Relates to certification and decertification of businesses as empire zone enterprises; repealer

6 Co-sponsors

• Darrel J. Aubertine
• Neil D. Breslin
• Ruben Diaz
• Craig M. Johnson
• Antoine M. Thompson
• David J. Valesky

Title of bill

An act to amend the general municipal law, in relation to certification and decertification of businesses as empire zone enterprises; and to repeal certain provisions of the tax law relating to the carryover of certain tax credits and tax refunds of certain tax credits

Purpose of the bill

This bill clarifies changes made to the Empire Zone Program during the creation of 2009-2010 State Budget.

Summary of specific provisions

This bill would: Clarify that companies that have more than one Empire Zone location shall be reviewed in the aggregate when performing the newly established decertification tests;

2. Establish that grounds for decertification as a result of new ownership shall only occur when the change of ownership results in the new entity having a different tax identification number;

3. Clarify that decertification shall take place for tax years beginning on or after January 1, 2009;

4. Clarify that companies that switched their tax identification number in 2002 and prior shall not be decertified if they pass the cost benefit ration test established for all businesses, and;

a. have wages, benefits and investments on their new employment greater than Empire Zone tax benefits received from the State; or,

b. have wages, benefits and investments for their new employees greater than $30 million;

5. Eliminates provisions requiring business to obtain retention certificates for Empire Zone credits, carryovers and refunds to conform with the elimination of retroactive look back provisions.

Existing law

This bill clarifies amendments made to the Empire Zone Law in the 20092010 State Budget.

Justification

The recent changes to the Empire Zone program were intended to remove companies that are not performing to the desired standards of the State, however such amendments impacted companies that are performing very well for the State and the economy. Additionally, making such changes to be retroactive to the 2008 tax year will hurt our economy and hinder our recovery from the current economic downturn. Therefore this bill would make such decertification effective for the 2009 tax year. In doing so, provisions related to various sections of the Tax Law which required businesses to obtain a retention certificate to receive Empire Zone tax credits were repealed.

The recent changes to the Empire Zone program are to dramatic to take place without any warning issued to the business community. The changes in this bill will help continue the positive economic development benefits that the Empire Zone program creates for New York's business.

Prior legislative history

This is a new bill

Fiscal implications

$90 million for fiscal year 2009-2010. To be determined for future years.

Local fiscal implications

To be determined

Effective date

Immediately