Good morning,

Happy Friday!  I hope you are safe, healthy and social distancing.  As of this e-mail, Governor Andrew Cuomo has not issued any new Executive Orders since the beginning of the week.  Over the past couple of days, however, Governor Cuomo and the New York State Legislature have finalized and adopted a $177 Billion Budget for the state’s 2020-21 Fiscal Year (the “Budget”).  This $177 Billion price tag does come with one very big and bold asterisk as it is unclear what will be the extent of the fiscal damage to New York and the Budget.  Governor Cuomo is forecasting a potential $10 billion short fall, which could result in significant cuts to many of the initiatives contained in the enacted Budget.

I wanted to use this e-mail to highlight some of the policy initiatives and new laws passed in connection with the Budget.  The following provides high-level descriptions of several new policies and programs that are being enacted through the Budget.

  • Paid Sick Leave for Working New Yorkers The Budget enacts a comprehensive paid sick leave program for working New Yorkers beyond the sick leave law passed last week covering COVID-19 illnesses. Businesses with five to 99 employees will provide their employees at least five days of job-protected paid sick leave per year and businesses with 100 employees or more will provide at least seven days of paid sick leave per year. Smaller businesses, with four or fewer employees, will guarantee five days of job-protected unpaid sick leave to their employees every year.  Small businesses already providing paid sick leave will still be able to so.
  • Establishment of a $3 Billion “Restore Mother Nature” Bond Act: The Budget authorizes the creation of a Bond Act to fund critical environmental restoration and climate mitigation projects in New York.  The Bond Act will require approval of New York voters in the 2020 election.  The Bond Act will be a key source of funding for projects focused on reducing flood risk, investing in resilient infrastructure, restoring freshwater and tidal wetlands, preserving open space, conserving forest areas, and reducing pollution from agricultural and storm water runoff. It will also fund up to $700 million in projects to fight climate change, including green buildings. Note that the final determination as to whether to move forward with the Bond Act will be made after an assessment of the state’s finances and the economic outlook is made later this year.
  • Accelerated Renewable Energy Growth and Community Benefit Act: The Budget contains a new law that will speed up the permitting and construction of renewable energy projects and accelerate renewable transmission delivery. This Act creates a new Office of Renewable Energy Permitting to improve and streamline the process for siting of large-scale renewable energy projects across New York while delivering significant benefits to local communities. “Build Ready” sites will be pre-approved, permitted and auctioned to developers to prioritize the re-use of abandoned commercial sites, brownfields, landfills, former industrial sites, and otherwise underutilized sites.
  • E-Bike and E-Scooter Legislation: The Budget enacts comprehensive legislation to legalize and expand the e-bike and e-scooter network in New York State.
  • Styrofoam Ban:  New York will prohibit the distribution and use of expanded polystyrene (i.e. Styrofoam), single-use food containers. It also bans the sale of expanded polystyrene packaging materials (“packing peanuts”). The statewide ban goes effective January 1, 2022.
  • Green Economy Tax Credits: The budget creates two tax credits related to Green Economy initiatives.  First is a new refundable, discretionary Green Jobs Tax Credit totaling up to 7.5 percent of wages for each net new job created fostering the expansion of green economy businesses.  The second is a refundable, discretionary Green Investment Tax Credit totaling up to 5 percent of qualifying new capital investments in connection with qualifying green economy projects and increasing to up to 8 percent of eligible investment for research and development in qualifying green economy projects.
  • Permanent Ban on Hydrofracking: The Budget codifies Governor Cuomo’s previous ban on the Department of Environmental Conservation approving permits that would authorize an applicant to drill, deepen, plug back or convert wells that use high-volume hydraulic fracturing as a means to complete or recomplete a well. The Budget also places a moratorium on future gelled propane hydrofracking applications until the DEC can conduct an analysis of the impacts of this completion method.
  • E-cigarettes and Vapor Products.  The Budget contains several new prohibitions and restrictions on several of these products.  Most of these provisions take effect on July 1, 2020, although some take effect sooner.  The Budget, for instance:
    • prohibits the sale or distribution of e-cigarettes or vapor products that have a characterizing flavor unless approved as part of an FDA pre-market approval.  This provision takes effect in forty-five days;
    • prohibits the sale of tobacco products, including e-cigarettes, in all pharmacies.  This provision also takes effect in forty-five (45) days;
    • restricts the delivery of e-liquid products only to NYS-licensed vapor retailers;
    • restricts the public display of tobacco and vapor products near schools;
    • requires manufacturers of vapor products to disclose to the DOH Commissioner and the public, information regarding the ingredients, by-products, or contaminants in vapor products, whether intentional or unintentionally added;
    • bans certain carrier oils if they are determined to be harmful;
    • bans coupons and manufacturer discounts and displays in shops; and
    • increases penalties for illegally selling tobacco products to minors.
  • Adjustments to 2019 Bail Reform Law:  The Budget modifies the 2019 Bail Reform Law by adding several offenses that would now be bail eligible when previously a person charged with one of those offenses would be released with no bail.  Crimes now bail eligible include certain sex trafficking offenses, money laundering in support of terrorism in the 3rd and 4th degree, child pornography offenses, repeat offenders, and those who commit crimes resulting in death.  The Budget also clarifies the 2019 Bail Reform Law to ensure jurists know all the options available to them with respect to non-monetary conditions for release and enhances the options upon which a judge can condition release, including mental health referrals and requirements to attend counseling.
  • “New York Hate Crime Anti-Terrorism Act”:  The Budget establishes a “domestic act of terrorism motivated by hate” crime as a new A-1 class felony punishable by up to life in prison without parole.  This new law arose out of the recent anti-Semitic attacks in Rockland County and other areas in New York State.
  • Prohibition of high-risk sex offenders from accessing the MTA systems:  The Budget includes a new law authorizing a judge to prohibit individuals who engage in unlawful sexual conduct against an MTA passenger or employee or a crime involving assault against an MTA employee from using MTA transportation services for up to three years, or as long as on probation, if less.
  • Requiring Automatic Manual Recounts in Close Elections:  The Budget now establishes statewide standards for when automatic ballot recounts are triggered and the process for how such recounts will be carried out.  Previously, losing parties was required to seek judicial intervention for all recounts.  The legislation requires automatic, manual recounts in all statewide elections in which the margin of victory for a candidate or ballot proposition is 0.2 percent of all votes cast in the contest.  It also requires an automatic manual recount in all other elections in which the margin of victory for a candidate or ballot proposition is 0.5 percent of all votes cast. (As a side note – It would have been nice to have had this law in place for my 2010 reelection!)
  • Student Loan Debt Relief Companies:  The Budget enacted certain legislation designed to set standards for the student loan debt relief industry in New York.  These standards include certain disclosure requirements as well as a number of prohibitions on the conduct on the part of student debt relief companies and their employees.
  • Prevailing Wage Law: The Budget sets out a new law that requires workers on private projects receiving a significant public subsidy be paid a prevailing wage. Private projects larger than $5 million where at least thirty (30%) percent of construction expenses are supported by public grants, tax credits, or certain other incentives will now be required to pay prevailing wage.
  • “New York Buy American” Act Permanent:  The Buy American Act requires State agencies to use high-quality American-made structural iron and steel in their projects.  The Act was set to expire this month and is now permanent in New York State.
  • Budget Cutting Powers:  As noted above, the enacted Budget faces a potential $10 Billion shortfall over the year.  As a result, the Legislature and Governor Cuomo agreed to empower the State Budget Director to develop a plan for across the board reductions and implement that plan as necessary over the course of the year, without having to seek approval of the New York State Legislature.  The Budget also requires three reviews the state’s finances during 2020 and the State can delay or withhold payments to schools and other localities if revenue estimates don’t match figures used to develop the enacted Budget.

The above list is not an exclusive list of policies and programs that will become law under the Budget.  Moreover, there were a number of policy initiatives that did not get done in the budget, such as legalization of adult use cannabis, gig economy worker provisions, sale of alcohol in movie theaters, small cell placement and Net Neutrality.  And given the unknowns with COVID-19, it is unclear when or even if, the New York Legislature will return to Albany in 2020 to address these and other unresolved matters.

If you have a question about the Budget or wish copy of a particular section of the Budget covering one of these provisions or anything else, please reach out to me at this e-mail address.  Please note that this e-mail is not providing legal advice and is for informational purposes only.  And again, if you wish to be removed from my e-mail list, please let us know.

Long Point Advisors will continue to update you on COVID-19 events and other related matters as they develop.  Have a nice and relaxing weekend.