Grants eligibility for the economic transformation and facility redevelopment program tax credit to certain state psychiatric centers with decommissioned or surplus land

Section 2 amends § 400(10)(d) of the Economic Development Law to provide that with respect to a closed facility described in paragraph (d) or (e) or subdivision eleven of this section, the economic transformation area shall consist only of the acreage of the closed facility.

Section 3 amends § 400(11)(d) of the Economic Development Law to add to the definition of closed facility a facility that is currently operated as a psychiatric center pursuant to § 7.17 of the Mental Hygiene Law, where at least three-fifths of the total acreage of such facility has been designated by the Commissioner of Mental Health as decommissioned or surplus, including the buildings thereon.

Section 4 amends § 402(1) of the Economic Development Law to provide that a business entity must submit a completed application as prescribed by the commissioner pursuant to specific deadlines, provided however that in the case of a closed facility as described in § 400(11)(d) and newly created paragraph (e), a business entity must submit a completed application as prescribed by the commissioner by September 1, 2016.

Section 5 amends § 35(h)(1) of the Tax Law to provide that a taxpayer which meets the requirements in this section shall be eligible to claim a credit on qualified investments with respect to the project for which the certificate of eligibility is issued The credit shall be equal to 10% of the cost of other bases for federal income tax purposed of the quailed investment at a closed facility, provided that the taxpayer that is the owner of the closed facility as described in the amended § 400(11) of the Economic Development Law shall be allowed to include in its cost or other basis of the qualified investment at the closed facility, any demolition costs incurred at such closed facility.

Section 6 is the effective date.

Existing law

§ 400 of the Economic Development Law provides the definitions for the Economic Transformation and Facility Redevelopment Program.

§ 402 of the Economic Development Law provides the application and approval process of the Economic Transformation and Facility Redevelopment Program.

§ 7.17 of the Mental Hygiene Law provides the programs, services, and operation of facilities in the Office of Mental Health. § 35 of the Tax Law provides the Economic Transformation and Facility redevelopment program Tax Credit. This bill adds the new definition of closed facility to the credit.

This bill seeks to adds to the definition of closed facility for the purposes of expanding the Economic Transformation and Facility Redevelopment Program facilities that are currently operated as a psychiatric center, as defined by the Mental Hygiene Law, where at least three-fifths of the total acreage of such facility has been designated by the Commissioner of Mental Health as decommissioned or surplus, including the buildings thereon.

Justification

The Economic Transformation and Facility Redevelopment Program includes a series of wage and tax credits designed to entice new businesses to locate, expand and grow, utilizing formerly occupied state facilities. Initially aimed at redeveloping former prisons and juvenile detention facilities, the program was expanded in the SFY 2016-17 State Budget to also include certain former psychiatric hospitals with the goal of reviving these facilities into thriving economic engines of job creation.

Meantime, in communities across New York, the state continues to operate psychiatric facilities, but on a much smaller footprint than originally planned for these purposes. The result is hundreds or thousands of vacant acres and buildings that are not being used, and with no plans for their reuse, yet they remain under state control, and off local community tax rolls. Many of these facilities are located in economically distressed communities.

For example, the St. Lawrence Psychiatric Center, located in Ogdensburg, continues to provide world-class medical care for hundreds of patients each year, and remains an important part of New York's fabric of mental health care, but utilizes a fraction of the land and buildings on the center's more than 422-acre campus.

Recently, the Legislature has recognized the value of releasing some of the unused land and derelict, abandoned buildings at St. Lawrence Psychiatric Center for possible redevelopment, and passage of this measure would enhance efforts to remove and redevelop blighted buildings, and transform communities by triggering revitalization efforts that can attract new economic activity and job creation.

Legislative history

New bill.

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately, provided that the amendments to sections 400 and 402 of the economic development law, made by sections one, two, three, and four of this act, and section 35 of the tax law, made by section five of this act, shall not affect the expiration and repeal of such sections and shall be deemed repealed therewith.