The Senate Majority has proposed a major expansion of the state's "Empire Zone" program, which makes specified regions eligible for tax credits and other economic development incentives.
The Senate plan, which was announced Feb. 27, would expand all of the 52 existing Empire Zones and create 14 new ones.
"The Empire Zone program has proven to be a very effective way to encourage economic development in certain locations," Senate Majority Leader Joseph Bruno said. "By providing additional incentives to locate in these zones, we attract new jobs to strengthen the economies of many urban and rural communities and we encourage growth in small and large businesses."
"Empire Zones have proved their worth as an effective tool for economic development and job creation," said Business Council President Daniel B. Walsh. "The Senate's proposal to increase their size and number will make them even more powerful."
Proposal details: The Senate plan has an estimated value of $350 million in tax credits and other incentives. Specifically, it would:
- Expand all 52 existing Empire Zones from a maximum of two square miles to a maximum of four square miles. All upstate zones would be expanded immediately; expansions of the 15 zones in the downstate Metropolitan Transportation Authority region would be phased in. All expansions would be subject to local approval.
- Create 14 new Empire Zones. The Senate plan would add Empire Zones for all 14 communities that have already completed applications and been prequalified for zones.
- Establish eight GEN*NY*SIS zones as part of the Senate's proposed GEN*NY*SIS program. These zones would offer additional incentives to attract job growth in biotechnology. The Senate's GEN*NY*SIS proposal, which was announced last December, calls for a new investment of $500 million in public and private funds in several initiatives designed to attract biotechnology-related intellectual and economic growth in New York.
Senator Bruno also said the Senate would also explore the possibility of authorizing creation of new Empire Zones in the 16 counties that would not have a zone after the proposed new zones are added. Those counties either do not quality for a zone or have not requested one.
Senator Bruno noted that several recent economic-development successes were made possible by Empire Zone benefits. These include IBM's decision to make the largest ever private-sector investment in state history in the East Fishkill zone by building a $2.5 billion chip-fab plant and creating 1,000 new jobs.
History of the Zones: In 1986, New York State created Economic Development Zones in which various incentives made economic growth more attractive. Expanding the program was a major part of the Assembly's tax-cut proposal last year, and the conversion of Economic Development Zones to stronger Empire Zones was approved by the Senate, Assembly, and Governor Pataki in 2000.
Empire Zone benefits: Businesses that locate in Empire Zones receive a significant reduction in taxes through a wide range of tax credits on things such as wages, capital investment and property taxes. Currently, communities can establish zones in a single location or subdivide the zone to encourage development different locations within the community.
How Empire Zones work: Empire Zones are areas in the state that have been made eligible for special incentives to encourage economic development. Empire Zones can become virtual tax-free areas for start-ups and newly attracted businesses to New York State. The zones are located in economically challenged areas, mostly urban and rural.