 fit that. It's one and two businesses who make 18 leather garments and sell a few, would like to 19 expand, people who really are at the very, very, 20 very beginning rudiments of business 21 development. 22 We have not been able to help 23 those people, and I think that's where a lot of 1 the growth can take place if we're able to 2 provide the kind of assistance that is -- that 3 will allow them to grow. There is a mind set by 4 the lending institutions and the people who have 5 grown up in that atmosphere of mistrust, and so 6 we have high risk loan -- revolving loan funds 7 in the state of New York which never make it to 8 the hands of the high risk businesses because 9 the people making the loans have a mind set of 10 the -- that does not include high risk 11 businesses. 12 So I'm afraid that if we're 13 establishing the board two-thirds with people 14 from the industry, from the community where 15 we've experienced the problem already, I'm not 16 sure that they're going to be able to make that 17 flip and be able to accommodate the various 18 nuances of really little bitty businesses that I 19 think about when I say small business. 20 So that certainly is a concern of 21 mine, and I would hope that, as we look at what 22 happens with the funding, I don't know where the 23 funding will go when it's not used, but what 1 we've generally done is that it ends up being 2 eaten up by something else because we blame the 3 victim. The small businesses didn't get it, 4 they didn't get it because they didn't deserve 5 it somehow; they weren't eligible to receive 6 it. The money is still sitting there, we 7 weren't able to lend it. So it goes back into 8 the pot, and it gets redirected, and I -- I'm 9 not able to track it always, and I don't know, I 10 always say it gets stolen by, you know, it's the 11 food of the minnows being stolen by the whales. 12 That happens too often, and I certainly hope 13 that we won't allow that to happen to this 14 program in terms of small business. 15 So, Senator Farley, I commend you 16 but, as you can see, I do have some concerns 17 about it and it's based on having worked very 18 closely, being frustrated for many years with 19 the economic development entities of our state 20 who, with every good intention, do not, in fact, 21 offer assistance to small businesses and the 22 whole issue of the marketing and the coordinat 23 ing and the workshops and all of these little 1 things that supposedly they do with the dog and 2 pony shows with those small business centers. 3 I can tell you in no uncertain 4 terms they do not serve small business people, 5 people who have a bakery shop who need a loan to 6 expand their bakery shop, or who have these 7 kinds of problems do not have the time to go and 8 sit and have a lecture and attend a workshop and 9 travel up and down the state and receive 10 certificates for being the wonderful business 11 person of the year. They just don't have time. 12 They're out there trying to eke out a living, 13 and if we can't figure out how to help those 14 people, then the whole issue of the state 15 helping small businesses is a charade. 16 So I hope this doesn't end up 17 being in that category. 18 Thank you, Mr. President. 19 ACTING PRESIDENT KUHL: Senator 20 Mendez. 21 SENATOR MENDEZ: Senator Farley 22 yield for a question? 23 ACTING PRESIDENT KUHL: Senator 1 Farley, will you yield to a question? Senator 2 does. 3 SENATOR MENDEZ: Senator Farley, 4 about the effect of your bill, the small 5 business investment, small business investment 6 business community will give -- let me start 7 over again. The SBIC will provide businesses 8 monies lending -- would lend money to small 9 businesses throughout the state of New York and 10 the SSBIC will provide loans to small businesses 11 that are located in very distressed or minority 12 or poor areas. 13 O.K. My question along those 14 lines is, if there is a small businessman 15 located or a small businesswoman located in a - 16 in a poor area, would that person have to apply 17 only to the SSBIC or will that person be able to 18 apply - 19 SENATOR FARLEY: No. 20 SENATOR MENDEZ: -- able to apply 21 to both? 22 SENATOR FARLEY: No, no, no, can 23 apply either place. 1 SENATOR MENDEZ: Either one. 2 Good. 3 Secondly, the banks, the banks 4 that are participating in the SBIC or the SSBIC, 5 would they be able to qualify for CRA credit? 6 SENATOR FARLEY: Yes. 7 SENATOR MENDEZ: This is a good 8 bill. It's a good bill because for years and 9 years you have heard all of us here criticizing 10 the banks for red-lining, even after that 11 particular legislation they have not come up to 12 par in terms of -- of doing what they're 13 supposed to do in this area. 14 So that's the only thing that I 15 think is very bad in this bill. I think that 16 this bill should have taken -- that we should 17 have taken notice of the bad track record in 18 this area, in the area of CRA, and then give a 19 credit after a certain period of time when the 20 SSBIC or the SBIC have proven that they have 21 foregone the bad record that up to now they have 22 had in this area with red-lining. 23 That's the only bad, bad point 1 that I see in that bill. Otherwise, Senator 2 Farley, I think that this bill is very badly 3 needed in our communities. I am very happy to 4 say that the businesses in our communities in 5 the poor communities will be able to apply to 6 either of these two financial entities, but the 7 only thing, as I said before, that that is bad 8 here, that the banks do not deserve to be 9 receiving credit, the CRA credit with these new 10 things because of the kind of record that they 11 have had before. 12 I'm so sorry it's there but again 13 I -- I congratulate you, and I think it's a good 14 bill except for that. 15 ACTING PRESIDENT KUHL: Is there 16 any other Senator wishing to - 17 SENATOR FARLEY: If I might, I 18 would like to pass the bill. The Governor's 19 office has called me and wants to talk to me. 20 The Assembly has adjourned after passing the 21 extension which he has no intention -- which he 22 has no intention of signing. 23 I would like to put this to 1 rest. I know that you've got an awful lot of 2 questions. I don't know what the purpose behind 3 these questions is, but I know that you've been 4 asked to take as much time as you can, but I 5 would like to bring some finality to this, my 6 neighbor, Senator Connor. 7 ACTING PRESIDENT KUHL: Senator 8 Connor. 9 SENATOR CONNOR: Will you yield 10 to a question? 11 ACTING PRESIDENT KUHL: Senator 12 Farley, will you yield to a question? Senator 13 does. 14 SENATOR CONNOR: I only have 15 15 or 20 questions, Senator. No, just a couple on 16 the motor vehicle, and that's why I focus on 17 this. 18 SENATOR FARLEY: That's not my 19 area of expertise, you realize that, my fellow 20 Senator. But I'll do the best I can. 21 SENATOR CONNOR: Well, Senator, 22 it's new. If you could explain, I understand 23 there's an arbitration provision in there. 1 SENATOR FARLEY: To settle 2 disputes. 3 SENATOR CONNOR: Right. Now, my 4 question is, who -- that's a good use of an 5 arbitrator. Seriously the -- it's the lessor 6 though, I think, who can select its own internal 7 arbitration -- arbitrator; is that correct? 8 SENATOR FARLEY: I beg your 9 pardon? 10 SENATOR CONNOR: As I understand 11 it, the bill provides an option to the lessor to 12 designate its own internal arbitration procedure 13 and arbitrator, is that correct? 14 SENATOR FARLEY: Yes, that's 15 correct. It can be appealed, but - 16 SENATOR CONNOR: Well, yeah, 17 that's my question. Can that be appealed? 18 SENATOR FARLEY: Yes. 19 SENATOR CONNOR: And if so how, 20 if you could explain that. 21 SENATOR FARLEY: Well, anyway, I 22 think it could be appealed at -- to a lower 23 level court, a small claims court or to -- and 1 on up. 2 SENATOR CONNOR: Well, generally, 3 Senator, isn't it true that when you appeal from 4 an arbitration you have to show that the 5 arbitrator's decision or the arbitrator acted 6 arbitrarily and capriciously in order to 7 overcome? I mean otherwise arbitration is 8 binding. 9 SENATOR FARLEY: That doesn't 10 stop you from appealing, though. 11 SENATOR CONNOR: Well, it makes 12 your appeal short-lived though, Senator. 13 SENATOR FARLEY: I couldn't 14 concur with you more, but - 15 SENATOR CONNOR: Now, in terms of 16 these -- now, I often -- let me proffer my 17 question. I've been seeing these ad's, too good 18 to be true, $300 a month, drive a brand new 19 Cadillac off, no down payment, and then at the 20 end of the ad, there's often -- and since I hit 21 40 I can't read it, but before I was 40 I know 22 the small print used to say, you know, you had 23 to pay so many cents a mile after 8,000 miles 1 and the wear and tear, and so on, and I gather, 2 Senator, the problem with this wear and tear is 3 that people return the car and end up with a 4 very, very large bill for wear and tear which is 5 determined by the lessor. 6 Now, as I understand this bill, 7 isn't it true that it provides that the -- does 8 it provide any remedy for the lessee, I guess? 9 You know, I read in the paper last week about 10 some guy who said, oh, he went out and got his 11 own estimates and they wouldn't even hear about 12 it. What's a person in that situation to do 13 under this bill? 14 SENATOR FARLEY: I guess the 15 whole purpose of the bill is that he could take 16 this model lease home with him and compare it 17 with other leases. It gives them a little bit 18 of comparison shopping. 19 SENATOR CONNOR: O.K. Well, 20 Senator, that was my next question or the answer 21 to my next question which was - 22 SENATOR FARLEY: Then you don't 23 need to ask it. 1 SENATOR CONNOR: No. 2 ACTING PRESIDENT KUHL: Senator 3 Connor, are you asking Senator Farley to 4 continue to yield? 5 SENATOR FARLEY: You're getting 6 me in trouble here. This is the third call from 7 the Governor. 8 ACTING PRESIDENT KUHL: He does, 9 Senator Connor. 10 SENATOR CONNOR: All right. 11 Thank you. You have -- O.K. You say you can 12 take the lease home and study it. Well, you 13 know, I'm a big believer in doing away with all 14 these legalese terms and having plain language, 15 and I know we have adopted "plain language" 16 bills in the past, but I recall you being a 17 staunch supporter of "plain language" bills. 18 The question is, why not require 19 in this bill that the lease be in plain 20 language? You know, some people could take home 21 something with all sorts of legal terms in it 22 and they could study it for a week and it 23 doesn't make it any clearer. 1 SENATOR FARLEY: We put that in 2 one of your proposals and they rejected it out 3 of hand. 4 SENATOR CONNOR: Who is "they," 5 Senator? 6 SENATOR FARLEY: The Assembly. 7 SENATOR CONNOR: They rejected 8 the proposal or the plain language proposal? 9 SENATOR FARLEY: The plain 10 language proposal. 11 SENATOR CONNOR: Well, I'm 12 shocked, Senator. If you had called me, I would 13 have talked to anybody on the Assembly side and 14 urged them to take - 15 SENATOR FARLEY: I will remember 16 that. 17 SENATOR CONNOR: Next time, we're 18 friends you know, Senator, just give a call. 19 Now, back to my question that I 20 -- about the alternative. My real question is 21 on the wear and tear, can the lessee go out and 22 get their own estimates? 23 SENATOR FARLEY: Yes, they can. 1 SENATOR CONNOR: All right. So, 2 now, switching back to the Small Business 3 Investment Corporation, Senator. Switching off 4 of this topic to the Small Business Investment 5 Corporation, I'm just curious, as a member in 6 this body who has been waiting for this banking 7 bill for months and months and months, and we 8 extended it to the end of January and here we 9 are mere hours away from its expiration, just 10 what -- what really is the political dispute 11 about this? When was this provision in your bill 12 in its present language, when was that put on 13 the table? When was that put in the bill, 14 Senator? 15 SENATOR FARLEY: Which provision? 16 SENATOR CONNOR: The provision to 17 which there is no agreement. 18 SENATOR FARLEY: It's been in the 19 agreement I would say since last -- we've had 20 everything on the table asking them to try to 21 in -- be inclusive. I don't think anybody in 22 this chamber, and I can only speak for this 23 chamber, would object to a poor person getting a 1 small business loan, and being excluded simply 2 because they're not a minority, and we have put 3 down economically and socially deprived, we've 4 offered that. It's the Governor's language. We 5 have offered the income tax credit language. We 6 also have offered the economic development 7 zone. 8 It -- it boggles my mind why none 9 of these proposals have been accepted, so we 10 have put in here the earned income tax credit 11 provision that we felt was realistic. All it is 12 is for poor people, working poor people that 13 would maybe like to get a small business loan. 14 That's basically it. 15 We -- every time we had 16 agreement, Senator Connor, we had agreement 17 after agreement after agreement, a new thing was 18 thrown on the table. It was kind of like let's 19 just keep this going on and on and on. 20 SENATOR CONNOR: Now, you, the 21 Senator -- Mr. President, if the Senator would 22 yield. 23 ACTING PRESIDENT KUHL: Senator 1 Farley, do you continue to yield? 2 SENATOR FARLEY: Yes. 3 ACTING PRESIDENT KUHL: Senator 4 does. 5 SENATOR CONNOR: Senator, could 6 you elucidate for me what exactly is the 7 language that you say others -- the other house 8 wishes to have in place of your language? 9 I think you've done a good job in 10 explaining what your different proposals were as 11 to qualifying language. 12 SENATOR FARLEY: Basically, the 13 short version, the Assembly bill would only 14 include minorities, persons who reside in highly 15 distressed areas which is a very exclusive - 16 well, that's not the right word, excluding - 17 it's a very excluding area of New York State. 18 SENATOR CONNOR: Limited. 19 SENATOR FARLEY: "Limited" is a 20 better word, I'm sorry. You're wearing me out 21 here. And persons who reside in neighborhood 22 based alliance communities. That's all. That's 23 all. It does not include poor people. 1 SENATOR CONNOR: Now, that's for 2 the second corporation, right? 3 SENATOR FARLEY: Yes, that's all 4 we're talking about. 5 SENATOR CONNOR: That's all we're 6 talking about. O.K. Thank you, Senator. 7 Mr. President, on the bill. I 8 don't know what it is around here, and I'm not 9 particularly criticizing this house or the other 10 house, but why we always have to be under the 11 gun, why we always have to be down to the final 12 hours on any issue, it seems, any expiration, 13 any sunset, end of session, four days past the 14 budget deadline, Saturday night, 4th of July, 15 there always seems to be that in order to do or 16 to make a reasonable attempt at doing the 17 people's business, these -- these -- this 18 institution of the Legislature takes us down to 19 the wire, forces us to deal with a very complex 20 bill. 21 I mean I -- if my questions to 22 Senator Farley about the leasing provisions 23 weren't the most technically pointed or erudite, 1 it's because we just get down to the wire here 2 and here it is a whole new provision on 3 leasing. All I know about leasing cars is I 4 once did it a number of years ago, and when I 5 took it back, the guy wanted me to pay a lot of 6 money for a couple of dents, and we negotiated 7 it out. 8 But the fact of the matter is we 9 get hit with that. We have all the other 10 banking provisions, many of which have been 11 discussed off and on over the last year. I'm 12 not saying these proposals are a total surprise 13 to anybody. They're not. But when you get a 14 final piece of legislation, Mr. President, it's 15 very important to weigh it as a legislator, it's 16 very important to weigh it. It's very important 17 to contrast, O.K., what's new in here from my 18 point of view and the point of view of my 19 constituents: What do we gain, what do we lose, 20 and it's a balancing. And I'm not suggesting, 21 Mr. President, the people who negotiated, 22 Senator Farley and the people in the Assembly 23 and the Governor's office, naturally as a 1 product of the negotiation they do that 2 balancing, they do a balancing, and they decide 3 they have agreement on whatever dozen or two 4 provisions represent changes in a banking bill. 5 But really, Mr. President, that's 6 the back room negotiating that characterizes the 7 way this Legislature operates. As members, I 8 believe we ought to have an opportunity to study 9 a bill like this and evaluate if the system 10 persists in having this negotiation by a 11 handful, we ought to be able to evaluate what 12 those compromises were, and the way we get down 13 to the final hour, the way it's presented, and I 14 know it was obvious that Senator Farley was 15 under pressure to take some phone calls or 16 something and would like to speed this process, 17 but the fact of the matter is the rules allow us 18 two hours and two hours is barely enough time to 19 digest something like this and also to get feed 20 back. 21 You know, how am I supposed to 22 get feedback from my constituents about their - 23 the effect on them and what their views are 1 about the inevitable compromises that are struck 2 with respect to any but the simplest 3 legislation, and this process doesn't afford us 4 that opportunity. And so now here we are and 5 the main sticking point is a difference in 6 language, albeit an important one I suspect, 7 between the two houses, and now we're told the 8 other house is adjourned for a couple of hours, 9 and I guess we're going to pass this probably 10 and adjourn for a couple of hours and maybe 11 we'll adjourn at the call of the Majority 12 Leader, but I have a feeling we're going to be 13 asked to stick around because while this state 14 has been able to exist for weeks without a 15 budget and this state has seemed to be able to 16 exist for several days without a Tenant 17 Protection Act and we've missed other deadlines 18 and gone, Oh, my goodness, what's it mean that 19 the last two days we haven't had a law on this 20 or that? 21 I really suspect, for some 22 reason, this Legislature is not going to let New 23 York State exist for three minutes without a 1 banking bill, a bank regulation bill, and so I 2 suspect we're in for a long night, and I can 3 only deplore that that's the way we make laws. 4 I don't think it adds to the credibility of the 5 institutions that are supposed to be doing this 6 kind of lawmaking and, you know, I haven't heard 7 from many people in my district who lease 8 vehicles either as lessee or lessors. 9 I don't know how this will affect 10 businesses. I don't know how it will affect, 11 more importantly I suspect in my district, 12 consumers in the leasing business. We just are 13 never given anything but a last minute, Oh, gee, 14 I know you got a lot of good questions but jeez, 15 we ought to hurry up and do this. Something is 16 going to expire. And I don't like -- I've been 17 seeing this for years. But I don't think that's 18 the way we ought to do business, Mr. President. 19 SENATOR GOLD: Mr. President. 20 ACTING PRESIDENT KUHL: Senator 21 Gold. 22 SENATOR GOLD: Yeah, Senator 23 Farley. I have been checking out the memo, and 1 I am curious about one comment that I think you 2 made, and I want to clarify it. In terms -- if 3 you will yield to a question, sir. 4 ACTING PRESIDENT KUHL: Senator 5 Farley, will you yield to a question? 6 SENATOR FARLEY: Yes, I will. 7 ACTING PRESIDENT KUHL: Senator 8 does. 9 SENATOR GOLD: In terms of the 10 financing agency, as it's called, mailing from 11 outside the state and still being considered an 12 in-state issuer of the credit cards, the way I 13 read that, Senator, we are, by that language, 14 authorizing these companies to basically do a 15 large part of their day-to-day business in other 16 states and employ people and we're going to give 17 jobs in other state. Isn't that exactly what's 18 going to happen? 19 SENATOR FARLEY: That's exactly 20 what's not going to happen. 21 SENATOR GOLD: I'd be glad to 22 hear you explain that. 23 SENATOR FARLEY: Yes. You're 1 very specific here on page 13 starting with line 2 30. But basically, Senator Gold, all that 3 allows them to do is to take physically and drop 4 it in a mail box outside the state. It's to 5 prevent theft and fraud and to kind of vary 6 where they mail it from. 7 SENATOR GOLD: In other words, if 8 I understand you, and it makes sense, I just 9 want to make sure I understand it, in other 10 words, Senator, the jobs, all the work would be 11 done in New York State? 12 SENATOR FARLEY: That's correct. 13 SENATOR GOLD: But instead of 14 people who are interested in theft knowing that 15 it always gets deposited in the Elmira post 16 office, that this way they could have a 17 messenger go to Cortland, could go to New 18 Jersey, could go to Vermont, and just put them 19 in those; is that what it is? 20 SENATOR FARLEY: That's exactly 21 it. 22 SENATOR GOLD: All right. I 23 appreciate it, and thank you, and I think it's 1 the last question. The -- the part -- and I'm 2 reading from this memo. 3 It permits charges for the 4 additional services of replacement of stolen 5 cards, replacement of sales slips and all of 6 that. Those are, just so I understand it, 7 situations which you say will make them 8 competitive but will be now increased costs upon 9 the card holder if they need those services. 10 SENATOR FARLEY: I - 11 SENATOR GOLD: In other words, 12 now, those are services that go with the card? 13 SENATOR FARLEY: I gave you that 14 example that they will now be able to charge 15 you, I think, for your fourth lost credit card. 16 SENATOR GOLD: Well, but this 17 also, Senator Farley, and I'm not saying it 18 shouldn't be the law, but I want it on the 19 record, it says for copies of sales slips, 20 monthly statements and other documents not 21 required by federal or state law governing 22 billing disputes. 23 In other words, right now, as I 1 understand it, if you want a copy of a sales 2 slip or whatever, you request it. Under this 3 there may be a charge for it, and I'm not saying 4 it should or should not be, but the way I'm 5 reading this memo - 6 SENATOR FARLEY: That's correct. 7 SENATOR GOLD: All right. So and 8 is -- and, Senator Farley, is that in the 9 existing law that we're codifying or is that in 10 addition to the new - 11 SENATOR FARLEY: That's in the 12 existing law. It -- oh, this is a new law. 13 SENATOR GOLD: Yeah. 14 SENATOR FARLEY: That is not the 15 -- that is not the current situation because 16 banks in other states can charge those fees. 17 SENATOR GOLD: I apologize for 18 that interruption. That is new language. 19 SENATOR FARLEY: Banks in other 20 state, banks that have credit card operations 21 can charge those fees. Whether they do or not 22 depends on the credit card company. It's a very 23 competitive business. 1 SENATOR GOLD: No, I understand. 2 Mr. President, on the bill. 3 ACTING PRESIDENT KUHL: Senator 4 Gold, on the bill. 5 SENATOR GOLD: Yeah. Mr. 6 President, I don't think there's any necessity 7 to -- to be repetitious, and I would like very 8 much to be associated with some of the final 9 remarks made by our new Assistant Minority 10 Leader, Senator Connor. 11 We have tried over the years and 12 when I say "we," I mean all of us -- I'm not 13 saying this as a Democrat/Republican issue. We 14 tried to make some changes in some of the 15 legislative processes, and I would hope that the 16 reason we want to make the changes is because of 17 some philosophy -- philosophical tie that we 18 have to the people who sent us here, and the 19 comment that Senator Connor made about giving 20 people in the districts time for comment is a 21 very, very well taken point. 22 We have in our Constitution a 23 requirement, we can't even act on bills unless 1 they've been on our desks for three legislative 2 days and, obviously, emergencies are taken care 3 of. But it just seems, Senator Farley, that the 4 only -- that we all know there's got to be a 5 better way, but the only way you get it to be a 6 better way is to do it. You know, sometimes I 7 say the only way to do it is to do it. 8 Maybe at some point we just have 9 to all of us stop it. It is ridiculous. This 10 is an important issue and, Senator Farley, your 11 explanations today certainly demonstrate that 12 you are a very knowledgeable person in this 13 field, and you're a good person to be speaking 14 in this field. 15 Our main objection is that you 16 shouldn't be subjected to having to fight on 17 this issue within seven hours of its deadline 18 and then we wind up in a situation where, 19 unfortunately, laws are hard to undo. It's hard 20 to make a law, but it's hard to undo that, and 21 what many of us on this side of the aisle are 22 concerned about is that some place in this 54 23 pages is something that maybe we didn't ask 1 about. 2 You certainly didn't hide it out 3 of any venality, Senator Farley. You tried to 4 be very open on it, but something that adversely 5 will affect people or situations that we care 6 very much about, and then we are stuck literally 7 in the circumstance of trying to undo that with 8 the same complicated three parties, our house, 9 their house and the Governor, and it just isn't 10 -- it isn't a good way to do it. 11 I would hope -- we understand the 12 rush involved in this, and we're going to bring 13 this to a vote, I assume, very, very, very soon, 14 but I really would hope that it's the end of 15 this. It just makes no sense. I look around 16 this room, and I can tell you as I look at every 17 face, I see people I respect, and somehow at 18 sometimes I say to myself, how could these 60 19 other people who I respect, the 200 -- the 150 20 in the other house, the Governor, and all his 21 staff, I look in their faces, I respect you all 22 and we can not find a solution so that we deal 23 with important issues in a more businesslike and 1 dignified way. It makes no sense to me. 2 Thank you, Mr. President. 3 ACTING PRESIDENT KUHL: Is there 4 any other Senator wishing to be heard on this 5 bill? 6 (There was no response.) 7 Read the last section. 8 THE SECRETARY: Section 67. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 ACTING PRESIDENT KUHL: Senator 14 Montgomery to explain her vote. 15 SENATOR MONTGOMERY: Yes, I would 16 like to explain my vote, Mr. President. 17 I'm going to vote for this 18 legislation because I think obviously we have to 19 pass a bill, and I want to be responsible in 20 that respect, but I do want to be on record as 21 it relates to hopefully the memorandum of 22 agreement that is called for in the legislation, 23 and I would hope that it is considered -- that 1 it has considered some of the issues that I am 2 raising here. 3 One is the size of small 4 businesses. I think that really needs a very 5 careful look and a more definitive 6 classification for businesses in our state, and 7 the amount and the size of the loans is also 8 very important. The ability to -- to make small 9 loans is sometimes very critical for small 10 businesses, and that is not an -- an area that 11 is dealt with oftentimes. 12 The representation of 13 shareholders, I think, is extremely important 14 and I do hope that the MOU will somehow indicate 15 that that absolutely be reflective of the small 16 businesss that we hope to provide assistance 17 for. People from the small business community, 18 people from the minority community, women, 19 people with a very wide range of background and 20 experiences and not just the financial 21 institution community representation as we are 22 inclined -- as it is inclined to be reflective, 23 white and male primarily. 1 There is no targeting that is 2 indicated, and I know this is a -- it's a curse 3 word to many people, but it's -- I think we must 4 say it. We must in our own minds understand the 5 implications of it, that when you say minority, 6 that in and of itself is very fluid, but then 7 when you add all of the other -- the other 8 criteria for being eligible to be assisted, if 9 you don't say at least X percent of this program 10 should be directed to minority businesses, it 11 will not happen. 12 So I want to be on record for 13 supporting that concept. I want it to be done 14 within the context of the federal and state 15 legal aspect of targeting or setting goals or 16 somehow establishing that a percentage of the 17 assistance or particularly the loans shall be 18 directed to minority businesses and, just to 19 lastly be very parochial about this, there is a 20 very successful kind of community credit union 21 in my district that was started by people who 22 live in that community; it's Bedford-Stuyvesant 23 where we have no banks, and the reason that the 1 credit union was started was because that is a 2 community where banks have essentially fled and 3 left us without financial institutions. 4 And so I don't want them to now 5 be faced with the possibility of an entity that 6 I'm voting for coming in and supplanting them 7 and any other credit union that exists. There 8 may be one or two others in the city of New 9 York, because they came in when no one else was 10 willing to invest in certain communities, in 11 certain districts. 12 So with that, I say, Senator 13 Farley, I do hope that we're able to address 14 some of those extremely important issues because 15 without an economic engine we can't hope to 16 generate the kinds of jobs for the people in the 17 community that this bill wishes to address. 18 ACTING PRESIDENT KUHL: Senator 19 Montgomery, how do you vote? 20 SENATOR MONTGOMERY: I vote yes. 21 ACTING PRESIDENT KUHL: Senator 22 Montgomery in the affirmative. Announce the 23 results. 1 Senator Dollinger to explain his 2 vote. 3 SENATOR DOLLINGER: Mr. 4 President, I want to commend the Banking 5 Committee again on this bill. This is a 6 difficult bill and a difficult concept to deal 7 with. I will, again, however, echo the comments 8 of my colleague, Senator Montgomery, in that we 9 are stepping down the road to increase the 10 availability of funds to those who are in 11 economic distress. 12 I appreciate the chairman's 13 explanation of the broadening of that definition 14 which this bill encompasses. My hope is that we 15 will continue to look at this problem of whether 16 or not the broadening of this definition is 17 achieving the laudable goal that the chairman of 18 the committee has articulated and my colleague, 19 Senator Montgomery, has articulated to bring 20 financial capital to those who can use it as a 21 form of entrepreneurship, increase job oppor 22 tunities in our distressed areas, broaden the 23 base of wealth, generate new wealth in the 1 communities that desperately need it in this 2 state. 3 My hope is, and I don't know 4 whether the bill provides it, I haven't read all 5 the details, my hope is that this will require 6 not only a reporting requirement for the success 7 of these small business banks and the 8 specialized small business banks, but also that 9 those reports come back to the Legislature so 10 that we can evaluate whether these steps which 11 appear to be going in the right direction are 12 absolutely in reality moving us in that 13 direction. 14 The last thing I would just 15 mention, I asked a question about the 16 incorporation concept. I've done some quick 17 research on incorporation. I hope we don't run 18 into a problem by incorporating both federal 19 statutes and federal regulation into this act. 20 It's something I have some concern about in 21 doing some quick research. 22 I understand the intention is to 23 rely on the federal principles with respect to 1 earned income credits. I hope we don't run into 2 a problem with that. I can't quite tell based 3 on my research, but I certainly see our 4 intentions not to create any constitutional 5 problem under this bill, but instead to simply 6 use a system of federal accounting as a means to 7 treat part of the targeted population and 8 facilitate the delivery of improved capital and 9 availability of capital to people in distress. 10 So I hope we don't create a 11 problem with that. Maybe that's something we 12 can talk about again, but I will vote in favor 13 of this bill, Mr. President. I think it's a 14 good step, and I hope we keep our eyes on it to 15 make sure that it goes in the direction we want 16 it. 17 ACTING PRESIDENT KUHL: Record 18 Senator Dollinger in the affirmative. 19 Senator Onorato to explain his 20 vote. 21 SENATOR ONORATO: Thank you, Mr. 22 President. 23 Senator Farley, I want to con 1 gratulate you on a job very, very well done 2 under very trying and difficult situations, and 3 I personally want to thank you for including me 4 in on many of your discussions. 5 While we passed an earlier 6 straight out extender bill earlier this session, 7 last session, this particular bill that we're 8 voting on today is much more inclusive, 9 including the auto leasing bill which was not 10 part of the original bill, and there's a lot 11 more in the banking bill that all of us should 12 be appreciative, and I certainly want to assure 13 my colleagues that it has not limited the scope 14 of the banking institution to lend money to the 15 small businesses in our community, but it has 16 expanded it. 17 It has, as every one loves to use 18 the phrase, leveled the ball playing field. I 19 think our particular version levels it a lot 20 more than the Assembly version, and I am urging 21 my colleagues before this day is over beyond - 22 on both sides not only of our house but in the 23 other house, to move forward with a deregulation 1 bill that we can all live with. 2 I intend to vote in the affirm 3 ative. 4 ACTING PRESIDENT KUHL: Record 5 Senator Onorato in the affirmative. Announce 6 the results. 7 SENATOR GOLD: Hold on a second. 8 ACTING PRESIDENT KUHL: Clerk 9 will announce the results. 10 THE SECRETARY: Ayes 52. 11 ACTING PRESIDENT KUHL: The bill 12 is passed. 13 Senator Present, what's your 14 desire? 15 SENATOR PRESENT: Thank you, Mr. 16 President. Let's take up the non-controversial 17 calendar, please. 18 ACTING PRESIDENT KUHL: The clerk 19 will call the non-controversial Third Reading 20 Calendar. 21 THE SECRETARY: On page 4, 22 Calendar Number 13, by Senator Levy, Senate Bill 23 Number - 1 SENATOR GOLD: Lay aside, 2 please. 3 ACTING PRESIDENT KUHL: Lay the 4 bill aside. 5 THE SECRETARY: Calendar Number 6 25, by Senator Bruno, Senate Bill Number 1744-B, 7 an act to amend the Executive Law. 8 ACTING PRESIDENT KUHL: Last 9 section. 10 THE SECRETARY: Section 3. This 11 act - 12 SENATOR GOLD: Lay aside, 13 please. 14 ACTING PRESIDENT KUHL: Lay the 15 bill aside. 16 THE SECRETARY: Calendar Number 17 29, by Senator Bruno, Senate Bill Number 4615-B, 18 an act to amend the Executive Law. 19 ACTING PRESIDENT KUHL: Last 20 section. 21 THE SECRETARY: Section 3. This 22 act shall take effect September 1st. 23 ACTING PRESIDENT KUHL: Call the 1 roll. 2 (The Secretary called the roll. ) 3 THE SECRETARY: Ayes 52. 4 ACTING PRESIDENT KUHL: The bill 5 is passed. 6 THE SECRETARY: Calendar Number 7 30, by Senator Bruno, Senate Bill Number 4616 8 B, an act to amend the Economic Development 9 Law. 10 ACTING PRESIDENT KUHL: Last 11 section. 12 THE SECRETARY: Section 2. This 13 act shall take effect immediately. 14 ACTING PRESIDENT KUHL: Call the 15 roll. 16 (The Secretary called the roll. ) 17 THE SECRETARY: Ayes 52. 18 ACTING PRESIDENT KUHL: The bill 19 is passed. 20 THE SECRETARY: Calendar Number 21 31, by Senator Bruno, Senate Bill Number 4617 22 B, an act to amend the State Administrative 23 Procedure Act. 1 SENATOR GOLD: Lay it aside, 2 please. 3 ACTING PRESIDENT KUHL: Lay the 4 bill aside. 5 THE SECRETARY: Calendar Number 6 47, by Senator Johnson. 7 SENATOR GOLD: Lay it aside, 8 please. 9 ACTING PRESIDENT KUHL: Lay the 10 bill aside. 11 THE SECRETARY: Calendar Number 12 49, by Senator Marino, Senate Bill Number 13 3237-A. 14 SENATOR GOLD: Lay it aside, 15 please. 16 ACTING PRESIDENT KUHL: Lay the 17 bill aside. 18 THE SECRETARY: Calendar Number 19 54, by Senator Volker, Senate Bill Number 20 4944-A, an act to amend the Civil Rights Law and 21 the Criminal Procedure Law. 22 SENATOR GOLD: Yeah. Lay it 23 aside. 1 ACTING PRESIDENT KUHL: Lay the 2 bill aside. 3 THE SECRETARY: Calendar Number 4 55, by Senator Skelos, Senate Bill Number 1156, 5 an act to amend the Executive Law and the Penal 6 Law. 7 SENATOR GOLD: Lay it aside, 8 please. 9 ACTING PRESIDENT KUHL: Lay the 10 bill aside. 11 THE SECRETARY: Calendar Number 12 63, by Senator Kuhl, Senate Bill Number 537, an 13 act to amend the Agriculture and Markets Law. 14 ACTING PRESIDENT KUHL: Last 15 section. 16 THE SECRETARY: Section 3. This 17 act shall take effect immediately. 18 ACTING PRESIDENT KUHL: Call the 19 roll. 20 (The Secretary called the roll. ) 21 THE SECRETARY: Ayes 52. 22 ACTING PRESIDENT KUHL: The bill 23 is passed. 1 THE SECRETARY: Calendar Number 2 64, by Senator Kuhl, Senate Bill Number 4654, 3 Agriculture and Markets Law, in relation to 4 agricultural assessments. 5 ACTING PRESIDENT KUHL: Last 6 section. 7 THE SECRETARY: Section 2. This 8 act shall take effect immediately. 9 ACTING PRESIDENT KUHL: Call the 10 roll. 11 (The Secretary called the roll. ) 12 THE SECRETARY: Ayes 52. 13 ACTING PRESIDENT KUHL: The bill 14 is passed. 15 THE SECRETARY: Calendar Number 16 66, by Senate Kuhl, Senate Bill Number 3336-A, 17 Agriculture and Markets Law. 18 ACTING PRESIDENT KUHL: Last 19 section. 20 THE SECRETARY: Section 2. This 21 act shall take effect immediately. 22 ACTING PRESIDENT KUHL: Call the 23 roll. 1 (The Secretary called the roll. ) 2 THE SECRETARY: Ayes 52. 3 ACTING PRESIDENT KUHL: The bill 4 is passed. 5 THE SECRETARY: Calendar number 6 67, by Senator Kuhl, Senate Bill Number 3413-A, 7 an act to amend the Agriculture and Markets 8 Law. 9 SENATOR GOLD: Lay it aside, 10 please. 11 ACTING PRESIDENT KUHL: Lay the 12 bill aside. 13 THE SECRETARY: Calendar Number 14 68, by Senator Kuhl, Senate Bill Number 4426-B, 15 Agriculture and Markets Law. 16 ACTING PRESIDENT KUHL: Last 17 section. 18 THE SECRETARY: Section 2. This 19 act shall take effect immediately. 20 ACTING PRESIDENT KUHL: Call the 21 roll. 22 (The Secretary called the roll. ) 23 THE SECRETARY: Ayes 52. 1 ACTING PRESIDENT KUHL: The bill 2 is passed. 3 THE SECRETARY: Calendar Number 4 69, by Senator Tully, Senate Bill Number 26-A, 5 an act to amend the Public Health Law. 6 ACTING PRESIDENT KUHL: Last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 THE SECRETARY: Ayes 52. 14 ACTING PRESIDENT KUHL: The bill 15 is passed. 16 THE SECRETARY: Calendar Number 17 70, by Senator Daly, Senate Bill Number 3137, an 18 act to amend the Public Health Law, in relation 19 to imitation controlled substances. 20 ACTING PRESIDENT KUHL: Last 21 section. 22 THE SECRETARY: Section 2. This 23 act shall take effect immediately. 1 ACTING PRESIDENT KUHL: Call the 2 roll. 3 (The Secretary called the roll. ) 4 THE SECRETARY: Ayes 52. 5 ACTING PRESIDENT KUHL: The bill 6 is passed. 7 THE SECRETARY: Calendar Number 8 72, by Senator Tully, Senate - 9 SENATOR GOLD: Lay it aside. 10 ACTING PRESIDENT KUHL: Lay the 11 bill aside. 12 THE SECRETARY: Calendar Number 13 74, by Senator Johnson, Senate Bill Number 1357, 14 an act to amend the Real Property Tax Law. 15 ACTING PRESIDENT KUHL: Last 16 section. 17 THE SECRETARY: Section 2. This 18 act shall take effect immediately. 19 ACTING PRESIDENT KUHL: Call the 20 roll. 21 (The Secretary called the roll. ) 22 THE SECRETARY: Ayes 52. 23 ACTING PRESIDENT KUHL: The bill 1 is passed. 2 THE SECRETARY: Calendar Number 3 75, by Senator Skelos, Senate Bill Number 1422 4 B, an act to amend the Economic Development 5 Law. 6 ACTING PRESIDENT KUHL: Last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 THE SECRETARY: Ayes 52. 14 ACTING PRESIDENT KUHL: The bill 15 is passed. 16 THE SECRETARY: Calendar Number 17 77, by Senator Johnson, Senate Bill Number 1703 18 A, an act to amend the Real Property Tax Law. 19 ACTING PRESIDENT KUHL: Last 20 section. 21 THE SECRETARY: Section 2. This 22 act shall take effect immediately. 23 ACTING PRESIDENT KUHL: Call the 1 roll. 2 (The Secretary called the roll. ) 3 THE SECRETARY: Ayes 52. 4 ACTING PRESIDENT KUHL: The bill 5 is passed. 6 THE SECRETARY: Calendar Number 7 78, by Senator Cook, Senate Bill Number 1654-A, 8 Education Law. 9 ACTING PRESIDENT KUHL: Last 10 section. 11 THE SECRETARY: Section 2. This 12 act shall take effect immediately. 13 ACTING PRESIDENT KUHL: Call the 14 roll. 15 (The Secretary called the roll. ) 16 THE SECRETARY: Ayes 52. 17 ACTING PRESIDENT KUHL: The bill 18 is passed. 19 THE SECRETARY: Calendar Number 20 79, by Senator Farley, Senate Bill Number 21 2014-A, Education Law, in relation to efficiency 22 study grants. 23 ACTING PRESIDENT KUHL: Last 1 section. 2 THE SECRETARY: Section 2. This 3 act shall take effect immediately. 4 ACTING PRESIDENT KUHL: Call the 5 roll. 6 (The Secretary called the roll. ) 7 THE SECRETARY: Ayes 52. 8 ACTING PRESIDENT KUHL: The bill 9 is passed. 10 THE SECRETARY: Calendar Number 11 81, by Senator Daly, Senate Bill Number 4794-A, 12 an act to amend the Education Law. 13 ACTING PRESIDENT KUHL: Last 14 section. 15 THE SECRETARY: Section 2. This 16 act shall take effect immediately. 17 ACTING PRESIDENT KUHL: Call the 18 roll. 19 (The Secretary called the roll. ) 20 THE SECRETARY: Ayes 51, nays 21 one, Senator Maltese recorded in the negative. 22 ACTING PRESIDENT KUHL: The bill 23 is passed. 1 THE SECRETARY: Calendar Number 2 82, by Senator Kuhl, Senate Bill Number 6215-A, 3 Education Law, in relation to school building 4 aid. 5 ACTING PRESIDENT KUHL: There's a 6 local fiscal impact note at the desk. Last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 THE SECRETARY: Ayes 52. 14 ACTING PRESIDENT KUHL: The bill 15 is passed. 16 THE SECRETARY: Calendar Number 17 83, by Senator Bruno, Senate Bill Number 2186, 18 an act to amend the Real Property Tax Law. 19 SENATOR DOLLINGER: Can we have 20 an explanation? 21 ACTING PRESIDENT KUHL: Lay the 22 bill aside. 23 THE SECRETARY: Calendar Number 1 86, by Senator Levy, Senate Bill Number 74, an 2 act to amend the Highway Law and the Executive 3 Law. 4 ACTING PRESIDENT KUHL: Last 5 section. 6 THE SECRETARY: Section 2. This 7 act shall take effect immediately. 8 ACTING PRESIDENT KUHL: Call the 9 roll. 10 (The Secretary called the roll. ) 11 THE SECRETARY: Ayes 52. 12 ACTING PRESIDENT KUHL: The bill 13 is passed. 14 THE SECRETARY: Calendar Number 15 87, by Senator Levy, Senate Bill Number 78, an 16 act to amend the General Business Law. 17 ACTING PRESIDENT KUHL: Last 18 section. 19 THE SECRETARY: Section 2. This 20 act shall take effect immediately. 21 ACTING PRESIDENT KUHL: Call the 22 roll. 23 (The Secretary called the roll. ) 1 THE SECRETARY: Ayes 51, nays 2 one, Senator DeFrancisco recorded in the 3 negative. 4 ACTING PRESIDENT KUHL: The bill 5 is passed. 6 THE SECRETARY: Calendar Number 7 88, by Senator Levy, Senate Bill Number 191, an 8 act to amend the Vehicle and Traffic Law. 9 ACTING PRESIDENT KUHL: Last - 10 SENATOR GOLD: Lay aside. 11 ACTING PRESIDENT KUHL: Lay the 12 bill aside. 13 THE SECRETARY: Calendar Number 14 89, by Senator Levy, Senate Bill Number 192, an 15 act to amend the Highway Law. 16 ACTING PRESIDENT KUHL: There's a 17 local fiscal impact note at the desk. Last 18 section. 19 THE SECRETARY: Section 2. This 20 act shall take effect immediately. 21 ACTING PRESIDENT KUHL: Call the 22 roll. 23 (The Secretary called the roll. ) 1 THE SECRETARY: Ayes 52. 2 ACTING PRESIDENT KUHL: The bill 3 is passed. 4 THE SECRETARY: Calendar Number 5 90, by Senator Stafford, Senate Bill Number 6 2778, an act to amend the Vehicle and Traffic 7 Law, in relation to the operation of school 8 buses. 9 ACTING PRESIDENT KUHL: Last 10 section. 11 THE SECRETARY: Section 2. This 12 act shall take effect immediately. 13 ACTING PRESIDENT KUHL: Call the 14 roll. 15 (The Secretary called the roll. ) 16 THE SECRETARY: Ayes 51, nays - 17 ayes 50, nays two, Senators Daly and DeFrancisco 18 recorded in the negative. 19 ACTING PRESIDENT KUHL: The bill 20 is passed. 21 THE SECRETARY: Calendar Number 22 93, by Senator Bruno, Senate Bill Number 3945, 23 an act to amend the Vehicle and Traffic Law. 1 ACTING PRESIDENT KUHL: Last 2 section. 3 THE SECRETARY: Section 2. This 4 act shall take effect immediately. 5 ACTING PRESIDENT KUHL: Call the 6 roll. 7 (The Secretary called the roll. ) 8 THE SECRETARY: Ayes 52. 9 ACTING PRESIDENT KUHL: The bill 10 is passed. 11 THE SECRETARY: Calendar Number 12 94, by Senator Levy, Senate Bill Number 4850, an 13 act to amend the Highway Law, in relation to 14 expenditures for repair. 15 ACTING PRESIDENT KUHL: Last 16 section. 17 THE SECRETARY: Section 2. This 18 act shall take effect immediately. 19 ACTING PRESIDENT KUHL: Call the 20 roll. 21 (The Secretary called the roll. ) 22 THE SECRETARY: Ayes 52. 23 ACTING PRESIDENT KUHL: The bill 1 is passed. 2 THE SECRETARY: Calendar Number 3 95, by Senator Johnson, Senate Bill Number 661, 4 an act to amend the Environmental Conservation 5 Law. 6 ACTING PRESIDENT KUHL: Last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 THE SECRETARY: Ayes 52. 14 ACTING PRESIDENT KUHL: The bill 15 is passed. 16 THE SECRETARY: Calendar Number 17 96, by Senator Johnson, Senate Bill Number 1303, 18 Environmental Conservation Law. 19 ACTING PRESIDENT KUHL: Last 20 section. 21 THE SECRETARY: Section 2. This 22 act shall take effect immediately. 23 ACTING PRESIDENT KUHL: Call the 1 roll. 2 (The Secretary called the roll. ) 3 THE SECRETARY: Ayes 52. 4 ACTING PRESIDENT KUHL: The bill 5 is passed. 6 THE SECRETARY: Calendar Number 7 97, by Senator Daly, Senate Bill Number 6067-A, 8 Environmental Conservation Law. 9 ACTING PRESIDENT KUHL: Last 10 section. 11 THE SECRETARY: Section 2. This 12 act shall take effect immediately. 13 ACTING PRESIDENT KUHL: Call the 14 roll. 15 (The Secretary called the roll. ) 16 THE SECRETARY: Ayes 52. 17 ACTING PRESIDENT KUHL: The bill 18 is passed. 19 THE SECRETARY: Calendar Number 20 98, by Senator Johnson, Senate Bill Number 6371, 21 an act to amend the Environmental Conservation 22 Law. 23 ACTING PRESIDENT KUHL: Last 1 section. 2 THE SECRETARY: Section 2. This 3 act shall take effect immediately. 4 ACTING PRESIDENT KUHL: Call the 5 roll. 6 (The Secretary called the roll. ) 7 THE SECRETARY: Ayes 51, nays 1, 8 Senator LaValle recorded in the negative. 9 ACTING PRESIDENT KUHL: The bill 10 is passed. 11 THE SECRETARY: Calendar Number 12 99, by Senator Johnson, Senate Bill Number 2475, 13 an act to amend the Banking Law and the Tax 14 Law. 15 ACTING PRESIDENT KUHL: Last 16 section. 17 THE SECRETARY: Section 2. This 18 act shall take effect immediately. 19 ACTING PRESIDENT KUHL: Call the 20 roll. 21 (The Secretary called the roll. ) 22 THE SECRETARY: Ayes 52. 23 ACTING PRESIDENT KUHL: The bill 1 is passed. 2 THE SECRETARY: Calendar Number 3 100, substituted earlier today, by member of the 4 Assembly Farrell, Assembly Bill Number 7782-A, 5 an act to amend the Banking Law. 6 ACTING PRESIDENT KUHL: Last 7 section. 8 THE SECRETARY: Section 2. This 9 act shall take effect immediately. 10 ACTING PRESIDENT KUHL: Call the 11 roll. 12 (The Secretary called the roll. ) 13 THE SECRETARY: Ayes 52. 14 ACTING PRESIDENT KUHL: The bill 15 is passed. 16 THE SECRETARY: Calendar Number 17 102, by Senator Farley, Senate Bill Number 1616, 18 an act to amend the Public Officers Law, in 19 relation to the power of the state legislators. 20 ACTING PRESIDENT KUHL: Last 21 section. 22 THE SECRETARY: Section 2. This 23 act shall take effect immediately. 1 ACTING PRESIDENT KUHL: Call the 2 roll. 3 (The Secretary called the roll. ) 4 THE SECRETARY: Ayes 52. 5 ACTING PRESIDENT KUHL: The bill 6 is passed. 7 THE SECRETARY: Calendar Number 8 103, by Senator Stafford, Senate Bill Number 9 6384, an act to amend the Tax Law. 10 SENATOR DOLLINGER: Lay aside. 11 ACTING PRESIDENT KUHL: Lay the 12 bill aside. 13 THE SECRETARY: Calendar Number 14 104, Senator Libous moves to discharge the 15 Committee on Investigations, Taxation and 16 Government Operations from Assembly Bill Number 17 9231-B and substitute it for the identical 18 Calendar Number 104. 19 ACTING PRESIDENT KUHL: 20 Substitution is ordered. Last section. 21 THE SECRETARY: Section 2. This 22 act shall take effect immediately. 23 ACTING PRESIDENT KUHL: Call the 1 roll. 2 (The Secretary called the roll. ) 3 THE SECRETARY: Ayes 52. 4 ACTING PRESIDENT KUHL: The bill 5 is passed. 6 THE SECRETARY: Excuse me. Ayes 7 51, nays one, Senator Dollinger recorded in the 8 negative. 9 ACTING PRESIDENT KUHL: The bill 10 is passed. 11 THE SECRETARY: Calendar Number 12 105, by Senator Saland, Senate Bill Number 2377, 13 an act to amend the Family Court Act. 14 ACTING PRESIDENT KUHL: Last 15 section. 16 THE SECRETARY: Section 2. This 17 act shall take effect immediately. 18 ACTING PRESIDENT KUHL: Call the 19 roll. 20 (The Secretary called the roll. ) 21 THE SECRETARY: Ayes 52. 22 ACTING PRESIDENT KUHL: The bill 23 is passed. 1 THE SECRETARY: Calendar Number 2 106, by Senator Saland, Senate Bill Number 2378, 3 an act to amend the Social Services Law. 4 ACTING PRESIDENT KUHL: Last 5 section. 6 THE SECRETARY: Section 2. This 7 act shall take effect immediately. 8 ACTING PRESIDENT KUHL: Call the 9 roll. 10 (The Secretary called the roll. ) 11 THE SECRETARY: Ayes 52. 12 ACTING PRESIDENT KUHL: The bill 13 is passed. 14 THE SECRETARY: Calendar Number 15 107, by Senator Saland, Senate Bill Number 3379, 16 an act to amend the Family Court Act. 17 ACTING PRESIDENT KUHL: Last 18 section. 19 THE SECRETARY: Section 2. This 20 act shall take effect immediately. 21 ACTING PRESIDENT KUHL: Call the 22 roll. 23 (The Secretary called the roll. ) 1 THE SECRETARY: Ayes 52. 2 ACTING PRESIDENT KUHL: The bill 3 is passed. 4 THE SECRETARY: Calendar Number 5 108, by Senator Libous, Senate Bill Number 4473 6 A, an act to amend the Social Services Law. 7 ACTING PRESIDENT KUHL: Last 8 section. 9 THE SECRETARY: Section 2. This 10 act shall take effect immediately. 11 ACTING PRESIDENT KUHL: Call the 12 roll. 13 (The Secretary called the roll. ) 14 THE SECRETARY: Ayes 52. 15 ACTING PRESIDENT KUHL: The bill 16 is passed. 17 THE SECRETARY: Calendar Number 18 109, by Senator Saland, Senate Bill Number 4868, 19 an act to amend the Family Court Act. 20 ACTING PRESIDENT KUHL: Last 21 section. 22 THE SECRETARY: Section 2. This 23 act shall take effect immediately. 1 ACTING PRESIDENT KUHL: Call the 2 roll. 3 (The Secretary called the roll. ) 4 THE SECRETARY: Ayes 52. 5 ACTING PRESIDENT KUHL: The bill 6 is passed. 7 Senator Present, that completes 8 the non-controversial calendar. 9 SENATOR STAFFORD: Mr. 10 President. 11 ACTING PRESIDENT KUHL: Senator 12 Stafford. 13 SENATOR STAFFORD: I ask for 14 unanimous consent to be recorded as abstaining 15 on Calendar Number 110, Senate Print 2106. 16 ACTING PRESIDENT KUHL: Without 17 objection, so ordered. 18 Senator Present. 19 SENATOR PRESENT: Mr. President, 20 let's take up the controversial calendar, 21 please. 22 ACTING PRESIDENT KUHL: Clerk 23 will call the controversial Third Reading 1 Calendar. 2 THE SECRETARY: On page 4, 3 Calendar Number 13, by Senator Levy. 4 SENATOR PRESENT: Lay the bill 5 aside for the day, please. 6 ACTING PRESIDENT KUHL: Lay the 7 bill aside temporarily. 8 THE SECRETARY: Calendar Number 9 25, by Senator Bruno, Senate Bill Number 1744 10 B, an act to amend the Executive Law. 11 SENATOR GOLD: Senator Bruno 12 yield to a question? 13 ACTING PRESIDENT KUHL: Senator 14 Bruno, will you yield to a question from Senator 15 Gold? 16 SENATOR BRUNO: Yes. 17 ACTING PRESIDENT KUHL: Senator 18 does. 19 SENATOR GOLD: Senator, this is a 20 bill that we've had before and it's passed 21 overwhelmingly but my notes indicate a memo in 22 1992 from DEA -- DEC. Are there any recent 23 memos that you know of? 1 SENATOR BRUNO: Not that I have 2 in my possession, Senator. 3 SENATOR GOLD: Last section. 4 ACTING PRESIDENT KUHL: Last 5 section. 6 THE SECRETARY: Section 2. This 7 act shall take effect immediately. 8 ACTING PRESIDENT KUHL: Call the 9 roll. 10 (The Secretary called the roll. ) 11 THE SECRETARY: Ayes 51, nays 1, 12 Senator Ohrenstein recorded in the negative. 13 ACTING PRESIDENT KUHL: The bill 14 is passed. 15 THE SECRETARY: Calendar Number 16 31, by Senator Bruno, Senate Bill Number 4617 17 B, an act to amend the State Administrative 18 Procedure Act. 19 SENATOR GOLD: Hold on. 20 ACTING PRESIDENT KUHL: Senator 21 Gold. 22 SENATOR GOLD: Could we have a 23 short explanation, please? 1 ACTING PRESIDENT KUHL: Senator 2 Bruno, explanation has been requested. 3 SENATOR BRUNO: Yes, Mr. 4 President. This bill we have passed before in 5 this chamber. It relates to negotiated 6 rulemaking by state agencies. And, very simply, 7 if a state agency is going to establish 8 regulations, new regulations on business, or 9 substantially change existing regulations, they 10 must issue a notice and the office of ORMA, 11 Regulatory and Management Assistance, would set 12 up an arbitrator who would arbitrate the 13 rulemaking before a committee of the industry or 14 business to be regulated and the state agency. 15 And this is of no real cost to the state, but 16 what it really does is allow businesses to have 17 some input before they are overly regulated by a 18 state agency. 19 And what happens now, after the 20 fact, they read about it. They get issued these 21 regulations; and then, if they want relief, they 22 end up in court. They end up with attorneys. 23 They end up negotiating from weakness. So we're 1 trying to get in front of the process. 2 And I can tell you that the 3 Governor, in his wisdom, has seen fit to 4 institute something like this in the agencies 5 now, but the difference in what he's done and in 6 what we're proposing is that he says, when you 7 are going to negotiate, the agency has total 8 control. The agency sets the arbitrator. The 9 agency establishes the rules. The agency has 10 the reps. They say who will serve on the 11 committee. And after the whole process is over, 12 they don't have to accept one single thing that 13 was proposed to them. 14 This legislation becomes law - 15 and I encourage you to do it -- once agreement 16 is reached by this arbitrator and the agency, 17 then what they agree on must be included in the 18 regs as they go forward, and the arbitrator also 19 can encourage the agency not to go forward if, 20 after discussions, it appears it's not in the 21 best interests of the business community or 22 those to be regulated. 23 ACTING PRESIDENT KUHL: Senator 1 Gold. 2 SENATOR GOLD: Will Senator yield 3 to a question? 4 SENATOR BRUNO: Yes. 5 ACTING PRESIDENT KUHL: Senator 6 Bruno, will you yield to a question? 7 SENATOR BRUNO: Yes, Mr. 8 President. 9 ACTING PRESIDENT KUHL: Senator 10 yields. 11 SENATOR GOLD: Senator Bruno, an 12 agency decides that it wants to have a rules 13 change under your bill I assume they start out 14 with some kind of a notice of publication. 15 SENATOR BRUNO: Yes. 16 SENATOR GOLD: All right. And 17 who does the notice go to? 18 SENATOR BRUNO: The Office of 19 Regulatory and Management Assistance, who then 20 notifies, puts out a notice to the industry to 21 be regulated that this process is going to take 22 place and invites them to reach them to indicate 23 an interest in serving on a committee, and the 1 management assistance group sets the arbitrator 2 in place from an established list of people who 3 are professionals in this work, so they are 4 objective about what's going on. 5 SENATOR GOLD: Senator yield to a 6 question? 7 SENATOR BRUNO: Yes, Mr. 8 President. 9 ACTING PRESIDENT KUHL: Senator 10 yields. 11 SENATOR GOLD: Senator, when you 12 take some of the large industries that have 13 industry groups and well-known representatives, 14 I can understand what you said so far, but 15 supposing you have a -- I don't know whether you 16 want to call it an industry, but you have people 17 who are doing business in a certain area, and 18 there is no filed lobbyist or huge organization, 19 what is the -- how do the people in that 20 business -- how are they made aware of the 21 proposed regulations? 22 SENATOR BRUNO: How are they made 23 aware? 1 SENATOR GOLD: Yes. In other 2 words, who gets notified in such a situation? 3 In other words, let's say there's a Petroleum 4 Council. Well, I guess you notify the Petroleum 5 Council. I'm not worried about the insurance 6 industry, but there are, I don't know, maybe 7 cleaning stores, I don't know, that may not have 8 a huge group that represents them, as such. 9 What does the management office do? Who do they 10 contact? How do they get the notice out? 11 SENATOR BRUNO: Well, if these 12 are major rules, major regulations that are 13 going to affect an industry -- take the chemical 14 industry -- I'm not sure that they have 15 lobbyists here that represent them as an 16 industry, but they are on file at the Secretary 17 of State's Office as to what their business is 18 and what their interests are. So the Office of 19 Management Assistance would reach out into the 20 industry through the records that are available 21 for any company that's incorporated here in the 22 state and creates a notice - 23 SENATOR GOLD: All right. So - 1 SENATOR BRUNO: -- and just 2 invites participants. 3 SENATOR GOLD: So I understand it 4 properly, it's the office's obligation to 5 determine what is fair in terms of who they 6 contact in order to stir up interest if it's out 7 there. 8 SENATOR BRUNO: Or the state 9 agency. If it's EnCon and they know who the 10 rules are going to affect, then they would be 11 helpful with Management Assistance in getting 12 the word out to those people. 13 SENATOR GOLD: Well, Senator, you 14 brought up EnCon. Supposing that there are new 15 environmental regulations and it involves people 16 who own certain types of land. These may be 17 Average citizens that own land and they are 18 going to now be affected. How does the notice 19 get out to these people? 20 SENATOR BRUNO: Well, the 21 Governor presently has a procedure in place that 22 I described that isn't very effective and 23 doesn't work. How does the Governor notify? 1 Through the State Registry, and they put out the 2 notice in that way. The only difference is - 3 and, Senator, what I'm saying is that there is 4 an attempt to do this now, but it's meaningless. 5 So they basically say we publish that we're 6 going to establish these rules. We invite you 7 to negotiate with us. Okay. But we, in 8 essence, end up negotiating with ourselves 9 because we're in total control of the process; 10 and after we get through, we don't have to pay 11 any attention to what you've had to say. 12 So that's very discouraging to 13 businesses, but the notices go out presently, 14 and there has been some exchange, but the 15 results are poor. 16 SENATOR GOLD: Mr. President. 17 SENATOR BRUNO: And I believe, by 18 the way - 19 SENATOR GOLD: Sorry. 20 SENATOR BRUNO: I'm sorry, but, 21 Mr. President, the Governor in his "State of the 22 State" message indicated that he wants to 23 strengthen this process. He talks about an 1 ambassadorship program where there will be 2 ambassadors with each state agency -- and we 3 have legislation that relates to that -- to be 4 the representative of the groups that are 5 regulated within that agency. So this is the 6 direction that even the Governor's office seems 7 to think makes sense, so there isn't anything 8 extraordinary about this. We're only trying to 9 expedite the process because the business 10 community desperately needs relief in this 11 state. 12 ACTING PRESIDENT KUHL: Senator 13 Gold. 14 SENATOR GOLD: Yes. Senator 15 yield to a question? 16 SENATOR BRUNO: Yes. 17 SENATOR GOLD: But on the point 18 we're talking about, "how notice gets out," I 19 don't want to be facetious in any way, but I 20 think what you're telling me is that the 21 Governor has a process for notice which is 22 insufficient, but that's the process, so you're 23 adopting that process. 1 SENATOR BRUNO: No, the notice 2 is - 3 SENATOR GOLD: I'm not talking 4 about the hearing part of the process but the 5 notice part. 6 SENATOR BRUNO: No, the notice 7 gets out, and that's sufficient. It's the 8 process that is insufficient that we are trying 9 to correct. So the notice that the Governor's 10 office presently puts out through his state 11 agencies is fine. 12 SENATOR GOLD: Mr. President. On 13 the bill. 14 ACTING PRESIDENT KUHL: Senator 15 Gold on the bill. 16 SENATOR GOLD: We've had this 17 bill before; and besides myself, Senator 18 Ohrenstein and Senator Leichter, it seems to 19 have been a good one to vote for by most of 20 you. It's supported I think by the National 21 Federation of Independent Businesses. 22 My problem with it, Senator, is 23 really very simple. We are given the 1 responsibility of governing. The agencies are 2 given delegated responsibility from the agency, 3 and the process that Senator Bruno described 4 indicates, as he says, that the agency reaches 5 out but that they have the power. 6 The way I read your bill, first 7 of all, the notice is really going to go to the 8 fat cats, the big people. Those are the 9 industry people who are known and who register. 10 Certainly, when you deal with legislation that 11 may affect smaller people or more diverse 12 interests, I'm sure the notice provisions are 13 such that they are not going to be affected 14 under your bill or the Governor's, but what you 15 are basically saying, the philosophy of your 16 bill, Senator Bruno, which I understand, is that 17 if people are going to be affected by 18 legislation then they should be part of the 19 process, the rulemaking process. 20 The problem with that, Senator 21 Bruno, is that everybody I represent is affected 22 by income taxes; but before we negotiate it, we 23 don't bring them in and have 18 million, 17 1 million people voting on income taxes. We have 2 the responsibility. They elect us, and then we 3 get together and we deal with it, and that goes 4 with every single issue. 5 And what we do, Senator, is we 6 set up regulatory agencies that are supposed to 7 regulate an industry, being fair to those people 8 in the industry and also protecting the public 9 interest which is their ultimate responsibility; 10 and if they are not doing it well, then we 11 should step in. If a Governor is not doing it 12 well with his agencies, we step in. 13 But the concept, the basic 14 philosophical concept that before an agency can 15 involve itself in rulemaking, which is an 16 extension of legislative authority -- and, by 17 the way, must be very carefully done -- that the 18 industry involved will then be a partner and it 19 just legislatively and governmently in my 20 opinion makes no sense. I realize that based 21 upon last year's vote I am in a vast minority, 22 but I think that's an important point to make 23 because I think philosophically there is a major 1 problem with the bill. 2 ACTING PRESIDENT KUHL: Senator 3 Bruno. 4 SENATOR BRUNO: Mr. President. 5 On the bill. 6 And thank you, Senator Gold, and 7 I know you are very sincere in your observations 8 and your comments. 9 Let me just point out a major 10 distinction in your understanding, and it is 11 probably my inability to communicate accurately 12 and well what this bill does. 13 When you talked about legislators 14 legislate and you can't open up the process to 15 17 million people, you're right. That's what we 16 are elected for. But regulators regulate, and 17 they aren't elected by anybody. They are 18 appointed and many times 18 tiers down, and they 19 take it upon themselves to regulate businesses 20 by their own thought process not by legislation, 21 and the public has no way of getting back at 22 those regulators other than to submit or seek 23 legal relief which is expensive. 1 Now, the bottom line is this, Mr. 2 President. Four out of ten jobs lost in this 3 country in the last four years are from New York 4 State. When surveys have been done of 5 businesses in this state -- and this is 6 important that we hear this finally - 7 seventy-two percent of all of the small 8 businesses in this state said that they think 9 that government is hostile to their business. 10 Forty-nine percent of them said they would leave 11 if they could. Now, that's not what we in 12 government ought to be all about. We shouldn't 13 have businesses out there feeling that we in 14 government are hostile to those businesses. 15 I, Mr. President, don't think 16 it's an accident that, since 1980, we have led 17 the country in job loss. Had we only kept pace 18 in New York State with the rest of the country, 19 1.2 million more people would be employed in New 20 York State today. Think about that. If we had 21 kept pace with the rest of the country since 22 1980, 1.2 million more people would be employed 23 in this state. In the last three years since 1 1990, the country has recovered their job loss. 2 We in this state employ 8-1/2 percent less 3 people than we did four years ago. We are not 4 recovering with the rest of the country. 5 It is this kind of 6 overregulation, oversimplification that has been 7 stifling business, smothering business, closing 8 businesses, driving them out of this state; and 9 all we keep hearing from the second floor it's 10 everybody in the world's fault except ours. 11 Now, I assume part of the 12 responsibility because I have been serving here 13 while a lot of this has been happening, but I'm 14 not the chief executive of this state, and 15 somebody has to be held accountable, and I think 16 it's about time that we stopped just using words 17 and that we start doing something to lead this 18 state out of the recession and join the rest of 19 the country in job recovery because people that 20 are unemployed out there, people that are on 21 welfare, have a right to work and we in 22 government should support those people and not 23 encumber them by overregulating the businesses 1 that keep them from employing people in this 2 state. 3 SENATOR GOLD: Mr. President. 4 ACTING PRESIDENT KUHL: Senator 5 Gold. 6 SENATOR GOLD: Yes. I will be 7 kind and I'll save my campaign speech for the 8 re-election of Senator Cuomo until another time 9 because, Senator Bruno, I know why our state has 10 problems and everybody knows why it has 11 problems, and that's why you no longer have a 12 Republican in the White House in Washington, but 13 let's not get involved in that. 14 The fact of the matter is, 15 Senator Bruno, if I were a member of the 16 Majority in this house and I had real political 17 ambition, real political ambition -- you can 18 have your leaderships and you can have your 19 Finance Committee -- there is a place I would 20 want to be, and Senator Present knows I have 21 said this for years. I would want to be the 22 chair of the Administrative Regulations Review 23 Commission because that was created not only by 1 joint resolution but then by statute to do 2 something -- to do something. And what was it 3 supposed to do? It was supposed to create a 4 mechanism whereby the Legislature -- a process 5 whereby the Legislature would finally have some 6 real oversight power. Let's see what the 7 agencies are doing. Let's analyze this agency 8 and that one. And if they are overregulating in 9 this area, we're going to cut back because we 10 all understand what the law is. 11 The law is simple. An agency may 12 not legislate. They may only take a grant of 13 authority from the Legislature and do some 14 rulemaking within the law making that we have 15 done; right? And, therefore, when I hear all of 16 the arguments on the other side of the aisle 17 about how the agencies are going way past that, 18 here was the chance. 19 Not only did we set up an 20 Administrative Regulations Review Commission but 21 because nobody likes to talk to each other we 22 wind up with two of them. Statute didn't say 23 it. But the Republicans do their thing in this 1 house. The Democrats in the Assembly do their 2 thing. We wind up with two of them. 3 Well, it's been a long time now. 4 I think I may be still the only original member 5 that's on that commission, but it's been a long 6 time now. And what have we done? Well, we do 7 things. And under the chairmanship of Senator 8 Present -- I think Senator Sears may have had it 9 for a while and Senator Cook. We have done some 10 things. But I'm not talking treason here. We 11 have the ability, the responsibility to do 12 massive overseeing into that area. 13 Now, that's different than your 14 bill which says, "I don't want to oversee it. I 15 just want the business community to think or 16 know that I like them, so I'm going to make them 17 a partner." And now before you can have an 18 agency exercise regulatory authority, granted it 19 by you -- by you! -- you are going to tell them 20 that they must sit down with the people being 21 regulated and get their consent. Well, that is 22 crazy. 23 SENATOR BRUNO: Will you yield? 1 SENATOR GOLD: In a minute. In a 2 minute, and I will yield, certainly. 3 You know, we are all very 4 sophisticated in this room, and we all 5 understand that if you run for office you got to 6 say you're against taxes and you got to say 7 you're against this and say you're against that, 8 and how you vote on the floor of the Senate 9 doesn't seem to matter much. But be fair. 10 At least let's look each other in 11 the eye and be honest and fair about it. There 12 isn't one law in the State of New York enacted 13 in the last twenty years or more that gives 14 rulemaking authority to an agency that didn't 15 receive the approval of you, the Republicans in 16 this house. You've had the majority. You can 17 structure that language as narrowly as you want 18 so that every agency must stay within these very 19 narrow guidelines and protect the consumers and 20 protect the business community. I can only 21 assume since I am looking at some very 22 distinguished people on the other side who are 23 very bright that you have structured that in a 1 way that you thought was accurate and would do 2 the job. If you didn't think its job is being 3 done, that's what you've got the Administrative 4 Regulations Review Commission for. 5 Now, that's a far cry, Senator 6 Bruno, than giving away the store. And in all 7 respect to you, who I do respect, and I 8 understand your philosophy, I think that it's a 9 huge jump and it's a jump too far. 10 SENATOR BRUNO: Mr. President. 11 Will Senator Gold stand for a question? 12 SENATOR GOLD: Yes, sir. 13 ACTING PRESIDENT KUHL: He will. 14 SENATOR BRUNO: Senator, Senator 15 Johnson was refreshing my memory, and I am 16 asking you. I ask if you would recall that in 17 the "State of the State" by this Governor in '93 18 that he proposed just the kind of thing that's 19 on the floor here today? Do you remember that, 20 Senator? 21 SENATOR GOLD: No. No, Senator, 22 I don't have the speech. 23 SENATOR BRUNO: Okay. 1 SENATOR GOLD: And I can say to 2 you -- I can say to you, Senator, that speeches 3 are language and principles. Bills are bills. 4 If you're telling me there is a Governor's bill 5 that does this, I will be glad to take a look at 6 that as the Governor's bill. 7 Except, I'll tell you something. 8 If the Governor proposes what you have in your 9 bill, I would be -- certainly in a small 10 minority, I'm sure, but one of those who would 11 say philosophically it's wrong. 12 SENATOR BRUNO: And, Senator, you 13 are very few times wrong? 14 SENATOR GOLD: Me? 15 SENATOR BRUNO: You, yes. 16 Philosophically or otherwise - 17 SENATOR GOLD: I don't know. 18 When was I wrong? 19 SENATOR BRUNO: -- and I respect 20 that. I want to ask if you think that this bill 21 requires the consent of those to be regulated 22 before a regulation can be enacted? 23 SENATOR GOLD: The way that I 1 understand your explanation of your legislation, 2 your legislation would place upon those being 3 regulated what I believe to be an inordinate 4 amount of power into the process. I believe 5 that the current situation which gives them 6 notice and invites their participation and takes 7 from them the information that they have to give 8 is a lot different than giving them a vote into 9 a process. And I think that giving them a vote 10 into a governmental process goes too far. 11 SENATOR BRUNO: Thank you, 12 Senator Gold. 13 And I just want to correct 14 because, again, I have trouble, sometimes, being 15 clear because this is a complicated process. 16 This -- if this became law, it 17 does not mandate that the input from those to be 18 regulated must become part of the law or the 19 regulation. It doesn't do that at all. It 20 simply says that those to be regulated will have 21 some input in the process. That's what it 22 says. It doesn't say that their input must be 23 accepted. So it simply opens up the process and 1 makes those to be regulated feel as if they are 2 not just being dictated to, but they have 3 something to say about the process. 4 Thank you. 5 ACTING PRESIDENT KUHL: Senator 6 Stavisky. 7 SENATOR STAVISKY: Would the 8 sponsor yield? 9 ACTING PRESIDENT KUHL: Senator 10 Bruno, do you yield? 11 SENATOR BRUNO: Yes. 12 ACTING PRESIDENT KUHL: Senator 13 does. 14 SENATOR STAVISKY: Senator, I 15 wanted to ask you this question. When this bill 16 was presented to us previously, did it have a 17 provision defining consensus of the committee as 18 two-thirds of the members of the committee? 19 SENATOR BRUNO: My recollection 20 is that it did, Senator. Two-thirds of the 21 committee that meets must consent in the 22 regulation going forward as a recommendation. 23 That represents a consensus. When two-thirds of 1 the committee agrees, that represents a 2 consensus and that is recommended to the 3 agency. The agency can accept or deny. 4 SENATOR STAVISKY: Senator Bruno, 5 given that definition of a consensus, do you 6 feel that we should have a two-thirds approval 7 of any bill that is approved by the Senate of 8 the State of New York? 9 SENATOR BRUNO: Well, as you 10 know, Senator, there are some bills on this 11 floor that do require a two-thirds vote. 12 SENATOR STAVISKY: I know, but 13 I'm talking about a general rule. 14 SENATOR BRUNO: No, I don't, 15 Senator. 16 SENATOR STAVISKY: It seems to me 17 that you are imposing a higher standard for 18 consensus, Senator Bruno, and I regret that I 19 didn't recall this provision in the earlier 20 vote. If you say that it was in there, in the 21 earlier vote, I will accept that. 22 But we should not impose upon 23 those involved in rulemaking a higher standard 1 of agreement than we ourselves are prepared to 2 accept. 3 I heard the conversation on an 4 earlier bill where there was the question, "If 5 you do not like the decision, you can go to 6 arbitration." I have often felt that maybe we 7 should go to arbitration between the Senate and 8 the Assembly, when we can't even get a consensus 9 at times when only a single, simple majority is 10 needed. If we in the Legislature, professional 11 legislators, can not get a consensus, then maybe 12 we need arbitration procedures, and maybe we 13 ought to impose the same kind of standard to our 14 own deliberations when we fail to reach 15 agreement with the other house. Maybe there is 16 something lacking in both houses, and a 17 compulsory arbitration procedure should resolve 18 the differences between the Senate and the 19 Assembly. And throw the Governor in there, 20 also. We shouldn't leave him outside. 21 I think you are establishing here 22 in this proposed rulemaking procedure too high a 23 standard of consensus. Consensus has always 1 been, with few exceptions in this chamber -- you 2 are absolutely right. There are certain bills 3 that require a two-thirds approval or 60 percent 4 approval. We are establishing here a flawed 5 definition of consensus. 6 Consensus means in general 7 agreement not an extraordinary agreement, the 8 kind that you would need for a constitutional 9 amendment. We are not asking the regulators to 10 amend the Constitution of the State of New 11 York. We are asking them according to your 12 procedure to come up with a consensus. 13 And I believe that if I had noted 14 this previously, I guess I would have joined 15 Gold, Leichter, and Ohrenstein in their negative 16 vote. And with the consensus defined at 17 two-thirds, I think I'm going to join them this 18 time to. 19 ACTING PRESIDENT KUHL: Senator 20 Wright. 21 SENATOR WRIGHT: Mr. President. 22 On the bill. 23 I think it's important to point 1 out that when we are discussing negotiated 2 rulemaking the whole emphasis is to ensure that 3 the voice of the regulated community is heard in 4 the process. And while we certainly hear that 5 voice when we enact legislation, and that's our 6 responsibility as elected officials, I don't 7 share your confidence in the agencies doing 8 likewise. 9 And as chair of the ARC, I have 10 had numerous examples related to me where, in 11 fact, the agencies don't listen to the regulated 12 community, and they impose additional burdens on 13 that community. They impose additional costs on 14 the regulated community, and that in turn has 15 cost jobs and raised the cost of doing business 16 in this state. 17 And if you have any occasion to 18 talk to the business community in this state, 19 and it's not limited to the business community, 20 if you have occasion to talk to local 21 governments, they will tell you the same thing 22 about the regulatory impact and what it's doing 23 in this state. So it's very important that, in 1 fact, we have an additional oversight, a 2 control, if you will, in this process when we 3 are dealing with the agencies, because, 4 unfortunately, the ARC does not have veto 5 power. 6 The ARC does not have the ability 7 to veto a regulation that we believe exceeds the 8 statute, that we believe goes beyond and the 9 agency takes substantially beyond the authority 10 of this Legislature. We, in turn, have enacted 11 legislation and proposed legislation over the 12 past year that addresses a number of those 13 concerns, ten of those bills joined with by 14 members in the Assembly and sent to the 15 Governor. 16 So, clearly, regulatory control 17 is an issue recognized by both houses, 18 recognized by the executive branch and an issue 19 that we need to move ahead on. 20 I don't put the faith in the 21 agencies. I think there needs to be the voice 22 of the regulated community, and heard, 23 particularly when you talk about the standard of 1 consensus. I would agree if those individuals 2 in the agencies were elected, they could work to 3 a lower standard, but they in fact are not. 4 They do not have the input. They are appointed 5 officials and, accordingly, should achieve a 6 higher concensus in terms of working on the 7 issue of regulations, and that is what it's all 8 about, ensuring participation, ensuring that the 9 regulated community has their voice heard; that 10 when regulations are looked at, they can be 11 implemented effectively. They can be 12 implemented and enforced effectively. 13 That's the whole point of 14 negotiated rulemaking, to create a more level 15 playing field so we're not simply relying on the 16 expertise of agencies but we're relying on the 17 people who continue to do business in this state 18 and their expertise. And on the basis of that, 19 I would encourage my colleagues to support the 20 bill. 21 ACTING PRESIDENT KUHL: Senator 22 Stavisky. 23 SENATOR STAVISKY: Senator Wright 1 yield for a question? 2 ACTING PRESIDENT KUHL: Senator 3 Wright, will you yield? 4 SENATOR WRIGHT: Certainly. 5 ACTING PRESIDENT KUHL: Senator 6 yields. 7 SENATOR STAVISKY: Would you 8 apply the same standard, the two-thirds 9 consensus, to other groups within the 10 population? For example, consumers who are 11 affected by regulations where rate increases are 12 given, should consumers be tallied and, 13 therefore, unless there is a two-thirds vote by 14 a committee in which consumers are represented 15 equally, there would be no rate increase in the 16 utilities? 17 SENATOR WRIGHT: There is a 18 mechanism for review of the utility rate 19 increases. In terms of regulations that affect 20 the consumers, this statute would apply equally 21 to them. They would be identified as having 22 participation in a particular rule that would 23 adversely affect the consumer, and they would be 1 part of that negotiating process achieving the 2 same degree of consensus. 3 So we're talking apples and 4 oranges in terms of the examples that you are 5 utilizing. 6 SENATOR STAVISKY: I didn't hear 7 a clear yes or no to your answer. What about 8 employees? After all, sometimes we impose 9 settlements upon employees in the private as 10 well as the public sector. Should we have a 11 consensus of two-thirds, including the employee 12 representatives, when we deny to the public 13 employees, for example, a benefit that they wish 14 and we decide that that benefit is not now - 15 not supportable in terms of a public policy in 16 the state at a given moment? Would you extend 17 that to the working people as well as to the 18 business people at two-thirds consensus 19 definition? 20 SENATOR WRIGHT: Oh, I think 21 there, in fact, are numerous examples that we 22 can identify where there should be a super 23 majority -- in fact, there are in statute where 1 additional majorities are required dependent 2 upon a particular circumstance. 3 You know, there are many who 4 advocate when taxes are being raised, when 5 constitutional debt limits are being modified, 6 there should, in fact, be super majorities, and 7 I think those are issues that we have bills 8 introduced we would like to see you also 9 address. 10 SENATOR STAVISKY: Again, I 11 didn't hear a - 12 ACTING PRESIDENT KUHL: Senator 13 Stavisky, do you -- excuse me, Senator Stavisky. 14 SENATOR STAVISKY: Yes, sir. 15 ACTING PRESIDENT KUHL: Do you 16 wish Senator Wright to yield to you, sir? 17 SENATOR STAVISKY: I want him to 18 continue to yield until the questioning is 19 over. 20 I did not hear a clear yes or no 21 to that question, and I think that if you are 22 going to give a special benefit to business, 23 then be fair across the board. Give that 1 special benefit of consensus, consultation to 2 consumers whom we do represent, remember, and to 3 people who work for us in government or work for 4 others in the private sector. 5 I don't see the clear willingness 6 when there is regulation that imposes a burden 7 upon other groups besides business. I don't see 8 a willingness to accept that single standard. 9 I'm not pressing for this. It may be a very 10 good idea. 11 But if you believe that the super 12 majority is needed, then let it be a super 13 majority across the board no matter whose ox is 14 being gored. There may be environmental people 15 who would like to be consulted with a super 16 majority before economic interests betray the 17 environmental concerns and needs of the State of 18 New York. 19 Be cautious when you impose a new 20 standard in participatory democracy. Make 21 certain that standard cuts evenly across the 22 board and that it not benefits one sement of the 23 population to the detriment of others. 1 ACTING PRESIDENT KUHL: Is there 2 any other Senator who wishes to be heard on this 3 bill? 4 (There was no response.) 5 Clerk will read the last section. 6 THE SECRETARY: Section 2. This 7 act shall take effect on the first day of 8 September. 9 ACTING PRESIDENT KUHL: Call the 10 roll. 11 (The Secretary called the roll.) 12 ACTING PRESIDENT KUHL: Announce 13 the results. 14 THE SECRETARY: Those recorded in 15 the negative on Calendar Number 31 are Senators 16 Galiber, Gold, Ohrenstein and Stavisky. Ayes 17 48. Nays 4. 18 ACTING PRESIDENT KUHL: The bill 19 is passed. 20 THE SECRETARY: Calendar Number 21 47, by Senator Johnson, Senate Bill Number 2372, 22 an act to amend the Penal Law. 23 ACTING PRESIDENT KUHL: Senator 1 Johnson, an explanation has been asked for by 2 Senator Gold. 3 SENATOR JOHNSON: Mr. President. 4 This bill makes it illegal to possess an obscene 5 sexual performance by a child or a sexual 6 performance by a child makes this a class E 7 misdemeanor. This bill has been debated three 8 years prior, very interesting debates. 9 The fact is that the Supreme 10 Court has held it legal to pass this type of 11 law. Several years ago, 27 states had passed 12 this law. I think there are several other 13 states who since have joined, passed a similar 14 law making it illegal to possess this material 15 which is of interest to pedophiles primarily, 16 used to show to children to entice them into 17 doing similar sexual acts. 18 And I feel the majority in this 19 house have felt in the past that this should be 20 illegal to possess this. The only way to stop 21 the production of this material is to stop the 22 end market for it, and this is a good way, I 23 feel, to do that. 1 Senator Gold? 2 SENATOR GOLD: Mr. President. 3 ACTING PRESIDENT KUHL: Senator 4 Gold. 5 SENATOR GOLD: Yeah, Senator 6 Johnson, I'd just like to ask you one question 7 because I think you made a misstatement, and I 8 just want to - 9 SENATOR JOHNSON: Really? 10 SENATOR GOLD: You said it makes 11 it an E misdemeanor. It's an E felony. 12 SENATOR JOHNSON: An E felony, 13 yes, of course. I have been reading it so many 14 times, it's all going around in my head. 15 SENATOR GOLD: No problem. No 16 problem. 17 SENATOR JOHNSON: It's a felony, 18 yes, that's correct. 19 SENATOR GOLD: Mr. President. 20 ACTING PRESIDENT KUHL: Senator 21 Gold on the bill. 22 SENATOR GOLD: As Senator Johnson 23 has pointed out, this has been debated a number 1 of times. And I would like to point out with 2 regard to that debate that we now have laws in 3 this state which make it illegal to be involved 4 in kiddie porn. 5 This bill does nothing along 6 those lines. This talks about possession of a 7 document. It isn't concerned about when it was 8 ever created, whether the people involved in it 9 could have been dead for 200 years, or whatever, 10 and we've had this whole debate. 11 Senator Connor and myself and 12 Senator Leichter and Montgomery and Ohrenstein, 13 Paterson, Santiago, Smith, Stavisky and Waldon 14 have voted against it in the past. 15 Last section. 16 ACTING PRESIDENT KUHL: Read the 17 last section. 18 THE SECRETARY: Section 2. This 19 act shall take effect on the first day of 20 November. 21 ACTING PRESIDENT KUHL: Call the 22 roll. 23 (The Secretary called the roll.) 1 THE SECRETARY: Those recorded in 2 the negative on Calendar Number 47 are Senators 3 Galiber, Gold, Ohrenstein, Santiago, Smith 4 Stavisky and Waldon. Ayes 45. Nays 7. 5 ACTING PRESIDENT KUHL: The bill 6 is passed. 7 Senator Smith, are you asking to 8 be recognized to explain your vote? 9 SENATOR SMITH: No, Mr. 10 President. I think the vote has been counted. 11 I would ask unanimous consent to be recorded in 12 the negative on Calendar Number 31. 13 ACTING PRESIDENT KUHL: Without 14 objection, so ordered. 15 SENATOR SMITH: Thank you, sir. 16 THE SECRETARY: Calendar Number 17 49, by Senator Marino, Senate Bill Number 3237A, 18 an act to amend the Criminal Procedure Law. 19 SENATOR GOLD: Mr. President. 20 ACTING PRESIDENT KUHL: Senator 21 Gold. 22 SENATOR GOLD: Yes. This bill we 23 had last year, also, and I just wanted to remind 1 Senators Leichter and Markowitz and Ohrenstein 2 and Santiago that they voted in the negative, 3 and that it was opposed last year by the Civil 4 Liberties Union on the HIV testing issue and by 5 the Gay Men's Health Crisis. 6 ACTING PRESIDENT KUHL: Senator 7 Dollinger has asked for an explanation of the 8 bill. 9 Senator Volker. 10 SENATOR VOLKER: Mr. President. 11 This is a bill that, as I think Senator Gold 12 explained briefly, is called the Rape Victims 13 Services Act of 1994, which basically sets up a 14 series of provisions relating to everything from 15 addressed -- the address of a victim to 16 statewide telephone services for rape victims, 17 for evidence kits involving sexual offense 18 evidence kits, provides a provision in here for 19 improved prosecution programs at local defense 20 attorney -- or local prosecutors. 21 It sets up a whole series of 22 programs. In fact, let me just say to you that 23 this is something that, personally, I feel very 1 strongly about; that I think it's really a 2 crying shame that we have not been able to come 3 to an agreement over the last couple years on a 4 bill that passed here the other day sponsored by 5 Senator DiCarlo and this bill in relation to the 6 crime of rape. 7 I am extremely hopeful that 8 before this session is out that we will develop 9 an agreement with the Assembly on the issue of 10 rape services and on the issue of increasing 11 penalties in rape crimes. 12 If there is anything further that 13 I can explain, I will be happy to do it. 14 There's a whole series of provisions. This 15 bill, by the way, passed the Assembly. 16 Essentially, this is the same bill that passed 17 the Senate, rather, last year; and I believe 18 essentially the same bill passed the year 19 before. There have been some fairly minor 20 changes, but it's essentially the same bill. 21 Senator Dollinger. 22 SENATOR DOLLINGER: Mr. 23 President. 1 ACTING PRESIDENT KUHL: Senator 2 Dollinger. 3 SENATOR DOLLINGER: Will the 4 sponsor yield to a question? 5 SENATOR VOLKER: Sure. 6 ACTING PRESIDENT KUHL: Senator 7 Volker yields. 8 SENATOR DOLLINGER: Senator, I 9 know we have been through this bill in 10 committee. I just wanted to follow up an issue 11 that came up in committee. Your counsel 12 provided me with some additional information 13 with respect to the HIV testing requirement. 14 SENATOR VOLKER: Right. 15 SENATOR DOLLINGER: As I 16 understand it, again, through you, Mr. 17 President, the bill permits an HIV test to be 18 conducted at the request of the victim - 19 SENATOR VOLKER: Right. 20 SENATOR DOLLINGER: -- upon 21 arrest and arraignment. Is that correct? 22 SENATOR VOLKER: Upon arrest and 23 arraignment at the request of the victim, and it 1 provides for a test of the defendant. That's 2 correct. 3 SENATOR DOLLINGER: Again, 4 through you, Mr. President. Is that test 5 mandatory? The Court can order that test of the 6 defendant? 7 SENATOR VOLKER: I think what 8 happens, if I'm not mistaken, is that upon the 9 request that he have a hearing. The only 10 difference, I think, is that since the statute 11 here provides for a test, then I would think 12 clearly the hearing would -- the defense 13 attorney would then be in a position where he 14 would have to show why the test should not be 15 provided to the -- to the victim. 16 But it's true that that is the 17 process for which -- if this bill were passed. 18 And, by the way, I assume -- I think you are 19 aware that because the State of New York does 20 not provide for testing of such victims, we 21 stand to lose a considerable amount of money 22 under the drug laws or under the present - 23 federal drug money, I'm sorry -- because of the 1 fact that we don't comply with federal standard 2 that say that we should allow victims to be able 3 to have testing in cases such as this. 4 SENATOR DOLLINGER: Again, 5 through you, Mr. President, if Senator Volker 6 will yield? 7 ACTING PRESIDENT KUHL: Senator 8 Volker, will you continue to yield? 9 SENATOR VOLKER: Sure. 10 ACTING PRESIDENT KUHL: He does. 11 SENATOR DOLLINGER: Again, just 12 so I make sure I understand this. Is the event 13 that triggers the ability of the Court to 14 mandate the test the arraignment or a finding of 15 probable cause of a felony indictment? What is 16 the precursor determination by the Court in 17 order to order the defendant, putative 18 defendant, to undergo the test? 19 SENATOR VOLKER: Probable cause. 20 In other words, there has to be a showing of 21 evidence of a crime before the person can ask 22 for the testing of the defendant by the victim. 23 SENATOR DOLLINGER: Again, 1 through you, Mr. President. Is it anticipated 2 that that showing of probable cause would be 3 either an indictment for a felony or a hearing 4 on the probable cause if there were a 5 misdemeanor allegation, or does it not apply to 6 misdemeanors? 7 SENATOR VOLKER: It would just be 8 a felony, and it would be a conviction or a 9 hearing or an indictment on a felony, but it 10 would not be in the case of a misdemeanor. It 11 would only be in the case of a felony. 12 SENATOR DOLLINGER: Again, 13 through you, Mr. President. Senator Volker, 14 just one other question. My understanding - 15 and I reviewed the materials that your counsel 16 provided and they were helpful. My 17 understanding is that the federal law currently 18 requires that the testing for HIV only be 19 conducted upon conviction and not prior to 20 conviction. Is that correct? 21 SENATOR VOLKER: We believe 22 that's correct, Senator. That's right. Yes. 23 We're not saying, by the way, Senator, that this 1 provision here is the absolute necessary 2 provision in order to comply with the law. This 3 probably goes a little beyond what is necessary, 4 admittedly, but some sort of testing provision 5 if it is not based by the Legislature and signed 6 by the Governor will create a real problem under 7 the federal rules. 8 SENATOR DOLLINGER: On the bill, 9 Mr. President. 10 ACTING PRESIDENT KUHL: Senator 11 Dollinger on the bill. 12 SENATOR DOLLINGER: First of all, 13 on the bill, and then I have, I believe, a 14 series of amendments at the desk. 15 On the bill itself, the issue of 16 the HIV testing is a very important one. I 17 appreciate the chairman's consideration on 18 this. This is a difficult issue from many 19 perspectives. But at least in my reading of the 20 federal statute, it simply requires that upon 21 conviction the test must be conducted in order 22 for us to get the federal drug money, and I 23 agree with that concept. 1 I think that the potential danger 2 that's included in this statute is that you 3 could have someone tested upon a finding of 4 probable cause, have a finding one way or 5 another on an HIV test, have a trial in which 6 the defendant is found not guilty, and the 7 victim will have been put through a process of 8 anticipation whether it's through HIV positive 9 or negative, whatever the result of testing is, 10 and may end up with an inclusive result at the 11 trial, that is, the person is found not guilty 12 of the conduct and there is no correlation in 13 the victim's mind between guilt and the testing 14 result. 15 I think there is a danger 16 inherent in that process. From my point of 17 view, I think that's something we have to look 18 at in this bill very carefully, I think for a 19 number of reasons because of the overall impact 20 of this bill, I'm going to vote in favor of it, 21 but I think that's a very critical 22 determination, and I hope that in the 23 discussions with our colleagues across the hall 1 that that issue will be looked at in even 2 greater debate if this comes back; that the 3 danger of a test result that is not followed by 4 a conviction could be excessive trauma, frankly, 5 on everyone's part, and something we should be 6 aware of. 7 Mr. President. I believe there 8 are also a series of amendments at the desk on 9 this bill. 10 ACTING PRESIDENT KUHL: The Clerk 11 indicates that there are two amendments at the 12 desk. 13 SENATOR DOLLINGER: I'll call up 14 number 1. 15 ACTING PRESIDENT KUHL: Are you 16 asking - 17 SENATOR DOLLINGER: Ask to waive 18 its reading, and ask that - 19 ACTING PRESIDENT KUHL: All 20 right. You are asking an opportunity to explain 21 it? 22 SENATOR DOLLINGER: Yes, Mr. 23 President. Thank you. 1 ACTING PRESIDENT KUHL: Senator 2 Present, why do you rise? 3 SENATOR PRESENT: Mr. President. 4 I would like to make a point of order that 5 Senator Dollinger's amendment to Senator 6 Marino's bill is out of order since it violates 7 Rule 6, Section 4 B, in that, it is not germane 8 to the original object of the purpose of Senator 9 Marino's bill. 10 Moreover, it seeks to amend 11 completely different sections of the law than 12 that addressed by Senator Marino's bill. 13 Senator Marino's bill addresses the plight of 14 rape victims, and Senator Dollinger's amendment 15 offers nothing on that subject. 16 Therefore, I ask that you rule 17 Senator Dollinger's amendment out of order. 18 ACTING PRESIDENT KUHL: The chair 19 would rule, Senator Dollinger, that your 20 amendments are out of order as not being germane 21 -- the first amendment. That's the only 22 amendment on the floor at this point. 23 SENATOR DOLLINGER: Yes, I 1 understand that, Mr. President. Can I appeal 2 the ruling of the chair on that issue and be 3 heard? 4 ACTING PRESIDENT KUHL: That you 5 can. 6 SENATOR DOLLINGER: With respect 7 to the issue before us, the amendments relate. 8 SENATOR DALY: Object. Mr. 9 President. Is an appeal of the decision by the 10 chair debatable? Is a decision by the chair 11 debatable? 12 ACTING PRESIDENT KUHL: Senator, 13 the Senator's motion has been ruled out of order 14 as not being germane. He has appealed the 15 decision of the chair, and that is debatable. 16 And the chair has recognized 17 Senator Dollinger to indicate why he feels the 18 chair ruled incorrectly. 19 Senator Dollinger. 20 SENATOR DOLLINGER: Mr. 21 President. The issue of the amendments, and I 22 believe the amendments deal with the action that 23 this body was asked to take several weeks ago to 1 deal with the issue of banning assault weapons 2 in the State of New York, and I would simply 3 point out that a part of this bill which is 4 currently before us relates to the provision of 5 mace in the State of New York and allows a 6 weapon that we have previously banned to now 7 become available. We're dealing with weapons. 8 This bill involves making a weapon available. 9 What the amendment seeks to do is 10 take another weapon which is now freely 11 available in this state, a far more dangerous 12 weapon than mace and restrict it's availability 13 to the people of this state, and I would simply 14 point out that nothing could be more germane 15 than, since we're dealing with weapons, to take 16 another section of law that involves weapons and 17 make an amendment in that section to restrict 18 access to a weapon which, at least in my 19 judgment, is far more dangerous, far more 20 threatening to the public, and one I think this 21 Legislature and this body should be on record in 22 favor of restricting access to. 23 So for that reason, Mr. 1 President, I believe it is germane. It does 2 relate to the topic at issue. It is part of 3 something that will promote greater safety in 4 this state, and I certainly think we ought to 5 get on with the business of creating not only a 6 restriction on -- removing restrictions on mace 7 which I support but imposing restrictions on 8 assault weapons, as well. 9 ACTING PRESIDENT KUHL: The Chair 10 reminds members that a vote in the affirmative 11 is to sustain the ruling of the chair. A vote 12 in the negative is a ruling to overturn the rule 13 of the chair. 14 Based on that, all those in favor 15 of the sustaining the ruling of the chair, 16 signify by saying aye. 17 (Response of "Aye.") 18 Opposed, nay. 19 (Response of "Nay.") 20 (Continuing response of "Aye.") 21 The ayes have it. The ruling of 22 the chair is sustained. 23 SENATOR GOLD: Mr. President. 1 ACTING PRESIDENT KUHL: Senator 2 Gold. 3 SENATOR GOLD: Is there such a 4 thing as a rebuttal aye after the nays have 5 already out voted the ayes? 6 ACTING PRESIDENT KUHL: Senator 7 Dollinger, do you wish to present amendment 8 number 2? 9 SENATOR DOLLINGER: In view of 10 the last vote, Mr. President, I will waive the 11 presentation of amendment number 2, but I will 12 be back. 13 ACTING PRESIDENT KUHL: Any 14 member wishing to speak on the bill. 15 (There was no response.) 16 Clerk will call the last section. 17 THE SECRETARY: Section 27. This 18 act shall take effect immediately. 19 ACTING PRESIDENT KUHL: Call the 20 roll. 21 (The Secretary called the roll.) 22 THE SECRETARY: Ayes 50. Nays 23 2. Senators Ohrenstein and Santiago recorded in 1 the negative. 2 ACTING PRESIDENT KUHL: The bill 3 is passed. 4 Senator Present. 5 SENATOR PRESENT: Mr. President. 6 I move that the Senate recess until 9:00 p.m. 7 ACTING PRESIDENT KUHL: The 8 Senate stands in recess until 9:00 p.m. 9 (Whereupon at, 6:20 p.m., the 10 Senate recessed.) 11 12 13 14 15 16 17 18 19 20 21 22 23 1 ...At 12:19 a.m... 2 SENATOR PRESENT: I'd like to 3 announce a Rules Committee meeting at 12:30 in 4 Room 332. I would like to announce a Rules 5 Committee meeting at 12:30 in Room 332. 6 ...At 12:35 a.m.... 7 ACTING PRESIDENT SPANO: Senate 8 will come to order. Senator Present. 9 SENATOR PRESENT: Mr. President, 10 can we return to reports of standing 11 committees. 12 ACTING PRESIDENT SPANO: Reports 13 of standing committees. Secretary will read. 14 THE SECRETARY: Senator Marino, 15 from the Committee on Rules, reports the 16 following bill directly for third reading: 17 Senate Bill Number 6584, by the Committee on 18 Rules, an act to amend the Banking Law and the 19 Personal Property Law, in relation to making 20 technical corrections. 21 ACTING PRESIDENT SPANO: Read - 22 SENATOR GOLD: No objection. 23 ACTING PRESIDENT SPANO: Read the 1 last section. 2 THE SECRETARY: Section 2. This 3 act shall take effect immediately. 4 SENATOR PRESENT: Is there a 5 message at the desk? 6 ACTING PRESIDENT SPANO: Message 7 is at the desk. 8 SENATOR PRESENT: I move we 9 accept the message. 10 ACTING PRESIDENT SPANO: All 11 those in favor signify by saying aye. 12 (Response of "Aye.") 13 Opposed nay. 14 (There was no response.) 15 The message is accepted. Read 16 the last section. 17 SENATOR DOLLINGER: Could we just 18 have an explanation of the amendment. 19 ACTING PRESIDENT SPANO: Sure, 20 Senator Dollinger. 21 SENATOR DOLLINGER: Just short 22 and quick, please. 23 ACTING PRESIDENT SPANO: Senator 1 Farley. 2 SENATOR FARLEY: Yes. 3 SENATOR DOLLINGER: Got to make 4 the night worthwhile. 5 ACTING PRESIDENT SPANO: Excuse 6 me, Senator Present. 7 SENATOR FARLEY: Let's have some 8 order here. 9 ACTING PRESIDENT SPANO: Can we 10 please have some order in the chamber. 11 SENATOR PRESENT: Would you 12 recognize Senator Montgomery. 13 ACTING PRESIDENT SPANO: Senator 14 Montgomery. 15 SENATOR MONTGOMERY: Yes, Mr. 16 President. I would like to ask unanimous 17 consent to be recorded in the negative on 18 Calendar Number 47. 19 ACTING PRESIDENT SPANO: Without 20 objection. 21 SENATOR MONTGOMERY: Thank you. 22 ACTING PRESIDENT SPANO: Senator 23 Farley for a brief explanation. 1 SENATOR FARLEY: Thank you. 2 The banking deregulation bill 3 which this house passed 52 to nothing a few 4 hours ago, several hours ago, has been passed 5 and signed into law in the Assembly. 6 This is a chapter amendment to 7 take care of the disagreement that we have in 8 regard to the SSBIC portion of the legislation. 9 What is added here on the front page is "*** 10 provided, however, in approving applications for 11 assistance, priority shall be given to 12 minorities residing in neighborhood-based 13 alliance communities, designated economic 14 development zones and/or highly distressed 15 areas" and, of course, the earned income tax 16 credit is in there also, which gives inclusive 17 ness throughout the state of New York. 18 The rest of the bill is technical 19 corrections that were made -- that were made to 20 the leasing portion of this bill. There even 21 may be more coming on that at another date, but 22 in essence, that's all that there is here. This 23 is totally agreed to. It will be passed 1 unanimously, I think, in both houses. 2 SENATOR DOLLINGER: Mr. 3 President, would Senator Farley yield to just 4 one question? 5 ACTING PRESIDENT SPANO: Senator 6 Farley, would you yield to a question? 7 SENATOR FARLEY: Yeah. 8 SENATOR DOLLINGER: Could you 9 just explain to me, through you, Mr. President, 10 just explain to me how the priority system 11 works. Is it is a priority based on designated 12 criteria; is it a $70 million pot that's going 13 to be set aside designated for minorities in 14 these categories, or how is the priority system 15 going to work? 16 SENATOR FARLEY: That will be 17 determined by the board, but this is the same 18 language that we've had precedent for in the 19 Jobs Bond Act and other places. In other words, 20 it's language that has been consistent by both 21 of these houses addressing this issue. 22 The board that will be appointed 23 will make that decision as to the -- as to 1 priority. 2 ACTING PRESIDENT SPANO: Senator 3 Dollinger. 4 SENATOR DOLLINGER: Just on the 5 bill ever so briefly. 6 I appreciate the difficulty in 7 arriving at this compromise, but one of the 8 things we talked about earlier today was the 9 question of regulation and the power of 10 regulators. It seems to me we've given them a 11 very, very broad field in which to play in 12 trying to determine what the phrase "priority" 13 means, and we may end up with the board and 14 other people interpreting that term in such a 15 fashion which may not achieve the goals that the 16 legislation is designed to do, and I would just 17 say that the danger of regulatory control and, 18 in fact, talking with Senator Wright and Senator 19 Bruno and some others, we're opening an awful 20 big door here for them to drive through, and we 21 don't know what this is going to look like. 22 I'm going to vote in favor of the 23 chapter, Mr. President, but I'm expressing my 1 concern about how that will be interpreted. 2 ACTING PRESIDENT SPANO: Read the 3 last section. 4 THE SECRETARY: Section 2. This 5 act shall take effect immediately. 6 ACTING PRESIDENT SPANO: Call the 7 roll. 8 (The Secretary called the roll.) 9 ACTING PRESIDENT SPANO: Senator 10 Waldon to explain his vote. 11 SENATOR WALDON: Not really. I 12 would like the record to show that had I been 13 here last week when Calendar Number 57 was acted 14 on, I would have voted in the negative. 15 ACTING PRESIDENT SPANO: Can we 16 just wait until we finish the roll call. 17 THE SECRETARY: Ayes 51, nays 18 one, Senator Padavan in the negative. 19 SENATOR STAFFORD: Mr. President, 20 I'd like to request permission to abstain from 21 voting, please. 22 SENATOR FARLEY: Results. 23 THE SECRETARY: Ayes 52, nays 1 one. 2 ACTING PRESIDENT SPANO: The bill 3 is passed. 4 Senator Waldon. 5 SENATOR WALDON: Thank you, Mr. 6 President. 7 My colleagues, I would like the 8 record to reflect had I been here last week when 9 Calendar Number 57 was voted upon, I would have 10 voted in the negative. 11 ACTING PRESIDENT SPANO: So 12 noted. 13 SENATOR WALDON: Thank you, Mr. 14 President. 15 SENATOR PRESENT: Do we have any 16 housekeeping to clean up here? 17 ACTING PRESIDENT SPANO: That's 18 it. 19 SENATOR PRESENT: All right. Mr. 20 President, there being no further business, I 21 move that we adjourn until tomorrow at 3:00 p.m. 22 ACTING PRESIDENT SPANO: The 23 Senate will stand adjourned until tomorrow at 1 3:00 p.m. 2 (Whereupon at 12:41 a.m., the 3 hearing was the Senate adjourned. ) 4 5 6 7 8 9