PUBLIC FORUM/TOWN HALL SMALL BUSINESS REGULATORY REFORM - TO LEARN FROM BUSINESSES AND INDUSTRY EXPERTS WHICH REGULATIONS ARE THE LEAST USEFUL, LEAST COST-EFFECTIVE, AND, THEREFORE, SHOULD BE ELIMINATED

Clarksville Corners 10 11 ---oOo--- 12 13 14 15 16 17 18 19 20 21 22 23 24 25 1 SENATOR CARLUCCI: Good morning. 2 I'm Senator David Carlucci, and I want to 3 welcome everyone to our hearing today; a very 4 important issue on the regulations in 5 New York State. 6 We want to thank the Nanuet Library for 7 hosting us today. 8 And gathered with me here today on this 9 bipartisan task force, I have senators from around 10 the state that have been traveling around the state, 11 having these types of hearings, to talk about these 12 important issues. 13 Usually regulations don't come to the 14 forefront, in terms of the debates on the Senate 15 floor or what we read about in the newspapers, but 16 we know how important it is. 17 If we're going to move New York's state 18 economy move forward, if we're going to make sure we 19 have the best quality of life for the people that 20 live here in New York State, then we have to make 21 sure that the regulations are in compliance and up 22 to speed with the times that we live in today. 23 So with new technology, with the different 24 culture that we're living in today, we've got to 25 make sure that the regulations are up to speed. 1 So we look forward to hearing from a diverse 2 group of people representing different industries 3 today, to talk about, really, how it affects small 4 business particularly. 5 This is one of many hearings that has been 6 done, but the focus today is on small business; the 7 backbone of New York State's economy. 8 So with me today are my esteemed colleagues 9 from around the state. 10 Senator Marchione -- and I'll have everybody 11 introduce themselves, and then we'll move forward -- 12 so, Senator Marchione. 13 SENATOR MARCHIONE: Thank you. 14 I represent the 43rd Senate District, which 15 comprises parts of Saratoga, Rensselaer, Washington 16 counties, and all of Columbia County. 17 In addition to being the senator from the 18 43rd District, I serve as the Chair of the 19 Senate's ARC Committee (the Administration 20 Regulation Review Committee). 21 And one of the things, of course, that we 22 have been looking at, and one of the last pieces of 23 legislation that I put forward, was to remove 24 1,000 rules and regulations. 25 SENATOR CARLUCCI: Great, thank you, 1 Senator Marchione. 2 And we also have with us from the western 3 part of the state, Senator Gallivan. 4 Senator Gallivan. 5 SENATOR GALLIVAN: Thank you, Senator. 6 Good afternoon, everybody. We appreciate 7 very much that you're here today. 8 I am our Deputy Conference Leader for 9 Economic Development. 10 And the team of -- the four of us up here 11 have been tasked with identifying over 12 1,000 regulations, to call for their elimination. 13 To give you an idea of how that fits, it 14 sounds like a lot, but there are over 140,000 pages 15 of regulations in New York State. 16 And we look at the problems of things that 17 you talk about from time to time; small businesses 18 and the impediments that they're facing. 19 A recent U.S. Chamber of Commerce report 20 ranked New York State 50th out of 50 states, as 21 far as its business environment goes, and we always 22 hear about taxes and regulations as those 23 impediments. 24 So, we embarked on a series, 10 hearings 25 altogether, industry-specific hearings, to try to 1 drill down and, ultimately, identify regulations 2 that we can eliminate: the most costly ones, the 3 least-effective ones, the ones that make no sense, 4 the ones where the costs greatly exceeds the 5 benefit. 6 And we couldn't do it without your help, so 7 we appreciate you being here. 8 We'll ultimately publish a report on the 9 Senate website. It will be available for everybody, 10 hopefully, by the end of November, and this will 11 become part of our agenda as we move forward to help 12 advance economic development in the state. 13 Thank you. 14 SENATOR CARLUCCI: Great, thank you, 15 Senator Gallivan. 16 And we also have with us, all the way from 17 Syracuse, Senator David Valesky. 18 SENATOR VALESKY: Thank you, 19 Senator Carlucci. 20 I represent the 53rd District: all of 21 Madison County, parts of Oneida and 22 Onondaga counties as well, and as Senator Carlucci 23 indicated, that means most of the city of Syracuse. 24 I'm very happy to be here. 25 I'm also the Chairman of the Senate 1 Standing Committee on Commerce, Small Business, and 2 Economic Development, and I'm participating in those 3 hearings, certainly, in that capacity as well. 4 I just want to mention, as I did last week in 5 our hearing in Saratoga, what you're seeing here 6 today really stands in stark contrast to what we're 7 seeing in Washington. 8 You've got three Republicans and two 9 Democrats here who are working together in a 10 bipartisan fashion to get the business of the people 11 done. 12 So, very pleased to be able to participate in 13 this very important set of hearings. 14 And as Senator Gallivan said, we'll be having 15 a whole series of recommendations following the 16 conclusion of this series of public hearings. 17 Thank you. 18 SENATOR CARLUCCI: Great, thank you, 19 Senator Valesky. 20 And with us, Senator Bill Larkin. 21 SENATOR LARKIN: Good morning, and thank you. 22 Sorry I'm a little late, but in case you're 23 interested, it's pouring out there. 24 [Laughter.] 25 SENATOR LARKIN: Scott, when you go all the 1 back to Albany, be careful. 2 You know, this is very important. 3 And, you know, as David just said a minute 4 ago, I think it was David, I can't see without these 5 new glasses, we're trying to do this in a good, 6 sound bipartisan manner. 7 There are two Democrats, there are three 8 Republicans. 9 The last time we had a meeting, there were 10 three Democrats and two Republicans. 11 We're not looking for -- [inaudible]. 12 We're looking for solutions. 13 We cannot have solutions without your 14 participation. 15 You know, it's easy to say cut taxes, do 16 this, but, my motto has always been, as a former 17 army officer, "You got to find solutions before you 18 go into the battle, or somebody's gonna get hurt." 19 So, we need your help. 20 Tell us, don't be embarrassed. 21 You know, someone says, I'd really like to 22 tell them, but, I don't want to be embarrassed. 23 Who's going to be embarrassed if you don't 24 ask us? "You"; because what you have to say may be 25 part of that circle that can be filled in. 1 Thank you very much. 2 SENATOR CARLUCCI: Great, thank you, 3 Senator Larkin. 4 And also with us, we have the supervisor of 5 the town of Clarkstown, Alex Gromack, our host town 6 today. 7 Thank you for being here. 8 And as was said, this is in direct contrast 9 to what you've seen, the gridlock in Washington. 10 We're working in a bipartisan fashion to focus on 11 results. 12 So that's why, without further ado, we'll 13 have our first speaker to talk about the issues that 14 are facing his industry, Scott Wexler, the executive 15 director of the Empire State Restaurant and Tavern 16 Association. 17 Mr. Wexler. 18 SCOTT WEXLER: Thank you, Senator Carlucci. 19 And thank you, Senator Larkin, for the travel 20 advice. 21 I think he just wants me to stop in his 22 district and help pick up the economy in the 23 Hudson Valley. It would be my great pleasure. 24 [Laughter.] 25 SCOTT WEXLER: Good afternoon. 1 I'm Scott Wexler, and I'm here today on 2 behalf of the Empire State Restaurant and Tavern 3 Association, and, our association represents a broad 4 array of small-business owners who operate 5 establishments where people can consume alcohol for 6 on-premises consumptions: restaurants, bars, hotels, 7 ski areas, etc. 8 Almost all of our members are single-store 9 operators. We called them "mom-and-pop" businesses 10 25 years ago when I started with the association, 11 but they're local owners who live, work, and 12 reinvest in their community. 13 And while I thank you for the opportunity to 14 provide input into your discussion about eliminating 15 costly regulations, I again want to begin by 16 thanking you for the work that you've done so far, 17 because it's really important that it be noted. 18 Working with your partners in state 19 government, you've held the line on taxes, you've 20 enacted the property-tax cap to help slow the growth 21 of local taxes, and you've put economic development 22 and job creation at the top of your priority list. 23 These accomplishments have begun the 24 groundwork for our recovery here in New York. 25 I had the privilege of appearing at your 1 forum last week in Senator Marchione's district in 2 Saratoga, and I shared with you some thoughts that 3 our association has about the Alcoholic Beverage 4 Control Law and the State Liquor Authority. 5 Today I want to focus on other regulatory and 6 administrative issues of concern to our members. 7 One of the most egregious examples of a 8 regulatory burden being imposed on business is the 9 administration of the General Business Law Security 10 Guard Act. 11 The law was passed in 1992, and mandated the 12 training, approval, and registration of security 13 guards under the direction of the Department of 14 State and the Division of Criminal Justice Services. 15 The law was amended in 1994 to correct the 16 overly broad, or at least to attempt to correct, the 17 overly broad interpretation of the law. 18 According to the sponsor's memo at the time, 19 quote: As currently written, the law will impose 20 additional costs through unnecessary mandates upon 21 employers who are not contract companies. There is 22 a distinction between contract security agencies for 23 whom the law was originally designed, and 24 organizations which hire their own staff to perform 25 security surveillance duties. 1 While the Department of State, the agency 2 responsible for licensing security guards and 3 security-guard companies, interprets this law to 4 require bouncers in a bar or restaurant to be 5 licensed security guards, it's their determination 6 that the bouncer's responsibility to check proof of 7 age to make sure the patron is of legal drinking 8 age, and their state of intoxication to make sure 9 they're not drunk and not safe to serve, and denying 10 admission to those who are underaged, drunk, or 11 unruly, meet the definition of "a security guard." 12 Not only does this require the bouncers to 13 become trained security guards and be subjected to 14 all of those burdens, but it, therefore, defines the 15 bar or restaurant as a "security-guard company," 16 requiring them to have that burden. 17 Now, the Security Guard Act was not designed 18 to apply to bouncers unless their principal duties 19 are to perform security functions, you know, like 20 security guards. 21 And, certainly, there are some establishments 22 that we've all been to or are familiar with where 23 the person at the door really does function like a 24 security guard. 25 I think about big nightclubs, for example, 1 where they really are performing a security 2 function. 3 But as a result of the overly broad 4 interpretation of the law, almost any time a person 5 stands at the door of a bar or a tavern, they're 6 defined as "security guard," requiring registration, 7 training, and the payment of hundreds of dollars in 8 fees. 9 The Department of State was so focused on its 10 view, that, in 2010, they proposed amending the 11 regulations covering Security Guard Act, to remove 12 the requirement that employees of licensed premises 13 function as security guards for at least half the 14 time in order to meet the definition. 15 In other words, it no longer would matter 16 what percentage of your job was security-related. 17 If you worked in a bar, restaurant, or similar 18 establishment and you performed security functions 19 at any time, you would be considered a security 20 guard and subject to those requirements. 21 Apparently, it didn't matter that the law 22 provides that a person has to principally perform 23 security functions to be covered. This proposed 24 amendment was contrary to the statute on its very 25 face. 1 Now, this proposal would have had the effect 2 of requiring almost all employees in licensed 3 premises to become security guards. 4 More reasonable heads prevailed, and that 5 proposal was slowed down and eventually withdrawn, 6 but the underlying overly broad policy remains in 7 effect, subjecting business owners to the cost of 8 compliance and fines for noncompliance, almost 9 always due to the business owner's ignorance, not 10 knowing that this burden was imposed on them. 11 Fixing this gross overreach by the unelected 12 bureaucrats at the Department of State would benefit 13 thousands of businesses throughout the state. 14 And while our experience has been with the 15 law as it relates to bars and restaurants, the same 16 interpretation would appear to cover ushers at a 17 movie theater, or anyplace else where someone is, 18 literally -- 19 SENATOR LARKIN: Taking control. 20 SCOTT WEXLER: -- taking control -- 21 Yes, Senator, thank you for your -- for that. 22 -- as opposed to what the law was originally 23 intended to cover. 24 Sales-tax audits are another problem for our 25 members. 1 Now, no one wants to be audited by the 2 Tax Department, but if you're in business, it's 3 likely to happen from time to time. And if you're 4 in a cash business, in the view of the auditors, 5 sales-tax audits are fairly common. 6 So our members are frequent subjects of 7 sales-tax audits, and have increasingly been subject 8 to aggressive envelope-pushing tactics by the 9 auditors. 10 A few years ago, the State hired hundreds of 11 new auditors to enhance the department's audit and 12 compliance programs and generate state revenue. 13 The department launched several new 14 initiatives, with these new auditors, that are 15 costly to business, as well as being unfair. 16 The first concern is the auditors' growing 17 emphasis and inflexibility with their recordkeeping 18 requirements. 19 Our members are increasingly having their 20 books and records deemed inadequate by the auditors, 21 often for the most technical of reasons. 22 If the Tax Department auditors deem a 23 taxpayer's records to be inadequate, then the 24 taxpayer can't defend its sales-tax payment to the 25 auditors, and leaves the assessment of sales tax due 1 to be determined by the auditor and by the 2 department, exposing the taxpayer to being charged 3 for sales tax due, plus interest and penalties, as 4 the State determines. 5 Our second concern and related, is the 6 auditors' use of external indices to assess the 7 sales tax due once they've determined that the 8 taxpayer's books and records are inadequate. 9 The auditors estimate correct sales of the 10 business by comparing the invoices, utility bills, 11 payroll, or other data for this -- for one taxpayer 12 with data for the industry at large. 13 Often, these indices are not based on local 14 standards and include few, if any, comparable 15 businesses in their analysis. 16 Senator Young called attention to this a few 17 years ago, when a sales-tax audit involving one of 18 her constituents, the restaurant was charging, you 19 know, $4 for a hamburger, but the sales-tax auditor 20 estimated the cost of hamburgers at $8, based on 21 this industry data. 22 SENATOR LARKIN: I remember that. 23 SCOTT WEXLER: In fact, that resource, which 24 is a common indice -- common index used by the 25 Tax Department, actually includes less than 1 100 restaurants in New York State in that database. 2 And, it's likely that there isn't a single 3 restaurant in that comparison that is actually just 4 like your business. 5 Senator Young and Assemblymember Schimminger 6 have introduced legislature to provide relief from 7 these regulatory burdens. Their bill, Senate 2691, 8 Assembly 5937, establishes a recordkeeping 9 compliance program. 10 Basically, it creates a safe harbor. 11 If business owners do these specific things, 12 as covered by Senator Young's bill, then the 13 Tax Department can't break the books. They have to 14 use the books and records. 15 And a second bill, Senate 2710, and 16 Assembly 5936, requires any external index used by 17 the Tax Department to reflect local economic 18 conditions. 19 We understand that, oftentimes, the 20 taxpayer's books and records won't be adequate, but 21 those decisions should be based -- it's better off 22 doing the sales-tax assessment based on the 23 business's actual records, when you can, and the 24 department should be more flexible and work with the 25 industry to accomplish that. 1 A third problem area for our members is the 2 Labor Department's rules for determining whether 3 musicians are considered employees or independent 4 contractors of a business. 5 Now, this is somewhat different than the 6 broader independent-contractor issue, because the 7 musician issue stems from an interpretation of 8 amendments to the Labor and Worker's Compensation 9 laws made in 1986. 10 In a supposed attempt to provide clarity to 11 the question of whether a musician is an employee or 12 an independent contractor, the law was amended to 13 provide that the musician is the employee of the 14 business, unless, by written contract, such musician 15 is stipulated to be an employee of another covered 16 employer. 17 But, it's not that simple. 18 The Labor Department has the narrowest 19 interpretation of the law possible. 20 Unless the chapter and verse of the statute 21 are specifically mentioned in the contract, the 22 musician is considered to be an employee of the 23 business -- of the business where they perform, 24 rather than an employee of the band or bandleader. 25 This doesn't appear to be motivated by logic. 1 This interpretation seems to be based on having the 2 broadest possible reach; or, perhaps, the easiest 3 way for the Labor Department to enforce the law by 4 finding a local employer to be liable. 5 Musicians who regularly perform for a 6 specific business, like a house band, are employees 7 and should be treated as such, but musicians who are 8 part of a band or are self-employed that regularly 9 perform at different businesses, are independent 10 contractors, and business owners should not have to 11 bear the costs that come along with classifying them 12 as employees. 13 These are the most prominent regulatory and 14 administrative burdens on our members' businesses, 15 but some rule, regulation, administrative directive, 16 or bureaucratic dictate gets in their way almost 17 every day. 18 While there are exceptions, very few of their 19 interactions with government are positive. 20 At your forum in Saratoga last week, the 21 owner of a local ski area expressed it best. 22 He told you he has a passion for running his 23 business, but that figuring out how to comply with 24 confusing government rules, and doing it right, is 25 demoralizing and costly. 1 Thousands of small-business owners know how 2 he feels, but your commitment is invigorating. 3 Our members are appreciative of your 4 accomplishments to date, and are impressed with your 5 willingness to continue to battle. 6 Thank you for giving me the opportunity to 7 share these concerns with you today. 8 We look forward to working with you in the 9 years ahead to get rid of some of these job-cutting, 10 costly business -- burdens on business. 11 Thank you. 12 SENATOR CARLUCCI: Great, thank you, 13 Mr. Wexler. 14 Senator Larkin? 15 SENATOR LARKIN: Scott, about two or 16 three years ago, you toured the Hudson Valley with 17 me, and if I recall, many of the people in business 18 say, and they still do, "Get off my back or I'm 19 going to close my door." 20 I assume that was your message here today? 21 SCOTT WEXLER: Yes; and it is a real pleasure 22 that we are now echoing the calls coming from the 23 leadership of state government, rather than making 24 plaintiff calls to state leaders who aren't 25 listening. 1 So, the reason we're invigorated, is that you 2 folks have actually made an impact on some of these 3 things, and it's very clear that you're going to 4 make an additional impact, Senator. 5 SENATOR LARKIN: Thank you. 6 SENATOR MARCHIONE: Scott, I just have a 7 statement. 8 I certainly listened to you in Saratoga, and 9 now here again today, and the information you're 10 giving us is just what we're looking for: the 11 specifics on how small businesses are being hurt. 12 Thank you. 13 You were our last speaker in Saratoga. I am 14 so thrilled that you became the first speaker here. 15 You were very patient last time. 16 And, again, let me just understand something: 17 Are you saying that if a band plays for a 18 week in a location, and then another week, that the 19 taxes, they're treated as an employee, each and 20 every location that they go? 21 SCOTT WEXLER: Yes. 22 And it's the employment taxes; so it's the 23 worker's compensation, it's the unemployment. 24 And, again, much like the Security Guard Act, 25 the way that the -- you know, if a big national band 1 is appearing in your nightclub, you don't expect 2 that they're ever going to file 3 unemployment-insurance claims or worker's comp 4 claims in New York. 5 So, it often comes as a surprise when the 6 Labor Department comes in, or, occasionally, the 7 Worker's Comp Board, but it's mostly the 8 Labor Department where this has been a factor. 9 They come in and find your -- the checks 10 you've written for the bands, and they say, Gee, you 11 didn't include any of their salary in your 12 assessment for unemployment insurance. Here's a 13 bill for.... 14 And it's not a big bill, but as the Senator 15 said, it's one more reason why they feel like it's 16 not profitable to do business in New York. 17 SENATOR MARCHIONE: Right. 18 Thanks very much. 19 SENATOR CARLUCCI: Senator Gallivan. 20 SENATOR GALLIVAN: Thanks again, Scott, for 21 your testimony, twice. It is very helpful in 22 leading us to try and to do something about this. 23 Two questions; first one has to do with the 24 Security Guard Act. 25 Do the businesses have to get any license 1 themselves? 2 SCOTT WEXLER: Yes. 3 SENATOR GALLIVAN: So they have to get a 4 license to act as a security-guard company? 5 SCOTT WEXLER: Company, yes. 6 SENATOR GALLIVAN: And then the individual 7 security guards have to obtain their own license to 8 work for a security-guard company? 9 SCOTT WEXLER: Yes, their own license. 10 They have to register. 11 They have to take, it's a 16-hour 12 pre-licensing training. 13 Then there's an 8-hour, if you're familiar, 14 and then the constant training. 15 Yes, Senator. 16 SENATOR GALLIVAN: But the owner of the 17 bar/restaurant that employs bouncers, they have to 18 be separately licensed as a security-guard company? 19 SCOTT WEXLER: They have to register/license 20 themselves as a security-guard company. 21 SENATOR GALLIVAN: Jumping on to the 22 sales-tax audits, one of the areas that you talked 23 about is a problem, was, when the records were 24 deemed inadequate. 25 Do the -- are the regulations specific as to 1 what records must be kept, or are they general and 2 subject to interpretation? 3 SCOTT WEXLER: They're more general and 4 vague, subject to interpretation, than not. 5 The Tax Department -- and, Senator, in 6 Saratoga, one of the testifiers talked about how 7 there's hardly ever any information by the agencies 8 put out. 9 And I made the point at that hearing, the 10 Tax Department has been pretty good about this. 11 And there are some -- we have all kinds of 12 detailed guidance documents from the Tax Department 13 we can offer, to make sure there's recordkeeping; 14 but, still, there is vagueness. 15 For example, folks with point-of-sale systems 16 who think that they have really done above and 17 beyond, they have these fancy computers. 18 I don't even know how they work. 19 But, most point-of-sale systems aren't set up 20 in a way that makes the recordkeeping compliant with 21 the Tax Department rules, so there's an area where 22 the department's guidance is vague. 23 Again, to their credit, they're working with 24 the point-of-sales folks to do better, but we still 25 are subject to the vague interpretation of the 1 auditor. 2 SENATOR GALLIVAN: Would a system -- when you 3 talk about point of sale, would a system -- this is 4 not the case right now -- but right at point of 5 sale, if the money was transferred -- the sales tax 6 was transferred directly to the State right then, is 7 that a system that could be helpful? 8 SCOTT WEXLER: It could. 9 We've actually -- again, I -- you know, we 10 complain about government agencies all the time. 11 Last week, I told you the SLA was doing a 12 much better job, and it needed to be noted. 13 And the Tax Department, doing a very good 14 job. 15 And we've had some of these conversations. 16 If they would -- what we've asked for, is if 17 the Tax Department would certify certain 18 point-of-sale systems that are very well known, and 19 others that could apply, to meet the standards. 20 And one of the very specific suggestions we 21 put forward, is setting up a third-party account, 22 much like you do for the Lottery, where you move 23 that money over. 24 And, again, you'd have to demonstrate you 25 were actually doing those things, but for the 1 businesses who were concerned about wanting to make 2 sure they were compliant, such a process would be 3 very helpful. 4 SENATOR GALLIVAN: Thanks. 5 If I could follow up with you separately; 6 somebody actually testified in Buffalo at a 7 tax reform hearing about that. 8 I'd like to say it was my original idea, but 9 it wasn't, but, I'll get that individual's 10 testimony, and just ask for your comments on that. 11 SCOTT WEXLER: I'll look forward to that, 12 Senator. Thank you. 13 SENATOR GALLIVAN: Thank you. 14 SENATOR CARLUCCI: Senator Valesky. 15 SENATOR VALESKY: Thank you, Senator. 16 Scott, just a follow-up on 17 Senator Marchione's question to you about this 18 musician issue. 19 So as I look at your testimony, so, it 20 appears that the Legislature amended the law to try 21 to fix this problem, and you're saying that the 22 Labor Department has taken a very narrow 23 interpretation of the amendment. 24 So the question is: Does the Legislature 25 need to go back and re-amend what, apparently, we've 1 already amended; or is some this a -- or is this 2 something that the interpretation of the 3 Labor Department itself is the problem, and, 4 therefore, that's what needs to be fixed? 5 See what I'm asking? 6 SCOTT WEXLER: I do. 7 Senator Valesky, Senator Larkin, I've had the 8 pleasure with working with both of you for many, 9 many years. 10 David was a kindergarten student when we 11 started, Senator, to explain that -- 12 SENATOR LARKIN: Speak for yourself. 13 [Laughter.] 14 SCOTT WEXLER: -- to explain that. 15 But, theoretically, as a student of 16 government, as a believer in this system of 17 government that we have, I think that proper 18 interpretation is really the way -- the better way. 19 You can't possibly pass a law to fix every 20 one of the 149,000 -- 21 Was that the number, Senator Gallivan? 22 SENATOR GALLIVAN: Oh, no. 23 Over 140, 000 pages; over 750,000 24 regulations. 25 SCOTT WEXLER: Okay. 1 -- so -- but I will say to -- the direct 2 answer, Senator Valesky, I have now taken the 3 approach, if a conversation with the agency doesn't 4 show openness to fixing the problem and a progress 5 to fixing the problem, to come to one of you to 6 introduce a bill. 7 Senator Libous is carrying a piece of 8 legislation on this -- on the bouncer issue. 9 We actually do believe that bouncers should 10 be trained, but not the training to be a mall 11 security guard. You should be trained in checking 12 ID and the things that are appropriate. 13 So, unfortunately, we have, more often than 14 not, now, the best solution I can come up with is, 15 passing a law to supercede the regulation, and hope 16 that that law is implemented in a way consistent 17 with the Legislature's intent. 18 SENATOR VALESKY: Unless, of course, and 19 I assume this is not the case, but if the judicial 20 branch of government were to determine, through the 21 court system, that an agency is misinterpreting 22 and/or misapplying a statute, that, obviously, would 23 be significant. 24 I assume that has not happened here. 25 SCOTT WEXLER: And it's very challenging. 1 And, again, you've been very generous with 2 your time for me, so let me wrap it up and be brief. 3 If you go -- the Department of State hasn't 4 prosecuted anyone for a violation of the 5 Security Guard Act, so you have no opportunity -- 6 we've had no opportunity to challenge DOS's 7 interpretation. 8 We're getting it through enforcement by the 9 Liquor Authority. 10 SENATOR LARKIN: That's right. 11 SCOTT WEXLER: And the question, if you 12 appeal a decision of any regulatory agency is, 13 "Was the decision arbitrary or capricious?" 14 Well, when the SLA is basing their 15 determination on a finding by the Department of 16 State, I can tell you that no attorney has suggested 17 to us we can overturn that as being arbitrary and 18 capricious. 19 We need to either get -- I should say, with 20 the Security Guard Act, the individual who is 21 usually responsible for slowing down, and eventually 22 stopping the regulation, who was working in the 23 executive chamber for Governor Paterson when the 24 2010 change was proposed, is now the exec deputy 25 commissioner at the department. 1 And if you and your colleagues deem this 2 regulation one that is worthy of some review, he, at 3 least, is sympathetic to, he understands, I think, 4 how the security-guards unit has made -- has taken 5 it in -- made a life of their own with it. 6 And we might actually be able to fix that 7 without a statutory change. 8 But I look forward to working with you on 9 that, back in Albany. 10 SENATOR VALESKY: Thank you. 11 SENATOR CARLUCCI: Senator Larkin. 12 SENATOR LARKIN: I want to follow up on what 13 you said about the State Liquor Authority. 14 This past weekend I -- knowing about this, 15 I visited some people on the waterfront, that you 16 did with me last year, and the complaint last year 17 is the same complaint. 18 These people got into a fist-fight or 19 discussion outside, on the street, and Bar A got 20 blamed for it. Bar A is in deep trouble right now, 21 because it's been two in the past month. 22 And they said they never were in his bar. 23 But now this guy, this owner, is -- you know, 24 he says, you know, I could lose everything. 25 I honestly believe, to all of our members, 1 that when we get to write the report here, 2 I think -- 3 Because we just had a -- you helped me with 4 the Farm Bureau issue, with Rivera, who we've both 5 known for a long, long time. 6 -- I think that we ought to talk to Rivera, 7 the Tax, and the ABC, Rosen, and bring them together 8 with us, and some of their staff people, and go over 9 these significant points. 10 Because, you know, "cooperate and graduate" 11 is a good word, and I think that maybe what we ought 12 to do, I mean, if you saw the owners of this place 13 Saturday, that had no fights, no nothing, but as far 14 as they're concerned, they have two violations, 15 they've got to be in New York on Thursday of this 16 week, and, they could lose their license for 17 90 days. 18 And the two individuals that they've brought 19 together said, "We were never in this restaurant. 20 We had dinner at the other end, and we got into the 21 classic place, and that's where it hit." 22 But the fight was in the middle of the road. 23 So how do you blame a restaurant? 24 You gonna blame every restaurant? 25 I think we really have to look at some of 1 those things. 2 Because your people -- your representative in 3 the Hudson Valley asked me to meet him Saturday, and 4 we went. 5 And my wife kept saying, "Where are you? 6 Where are you? We're ready to go to mass." 7 I took a blessing, and I went to mass. 8 But it's a serious issue. 9 You know, someone says, Well, they must have 10 been drinking in there. 11 But the fight started on the street, not in 12 the bar. 13 So which -- which of the eight are on the 14 waterfront in Newburgh, who do you blame? 15 So, sorry, I didn't mean to take up time, but 16 it's a crucial issue for us. 17 David, you have waterfront. 18 SENATOR CARLUCCI: Sure. 19 SENATOR LARKIN: We both have it here in 20 Rockland. 21 SENATOR CARLUCCI: Well, Mr. Wexler, what we 22 get so much of the time in all of our offices is 23 help small businesses need, particularly dealing 24 with the Liquor Authority, and some of the things 25 are just processing applications. 1 Do you have recommendations and ways that you 2 see that could streamline some of this process, to 3 make sure that we're meeting the duty that needs to 4 be met, to make sure that unscrupulous business 5 owners aren't given licenses, but to make sure that 6 we weed that out of there? 7 Are there suggestions that your association 8 has to streamline that process? 9 SCOTT WEXLER: Senator, I took a great deal 10 of time up at your hearing in Saratoga to talk about 11 those things, and I've spent some time up here this 12 morning. 13 We do. 14 I mean, I think it's important to know note, 15 one, Liquor Authority has made really great 16 progress, particularly in the licensing area. 17 But as Senator Larkin has pointed out, and 18 I noted in my testimony last week, in the area of 19 compliance, there's some work to be done. 20 I'm sure that my testimony is sitting on your 21 desk, and there's a number of legislative 22 suggestions we've made. 23 Senator Gallivan, Senator Valesky, are 24 sponsoring some. 25 I'm sure there's room for a few more good 1 ideas, and we look forward to working with you to 2 see those through. 3 SENATOR CARLUCCI: Great, thank you. 4 SENATOR GALLIVAN: Thanks, Scott. 5 SENATOR CARLUCCI: Next we're going to hear 6 from the supervisor from the town of Clarkstown, 7 Supervisor Alexander Gromack, a former member of the 8 Assembly, has been working in the town of Clarkstown 9 to make sure the small business are thriving. 10 We thank you for coming in to talk to us 11 about some recommendations. 12 ALEXANDER GROMACK: Well, thank you, Senator. 13 And as you noted, in another life, I spent 14 14 years in the State Assembly. 15 Senator Larkin, I guess things are advancing, 16 because some new members here have certainly joined 17 the Senate, but, I do thank you for coming. 18 I don't have any prepared testimony, but 19 I can certainly give you some -- and I'll just, 20 maybe, give an example, and, hopefully, it's 21 something that you can focus on. 22 One of the concerns that I think we have is 23 the -- various regions of the state, different rules 24 apply to different regions, and I'll give one 25 example. 1 And I want to thank Senator Carlucci, who was 2 very helpful in getting -- cutting some red tape. 3 We're only three days away from opening the 4 shops in Nanuet -- it's just right around the corner 5 from you -- October 10th; a major Simon project. 6 And well into the project, as they were 7 getting tenants, they came across a problem, where 8 Apple wanted to be a tenant in Simon's new center. 9 And, they also own Woodbury Commons. 10 And they found out that there is a difference 11 at the border of Westchester or Putnam and Rockland, 12 and the way they wanted to do their vestibule, they 13 could not in Rockland County, but they could in 14 Westchester County. 15 And if Apple didn't do it the way they have 16 done it in other parts of the state, they did not 17 want to come. 18 So we had made calls to the Secretary of 19 State to find out, you know, how do we, kind of, cut 20 through this? 21 Because, obviously, if it's a weather issue 22 dealing with climate, or something, we don't see 23 much of a difference between the -- Westchester or 24 Rockland or the shopping center to the north. 25 And I guess, after a long discussion, you 1 know, the answer was, Well, these are the rules that 2 your region has to live by. 3 And with Senator Carlucci's help, we did 4 finally get from them, that you could apply for a 5 waiver; however, it's very rarely granted, and 6 there's lots and lots and lots of documentation. 7 Out of the fifty stores, we may have had 8 three or four. They said you couldn't do it 9 collectively; you'd have to do it individually. 10 So it became a whole big problem. 11 Well, the good news is, I guess they made 12 their case, with the new technology, and all the new 13 things that are out there, and we were able to get 14 Apple there. 15 But I think one area that would be helpful, 16 is to find out, you know, what are these different 17 rules that pertain to one county and not another? 18 I understand, in some areas of the state you 19 got to draw a line, and the line's the line, but, 20 when you talk about a county like Rockland, only 21 miles away from Westchester, to have completely 22 different sets of rules, there has to be a more 23 simplified waiver process if you make the case. 24 So as I said, in that sense, we almost lost 25 Apple coming to the shops at Nanuet because of a 1 Secretary of State rule. Some of these rules, 2 I assume, are probably decades and decades' old that 3 have not changed with the times, have not changed 4 with the new technology that is out there. 5 And I think it would be helpful to at least 6 be able to say up front, You know, what? We want to 7 help solve your problem, not put a roadblock. 8 And it would have been helpful up front if 9 they said, You know what? There is a waiver. 10 Here's the documentation. We would also be able to, 11 collectively, take four or five stores in one 12 review. 13 They had to go out and get five different 14 engineers, five different applications, 15 five different reviews, for, virtually, the same 16 type of problem. It couldn't be under the one 17 application of Simon. 18 So, it drove up the costs because, these 19 individual shops, they have to do their own 20 outfitting, but, certainly, it would have been 21 helpful if, again, Simon, or one person, could have 22 kind of handled it for the five or six that needed 23 that relief. 24 So I think, you know, in the host of things 25 that you're looking at, one of the areas certainly 1 would be the regional effect; what region you're in, 2 because there are different rules for different 3 regions. 4 And I can understand a different rule perhaps 5 for Buffalo and Rockland, but when you start to get 6 to the borders of Rockland, Westchester, or another 7 county, I think there needs to be some clear-cut 8 waiver. 9 And I don't necessarily mean, waiver, like we 10 want to skirt the rules, but, if you can provide the 11 documentation that shows why you should conform to 12 another region's rules if you're providing the same 13 or better technology to site a building in the 14 building codes, that certainly would be helpful. 15 SENATOR CARLUCCI: So -- and for those of my 16 colleagues that don't know Supervisor Gromack, 17 Supervisor Gromack is extremely proactive, and 18 besides this case, I think can provide us with a 19 whole slew of different ideas for removing some 20 unnecessary regulations. 21 So, we'll get the details from the specifics 22 of the Apple case and share them with the Committee. 23 One of the things, I don't know if you wanted 24 to touch upon, is one of the things we've been 25 working on is the Adopt-a-Spot. 1 And I don't know if you want to talk about 2 that in a minute or two? 3 ALEXANDER GROMACK: Sure. 4 That's another area in the town of 5 Clarkstown. We have a partnership with various 6 landscapers that are creating beautiful 7 Adopt-a-Spots, and some of them do fall in state 8 right-of-ways along DOT roads. 9 They're beautiful. 10 They've gotten more elaborate, with 11 waterfalls, lighting, and American flags, and 12 they've really become a showpiece. 13 So on town roads, we're very easily able to 14 site them, but the state regulation says that if 15 they advertise, I think that's one of the 16 impediments, that you can't put this Adopt-a-Spot on 17 a state road. 18 Now, I've seen other state roads where 19 they've had some recognition, you know, the 20 Rotary Club, this might be a -- you know, a name of 21 a landscaper, and it doesn't say anything other 22 than, you know, "Built by Bluescape Landscaping." 23 And so we're finding, on the state 24 intersections where we want to do this, that DOT is 25 becoming very difficult, and that's primarily where 1 we want to put them. 2 So, again, we just don't understand why this 3 regulation or rule is being so onerous, when, in 4 some cases, we're getting a partnership and a 5 donation of five to twenty-five thousand dollars to 6 beautify this Adopt-a-Spot. 7 And I think it even goes to some of the state 8 roads, where we have bus shelters, where they'll 9 take over the maintenance of a bus shelter, a 10 private organization. 11 And all they're really asking for is, you 12 know, "This bus shelter is being maintained by," 13 The New City Rotary Club, or, the Nanuet Lions Club. 14 And absent that, we're finding some 15 difficulty in these beautification projects. 16 And, we'll certainly be glad to share some of 17 these projects. 18 As I said, they're very elaborate, with 19 waterfalls, and they really become a thing of pride. 20 They identify a hamlet. 21 And so, certainly, that's another DOT rule 22 and regulation which we're trying to work through, 23 with the help of Senator Carlucci, but finding it 24 very difficult. 25 We have landscapers, again, ready to make a 1 five- to twenty-thousand-dollar commitment on these 2 couple of spots that happen to be on the state 3 right-of-way, where we're having great difficulty. 4 Yes, sir. 5 SENATOR CARLUCCI: Senator Larkin. 6 SENATOR LARKIN: Transportation Committee's 7 meeting in New York City tomorrow, and I will 8 personally bring this up to Senator Fuschillo, and 9 I'll have him call you. 10 And then, whatever we do, the group here, 11 we'll have a meeting with, the DOT, Bill Gordon, the 12 acting director. 13 But I think that, eventually, we'll have to 14 go see Joe McDonald, because this is not an issue, 15 I'm sure -- I'm sure my colleagues from 16 Western New York and Central New York can tell us 17 that they have, and I think we ought to make a 18 full-court press on it. 19 Because this violates the business of, first 20 of all, it beautifies your areas. It gives credit 21 for the community that wants to help. 22 Tell me about it; I got stacks of it like 23 this [indicating] from them. After 36 years, the 24 pile is not getting any smaller. 25 ALEXANDER GROMACK: Again, it's confusing, 1 because I've certainly seen on state highways, 2 where, "Adopt-a-Road," and it lists the 3 organization. 4 So, I don't know why we can't have an 5 "Adopt-a-Spot," listing the organization. 6 And that is probably some of the regulatory 7 reform that needs to be clarified. 8 I don't see much difference. 9 The town is backing these organizations. We 10 get all the permits. We actually put in the 11 waterlines, the lightings, and we pay the bills. 12 It's just a very nice donation. 13 And I hope Senator Carlucci can share what 14 these Adopt-a-Spots look like. 15 They're not a simple thing. As I said, 16 they're very extravagant. 17 The other thing, I would just leave you with 18 this, and you have probably done this, but, you 19 might want to check with, like, the 20 Builders Association, to find some of the problems 21 they see in siting small and large businesses, and 22 some of the rules that they find difficult in 23 complying with the state. 24 I think they would be a great resource. 25 Peter Barry is certainly -- our building 1 inspector, could give you a list, but I'm sure 2 there's a state association that might highlight. 3 And, again, I just give one example of a 4 major mall, Simon, and how we almost lost Apple as a 5 major tenant, because of a rule that applied in 6 Rockland, but did not apply to Westchester. 7 Thank you. 8 SENATOR LARKIN: Childishness. 9 SENATOR CARLUCCI: Thank you, 10 Supervisor Gromack. 11 Next we will hear from two members of the 12 Rockland Business Association. 13 Why don't you both come up. 14 We have, Lena Bodin, who's the president and 15 CEO of People Resource Strategies, and she's also 16 the co-chair of the Small Business Council of the 17 Rockland Business Association; 18 And, Robert Pitkofsky, who is -- has his law 19 firm, Pitkofsky, LLC, and is the co-chair of the 20 Rockland Business Association's Small Business 21 Council. 22 Thank you both for coming today, and we 23 appreciate your time, and look forward to your 24 testimony. 25 LENA BODIN: Well, thank you very much for 1 having us here. 2 We will be providing separate testimonies on 3 separate issues, but before I get started, I wanted 4 to say, Good afternoon to the Senators: 5 Senator Larkin, Marchione, Carlucci, Gallivan, and 6 Senator Valesky. 7 As the introduction, my name is Lena Bodin. 8 In addition to being a consulting firm that 9 helps small businesses, I am also a board member for 10 the Rockland Small Business Association, and 11 I co-chair the Small Business Council, and also the 12 Human Resources Council. 13 In addition, I'm a board member of the 14 New York State Council of the Society of 15 Human Resource Management, which is New York State 16 SHRM, where I currently serve as the legislative 17 co-director of government affairs, and, also, I sit 18 on the board of the Westchester Chapter, and serve 19 as a legislative director on that. 20 As a legislative director, our job really is 21 to help advocate some of the laws or some of the 22 issues that the human-resource professionals have to 23 deal with on a day-to-day basis. 24 And I was actually at the Turning Stone on 25 Saturday, in Verona, and we had about 1 250 HR professionals that are volunteers. 2 And it was a resounding, when I mentioned to 3 them that I'll be here, "Please, let's get this 4 particular law modified, repealed, or whatever." 5 So that's what I'd like to talk to you about. 6 SENATOR VALESKY: How much did you win while 7 you were there? 8 LENA BODIN: I didn't have the opportunity to 9 play. 10 [Laughter.] 11 LENA BODIN: We were very busy. It was a 12 very intensive seminar. 13 I am pleased to appear today before you, on 14 behalf of these groups that I just mentioned, and 15 they really do want me to become the voice here. 16 What I'd like to talk to you about today is 17 the repeal of the annual reporting requirements of 18 the Wage Theft Protection Act of 2010-- I'm sorry, 19 Prevention Act of 2010. 20 And I'm going to refer to this as "The Act" 21 as I go on. 22 And it's a requirement that is not only 23 time-consuming and cumbersome for the 24 HR professionals, but it's also very costly for the 25 business owner; and, therefore, again, I do thank 1 you for the opportunity to speak. 2 You've also all voted yes, so that's a very 3 great start for us, but I know that, you know, even 4 though the Senate has voted yes, and in favor of it, 5 in June of this year, it still has to go through the 6 Assembly and the Labor Board. 7 So we're kind of wholly hoping that, you 8 know, we will be more than happy to be of any 9 assistance that you need to help progress that 10 through the Assembly. 11 Just to tell you a little bit about The Act: 12 It requires communication in the form of a 13 notice to every employee in New York State, and it's 14 a written statement that shows the rate of pay, the 15 overtime rate, any of the premiums or payments, the 16 pay date, and the employer's intent to claim 17 allowances, such as FICA, [unintelligible], you 18 know, social security taxes, and this is as part of 19 the minimum wage, and any other information that's 20 set forth in the statute. 21 A signed copy of this notice must be retained 22 by the employer for each employee. 23 And the annual notification requires that 24 this notice be reissued to each employee at the 25 beginning of each calendar year, and, again, have 1 signed copies collected from the employees to be 2 maintained by the employer. 3 In my consulting practice, I have hands-on 4 experience in working with the Wage Theft Prevention 5 Act, and how it's impacted my clients. 6 And I also regularly work with the 7 small-business owners and their HR staff to develop 8 workplace policies, balancing the interests of 9 companies and their employees, while ensuring that 10 those policies are in full compliance with 11 New York State employment laws. 12 And to that end, I know, and I understand, 13 because I've worked with the businesses, and I hear 14 their groans whenever the annual-notice time comes 15 up; and it's particularly due to the duplicative 16 nature of the information that's required on this 17 notice, and the timing of the notice of when it must 18 be provided to the employees, and, particularly, the 19 requirement that the employers collect signed copies 20 of this notice back from each employee, or risk 21 penalties for non-compliance. 22 The New York State Business Council, a couple 23 of years ago, had conducted a study, collecting data 24 from their member organizations, which is available 25 on their website, and their information can easily 1 be applied to any small businesses, as well as the 2 larger employers. 3 The Business Council statistics showed that 4 the cost of the compliance could be anywhere, from 5 $3, up to over $55, per employees, and that becomes 6 very cost-prohibitive for a very small employer. 7 They also have statistics, where there was 8 one employer, where their cost was $161. And it's 9 probably because the person who's chasing these 10 signed documents from their employees, on an annual 11 basis, happens to be the business owner or an 12 executive within the company. 13 This issue was before the Legislature for the 14 past few years. 15 Most recently, the bill was introduced in 16 both the Assembly and the Senate by 17 Assemblyman Gabryszak and by Senator DeFrancisco, 18 which would have repealed the annual reporting 19 requirement of The Act. 20 And on June 21 of this year, in the final 21 hours of this year's legislative session, the Senate 22 passed its bill in a bipartisan vote of 43-20. 23 The Assembly, on the other hand, failed to 24 act before adjournment, and, although, its bill was 25 co-sponsored by a bipartisan mix of 62 members. 1 The groups I represent strongly support the 2 intent of the Wage Theft Prevention Act, 3 particularly the requirements that employers provide 4 wage information to their employees at the time of 5 hire, and any change in their rate pay when it 6 occurs. 7 But the annual-notice requirement, we feel, 8 is duplicative, because it is being applied: If an 9 employee get hired on December 14th, they're being 10 provided the notice; they sign it, they return it to 11 their employer. 12 January 1st, they get that notice reissued to 13 them, and a lot of times, the employees are the ones 14 that are coming back and saying, "I just signed 15 that. Why am I having to do this again?" 16 It really becomes cumbersome for the 17 HR professionals. 18 Usually their voices are not heard because 19 they don't come to testimonies such as this. 20 But at the beginning of the year, they're 21 dealing with wage -- W-2 statements, confirmation of 22 their benefits, you know, the 401(k) statements, any 23 other benefit notices; anything under Section 127, 24 all those reporting requirements happen at the 25 beginning of the year. 1 So this particular notice really becomes 2 another thing that they have to do, that they don't 3 have the time to get involved in and do. 4 The annual requirement is particularly 5 burdensome and costly for small businesses who don't 6 have a dedicated HR person, and it has to go to 7 somebody else within the organization that has to go 8 and chase down these forms. 9 Signed copies of this notice -- the annual 10 notice, along with each individual notice at the 11 time of hire, has to be maintained for six years. 12 It doesn't -- as I mentioned earlier, it 13 doesn't really cause a hardship to the employer at 14 the time of hire, because they're providing new-hire 15 documentation to the employee, and at the time, 16 they're signing everything and returning it. 17 It's the annual notification that really is 18 becoming the burden, and that's what we're 19 looking -- or, that's what we're asking to have 20 repealed, is the annual-notification requirement. 21 Given the economic fragility of our state, 22 and the U.S. economy as a whole, the RBA and the 23 New York State SHRM members implore you, and the 24 members of the Legislature, to take a close look in 25 early 2014 at the hardships New York employers have 1 encountered with the annual reporting requirement of 2 the Wage Theft Prevention Act. 3 I think that you will find, by amending the 4 law to eliminate the annual reporting requirement, 5 you will be eliminating a major burden for 6 employers, while maintaining the original intent of 7 the statute, that employees in our state are 8 well-informed about their rates of pay and any other 9 pay requirements set forth by statute. 10 Again, I wanted to thank you for providing me 11 the opportunity to speak on behalf of many of the 12 members who are not here, and I'm happy to answer 13 any questions that you might have. 14 SENATOR CARLUCCI: Great, well, thank you, 15 Lena. 16 What I'd like to do is, have Mr. Pitkofsky 17 speak as well, and then you can answer questions 18 together, because I think it would be a good 19 collaboration, the two of you both serving as the 20 co-chair of the Small Business Council. 21 So, Mr. Pitkofsky. 22 ROBERT PITKOFSKY: Great, thank you, Senator. 23 And I really -- and, really, to all of the 24 Senators, I really appreciate the opportunity to 25 speak with all of you today. 1 As the Senator noted, it's a wonderful 2 bipartisan relationship, and such a critical problem 3 for small businesses, you know, throughout our 4 region and our county and our state. 5 So, again, thank you for that opportunity. 6 There are a number of statutes, regulations, 7 and rules which hinder the creation of business 8 entities, but, just to give you a little background 9 of myself: 10 I'm a small-business attorney with a sole -- 11 solo practice here in New City, and I consist of -- 12 it consists of working with small and emerging 13 startup businesses to set them on the right foot. 14 And as has previously been mentioned, I'm 15 proud to serve the business community as co-chair, 16 with Lena, of the Small Business Council of the 17 Rockland Business Association, which is an 18 organization committed to advocating for business 19 interests in the Hudson Valley and in Albany. 20 And, we work with entrepreneurs, fewer than 21 25 employees, which are the lion's share of 22 businesses here in Rockland and the Hudson Valley, 23 generally. 24 And what we provide is a supportive forum to 25 discuss these business owners' operational, 1 marketing and employment concerns, confidentially, 2 because business owners have that -- or, are able to 3 establish that rapport in that relationship. 4 So, we're excited about the support that our 5 council's received. 6 But one of the most confounding requirements, 7 and I'm gonna speak about one today, that are 8 imposed, especially upon new business owners that 9 are looking to start up here in New York, is the LLC 10 publication requirement under the Limited Liability 11 Company Act. 12 New York's Limited Liability Company Laws, 13 Section 206, requires all members of 14 limited liabilities companies, which is one of the 15 most user-friendly corporate forms, incidentally, to 16 publish a legal notice in two newspapers, one daily 17 and one weekly, over a six-week timeframe within 18 120 days of the organization of the entity. 19 The Legislature has actually confirmed this 20 requirement several times; most recently in 2006. 21 To be quite honest, at least in my practice, 22 and from the literature prior to that amendment, 23 many entities decided to simply ignore the statutory 24 requirement entirely, because, before 2006, LLCs 25 that did not comply with this requirement were 1 simply un- -- they were unable to access the court 2 system to defend or prosecute an action in court. 3 So many of these entities, if there was an 4 action, simply filed for -- you know, at that time. 5 So it -- again, it became a burdensome 6 requirement that didn't advance the public need 7 anyway. 8 But, however, in 2006, the Legislature again 9 reaffirmed this requirement, and they seemed to 10 attempt to strengthen the penalty for 11 non-compliance, though, it's a bit unsure. 12 So under current law, as it stands, 13 Section 206(a) of the Limited Liability Company Law 14 states that the LLC's, quote, authority to carry on, 15 conduct, or transact business in this state, 16 unquote, is suspended as a result of failing to 17 comply with this publication requirement. 18 However, the language is nebulous at best, 19 and it does not seem to limit the LLC's ability to 20 contract or conduct business in the state. 21 Further, the Department of State does not 22 appear to keep any records of these non-compliant 23 LLCs, and does not have any mechanism for suspending 24 them, at least in my practice. 25 And so, again, it's -- from my experience, 1 this is the type of regulation that, certainly, this 2 Committee was formed to examine. 3 So, again, we continue -- my clients and 4 I continue to struggle with the public-policy 5 rationale behind this requirement, because after an 6 entrepreneur makes a decision about what entity to 7 choose, the client quickly turns to startup costs, 8 legal costs, and filing costs. It's just a natural 9 conversation. 10 So after the initial filing fee and the 11 registered-agent fees for any kind of business 12 entity, the publication costs, these LLC 13 publications' costs, can cost up to $2,000 per 14 entity, depending on which county the LLC is 15 organized in, which is also very unfair as well. 16 So as my clients tell me often, "No one reads 17 the legal notices in the newspaper." 18 And this information is more readily 19 available on the Internet through the Department of 20 State's database. 21 There must be other technological ways to be 22 able to do this. 23 And this is a -- you know, again, an example 24 of how we can improve the business and economic 25 climate here in New York; because, again, from a 1 public-policy standpoint, I submit this requirement 2 has reduced the willingness of business owners to 3 open or conduct business here in New York, because 4 with the other, quote, more business-friendly 5 jurisdictions, such as Delaware, have taken 6 advantage of similar arcane requirements, such as 7 this publication requirement, and relaxed the 8 jurisdictional nexus that a business must have with 9 a foreign state in order to operate. 10 And I would further argue that this 11 requirement, which, again, does not have that 12 public-policy underpinning, seems to perpetuate the 13 unfair perception that New York State is not 14 business-friendly, which is completely antithetical 15 to what we're trying to do here; or, somehow, that 16 the state is not a great place to invest capital, 17 hire employees, and to manufacture products. 18 So I recognize, yes, that the elimination of 19 this requirement would reduce some revenue 20 recognized by the Department of State, in terms of 21 the filing fees. There is a formative fee required 22 after filing these publications. 23 In addition, there would be some loss of 24 revenue to the handful of newspapers that are 25 approved to publish these LLC notices; however, 1 I would argue that the elimination of the 2 requirement would encourage new and existing 3 business owners to consider doing business in 4 New York State, and that would result in a net 5 increase in tax revenue to the state. 6 Business owners who are considering which 7 state to incorporate in or do business in always 8 look at the bottom line. 9 So I respectfully ask that this Committee 10 look at this and examine this thoroughly -- there 11 are definitely resources that are available -- and 12 strongly consider substantially amending this, or 13 abolishing it altogether. 14 And so I thank you for your consideration, 15 and will certainly entertain any questions you may 16 have. 17 SENATOR CARLUCCI: Senator Larkin. 18 SENATOR LARKIN: May I call you, Lena? 19 LENA BODIN: Please. 20 SENATOR LARKIN: While you were talking, 21 I kept thinking about, I owned a business from 22 1975 to 1995. 23 Why do you think I sold it? 24 LENA BODIN: Because of too many -- 25 SENATOR LARKIN: Every time I turned around, 1 there was something new. 2 LENA BODIN: [Unintelligible] do with the 3 employees. We have a lot of -- 4 SENATOR LARKIN: But, you know, the media 5 that's here has to understand: 6 I owned a dry-cleaning. 7 Do you know why I bought it? 8 Because the guy said, "You come in here 9 a lot." 10 [Laughter.] 11 SENATOR LARKIN: I'm a retired army colonel, 12 and my uniforms have to be such-and-such. And, 13 I have three grown children who like their laundry 14 without being paid. 15 But the thing about it is, I saw -- you know, 16 I wasn't in there every day, because I was also the 17 town supervisor, but I saw, on one day, the people 18 coming in, looking at the smoke stack. The people 19 coming in, looking at the washer and the dryer. 20 We eliminated that because we bought a 21 machine that did washing and drying. 22 And I forgot to put a piece of paper on one 23 of the machines. It cost me $500. 24 In 1975, 500 bucks was a heck of a lot. 25 LENA BODIN: Was a lot of money. 1 ROBERT PITKOFSKY: Sure. 2 SENATOR LARKIN: And we put it into the file 3 cabinet where the auditor said it should be, but 4 nobody told me that it had to be on the machine. 5 There's nothing in writing they could ever 6 show me. 7 So I took it, just as a case, took it to 8 court. We got our $500 back. 9 But the point was, that the employees kept, 10 What did we do wrong? Are we going to be punished? 11 Are we going to lose money? 12 I'm going to tell you, I had it for 20 years, 13 it was good, but 28 people got paid. 14 But maintaining the records, when they got 15 pay raises or that, first of all, everyone was -- 16 you know, you did all of this, and he did all of 17 this, and she did all the work. 18 We have to come up with something that is 19 simple. 20 You know, small businesses; you know, there 21 are small businesses that have 7 or 8, 10 people. 22 They don't need all of this, you know, because 23 they're not going to survive. 24 The people who bought my business kept it for 25 five years, and he said, "I can't afford it." 1 "I can't afford it." 2 He was making money, but every time he turned 3 around, somebody come up with a new form, or some 4 new regulation, you know, two and three and 5 four inspectors a day, you know, between 6 Taxation Department, Environmental Conservation. 7 LENA BODIN: OSHA. 8 SENATOR LARKIN: Oh, OSHA. 9 [Laughter.] 10 SENATOR LARKIN: That caused me to sell it. 11 But, I mean, what we're trying to do here is 12 the right thing, but, you know, Robert, you said you 13 hope we do this. 14 When am I going to see a letter from you and 15 our BS that says, This is a priority for us? 16 I mean, we've all taken notes here -- 17 ROBERT PITKOFSKY: Okay. 18 SENATOR LARKIN: -- but we need something, 19 that when we go to a Committee and we say A, B, C, 20 we're gonna be able to say -- David and I both 21 represent Rockland County -- we're going to be able 22 to say, Our county is strongly for or against. 23 Not that we took notes at a meeting, but, in 24 writing of your position. 25 ROBERT PITKOFSKY: Absolutely. Understood. 1 I appreciate that opportunity to provide 2 that. 3 SENATOR LARKIN: Thank you. 4 Thank you very much. 5 ROBERT PITKOFSKY: Thanks, Senator. 6 SENATOR LARKIN: It was amazing to think that 7 somebody thought like I did. 8 SENATOR CARLUCCI: Senator Gallivan. 9 SENATOR GALLIVAN: Lena, thank you for your 10 detail. It was very. 11 You'd probably be interested in knowing, this 12 is now our sixth hearing that we've conducted. 13 That, has come up every time. 14 LENA BODIN: Yes. 15 SENATOR GALLIVAN: Large businesses, small 16 businesses, medium businesses. 17 LENA BODIN: It impacts every business. 18 SENATOR GALLIVAN: But the detail that you've 19 provided is very helpful, so we are focused on that. 20 I hope we can get some results. 21 But, thank you. 22 The LLC issue has also come up, and 23 interestingly enough, it's a mandate; it's a mandate 24 on local governments as well, that they have brought 25 up when they have to publish local laws. 1 So, I guess the supervisor, I think has moved 2 on, but, the towns in my district have articulated 3 to me that they can only pass -- propose a certain 4 amount of new laws per year, because they have to 5 budget for it, which is kind of crazy to me in this 6 day and age. 7 ROBERT PITKOFSKY: It's counterintuitive, 8 exactly. They're -- 9 SENATOR GALLIVAN: But we appreciate your 10 detailed testimony as well. 11 ROBERT PITKOFSKY: Thank you, Senator. 12 SENATOR MARCHIONE: Yes, thank you. 13 SENATOR CARLUCCI: Well, Ms. Bodin and 14 Mr. Pitkofsky, thank you. 15 You gave us much detail, and we appreciate 16 your time and testimony, and we look forward to 17 working with you in the future on these issues, and 18 others as well. 19 Thank you. 20 ROBERT PITKOFSKY: Thank you, Senator. 21 Thank you all. 22 LENA BODIN: Thank you. 23 SENATOR CARLUCCI: Next we're going to hear 24 from Steven Porath, who is the executive director of 25 the Rockland Industrial Development Agency. 1 STEVEN PORATH: Well, good afternoon, and 2 thank you for having me here. 3 I'd like to start off apologizing; I don't 4 have formal remarks that I had sent to you in 5 advance, but I intend to follow up with that, and 6 maybe based on some of the discussion we have today. 7 My comments today are, more, some suggestions 8 of things we should have versus eliminating things 9 that exist; so let me start with that note. 10 Coming from the IDA, I think we -- I have a 11 certain perspective of what the type of projects 12 that the IDA typically does, and, also, sister 13 agencies like Empire State Development, that I can 14 say, by and large, the industry of economic 15 development does not lend itself easily to working 16 with small businesses. 17 It's structured, it's goals, it's the 18 regulations, that rule what we do, lends itself to 19 impactful projects. 20 And by "impactful," I'm talking about 21 two things: a lot of jobs, a lot of investment. 22 The small retailer, the small entrepreneur, 23 oftentimes is in -- there is no fit for them in the 24 world of the IDAs or Empire State Development 25 Excelsior programs, the former Empire Zones program. 1 It just wasn't a good fit. 2 And, I can understand the argument for some 3 of this. 4 Retail, inherently, is 5 demographically-oriented, as compared to 6 manufacturing. 7 A small, you know, retail shop is going to go 8 where the shoppers are. 9 A restaurant's going to go where, you know, 10 the customers are going to be. 11 And that oftentimes puts it at odds of what 12 economic development typically does, which is, try 13 to give significant tax incentives for it to go and 14 land into a specific spot. 15 But I think there's a way that we can bridge 16 that. 17 Because the industry of economic development 18 is geared towards jobs and overall investment, 19 looking at a small mom-and-pop company that has one 20 or two, maybe the employers -- the employees are the 21 owners, or they have one or two part-timers, in 22 itself is not impactful in the scheme of overall 23 investment and jobs. 24 So rather than looking at that individual 25 business, which is how incentives are provided 1 today, I would suggest that we start to really 2 change the paradigm a little bit. 3 Let's change the dynamic of how we look at 4 economic development, and maybe start considering, 5 and I'm talking specifically about Rockland, but 6 I think it can also lend itself to other areas of 7 the state, look at pools, areas of a community, 8 whether it's a retail sector or whether it's a 9 downtown, allow a mechanism, and with the 10 cooperation of the State and the local 11 municipalities, to define, maybe call them 12 "redevelopment zones" -- 13 I like to call them "pockets of commerce," is 14 a phrase that I've used in the past. 15 -- where you define a zone, and if a 16 business, regardless of size, resides within that 17 zone and meets certain preestablished criteria, as 18 far as job creation, investment, every -- and other 19 criteria that can be defined locally, they will be 20 enabled to have some tax incentives, and that could 21 be in the form of property-tax abatements, perhaps 22 sales-tax exemption on, uhm -- things like the IDA 23 does, like sales-tax exemption on capital 24 improvements. If there's a -- you know, a financing 25 and there's a mortgage-recording tax, exemption on 1 that. 2 These are things that large businesses, and 3 I deal with this almost every day of the week as the 4 executive director of the IDA, those types of 5 incentives, a large company is very familiar with 6 it. They have the machine of economic development. 7 They have consultants, they have experts, they have 8 attorneys, that know how to acquire those benefits. 9 The small mom-and-pop simply doesn't, and 10 it's not a natural fit. 11 But, again, rather than having an individual 12 business have to go through, for example, the IDA 13 application process, have a community define a zone, 14 "a pocket of commerce," that if they fall within 15 that area, they can take advantage of some of these 16 incentives that already exist. 17 The machinery of those exemptions are in 18 place, it's just a matter of getting them to the 19 small businesses. 20 And that's it; I really just wanted to give 21 you a real, like, a bullet shot of one program. 22 I mean, there's a lot of things we can talk 23 about small business, from financing, and other 24 things, but, opening up the doors to some of these 25 programs to the small business I think is crucial to 1 seeing -- seeing, like, communities, like Rockland, 2 which has maybe a few downtowns, but also has retail 3 corridors, having stores within that take advantage 4 of it. 5 So, really, that's my comments, and I'm 6 available for any questions or thoughts you might 7 have. 8 SENATOR CARLUCCI: Very well. 9 Steven, thank you for the testimony, and 10 thanks for being concise. 11 The pockets of commerce, that idea, it sounds 12 great. 13 Now, it sounds similar to the idea of the 14 Regional Economic Development Council that has been 15 developed over the past few years. 16 How would you rate that, in your role? 17 STEVEN PORATH: Yes, I think -- and, in fact, 18 I think they go part and parcel with each other. 19 This pockets-of-commerce idea is really 20 almost boiling it right down to the local community. 21 It could be -- for example, I can give a very 22 specific example where this concept was adopted by a 23 municipality. 24 Two years ago, the town of Stony Point 25 adopted by resolution, this concept of pockets of 1 commerce for a retail corridor. It ran -- the 2 particulars are -- isn't really relevant, but it 3 went through Stony Point's retail corridor. 4 And it would take, as we were developing that 5 with the town of Stony Point, it quickly became 6 evident that there was a lot of regulations. 7 And, again, that industry of economic 8 development doesn't lend itself, without a lot of 9 changes, of how to incorporate that. 10 The stumbling blocks became very quick and 11 evident that it would be very hard to implement. 12 But, in that case, it would be a good fit. 13 With the regional councils, again, they're 14 set up to define these, and I think that's an 15 existing tool that we can incorporate into that 16 process, and use that as the vehicle to really 17 make -- put some meat to this concept. 18 SENATOR CARLUCCI: Well, Steven, you touched 19 on something that I think we've all seen, time and 20 time again, is that it's -- you know, we develop 21 these policies, the incentives, but the smaller 22 businesses aren't equipped to take advantage of it. 23 It's the bigger multinational corporations, 24 with the consultants, the attorneys, that can do it. 25 Do you have, in your experience, ideas where 1 you can make it easier for the mom-and-pops, the 2 small businesses, the budding entrepreneur, to take 3 advantage of some incentives? 4 STEVEN PORATH: Sure. 5 Yeah, I'll give you a very real example. 6 Several years ago, and it's our own 7 organization, Rockland IDA, we recognized this 8 issue, because the process of approvals, there's 9 inducements and authorizing resolutions and public 10 hearings, and, just the process, the machinery of 11 it, was bulky. 12 And because IDAs are fee-based organizations, 13 the fees themselves can actually cancel out the 14 benefit. 15 You know, fees cost you -- simple -- if it's 16 $5,000 in fees, and you're only getting $6,000 in 17 tax incentives over several years, it just doesn't 18 make sense to do. 19 So what the IDA did several years ago, we 20 created, we call it, informally, "our small business 21 program." 22 What we did was, for small businesses that 23 met certain criteria, they could have had a fixed 24 fee of, I believe it was $1500, all told. They 25 could take advantage of sales-tax exemption only. 1 That's the 8.375 percent state and Rockland County 2 sales tax, for capital improvements. And it could 3 be up to $100,000 in purchasing. 4 So it worked out to where it was very simple. 5 We kind of made the forms standardized. We 6 made their approval and the contracts and all the 7 agreements very standard, as compared to the 8 bigger -- bigger-blown ones. 9 And that was a very simple way to let some 10 businesses, that otherwise would have never taken 11 advantage of the IDA, to take advantage of it. 12 And we've got some examples of that. 13 But I will say, in all fairness, they also 14 weren't mom-and-pops. 15 I mean, if you go by the definition of what a 16 "small business" is, a lot of small businesses, by 17 federal regulations, are big enough to have CFOs 18 and, you know, everybody else. 19 So I'd like to see us even make it even a 20 little simpler. 21 That's a personal goal for the IDA; to lower 22 that bar even farther down to make it less 23 expensive, so businesses can take advantage of some 24 of these incentives. 25 But that's how we can do it. 1 And I think, working together with the State, 2 we can make that happen. 3 SENATOR CARLUCCI: Yeah, because that's one 4 of our goals. 5 I know Senator Marchione is a former clerk, 6 I was a former town clerk. 7 You'd meet with these entrepreneurs that have 8 ideas, have a dream, want to make a business, and 9 then they meet up against all the red tape that 10 you've heard about before. 11 So any strategies in terms of affecting 12 regulations, where we can help cut down on that 13 barrier to entry, or make it easier to get into 14 starting a business, you know, we're all ears, and 15 look forward to working on that. 16 STEVEN PORATH: Absolutely, and I'd be happy 17 to provide some of that. 18 SENATOR CARLUCCI: Senator Larkin. 19 SENATOR LARKIN: Years ago, Alex and 20 I chaired Local Government; he in the Assembly, 21 myself in the Senate, and we made a lot of progress. 22 One question that still bothers me, when IDAs 23 come about and say to town -- to the supervisor of 24 the town of Saratoga, We want you to give this 25 company 35 percent reduction on tax. 1 And I disagree with that. 2 I disagree, because I was a town supervisor. 3 You didn't have to make the budget. You 4 didn't have to meet everything. 5 Where do you get off telling me what benefits 6 I will give? 7 I think it's -- we've had one in 8 Orange County, Steve Neuhaus, now running for 9 county exec, he took it to court, and you know what 10 the court said? 11 "IDA, thank you very much for your help, but 12 when you start paying the bill, then you can make 13 the decision he is." 14 So I think that there's a little roughening 15 between IDAs and local governments, because some 16 IDAs across the state, and I've met most of them, 17 think I'm the guy with the pocketbook. 18 You are the guy with the pocketbook, but, 19 also, if you remember, that town or village or city 20 is also in the process of trying to recruit 21 business. 22 So I think that demanding that certain taxes 23 be exempt, I think is negative. 24 STEVEN PORATH: Senator, if you -- if you 25 were -- if I was to hand you an issue and say, 1 "Bring that up so I can respond to it," I couldn't 2 have put it better, because I couldn't agree more 3 with you on that issue. 4 And I would even go as far to say, a lot of 5 IDAs, they have the checkbook, but it's the 6 municipalities that actually have the bank account 7 that gets impacted. 8 So it's -- 9 SENATOR LARKIN: You're exactly right. 10 STEVEN PORATH: So that lends itself to -- 11 and it's, very rarely, do you have an opportunity to 12 respond so positively to something that's a serious 13 issue. 14 Rockland County is one of two IDAs throughout 15 the state that does not have the legal right to 16 impose a pilot on the local taxing entities: school 17 districts, towns, villages, and the county. 18 And a lot of times, when I first came to the 19 IDA, my first initial reaction was, Geez, we don't 20 have the same, you know, tools that our neighboring 21 counties have. 22 I've come around to coming and saying, that 23 one element, not having that right, has given us so 24 much benefit, much more -- because I'm very much 25 aware of these lawsuits that fly around. 1 I've talked to school districts, you say the 2 words "IDA," and they run. They look at you like 3 you're the enemy. 4 In Rockland County, because I don't have 5 that -- and when I say "I," I mean the IDA -- 6 because we don't have the ability to impose, what we 7 do, by -- by -- initially, by -- because we had to, 8 but it has become a machine in its own sense, is to 9 meet with all the local taxing entities. 10 When we have an IDA project and the applicant 11 that's seeking a pilot, our first step, usually 12 informally, is to sit down with the town, a village, 13 the school district, the county, talk it through. 14 Because, how we're are set up is, I don't 15 have the ability to approve anything. 16 I can approve a business for the ability -- 17 for the right to negotiate a pilot, but the towns, 18 the school districts, and village have to actually 19 consider it, structure it, and pass by resolution, 20 that deal. 21 As a consequence -- because we're forced to 22 work together, not only does the business and the 23 school districts and the towns, and everyone, reach 24 a deal that makes sense for everybody; that there's 25 some continuity, that it addresses the issues that 1 that business needs, maybe the pilot is front-loaded 2 a little bit more than spread out, or vice versa, 3 but as a consequence, a deal is made that's agreed 4 to by all. 5 And as a result, in Rockland County, there 6 has never been an IDA pilot challenged in court, or 7 even fought over. 8 There's clawback, and all the protections 9 that a municipality should have, if somebody doesn't 10 do what they're supposed to do. 11 But I think it's the best thing -- one of the 12 best things Rockland County has done, was not give 13 me the ability to impose that pilot. 14 So I agree with you more. 15 SENATOR LARKIN: I knew you -- I knew the 16 position of the county, because David and I spoke 17 about it, but I had -- but I just wanted to make 18 that you're giving advice to the rest of us who have 19 different parts of the state -- 20 STEVEN PORATH: Absolutely. 21 SENATOR LARKIN: -- because it's -- many 22 times, it's a deterrent, rather than a positive, 23 because, when they look and they say, Well, she's 24 the town supervisor. 25 She says, I'm giving you 35 percent. 1 And he says, We're going to give them 50. 2 And she says, Wait a minute, where's the 3 15 percent coming from me? I don't have it. I got 4 the checkbook, but there's no 15 in there; there's 5 only 35. 6 So if you want it, you want to come to our 7 town, here's what we're giving you. 8 And I agree with you, this basic ground 9 movement is the positive solution. 10 STEVEN PORATH: It's a good -- that's one 11 thing at -- 12 SENATOR LARKIN: I've promoted you, see that? 13 [Laughter.] 14 STEVEN PORATH: So, no, I thank you for 15 bringing that up because it's -- obviously, it's an 16 issue that's very near and dear to the -- our IDA's 17 heart, that we like how it is. 18 And I'd say, if I was to make a 19 recommendation, that this be considered elsewhere. 20 SENATOR LARKIN: Thanks for your response. 21 SENATOR CARLUCCI: Great, thank you, Steven. 22 STEVEN PORATH: Thank you very much. 23 SENATOR MARCHIONE: Thank you. 24 SENATOR GALLIVAN: Thanks, Steve. 25 1 SENATOR CARLUCCI: Next we're gonna hear from 2 Jim Calvin, who is the president of the New York 3 Association of Convenience Stores. 4 SENATOR LARKIN: Hi, James. 5 JAMES CALVIN: Good afternoon, Senators. 6 SENATOR LARKIN: How you doing? 7 JAMES CALVIN: Nice to see you. 8 SENATOR LARKIN: Good to see you. 9 JAMES CALVIN: My name is Jim Calvin. I have 10 the privilege of serving as president of the 11 New York Association of Convenience Stores. 12 We're a statewide trade organization that 13 represents nearly 8,000 retail establishments, from 14 one corner of the state to the other. 15 From a corner market in West Seneca, to a 16 bodega in Brooklyn; from a country store in 17 Saratoga County, to a Gas 'N Go in suburban Syracuse 18 or Spring Valley; convenience stores come in all 19 different shapes and sizes and formats. 20 Open extended hours, these small businesses, 21 many of which are independent family-run 22 enterprises, are proud to be part of an industry 23 that millions of New Yorkers rely on as a 24 gas station, quick-serve restaurant, bank, 25 refreshment center, and source of community 1 connection. 2 Our thanks to the Senate Majority Coalition, 3 and Senators Gallivan, Valesky, Marchione, Carlucci, 4 and Larkin, for convening this forum. 5 I'm very proud to say that Senator Marchione 6 is my senator. 7 Greetings from Kinderhook, New York, Senator. 8 SENATOR MARCHIONE: Thank you. 9 JAMES CALVIN: And NYACS is honored to be 10 able to testify today. 11 Convenience stores have a unique perspective 12 on New York State's regulatory climate because we 13 are engulfed by it. 14 We sell motor fuel, tobacco, 15 alcoholic beverages, prepared food, milk, snacks, 16 and a wide range of other products, and we collect 17 billions of dollars in excise and sales taxes for 18 the state of New York. 19 And, consequently, we're licensed and 20 regulated and audited and inspected by the following 21 state agencies: 22 The Consumer Protection Board; 23 Agriculture and Markets; 24 Environmental Conservation; 25 Department of Health, of Labor; 1 Division of the Lottery; 2 Department of State; 3 Department of Taxation and Finance; 4 The State Liquor Authority; 5 The Office of Alcoholism and Substance Abuse 6 Services. 7 If it isn't the tax auditors, it's the 8 alcohol-warning-sign police; 9 Or, Ag and Markets inspectors, monitoring 10 food-service sanitation; 11 Or, health departments, performing undercover 12 tobacco stings; 13 Or, a badge-wielding bureaucrat showing up 14 unannounced, and opening up every cigarette carton 15 to see if every pack has a valid state tax stamp; 16 Or, the Labor Department, checking your 17 wage-and-hour records; 18 Or, the environmental officer, writing you up 19 for fading paint on the caps of your underground 20 petroleum storage tanks; 21 Or, Weights and Measures, doing an 22 item-pricing inspection. 23 It's endless. 24 I swear, as Senator Larkin was alluding to 25 earlier, some days, more inspectors come through the 1 door than customers. 2 On more than one occasion, I have 3 half-jokingly suggested that, in the name of 4 efficiency and common sense, why don't the state, 5 local, and federal governments team up and assign 6 one dedicated, full-time "super-inspector" to each 7 convenience store to ensure 100 percent compliance 8 with every single law, regulation, and policy known 9 to man? 10 Most of our members got into the 11 convenience-store trade because they wanted to sell 12 stuff, interact with customers, earn a living, and 13 grow a business, but, wave after wave of additional 14 regulation has turned them into compliance officers, 15 draining their limited time and energy and 16 resources; draining it away from running their 17 business in order to ensure they meet the state's 18 ever-expanding regulatory requirements. 19 For the single-store mom-and-pop operator, 20 the challenge is almost insurmountable. 21 Now, in my written testimony, I've offered a 22 number of specific laws, regulations, and policies 23 that may merit your attention as you move forward. 24 I would be happy to discuss any of them 25 today, or in the future. 1 We're developing more, and I expect that our 2 individual members will be submitting additional 3 suggestions, using the feedback form that you've 4 provided. 5 One issue I do want to touch on here during 6 my oral testimony, has to do with preventing 7 underaged sales. 8 We wish to commend Senator Gallivan for 9 introducing legislation this year, Senate Bill 3493, 10 that will require all individuals wishing to 11 purchase alcohol or tobacco at off-premises 12 establishments, like ours, to present a valid 13 photo ID, regardless of age. 14 Existing law says, we have to ID a tobacco 15 customer who appears to be under 25, and a beer 16 customer who appears to be under 21. 17 But anybody who has ever worked in a retail 18 environment knows how hard it is to discern a 19 customer's age. 20 Too often, even properly trained cashiers 21 guess wrong, don't ask for ID, and mistakenly sell 22 to a minor. 23 That jeopardizes public safety and health, 24 and it subjects them and our stores to harsh 25 penalties. 1 This legislation would eliminate the 2 guesswork; thereby, reducing underaged sales. 3 Rather than training store clerks only to 4 ID customers who look younger than a certain age, 5 we'd be able to tell them, "Just ID everybody." 6 Some stores have already, voluntarily, 7 adopted this as a store policy, but, regrettably, it 8 has cost them business, because, when older 9 customers get annoyed at being asked for their ID, 10 they walk out and go across the street to a store 11 that doesn't have a policy like that. 12 A statewide law is the solution. 13 We -- this bill would also address the lack 14 of prompt notification on the part of the 15 State Liquor Authority when there is an 16 underaged-sale violation. 17 And what's been happening, as you well know, 18 Senator Valesky, from your friends at Nice N Easy 19 Grocery Shoppes, there are retailers that have 20 received notice of a violation, 6 months, 8 months, 21 10 months, after the alleged incident, and that's 22 the first time they become aware that there was an 23 underaged sale. 24 And that means that the State Liquor 25 Authority has allowed that clerk or cashier to 1 remain on the job; who knows how many additional 2 underaged sales they have made to the public without 3 the knowledge of management. 4 And, you know, contrary to their training, 5 and the law, it's important that we know as soon as 6 possible so we can remove the problem immediately. 7 So we look forward to working with 8 Senator Gallivan and the Senate Majority Coalition 9 to pass this legislation in 2014. 10 New York's pervasive regulatory burden would 11 be easier for all of us to bear if our 12 Native American competitors were held to the same 13 standards. 14 They sell billions of dollars worth of 15 cigarettes and motor fuel to non-Indian customers; 16 yet, they're not required to obtain licenses, to 17 collect and remit state taxes, undergo audits or 18 inspections, or abide by any of these regulations. 19 And in the case of the Oneida Indian Nation 20 in Central New York, their reward is an agreement 21 signed by Governor Cuomo, and ratified by the 22 Legislature earlier this year, under which our state 23 essentially promises to forever look the other way 24 on all of the above regulations, permanently 25 bestowing special privileges and competitive 1 advantages on those who have made a fortune thumbing 2 their nose at duly enacted standards for doing 3 business with New Yorkers. 4 Meanwhile, law-abiding convenient-store 5 operators who, for decades, have pleaded with the 6 State to end this injustice; instead, get poked in 7 the eye. 8 All we have ever asked for is a fair chance 9 to compete for retail trade. 10 We really appreciate the initiative that all 11 of you have taken, and the success that you have 12 achieved in a very short period of time, in starting 13 the arduous task of reforming and repealing and 14 rolling back and modifying costly and unnecessary 15 regulations that impede small-business growth. 16 When legislators ask me, "What can we do to 17 make things better?" the first thing I think of is, 18 refrain from making it any worse. 19 Thus, in 2014, when election-year proposals 20 for more burdensome legislation and regulations are 21 introduced, we ask you and your colleagues to just 22 say "no." 23 When they want to expand the "Bottle Bill" to 24 iced tea and juice and sports drinks and 25 flavored water, sticking us with the mess of having 1 to redeem and store empty, unrinsed containers, 2 please say "no." 3 When they try to impose mandatory sick leave 4 on private-sector employers who can't afford it, say 5 "no." 6 When they try to place new restrictions on 7 what products we can sell, or what form of payment 8 we can accept, please say "no." 9 When they try to prohibit retail businesses 10 from checking into whether an applicant for a 11 cashier position has any past criminal convictions 12 until after we conditionally offer them a job, 13 please say "no." 14 When they propose higher taxes on our core 15 products, say "no," because those tax rates are 16 already the highest rates in the country, or, among 17 the highest rates in the country. 18 When they want convenient-store operators to 19 wear "Kick Me" signs on their backs, by requiring 20 gas pumps to display the phone number of the 21 Attorney General's Office, so consumers frustrated 22 with gas prices can call and arbitrarily accuse us 23 of overcharging, please say "no." 24 Say "no," because these measures would drive 25 up our costs, reduce our sales, and/or erode our 1 ability to cope with the existing tax and regulatory 2 burden. 3 Say "no," because such actions would only 4 reinforce New York's reputation as having the worst 5 business climate in the country. 6 Say "no," because you sincerely want small 7 businesses to be able to succeed, and grow, and 8 provide employment, and generate tax revenue, and 9 contribute to the communities they serve. 10 On behalf of NYACS, thank you for your time 11 and attention, and for your bipartisan commitment to 12 addressing overregulation of small business. 13 SENATOR CARLUCCI: Great, thank you, Jim. 14 Do we have questions? 15 SENATOR LARKIN: Jim, one thing we talked 16 about earlier this year: I have seen some of your 17 stores, where somebody comes in, underage, and they 18 pick 'em up. 19 The underaged person, in this case, was in 20 Highland Mills, New York. I was -- I brought to 21 the -- somebody brought the lady in. 22 She said, "I was asked to do this by the 23 Department of Health." 24 This lady looked more towards 30 than she did 25 towards 18. 1 Now, they got fined, but here's what bothers 2 me, and I think we as legislators ought to take a 3 good look at it: 4 This is a mom-and-pop store. 5 Mom-and-pop put 18 to 20 hours a day in 6 there, but, they lost their license to sell 7 cigarettes. 8 Ah! They lost the Lottery ticket sales. 9 They also lost the beer license. 10 Now, let's think about it: 11 Your customer comes in. It's near a bus 12 stop. 13 They come in; they buy a newspaper, they buy 14 a cup of coffee, they buy a pack of cigarettes, and 15 maybe something else, a sandwich, or something. 16 But when they can't buy those cigarettes or 17 that Lottery, "When you going to get it?" 18 "I don't know. It could be six to 19 nine months." 20 Where does your customer go? Someplace that 21 has it. 22 JAMES CALVIN: That's right. 23 SENATOR LARKIN: I mean, if you're going to 24 punish me for selling cigarettes, then punish me for 25 selling cigarettes. 1 I didn't sell, illegally, the Lottery or the 2 beer or the newspaper. 3 I think we ought to strive to get together 4 with the Lottery tax and Health on that, because, 5 Health, and the counties involved in this, so we 6 have to bring them in. 7 But, do we need to put someone out of 8 business? 9 Because when you say, in this case, these 10 people told me, it's almost nine months, and they 11 haven't sold a cigarette. 12 JAMES CALVIN: Yeah, losing your tobacco and 13 Lottery licenses, that's a death sentence for the 14 typical convenient store. Those are your two top 15 traffic-drivers. 16 We understand, that if there are repeat sales 17 of tobacco to minors, then you're gonna get your 18 tobacco license suspended. 19 We accept that. 20 But, to also require that your Lottery 21 license be suspended, on the theory that, if you 22 sold tobacco to minors here, you're probably going 23 to sell Lottery to minors over there, we don't -- 24 that's not rational, in our view. 25 If you get pulled over for speeding, and you 1 get points on your license, you lose your driver's 2 license, should your hunting license be suspended? 3 I don't think so. 4 SENATOR LARKIN: Same thing. 5 JAMES CALVIN: But there's a presumption, 6 that because you committed an offense here, you'll 7 commit an offense there. 8 It's not fair to the retailer to lose that 9 Lottery license. 10 SENATOR LARKIN: The other thing I -- you 11 know, they forced me to do this; they said, Make 12 sure you go out and check all these stores in your 13 district. 14 I said, I do it every day. Buy a lottery 15 ticket from you, Lottery ticket from you. 16 [Laughter.] 17 SENATOR LARKIN: My wife says "fool's gold." 18 But the point about it is, I look at a place 19 that I didn't pay attention to. 20 I get my morning paper there, and my gas, and 21 I saw all these stickers. 22 You know, "Go to school on time." "Pick up 23 your child on time." "Oh, if you buy cigarettes, 24 they can't be this here." 25 There's more notices in these stores than 1 there is going to a doctor's office that says, If 2 you don't have a co-payment, we can't take care of 3 you. 4 Is there anything, gentlemen, that we could 5 pay attention to, to look at that? 6 Because I -- Saturday morning, somebody was 7 there when I was getting my paper at 6:30, and this 8 gentleman in business says, "Am I glad I don't own 9 one of these." 10 Because, what happened if somebody, by the 11 way, last night, in cleaning, took a sign down, and 12 the next day, a guy comes in and said, You're 13 supposed to have that sign. 14 And the guy says, "It was there yesterday." 15 "Well, you're fined for this here." 16 I mean, I think there's too many. 17 I don't know if you agree with me, but 18 there's -- you know, there's -- you know, go to bed 19 at 9:00, get up at 5:00; go get your newspaper, pay 20 the gas; pick up your grandchildren; have dinner for 21 the grandchildren. 22 I mean, I have that at home. 23 My wife said, Anna Jean [ph.] and the kids 24 are coming for dinner tonight, and tomorrow night, 25 and I got to go to something at 7:00, so she said, 1 "We're eating at 5:00." 2 I look at that, and that's my house. 3 But a business, I think you're causing 4 troubles. 5 I really do, gentlemen. 6 I think it's -- I mean, we all want to make 7 sure that we comply, that we help, and do that, but, 8 you know, there comes a time when you start to say, 9 What are we gaining by doing all of this? 10 JAMES CALVIN: Senator, we agree that -- at 11 least that there's a on our part, that, every 12 week -- 13 SENATOR LARKIN: But why do we -- 14 JAMES CALVIN: -- there are more -- 15 SENATOR LARKIN: -- Jim, you've done this a 16 couple years ago, when we had this ration going on, 17 and you got people together. 18 Could we put together, for the board -- 19 I'm speaking out of turn. I'm -- but I'm not 20 a member of this Committee, but this is my district, 21 and I wanted to find out what you folks cared about. 22 -- I think that we ought to go and put 23 Health Department, Liquor Authority, Lottery, 24 together, and say, Hey, what has to be in this 25 store? 1 You know, you got to remember, sometimes the 2 store's like this in here [indicating]. 3 There's more signs on the wall than it tells 4 you how much a pack of cigarettes are. 5 And, you know, everybody knows how much the 6 Lottery is going to win, because they see it there. 7 But, all of these other signs, and you think 8 If I forget to put one of them up, or change it, it 9 could cost me my business. 10 I think that's a disgrace. 11 That's where, you know, the Governor said, 12 "We open for business," and he's serious about 13 looking at, how do we cover and protect it? 14 I would like to sit down with you in Albany, 15 and I know the rest of us would, bring some of your 16 people together, and we should do it before 17 January -- January the 8th, and say, What can we do 18 to help business, but, yet, ensure that things are 19 done right? 20 JAMES CALVIN: It would be our pleasure. 21 SENATOR LARKIN: You did it for me a couple 22 years ago, and we saved some people business. 23 JAMES CALVIN: Yes. 24 SENATOR LARKIN: But when you start to say, a 25 small mom-and-pop, somebody brand new, sold some 1 cigarettes, they lose Lottery, beer, nobody realizes 2 it, but they lost coffee and they lost a bun or a 3 sandwich. 4 SENATOR CARLUCCI: Senator Marchione. 5 SENATOR MARCHIONE: Jim, just a statement -- 6 you know, your statement of "do no harm." 7 We heard that a couple of times in Saratoga 8 as well. 9 And it's interesting the people are saying, 10 Okay, it's really, really bad, but don't do anymore; 11 don't do anymore to us. You know, we're struggling 12 under the burden. 13 And our goal here is to get you out from some 14 of that struggling. 15 So, we appreciate your testimony today, and 16 bringing to light what you live under, because 17 I don't own a convenient store. I don't know the 18 rules and regulations that you're subjected to. 19 But your testimony so far, for me, has been 20 the most onerous out of any. 21 You look at a small store, and you think 22 about how you have to maintain your businesses. 23 And I just want you to know I appreciate what 24 you've brought to the table today. 25 JAMES CALVIN: Thank you, Senator. 1 SENATOR CARLUCCI: Senator Valesky. 2 SENATOR VALESKY: Senator Carlucci. 3 Jim, good to see you again. 4 JAMES CALVIN: Good to see, sir. 5 SENATOR VALESKY: One of the issues that has 6 been raised at at least three of the other hearings 7 that we've had, has been the issue of the expanded 8 SEQRA form. It is going into effect as we speak. 9 You mentioned Nice N Easy, which is a very 10 successful convenient-store chain in 11 Central New York. 12 So I would just ask you, if you would share 13 with us, as the process moves forward, your members 14 that are fortunate enough to be expanding, if you're 15 encountering any problems with this expanded form, 16 or that's slowing down the approval process locally. 17 I know that this Committee would be 18 interested to know that, from your -- from the 19 perspective of your membership. 20 JAMES CALVIN: I don't have a great deal of 21 feedback yet. 22 SENATOR VALESKY: Yeah, I didn't think you 23 would right now, but as we -- 24 JAMES CALVIN: But I'm beginning to hear 25 members moaning about the additional information 1 that's required, and the level of sophistication 2 that you need in order to complete the forms to the 3 satisfaction of DEC. 4 In almost all cases, they have to use an 5 outside consultant, you know, a paid consultant, 6 naturally, or, they may have their own staff that 7 specialize, or an attorney, or what have you. 8 At the same time, the Department of 9 Environmental Conservation has just proposed new 10 regulations governing underground petroleum storage 11 tanks; mainly, to bring them into conformity, the 12 state regs, into conformity with the federal regs. 13 But it's introducing several new requirements 14 that, up to now, retailers that sell gas had not had 15 to meet. 16 There's a requirement for operator training; 17 you have to pass a test, certifying that you 18 understand all the ins and outs of underground 19 storage tanks. And, it's very technical in nature. 20 It's going to force a lot of retailers to 21 have to hire outside consultants to manage their 22 environmental compliance. 23 And I really fear what the consequences are 24 for the mom-and pop operators who don't have that 25 expertise, and don't have the resources, 1 necessarily, to hire an outside specialist to do 2 that. 3 So, environmental compliance is becoming more 4 and more of a concern, an administrative burden on 5 retailers. 6 We understand it's important. 7 We have a responsibility to protect 8 groundwater in the surrounding environment, but, 9 many of our members think we've gone a little bit 10 overboard. 11 SENATOR VALESKY: Thank you. 12 SENATOR CARLUCCI: Thank you, Mr. Calvin. 13 We look forward to working with you in the 14 next session. 15 Thank you. 16 Next we're going to hear from David Golub 17 who's the senior vice president of Price Chopper 18 Supermarkets. 19 DAVID GOLUB: Thank you, Senator Carlucci. 20 Senators, I have to start by saying that 21 I really applaud your efforts in going after 22 regulatory reform. 23 It's personally inspiring to me, as a 24 resident of the state of New York, to see a 25 bipartisan effort to really go after making 1 business -- more of a business-friendly environment 2 in New York State. 3 And in your efforts, I'm convinced, are 4 really going to make some additional headway towards 5 making New York more business-friendly, which is 6 going to favorably impact all the residents of 7 New York State. 8 My name is David Golub. I'm the 9 senior vice president of administration for 10 Price Chopper Supermarkets. 11 We're a privately held, full-service 12 grocery-store organization. 13 We operate in six northeastern states. We 14 have 132 stores; 81 of those stores are operated in 15 New York State. 16 We have five distribution centers. Those 17 operate in Rotterdam and Guilderland, New York, and 18 they service the entire chain; 19 As well as, we have 22,000 associates, 20 14,000 of which work in the state of New York. 21 While it's refreshing to hear some of the 22 other issues that the others before me have 23 mentioned, because a lot of those are also impacting 24 us, and it's nice to hear that a lot of the similar 25 types of issues that go across businesses are things 1 that, if you can make headway on, they can really 2 help all of the businesses across New York State. 3 There are a lot of topics that I could cover, 4 but, I'm going to focus on three areas that we feel 5 are the most in need of attention, from our 6 perspective. 7 To start: With the implementation of the 8 Affordable Care Act, and the mandate requiring all 9 U.S. citizens to have health-care coverage, and the 10 introduction of transitional reinsurance, it should 11 no longer be necessary to impose surcharges at the 12 state level on providers of health care in order to 13 fund the indigent care. 14 As an employer with a self-insured medical 15 plan, Price Chopper currently pays approximately 16 $2 million per year in HCRA surcharges annually; 17 that's, "Health-Care Reform Act" surcharges. 18 Price Chopper has this as a tax on the 19 health-care services that negatively impact our 20 company and our associates, because some of these 21 fees are passed on to them as well. 22 And a reduction or elimination of this large 23 tax would help alleviate some of the burden on 24 companies like ours, and help to have a favorable 25 impact on job creation across the state. 1 Another area of opportunity involves a 2 significant cost to having a self-insured 3 worker's compensation program in the state. 4 Price Chopper currently has a self-insured 5 program, and we pay extremely high premiums and 6 assessments in New York State versus the five other 7 states that we operate in. 8 Just to give you some perspective: 9 Premiums and assessments in New York are 10 10 times more in dollars that we pay than in all 11 other 5 states combined. 12 As a percent of payroll, New York represents 13 7 times more than all other 5 states put together, 14 in premiums and assessments. 15 And we are aware that there's currently a lot 16 of work being done to identify opportunities for 17 improvement through a worker's compensation process 18 reengineering project, and as the ideas that are 19 generated from this process, we feel that this is 20 really a good process. 21 And we would ask for your support in helping 22 to bring down the stifling cost of 23 worker's compensation insurance and their impact on 24 business in the state. 25 And I think that the project that they're 1 doing, and it's done through the 2 Worker's Compensation Board, that they're going to 3 come up with some really good ideas, and would 4 I just ask for your support in trying to help to 5 make it more business-friendly in the state. 6 And the final area that I would like to cover 7 involves the inefficiency of licensing for food 8 retailers in the state. 9 When trying to open a food-retailing business 10 in New York, there's currently no uniformity in the 11 application process from the different state 12 agencies. 13 And, you know, it's funny, I started thinking 14 about, my daughter is a senior in high school, and 15 she's looking at applying to colleges. And I talked 16 to her about getting the applications together, and 17 make sure that, you know, she's got them all filled 18 out and sent out to all of the different colleges. 19 And I said, "You know, how have you gotten 20 all the different applications filled out?" 21 And she said, "Dad, that's so yesterday." 22 I don't know if you're familiar, but they 23 have a common application. 24 I mean, this is amazing, and it's great; and 25 they fill out one application, and they shoot it to 1 all the colleges. 2 So the thought here is, if you could get a 3 common application in New York State. 4 We currently fill out the same basic 5 information, over and over again. 6 For Tax and Finance, SLA, Ag and Markets, 7 Health Department, Division of Lottery, DEC; all of 8 these different applications, the same information, 9 over and over again. 10 If you could have a common place to be able 11 to fill out an application and submit it, that could 12 really streamline it, not just for us, but for any 13 food businesses in the state, from a licensing. 14 And I know Mr. Wexler was talking about, and 15 you were talking about, SLA, and I had an idea with 16 that, because when you asked for recommendations, 17 you know, one of the simple things with that is, 18 right now, when we apply to the SLA, we have to 19 apply to New York City. 20 We send in information to New York City 21 lockbox -- 22 SENATOR LARKIN: And it's held there. 23 DAVID GOLUB: Right. 24 -- but then it goes back to the counties 25 14 days later that we're trying to get the licensing 1 for, and it puts another two weeks in process time. 2 So, I mean, any way that we can streamline 3 these processes can help make it more 4 business-friendly, because what it does is, it helps 5 businesses to navigate much more quickly and 6 efficiently. 7 And this would be good, not just for 8 businesses, but for agencies, because if you can 9 streamline the process for them, it's less arduous, 10 it's less expensive, and it's much better. 11 So I just see that as one of the other 12 opportunity. 13 And, you know, again, I just have to say 14 thank you for your efforts in going after, trying to 15 make this state -- you know, this is a great state 16 to live in, it's a great state to operate in. 17 And, you know, I think that your efforts can 18 only do much better things for helping to make this 19 business-friendly. 20 SENATOR CARLUCCI: Very well. 21 Thank you very much, Mr. Golub. We really 22 appreciate your testimony, and working with us. 23 We'll start off with Senator Gallivan who has 24 a question. 25 SENATOR GALLIVAN: Are you able to comment or 1 make a comparison; you talk about -- well, not talk 2 about -- you testified, you're in six different 3 states: New York and five others. 4 DAVID GOLUB: Yes. 5 SENATOR GALLIVAN: And the point that you 6 make regarding your premiums and assessment for 7 worker's comp, I mean, illustrates our problems, 8 among them. 9 But as far as trying to get in the 10 food-retailing business and opening a store, or 11 getting into another state, are you able to compare 12 for us, the cost and the timeliness? 13 You know, how much it costs in other states 14 to get started, compared to New York; and how long 15 the process takes? 16 I mean, I know you talked about it in general 17 terms. 18 Are you able to be more specific? 19 DAVID GOLUB: Not off hand. 20 I'd have to talk to some of our departments 21 that actually do some of the licensing. 22 I know that, in other states, the licensing 23 issues that we're seeing in New York are not 24 uncommon, so that, you know, getting licenses, it's 25 not really that streamlined anywhere. 1 So, I think that New York could really lead 2 the way in doing that. 3 From the standpoint of expense, or being able 4 to operate at a lower cost, the five other states, 5 in many instances, are much less expensive to 6 operate in, so that when we're looking at things 7 that -- places for enhancement, or to build new 8 stores, and to go in other locations, when we look 9 at the numbers, expenses like, worker's comp, you 10 know, any of the additional taxes, and, you know, 11 the different things with regard to, you know, 12 health-care surcharges, I mean, right now 13 health-care surcharges, we only have one other state 14 that has the health-care surcharge, and that's 15 Massachusetts, and that's $42,000 a year versus 16 $2.3 million a year in New York State. 17 And that's for something that should be 18 redundant, because Affordable Care Act makes it. 19 So there are things right now in New York 20 that make it actually difficult for us to want to 21 expand. 22 And as much as we want to expand, and this is 23 our home, and we really -- we're growing here, we've 24 been doing more building in a lot of other states 25 because of the climate, and some of those things. 1 So from the standpoint of, actually, the 2 registrations and the licensing, I can't say 3 offhand, because I'd have to -- I can get more 4 information on that, but, you know, we want to be 5 able to be here, and we already have a majority of 6 our chain here, and we're looking to build more 7 stores. 8 It's, just, if it could be made more 9 user-friendly, from a business standpoint, less 10 expensive. 11 SENATOR GALLIVAN: If you are able to get 12 that information, we would be very interested in it. 13 There's, uh -- on the back table, there's a 14 form there with the e-mail address on it, that you 15 could provide it, if you're able to. 16 DAVID GOLUB: Sure. 17 Sure, and I'll get information on whether 18 it's licensing, or whether it's anything -- any 19 other things that, in comparison, that could make it 20 easier for you to go after. 21 SENATOR GALLIVAN: Great, thank you. 22 SENATOR CARLUCCI: Senator Marchione. 23 SENATOR MARCHIONE: I just want to say that 24 I think your idea of a common application is right 25 on. 1 "It's right on." 2 I mean, coming from a county-clerk position 3 myself, I mean, we're -- the office is with paper, 4 but, boy, we put your name in, and everything you do 5 is on a second sheet; everything you need is on the 6 second sheet. I mean, it would tell you every 7 agency that you're involved in, and cut down your 8 paperwork. 9 And, it's just a terrific idea. 10 Thank you. 11 DAVID GOLUB: My pleasure, thank you. 12 SENATOR CARLUCCI: Senator Larkin. 13 SENATOR LARKIN: I love your business. 14 DAVID GOLUB: Thank you, we do, too. 15 SENATOR LARKIN: I'm a former employee. 16 DAVID GOLUB: Oh, you are? 17 SENATOR LARKIN: When I was a 14-year-old, 18 I worked at First and Monroe, when Uncle Morty used 19 to come from Schenectady. 20 And, Uncle Morty -- I'm not being 21 disrespectful -- he had glasses bigger than this end 22 here [indicating]. 23 And he came down to every individual 24 employee; whether you were a weekend or day, or 25 what, but he had the greatest love for kids that 1 went to LaSalle High School, because it was 2 discipline, discipline, discipline. 3 And I can remember the day I left the 4 company. 5 I went into the army in 1944, April the 26th. 6 And the day before, he called and told me to 7 be there, and I got an envelope. 8 I never opened it, because you didn't do that 9 in front of Uncle Morty. 10 But what I liked then, and I think I learned 11 a lot, was how the store took care of its precious 12 customers. 13 Because if you -- there's not too many who 14 would remember here -- we used to have the butter 15 under the counter because they had to have stamps, 16 and they had sugar. 17 And I had a sister-in-law who was having a 18 baby. 19 "Should I be good to my sister-in-law?" 20 But, I just think the way you operated, and 21 the store you have in the Windsor at Five Corners, 22 when you first come in there, people said, Oh, 23 there's too many stores. 24 Well, there isn't. 25 You can go in that store, and I tell, from 1 you the bottom of my heart -- 2 My wife goes there all the time when she 3 found out I was an employee of yours. 4 -- she said, "You know, it's always clean." 5 And if you stop someone and say, Where is 6 so-and-so? and the person doesn't know, says, "Just 7 a minute. Michael, would you take this gentleman to 8 where hangers are put," the attitude. 9 But the attitude is only important to some 10 extent. 11 If you are exceeding costs to maintain that, 12 something's gotta give. 13 I like your application, as Kathy said; you 14 know, one application. 15 We talk about one-stop for everything. 16 This would be a great thing, because you have 17 your cigarette license, you have your wine and beer 18 license, you have other licenses that go through 19 there. 20 And the competition today for business is 21 serious. 22 We talk about the WIC. 23 You know, people say to me, they have no idea 24 what it takes to keep all these tickets in stock, 25 and how we record them, and how we notify the State 1 and how we notify counties. 2 These are a lot of burdens that, somehow, 3 I think, whether it's the county or the State or the 4 federal government, we ought to sit down someplace 5 and say, How do we do this? 6 Granted, you're hiring somebody to do it, but 7 we're paying for it, because the price of what we 8 want, you're gonna have to change it, because these 9 are costs that are, technically, mandated, and you 10 have no way to cure it. 11 But I -- who was your father or uncle? 12 DAVID GOLUB: My father was Lewis [ph.]. 13 SENATOR LARKIN: That's what I mean. 14 DAVID GOLUB: Yeah. 15 SENATOR LARKIN: Yeah. 16 DAVID GOLUB: So I'm fourth generation. 17 SENATOR LARKIN: Well, I shop there, and 18 I shop with pride, because I knew what it was as a 19 kid. 20 And, boy, if you gave out butter and sugar, 21 and you didn't have coupons to get it for -- 22 DAVID GOLUB: Well, I appreciate your service 23 to us as an organization, as well as your patronage 24 as a shopper. 25 SENATOR LARKIN: Thank you. 1 [Laughter.] 2 SENATOR CARLUCCI: Senator Marchione. 3 SENATOR MARCHIONE: And I just would like to 4 add my thanks as well, coming from Saratoga. 5 I know that your first store was in 6 downtown Saratoga, and it was there for years, and 7 it's absolutely beautiful. You just remodeled it, 8 and, what, built new. 9 Absolutely gorgeous. 10 Thank you for what you've done for our 11 community. 12 DAVID GOLUB: Thank you for supporting the 13 store there. 14 SENATOR CARLUCCI: Thank you, Mr. Golub, for 15 your testimony, and we look forward to working with 16 you in our upcoming session. 17 DAVID GOLUB: Thank you, Senators. 18 Next we're going to hear from the 19 representatives from the New York State Motor Truck 20 Association. We have with us Joseph Fitzpatrick and 21 Karen White. 22 KAREN WHITE: Only Joe has the testimony 23 today, but I felt compelled to come up once my name 24 was called. 25 JOSEPH FITZPATRICK: Good afternoon, 1 Senators, and thank you for the opportunity to speak 2 to you today regarding the impact of burdensome 3 regulations on small businesses. 4 My name is Joe Fitzpatrick, and I own 5 Lightning Express, a small trucking company based in 6 Modena, New York, in Ulster County. 7 I started out in May of 2000 with one truck, 8 and by myself. 9 Today I employ 27 people who ensure that my 10 customers' good are delivered in a safe and timely 11 manner. 12 I am also a member of the New York State 13 Motor Truck Association, Eastern Region Board. 14 Lightning Express serves an average of 15 100 small businesses and retail customers a year 16 throughout New York State, so anything that impacts 17 my small trucking business trickles down to impact 18 all of the businesses I serve; and, in turn their 19 customers. 20 Since I started my company 13 years ago, 21 I have seen a great deal of growth, but as the years 22 have passed, running a business has gotten much more 23 difficult. 24 Worker's compensation insurance is now the 25 equivalent to over 13 percent of my entire payroll, 1 and the rate for my drivers is over 15 percent. 2 I was informed by my auditor that truckers 3 are now second only to roofers in 4 worker's compensation premium rates. 5 My business, like all other businesses, now 6 gets an extra bill each year for unemployment 7 insurance, to pay back the interest New York took 8 out on a federal loan it hasn't paid back. 9 And liability-insurance premiums on small 10 business are also exorbitant because of frivolous 11 lawsuits and the Scaffold Law. 12 Thanks to the Scaffold Law, I have to carry 13 general liability insurance on my facility to cover 14 even things that aren't my fault, or the fault of 15 the contractor I hired to replace windows, for 16 instance. 17 As you likely know, the Scaffold Law imposes 18 absolute liability for elevation-related injuries. 19 That means that the actions of an injured 20 worker, such as failure to use provided safety 21 equipment, or gross negligence, is, virtually, 22 irrelevant in court. 23 As an owner of a business facility, if I hire 24 company to install new windows, and one of their 25 workers is injured because he does not use the 1 safety equipment provided by his employer, his 2 employer is automatically held liable, and I can be 3 sued for liability as well. 4 An absolute-liability standard makes no 5 sense. It drives my insurance premiums through the 6 roof. 7 Additionally, New York is the only state with 8 such a standard, leaving me at a competitive 9 disadvantage to small trucking companies in 10 bordering states who do not have that financial 11 burden. 12 As I mentioned, in addition to being a 13 small-business owner, I am also a member of the 14 New York State Motor Truck Association, an 15 organization which represents the interests of the 16 trucking industry in New York State. 17 The number of rules and regulations stifling 18 the trucking industry in New York is astonishing. 19 For the sake of time, I will only touch on a 20 few of the most onerous regulations. 21 First, it should be noted that the trucking 22 industry in New York State employs over 23 270,000 people. It is responsible for delivering 24 everything that is produced, used, consumed, or sold 25 by nearly every business in New York State. 1 Trucking is the backbone of New York's 2 business. 3 What impacts the trucking industry impacts 4 all businesses it serves and the consumers served by 5 those businesses. 6 What's more, trucking not only supplies 7 New York's business, large and small, but the 8 majority of the state's 28,000 trucking companies or 9 small businesses. 10 One of the biggest financial burdens in the 11 trucking industry is the highway-use tax, or, a 12 ton-mile tax. 13 New York is the only state in the northeast, 14 and the only one of four states in the nation, with 15 a highway-use tax. 16 The tax puts New York at a competitive 17 disadvantage, and is the primary reason why New York 18 ranks as the second most-expensive state in the 19 nation in which to operate a truck. 20 Compliance with the tax is extremely 21 burdensome, not only to carriers, but to the State 22 as well. 23 In addition to the cost of the tax itself, 24 there is significant administrative costs to 25 maintain the detailed records required to comply 1 with the tax. 2 Many motor carriers have staff dedicated to 3 compliance with the highway-use tax. 4 Evasion of the tax is a serious issue that 5 results in loss of revenue to the state, and 6 inadvertently results in an unfair competitive 7 advantage to out-of-state carriers. 8 While there is an audit program in place, it 9 is much more likely for a company in New York to be 10 selected for audit by the New York State 11 Department -- New York State Tax Department than a 12 carrier based out of state. 13 Additionally, if an out-of-state carrier is 14 evading the highway-use tax, they're evading the 15 compliance with the International Fuel-Tax Program 16 and the International Registration Plan as well, 17 resulting in significant revenue loss to the state. 18 Currently, the tax generates approximately 19 $145 million which goes into the dedicated Highway & 20 Bridge Trust Fund. 21 There are other alternatives for the state to 22 collect its revenue that ensures all commercial 23 users are paying the tax, not just those in 24 New York. 25 An increase in registration fees and fuel tax 1 can be evenly distributed through the 2 International Fuel-Tax Agreement and International 3 Registration Plan programs. 4 While not politically attractive, fuel tax 5 remains the most efficient mechanism by which to 6 generate highway funds, and increase in the fuel tax 7 is supported by the trucking industry as a way to 8 ensure parity. 9 A study conducted on five states that 10 repealed their highway-use tax found that annual 11 highway-user revenue, after the repeal, equaled or 12 surpassed the annual revenue collections when 13 highway-use taxes were in place. 14 In addition, in the year following the 15 elimination of their highway-use tax, reportable 16 taxable gallons of diesel fuels increased, on an 17 average, 5 to 7 percent more than the national 18 average. 19 This increase in diesel fuel can be 20 attributed to eliminating evasion, not because more 21 diesel fuel is actually used. 22 It is important to note that four of the 23 five states studied eliminated the highway-use tax 24 without any increase in other taxes or fees, in 25 attempt to replace the highway-use tax revenue. 1 The highway-use tax is an onerous, antiquated 2 tax that puts all businesses in New York at an 3 economic disadvantage. 4 Highway taxes continue to harm New York and 5 discourage business from establishing locations 6 here. 7 The elimination of this tax will help reduce 8 transportation costs in New York, and encourage new 9 business, as well as help retain the businesses 10 New York already has. 11 The second regulation I would like to discuss 12 is the Wage Theft Prevention Act, which Lena already 13 touched on, which came into effect in 2011. 14 Part of the act requires an annual wage 15 notice to employees, which involves a lot of time, 16 effort, and expense on the part of the employer. 17 This annual pay notice contains the same 18 information now required by State Labor Law to be 19 placed on each and every pay stub by employers, 20 including rate of pay; overtime rate of pay; basis 21 for pay, by hour, week, salary, etc.; allowances, if 22 there are any; payday; employer's name; DBA used by 23 employer; physical address; mailing address; 24 employer phone number; and employee name. 25 This is the exact same information we give 1 our employees every time they get their paycheck. 2 Further, the employer is required to obtain 3 written acknowledgment of the receipt of this notice 4 by every employee and maintain this documentation 5 for six years. 6 Realistically, the Annual Wage Reporting 7 requirement is a time-consuming cost endeavor for 8 both small and large employers. 9 In the trucking industry, even small business 10 often have drivers whose routes keep them away from 11 their terminal for weeks at a time. Getting them to 12 sign and return a slip of paper isn't always easy, 13 and there is nothing to be gained by doing so. 14 Though the Department of Labor has 15 acknowledged that the wage compliance is an issue 16 for only a small percentage of New York State 17 employers, the Annual Pay Notice requirement 18 universally applies to everyone, even those without 19 compliance issues. 20 This type of annual-notification requirement 21 is much better suited as an enforcement tool, and 22 should be the exception rather than the rule, 23 reserved for instances where non-compliance by an 24 employer has been an issue. 25 The trucking industry would like to see a 1 repeal of the requirement that force all 2 private-sector employees to provide a written pay 3 notice to every employee in New York State annually, 4 and obtain written acknowledgment of the receipt of 5 this notice by every employee. 6 This modification to the Wage Theft 7 Prevention Act leaves in place the act's most 8 significant reforms intended to ensure payment of 9 all wages earned by employees. 10 The other issue I have with that, my wife 11 does my HR, and it just gives her something else to 12 complain about. 13 And, trust me, I give her plenty. 14 [Laughter.] 15 JOSEPH FITZPATRICK: The final issue I'd like 16 to bring to your attention is the issue of 17 indemnification clauses in carrier contracts. 18 In the past decade, it has become common 19 practice for shippers to include language in their 20 contracts with for-hire carriers, indemnifying the 21 shipper against any liabilities or damages to the 22 goods being shipped regardless of fault. 23 SENATOR LARKIN: That's terrible. 24 JOSEPH FITZPATRICK: These clauses serve to 25 automatically assign liability to the carrier rather 1 than determine who was liable. 2 I'd like to give you an example. 3 A shipper hires a carrier to deliver a 4 truckload of housewares, including dishes and 5 glasses. Part of these goods is dropped by a 6 forklift operator in the shipper's warehouse, 7 damaging some of the breakables inside prior to 8 loading the truck. The boxes are loaded onto the 9 carrier's truck and transported to a retailer. The 10 retailer rejects the load due to damage. 11 Under current law, the indemnification clause 12 by the shipper would automatically make the carrier 13 responsible for all damage regardless of actual 14 fault or negligence. 15 Due to the number of shippers utilizing this 16 practice in New York, carriers do not have the 17 luxury of simply rejecting these contracts. 18 The increased instance of shippers assigning 19 liability to carriers for things out of the 20 carrier's control must be stopped, and the New York 21 State Motor Truck Association aims to do so with the 22 passage of Fairness In Contracts legislation. 23 This legislation, Senate Bill 1087, and 24 Assembly Bill 3673, was sponsored by 25 Senator Moraz [ph.] [sic], and Assemblywoman Lupardo 1 in 2013. 2 Fairness In Contracts legislation will level 3 the playing field by enabling the responsible party 4 to be held accountable for damages and liabilities. 5 This legislation would not limit anyone's 6 liability to sue someone who is at fault. Instead 7 of liability automatically being assigned to the 8 carrier, it would allow fault to be determined. 9 Currently, 38 states have adopted legislation 10 aimed at protecting carriers from overreaching 11 indemnification provisions in shippers' contracts. 12 More than half of those laws were passed in 13 the last four years. 14 In practical terms, that translates to 15 76 percent of the states in the country having a 16 competitive advantage over carriers in New York. 17 Pennsylvania, Connecticut, and Massachusetts 18 have adopted such legislation, and is being 19 considered in Vermont and New Hampshire, putting 20 New York carriers at even a greater disadvantage in 21 the region. 22 Senators, I would like to thank you for the 23 opportunity to speak to you today. 24 As I mentioned earlier, anything that impacts 25 the trucking industry impacts all businesses; it's 1 unavoidable. 2 I encourage you to keep that in mind as you 3 look to determine the top 1,000 impediments to 4 business growth in New York. 5 Thank you. 6 I need a drink. 7 [Laughter.] 8 SENATOR CARLUCCI: Thank you, 9 Mr. Fitzpatrick. 10 Senator Gallivan. 11 SENATOR GALLIVAN: Thank you for your 12 testimony. 13 Do you have extra written copies for us, or 14 at least one that you could leave with us? 15 KAREN WHITE: Yes, there is. 16 SENATOR GALLIVAN: Because there's a lot of 17 information there. 18 We appreciate that. 19 Scaffold Law; we have heard about that at 20 almost every hearing, very extensive. 21 And we actually have proposed legislation to 22 change -- to modify the absolute liability to 23 comparative negligence. 24 And what's interesting, Illinois was the last 25 state that had a law similar to New York's, and when 1 they repealed that law, construction jobs went up, 2 insurance rates went down, fatalities went down, and 3 workers' safety was enhanced. 4 So, where do you live? 5 JOSEPH FITZPATRICK: Gardiner, New York. 6 SENATOR GALLIVAN: Which is -- is that 7 Ulster County? 8 JOSEPH FITZPATRICK: Ulster County, yep, 9 between Newburgh and New Paltz. 10 SENATOR GALLIVAN: Call your Senator's 11 office, call your Assemblyman's office, and your 12 association. 13 It could be helpful if they were -- you know, 14 your association throughout New York, all the 15 members, if they were making calls and saying, 16 "Do something about this." 17 KAREN WHITE: Yeah, and on behalf of the 18 New York State Motor Truck Association, I'm the 19 deputy director, and we do support the reform of the 20 Scaffold Law. 21 SENATOR GALLIVAN: Are you part of the group? 22 KAREN WHITE: We are not officially yet, but 23 we will be soon. 24 SENATOR GALLIVAN: Perfect. 25 There's, uh -- see the good-looking guy back 1 there, with the glasses? 2 KAREN WHITE: Okay. 3 SENATOR GALLIVAN: Would you talk to him on 4 the way out? 5 KAREN WHITE: Absolutely. 6 SENATOR GALLIVAN: And we can get you signed 7 up. 8 KAREN WHITE: Okay. 9 SENATOR GALLIVAN: The other thing, the 10 indemnification clause, that you talked on the 11 carrier contract, and I just looked up the piece of 12 legislation, haven't read the thing yet, but it kind 13 of strikes me that that's somewhat similar to the 14 Scaffold Law, and it's throwing complete liability 15 on one party -- 16 JOSEPH FITZPATRICK: Right, and -- 17 SENATOR GALLIVAN: -- without any opportunity 18 to be heard. 19 JOSEPH FITZPATRICK: Right. 20 And there's so many times trucks get loaded 21 without the driver -- I mean, he's just told, 22 "Go pick up that trailer." 23 It's already sealed. 24 When you get to the other end, they open it, 25 start unloading it, say, "There's damage here," and 1 now the carrier is responsible. 2 SENATOR LARKIN: That's terrible. 3 SENATOR GALLIVAN: That was it. 4 Thank you. 5 KAREN WHITE: And, actually, Joe brought 6 up -- I just want to mention, Joe brought up a very 7 good point, when he mentioned that the truck was 8 sealed. 9 There a lot of times that a load is secure, 10 and the driver does not have access to open it, or 11 access it, so, they have to simply accept what is on 12 the trailer. 13 And then if it gets to the destination and 14 it's damaged, the driver is held responsible. 15 Clearly, like you said, just like the 16 Scaffold Law, it makes no sense. 17 SENATOR CARLUCCI: Senator Marchione. 18 SENATOR MARCHIONE: The highway-use tax that 19 you were discussing, is that paid through your 20 registration? Your trucking registration? 21 JOSEPH FITZPATRICK: No. 22 SENATOR MARCHIONE: Or is it direct? 23 Because I know, the highway-use tax at the 24 county level, whether or not the counties choose to 25 have that on each vehicle on the street. 1 This is a different money you pay to DOT? 2 JOSEPH FITZPATRICK: It's a separate tax. 3 KAREN WHITE: It's specific to trucking. 4 JOSEPH FITZPATRICK: And we have to keep a 5 sticker on the front of our bumper or the cab of our 6 truck, showing that we were registered with it, and 7 it's paid. 8 KAREN WHITE: Yeah, years ago, the 9 Tax Department did away with the highway-use-tax 10 sticker, which was a revenue-generator for the 11 sticker itself; and, instead, they raised 12 registration fees for trucks. 13 And then they decided to bring their sticker 14 back. 15 Of course, the registration fees for trucks 16 did not drop; instead, there's an extra fee for a 17 sticker. 18 And we actually had a carrier, just the other 19 day, who is getting a hefty fine because their 20 sticker fell off. 21 They paid the tax; they can prove they paid 22 the tax, but they got a hefty fine because the 23 sticker fell off. 24 The brand-new sticker is, that the 25 Tax Department just said, "You know, they won't fall 1 off, don't worry." 2 And that's exactly what happened. 3 SENATOR MARCHIONE: Well, coming from 4 Motor Vehicle, 'cause that's what I oversaw before 5 I became a senator, they always fall off. 6 [Laughter.] 7 KAREN WHITE: Exactly. 8 SENATOR MARCHIONE: We have been complaining 9 about that for five years. 10 KAREN WHITE: And one thing to mention about 11 the highway-use tax is, the highway-use tax, the 12 money goes into the dedicated Highway & Bridge Trust 13 Fund. 14 I obviously don't need to educate you, but, 15 65 percent of that money that's come out of the fund 16 so far, has not gone to highways and bridges. 17 So, it's money that's going in, but it's not 18 going back out, even where it's intended. 19 SENATOR CARLUCCI: Senator Larkin. 20 SENATOR LARKIN: You know, the moving 21 industry, you know, the truckers across country, and 22 everything else, they have come to our office last 23 week and said, "We joined them, can you help us?" 24 But, you know, one thing that this Governor's 25 gonna be looking at, is if we do this, how do we 1 fill that gap? 2 Now, if you remember, Joe, last year, when 3 they were talking about the 14 percent increase on 4 the Thruway? 5 JOSEPH FITZPATRICK: "45." 6 SENATOR LARKIN: "45." 7 Well, okay, I saw, you actually had more hair 8 then. 9 [Laughter.] 10 JOSEPH FITZPATRICK: It's that Wage Theft 11 Prevention law. 12 [Laughter.] 13 SENATOR LARKIN: You know, we've given the 14 Motor Vehicle and the Thruway Authority and the 15 Governor a proposal. 16 It's signage. 17 And they're saying we can't do it because, in 18 '65, Lyndon Baines Johnson convinced our 19 then-President to have a law, because she owned all 20 the radio and all the TV, but she didn't owned the 21 billboards, and they wouldn't go to her agreement. 22 So then we came to the Beautiful Act, and the 23 Beauty Act said, people keep saying, it says you 24 can't have signs. 25 The Beauty Act says "limited." 1 We've given a plan to digital. 2 Joe, you know where Woodbury Commons is? 3 JOSEPH FITZPATRICK: Yes. 4 SENATOR LARKIN: They think it's great. 5 We've talked all the way up to Buffalo, to 6 Pat's organization. 7 We're going to send you a copy, because maybe 8 you can say to them, Here's a way to reduce some of 9 the burden of taxes. 10 'Cause when they reduce some of these 11 burdens, this is where the individuals, whether it's 12 a business or whatnot, is going to benefit. 13 We look for your support. 14 JOSEPH FITZPATRICK: I'll be there. 15 SENATOR CARLUCCI: Well, thank you. 16 Look forward to working with you. 17 JOSEPH FITZPATRICK: Thank you. 18 Next we're going to hear from Chris Theising, 19 who is the adjunct professor in communication media 20 arts at SUNY Rockland Small Business Development 21 Center. 22 CHRIS THEISING: Thank you, Senator Carlucci. 23 I appreciate you asking us here today. 24 And my official capacity is as a business 25 consultant for the Small Business Development Center 1 located here in Rockland Community College. 2 I did not prepare any official statement, due 3 to the fact that our clients' confidentiality is 4 held in strictest confidence, and, by law, I'm not 5 allowed to have any official opinions on regulations 6 and restrictions, laws, that affect our small 7 businesses throughout the state. 8 To that I could say, that our clients have 9 voiced certain opinions to us. 10 What is most important in our job, is that, 11 while we are trying to help small businesses to 12 develop a business plan, and, perhaps get some 13 financing, a lot of the questions do come up 14 regarding our regulations. 15 For instance, a small business recently came 16 to us, "We're making cupcakes and cakes, and 17 everybody loves my baking, especially at the PTAs, 18 and perhaps some of the other meetings." 19 And to which point, they asked, you know: Is 20 this legal? I'd like to -- I'd really like to start 21 my own bakery here, but I don't have the money to 22 rent or lease a space. 23 Of course, we have to do due diligence and 24 give them the right information. 25 Now, we're not experts, and as you heard, 1 there's 786,000 regulations on the books. 2 To be able to memorize all of that, we'd be 3 geniuses, of course, and I don't proclaim to be one. 4 My basic modus operandi is to help these 5 individuals, and, certainly, come up with the right 6 questions. 7 And I think, that, at times, is more 8 important. 9 First, folks, I have to thank you all for 10 being here, and I really, really applaud your 11 efforts. 12 And, in any way, shape, or form, if I can be 13 of help, please, feel free. 14 It's too bad that Senator Larkin had to 15 leave, but, I could go over certain specifics, and 16 without divulging information, later on, in your 17 questions, if you have any, I would certainly be 18 more than willing to give you some of those. 19 But just in brief, what we've been busy with, 20 and one of the reasons why I haven't been able to 21 put together a coagent statement here today, is 22 because we've been very heavily involved in the 23 "Sandy" relief, the New York Rising program, which 24 I'm sure most of you are familiar with. 25 I'm trying to get out there and help the 1 business owners that have been affected. 2 And thanks, in part, to the recent 3 advertisements, we've been getting inundated with 4 calls. I think the word is finally getting out 5 there, and up to a couple of weeks ago, it was 6 trickling in. 7 But we've been finding that, again, because 8 of the regulations and some of the rules that have 9 been applied, it's been very slow in coming. 10 But I think, certainly, the Senate, the 11 Assembly, and, of course, the Governor's Office, 12 have heard the complaints loud and clear, and have 13 been, more or less, on the fly, making adjustments, 14 making it easier for these individuals who have been 15 affected by "Sandy" to get the help and the 16 much-needed assistance that they are asking for. 17 That said, part of what we do here also, is 18 to make the bonding efforts a little bit easier. 19 We're working with the Empire State 20 Development programs. 21 We've held a number of workshops for local 22 community organizations, as well as the business 23 owners themselves, because, as we've heard here 24 today, there's just so many rules and regulations. 25 One of the things, we have the 1 Tappan Zee Bridge being rebuilt, and, of course, 2 there's a lot of folks, local individuals, that were 3 chomping at the bit, trying to get, you know, just a 4 little piece of that. 5 When we start throwing billions of dollars 6 around in the media, and people say, Wow, I'd settle 7 for $10,000, one of the ways we've tried to do that, 8 is to make the bonding efforts a bit easier, through 9 cooperative efforts, and through our workshops. 10 One of the things, of course, is the 11 SBIR grants, that the Senator has been involved 12 with, the SUNY tax-free zones that are coming up. 13 Again, I have to applaud your efforts. 14 I think the people have spoken. 15 I think the rateables, everybody's been 16 concerned about, and the taxes in New York State, 17 have certainly spoken very loud and clear that. 18 You're right, it hasn't been 19 business-friendly. 20 So I think these efforts, you know, just 21 going out there and finding out, "What are the right 22 questions we need to begin to ask?" that's more 23 important than having. 24 And listening to all of these individuals 25 today, you're right, there's an awful lot of 1 information here. 2 I think that you've begun to drill down, and 3 I think it's wonderful. 4 We have certain business boot camps. 5 And, of course, I'm sure most of you got the 6 little letter this morning about the MWBE. 7 We met 20 percent, which was one of our goals 8 for the Minority Women-Owned Business entities. 9 Over at the SBDC, of course, that's part of 10 what we do, is we help to certify all of these 11 individuals. 12 And, we take them, navigate them through the 13 process. 14 It's an arduous process, but it's one that, 15 certainly, in the last year, has gone online. 16 Prior to that, it was a packet about that 17 thick [indicating]. 18 So, you know, government bureaucracy, it's 19 like that big steamship, as they say, and it takes a 20 while to turn it. 21 But I think, because of your efforts, 22 especially here today, we're beginning to recognize, 23 we do need to navigate different waters, and maybe 24 we need to turn the ship around; or at least a 25 different direction. 1 So I'd like to thank you for that. 2 And I guess, at this point, if there's any 3 questions, I'd be more than willing to -- 4 SENATOR CARLUCCI: Thank you, 5 Professor Theising. We really appreciate your 6 testimony. 7 Do we have questions? 8 Senator Gallivan. 9 SENATOR GALLIVAN: Thanks for being here. 10 We have a form in the back, it's blank. 11 If you could take that, and the people that 12 you deal with, you mentioned specifics. We don't 13 need to know specific stories, but we would like 14 specific regulations that are particularly onerous, 15 duplicative, and that are outdated, and so on. 16 And it's very easy; people can respond 17 anonymously, and they can do it right to an e-mail 18 address that's right on there. 19 So if you'd take that, we'd appreciate it. 20 CHRIS THEISING: Perfect. 21 SENATOR GALLIVAN: MWBE certification; we 22 have heard, once or twice, that -- people talking 23 about the process and the duplication of that? 24 Federal MWBE -- 25 CHRIS THEISING: Yes. 1 State and city. 2 SENATOR GALLIVAN: -- state, and then, in 3 some cases, you have localities; some counties in 4 the state, some cities in the state? 5 Do you experience that? 6 CHRIS THEISING: Yes, we have. 7 And from my understanding, of course, 8 Empire State Development has put together. 9 New York City now does recognize the state 10 certification, so, they've eliminated the duplicity 11 of that. 12 SENATOR GALLIVAN: What about in 13 Rockland County? 14 CHRIS THEISING: That's a real good question. 15 They recognize -- 16 SENATOR GALLIVAN: Is there anything that you 17 are aware of? 18 CHRIS THEISING: No, not that I'm aware of. 19 SENATOR GALLIVAN: It's hit or miss around 20 the state, more than -- 21 CHRIS THEISING: Yes. 22 SENATOR GALLIVAN: Okay. 23 Thank you. 24 CHRIS THEISING: Thank you. 25 SENATOR CARLUCCI: Great. 1 Well, Professor Theising, we really 2 appreciate your testimony. 3 And, particularly working in that barrier to 4 entry, how do we get these small businesses that you 5 are dealing with, up and running? 6 We've dealt with so many of those in our 7 district offices. 8 Like, you talked about the cupcakes. 9 You know, you can go under Ag and Markets and 10 be regulated in one way; and then, under the 11 Health Department, another. 12 So, we look forward to those specifics. 13 So, thank you. 14 CHRIS THEISING: Excellent. 15 And if I may, just one quick recommendation. 16 I guess I'm not out of line on this one. 17 When you folks are completed with this 18 arduous task, if you could supply us, or our office 19 with, dare I say, a one-pager? I don't think it's 20 possible, but... 21 [Laughter.] 22 CHRIS THEISING: To make us more effective as 23 counselors, as advisors, to be able to give us, 24 perhaps a list: If you want to start your own 7-11, 25 or start your own trucking business, and, perhaps, 1 these are the regulations that you need to be 2 familiar with, or at least comply with. 3 That would help us, and, certainly, I think, 4 make us more efficient and more effective as a 5 business advocate for our clients. 6 If it's possible. 7 Thank you. 8 SENATOR GALLIVAN: That is a great suggestion 9 that has come up. 10 People who are looking to start a business 11 don't know where to go. There's no one-stop 12 shopping for them. 13 So, the idea of some sort of clearinghouse 14 for that has come up, and it's a great suggestion. 15 That is -- that may be a recommendation from 16 our report, but our report won't do that, initially. 17 But when our report is published, it will be 18 available on the website. 19 We'll try to make sure that we publicize it, 20 but, on the nysenate.gov website, it will be 21 prominent, somewhere there. I can't tell you 22 exactly where. 23 And we will try to publish it throughout in 24 the Senate districts, so it's available. 25 CHRIS THEISING: Absolutely. 1 And I understand it's different in some 2 counties, as we have heard, from county to county. 3 And perhaps, working with the counties, we 4 could make it more generalized, so that the counties 5 do sign on for most, if not all, of it. 6 SENATOR GALLIVAN: That's a great suggestion. 7 Thank you. 8 CHRIS THEISING: Well, thank you, Senators. 9 Appreciate all your efforts. 10 SENATOR CARLUCCI: And next we're gonna hear, 11 for the Senators that don't know, we've got a 12 local -- a great local business here, that's been 13 here for years. 14 We have Michael and Larry Beckerly. 15 Were you planning to testify? 16 Or, no? 17 SENATOR GALLIVAN: Keep talking so we don't 18 have to go out in the rain. 19 [Laughter.] 20 MICHAEL BECKERLY: So, I'm Mike Beckerly, and 21 this my big brother, Larry Beckerly. 22 We run a building material, lumberyard, 23 retail, four locations in Rockland County, all 24 within 10 miles of each other. 25 So, I don't have a formal presentation, other 1 than short the a format, but, trying to focus on a 2 couple of things, one was sales-tax collection. 3 I know, reported, the revenue generated 4 recently, a couple years ago, they got rid of the 5 whopping $250 per-quarter fee that they used to 6 refund us, finally, in our tax returns -- or, our 7 sales-tax returns. 8 And, of course, it's a lot more than $250 to 9 do our quarterly sales-tax returns. 10 But more important than that is, there seems 11 to be such ambiguity on who is responsible for 12 keeping track of who's tax-exempt. 13 People come into our store with -- I have -- 14 an exempt organization might be a religious 15 organization, or it might be a reseller. 16 And when you call the Tax Department, and 17 they say, Okay, they have to pay, like, say, being 18 specific, by a credit card from the exempt 19 organization or by a check from the exempt 20 organization, we can't get seem a straight answer 21 on, if they pay cash. 22 So, can you pay cash and be tax-exempt, and 23 you sign a ticket and off you go to the races? 24 You know, so that's a big issue. 25 On a bigger scale, I think, my personal 1 opinion is, nobody should be tax-exempt. There 2 should be less loopholes. I understand it's a 3 federal issue. 4 So that's one thing, is, Who is responsible 5 for holding those certificates? 6 And in our competitive world, the big boxes, 7 the Lowe's and the Home Depots that are around us 8 that we fight with all the time, successfully, 9 I think, to a point, we hear, pretty often, that 10 they come into our place and we'll say, Well, this 11 is not -- we need a certain type of form, and this 12 is not the form that the State tells us we need. 13 Oh, I go to so-and-so, and the big box, and 14 they give them just a different little certificate. 15 They don't give them a certain type of form. 16 So I just want to make sure we're on the same 17 playing field with them. 18 And along those same lines, with sales tax, 19 one thing that we hit constantly, is we have 20 installed sales. 21 So, the regulations that we understand is, 22 you have got to charge -- you have to collect -- 23 I shouldn't say charge -- we have to collect for the 24 State, sales tax on the material for the installed 25 sale. 1 So if somebody puts in a door, they have to 2 pay sales tax on the door. 3 SENATOR GALLIVAN: Right up front? 4 MICHAEL BECKERLY: Right up front, right, 5 so -- yeah, when we deliver the door, they buy the 6 door, they have to pay sales tax for that material, 7 but, they don't have to say sales tax for the labor. 8 So that's the way we work. 9 And when we bill the customer, they see the 10 invoice and it has the items that's taxed; it has 11 the labor, no tax. 12 Over and over again we hear, Lowe's, 13 Home Depot -- 14 We even had an employee from Lowe's reinforce 15 it, and he even called the New York State Sales-Tax 16 Department and they put in a complaint about it. 17 -- is that, I can go to Lowe's and I don't 18 pay sales tax on any of the products in -- either 19 product or the labor. 20 So, we're still trying to figure out how 21 that's possible; if they really hide the sales tax 22 in there and they actually are paying the sales tax? 23 Maybe they have an IDA exemption type of thing? -- 24 is one of my concerns. 25 I've never really asked the IDA or anybody 1 like that, which -- you know -- 2 SENATOR CARLUCCI: That's a good question, 3 yeah. 4 MICHAEL BECKERLY: -- it makes the playing 5 field unlevel. 6 So, we are constantly fighting that one. 7 On a bigger scale, not really a regulation, 8 but I'm very curious where the State is with 9 Scaffold Law, is one thing I hear about all the 10 time. 11 I heard it almost went through; got signed 12 through this year, but didn't quite make it to the 13 last signature. 14 But any number -- you have any dollar number 15 that that has added to the cost of the TZ Bridge? 16 SENATOR GALLIVAN: I do, actually. 17 MICHAEL BECKERLY: Because that sounds 18 insane, how much that's cost the New York State 19 taxpayers to pay for that insurance coverage. 20 SENATOR CARLUCCI: Senator Gallivan has done 21 a lot of work on this issue, so we'll let 22 Senator Gallivan produce the numbers. 23 MICHAEL BECKERLY: He's the numbers' guy? 24 SENATOR CARLUCCI: On this issue. 25 [Laughter.] 1 SENATOR GALLIVAN: Somebody else provided the 2 information, but we actually have an estimate. 3 Association of General Contractors at the 4 statewide organization, they estimate that cost to 5 be more than $100 million added on to the cost of 6 the -- on to the cost of construction. 7 And that, of course, is just that. 8 New York City School Construction Authority 9 says that they could build another two or three 10 schools a year, because of all the money -- the 11 extra money they're spending on insurance. 12 If you compare it to -- they're spending 13 125 million a year on insurance. 14 And for New Jersey school construction, in 15 all of New Jersey, $25 million is spent on liability 16 insurance. 17 Just two examples, but significant costs. 18 MICHAEL BECKERLY: You know, I'm also a 19 member of the "RBA"; the Rockland Business -- I'm on 20 the board of the Rockland Business Association, and 21 I've gotten more involved in the government affairs 22 committee, and all that stuff. 23 So another question I would have is: It 24 seems to me, I don't know if it's -- if you call it 25 a regulation, but one of the most expensive laws in 1 the state is the Taylor Law, and the associated 2 Triborough Amendment; and how that deals with our 3 local civil unions -- civil-service unions and the 4 arbitration process. 5 So, is there anything happening on those 6 fronts? 7 That seems to be a very expensive regulation 8 that needs to be corrected. 9 So, in general, that would be a tort reform 10 thing, which is big. "Big." 11 LARRY BECKERLY: I have a question. 12 I want to echo what others have said: Thank 13 you for doing this. 14 Many people already are very cynical about 15 government, and, in many cases, given up. 16 You know, a lot of our neighbors and friends 17 say, "I'm getting out of here, I'm moving south. It 18 costs less to live south than here." 19 So I think people being here, I think, I feel 20 it's a great thing, what you're doing, and trying to 21 do, and I applaud you for doing it; someone moving 22 forward. 23 I just wonder -- 24 And I don't have any specific regulations to 25 address. I echo what I've heard here today. 1 I think those are all excellent ideas. 2 -- but to my question, is part of the process 3 of discovering, trying to find out what regulations 4 are onerous, and maybe need to be adjusted or 5 repealed, is there anything being done with looking 6 at what the regulations are in the neighboring 7 states? 8 I guess I heard, it was said we're ranked 9 50 out of 50. 10 I don't know if our neighbors, are they 45? 11 46? 47? 48? 12 But, you know, similar states with similar 13 demographics, has someone taken their manual and 14 looked at, do they have 750 -- 749,000 regulations? 15 You know, can we look and see? 16 There are, obviously, some things that we 17 need to have to protect the people of the state; 18 safety regulations, and things like that, but, you 19 know, there's got to be some commonality between the 20 states around us, at least. 21 Or maybe we should look at this -- one of the 22 medium states, and, instead of reinventing the 23 wheel, say, How does our reform book compare to 24 theirs? And what should we keep, and what should we 25 put to the side and say "throw out"? 1 I mean, you guys cannot possibly read 2 750,000 regulations. 3 Maybe those guys can [indicating]. 4 [Laughter.] 5 LARRY BECKERLY: But, you know, if you start 6 looking at what exists already in the other states 7 around us, and seeing, Okay, those, we probably need 8 to keep. 9 And the other thing to keep in mind, which 10 I'm sure you do in this district, and many of the 11 districts throughout the state: We border on other 12 states, and we try to do business in other states. 13 So, we need to be able to be competitive to 14 go across state lines; and, to keep that in mind, 15 too. 16 SENATOR CARLUCCI: Please, Senator Gallivan. 17 SENATOR GALLIVAN: Comparisons with other 18 states are made on a regular basis when we're 19 researching laws; or, in this case, some of the 20 regulations. 21 There has been, over the years, numerous 22 attempts to overhaul regulations, and they've done 23 it in many ways, shapes, or forms; but, as you've 24 seen, it hasn't been that successful, over time, 25 for, I imagine, a variety of reasons. Politics 1 playing some of it. 2 When you look at that many, and you try to 3 engage all the state agencies to look at it, it 4 takes time and different administrations. 5 There's been different laws passed, over 6 time, that require a regular review, that then 7 generally -- that has not always gotten followed. 8 There are laws that have been passed that 9 require a review, I think, every five years, or, a 10 top-to-bottom review by agency, and it's fallen 11 apart over time. 12 We are starting this, to try to do something 13 about it. 14 It is -- it will not be completely 15 exhaustive, and it will not be a review of all 16 750,000, but the idea is, to call attention to this. 17 We all know our taxes are high, but that 18 other part of it, that so-call "death by a thousand 19 cuts," the idea is, to call attention to this and 20 start people looking at it, and, with hope, of 21 course, that things are regularly reviewed. 22 That we have a start; a minimum of 1,000, 23 that starts, and then, hopefully, it can keep up, 24 and whatever laws are passed to require people to 25 keep it up and regularly review it, that we would 1 hope that we can have some teeth in the laws, or 2 whatever we recommend out of this. 3 But your suggestion is a very good one. 4 Time prevents us from doing this. 5 We're looking to accomplish all of this in 6 about a month and a half, the hearings and the 7 recommendations, but the idea is, to have some 8 tangible number and goal to start to do something 9 about it. 10 And that's where we're starting. 11 But your point's very well taken. 12 LARRY BECKERLY: And I applaud that effort. 13 SENATOR CARLUCCI: It's very fitting to have 14 the Beckerlys testify and talk about this issue. 15 Being here in Nanuet, we're only a couple 16 miles from the New Jersey border. 17 So we're here in Rockland, very susceptible 18 to any type regulatory change, tax-code change, that 19 we know, that a certain product, once it hits a 20 price point, people are just not going to buy it 21 here in New York, and they can easily travel to 22 New Jersey and buy that. 23 So we've seen for years, some of the many 24 trade associations that testified earlier today have 25 shared with us, the amount of tax revenue that we 1 lose, and jobs we lose. 2 Once taxes hit a certain point for New York, 3 they can go right down the road -- for Rockland, 4 they can go right down the road to New Jersey. 5 So, that's something that is extremely 6 important for us here in Rockland, and that we share 7 with the rest of our colleagues in the state. 8 So, it's something that we have to stay on 9 top of, and you guys feel the brunt of that when 10 it's not being addressed. 11 So, do you have any further testimony? 12 MICHAEL BECKERLY: I just think -- I didn't 13 say, how it is fantastic you guys are doing this, 14 and gals. 15 SENATOR MARCHIONE: Thank you. 16 If I could just make one comment as well: 17 Through the Administrative Regulations Review 18 Commission, we have looked a little bit into Florida 19 and Texas, a little about bit into Nevada, where 20 they have started getting rid of their regulations. 21 They're getting -- you know, making a real concerted 22 effort to do so. 23 So, we have reviewed some of those, and 24 looking to say, What were they successful in getting 25 rid of, and can we mirror some of that ourselves? 1 So, we have addressed some of that, although 2 we have a long way to go with it as well. 3 MICHAEL BECKERLY: I am curious; I know 4 state, we're focusing on, but, is there any on the 5 lower levels, like the towns and villages, counties? 6 SENATOR CARLUCCI: Well, it's one of the 7 things that we're constantly dealing with, in terms 8 of when I talked about the elasticity factor. 9 I mean, it's something that we have to fight 10 with the localities, when they talk about raising 11 the sales tax or the mortgage tax or the transfer 12 tax, that's something that we have authority over, 13 and we can help with, and say, Look, you know, 14 you're chasing business out of the community. 15 But one of the things that we're looking to 16 do is, how do we streamline it? 17 And I know, as Senator Marchione talked about 18 her previous life as a county clerk, and me working 19 as a town clerk, and Senator Gallivan as a sheriff, 20 we can see that there are so many different things 21 we can do. 22 When we talked about the software for 23 businesses, you can do the same with localities, in 24 terms of, if you're processing an application, or 25 doing that with different state agencies, that 1 there's no reason why each municipality should have 2 a different software program; or that you're 3 recreating the wheel at every level. 4 So that's a part of what we would like to do, 5 is, How do you do that; how do you streamline 6 government? 7 Because at the end of the day, that means 8 less taxes; less burdensome regulations that the 9 small businesses have to go through. 10 SENATOR GALLIVAN: And if I may add to that, 11 that has come up, and that is something that we will 12 look at, to the extent that we the authority to do 13 something. 14 To give you an example, the way that it up: 15 We were doing -- construction was one of the 16 industries that we were doing out on Long Island, 17 and they talked about somebody who's licensed as an 18 electrician in Nassau County, if I remember 19 correctly, has to get -- 20 Is it 26 licenses? 21 SENATOR VALESKY: Suffolk County. 22 SENATOR GALLIVAN: Oh, I'm sorry. 23 -- in Suffolk, 26 licenses, to work in every 24 one of those towns. 25 So, apparently, they get a license from the 1 state as an electrician, and in Suffolk, some of the 2 towns license them additionally. 3 And, now, apparently, the county -- or, 4 vice versa, the county licenses them, and now some 5 towns are looking to do that in Nassau. 6 I'm getting them goofed up. 7 But yet, in the other county, there's 8 26 licenses in addition to the state license. 9 So it has come up, and it's kind of opened 10 our eyes a little bit, to look at that. 11 Exactly how, I don't know, but it's come up, 12 and we are looking at that, or, we will look at 13 that. 14 UNKNOWN MALE SPEAKER: One comment to what 15 you were saying, in Connecticut, they tag one 16 license, and they can go throughout the state; 17 whereas, in Nassau, Suffolk, they have -- 18 [inaudible]. 19 MICHAEL BECKERLY: Yeah, that's a problem 20 throughout New York State. 21 You know, I don't know how much authority the 22 state government has over that. 23 SENATOR GALLIVAN: We're going to find out. 24 MICHAEL BECKERLY: Yeah, it's a huge problem. 25 LARRY BECKERLY: Well, to that point, the 1 County of Rockland does require a home-improvement 2 license; other counties do not. 3 And so, you know, what they -- the purpose 4 I think for the county regulation, is to make sure 5 that your contractor is properly insured and 6 properly trained, etc., so the consumer has 7 protections, so that someone, just a pickup truck 8 and a toolbox, doesn't come in and get hurt on the 9 job and then the homeowner's liable. 10 SENATOR GALLIVAN: Yeah, and I would imagine, 11 you know, somewhere we'll have to look at, where 12 they're doing it for legitimate additional purpose, 13 versus, just collecting a fee for the same thing, 14 that's just an out-and-out money-grab. 15 LARRY BECKERLY: But if you were to ask me, 16 and I think, according to what -- we would be better 17 off with a state licensing, rather than by each 18 individual municipality, because it is onerous on 19 the contractor. 20 MICHAEL BECKERLY: Is that where the, I'm a 21 little confused, the home rule comes into play? 22 Is that the issue? 23 SENATOR CARLUCCI: Well, with the home 24 contractor, that's something that each, county by 25 county, has authority over. 1 I mean, right now, Rockland County has it; 2 Orange County doesn't. 3 So the issue that you get into with doing it 4 on a statewide basis, is you have plenty of 5 counties, probably the majority of which, don't have 6 a licensing. 7 But something, that to really hit home on 8 this issue, is one of the things that we were able 9 to accomplish in the Legislature, finally, last 10 year, was, in Rockland County, we have 17 villages, 11 5 towns, and one of the problems we had was with 12 taxi cabs, and each village and town wanted to do 13 their own licensing. 14 Imagine the problems that you run into with 15 that. 16 And we finally were able to get a Taxi Cab 17 Bill passed by the Legislature, signed by the 18 Governor, that will allow for Rockland to be its own 19 commission to do the medallion process, which also 20 allows us to then go travel through other counties. 21 But it's just another example of this 22 burdensome situation, where you go from town to 23 downtown, municipality to municipality, where, if 24 you can do it on a countywide basis or a statewide 25 basis, you can make a big difference. 1 Well, thank you very much for your testimony. 2 We look forward to working with you. 3 MICHAEL BECKERLY: Thank you for your 4 patience, sir. 5 SENATOR CARLUCCI: Yes, thank you. 6 I think we have one more speaker. 7 I know Joe wanted to say a few words. 8 JOSEPH SCHWIMER: Joe Schwimer; thank you. 9 I'm not sure that this comes under state law, 10 or county law. It's been -- this has to do with the 11 Health Department in Rockland County. 12 I'll be very brief. 13 I own Clarksville Corners, which is probably 14 the most historic property in Rockland County. I've 15 owned it for 18 years. 16 This first occurred one year ago, practically 17 to the day. I think it was like the 9th of 18 October. 19 Clarksville Corners consists of 20 four buildings, and it has stores, a major 21 restaurant, another restaurant, and apartments. 22 On approximately October 9th, a person from 23 the Health Department came to the building because 24 there was a dispute about one of my tenants -- 25 Which, by the way, I was 100 percent in the 1 right on this, and -- but that's beside the point. 2 -- and said, "This is a three-story 3 building." 4 By the way, someone has lived there for, at 5 least, over 150 years. 6 "It's a three-story building, and you're not 7 allowed to have a tenant in the third story." 8 Actually, it's listed everywhere as a 9 two-story building, and it is a two-story building. 10 It was once a single-family house converted 11 to a two-family house, and in 1955, the basement was 12 converted into a store. 13 The building hasn't grown. 14 This is still going on today, a year later. 15 During the time, by the way, where my wife 16 was deathly sick. She passed away two months ago 17 from Parkinson's. 18 When I heard about your meeting on laws, here 19 is one that is so absurd. 20 "So absurd." 21 How do you still have things like this going 22 on? 23 Now, I can elaborate further. This is all 24 papers having to do with it. 25 And the law, I have it here, it says that a 1 tenant can -- well, I had it here. 2 In any case, it says, that if you have a 3 tenant in a third story, you need to provide either 4 a fire system, which is ludicrous. It will only 5 destroy a whole building. 6 SENATOR CARLUCCI: Well, Joe, I think this 7 sounds like it's a municipal issue. 8 JOSEPH SCHWIMER: It may be a county, but the 9 county says it's a state. 10 SENATOR CARLUCCI: Okay, so what we should 11 is, I'd like to do sit with you after this hearing, 12 and we can go through it, and go through those 13 documents and see, find out exactly what it is. 14 And if we find out that there are state 15 issues there, we can report back to the Committee. 16 JOSEPH SCHWIMER: By the way, we are in 17 100 percent compliance with all state regulations, 18 all building-department regulations. 19 We have no violations, "zero," and this is 20 still going on. Still. 21 Oh, by the way, I am going to sue them now. 22 Now that my wife has passed away, I'm not 23 taking this anymore, and I am getting an attorney 24 and suing them. 25 This is an absurd law, and that's why I'm 1 here. 2 There are lots of absurd laws, and they have 3 to be changed or dropped. 4 You just cannot have the number that you 5 mentioned, what was it, 750,000, or whatever? 6 You know, it's absurd. 7 Really, the only thing that you can do, is 8 eliminate every one and put in new laws, sensible 9 laws, which have to do with the 10 twenty-first century. 11 I mean, it's a job, it's a tremendous job, 12 but, really, that's the only true answer. 13 SENATOR CARLUCCI: Well, Mr. Schwimer, we 14 appreciate your bringing this to our attention, and 15 I look forward to working with you on the specifics 16 of that, to figure out exactly where it's coming 17 from, and if there is something that we can do on a 18 state level to streamline the process, to make it 19 easier for people in the future. 20 So, thank you. 21 JOSEPH SCHWIMER: This is why I'm here. 22 SENATOR CARLUCCI: Yeah, we appreciate it. 23 Thank you. 24 JOSEPH SCHWIMER: Yeah, thanks. 25 SENATOR CARLUCCI: Well, that's the last of 1 our scheduled speakers, and we want to thank 2 everyone for coming out today. 3 And, I think we've gotten a lot of good, 4 specific ideas and proposals. 5 And like we said, this is one of seven 6 hearings that we're having around the state, and 7 I think this was really good, in terms of 8 pinpointing some key areas that we can go back and 9 find out, what can we do to make it easier for small 10 businesses, while, at the same time, making sure 11 that we're protecting the public, the environment, 12 and everything else that we're supposed to be doing 13 in the state of New York. 14 With that, if anybody else would like to 15 close with any comments? 16 Senator Marchione? 17 SENATOR MARCHIONE: Just, thank you all very 18 much for being here today, and for your testimony. 19 It is such an important part of what we're 20 doing, and we could not go forward and look for 21 1,000 rules and regulations without the help that 22 you've provided to us. 23 So, thank you for your time this afternoon, 24 and for sharing all of your thoughts. 25 SENATOR GALLIVAN: I thank everybody as well. 1 SENATOR CARLUCCI: Great. 2 Thank you. 3 [Applause.] 4 (Whereupon, at approximately 3:45 p.m., 5 the public forum on Small Business Regulatory 6 Reform held before the New York State Senate 7 Majority Coalition concluded, and adjourned.) 8 ---oOo--- 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Public Forum/Town Hall Small Business Regulatory Reform - To Learn from Businesses and Industry Experts Which Regulations Are the Least Useful, Least Cost-Effective, And, Therefore, Should Be Eliminated

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