Legislative Report from the
NYS Assembly Committee on
New York’s aging cities and other communities have numerous residential and commercial properties that have fallen into disrepair and are no longer structurally viable. This has resulted in blighted and unstable neighborhoods with extensive vacant and abandoned structures. This, in turn, has led to the loss of jobs and population to suburban areas and areas outside the region and State. As a result, municipal tax bases have been eroded and compromised as the assessed value of property declines.
In response to these conditions, the Assembly proposed the Restore New York’s Communities Initiative. This proposal was enthusiastically embraced by the Senate, which joined the Assembly in its passage. The legislation creates two programs: the Demolition and Deconstruction Program and the Rehabilitation and Reconstruction Program.
In order to participate, municipalities will be required to assess and list their vacant, abandoned and deteriorated properties for which funding is being sought. Empire State Development Corporation (ESDC) will consider applications for grants of up to $20,000 per residential structure for demolition and deconstruction and up to $100,000 per residential structure for rehabilitation and reconstruction.
The amount of funding available for the demolition, deconstruction, rehabilitation and reconstruction of commercial properties will be established by ESDC based on a cost-per-square-foot basis with a consideration of regional cost differences. The Rehabilitation and Reconstruction Program will also provide funding for site development which may include water, sewer, parking and other cost associated with making improvements to distressed properties.
Municipalities that seek funding for these activities will be required to provide a 10% match. This requirement can be met through either financial or in-kind contributions, including grants from federal, other State or local entities.
Priority for funding will be given to properties that are included in Brownfield Opportunity Areas (BOAs), Empire Zone Development Plans, and other State and federal redevelopment, remediation or planning programs. Priority will also be given to properties in economically distressed communities which will be defined by the Commissioner of the Department of Economic Development on the basis of poverty, unemployment, the number of individuals receiving public assistance, population loss, negative changes in per capita income, and other factors.
Funding for the program is as follows: $300 million over three years at $50 million in SFY ’06 – ’07, $100 million in SFY ’07 – ’08, and $150 million in SFY ’08 – ’09.
ESDC has established a maximum award of $5 million per municipality for the first round of funding this year and expects to announce funding awards by mid-October.
Additional information and may be obtained from the ESD Web site: www.nylovesbiz.com.
New State Budget Contains Tax Cuts
In addition to rejecting every one of the Governor’s $1.5 billion in new or increased taxes and fees that he proposed for the 2006-07 state budget, the bipartisan budget enacted by the State Legislature included an array of income, business and sales tax reductions that will provide a total of $4.1 billion in tax relief for New Yorkers when all the cuts are fully effective in two years. Also, several tax cuts were passed as separate legislation and were signed into law this year.
Gas Tax Cap – Converts the state sales tax on motor fuel into a flat eight-cents-per-gallon tax, effectively reducing the state tax on gasoline and diesel fuel, and allows localities to similarly reduce their taxation of motor fuel sales.
Vendor Allowance – Increases the sales tax vendor credit, which compensates retail establishments for collecting and remitting state and local sales taxes.
S-corporations – Eliminates the Subchapter S differential tax, a burdensome method of taxing small businesses organized as Subchapter S corporations.
Bio-Fuel Production – Provides a tax credit to manufacturers of qualified bio-fuel products, such as ethanol and bio-diesel.
Brownfields – Extends enhancements to the brownfield clean-up program’s tax incentives scheduled to expire this year for four additional years to encourage the redevelopment of underutilized and contaminated sites.
Land Conservation – Helps preserve open space within the state by allowing landowners who donate land to a conservation agency through a conservation easement a tax credit for the property taxes paid on the easement.
Sales Tax Exemption – Gives counties the option of exempting clothing and footwear up to $110 from sales tax, as the state does.
Alternative Fuels – Exempts certain alternative fuels, such as E85, B20, CNG and hydrogen from motor fuel and sales taxes, and extends Empire Zone benefits to qualified clean energy enterprises.
Amusement Parks – Makes the sales tax exemption for admission charges to amusement parks permanent.
Low Income Housing – Increases the aggregate amount of low income housing tax credits from $8 million to $12 million in 2006.
Film Production – Extends the Empre State Film Production Credit to January 1, 2012, and increases the annual allocation of tax credits to $60 million.
Commercial Production – Creates an annual credit for qualified commercial productions in New York State.
Historic Properties – Provides a corporate carryover credit for rehabilitating a historic property of 30 percent of the federal credit up to $100,000 and provides a carryover credit of 20 percent of qualified expenditures capped at $25,000 per property per taxpayer for rehabilitating an eligible historic home.
Property Tax Relief – Provides taxpayers an annual, advance personal income tax rebate, equal to roughly 30% of a homeowner’s STAR benefit, for their school property taxes.
Marriage Penalty – Eliminates the personal income tax marriage penalty by increasing standard deductions for married couples.
Empire State Child Credit – Creates a refundable child tax credit equal to 33 percent of the federal child tax credit, or at least $100 per child, for parents with school age children aged 4 to 17.
Volunteer Firefighters – Establishes a new $200 income tax credit for volunteer firefighters and emergency personnel who don’t receive a local property tax exemption.
National Guard – Provides a tax deduction for military pay earned by members of the New York National Guard activated by the federal government to combat terrorism in New York State.
Energy Efficiency – Creates an income tax credit for the purchase of energy efficient residential home heating systems equal to 50% of the purchase and installation costs up to $500.
Significant Legislation That Passed the Assembly
Military Reservists – Provides loans of up to $150,000 to small and medium-sized businesses that have been adversely affected by the loss of an owner, manager or key employee who has been called up on active military duty. (Law – Chapter 164)
Power for Jobs – Extends the Power for Jobs Program and the Economic Development Power Program, which provide reduced-cost power to eligible employers, through June 30, 2007. (Law – Chapter 645)
Alcohol Vaporizing Devices – Prohibits the sale of alcohol without liquid, or “AWOL,” devices in New York State and the possession of such devices by any Alcoholic Beverage Control Law licensee. (Law – Chapter 172)
Radioactive Materials – Would prohibit the sale or distribution of radioactive secondary waste materials in the state. (Veto #248)
Indoor Pyrotechnics – Prohibits indoor fireworks or pyrotechnic displays without a valid permit in premises licensed for on-premises consumption of alcoholic beverages. (Passed by Both Houses, Awaiting Gubernatorial Action)
Installment Payments – Would allow small businesses to make installment payments for fees or civil penalties owed to state agencies. (Veto #343)
State Register – Increases public access to government by allowing comment on proposed regulations published in the State Register to be made by electronic mail. (Law – Chapter 230)
Workplace Postings – Requires anyone selling printed material that is required to be posted under Federal or State labor laws to provide notice that such documents are available free from the government office having jurisdiction over the required notices or postings. (Law – Chapter 623)
Industrial Development Agencies – Extends expiring provisions of the law related to IDAs to July 1, 2007, including the authorization for IDAs to finance certain projects. (Law – Chapter 142)
Bioinformatics and Life Sciences
Creation of a promising life-sciences industry and economy for the Buffalo Niagara region took a huge step forward in June as a ribbon-cutting ceremony marked the opening of the Buffalo Center of Excellence in Bioinformatics and Life Sciences in Buffalo’s growing downtown medical campus. The Buffalo Center is one of five Centers of Excellence statewide focusing on different, critical emerging high-tech fields.
The Center, a state initiative bringing together the University at Buffalo, Roswell Park Cancer Institute, and the Hauptman-Woodward Medical Research Institute in a new three-building interconnected complex, will produce a unique and powerful combination of state-of-the-art labs, technologies and research expertise aimed at fostering advances in science and health care. And with its emphasis on collaboration and commercialization, the Center creates the framework to bring scientific discoveries quickly from lab to market.
Total investment in the Bioinformatics and Life Sciences Center is now nearly $320 million, including $120 million in corporate partner investments, $27.5 million in federal dollars and $30 million in foundation grants. The Center’s impressive list of private sector partners include; Hewlett-Packard, General Dynamics, Dell, Stryker, Informax, Pfizer, Invitrogen Corporation, Cognigen, TATA Corporation, HealthCare Tech Inc., General Electric, Bristol Meyer Squibb, Corning and IBM.
The opening of the Center will, at very least, bring new research, technical and support staff positions to Western New York. Employment at the Center of Excellence is expected to grow to 500, with many additional private sector jobs created in the region.
Bioinformatics is an emerging science field that uses high-performance computing to analyze biological data, and is seen as a major platform for drug discovery and modeling and other biotechnology research efforts. By bringing together talented researchers from related scientific disciplines in an environment that fosters collaboration and innovation, the Center will focus its resources on developing new treatments for serious and complex diseases. In turn, these medical breakthroughs can then be transferred for commercialization to new and existing companies in Western New York, hopefully resulting in a large pipeline of medical treatments and devices coming out of the region and creating new jobs locally. Several new, home-grown companies already have been spun off from the Center, including Pneuma Partners, which makes drugs for respiratory illnesses, and Empire Genomics, which provides testing for genetic abnormalities.
Working in teams, Centers of Excellence scientists will target four disease areas: cancers, such as melanoma and lung cancer; inflammatory diseases, such as diabetes and cardiovascular disease; neurodegenerative diseases, including Alzheimer’s, stroke and multiple sclerosis; and infectious diseases, including pandemics. Other research teams will focus on pharmacotherapy, nanomedicine, tissue engineering and population health genetics.
In addition, the Center of Excellence will be home to the new Hunter James Kelly Research Institute, focusing on research into Krabbe Disease, the fatal nervous system disorder that affected the late son of former Buffalo Bills quarterback Jim Kelly and his wife, Jill, and other leukodystrophies.
With the opening of the Buffalo Center of Excellence in Bioinformatics and Life Sciences the doors of opportunity and progress for the Buffalo Niagara region are now open, and a new march toward lifesaving and life-enhancing medical advances has begun.
MARKING PROGRESS. Chairman Schimminger and Tonawanda officials marked the beginning of demolition this summer at the abandoned Spaulding Fibre plant in the City of Tonawanda. The Assemblyman recounted the state’s critical role in the ongoing environmental clean-up and recently begun demolition of the long-shuttered industrial facility. Once cleared, redevelopment possibilities for the 47-acre site will be enhanced by its location in the state-designated Town of Tonawanda Empire Zone. Schimminger had encouraged town and city officials to collaborate across municipal lines and include the property within the town’s zone.
Economic Development Budget Highlights
The Standing Committee on Economic Development, Job Creation, Commerce and Industry has purview over many areas of the New York State Budget. These areas include the agency budgets of the Urban Development Corporation (UDC), the Department of Economic Development (DED), and the New York State Office of Science, Technology and Academic Research (NYSTAR) now officially established as the Foundation for Science, Technology and Innovation. In SFY 2006-2007, the Legislature, after negotiating changes to the budget adopted prior to April 1, fully funded the following programs at the UDC: Jobs Now ($32.1 million), Empire State Economic Development Fund ($32.3 million), Urban and Community Development Program ($3.5 million), and Minority and Women Business Development and Lending Program ($3.5 million). Funding for the MWBDL program will be sub-allocated as follows: the Entrepreneurial Assistance Program Centers ($1.3 million) and Community Development Financial Institutions ($1.5 million). The Legislature also approved funding for the operating expenses of the Centers of Excellence program, including $1.4 million for Buffalo’s Center of Excellence in Bioinformatics and Life Sciences. In addition, $100,000 was included for infrastructure and other improvements at the Niagara Falls Air Force Base.
At DED, the Legislature provided $2.3 million for Empire Zone Administrators to help municipalities hire qualified staff to run the local operations associated with the Empire Zone Program. An additional $500,000 was provided to the Entrepreneurial Assistance Program Centers. At NYSTAR, the following statutory statewide programs were fully funded: Centers for Advanced Technology ($15 million), Technology Development Organizations ($2.5 million), and the High Technology Matching Grants program ($5 million).
Funding for these programs continues our commitment to improve the Upstate economy and to create the high value jobs of the Twenty-first Century.
Public Hearings on Alcoholic
In keeping with its mandated responsibility to provide oversight and analysis, the Committee conducted two public hearings recently regarding the enforcement of Alcoholic Beverage Control Laws. The first was on September 20th, 2005 in Albany. This hearing focused on the retail and wholesale segments of the alcoholic beverage industry and on the extent to which the State Liquor Authority (SLA) has effectively monitored and enforced the laws regulating these segments of this important industry. The Committee questioned SLA officials regarding reports of abuses in the pricing of alcoholic beverages and its enforcement of laws dealing with the operation of problem on-premises retail establishments. Testimony revealed that the Authority is greatly understaffed and, consequently, needed to focus on more serious problems in the industry, rather than minor violations that simply raise revenue.
As a result of the hearing, the Committee fought for, and was instrumental in achieving, an increase in the number of enforcement officers. Nine positions were added to the existing 28, increasing the number to 37 enforcement officers.
The second hearing was conducted on May 5th, 2006 in New York City. This hearing focused on the issues of problem on-premises retail establishments and the over-saturation of on-premises establishments in New York City. The Committee heard testimony from all the stakeholders, including community residents and on-premises licensees, and will weigh various options that will attempt to improve the quality of life in the affected neighborhoods, particularly Lower Manhattan, while continuing to encourage appropriate economic development in the same neighborhoods. The Committee is considering greater involvement of local governments as a part of any solution to these vexing problems.
Border Passport Plan Imperils
Upstate New York’s ability to profit from cross-border international trade and tourism stands to be seriously hurt by the federal government’s current plan to require a passport or passport-type ID card for all who cross the U.S.-Canada border beginning January 1, 2008. The easy border-crossing Upstate New Yorkers and visitors to the region now take for granted could become just a fond memory if new ID requirements turn even a single family day trip into an expensive proposition entailing documentation – even for infants – that must be applied for and paid for well in advance.
As part of the Intelligence Reform and Terrorism Prevention Act of 2004, the U.S. Congress established the Western Hemisphere Travel Initiative (WHTI) which imposes these costly identification requirements for everyone, including U.S. citizens, entering or reentering the U.S. from Canada, Mexico, Bermuda, the Caribbean or Central and South America. These requirements are currently set to apply to air and sea travel this coming January and to land border crossings a year later.
Canada is New York State’s largest export market, with more than $30 billion worth of goods exchanged annually. New York’s worldwide exports that are sold to Canada account for more goods than our next three export markets combined. And the New York-Canada partnership boasts the largest bilateral tourism industry in North America, with residents from both places accounting for an average of more than 11,000 visits per day. Any confusion or delays at our border crossings – real or perceived – could cause billions in economic damage in cross-border communities like those in Western and Northern New York.
Many in New York State’s congressional delegation are working with their colleagues from other northern border states to delay implementation of the ID requirement so that new technologies, infrastructure and procedures can be integrated into a better “smart border” solution. As co-leader of the bipartisan, bicameral Western New York state legislative delegation, I have worked to coordinate bi-national efforts with our Canadian provincial counterparts in Ontario. I authored a legislative resolution adopted by both the Assembly and the Senate calling on Congress and the President to delay WHTI until the Department of Homeland Security and the Department of State get it right. I am also working with public officials from other northern border states and Canadian provinces to convince Washington officials that, while we all share a commitment to border security, the passport plan is far from the best way to achieve it.
State Targets Aid to Manufacturers
A new state initiative modeled on an Assembly proposal first outlined in our 2004 NY@Work economic development agenda will provide grants of up to $1 million each to eligible manufacturing companies. The Manufacturing Assistance Program (MAP) reflects the importance of the manufacturing sector, structures funds to assist it in more effectively meeting competition from around the world, and helps safeguard manufacturing jobs for New Yorkers.
By encouraging New York manufacturers to make investments that improve the output, productivity and long-term competitiveness of their facilities, MAP is targeted to a sector of the state’s economy made up of nearly 20,000 enterprises that directly employ approximately 600,000 workers. Each job further supports about 2.4 additional jobs in the surrounding economy, making the indirect employment benefit of manufacturing about 1.4 million positions.
Manufacturing generally provides higher paying jobs, and tends to import wealth into a region by exporting products outside of it. New York State manufacturers eligible for MAP funding must employ at least 50 people and export at least 30% of their production beyond the immediate region, or supply at least 30% of their production to a prime manufacturer that, in turn, exports beyond the region.
Eligible projects must include investments of at least $1 million in machinery and equipment, and may also include building and infrastructure improvements, changes in manufacturing process or layout, and worker training, to the extent that those contribute to the resulting enhancements to productivity and production.
Awards, which can be up to $1 million, will be based on quantifiable improvements in competitiveness and productivity and overall benefit to the manufacturer and the regional economy.
For more information, contact Empire State Development (the N.Y.S. Department of Economic Development) at 800-STATENY or 518-292-5340 or the ESD website at www.nylovesbiz.com.
Empire Zone Changes
The Legislature approved changes to the Empire Zones program that create two new types of projects that would be eligible for expanded Empire Zone benefits:
Empire State Development Corporation can require that certain conditions be met in order to ensure an economic contribution to the state. They are also authorized to recommend recapture of certain tax benefits if job creation goals are not met. Applications must be made by December 31, 2007.
The Legislature also approved changes to the program that will allow companies that were certified for the Empire Zones program between August 1, 2002, and March 31, 2005, and are subject to “brownfield” site clean-up agreements executed prior to January 1, 2006, to be subject to a different employment test for the purposes of calculating certain tax benefits.
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