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

President, Manufacturing Association 13 of Central New York

President, Manufacturers Alliance of 14 New York State 15 Keith Bowman 80 89

Vice President 16 F.M. Howell & Company 17 Jack Bebernes 91 95

Employee 18 Dresser-Rand 19 George Miner 99

President 20 Southern Tier Economic Growth 21 Jamie Johnson 99

Executive Director 22 Steuben County IDA 23 John Giovenco 123 130

Traffic Manager 24 Nucor Steel, Vulcraft steel-fabrication

facility (Chemung, New York) 25 1 SENATOR O'MARA: Good morning, everyone, and 2 thank you for being here for the New York State 3 Senate Majority Coalition Regulatory Reform Public 4 Forum, and the focus of today's forum is on 5 manufacturing regulations. 6 You know, we hear all too often about how 7 New York State is uncompetitive and does not have a 8 positive business climate, and we are working on a 9 variety of ways to try to improve our business 10 climate in New York State; something that we all 11 focus very much on here. 12 And part of the purpose of the 13 regulatory-reform forums that we're having across 14 the state in a variety of industries, including 15 manufacturing, which is today's, we're doing them on 16 construction, on agriculture. 17 What's the other topic wear doing? 18 SENATOR GALLIVAN: We've done health and 19 medical. 20 SENATOR O'MARA: Oh, health and medical is 21 the other major area. 22 SENATOR GALLIVAN: Insurance and banking. 23 SENATOR O'MARA: And insurance and banking, 24 for topic areas across the state. 25 So, I want to thank you all for coming out 1 and participating today, to give us your input on 2 regulations. 3 Our focus is to come up with 4 1,000 regulations statewide, and out of the 5 100,000-plus regulations we have in New York State, 6 we don't think that should be too difficult of a 7 task to meet. 8 But, we're committed to reducing regulations 9 everywhere we can. 10 And, obviously, with the tax structure, or 11 the tax climate, in New York, again, the 12 Tax Foundation out of Washington D.C., came out with 13 its annual report, either yesterday or today, I just 14 read about it, where we are number 50 again out of 15 all countries [sic] in tax climate. 16 And, you know, I firmly believe in the motto 17 that Governor Cuomo has spoken about since he took 18 office, and that is, "New York State has no future 19 as the tax capital of the nation." 20 So, we need to focus on reducing taxes, and 21 the Governor's announced a commitment to looking at 22 reducing taxes in this coming legislative session 23 starting in January. 24 And part of that, I believe, is equally 25 important, is to ease the regulatory burdens and 1 structures that we have in New York State. 2 So I look forward to your testimony here 3 today. 4 Those of you that are testifying, and those 5 of you that are here to attend and listen, thank you 6 for your interest. 7 And I will introduce my colleagues here. 8 Senator Patrick Gallivan, who's one of the 9 co-chairs of these forums, and 10 Senator Kathy Marchione. 11 Kathy is from the Saratoga area, and 12 Patrick is from the Erie County, Livingston County, 13 area of New York State. 14 We all have districts that cover multiple 15 counties throughout the state. 16 We do apologize for starting a few minutes 17 late today. Patrick came up from New York City, 18 from some work he was doing down there yesterday, 19 and you know how that travel can get delayed at the 20 bridges and tunnels, and whatnot. 21 So, Patrick, thank you for coming to Corning 22 with this forum. 23 SENATOR GALLIVAN: Thanks, Senator. 24 And good afternoon, everybody, and thank you 25 for being here, and thanks for hosting this. 1 We, of course -- the Senator gave a great 2 introduction, and really took most of the words that 3 we have been saying at these different hearings, out 4 of our mouths; but, clearly, 50 out of 50 today, the 5 Tax Foundation came out with that report. 6 Earlier this year, the U.S. Chamber of 7 Commerce came out with a report that ranked 8 New York State 50 out of 50 as having the worst 9 business climate in the country. 10 And it comes down to the two things, I think, 11 that Tom articulated: taxes, and that so-called 12 "death by a thousand cuts" regulations. 13 We are conducting a parallel series of 14 hearings across the state. 15 One is focused on tax reform, and then 16 Senator Marchione and I, Senator Dave Valesky from 17 the Syracuse area, and the Senator from down 18 Rockland County, have been traveling the state, 19 doing these regulatory-reform hearings. 20 We're near the end. This is our 21 second-to-last. We finish up with a biotech 22 industry next week in Rochester. 23 Our goal is to put forward, as Tom had 24 mentioned, a minimum of 1,000 regulations to repeal, 25 period. Not to replace, not to redo, but to repeal. 1 And the idea is, not just to focus on the big 2 things, but the so-called "death by a thousand 3 cuts." And if we can identify the outdated 4 regulations, the useless regulations, the 5 regulations where the costs greatly exceeds the 6 benefit, where we can catch up with modern 7 technology and replace paper with electronics, 8 that's what our goal is. 9 That thousand is just a start, though. 10 But we will have a report that will be 11 available on our website for everybody to view, and 12 we anticipate that being done, probably by the end 13 of November, and it will form the basis for our 14 legislative agenda as we move forward. 15 So, we appreciate everybody being here, 16 because we can't get down, drill into the 17 industries -- we don't do those things for a 18 living -- without people in the various industries' 19 help. 20 So we appreciate your time and willingness to 21 be here to testify today, and I'll just turn it over 22 to Senator Marchione before we get started. 23 SENATOR MARCHIONE: Thank you, and good 24 morning to everyone. 25 It's a pleasure for me to be here with you as 1 well. 2 And, just to add a little bit to what 3 Senator O'Mara and Senator Gallivan have said, all 4 of the rules and regulations and red tape, if you 5 were to lay them, paper by paper, 8 1/2-x-11, they 6 account for more than 22 miles of red tape that 7 New York businesses are tangled up in. 8 And I'm looking forward to hearing from the 9 manufacturing industry today, recognizing that there 10 are over 462,000 manufacturing jobs in 11 New York State, and we need those jobs; we need to 12 expand this industry. 13 And we're hoping what we're doing here today 14 will provide you with some needed relief; that we 15 will be able to get rid of some of the rules and 16 regulations that form those 22 miles. 17 I want you to know, though, that we're not 18 here to point blame at anyone. We're here for the 19 sole purpose, our only goal, is to listen to each 20 and every one of you, so that we can find solutions, 21 real solutions, to the problems that we have. 22 So thank you all for being here, and I look 23 forward to your testimony. 24 SENATOR GALLIVAN: Thank you, Senator. 25 1 Our first speaker is G. Thomas Tranter, 2 president of Corning Enterprises. 3 And we appreciate your patience, and your 4 willingness to testify today. 5 G. THOMAS TRANTER: Thank you, Senator. 6 SENATOR GALLIVAN: When you're ready, sir. 7 G. THOMAS TRANTER: And I appreciate the 8 opportunity to come before you and give you some 9 feedback, and if I do it in five minutes, we'll be 10 right back on schedule, so -- and I think I can do 11 that. 12 [Laughter.] 13 G. THOMAS TRANTER: So, first of all, 14 Corning, Incorporated, is a worldwide employer, but 15 we're proud of the fact that we have our 16 headquarters, our research facility, and our 17 environmental plants in the Corning Valley. 18 Approximately 6,000 employees of the 26,000 19 that we have are in New York State. About 5,400 are 20 here. We also have manufacturing plants in Oneonta, 21 Canton, and Fairport. 22 And I'm just gonna kind of run through 23 quickly what we see as some of the changes that we 24 would like. 25 So, first, and I know you've, all three, been 1 working hard on this, is repeal 18-A. 2 Tom has heard us say that loud and clear. 3 That costs us about a million and a half 4 dollars a year. 5 And that's something, you know, when you 6 compare us to places that we do business in the 7 United States, such as Virginia, North Carolina, and 8 Kentucky, we don't have that kind of utility tax. 9 So, I'd really like to see that go away. 10 Speaking of taxes, as you did, we pay over 11 $12 million in local property taxes in 12 Steuben County, which, obviously, being the largest 13 industry in the area is appropriate, but one of the 14 frustrating things is all the levels of government; 15 and, again, a lot of the regulations that you refer 16 to. 17 Just simple things like, you know, 18 multi-jurisdictional tax bills, you know, can't we 19 have one tax bill? 20 And the layers of government in 21 Steuben County; we have 22 different school 22 districts, as well as all the communities that you 23 deal with, villages, cities, towns, counties. 24 Again, if you compare us to Virginia, 25 North Carolina, and Kentucky, most of those have 1 only one or two. Generally, the county oftentimes 2 runs the school district, and, you know, many of 3 the, like, water, sewer; all those kinds of things. 4 So, I know this governmental structure goes 5 way back, but, anything you can do to kind of 6 consolidate would be greatly appreciated. 7 Another one that I know your House has done a 8 great job on, but we really want to see, because 9 it's driving our insurance rates up tremendously, is 10 repeal of the Scaffold Law. 11 I think -- I don't have to explain it to you, 12 you understand it, but it is a big liability for 13 something that we shouldn't have to bear 14 responsibility for. 15 You know, we're a telecommunications company. 16 There's a nice little write-up, actually; 17 we're in, really, four major business areas, but one 18 thing we want to make sure is, that there's not any 19 new regulations, because there's already a lot of 20 regulations over the Internet usage and rates, and 21 terms and conditions of services. 22 Right now, the way New York does it, and we 23 think it works pretty well, is through the 24 Public Service Commission. 25 We don't need more regulations imposed by the 1 Legislature. 2 You know, again, another one that I think 3 your House has worked on repealing is the 4 annual-notice requirement called "The Wage Theft 5 Prevention Act." 6 That's very burdensome for somebody that's 7 got 6,000 employees, that we've got to send every 8 single one an official notice, and have to have it 9 signed, sealed, notarized, and back in their file 10 every year. 11 I mean, it seems kind of ridiculous, frankly. 12 You know, another one is prevailing-wage 13 determinations. 14 Up here it's really important, that if they 15 do prevailing wage, that it reflect regional, you 16 know, differences. I mean, the wages here, 17 obviously, are nothing compared, you know, to 18 New York City and larger metropolitan areas. 19 And there clearly is an emphasis, in recent 20 years, about expanding the definition of 21 public-works and prevailing-wage mandates. 22 And while that doesn't impact Corning, the 23 wages we pay our employees, it certainly does with a 24 lot of contract services; for example, you know, 25 landscaping, janitorial, those kinds of security 1 services that are contracted out. 2 And then, lastly, kind of in the 3 environmental area, there's lots of regulations. 4 Just deal with DEC, and you'll find out, of 5 that 22,000 miles, I don't know how much -- or, 6 22 miles, I don't know how much they have, but they 7 have a lot of regulations. 8 But some of the ones that are difficult is, 9 first of all, you know, again, compared to other 10 states, the SEQR, and I don't have to tell you how 11 long and involved the SEQR process is. 12 I mean, we just built the new plant here, and 13 the SEQR process takes, like, four months before you 14 can even do anything. And that was to, you know, 15 add to -- 250 jobs to our already 500 employees at 16 our diesel manufacturing. 17 But -- and then the other thing that's really 18 difficult about SEQR, besides all that you're 19 required to do, is the fact that people can, 20 basically, file objections, and just from the public 21 at large, and they don't really have any personal 22 injury, or anything, that they're actually losing. 23 And what happens a lot of times, it just 24 becomes a cause. They're against, you know, a new 25 facility in their neighborhood or backyard, or 1 whatever. 2 Another one is Article 10. 3 I know you've done a fair amount in terms of 4 that, but, again, you know, when it makes a lot of 5 sense, fast-tracking that process that meets certain 6 environmental criteria, like, things like pollution 7 reduction and economic development, expansions, it 8 just seems like those drag on and on and on. 9 And then, you know, all the monitoring that 10 DEC does with air permits and water quality and -- 11 you know, again, we abide by all of that, but -- and 12 always will, but, you know, they're onerous 13 regulations. 14 So -- and, if you want, I can send you some 15 of those details from some our environmental people. 16 But, again, I appreciate the opportunity to 17 make some comments, and anything you can do would be 18 greatly appreciated. 19 And this is certainly important, and 20 I commend you for trying to get rid of some of these 21 regulations, because my belief is, what happens, 22 over time, they just add and add and add and add, 23 and they never delete. 24 Right? 25 SENATOR MARCHIONE: That's true. 1 G. THOMAS TRANTER: So, thank you very much. 2 SENATOR GALLIVAN: That's exactly it. 3 Well, thank you. 4 You would be interested to know, there are 5 over 140,000 pages of rules and regulations. 6 The department that has the most, is the DEC; 7 24,698 pages, believe it or not. 8 G. THOMAS TRANTER: I rest my case. 9 SENATOR GALLIVAN: We would appreciate, if 10 you are able to put together some of the specifics 11 that you mentioned -- 12 G. THOMAS TRANTER: Okay. Yep, no, I can do 13 that. 14 SENATOR GALLIVAN: -- so we can take a look 15 at some of the specific regulations, that would be 16 appreciative. 17 G. THOMAS TRANTER: Yep, I'll be glad to do 18 that. 19 SENATOR GALLIVAN: And then we can -- 20 G. THOMAS TRANTER: It will be our 21 environmental people, but I'll transmit it to you. 22 SENATOR GALLIVAN: No, that's fine. No, that 23 would be good. 24 Scaffold Law has come up -- well, much of 25 what you have spoken about has come up in the 1 different industries that we're dealing with. 2 Scaffold Law, yesterday, we were in New York, 3 our hearing was about four hours: insurance and 4 banking, financial services. 5 About two hours was spent on the 6 Scaffold Law. 7 And, we're somewhat optimistic. We have 8 legislation that we have tried to advance. 9 G. THOMAS TRANTER: Right, and you passed it 10 in your House; right? 11 SENATOR GALLIVAN: We haven't yet, but it 12 really wouldn't have mattered, because the Assembly 13 wouldn't do anything about it. 14 But, we are now trying to work with the 15 Governor's Office, and, we're somewhat optimistic 16 that we may be able to have some action on it. 17 G. THOMAS TRANTER: That would be great. 18 SENATOR GALLIVAN: But, I mean, we will 19 continue, so we appreciate that it keeps coming up 20 in testimony, so we can use it, obviously, when we 21 make our recommendations. 22 But I appreciate your testimony. 23 I don't have any questions. 24 I don't know if -- 25 SENATOR MARCHIONE: I do, if you don't mind. 1 G. THOMAS TRANTER: Yep. 2 SENATOR MARCHIONE: And just to add to the 3 Scaffold Law a little bit, I mean, yesterday we 4 heard from the insurance companies, that it's 5 getting so bad out there, that there's "a company" 6 who's writing. 7 And for the insurance aspect of this, it's 8 10 times more costly than it used to be 2 years ago. 9 G. THOMAS TRANTER: Right. 10 SENATOR MARCHIONE: So it's very serious. 11 We hear what you're saying, but we appreciate 12 that we're hearing it from all different industries: 13 construction; now manufacturing, and insurance and 14 banking. 15 But I have just a couple of questions on the 16 DEC regulations. 17 Do you find in your business that EPA -- the 18 federal EPA regulations and the DEC regulations, are 19 you finding them duplicative? 20 Are you -- 21 G. THOMAS TRANTER: I would say there's times 22 that they are. Generally, though, we deal more with 23 DEC than EPA. 24 We also, though, you know, and to add to what 25 you're saying, we also deal with Army Corps; and, 1 so, there's really the three, kind of, regulatory 2 agencies. 3 SENATOR MARCHIONE: To add to the request 4 from Senator Gallivan, if you have duplicative 5 regulations you're dealing with, could you list 6 those as well, so we would know. 7 G. THOMAS TRANTER: Sure. 8 SENATOR MARCHIONE: Perhaps we could get rid 9 of some of ours if EPA has them. 10 SENATOR GALLIVAN: Yes, and as long as you're 11 tasking your environmental people -- 12 [Laughter.] 13 SENATOR GALLIVAN: -- I know the SEQR 14 process, they have a new form? 15 G. THOMAS TRANTER: Right. 16 SENATOR GALLIVAN: And we've heard about some 17 of the questions that are on there, that don't seem 18 to make any sense, that are highly technical, and 19 don't seem to serve a purpose. 20 G. THOMAS TRANTER: Comment on them? 21 SENATOR GALLIVAN: So, if your environmental 22 people are able to comment on that, that would be 23 appreciative as well. 24 G. THOMAS TRANTER: Yep, okay. 25 SENATOR GALLIVAN: And, right directly behind 1 you, the good-looking guy with the glasses, can give 2 you an e-mail address, that -- 3 G. THOMAS TRANTER: Okay. 4 SENATOR GALLIVAN: -- yeah, right in the 5 very back, he can give you an e-mail address. 6 SENATOR O'MARA: He did say "good-looking," 7 but, the guy with the glasses. 8 SENATOR GALLIVAN: All the good-looking guys 9 with the glasses, but, the one in the back. 10 SENATOR O'MARA: Tom, thank you for being 11 here. 12 And I certainly want to thank 13 Corning, Incorporated, for its commitment to the 14 Southern Tier; being their largest employer in the 15 Southern Tier, and committing to expand 16 manufacturing into the Southern Tier, with your 17 heavy-duty diesel plant, where you chose Irwin to 18 expand that as opposed to going to Asia. 19 We're certainly very proud to have you as our 20 number one employer in the region, and thank you for 21 your participation today. 22 G. THOMAS TRANTER: Glad to help. 23 Good luck. 24 SENATOR GALLIVAN: Thanks again. 25 SENATOR MARCHIONE: Thanks. 1 SENATOR GALLIVAN: Our next speaker is 2 William Wolfram, board chair of the New York State 3 Chemical Alliance. 4 Oh, hi there. 5 And did I pronounce your name correctly? 6 WILLIAM WOLFRAM: That's fine. 7 SENATOR GALLIVAN: And, Margaret Gorman, who 8 is also with the -- or, who is with the 9 American Chemistry Council. 10 Thanks, both of you, for being here. 11 MARGARET GORMAN: Thank you. 12 Good afternoon, Senators O'Mara, Gallivan, 13 and Marchione. 14 My name is Margaret Gorman, and I'm manager 15 of state affairs for the northeast region for the 16 American Chemistry Council. 17 We're a national trade association based in 18 Washington, D.C., but have our regional office in 19 Albany, about -- just up the block from you. 20 We represent chemical and plastics 21 manufacturers throughout the country, throughout the 22 world. 23 We have over 80 plant sites in 24 New York State, with a huge concentration of those 25 facilities in Western New York and the 1 Hudson Valley, in the Capital Region and 2 Long Island. 3 We have sites throughout New York, but that's 4 where a major, you know, portion of our facilities 5 are. 6 In addition to that, we have about 500 plant 7 sites from customer bases that are also throughout 8 New York State. 9 Over 96 percent of all manufactured goods are 10 directly touched by the business of chemistry, 11 making the industry an essential part of every facet 12 in our nation's economy. 13 Chemistry provides significant economic 14 benefits in every state, including New York. 15 Thanks to chemistry, our lives are healthier, 16 safer, more sustainable, and more productive than 17 ever before. 18 For every job created by the chemistry 19 industry in New York, an average additional two jobs 20 are created in dependent industries, including 21 mining and utilities, construction, health care, 22 manufacturing. 23 We directly employ over 40,000 jobs in 24 New York State, and indirectly support another 25 88,000 jobs. 1 The average wage of a chemistry-industry 2 employee in New York is approximately $74,000, and 3 then the industry directly generates over 4 350 million in state and local taxes, and another 5 700 million in federal taxes, supporting the needs 6 of New York and its residents. 7 I know a few of you have been to our sites 8 throughout New York. 9 And one thing that I've noticed, as I've 10 traveled and visited those sites, is just the 11 longevity of the employees there. 12 I've met some people that have been there 13 35, 40 years. They started in the industry, you 14 know, that's the first job out of school, their 15 first job, and that's where they're going to end. 16 So, they're really dedicated to staying in 17 the industry; they're loyal in staying in New York. 18 Chemistry creates fertilizers that enable an 19 abundant food supply; plastic packaging, in 20 Canandaigua, New York, for example, that help to 21 preserve healthy food shipped from New York farms 22 and factories to homes across the country. 23 Chemistry creates solutions that help local 24 food producers purify water, and sanitize meat and 25 poultry, to reduce food-bourne illness. 1 Many lithium-ion and lithium-polymer 2 batteries, for example, are made in New York and 3 employ chemistry to create rechargeable batteries 4 for consumer and military applications, including 5 laptops, cameras, mobile phones, communication 6 devices, and GPS systems. 7 Chemistry's essential to our everyday lives. 8 The business of chemistry transforms the 9 natural raw materials of the earth, sea, and air 10 into products that we use every day. 11 The business of chemistry drives innovation 12 and creates jobs and economic growth by creating 13 products that bring major societal benefits to our 14 quality of life. 15 Our industry represents 9 percent of total 16 New York manufacturing and employment in New York, 17 and 24 percent of overall manufacturing shipments. 18 Innovative and dynamic industries work, 19 creating jobs, and help with our economic growth in 20 New York. 21 Today, in 2013, New York is now ranked at the 22 seventh largest chemistry producer in New York 23 State. 24 It was the fifth. 25 Notice I said "was"? 1 I was curious to see, when we were the fifth, 2 so I did a little research and noticed that was this 3 time, last year. 4 It is now outranked by North Carolina that 5 has surpassed New York, and North Carolina is now 6 the third largest chemistry producer in the 7 United States. 8 Comparing 2006 to 2011, latest available 9 data, shipments in New York have declined 10 27 percent; from 41 billion, to 30 billion. 11 In North Carolina, they have risen 12 43 percent; from 39 billion, to 56 billion. 13 And you've all made some, you know, great 14 points about New York being at the bottom of the 15 tier in best places to do business in the country. 16 I did a little, you know, side-by-side on 17 North Carolina, because they have similar jobs 18 that -- you know, similar amount of jobs in the 19 state, although they're a little bit more revenue, 20 but it's pretty similar on those statistics. 21 North Carolina on that ranking is the third 22 best place to do business in the country, compared 23 to New York's 50. 24 So I think that's a good way to kind of look 25 at, you know, you've got opportunities. You've also 1 got, you know, as you said, there's burdensome, you 2 know, tax issues here as well, overregulation, etc. 3 So I think that's a really good way to look 4 at that, and that state is just soaring, soaring 5 past New York. 6 I know you've mentioned, you know, and we 7 commend you for going across the state and 8 collecting regulations, and you're going to hear 9 more from William today, on specific regulations 10 that are impacting our industry. 11 But, it's also important to note that, in 12 addition to those that are out there, there's also 13 those that can be prevented. 14 And so many times you've seen in legislation, 15 that there's sections in the legislation that allows 16 DEC, for example, to promulgate rules and 17 regulations that would be in an additional burden, 18 for example, on the industry. 19 We have one that is going to come up during 20 session, and it's a bill that we -- is one of our 21 key issues; and that's Senate Bill 4614 and 22 Assembly Bill 6328. 23 It would, essentially, create a state 24 chemical regulatory program, with the ultimate 25 intent of allowing an estate, through a 1 chemical-prioritization process, to target specific 2 chemicals for bans in consumer products. 3 ACC opposes the legislation, for the primary 4 reason it is predicated on the assumption there's 5 inadequate protection for consumers and children in 6 the marketplace. 7 The justification used for pushing this 8 regulation at the state level, is the current 9 federal regulatory system for chemicals is broken; 10 and, therefore, states have to step in. 11 We strongly disagree. 12 The legislation is already being addressed by 13 EPA and does not need to be addressed by DEC. 14 S4614 does not acknowledge the broad safety 15 net of existing federal consumer-protection and 16 chemical-regulation laws. 17 Over 14 different federal statutes play a 18 role in regulating chemical use in consumer 19 products. 20 The issues in this legislation are being 21 addressed by EPA today, and reporting information 22 about chemicals, prioritization of chemicals, 23 assessment of chemicals, and regulation of chemicals 24 are all things that EPA is already looking at. 25 And I can -- you know, we can follow up and 1 provide you a real detailed list on what -- what 2 they're specifically looking at. 3 Here's one example: 4 The chemical-data reporting rule, in February 5 of this year, EPA released information it had 6 collected from chemical manufacturers last year 7 about their uses of chemicals; industrial uses, 8 commercial uses, consumer-product uses, for example. 9 In February, EPA then established 10 83 work-plan chemicals for review and assessment, 11 and regulation where warranted. 12 So my point in this is that, you know, this 13 legislation, for example, would require DEC to 14 create another list of chemicals; just creating an 15 additional reporting requirement for businesses in 16 New York State. 17 And William's gonna touch base on that as 18 well, and just the general impact that that would 19 have. 20 And, New York being an outlier in the country 21 on that, a state like North Carolina does not have 22 this; does not require this. 23 So in looking at those two states, what would 24 prevent, you know, a business, and all these 25 different requirements, from just moving out? 1 The piecemeal review of a few chemicals a 2 year will do nothing to enhance the safety of 3 New York residents, nor will it provide any 4 certainty to New York chemistry businesses that will 5 never be certain when their products will come under 6 state regulatory scrutiny. 7 On behalf of ACC, we would ask you, during 8 session, not to support this legislation, going 9 forward. 10 In addition to that legislation, we also 11 have, there's other product-ban legislation that 12 we're always seeing in New York State, but for the 13 purposes of this forum, this is a key one, because 14 it -- it does promulgate additional rules and 15 regulations. 16 One -- another particular area that we are 17 supportive of, that doesn't have any regulation yet, 18 is the access to natural gas. 19 Access to vast new supplies of American 20 natural gas from shale deposits is one of the most 21 exciting domestic energy development in decades; 22 particularly for the business of chemistry. 23 Our industry actually relies on affordable 24 natural gas as a source of energy, as a raw material 25 or a feed stock for countless chemical products. 1 The low price of natural gas, that gives 2 U.S. manufacturers an advantage over competitors 3 that relied on more expensive oil-based feed stock. 4 And William has, you know, just from 2010 5 till now, the price in natural gas has decreased due 6 to that. 7 The business of chemistry is at the heart of 8 manufacturing. 9 Access to shale gas is dramatically boosting 10 America's competitiveness, and can help meet our 11 nation's goals for increased exports and new jobs. 12 State oversight of hydraulic fracturing is 13 appropriate, since state governments have the 14 knowledge to oversee the process in their 15 jurisdictions. 16 So on behalf of ACC, I appreciate you giving 17 me the opportunity to present, and we look forward 18 to working with you throughout session. 19 And at this point, William Wolfram, who is 20 the chairman of the board of the New York State 21 Chemical Alliance, and a member, also, of the 22 American Chemistry Council, he's director of global 23 regulatory affairs for SI Group, is going to speak 24 on the company perspective. 25 WILLIAM WOLFRAM: Thank you, Senators. 1 I really appreciate the opportunity to 2 address you today. 3 SI Group is a family-owned and privately held 4 global chemical company. 5 We have 19 manufacturing locations in 6 10 countries. 7 We are headquartered in Schenectady, 8 New York. 9 We employ 350 people in New York State, 10 600 nationally, and about 2,000 worldwide. 11 So, all told, we're about a 12 billion-and-a-half-dollar enterprise, in terms of 13 turnover. 14 We've been in -- we were founded in 15 Schenectady, back in 1906, so, we're over 106 years 16 old. 17 And, our company, through its payroll, 18 contributes about $45 million annually to 19 New York State, to the economy, and an additional 20 $110 million through the purchase of goods and 21 services as a consumer of articles and feed stocks 22 in New York State. 23 Our production: We have our headquarters in 24 Schenectady and a production facility in 25 Rotterdam Junction, New York. 1 The production facility employs 200 people. 2 And in 2012, we produced about 440,000 metric 3 tons of high-value chemical intermediates. That 4 equates about to about 97 million pounds, if that's 5 an easier number. 6 But, mainly for the rubber-coatings and 7 adhesives industry, and about a quarter of these 8 products are actually imported to other regions of 9 the world, and even China. 10 So, we're probably one of the few sectors 11 that actually exports our products to China instead 12 of, let's say, getting products from China. 13 As far as our company is concerned, we are an 14 ACC member. 15 We're also, as an ACC member, a 16 responsible-care company, so we really have a 17 comprehensive environmental, health, and safety, 18 security -- safety and security management system. 19 So I think that's really important to 20 mention, because I think the business of chemistry 21 has really come to the realization that we, 22 ourselves, have to become a lot more transparent, as 23 far as communicating to other, you know, 24 stakeholders in the value chain. 25 And I think ACC has done a great job really 1 promoting the product-stewardship aspects. 2 And, basically, this comes along with 3 membership, so you can't be an ACC member and not be 4 a responsible-care company. 5 So, these two things go hand in hand. 6 I just wanted to, perhaps, just say a few 7 words about the things that Margaret's already 8 mentioned. 9 But, obviously, one of the hugest, or most 10 critical, issues for the chemical industry in 11 New York State, and certainly nationally, is 12 regulatory certainty and a level playing field. 13 Even a -- let's say, a relatively small 14 company like we are, we're about in the top 150 of 15 chemical companies in the United States. 16 We do business in 32 of the 50 U.S. states, 17 and we could really imagine nothing worse than a 18 patchwork of disparate chemical regulations that 19 would, basically, be very disruptive of commerce. 20 And, again, these specific state-by-state 21 actions, and, you know, without being insulting to 22 any particular group, many times, they don't seem to 23 be particularly well-informed, and they're based on 24 various regulatory lists, which are candidate lists. 25 There's no real objective evidence or any specific 1 ties to a positive environmental or human-health 2 outcome to a lot of these programs. 3 Obviously, they're very impactful, because 4 there is a strong emotional appeal to many 5 stakeholder groups, so we don't want to discount 6 that. 7 But, certainly, we would certainly concur 8 with ACC that the best solution for the U.S. is a 9 strong national chemical-control scheme based on the 10 Lautenberg-Vitter Bill; U.S. Senate Bill S1009. 11 And, certainly, this offers the best 12 opportunity for chemical regulatory certainty; an 13 assessment that's based on a risk-based assessment 14 that's really founded in sound science and a 15 balanced weight-of-evidence approach, which we feel 16 is crucial. 17 The Lautenberg-Vitter Bill has many, really, 18 what we think are good attributes. I think industry 19 has kind of -- this has kind of been -- the nickname 20 has been, like, it's the "industry bill." 21 But in our view, it's really a balanced bill 22 that protects all the stakeholders in the supply 23 chain, and certainly allows U.S. chemical industry 24 to be sustainable while protecting human health and 25 the environment. 1 And, again, it's -- we agree 100 percent that 2 this is probably the best opportunity for 3 TSCA reform that's been presented in the past 4 decade, and may, in fact, be the last opportunity, 5 you know, if these basic principles are not upheld. 6 But the basic -- some of the big issues for 7 the chemical industry, is that the safety standard 8 in the Vitter-Lautenberg Bill really is a standard 9 that assures no unreasonable harm to human health or 10 the environment from exposure to a chemical 11 substance in its intended use. 12 In other words, there are many, many things 13 that have intrinsic hazards. You know, even pure 14 water has an intrinsic hazard that can't be denied. 15 But it's really the safe-use standard that's 16 really critical to chemistry. 17 And, also, the ability of, let's say, the 18 regulatory community, if they adopt this bill, to 19 give regulatory certainty. 20 In other words, is this an absolute safety 21 standard? And you're either a high-priority 22 substance or you're a low-priority substance. 23 So, in the past, there's always been this 24 kind of changing landscape. 25 There's been, EPA has promulgated a chemical 1 action plan; then a work-plan chemical program. 2 None of these things seem to fit together in 3 any cohesive way or coherent way that describes a 4 program that would actually prioritize and make 5 these safety determinations. 6 I mean, obviously, they're trying, but we 7 think the Lautenberg-Vitter Bill certainly has as 8 many advantages to facilitate that process. 9 Again, I wanted to just switch gears a little 10 bit and talk about energy utilization in the 11 chemical industry, and this goes back to the 12 development of shale gas. 13 Our plant in Rotterdam Junction, New York, in 14 recent years, it's basically the -- we're very happy 15 and grateful for this, that our natural gas bill is 16 actually coming down. 17 Back in the early 2010s; 2010, 2011, we were 18 paying about $5 million annually in natural gas; and 19 that annual natural gas bill now has come down to 20 about $3 1/2 million, due to the development or the 21 plentiful supply of shale gas. 22 And so what this means, in real numbers: 23 Back in 2010, we were paying about $9.35 a 24 dekatherm, and that has steadily decreased to 25 $9.15 in 2011, $8.61 in 2012, and this year it's 1 $6.68, per dekatherm. 2 And this is hugely important for us. 3 And not only the market price, but, 4 certainly, in the history of natural gas, and 5 I guess you could say probably the oil industry as 6 well, there have been huge swings in natural gas 7 prices. 8 Back in 2006 and 2008, where there was a lot 9 of speculation in the market, that natural gas price 10 was almost double, and sometimes triple, that price; 11 so it went up to over, like, over $13 a dekatherm 12 for an extended period. 13 So with the availability now of natural gas, 14 the trend line for natural gas prices has smoothed 15 out. 16 In other words, the -- I guess the drivers 17 that people would be able to, let's say, use 18 potential shortages, or other, let's say, global 19 political factors, to say natural gas would be short 20 in supply, is now gone. 21 So that's -- it's the trend line is now much 22 smoother than it was, so this, again, allows people 23 to plan, allows for more certainty. 24 I think it's all -- it's -- there are some -- 25 certainly, shale-gas development, I mean, none of 1 these positive benefits have yet been realized in 2 New York. 3 And I think we've -- in terms of the chemical 4 industry, another big source of interest and 5 innovation for us, is the fact that there have been 6 a number of world-scale chemical feed-stock 7 facilities that are now planned in the 8 United States, and they're being planned in places 9 like West Virginia, Pennsylvania, and Ohio. 10 They're certainly not being planned in 11 New York State. 12 And these are going to bring, let's say, a 13 very high, not only jobs, but the raw material, the 14 supply -- the ready supply of reasonably-priced raw 15 material, is a magnet for other chemical industries. 16 And so, right now, the natural gas price in 17 the United States is really half to one-third that 18 of the natural gas price in Europe and Asia, and 19 this gives the U.S. chemical industry a huge 20 competitive advantage, especially in, let's say, 21 high-energy industries. 22 To balance that, there's, also, the market is 23 now shifting, since we have this abundance, to 24 actually produce liquid natural gas -- well, gas 25 liquefaction facilities that will allow the U.S. to 1 export liquid natural gas to other countries. 2 And, again, this is an area that we watch -- 3 or, intend to watch very closely. This is supposed 4 to, basically, come to fruition in the 2016-2017 5 timescale, which could, again -- certainly, the 6 drivers are all economic because, if natural gas 7 prices are much higher in Europe and Asia, they'd 8 certainly pay a lot more than they would pay in the 9 U.S. to get that gas, which would then raise -- have 10 an effect on domestic prices. 11 So this is another reason why, you know, a 12 balanced program for safe natural gas development 13 would be important for New York State, potentially, 14 to counterbalance some of those future price swings 15 if -- I don't know if it's -- it's probably not good 16 even to say "if" -- when this will happen, because, 17 obviously, people will want to harvest these profits 18 during -- by exporting natural gas. 19 I'd like to switch now, and maybe give you 20 some more specific examples; and I'd like to discuss 21 the impact of the regulatory environment in New York 22 on an upstate company headquartered in Schenectady, 23 New York, who shall remain nameless. 24 But, basically, our company submitted a -- we 25 submitted a Title V air permit, that was granted in 1 2001. 2 And Title V air permits get renewed every 3 five years, so, 2006 was a normal renewal date. 4 And we submitted our renewal several months 5 ahead of the deadline, but since that time, 6 actually, there have been a number of mitigating 7 circumstances, but the bottom line is, is that it's 8 now been 12 years, and we're still on that 9 2001 Title V permit; 12 years later. 10 SENATOR GALLIVAN: If I can interrupt; so the 11 2006 permit application, the State hasn't responded 12 to yet, or granted or denied? 13 WILLIAM WOLFRAM: That's correct. 14 Actually, that's a part of the story. 15 The original permit adviser, apparently, 16 retired in 2010. 17 And, basically, we did submit a renewal 18 application in 2006, and this was held by DEC for, 19 basically, 5 years without significant action. 20 But, basically, the new permit adviser came 21 on board -- there was a transition period. He came 22 on board, basically, in 2006, and, basically, threw 23 out the 2006 permit application, because it no 24 longer reflected the conditions on the plant, even 25 though it was the standard. 1 In other words, the legal requirements, 2 compliance requirements, were still the 2001 permit, 3 which, to my knowledge, is the way it is today. 4 So, we submitted a new permit application, 5 basically, in April of 2012. That's within a month 6 or so, a year and a half ago, and we have yet to see 7 any action on DEC. 8 So, the draft version of our permit has not 9 been accepted and not been offered for public 10 comment. 11 So, basically, the only approved document 12 that we have for our Title V permit is now, 13 essentially, a decade old. 14 And, you know, part of the -- you know, 15 getting back to the uncertainty aspect of this, 16 I mean, we're very concerned, number one, that the 17 regulations are changing all the time. 18 There's a Part 212 regulation that we hope 19 not to be caught by in this, because you're really 20 only subject to those regulations at the time of 21 permit renewal. 22 So we're still in the renewal phase, so if we 23 don't get this going, we may actually be subject to 24 additional regulations that we would not have been 25 subjected to if our permit had been approved 1 earlier. 2 So -- I mean, eventually, these regulations 3 do catch up with you at the time of permit renewal. 4 And, again, I'm not suggesting to you that 5 there are any bad actors here, but what we can say, 6 is that there is a lack of transparency in the 7 permitting process; that it's -- we hear this over 8 and over again, that the permitting process takes 9 inordinately long. 10 And in our case, really long. 11 That there could be an improved process that 12 would aid all the stakeholders: the regulators, the 13 regulated community, and the environment, we think. 14 So -- and just to answer one of the prior 15 questions, I mean, many of the DEC regulations, 16 obviously, are based on federal regulations that 17 DEC is now empowered to promulgate, by EPA. 18 So, I mean, the fact that Title V is 19 certainly a federal EPA program, but the states, 20 typically, are in the business of implementing 21 those; but what they can control, or have more 22 control over, is the permitting process for these 23 things. 24 So, I think that that's one example. 25 Another example, and this is not really -- 1 we're still working on this: We had a -- basically, 2 a chemical waste stream that was solvents that were 3 used in our process, that we actually could sell. 4 We had a buyer who had already evaluated our 5 material, and would be using this as a carbon source 6 for steel-making, because steel requires, if you're 7 making carbon steel, you have to put in a certain 8 amount of carbon as an alloying agent to produce the 9 steel of a desired quality. 10 But we've tried, on several occasions, to get 11 DEC to approve this, and we're not done with this 12 yet, but this has caused us, basically, to have to, 13 essentially, dispose of this solvent, thousands of 14 gallons of the solvent, as a hazardous waste, to 15 have it burned -- to pay to have it burned, instead 16 of being allowed to use it for a -- let's say, a 17 constructive purpose. 18 So these are other issues that we think, 19 perhaps, there's still some room to, basically, 20 recycle and repurpose some of these raw-material 21 streams. 22 And, obviously, a company like we are, 23 there's very little -- I mean, we're -- waste 24 minimization is a full-time job. I mean, we have a 25 whole team of engineers that do nothing but process 1 improvement and waste minimization. 2 So, I think that's an area that we could 3 maybe ask for a little more cooperation in. 4 The last thing I'll talk about is just the 5 DEC's environmental self-audit policy, and DEC has 6 been very transparent about this. They've actually 7 announced this policy over a year ago. 8 We understand that DEC intends to post a 9 finalized policy in the coming weeks. 10 We applaud that. 11 The only thing that we still have some issues 12 with, is that -- is how the policy would be 13 utilized, and its usefulness to New York State 14 chemical industry. 15 So I've listed here a number of -- actually, 16 several pages of analysis of this law, but, 17 basically, it talks about a self-reporting of 18 violations. 19 The only caveat is, that if you have a 20 previous consent decree, or you've had an issue -- a 21 compliance issue with this, you're barred from 22 applying for this. 23 And this is, of course, to prevent, let's 24 say, quote/unquote, repeat offenders from utilizing 25 this law to escape permit violations. 1 But the other side of that coin, is that it's 2 written so strictly, that, really, the only time 3 that it could be used, would be, let's say, if you 4 had no egregious violations in the past at all, or, 5 if you just purchased a new chemical facility and 6 there were some unknown issues that you were unaware 7 of, or, you were in a -- let's say, a regulated 8 entity, like a hospital, or something like that, and 9 you may have disposed of a waste improperly, you're 10 not, let's say, really a chemical facility, but you 11 may not have been up on the most current 12 regulations. 13 But since we're here to talk -- or at least 14 we are, about the chemical industry, there's really 15 a very narrow window of opportunity for a chemical 16 industry to actually use this bill. 17 And, again, DEC has a lot of stakeholders 18 involved, and it's pretty obvious that it's not a 19 "Get Out of Jail Free card." 20 That's kind of what some of the NGOs have 21 called it if they were to relax some of these 22 things. 23 But, I think DEC is very interested, not only 24 in compliance; they use the term "beyond 25 compliance." 1 But I think, if there was a more, let's say, 2 rational program, that you, basically, didn't have 3 to, you know, commit hari-kari by submitting these 4 self-audit documents, that there could be some room 5 for improvement. 6 Also, one of the biggest things is, that this 7 is a New York State program, and nowhere in this 8 program does it give you immunity from EPA. 9 So if you, basically, spill your guts and 10 say, "I've done this, please forgive me DEC," EPA 11 could, basically, unload the ton of bricks on you, 12 even though you've, let's say, disclosed this under 13 this program. 14 So there's no immunity from EPA prosecuting 15 you, should you divulge this. 16 So it's really an atmosphere, where, you 17 know, it's nice on paper, but how do you use it? 18 But, there are certainly a number of issues 19 that are certainly pending; for example, the 20 Part 212 imposed modifications to the air rule. 21 And these are still under study, so, I guess, 22 they're not fully vetted, but, obviously, there's 23 the constant trend of reducing emissions. 24 And that's all well and good, but, you know, 25 sometimes the -- some of the emission-reduction 1 goals are, more or less, just put out there, you 2 know, a tenfold reduction, for example, and then 3 you're left to figure out, Well, how the heck are we 4 gonna -- how do we get there? Is it even possible 5 to get there? And what's it going to cost us to get 6 there? 7 So, again, we haven't finished our analysis 8 of that, but some of these things, obviously, are 9 laudable goals, but getting there, sometimes, is not 10 going to be easy for the industry. 11 So thank you very much for your time, and 12 I really appreciate the opportunity. 13 SENATOR GALLIVAN: Any questions? 14 Just a minute. 15 SENATOR MARCHIONE: Go ahead. I'm just going 16 to look, if you don't mind? 17 SENATOR GALLIVAN: I'm interested in the 18 Senate Bill S4614, but for sake of today's time, and 19 my lack of understanding right now with more 20 research, you indicated that you were going to be 21 following up, your association, with submitting 22 things, I'm assuming, to all the members of the 23 Legislature. 24 MARGARET GORMAN: Yes, we are. 25 SENATOR GALLIVAN: So we'd be very interested 1 in that. 2 And that, of course, is something that we'll 3 be dealing with in the regular legislative session. 4 MARGARET GORMAN: I anticipate that, 5 definitely. 6 SENATOR GALLIVAN: So I'll hold off on 7 questions -- 8 MARGARET GORMAN: Okay. 9 Well, we can follow up with individual 10 meetings. 11 SENATOR GALLIVAN: -- until we get that in, 12 and your points. 13 Okay. 14 MARGARET GORMAN: Sure. 15 SENATOR GALLIVAN: Thank you. 16 And that was all I had. 17 SENATOR MARCHIONE: Yeah, I think I'm okay as 18 well. 19 You know, we've heard -- we hear a lot, you 20 know, "do no harm," you know, and we're hearing that 21 from you. We heard it from our first speaker. 22 And it's a trend that we are hearing. 23 Also, also I am hearing from other 24 manufacturers that I visited personally, about your 25 workforce, and how the workforce in manufacturing 1 plants, such as yours, is very stable. And even 2 when there is a downturn, there's not an influx or, 3 you know, a reduction in your workforce. 4 So these are jobs that New York needs to be 5 very concerned about, and, certainly, ones that we 6 want to keep. 7 So thank you for your testimony. 8 Are we going to get a copy -- can we have a 9 copy of your testimony? 10 SENATOR GALLIVAN: Do we have a copy of that? 11 Oh, we don't? 12 MARGARET GORMAN: I have copies I can give 13 you. 14 SENATOR GALLIVAN: Okay, great. Thank you. 15 MARGARET GORMAN: Thank you. 16 SENATOR GALLIVAN: Our next speaker is 17 Mark Johnson from Pepsi Cola Bottling, and the 18 New York State's Bottlers Association. 19 And as Mark is making his way up, I would 20 also like to note that Jessica Jones, from 21 Senator Cathy Young's office, is also represented 22 today -- or, is here today representing the Senator. 23 Thanks for being here. 24 We can get this figured out, thanks. 25 When you are ready, Mr. Johnson. 1 Thanks for being here. 2 MARK JOHNSON: Well, thank you, 3 Senators Gallivan, O'Mara, and Marchione, for seeing 4 me, and hearing me. 5 My name is Mark Johnson, and I'm the 6 vice president of finance for both Pepsi Cola and 7 Canada Dry Bottling Companies of New York. 8 We manufacture and distribute mostly PepsiCo 9 and Dr. Pepper Snapple Group products, including 10 soft-drink brands such as Pepsi, Canada Dry, and 11 Schwepps. 12 We also distribute non-carbonated beverages, 13 like Gatorade Sports Drink, Evian, and Aquafina 14 water to the five boroughs in New York City, 15 Westchester, Suffolk, and Nassau counties. 16 Pepsi operates two bottling plants, and 17 half a dozen of distribution warehouses in the 18 New York market. 19 We're part of a group of bottlers owned by 20 the Honickman family. They are one of the largest 21 privately held bottlers in the United States. 22 And since we cover densely populated areas 23 with many individual retailers, we sell our 24 beverages primarily through independent distributors 25 who have long-term relationships with their 1 customers. 2 We also utilize company employees to 3 distribute our Canada Dry portfolio of brands. 4 Our workforce consists of over 1,500 people. 5 As a company, we have a historic track record 6 of investing in our manufacturing and distribution 7 business, the New York economy, and the communities 8 in which we operate. 9 Manufacturing businesses like ours need your 10 assistance addressing out-of-control regulatory 11 challenges in this state so that we may continue to 12 survive and thrive in New York. 13 While you will hear from, and have heard 14 from, many of our corporate colleagues today 15 regarding a vast array of hurdles New York companies 16 face, I'm here today to provide testimony on the 17 single largest regulatory impediment to our 18 businesses, which is New York State's worker's 19 compensation system regulations; in particular, 20 scheduled loss-of-use awards. They're commonly 21 referred to as "SLUs," but I'll get back to that 22 after I provide you with some important background 23 information. 24 As you are well aware, the 25 worker's compensation program was developed to 1 provide financial support to employees who are 2 injured while working or who are prevented from 3 working because of work-related illnesses or 4 diseases, while relinquishing the employer of any 5 tort of negligence. 6 The worker's compensation system was designed 7 to provide some replacement income and cover an 8 employee's medical expenses, but it was certainly 9 never intended to give employees rich windfalls. 10 Let me be very clear: Our companies take 11 very seriously injuries that are a result of 12 employment with us, and we acknowledge and we 13 embrace our responsibility to recompense every 14 injured employee, even though it is often virtually 15 impossible to differentiate non-work-related 16 injuries from work-related injuries. 17 This is an inherent system-design weakness 18 and, essentially, tilts the scale in favor of the 19 employee. 20 For example, an employee could have injured 21 their knee, arm, hand, back, or foot participating 22 in a personal sporting activity over the weekend, 23 completely unrelated to their job; nevertheless, we 24 pay the bill. 25 We had hoped that the reforms of 2007 were 1 going to bring us some relief from the huge burden 2 of comp costs which plague New York manufacturers. 3 Instead, we were met with very unwelcomed 4 results: our comp costs skyrocketed. 5 As a reference point, here's our company's 6 scorecard, before, and after, the 7 Worker's Compensation Reform Act of 2007: 8 In 2003, we had 379 reported claims, versus 9 201 in 2012; a reduction of 47 percent. 10 We, essentially, cut the number of incidents 11 in half. 12 Our costs, however, in 2003, were 13 $5.4 million; or an average of $14,000 per claim. 14 In 2012, our costs are $10.8 million; or 15 $54,000 per claim. 16 To sum it up, we've cut our accidents in half 17 and our costs have doubled. 18 How does a company compete with those kinds 19 of costs that other employers in other states simply 20 don't have? 21 This phenomenon alone is enough to deter any 22 business from locating to New York State. 23 The economic model of New York State's 24 worker's compensation system can be broken down into 25 three categories: 1 One, indemnification of lost wages; 2 Two, reimbursement of medical and other 3 related expenses; 4 And, three, loss-of-use awards. 5 Let's discuss the indemnification of wages. 6 Currently, workers are entitled to two-thirds 7 of their weekly wage, capped at the New York State 8 average weekly wage. 9 Today, the weekly rate is $803 not taxable; 10 or the equivalent of $1,071 taxable wage. That's an 11 annual rate of $55,000 per year. 12 Our average annual wage for our hourly 13 employees is around $55,000. 14 Therein lies a very significant systemic 15 problem. 16 Assuming an injured employee earns $1,000 per 17 week, and while not working under the comp system is 18 entitled to $667 per week, which is two-thirds of 19 their average weekly wage, that $667, adjusted for 20 taxes, because it's nontaxable, is really equivalent 21 to $889 per week; or 89 percent. 22 "89 percent" of their regular earnings to 23 stay home. 24 That's a compelling incentive to stay out of 25 work, and we're seeing it. 1 Prior to the Worker's Compensation 2007 2 Reform Act, the maximum cap was $400 per week. 3 That all changed with the 2007 Reform Act. 4 The regulations were changed to be indexed to 5 two-thirds of New York State average weekly wage, 6 which, today, is $803. 7 So, today, on the very same employee, instead 8 of paying $400, we are now paying $667; a 67 percent 9 increase. 10 Our recommendation regarding the weekly rates 11 would be to either roll them back to 2007 12 pre-Reform Act rate of $400, or extract Wall Street 13 wages from the average weekly rate calculation, but 14 something must be done to address the excessive 15 rates. 16 It puts New York companies at a severe 17 disadvantage to other states, as well as creating an 18 unintended incentive to stay out of work. 19 Now, let's transition to medical costs. 20 I'm sure you're all aware of the compounded 21 increases in medical costs over the last several 22 years. 23 We recognize our collective inability to 24 impact medical-industry cost curves; however, you do 25 have the authority to make legislation that would 1 require the most current and most evidence-based 2 medical-treatment guidelines, as opposed to relying 3 on either New York-specific or outdated practices. 4 We need to address and eliminate the wide 5 discrepancies of findings between doctors. 6 Lastly, but certainly the most important of 7 all three categories, the exponential growth of the 8 loss-of-use awards; or the "SLUs." 9 Here's how SLUs work: 10 Assume our employee that I mentioned earlier 11 had injured her arm and was out of work for 12 12 weeks, and she had surgery that cost $25,000. 13 At this point, the company has incurred a 14 cost for lost wages of $8,000, which is the 15 12 weeks times $667, plus 25,000 in medical costs, 16 for a total of $33,000. 17 Now, let's move on to post surgery and 18 rehabilitation: 19 The employee visits her doctor, and the 20 doctor makes a determination that the employee has 21 loss of use of 80 percent of that arm. 22 The company's independent medical doctor 23 examines that employee and makes a determination 24 that there is zero loss of use; completely 25 rehabilitated. 1 Lawyers for both sides negotiate and settle 2 on 40 percent. 3 Here's where the proverbial wheels come off: 4 At this point, you simply look at the 5 SLU chart. It has percentages across the top in the 6 columns, and the type of injury on the left-hand 7 side and rows, and it will show you, 124 weeks, for 8 a 40 percent loss for the arm; so the math is: 9 124 weeks times two-thirds of the employee's 10 weekly wage, which is $667, and the SLU 11 determination totals $82,700. 12 The company must now pay an additional SLU 13 award of $74,000. 14 You simply take the SLU, and you subtract out 15 what you've paid for lost wages; so, the 74 plus the 16 medical. 17 So that's how it works. 18 We offer two different recommendations: 19 Eliminate the SLU concept for any no-loss 20 time or little loss-time injuries, leaving 21 exceptions in the severe instances of a lost limb or 22 injuries that were the original reason for such 23 awards; 24 Or, again, roll back the weekly 25 indemnification rates to the pre-2007 reform levels. 1 Regardless of the chosen path of SLU reform, 2 it must be acknowledged that award payouts and 3 frequencies have severely grown since the doubling 4 of the weekly benefit. 5 For effective economic development to occur, 6 these windfall award amounts must be brought back 7 down. 8 Finally, as you may be aware, 9 worker's compensation fraud is a serious problem in 10 New York. 11 New York ranks second in the nation for 12 questionable worker's compensation insurance claims, 13 according to the National Insurance Crime Bureau. 14 The analysis noted that questionable claims 15 in New York more than doubled between 2011 and 2012, 16 with 344 reported in 2012, and 161 in 2011. 17 Now, going after fraud is the correct 18 approach, and we recognize the difficulty in proving 19 fraud. 20 Believe me, we have many cameras and private 21 investigators, but, virtually, no convictions. 22 Fraud enforcement requires significant 23 resources, and, realistically, we don't expect 24 New York State to have the necessary manpower to 25 fully eliminate fraud, but this does not excuse the 1 Worker's Compensation Board, the Attorney General, 2 or the local DAs from doing their job to root out 3 and prosecute this fraud which dramatically hampers 4 the economic vitality of this state. 5 We would hope to see more teeth in 6 fraud-abuse cases. 7 In summary, we have shared our company's 8 internal information with the Worker's Compensation 9 Board to demonstrate the devastating impact 10 attributable to the rate increases from the 11 2007 Reform Act. 12 The worker's compensation system in New York 13 has been transformed into an entitled-bonus-award 14 system, leaving companies defenseless, even in the 15 face of non-work-related injuries. 16 The reduction of SLU awards and/or rates are 17 the only alternatives to the current system that 18 would promise significant cost impact. 19 Hopefully, I have provided you with some 20 insight to a critical cost that is driven by both 21 regulation and legislation that places New York 22 businesses at a severe competitive disadvantage. 23 I would welcome the opportunity to answer any 24 questions you may have regarding these important 25 issues. 1 I want to leave you with five points on this, 2 okay, five points, by lowering the rate: 3 Worker's comp, it's complex. The 4 legislation's complex. There are a lot of things 5 that you could get dragged down in the details and 6 lose the forest for the trees. 7 Just by focusing on the rate, here's what you 8 can accomplish: 9 You can protect your base businesses in 10 New York. 11 They have alternatives. 12 Relocate, I'm sure you're aware of that. 13 There's also technological innovation, which 14 is not manufactured here. It's manufactured over in 15 Europe. It exists. 16 Prior to this legislation, the advances in 17 technology, automated loading systems, versus the 18 return, we're out of whack, which is why people 19 don't invest, but now it's tilted. 20 The returns on these investments are very 21 real, so it's a risk to your base business, not 22 talking about the new business. 23 The second point: You reduce the cost 24 barrier for the new businesses, new manufacturing. 25 The third point is, you will reduce fraud, 1 guaranteed. 2 The fourth point: You will eliminate the 3 incentive for employees to stay out of work. 4 We want them back to work, but why work when 5 you're getting over 80 percent of your salary? 6 And, five: You can raise revenues for 7 New York State, because the 5 million that we paid 8 back in '03, went to 10 million. 9 That extra 5 million is not taxed. 10 We were paying taxes on it back then, and 11 New York State lost revenues on it. 12 And many companies have this issue. 13 I've been with UPS, I've been with Con Ed, 14 with Coca-Cola; these are major -- when you have a 15 manufacturing environment that requires physical 16 labor, their costs are crushing them. 17 "Crushing them." 18 And it's very difficult to fight. 19 And we understand that, but the rate, when 20 they changed the rate, the system has just exploded. 21 So, thank you for your time. 22 If you have any questions? 23 24 25 1 SENATOR MARCHIONE: No, just thank you for 2 your in-depth testimony on this problem for your 3 company. 4 We've heard worker's compensation on other 5 hearings, but never so in depth, and I appreciate 6 the testimony you've given today. 7 MARK JOHNSON: Well, thank you. 8 I just -- my hope is that, the rate -- 9 everybody runs from the rate. 10 They run from it, because they try to fix 11 this or fix that; there's a lot of pieces. 12 Park that to the side, we can deal with that 13 later. 14 The rate alone can be a home run for the 15 state of New York and the companies; just the rate, 16 take it back. 17 So that's what we ask. 18 SENATOR O'MARA: I want to say thank you for 19 this very explicit outline of the impact of the 20 worker's comp reform that was done. 21 I was in the State Assembly in 2007, and 22 I was very skeptical at the time, how you could 23 raise the average weekly wage so dramatically, and 24 then, at the same time, claim you're gonna have 25 savings in the system as well. 1 And it's, politically, extremely difficult to 2 take something back once you've given it. 3 And that's -- you know, I think we probably 4 should focus on the SLU part of it, and those, 5 because I just don't know how, politically, you can 6 get over the hurdle of cutting back into something, 7 or maybe at leat freezing it now, or holding it. 8 So -- but, to go back to 400, that's not a 9 political reality. Let me just be frank about that. 10 But, I think you've outlined this very well. 11 I was wondering if -- have you've gotten any 12 feedback from the Worker's Compensation Board by you 13 sharing this outline to them? 14 MARK JOHNSON: Yes, I have. 15 We met with the Office of the Governor, with 16 Alfonso David, and we were there with Con Ed and UPS 17 and some attorneys. 18 And, you know, at the end of the day, you 19 know, we relayed our concerns, and, you know, they 20 walked away with, Yeah, we can look at some 21 evidence-based things. 22 But I'm a finance guy, and I'm telling you, 23 you know, that stuff is just -- you're barely going 24 to scratch the surface on it. 25 The rate drives not only the cost, but the 1 rate drives the incentive for employees to stay out 2 of work and to do fraud. 3 That's what's going on. 4 And the promises, as you referred to, 5 I actually took that line out, when you said it is a 6 political -- I was going to tell you guys, this is 7 easy, and it's difficult. 8 It's easy, because you flip rate. 9 It's difficult, because it is a political 10 hot-button. 11 I totally agree with you. 12 But, if we ignore the rate, you're still 13 going to be faced with a lot of challenges. 14 I mean, you can go after the SLU awards, but 15 I think people -- I didn't get the sense that there 16 was an excitement behind going after anything more 17 than touching evidence-based. You know, tweaking 18 some of the medical guidelines. 19 But it's a problem. It's a major problem. 20 SENATOR O'MARA: What has your experience 21 been in the time frame it takes to get from the 22 initial claim to an SLU award? 23 MARK JOHNSON: They vary. It could be 24 several months, several months. It does vary. 25 I mean, this thing has become a money-grab. 1 Attorneys are on it; they're making money on 2 it. They used to give away this business. They're, 3 you know, keeping it now. And, they know the 4 charts. 5 I mean, the chart, it's the chart. 6 I wasn't kidding; it's a chart, and it's a 7 guaranteed number. 8 And they basically say, Okay, my doctor says 9 this, your doctor says that; we'll split it. 10 Go to the chart; write the check. 11 It's broken. 12 And, it's unfortunate, that it's -- it wasn't 13 designed to incentivize people. It was designed to 14 get people back to work. 15 SENATOR O'MARA: So is there any 16 limitation -- I don't believe there is -- any 17 limitation on that worker, once they get their SLU 18 award, from going back to work the next day? 19 MARK JOHNSON: No. All they need is a note 20 from the doctor, and then we give them what's called 21 a "faculty-capacity exam task." 22 SENATOR O'MARA: That doesn't impact the SLU 23 award they got? 24 MARK JOHNSON: No, they're going to get the 25 award. 1 And here's the trouble: 2 The person comes back from -- first of all, 3 the award, you know, if I were 20 years old and -- 4 or you're 20 years old, do you think your shoulder 5 looked, 20 years old versus a 50-year-old? 6 It's gonna be -- we're paying for that. 7 That's in the system, and we understand that, and we 8 are paying for that. 9 But it's -- the awards, that's just one 10 award. 11 They can come back the next day and get hurt 12 again; and they go from here, to here, to here, to 13 knees, to here, to here, and there's nothing -- you 14 cannot prove that somebody is not hurt when they 15 take an X-ray and they say, Yeah, you've got a 16 problem. 17 And we're stuck with it, whether we caused it 18 or not. 19 And we're the first to get behind employees, 20 as far as getting them back; but, why do it, when 21 you got an automatic bonus? 22 You want to go on vacation. 23 What we see is, pre-vacations. 24 People go out. They're going to get an 25 award, gonna pay for the vacation, and, their lost 1 time is covered, medical is covered, and I'm going 2 to give you a bonus. 3 And that is what the system is today: 4 pre-retirement. 5 We're seeing it more and more. 6 People ready to retire, right before they 7 retire, what do they do? They go out. 8 I can't prevent you. 9 I can -- any one of you can come work for us 10 and have a claim the next day. 11 Under cameras: We've got it on camera, 12 I can't defend it. You cannot defend it when 13 someone reaches down under a camera and lifts up a 14 case of soda. 15 You can't defend it. 16 You could have hurt your arm any way, but I'm 17 paying for it, and I can't defend it, and you're 18 getting a bonus. 19 I'm giving you a bonus. 20 I'm gonna pay your wages, your medical, and 21 I'm giving you a bonus for that. 22 And that's what the system has turned into. 23 And I know, and I have heard it over and 24 over, that it's a political problem, the rates, but, 25 it got in there. 1 I'm making a plea: Is there anything you can 2 do with the rates? 3 I mean, it really is, it's problematic for 4 manufacturers who have physical work. 5 So, thank you. 6 SENATOR O'MARA: Thank you. 7 SENATOR MARCHIONE: Thank you. 8 SENATOR GALLIVAN: You spoke about fraud. 9 Who's doing anything about it? Anybody? 10 MARK JOHNSON: Fraud, it's not sexy enough 11 for an Attorney General. 12 We've tightened up our internal approach with 13 it, challenging people who have multiple cases. 14 People have five, six, seven, eight, 15 nine claims, out for six, seven hundred days, 16 different periods of time, but these people are 17 habitual. 18 And we've taken the position with the union, 19 and said, We're going to start taking these people 20 in our collective-bargaining agreement to 21 arbitration. 22 Because, someone who has 7, 8, 9, 10, 23 15 worker's comp claims, they're not -- they can't 24 do their job. 25 They really can, but they're just gaming the 1 system, and, it's hard to prove fraud, even when we 2 have evidence. 3 We have evidence of people who's out with a 4 bad knee. We have film shots; we sent our 5 investigators out, they catch them dancing on the 6 table. 7 The judges go, "He had a good day." 8 We have footage, we have cameras; guys, we 9 have it all. 10 We have footage of a guy driving a forklift, 11 one mile an hour, it's all on the show, slow little 12 slide, we're paying. 13 We're paying; he didn't get hurt. 14 But, I mean, you can't -- you're defenseless, 15 you can't fight it. 16 So the system is tilted, relative to your 17 inability to defend; the disparity between this 18 doctor says 80 percent, this doctor says 40 percent. 19 So it's tilted already, and this just 20 exacerbated it and blew it up. 21 Our costs did not double. 22 I mean, our frequency, our accidents, went 23 down, in half, and our costs doubled. 24 It's a serious problem. 25 So, I do make a plea to you to do the best 1 you can with rates. 2 And I do, we do, recognize it's a political 3 problem. 4 So, thank you. 5 SENATOR GALLIVAN: Thanks for your testimony. 6 SENATOR MARCHIONE: Thank you. 7 SENATOR GALLIVAN: Randy Wolken, president of 8 the Manufacturing Association of Central New York. 9 Did I pronounce that correctly? 10 When you're ready, sir. 11 RANDY WOLKEN: Sure. 12 Good afternoon, and I want to start by 13 thanking you for this opportunity to speak about 14 this really important issue, and for recognizing the 15 immediate need to address regulatory costs and 16 improving the economic climate, for not only 17 manufacturers, but businesses statewide. 18 And I commend you for the goal of eliminating 19 1,000 regulations. That may be just the start as we 20 start to look at this issue. 21 As you've mentioned, I'm the president of the 22 Manufacturers Association of Central New York. 23 I'm also here representing the 24 Manufacturers Alliance of New York State, as my role 25 as its president. 1 As you may know, the Manufacturers Alliance 2 of New York State is the state's largest 3 manufacturing group. It represents small and large 4 manufacturers in every industrial sector throughout 5 New York State. 6 We have proudly served as the leading 7 advocate for pro-business policy agendas that help 8 manufacturers compete in this global economy, and 9 allows policymakers to make better business 10 decisions, helping businesses in New York State. 11 It's well known that the strong manufacturing 12 base is critical to any successful economy, and 13 during New York State's difficult fiscal times, a 14 solid manufacturing base is needed more than ever to 15 be able to do what our sector does best: retain and 16 create family-supporting high-paying jobs, maintain 17 a significant amount of economic and tax revenues, 18 and provide communities with the jobs and economic 19 stability that's so necessary. 20 As you're well aware, the ongoing efforts to 21 revitalize New York State's economy has proved 22 incredibly challenging. 23 It's a well-known fact, in order to create 24 economic growth, a vibrant and friendly business 25 climate must be established and fostered so that 1 businesses can operate efficiently and successfully. 2 And that's not always the case in 3 New York State. The state's manufacturing sector 4 experiences this firsthand. 5 Regulatory burdens have become so exhaustive 6 on the manufacturing sector, and the businesses in 7 general, and it has significantly hindered the 8 sector's ability to do what it needs to do: generate 9 economic development, sustain and grow jobs in our 10 community. 11 As a part of this testimony, I'm pleased to 12 announce, that based on the request of this effort, 13 as well as others in Albany, for regulatory burden 14 and feedback, we've conducted a study with our 15 Manufacturing Alliance members which represent over 16 2,500 companies and organizations throughout 17 New York State. 18 And in this survey, we've asked what specific 19 regulatory burdens are they experiencing, and what 20 departments are they having difficulty in working 21 with? 22 The survey is currently being compiled into a 23 report and will be released in the near future. 24 And I can assure you, you will you have 25 copies of this survey for your consideration, and 1 I hope you'll find the responses directly from the 2 statewide manufacturing community to be helpful. 3 As a reference, we've included a copy of the 4 questionnaire in my testimony so you can see the 5 questions we've asked members and manufacturers 6 throughout the state. 7 But just to let you know, we've already 8 heard, specifically around departments and areas, 9 such as the Scaffolding Law, the Department of 10 Taxation, the Department of DEC, and the 11 Department of Labor, all come in as high areas of 12 concern. 13 And while there are hundreds of regulatory 14 burdens that hinder the manufacturing sector, at 15 your request, we've outlined just a few key areas 16 that our members have specified are areas that need 17 immediate reform. 18 Let me also echo some of the other comments 19 we've heard this morning, that we've heard from our 20 members: 21 The repeal of 18-A, which Tom from Corning 22 recommended as a high priority; 23 Tax burden and compliance, in general, 24 continues to get discussed; 25 The Scaffolding Law. 1 And, really, I really applaud Mark for doing, 2 actually, an extensive look at worker's comp, which 3 we're hearing across the board from our members, 4 that, we did worker's comp reform, but reform did 5 not accomplish its outcome, and much more work has 6 to be done here. 7 Economic regulations on businesses includes 8 such areas as, prices, or wages allocation, public 9 resources, use of these tax dollars. 10 And one of the significant areas is in need 11 of reform here, is through the Department of Labor 12 and their unemployment-insurance regulations. 13 Historically, manufacturers have taken a 14 significant hit from UI, fiscal irresponsibility, 15 and lack of oversight; and most recently, resulting 16 from an overborrowing in 2011, New York owed the 17 federal government $3.3 billion for borrowing funds 18 so it could afford to pay for unemployment benefits. 19 In 2011 alone, $115 million was owed by 20 New York in interest costs, and over 500,000 21 New York State employers, manufacturers amongst 22 them, were blindsided by these costs, and for no 23 reason other than the State could not afford to pay 24 it back. 25 These added fees, whether permanent or not, 1 significantly impact the manufacturer's ability to 2 operate a business here in New York State. 3 And simply put, the solution is not to put 4 the cost burden of UI State borrowing on the backs 5 of manufacturers and employers in New York State. 6 The fund must be returned to solvency, and 7 must be done without increasing the cost on 8 employers. 9 The state and federal governments need to fix 10 this structural problem and relieve the burden 11 that's placed on businesses, once and for all. 12 I implore you and the Administration to take 13 a lead on this effort. 14 Another area is social regulation. It comes 15 in the effect of areas of environmental protection, 16 consumer safety, employment discrimination, and 17 public health. 18 A significant example of the DEC regulatory 19 reform comes from improving SEQR, and permitting 20 programs to give business a more certain workable 21 timetable for environmental review of major 22 investment projects -- 23 Obviously, very important to manufacturers. 24 -- including a more appropriate standard for 25 adjudicating issues in the DEC permitting hearings; 1 assuring that regulatory timetables for project 2 reviews are adhered to; creating an expedited 3 process for applications that meet in certain 4 criterias, such as replacement of projects and 5 pollution reduction; and integrating coastal-zone 6 reviews with other state environmental review 7 requirements. 8 Additionally, amending DEC's new 9 source-review regulation to eliminate unnecessary 10 restrictions on capital investments and operating 11 changes that are intended to improve efficiency and 12 competitiveness or reduce emissions in energy, would 13 also prove beneficial to the state's manufacturing 14 sector. 15 Another area is compliance regulation which 16 significantly hinders manufacturers' abilities to 17 function effectively. 18 Paperwork and documentation compliances are 19 just two such examples. 20 As was discussed already by Corning, the 21 Wage Theft Protection Act that was passed in 2009 is 22 just one example of such burdensome regulatory 23 compliance, unnecessary for a large percentages of 24 businesses in the manufacturing community. 25 One area where our members routinely identify 1 as a target for reform has been the Wage Theft Act. 2 In fact, I'd like to point out one specific 3 incidence that just illustrates the point. 4 The New York State Legislature recently 5 passed an amendment to Section 193 of the Labor Law 6 which governs the deduction from wages, which was 7 then signed into law. 8 Specifically, employers were given the right, 9 in writing, to deduct for correction and repayment 10 of an overpayment of wages. 11 Also, they're now able to deduct for a loan 12 repayment when they allow their employees to borrow 13 against future wages. 14 However, the issue, is that these new rules 15 require, and I quote: The employer shall comply 16 with regulations by the commissioner for this 17 purpose, which regulations shall include but not 18 limited to provisions governing the size of 19 overpayments that may be covered by this section, 20 the timing, frequency, duration, method of such 21 recovery, limitations on the periodic amount of such 22 recovery, a requirement that notice be provided to 23 the employer [sic] prior to the commencement of such 24 recovery, a requirement that the employer implement 25 a procedure for disputing the amount of such 1 overpayment or seeking to delay commencement of such 2 recovery. The terms and content of such a procedure 3 and requirement that notice of the procedures for 4 disputing the overpayment or seeking to delay 5 commencement of such recovery be provided to the 6 employer [sic] prior to commencement of such a 7 recovery. 8 Now that's a mouthful. 9 However, to date, the commissioner has not 10 issued any regulations for employers to follow to 11 ensure compliance. 12 As a result, employers are going to be held 13 to a standard, retroactively, once it's written. 14 Just one example of how a regulation gone 15 amuck causes problems throughout manufacturing and 16 businesses at large. 17 What's most interesting was, my comment on 18 the wage-theft regulation, or lack thereof, is that 19 one may be led to believe that we're asking for 20 regulations to take place. 21 That's not my message here. 22 What I'm pointing out is, it's a clear case 23 of government making a regulation and not taking the 24 necessary action to implement it. 25 What does this say about the regulation and 1 its necessity in the first place? 2 I think this provides just one example, and a 3 concise example, of a regulatory burden that's not 4 even necessary. 5 I ask you to consider this in the upcoming 6 session when regulations are introduced. 7 As you know, MACNY and the 8 Manufacturers Alliance has a long history of working 9 with our business-partner organizations and your 10 conference in finding ways to help create a better 11 business climate. 12 We've had a number of successes, thanks to 13 your leadership, including the passage of 14 Recharge New York and a 25 percent reduction of the 15 corporate franchise tax for manufacturers. 16 It is our belief, by addressing regulatory 17 burdens, we would further enable manufacturers to 18 operate more efficiently and effectively. 19 And, generally, these don't cost anything, 20 and they don't need to be done during the regular 21 budget process. It doesn't also increase the tax 22 burden. 23 So by reviewing the current regulatory 24 burdens, making recommendations on easing them, and 25 more importantly, acting on these regulatory 1 changes, a better business climate can be created so 2 that manufacturers can do what they do best: foster 3 economic development, and sustain and grow jobs. 4 Thanks for your time and your consideration 5 in these critical matters, and I look forward to 6 working with you in the future. 7 SENATOR O'MARA: Thank you, Randy. 8 SENATOR GALLIVAN: Thank you. 9 We did get some testimony from MACNY in 10 Syracuse, and we will look forward to the report. 11 I think that will be useful. Very useful. 12 RANDY WOLKEN: And we appreciate it. 13 Again, I was mentioning it to Tom on the way 14 in, we had the pleasure of walking on the way in: 15 This really is a critical issue, and you 16 taking a leadership role and focusing on actual 17 reduction in regulations, would dramatically help 18 businesses. 19 And we appreciate that. 20 SENATOR GALLIVAN: Do I understand, you've 21 now collected, all the surveys have been returned -- 22 RANDY WOLKEN: We are putting that into a 23 report, and then we'll actually provide that to you. 24 So we'll have, not only access to the 25 comments specifically, but we can also then go back 1 to those member organizations and companies, and 2 continue to work on this issue with them. 3 SENATOR GALLIVAN: Is that something that you 4 think will be prepared this month, or the month -- 5 RANDY WOLKEN: In the near future, yes. 6 SENATOR GALLIVAN: Okay, great. 7 Thank you. 8 RANDY WOLKEN: You bet. Thank you. 9 SENATOR GALLIVAN: Keith Bowman from 10 F.M. Howell & Company. 11 KEITH BOWMAN: Good afternoon. 12 SENATOR GALLIVAN: Good afternoon. 13 When you're ready, sir. 14 KEITH BOWMAN: I very appreciate the 15 opportunity to address these issues. 16 I'm vice president of finance with 17 F.M. Howell & Company, a much smaller company than 18 Corning and the others, but, we have been around for 19 130 years. 20 We operate in three different business 21 sectors in Elmira: 22 One is, and the primary and the core unit 23 being, folding carton packaging, primarily for the 24 pharmaceutical industry; 25 Secondly, we have a contract packaging 1 operation, again, focused on the pharmaceutical 2 industry, and including fulfillment services, which 3 I will address a bit in specifics; 4 And, thirdly, we have a plastics operation 5 which, again, is focused on packaging. 6 All right, first, I found a different survey 7 that actually ranked New York 49th, rather than 8 50. 9 SENATOR O'MARA: Awesome. 10 [Laughter.] 11 KEITH BOWMAN: One of the comments that they 12 specifically cited in this is was from 13 ChiefExecutive.net, is that New York is headed in 14 the right direction, but still way behind other 15 states. 16 And that's an important thing to recognize, 17 that the efforts are going in the right direction. 18 The second they mentioned, is that no matter 19 how good the people and the weather are, activist 20 departments of revenue, lots of regulations, and 21 high taxes make states like California and New York 22 bad options. 23 I think it's obvious they were referring to 24 California when they talked about the weather. 25 [Laughter.] 1 KEITH BOWMAN: But, I think -- I've 2 personally witnessed negative consequences with 3 interactions with activist state government 4 employees, but I really don't want to dive into 5 generic governmental cultural attributes. I think, 6 those, I would rather deal with in a separate forum, 7 and instead, in this case, be as specific as 8 possible. 9 Secondly, New York State corporate tax rates 10 are very high, and I think you'd expect to hear that 11 from a finance guy, but I don't think that they are 12 the top priority. 13 I find a higher priority in companies trying 14 to make employees whole who are facing the personal 15 and local taxes that our employees face. 16 It makes it extremely difficult for us to 17 hire high-caliber people, and to get them to come to 18 New York State. 19 There was, at one time, a study done, that 20 reflected that a New York employer had to pay 21 43 percent more than a Carolina employer in order to 22 keep the employee whole. 23 Dated data, but I doubt that it's changed a 24 lot. 25 Next, the tax code is itself, and as an 1 accountant, I can attest to this one very 2 personally, it is very cumbersome and very difficult 3 to navigate. 4 Particularly obtuse are the sales and use tax 5 regulations in New York. 6 I think that's evidenced by the recent news 7 of the pretzel factory that got a back tax bill 8 because they warmed the pretzels. 9 It's very difficult, and takes excessive 10 effort, lots of training, to try to navigate the 11 sales and use tax rules, and it is something that is 12 discussed among manufacturers, that, the difficulty 13 in dealing with. 14 Again, this is not something that can be 15 dealt with on a very specific basis. It really 16 needs to come back to bringing the sales and use tax 17 codes into a more concise and understandable 18 structure. 19 In terms of additional code, New York should, 20 I believe, strive for conformity with IRS codes. 21 The tax rules promulgated at the federal 22 level should be recognized and they should be 23 elected at the state level. 24 An example of one that I recognize the need 25 for, but has created problems, is the non-conformity 1 by the State of the federal Economic Stimulus Act of 2 2008, which allowed 50 percent bonus depreciation. 3 While at the time that may have seemed like a 4 relatively easy change to make, what it has created 5 is a different set of tax basis for every asset 6 elected for the bonus depreciation. 7 That adds to audit fees. It adds to 8 complexity in the business. 9 And, to me, the issue really here should be, 10 to try to eliminate the two sets of books, and to 11 try to keep the tax codes as closely as possible in 12 compliance with the federal codes. 13 Next is a very particular issue. 14 Our business has a customer who has not gone 15 away yet, but has told us they're going to; 16 specifically, as a result of New York State tax 17 rules. 18 The issue, is that, under a C-corporation 19 structure or under an S-corporation structure, a 20 company can use the services of a New York State 21 fulfillment-service operation. 22 And Tom is well aware of this one. 23 Unfortunately, an LLC cannot take advantage 24 of that, so an LLC does not get the exemption for 25 the fulfillment services. 1 We would like, very much, to see the 2 Senate Bill, which was 3473, and, the Assembly 3 Bill 5944, which is currently tabled, move forward, 4 in order to try to alleviate the problem. 5 It might be a good thing that the customer is 6 from Illinois, and with the increase in their tax 7 rates, has been a little less adamant over the past 8 year, but, it is an issue where we will lose a 9 customer; we will lose employees as a result of 10 losing that customer. 11 And it again goes to consistency in the 12 application of the laws. An LLC should not have a 13 different set of rules than a C corp or an S corp. 14 I'd like to address here some of the 15 employment laws, and I wholeheartedly concur, 16 particularly with Mr. Johnson, on the worker's comp 17 rules. 18 It is an issue that we suffer with as well. 19 It is a very, very high-cost state in which 20 to have a worker's comp program. 21 But, there are several other employment laws 22 that we would like to see addressed. 23 One: The Minimum Wage Act, or, Article 19 of 24 the New York Labor Law, has prescribed an increase 25 of 20 1/2 percent in the minimum wage over the next 1 two years. 2 While I understand an increase, that, to me, 3 is somewhat excessive, but I would propose, and urge 4 again, that consistency be established relative to 5 federal rules, and not create uncompetitive 6 situations in New York relative to our neighboring 7 states. 8 Secondly, which has been brought up a number 9 of times, the Wage Theft Prevention Act, or, 10 Section 195 of the New York Labor Law, is an 11 extraordinarily burdensome regulation. 12 The requirement to have a documented review 13 with each employee, and to reinforce to them their 14 wage, when they see it on their weekly paychecks, is 15 burdensome and completely unnecessary. 16 We strongly urge that the proposed 17 legislation, S2313 and A2482, which is in process, 18 I believe, to repeal that, that that be adopted. 19 The New York State Fair Pay Act, which is 20 proposed legislation, S1491, A5958 -- 21 I'll digress for a second here. 22 I do find it interesting that, while we're 23 dealing with a thousand laws that are on the books, 24 we're also dealing with proposals to put new laws on 25 the books. 1 And I think it's as important to stop the new 2 ones as it is to get rid of the old ones. They are 3 both extremely important. 4 The New York State Fair Pay Act gives the 5 Labor Department the responsibility of creating a 6 single job-evaluation system. 7 I'm going to quote from the New York State 8 Business Council. 9 "Once the department establishes a single 10 job-comparison system, it will require all employers 11 to use it. This would be unprecedented government 12 intrusion into the establishment of private-sector 13 organizations' pay methods and systems." 14 I don't think you can say it much better than 15 that. 16 It's an opportunity for an expansion of State 17 oversight into employment practices, that is 18 unacceptable. 19 Next, the proposed legislation, again, 20 proposed, it's S2626, it's relating to paid sick 21 leave, would require employers to provide up to 22 80 hours of paid sick time, if more than 23 10 employees; or 40 hours, if less than 24 10 employees. 25 This is certainly an uncompetitive and a 1 burdensome mandate on state's employees -- or, state 2 employers, and we suggest that the legislation be 3 rejected, as, ultimately, it will result in fewer 4 jobs being added, and fewer jobs being retained, in 5 the state. 6 Next, proposed legislation again, S2509, 7 A7029, mandates that employers provide three months 8 of continuous or intermittent unpaid job-protected 9 leave for victims of domestic-violence abuse. It 10 further mandates that employers provide paid medical 11 insurance while the employee is on leave. 12 We are empathetic to domestic-violence 13 situations, but we do not feel that employers should 14 be put in the position of bearing the burden for 15 employees' personal matters. 16 Next, New York City recently proposed 17 family-leave legislation, mandating paid benefits of 18 up to 12 weeks of injury or sickness, pregnancy, or 19 family care. 20 And if this legislation were to reach 21 upstate, it would cause serious damage to the 22 upstate manufacturing sector. 23 We have had a number of conversations about 24 our employees, and, unfortunately, there are 25 employees, wherein, a sick-leave allowance is very 1 much perceived to be an additional vacation; and to 2 mandate that structure leaves that opportunity open. 3 My preference, is that the good employers 4 offer good benefits, and that that not be mandated; 5 but that, instead, be operated on a 6 good-manufacturing basis. 7 And to close here, I'm going to skip one, 8 but, the activist Departments of Revenue and Labor, 9 excess regulation, high taxes, have really created 10 what, in accounting terms, is called a 11 "death spiral" in New York State. 12 Enacted or proposed legislation, such as the 13 Wage Theft Protection Act, the New York State Fair 14 Pay Act, and the paid sick-leave mandates, really 15 present a picture that indicates that "open for 16 business" could be overwhelmed by bad legislation. 17 So I'd like to close with: 18 It has been a privilege to participate in 19 this, and I commend the efforts, and wish you the 20 best of luck with all of them. 21 SENATOR O'MARA: Thank you, Keith, for being 22 here. 23 And I assure you that I continue to work on 24 the fulfillment-services legislation. 25 I have, in addition to introducing that 1 legislation, upon learning about it from 2 F.M. Howell & Company, and that, obviously, the 3 intent of that original exclusion for corporate 4 income taxes in the state is to encourage the use of 5 fulfillment services from outside corporations. 6 And, to treat an LLC or partnership 7 differently than corporations, I believe, is just -- 8 is wrong. 9 And I'm making some progress. 10 We have passed it in the Senate two years in 11 a row, and we're trying to get the Assembly to do 12 the same. 13 I'm also working in trying to get that 14 incorporated into the budget; as well as, I have 15 referred that to the Governor's Tax Commission to 16 review the code. 17 Now, that tax commission, as many of the 18 other commissions and task forces in the state, have 19 been in place for some time, with little or no to 20 show for it, so, that that part of it is 21 frustrating, but we will continue to work. 22 And, I just wanted to assure you of that. 23 And these other legislations, you know, 24 there's thousands of bills introduced every year. 25 And, as this is a task force put together by 1 the Majority Coalition in the Senate, I can tell you 2 that we worked very hard, as this majority that we 3 have, to stop legislation like that. 4 Without getting too political, it's important 5 that that type of majority is maintained. 6 SENATOR MARCHIONE: I just want to thank you 7 for bringing forward, not only what's burdensome to 8 you now, but the future legislation that's before 9 us, because it is true, every year, approximately 10 300 new rules and regulations are put upon our 11 businesses and organizations within the state of 12 New York. 13 So as you saw us looking, we were actually 14 looking up those bills while you were talking about 15 them, so we could get a better understanding. 16 So I really appreciate that part of your 17 testimony as well. 18 KEITH BOWMAN: Very good. 19 Thank you very much. 20 SENATOR GALLIVAN: Thank you, Mr. Bowman. 21 SENATOR O'MARA: Thanks, Keith. 22 Jack Bebernes from Dresser-Rand. 23 SENATOR GALLIVAN: Did I pronounce that 24 correctly? 25 JACK BEBERNES: Close. 1 SENATOR GALLIVAN: How do you pronounce it? 2 JACK BEBERNES: Bebernes. 3 SENATOR GALLIVAN: Bebernes. 4 Well, thank you for being here. 5 Whenever you're ready. 6 JACK BEBERNES: I've been with Dresser-Rand 7 for exactly one week, so -- 8 SENATOR GALLIVAN: Oh, jeez. 9 [Laughter.] 10 JACK BEBERNES: I'm here instead of Doug, our 11 plant manager here in Painted Post, but, there are a 12 couple of comments I think I can make that may be 13 helpful, so this will be a short presentation, 14 I think. 15 SENATOR O'MARA: I know, generally, what 16 you're about, so I'll let you speak, and we'll get a 17 little bit of dialogue going, so, make it easier for 18 you. 19 JACK BEBERNES: Thank you very much. 20 There's bits in regulation about liquid 21 natural gas storage in the state of New York for, 22 I think, many years. 23 And I believe there's a -- there's proposed 24 legislation to change that, and there's a hearing, 25 I think the end of this month, and public comment on 1 that until November 4th. 2 So first thing I want to say is, that's very 3 positive, and can be very good for our business. 4 We are looking at some potential product 5 lines that would involve compression and storage of 6 liquid natural gas, and that could mean substantial 7 employment opportunities for the Southern Tier, for 8 the Painted Post-Corning area. 9 So that's a positive thing. I hope that 10 happens. 11 The other issue, that just in this past week 12 I've worked on, is a variance of Section 161 of the 13 New York State Labor Law; it's about work hours. 14 I think the regulation in New York is, you 15 have to offer people one day off out of seven, and 16 if you want to work a schedule different than that, 17 you need a variance from that law. 18 We have -- I have a very thick file on all 19 the work we've done year after year after year to 20 get that variance, which is important for our 21 business as we schedule work, and we've always been 22 granted that variance. It's just a burdensome 23 process to go through. 24 And we just had a variance approved last 25 week, as a matter of fact. 1 SENATOR O'MARA: How frequently do you have 2 to get that variance approved? 3 JACK BEBERNES: Once a year. 4 SENATOR O'MARA: Once a year? 5 JACK BEBERNES: Once a year. 6 But, you know, we work with our union. We 7 need their support in doing that. They always 8 support us as long as there's nobody laid off at the 9 time. 10 So, just from a scheduling perspective, and 11 many manufacturing industries need an alternate 12 scheduling, you know, that flexibility, so I think 13 that can be a troublesome regulation to the state of 14 New York. 15 Other than that, as a person moving back to 16 the state, I'm a native Upstate New Yorker from near 17 Watertown. My wife is from near Syracuse. 18 After I graduated from Syracuse University in 19 1986, we left, and this is my first time back. 20 So, as somebody just moving in, tax rates are 21 burdensome here. It's gonna be difficult, make it 22 more difficult, to attract the right talent to this 23 area of the country, to be competitive. 24 And I've been in the midwest quite a bit over 25 the last couple of decades, and there's some very 1 bright spots in Ohio and Michigan that take those 2 burdens away, where the tax rates aren't so high for 3 individuals, and I think that's a big competitive 4 issue for New York. 5 So, I think that's all I have. 6 SENATOR O'MARA: Well, Jack, I appreciate you 7 coming up here on your first week with Dresser-Rand, 8 and I think Doug Rich owes you for throwing you out 9 here like this. 10 JACK BEBERNES: That's okay. 11 SENATOR O'MARA: But I have been very active 12 in the last year on the LNG regulations; and, 13 particularly, we had legislation drafted at the end 14 of session, which we passed in the Senate, and it 15 got hung up in the Assembly, as, unfortunately, so 16 many pro-business things do. 17 And there is certainly concern over that, 18 with the anti-fracking sentiment in this state. 19 And anything that uses natural gas will, 20 somehow, help that effort along. 21 But, I understand that the products that you 22 have at Dresser-Rand, that are interested in 23 developing, is a conversion process for LNG, and 24 these regulations that we're working through, and 25 I've been in contact with the Governor's Office and 1 with DEC on this, and these proposed regs came out 2 recently, that will be reviewed at the hearing for 3 which we're under a comment period right now. 4 And I'm in the process of reviewing those as 5 well, and hope that those are gonna come out 6 favorable, for you to be able to pursue at Dresser 7 the opportunities of LNG conversion. 8 You know, we in New York are the only state 9 in the country that does not allow the storage of 10 LNG gas. 11 You're allowed to truck it, a tanker full of 12 it across New York State, with a truck operated and 13 fueled by liquified natural gas, but you can't stop 14 and fill up; you can't unload that and store it 15 anywhere in the New York State. We're the only 16 state that doesn't allow it. 17 There are federal regulations that cover all 18 of this throughout the country. 19 New York, because of an explosion in 1976, in 20 Staten Island, of an LNG storage tank -- 21 For just a little history of everybody. 22 -- the storage tank was under maintenance, 23 and being repaired and being painted. Didn't have 24 LNG in it at the time of the explosion; yet, we've 25 had a ban for 30 years of LNG in New York State 1 because of that. 2 There were a significant number of deaths in 3 that explosion, and it was a serious incident. 4 But, to continue to ban LNG in this state 5 flies in the face of economic development and the 6 use of cleaner-burning fuel, lower-cost fuel, and 7 this great manufacturing opportunity for Dresser to 8 be able to, hopefully, produce this product right 9 here in the Southern Tier. 10 Now, I understand that the regulations that 11 are put out there -- 12 And are you familiar with the regs, Jack, to 13 discuss them at all, or -- 14 JACK BEBERNES: I read some this morning. 15 SENATOR O'MARA: Okay, all right. 16 -- I mean, it will allow a limited amount of 17 storage, I believe, for Dresser to partake in that 18 some of that. 19 And we're looking at the ability to actually 20 go through the conversion process, so that Dresser 21 can test and experiment with the equipment in your 22 processes of manufacturing. 23 We're trying, I think, to expand the 24 regulations that are proposed right now, to make 25 that a little more friendly to you in what you want 1 to do with Dresser. 2 But, I applaud your efforts at Dresser, your 3 technological advances in this area, and a scenario 4 where -- that will spin off with so many other 5 businesses in New York State: the trucking industry, 6 the delivery industry, other manufacturers that 7 could power their equipment with liquified natural 8 gas. 9 There's a paper company up in the 10 North Country that can't get natural gas supplied to 11 them, but they could utilize LNG to power their 12 manufacturing facility. 13 These regs, as they stand right now, my 14 understanding, still would not allow that type of 15 action to happen in New York. 16 So, we're looking to do this in New York. 17 You've been away for a while, Jack, but, 18 we're either first or we're last, and it's usually 19 not for the right reason, in my opinion. 20 So, it's a difficult state, but, you know, 21 I've been all in on helping Dresser and the issues 22 with LNG here. 23 So, thank you for being here today. 24 JACK BEBERNES: Thank you very much, 25 Senators. 1 SENATOR MARCHIONE: I actually had some 2 questions on LNG, and I thank you for that education 3 you just provided, because you answered some of the 4 questions I had. 5 Thank you, Senator. 6 SENATOR GALLIVAN: Thanks, Jack. 7 George Miner from Southern Tier Economic 8 Growth, and, Jamie Johnson from Steuben County IDA. 9 GEORGE MINER: Am I going first? 10 JAMIE JOHNSON: You're on the agenda first. 11 GEORGE MINER: I'm going first, good. 12 That's Jamie. 13 Thank you. 14 JAMIE JOHNSON: I can provide some. I don't 15 have any right at the moment. 16 GEORGE MINER: I left mine at my seat. If 17 you want to grab it, it's right in that portfolio 18 right there. 19 Yes, thank you. 20 My name is George Miner. I serve as 21 president of Southern Tier Economic Growth, whose 22 mission is promote prosperity and job creation in 23 the Elmira-Chemung County region. 24 Elmira has a rich manufacturing tradition. 25 You just heard from Keith Bowman, who's 1 been -- his company's been here for over 100 years, 2 manufacturing product. 3 For over 100 years, our labor force has 4 manufactured fire trucks, helicopters, planes, 5 trains, machine tools, water valves, fire hydrants, 6 glass bottles, food products, televisions, 7 automobile parts, and I didn't have "packaging" 8 until Keith got up there, so I added packaging. 9 But, just numerous parts of products that are 10 sold all over the world. 11 And that's one of the things that just amazes 12 me, is how taken for granted manufacturing is, and 13 how the economic impact of manufacturing isn't 14 realized. 15 All the wages that Keith was talking about 16 that go to F.M. Howell employees come from outside 17 our area. They don't sell any product in 18 Chemung County. It's all going to other companies, 19 and part of other products that are sold all over 20 the world. 21 The pharmaceutical industry he talked about. 22 It's all new money to our region that's 23 paying those wages. 24 I'm not going to bash retail. Everybody 25 loves retail, we all shop, but when you go to 1 Wal-Mart, you know, the money that's being -- those 2 wages being paid there, it comes from the people 3 that are already in that community that are 4 buying -- you know, buying those goods, and it's 5 just kind of circling around, you know, briefly at 6 that store until it goes to corporate headquarters. 7 Manufacturing is just the opposite of that; 8 it's money coming into our area. It's new money in 9 this global economy, it's coming from around the 10 world. 11 And it's just like I said, it amazes me how 12 much citizens need a good education in capitalism. 13 And I say "capitalism" as if -- it's like a 14 dirty word these days, but it's what our economy is 15 based on, it's what the world's economy is based on. 16 And it scares me that, and it's not just 17 young people; it's people my age, old people, that 18 don't understand the importance of manufacturing, 19 and that's because so few of us work in 20 manufacturing these days. 21 In Chemung County, we're down to about 13 -- 22 somewhere around 13, 14 percent. We used to be 23 close to, at the height of World War II, we were 24 close to 50 percent. 25 You know, that's how much it's downsized in 1 our area. 2 I've lived in New York State for 56 years. 3 I've lived in Upstate New York for 38 of those 4 years. 5 For the past 30 years, in the 6 economic-development profession, I've witnessed 7 New York State earn its reputation as the most 8 expensive place to do business in the United States. 9 Once in a while, Hawaii or California, maybe 10 Connecticut, once every 10 years, will pass us in 11 some worse rankings. 12 What's so troubling, is that in all the 13 categories of how a state is looked at as far as a 14 place to do business, in every category, we're in 15 the top three or four of being the worst, if not the 16 top. 17 If it was just one, like electric rates, that 18 would be great, we could address that. You guys 19 could come up with more recharge programs, and we 20 would be great at everything else, and we would be 21 flourishing, but we are terrible at everything. 22 Now, you heard about worker's comp. I'm 23 going to rattle off some things, too. I'm not 24 really going to add a lot more to it, but I'm just 25 sharing with you, like I said, 30 years of 1 frustration in economic development. 2 The best one I see here, that Keith alluded 3 to, we rank 49th, not 50th, as the worst state 4 for business climate, according to "Chief Executive" 5 magazine. 6 Those are not -- that's not tax rates, that's 7 not some statistics from the Department of Labor or 8 Taxation and Finance. 9 Those are interviews with CEOs across the 10 country that say, This is a terrible place to do 11 business. 12 Those are the decision-makers; those are the 13 guys and ladies that make those kinds of decisions. 14 Those are the people that Jamie and I work 15 with, to try to get to come here, and they're coming 16 right out in an interview saying that this is a bad 17 place to do business. 18 I have been laughed at over the phone when 19 I have contacted companies outside New York State to 20 consider locating in the Elmira area and in the 21 Batavia area, over 30 years. 22 Just, the guy, you know, he's like holding 23 the phone away from his mouth because he's laughing 24 so hard. 25 Over the past five years, I have watched 1 thousands of workers from outside of New York State 2 come to New York to work in the natural gas 3 industry. These people have been treated with the 4 utmost discourtesy and scorn that I've ever 5 witnessed. 6 I'm embarrassed for my community, for our 7 state, the way these people are treated. 8 They are -- often, they are required to drive 9 their trucks home. 10 We all joke around here about the white 11 pickup trucks that Chesapeake and Schlumberger and 12 other gas companies drive. 13 Those people are treated just terribly, in 14 church, at grocery stores, and school-board 15 meetings...everywhere they go. 16 Their spouses, the trailing spouses, are not 17 happy about being here, because the way that they're 18 treated by people. 19 I mean, when did New York -- now, we've 20 always been, you know, Ellis Island; we've always 21 welcomed people from all over the world, and, now, 22 these gas workers come in from Oklahoma and Texas 23 and other areas, and they're treated so poorly. 24 I don't like going and visiting with the 25 gas-company people to see what we can do to help 1 them with expanding. 2 We've had companies, like, Schlumberger made 3 a $40 million investment. They employ about 4 300 people. They pay amongst the highest wages in 5 the region. 6 But when you talk to those people, not as 7 Schlumberger executives or decision-makers, but as 8 people, people you want to play gin rummy with, they 9 don't feel welcomed here, and that really infuriates 10 me. 11 At the same time, I've seen thousands of 12 Upstate New Yorkers, and many, many, many from the 13 Southern Tier, move to Pennsylvania, Ohio, 14 West Virginia, to secure high-paying jobs supported 15 by the natural gas industry. 16 I've got, my sons -- my sons have friends 17 that went to RIT, that went to Alfred, that went to 18 Syracuse, okay, they got degrees in engineering. 19 Okay? 20 They're gone. 21 They're not coming back to New York; they're 22 gone. 23 They've got great jobs with the natural gas 24 industry. They're not -- they're not -- they don't 25 have to -- they've all got these strange titles, but 1 they're not dangerous jobs. They're good jobs, 2 they're rewarding jobs, with tremendous, tremendous 3 opportunity. 4 They didn't want -- you know, I talked to 5 their parents. Their parents are, you know, 6 What are we going to do? Are we gonna follow the 7 kids? 8 I mean, usually the kids follow the parents. 9 "Are we going to follow their kids?" 10 Our municipalities have been prevented from 11 earning millions and millions in revenues. 12 I've seen the reports from Pennsylvania; the 13 way the sharing has gone on in Pennsylvania, what 14 the counties get from the royalties from natural gas 15 exploration. 16 That would go a long way in the Southern Tier 17 to help rebuild infrastructure in our area and 18 support manufacturing and other businesses. 19 100 percent, every penny, of property tax 20 paid to Chemung County goes to pay for 21 New York State-mandated social-service programs. 22 "Every penny." 23 And then I think it's another 30 percent of 24 our sales-tax income goes to pay for welfare, 25 Medicaid, probation, childhood intervention. 1 These funds are not available for much-needed 2 infrastructure. 3 We're -- our roads are falling apart, our 4 pipes are bursting, we have lots of services that 5 need resources, and they're not there, because 6 they're going to pay for unfunded mandated 7 social-service programs. 8 Besides taxes, energy rates are the highest 9 in the nation. 10 It costs NYSEG, it costs National Grid, the 11 same amount of money to buy this energy -- to buy 12 gas, to buy electricity -- as PENELEC in 13 Pennsylvania; yet, we're 60 percent higher than 14 PENELEC. 15 That's my competition; I compete with 16 Pennsylvania. 17 That's because of taxes. 18 NYSEG's done a really good job on their 19 electric bill of breaking that stuff out. 20 I don't have a National Grid bill, but I'm 21 sure they've done the same thing, of just layer upon 22 layer of taxes. 23 We have a systems-benefit charge. 24 We have the 18-A charge, I was told to say by 25 my peers when I asked, you know, "What regulations 1 should I talk about?" 2 And then there's the 3 greenhouse-gas-initiative charge. 4 We just have all these layers of extra 5 charges and taxes and regulations that drive up the 6 cost of electricity, in particular. 7 And natural gas has come down, but it's still 8 more expensive in New York than it is in 9 Pennsylvania. Not because that they can drill in 10 Pennsylvania; it's because of these extra taxes that 11 we put on the utilities that businesses have to pay 12 for. 13 New York State businesses pay the State over 14 $4 billion annually in taxes, to have the State 15 regulate the insurance industry, and health-care 16 providers and employers to oversee the health-care 17 industry and the insurance industry. 18 Employers pay that, manufacturers pay that, 19 extra cost. 20 It's just a total lack of trust by the State 21 to the business industry, to the health-care 22 industry, to the insurance industry, that they have 23 to create this whole bureaucracy to regulate and 24 oversee them. 25 Health-insurance costs, like you heard from 1 Keith earlier -- 2 [Technical difficulties.] 3 -- is driving manufacturers out of 4 New York State and discourages new businesses from 5 coming here. 6 Site-location consultants point to taxes, 7 such as covered-lives assessment in the HCRA 8 surcharge, Section 332 assessment, and the premium 9 tax, as taxes that place New York manufacturers at a 10 competitive disadvantage. 11 I crossed out my LNG stuff because I saw 12 Dresser-Rand on here, but I'll talk about LNG, and 13 I know Jamie's got a lot more to say about it. 14 But, 13 percent of Chemung workers work in 15 manufacturing. Many of these workers manufacture 16 compressors, valves, and related equipment that's 17 used in the energy industry. 18 It's one of the fastest growing industries in 19 America, the energy industry, and New York is not 20 allowed to play in this because one of the issues 21 you see is LNG. Manufacturers are denied the 22 ability to manufacture projects that convert natural 23 gas into liquid natural gas. 24 It's an inexpensive gas. 25 I don't understand. I mean, I know why 1 Dresser-Rand is interested in doing it here, is 2 because they make the best compressors in the world, 3 right in Painted Post. 4 But, you know, if it wasn't for that, they 5 wouldn't even be considering New York State. 6 Why would you consider New York State for 7 doing this if it's the only state in America that 8 will not allow the storage of liquid natural gas? 9 New York labor laws are often repressive to 10 employers. 11 The state's Wage Theft Prevention Act needs 12 to be repealed. 13 A major manufacturer can handle that extra 14 bureaucracy. They hate it, but they can handle it. 15 It's really -- and so many manufacturers, 16 you've got the big ones, you know, here, you know, 17 today, but there's so many manufacturers that are 18 5-man shops and 10-man shops, and that's where these 19 regulations are so burdensome. 20 The mandated Paid Family Leave Bill drives up 21 the cost of doing business in a state that's 22 already, as I said, the most expensive place to do 23 business. 24 These laws are particularly burdensome for 25 small businesses. 1 In 1885, states enacted a Scaffold Law to 2 protect construction workers. 3 For the past 128 years, construction 4 companies have paid high insurance costs that have 5 driven up the cost of building commercial and 6 residential facilities. 7 Today, New York is the only state which 8 retains this antiquated law which drives up the cost 9 of roads, bridges, and simply every kind of facility 10 you want to build in this state. 11 This is one area of regulatory reform that 12 can be addressed while not infringing on worker 13 safety, and result in lower costs of doing business 14 and encourage investment in infrastructure and 15 create jobs. 16 I know another issue, which I don't really 17 fully understand, but is the Wicks Law. It just 18 puts layers of public bidding and multiple contracts 19 into public-works projects; and the end result, it 20 drives up cost; and the end result is, things just 21 don't get built. 22 I mean, our roads are falling apart; like 23 I said, our pipes are bursting; and they're just not 24 getting done because it costs too much. 25 And if we can get rid of things like the 1 Wicks Law and the Scaffold Law, and repeal them, 2 costs would come down. 3 As I stated in the beginning, the negative 4 antibusiness environment in New York State is not 5 new. It was inherited by this Legislature and by 6 this Administration. 7 I'm not blaming you folks. 8 Believe me, I've lived here, like I said, 9 56 years. I've been reading about it and seeing it. 10 I studied it at Geneseo State. 11 The loss of manufacturing jobs is not just a 12 New York problem, it's a national problem, but one 13 where economists, policy analysts, and, 14 unfortunately, the people I deal with, 15 business-location consultants and CEOs, all point to 16 New York as a prime example of a bad place to do 17 business. 18 We're not just losing jobs; we're losing 19 people. Our population is declining, and declining 20 rapidly. 21 The majority of upstate counties lost 22 population in the last census, 2010. 23 I'm terrified to see the results of the next 24 one. 25 Neighboring Broome County had the largest 1 population loss of any county in New York State. 2 The Governor acknowledges that the upstate 3 economy is in a crisis. 4 We need real solutions, or we risk losing 5 many upstate communities and citizens for 6 generations to come. 7 I want to thank you for allowing me to speak 8 on the record today, and close by saying: 9 That while I don't hold much optimism for 10 much productive change in New York business climate, 11 I do commend all of you for acknowledging that there 12 is a problem, and for seeking ways to reverse 13 New York's decline. 14 Thank you. 15 Jamie. 16 JAMIE JOHNSON: Thank you, George. 17 And I'd like to thank all of you for the 18 opportunity today to talk about the issues facing, 19 not only our manufacturing industry, but economic 20 development throughout the region. 21 My name is Jamie Johnson. I'm the 22 executive director of the Steuben County Industrial 23 Development Agency, which is the designated economic 24 development organization for Steuben County. 25 Steuben County is the largest geographic 1 county in the Southern Tier, and with over 2 1400 square miles of land area, we have an extremely 3 diverse industrial base. 4 Steuben County is fortunate to serve as the 5 headquarters for many of the companies you heard 6 here today, including Corning, Incorporated, and 7 other global corporations with their locations and 8 manufacturing operations in Steuben County, such as 9 Dresser-Rand, World Kitchen, Kraft, and Alstom, just 10 to name a few. 11 We also are home to a significant number of 12 small- and medium-sized manufacturing operations all 13 facing similar issues today. 14 Manufacturing represents nearly 19 percent -- 15 18.9 percent -- of our total economy in 16 Steuben County, double the state average, and 17 5 percent greater than the U.S. average; and as with 18 Chemung County, it has been on the decline. 19 Manufacturers in Steuben County employ over 20 7,000 people; or 15 percent of the total workforce, 21 but the more important number, is that this number 22 represents over 40 percent of the total payroll in 23 the county. 24 So while manufacturing only makes up 25 15 percent of the economy, it makes up 40 percent of 1 the wages that are being paid in the county. 2 I'm going to echo a lot of what you've heard 3 here today, so I apologize if I repeat myself, but 4 it's important enough to say again. 5 Unfortunately, New York ranks among the worst 6 states for doing business, stifling the growth of 7 our manufacturing operations. 8 We've already talked about the 9 Tax Foundation's "2013 State Business Climate 10 Index," putting New York State at dead last as far 11 as all of the other states in the country. 12 These rankings, you know, represent the worst 13 income taxes for individuals, the sixth-worst 14 unemployment-insurance taxes, and the sixth-worst 15 property taxes in the country. 16 New York State needs broad-based rate 17 reductions for all business taxpayers, but most 18 importantly, it needs to repeal the corporate income 19 tax for manufacturers. 20 In addition to tax relief, we've talked about 21 the Scaffold Law a lot here. This places absolute 22 liability on a contractor and project owner for 23 injuries occurring on a work site. 24 This law is unique to New York State. We're 25 the only state in the country that still has this on 1 the books, and it is a significant cost-driver for 2 construction projects in the state, discouraging 3 investment. 4 Much like the Scaffold Law, New York State is 5 also the only state in the country which has a 6 moratorium on the transportation and storage of LNG 7 (liquified natural gas). 8 We've heard a lot about that today. 9 You know, LNG can be used in New York and 10 stored in New York, but, currently, it can only be 11 transported in New York if it is part of an 12 interstate commerce. 13 LNG is considered one of the cleanest and 14 most economic fuel sources, and it is increasingly 15 being used in a number of applications, including 16 trucking fleets, like UPS. 17 I think we were talking about that earlier. 18 GEORGE MINER: UPS is making a $50 million 19 investment in LNG filling stations in about 20 six states, Ohio and Pennsylvania being two of them. 21 New York not one, obviously. 22 JAMIE JOHNSON: In addition to it's 23 environmental and economic benefits, there's 24 manufacturing activity, as apparent with 25 Dresser-Rand, to advance technology to make it even 1 easier and safer to produce. 2 The current moratorium is making it 3 increasingly difficult to develop this technology 4 here, and while regulations that are being 5 promulgated right now will help with that, they 6 don't solve the problem. 7 I just received an e-mail that was forwarded 8 to me by Mr. Tranter, and he received it earlier, 9 which says, that while we may be able to store it, 10 we can't re-gasify it once it's made into LNG, under 11 the current regulations. 12 So a manufacturing operation which may not 13 have access to natural gas, could get LNG trucked to 14 them, but then they couldn't convert it back into a 15 gas form in order to use it. 16 So, it makes no sense; we can take it in a 17 gas form, put it into a liquid form, but then the 18 regulations don't allow us to take it back into a 19 gas form. 20 GEORGE MINER: So what this machine does, 21 what LNG is, is it's natural gas, which is right in 22 the pipe right here, heating and cooling this 23 building, and then it's cooled and compressed. 24 So now when it takes -- now it's -- it's 25 shrunk, so now it makes it transportable. You can 1 move a lot of natural gas to a location, and then 2 "re-gasify" it? 3 Is that what you called it? 4 It's still natural gas. It's still what we 5 have going to some of our homes. 6 I have propane. 7 But, that's all it is. It's not anything -- 8 you know, it's the same gas that goes to your house, 9 to manufacturing; it's just compressed through a 10 cooling process. 11 So, I think it's 6:1, or is it 60:1? 12 JAMIE JOHNSON: 6:1 ratio. 13 GEORGE MINER: 6:1. 14 So -- so then it can be taken to a rural 15 upstate location, de-gasified, and so it's expanded 16 six times, and utilized, versus, having to run very 17 expensive natural gas lines, and things of that 18 nature. 19 Sorry. 20 JAMIE JOHNSON: Thank you. 21 GEORGE MINER: Science. 22 JAMIE JOHNSON: You know, Senator O'Mara has 23 sponsored a bill which passed in the Senate, which 24 we commend him for, but more work needs to be done 25 because the Assembly wouldn't even get it out of 1 Committee. 2 So while, you know, the Senate has passed it, 3 I think we need to work with the Assembly, on both 4 sides of the aisle, to make sure this does move 5 forward, because it is an important issue, not only 6 facing the Southern Tier, but also New York State. 7 Because as George said, there are 8 communities, like Lake Placid, which just, 9 literally, you could not build a natural gas line 10 to, but you could truck LNG to and be able to supply 11 that community with natural gas. 12 The LNG issue is just one example of 13 energy-development opportunities that are available 14 in our region, whether it's making investments in 15 infrastructure to support additional wind-energy 16 development, or finding new technologies to advance 17 solar energy, or the safe exploration of our natural 18 gas assets in New York, we should be a leader in the 19 next generation of energy development, and not 20 standing by, watching neighboring states reap the 21 benefits. 22 Steuben County has the ability to add another 23 200 wind turbines in our county alone if New York 24 can continue to make it easier through regulations, 25 like Article 10, to site these developments, and 1 find ways to invest in our energy-transportation 2 infrastructure to allow for the development of 3 resources in underdeveloped communities. 4 Right now, we have a project underway in the 5 town of Jasper, and because that project is going to 6 use up all of the capacity in the transmission line 7 that is currently in place, other projects have, 8 basically, been canceled in our community to advance 9 wind energy. 10 We invest in roads, we invest in sewer, we 11 invest in waterlines, but, you know, when it comes 12 our electric infrastructure, everybody points the 13 other way and says, Geez, we don't have any money to 14 do it. 15 The State should also immediately lift the 16 moratorium on hydrofracking and allow for the safe 17 exploration of natural gas. 18 We are now four years into the review of this 19 process with no end in sight. 20 The New York Department of Environmental 21 Conservation is considered a leader in protecting 22 the environment of our great state, yet we won't let 23 them do their jobs, and have let political politics 24 dictate this review with no clear path to bring it 25 to a conclusion. 1 While we sit back and wait for something to 2 happen, our neighbors to the south are becoming 3 leaders in energy development and leaving 4 New York State behind. 5 Because of the moratorium, Steuben County has 6 already lost $75 million in assessed value, and it 7 expects to lose another $25 million in the coming 8 years due to the inability to bring our gas 9 resources to market. 10 So we're actually losing assessed value 11 because we can't get the gas out of the ground and 12 ship it to market. 13 Even the New York DEC recognizes the 14 potential impact of natural gas development. 15 In 2011, they released a report outlining the 16 socioeconomic impact of drilling activities in the 17 state, and estimate that an average growth scenario 18 will result in the creation of 17,634 direct jobs, 19 and as many as 29,174 indirect jobs. 20 This could generate up to $2.5 billion in 21 employee earnings in the state, and up to 22 1.4 million in additional local property tax 23 revenues, per well -- that's "per well" -- during 24 its projected 30-year life. 25 Many feel that this opportunity has passed us 1 by, but even a fraction of this activity would be a 2 significant impact to the region and to the state. 3 I would be remiss if I did not highlight 4 issues facing our ag industry. 5 The development and advancement of 6 opportunities in ag development, particularly in the 7 value-added markets, is a priority to the county. 8 Steuben County ranks tenth in cash receipts 9 for farm sales, and is the largest potato producer 10 in the state. 11 The Steuben County IDA supports the 12 New York Farm Bureau's priority issues for 2013, to 13 transition farms to the next generation, invest in 14 agriculture, develop a healthy farm-to-market 15 transportation system, and fuel the economy through 16 increased ag development and manufacturing. 17 I'd like to thank you for this opportunity to 18 speak to you today, and your leadership to identify 19 and eliminate unnecessarily costly regulations that 20 inhibit growth and drive up costs in our state. 21 And, I'd be happy to answer any questions. 22 Thank you. 23 SENATOR O'MARA: Good. 24 SENATOR MARCHIONE: I'm good. 25 SENATOR O'MARA: Thank you guys, for both of 1 you being here. 2 SENATOR GALLIVAN: Thank you, both. 3 If I might just note your point on 4 agriculture; we have targeted agriculture as one of 5 the industries. 6 And we had a hearing up in Watertown that was 7 very well attended, and the New York Farm Bureau did 8 testify, so, we've got a lot of information from 9 them. 10 JAMIE JOHNSON: Great. 11 SENATOR GALLIVAN: Thank you. 12 JAMIE JOHNSON: Thank you. 13 GEORGE MINER: Thank you. 14 SENATOR GALLIVAN: John Giovenco. 15 JOHN GIOVENCO: Yes, sir. 16 SENATOR GALLIVAN: Was I right? 17 JOHN GIOVENCO: You're correct. 18 SENATOR GALLIVAN: Excellent. 19 Welcome. 20 JOHN GIOVENCO: Thank you very much. 21 Distinguished members of the Senate Majority 22 Coalition, good morning -- or, actually, good 23 afternoon. 24 My name is John Giovenco. I'm the traffic 25 manager for Nucor's Vulcraft steel-fabrication 1 facility located in Chemung, New York. 2 On behalf of Vulcraft-Chemung and its parent 3 company, Nucor Steel, thank you for this opportunity 4 to speak with you today. 5 We are proud to say the Nucor Vulcraft family 6 is part of the fabric of New York State. 7 Nucor owns and operates a raw-steel 8 manufacturing facility in Auburn, New York, casting 9 over 500,000 tons of rebar and other steel products 10 used in all kinds of infrastructure and industrial 11 applications. 12 In 2001, Nucor built its Vulcraft-Chemung 13 facility where we build steel joist and steel 14 decking. Nearly half of all the raw steel we use in 15 Chemung is manufactured in Auburn. 16 And I will also note that 100 percent of it 17 is made in the United States. 18 Also, in 2008, Nucor purchased, and now 19 operates, its Harris steel-rebar fabrication and 20 installation facility in New York -- in Albany, 21 New York. 22 All told, Nucor is a huge economic-driver in 23 upstate, employing nearly 600 teammates whose 24 average annual earnings are $70,000, not including 25 management. 1 In addition, 85 percent of the 2 1 billion pounds of scrap steel we purchase annually 3 to make the new steel in Auburn comes from dozens of 4 New York-based scrap businesses. 5 We're also proud to say that Nucor is serving 6 as the largest supplier of steel beams for the 7 Freedom Tower, 911 Memorial projects in 8 New York City, and we supply the vast majority of 9 steel used in the Citi Field and Yankee Stadium 10 projects. 11 And, again, thank you very much for allowing 12 me to speak here today. 13 I go right to one of our first points: 14 We would ask you consider a "Buy American" 15 protection to create and protect American jobs. 16 Nucor was extremely disappointed to learn 17 about the Metropolitan Transit Authority and 18 Port Authority's recent decisions to award 19 multimillion-dollar infrastructure contracts to the 20 Chinese, to supply steel for the Verrazano Bridge 21 and Bayonne Bridge re-decking contracts. 22 Sending major infrastructure projects 23 overseas flies in the face of local job creation and 24 restoring New York's economy. 25 We urge the Coalition to explore ways to 1 protect jobs and keep New York State taxpayer 2 investment at home by incorporating "Buy American" 3 provisions in New York State law. 4 I will echo the request to repeal the 5 Wage Theft Protection Act. It is onerous. 6 We support Senate 6063 and Assembly 8856 in 7 this regard. 8 We also support Governor Cuomo's bipartisan 9 efforts to cut taxes. 10 And we, you know, urge you, the 11 Majority Coalition, to work with the Governor and 12 your colleagues to reform New York's burdensome and 13 costly taxation system. 14 We also want to highlight the commercial 15 transportation industry. 16 Everyone who has spoken here today in 17 manufacturing relies on the transportation industry. 18 Easily, 85 percent of the goods and 19 services -- well, goods we buy and utilize are 20 delivered by truck. 21 The lynchpin to the continued growth and 22 success of New York State's steel and other 23 manufacturing industries is a robust and affordable 24 commercial-trucking industry able to compete on a 25 level playing feel field with neighboring states. 1 We recommend the following policy changes: 2 Repeal the interstate prohibition on LNG 3 hauling. 4 There is actually -- I know Senator O'Mara 5 knows this, but I would like to say for the record, 6 there's also a specific issue in the regulations 7 that does not allow a New York State producer to 8 truck it to a New York State user. 9 So, in fact, that element of the regulation 10 requires us to either export our LNG out of state, 11 if you're a producer, or, if you're a user, to buy 12 it from out of state, and have it trucked in. 13 And that's due to, you know, the interstate 14 commerce. 15 The feds, obviously, wouldn't allow us to ban 16 interstate commerce, but it's intrastate commerce 17 that's affected, really banned, by New York State 18 law -- or, regulation. Excuse me. 19 Another political hot-button I'll throw at 20 you is the Highway Use Tax. 21 It is very difficult to undo something that's 22 been done; however, as one of only four states in 23 the nation that still has a Highway Use Tax, which 24 makes us the second most-expensive transportation 25 state only second to Oregon in taxes and fees paid 1 by trucking companies, the Highway Use Tax leaves us 2 at a competitive disadvantage to New York 3 neighboring-based trucking companies: Pennsylvania, 4 New Jersey, and the like. 5 Evasion of the tax has, historically, been a 6 serious issue that results in unfair competitive 7 advantage to those out-of-state carriers. It also 8 reduces the amount of tax we collect. 9 We urge your support of Senator DeFrancisco's 10 and Assemblyman Magnarelli's legislation to repeal 11 the unfair tax and explore ways to fairly assess the 12 tax on all carriers. 13 We obviously support the tax need, or the tax 14 basis, for rebuilding/repairing our infrastructure. 15 We're not saying we don't want to support 16 that. We want to say we want pay our fair share. 17 And we feel that it's very obvious that 18 New York State-based carriers are unfairly burdened, 19 while others are not paying their share. 20 We also support enacting the Fairness In 21 Contracting legislation. 22 In the past 4 years, 38 states, including 23 Pennsylvania, Connecticut, and Massachusetts, have 24 adopted laws aimed at protecting common carriers 25 from unfair indemnification provisions in shipper 1 contracts. 2 Legislation sponsored by Senator Maziarz and 3 Assemblywoman Lupardo would reduce undue cost borne 4 by New York carriers by establishing a system of 5 fairness: the responsible party is accountable for 6 damages and liabilities. 7 This legislation, which is S1087 and A3673, 8 would not limit anyone's ability to sue someone who 9 is at fault, but simply prohibit undue liability 10 automatically being assigned to the carrier, which 11 happens in many contracts today without this law. 12 We again repeat the support of holding the 13 line on repeal of the 18-A utility tax. 14 So, I won't go into detail on that, that's 15 already been covered. 16 And, lastly, we would support adopting 17 policies to increase domestic energy supply. 18 And, again, I think that's been very well 19 covered, so I won't go into detail on that. 20 We're hopeful that our recommendations are 21 useful as the Majority Coalition continues its 22 important work in making New York a better place for 23 manufacturers to thrive and grow. 24 Of course, if you have any questions, or need 25 further information, please do not hesitate to 1 contact me. 2 SENATOR MARCHIONE: One thing I would like to 3 say is, thank you for your testimony, because, 4 between yesterday and today, we're hearing a lot of 5 reoccurring themes, and when we hear that, we 6 recognize that some of these regulations are 7 transcending to a lot of different types of jobs. 8 And so what we're hearing today, a lot we 9 heard yesterday, with insurance and banking, and we 10 appreciate hearing it from you, because we recognize 11 that regulation is really onerous to a lot of 12 different job sectors. 13 So thank you very much for your testimony. 14 JOHN GIOVENCO: You're welcome. 15 SENATOR O'MARA: John, thank you, and, thank 16 you to Nucor, for your commitment to manufacturing 17 in New York State. 18 JOHN GIOVENCO: You're welcome. 19 Thank you all. 20 SENATOR GALLIVAN: Did we miss anybody? 21 SENATOR O'MARA: Is anybody here from any 22 manufacturer that would like to add a comment before 23 we close out? 24 I want to thank you all for coming. 25 It's been very informative for us, and 1 helpful for us to get this material, some of which 2 we're familiar with, and some of it which is new to 3 us, but, to get it all on the record so we have this 4 to use in moving legislative initiatives forward in 5 our effort to eliminate the regulatory burdens in 6 New York State. 7 Thank you all. 8 SENATOR GALLIVAN: Thank you. 9 SENATOR MARCHIONE: Thank you. 10 (Whereupon, at approximately 2:30 p.m., 11 the public forum on Manufacturing Regulatory 12 Reform held before the New York State Senate 13 Majority Coalition concluded, and adjourned.) 14 ---oOo--- 15 16 17 18 19 20 21 22 23 24 25