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.