Overview of FY 2010 Executive Budget Empire Zone Program Amendments 12/29/08

Staff Contact: Ken Pokalsky

The proposed NYS Executive Budget for Fiscal 2010 includes dramatic changes to the Empire Zone program that, if adopted, would significantly affect current program participants and limit new business certifications. Key provisions are summarized below.

Click on these links for the Administration's bill memo and bill text related to these Empire Zone amendments.

We look forward to your input as we assess these proposals, and hope that you can remain involved in our advocacy efforts in response to these and other budget issues.


During 2009, all businesses certified prior to 4/1/05 will be required to show at least 20 to 1 ratio of wages and benefits paid and capital investments at their QEZE sites versus empire zone tax credits used at such sites. This one-time test will apply to all tax years for which the company has been certified since 2001. If a business exceeds this threshold, they will receive a benefit retention certificate. If not, they will be decertified, and will be ineligible for additional QEZE credits, and will be precluded from carrying forward any QEZE credits earned in prior tax years. Decertification will apply to tax years beginning on or after 1/1/08. The Commissioner has discretion to continue certification for businesses that fall below 20:1 based on “other economic, social and environmental factors.” A business can appeal a decertification to the Commissioner, showing either they meet the threshold, or that “extraordinary circumstances” have prevented it from meeting the threshold.

New Certifications

As of 4/1/09, new QEZE certification will be limited to manufacturing and financial service enterprises, and to “extraordinary projects,” with each category to be defined in regulation. Criteria for “extraordinary projects” will include substantial job creation/retention; substantial capital investment; degree of exports; and other factors. To be newly certified, a company will have show an estimated 20 to 1 ratio of wages/benefits/investments to zone tax credits for the first 3 years after certification, and document achievement of that ratio after three years in the program. Companies in these categories are eligible for benefits regardless of whether they are located within previously designated zone boundaries, and would be treated as if they were in an “investment zone,” for purposes of calculating the QEZE real property tax credit.


In addition to the new 20:1 cost/benefit threshold discussed above, existing criteria for decertifying QEZEs would be modified to:

Other Provisions


The Administration has said that between one quarter and one half of currently certified QEZEs could lose decertified under this proposal. The Administration is projecting $272 million in savings for Fiscal 2010