Public Hearing - October 9, 2013
1 BEFORE THE NEW YORK STATE SENATE MAJORITY COALITION
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2
PUBLIC FORUM/TOWN HALL
3
MANUFACTURING REGULATORY REFORM - TO LEARN FROM
4 BUSINESSES AND INDUSTRY EXPERTS WHICH REGULATIONS
ARE THE LEAST USEFUL, LEAST COST-EFFECTIVE, AND,
5 THEREFORE, SHOULD BE ELIMINATED
6 ------------------------------------------------------
7
8 Corning Community College
Triangle Lounge
9 1 Academic Drive Building
Corning, NY 14830
10
October 9, 2013
11 12:00 p.m. to 2:00 p.m.
12
13
14 SPONSORS PRESIDING:
15 Senator Patrick M. Gallivan
Deputy Conference Leader for Economic Development
16
Senator Kathleen A. Marchione
17 Chair of the Administrative Regulations Review
Commission
18
19
CO-SPONSOR PRESIDING:
20
Senator Thomas F. O'Mara
21
22 SENATE MEMBERS ALSO PRESENT:
23 Representative of Senator Catharine Young's Office
24
25
2
1
SPEAKERS: PAGE QUESTIONS
2
G. Thomas Tranter 9 15
3 President
Corning Enterprises
4
Margaret Gorman 20 46
5 Manager, State Affairs, Northeast Region
American Chemistry Council
6
William Wolfram 20 46
7 Board Chair, NYS Chemical Alliance
Director, Global & Regulatory Affairs
8 for SI Group
9 Mark Johnson 48 61
Vice President of Finance,
10 Pepsi Cola and Canada Dry Bottling
Companies of New York
11 New York State Bottling Association
12 Randy Wolken 69 79
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
3
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
4
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
5
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.
6
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.
7
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
8
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
9
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
10
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
11
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
12
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
13
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
14
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.
15
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
16
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.
17
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,
18
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
19
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.
20
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
21
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.
22
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.
23
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"?
24
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
25
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
26
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
27
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?
28
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.
29
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.
30
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.
31
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
32
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
33
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.
34
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
35
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
36
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
37
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
38
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
39
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.
40
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
41
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 --
42
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
43
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.
44
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."
45
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
46
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
47
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
48
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.
49
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
50
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
51
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
52
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:
53
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.
54
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
55
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.
56
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.
57
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
58
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.
59
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,
60
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
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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.
62
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
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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.
64
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.
65
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
66
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.
67
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
68
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
69
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.
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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
71
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
72
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.
73
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,
74
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;
75
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
76
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
77
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
78
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
79
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
80
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
81
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.]
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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
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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
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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.
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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
86
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.
87
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
88
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
89
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
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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
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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.
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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
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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.
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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
95
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
96
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
97
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
98
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.
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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
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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
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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
102
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
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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
104
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
105
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
106
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.
107
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
108
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
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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
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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.
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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.
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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
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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
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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
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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.
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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
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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.
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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
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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
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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
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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
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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---
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