Relates to applications under the economic transformation and facility redevelopment program

BILL NUMBER:S7397

Title of bill

An act to amend the economic development law, in relation to application under the economic transformation and facility redevelopment program

Purpose

To ensure that communities which intend to convert correctional and juvenile justice facilities into business and industrial parks have a meaningful opportunity to participate in the tax incentive program which was created in 2011.

Summary of provisions

Section 402(1) of the Economic Development Law is amended 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 law sets a deadline of the later of three years after the closure of the facility or January 1, 2015. This bill would also allow applications until four years after the date that the title to a closed facility is transferred from the state to a county or municipality but no later than 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 vulner- able communities.

Part V of Chapter 61 of the Laws of 2011 added Article 18 to the Econom- ic 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.

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 three years after the facili- ty's closure or January 1, 2015, whichever is later.

However, the redevelopment process has been hindered in some areas because of delays in transferring the title to the affected properties. 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. To address the delays involved in transferring properties, this bill would extend the period of time in which eligible businesses may apply for tax credits in those communi- ties.

Fiscal implications

This bill extends for a few additional years the availability of the tax credit program for those communities where a local government is taking possession of the property.

Effective date

Immediately.