Relates to extending the date of the application and approval process for the economic transformation and facility redevelopment program

BILL NUMBER:S7329

Title of bill

An act to amend the economic development law, in relation to extending the date of the application and approval process for the economic transformation and facility redevelopment program

Purpose

To honor the State's commitment to help local communities affected by the 2011 closure of correctional facilities and juvenile justice facilities by allowing a meaningful opportunity to utilize the tax credit program which offers incentives for job creation and local investment.

Summary of provisions

Amends Section 402(1) of the Economic Development Law to extend the deadline by which a business entity must apply for tax credits for locations within an Economic Transformation Area for a recently closed correctional facility or juvenile justice facility. The current deadline of January 1, 2015 would be extended to January 1, 2018.

Justification

In 2011, several correctional facilities and juvenile justice facilities throughout the state were closed. As part of the 2011 State Budget, the Governor and Legislature agreed to measures to try to ameliorate the impact of the closures and promote economic development in these vulnerable communities.

Part V of Chapter 61 of the Laws of 2011 added Article 18 to the Economic Development Law, entitled the Economic Transformation and Facility Redevelopment Program. This legislation offered tax benefits for the redevelopment of the closed facilities and the economic transformation of the surrounding communities.

However, the 2011 law set a deadline by which new businesses which locate within a designated economic transformation area must apply for participation in the tax credit program. The deadline is the later of three years after the facility's closure or January 1, 2015.

Unfortunately, given economic conditions and delays in converting facilities, it is taking longer than anticipated in some communities to begin the redevelopment process. For example, one county is planning to convert a closed juvenile justice facility into a technology park and business incubator. However, it took until January 2014 before the property was legally transferred from the State to the county. Only then could the county begin to undertake the necessary infrastructure work to convert the site into a business park. Because of these delays, the tax credit program will be on the verge of expiring by the time the community is ready to start marketing the site.

These communities were promised assistance to help them recover from the loss of state facilities and needed local jobs. It is important to provide these communities with a realistic and meaningful opportunity to actually utilize these programs. This bill would extend the period of time in which eligible businesses may apply for tax credits.

Fiscal implications

This bill simply extends the availability of the tax credit program, and does not change any of the other parameters of the program. The State has spent far less than anticipated over the

past few years because of the delays and under-utilization of the program.

Effective date

Immediately