Senate Bill S4660

                                 
BILL NUMBER: S4660

SPONSOR: SKOUFIS
 
TITLE OF BILL:

An act to repeal section 36, subsection (tt) of section 606, and
subsection (bb) of section 1511 of the tax law and subdivision 3 of
section 425 of the economic development law relating to the empire state
jobs retention program credit

 
PURPOSE:

This bill repeals the Empire State Jobs Retention Program credit

 
SUMMARY OF PROVISIONS:

Section 1: Repeals Section 36 of the tax law

Section 2: Repeals Subdivision 3 of section 425 of the economic develop-
ment law.

Section 3: Repeals Subsection (tt) of section 606 of the tax law.
              

Section 4: Repeals Subsection (bb) of section 1511 of the tax law.

Section 5: Sets effective date.

 
JUSTIFICATION:

According to Empire State Development's website, the Empire State Jobs
Retention Program was created to "provide financial incentives to retain
strategic businesses and jobs that are at risk of leaving the state due
to the impact on business operations from a natural disaster." The
program is open to businesses in strategic industries that operate in
counties where the Governor has declared an emergency. Eligible busi-
nesses can receive a refundable tax credit of 6.85% of wages for each
impacted job they retain.

Since its inception in 2013, the Empire State Jobs Retention Credit has
awarded approximately $72 million in awards to retain an average of
approximately 1,800 jobs per year. In addition to retaining jobs, the
program encourages the creation of new jobs. All told, the credit has
cost taxpayers $72 million to retain 1,800 positions year to year -
$40,000 to retain each worker.

A 2024 independent analysis commissioned by the Department of Tax and
Finance under the Fiscal Year 2022-23 Enacted Budget further underscores
the program's inefficacy. The report found that utilization has been
extremely low, likely due to restrictive eligibility requirements. Since
the program's launch, only three companies have been accepted, with just
two still actively using the credits. Additionally, comparable credits
do not exist in other states, suggesting that this type of incentive may
not be necessary or effective.

 
LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS:
Savings to the State

 
EFFECTIVE DATE:
This act shall take effect on the first of January next succeeding the
date on which it shall have become a law and shall apply to taxable
years beginning on or after such date. Effective immediately, the addi-
tion, amendment and/or repeal of any rule or regulation necessary for
the implementation of this act on its effective date are authorized to
be made and completed on or before such effective date.