"Terrorism destroyed buildings, but it failed to shake our resolve and pursuit of liberty. We will answer the terrorists by making New York City and our state more dynamic than ever before."

ROBIN SCHIMMINGER
Chairman, Committee on
Economic Development

Dear Friend,

The horrific events that took place on September 11th affect us all. As the World Trade Center collapsed, it sent a shockwave across our state and country. But as we grieve our losses, we draw inspiration from the heroic police officers, fire fighters, and emergency workers who epitomize the strength, courage and perseverance of our nation.

New Yorkers must now show their fierce resolve by proving we will not allow these attacks to change the way we live our lives. That is why we went right to work to begin addressing the fiscal challenges caused by these terrorist attacks — in particular, the challenges now facing our business community. The Assembly has designed a disaster relief package that would provide assistance to affected businesses through grants, low-cost loans and tax incentives.

The Assembly was also successful in assisting businesses across the state by expanding its Empire Zones program to provide tax relief to more job-creating businesses. And in spite of shrinking state revenues, the Assembly will work hard to ensure that the business tax cuts we have enacted remain intact. Through a combined effort from the state and federal governments, New York will overcome these hardships to emerge stronger and more prosperous than before.

Manhattan plays a central role in the state’s — and the nation’s — economy. In fact, before the September 11th attack, jobs in Manhattan below 14th Street alone accounted for 14.9 percent of the state’s total wages. It is critical for the prosperity of the entire state that we work to retain and expand lower Manhattan’s status as the financial capital of the world.

To stabilize and restore this vital area of New York, the Assembly introduced a disaster relief package that includes legislation to create a Lower Manhattan Resurgence Authority (A.9465), with broad powers to plan and finance efforts to rebuild the area devastated by the attack on the World Trade Center. The authority would be able to:

issue "Rebuild New York" bonds and provide significant tax incentives to help attract and retain businesses in the financial district and the state;

restore and upgrade the infrastructure at Ground Zero;

improve security; and,

offer grants and low-cost loans to affected businesses as well as worker training grants to businesses that lost employees.

The legislative package builds on the newly created lower Manhattan Liberty and Resurgence Zones, which provide Ground Zero businesses with significant tax relief. The zones are modeled after the Assembly’s successful Empire Zones program, which creates virtually tax-free zones to create and retain jobs in struggling areas of the state.

The Assembly passed legislation in October that will help bolster the state’s economy and create jobs, improve the state’s long-term financial outlook, and begin to address the fiscal challenges presented by the September 11th terrorist attacks.

The plan includes a $100 million economic development package to stimulate the state’s economy, including:

$69.5 million for traditional economic development programs, such as grants and loans to businesses;

$10 million for high-tech and bio-tech initiatives;

$10 million for the creation of a Liberty Zone and a Resurgence Zone that will encourage redevelopment of lower Manhattan;

$6.1 million for tourism promotion through the "I Love New York" marketing campaign; and,

$4.4 million for business marketing and international trade promotion, which will increase investment in New York and create business opportunities for New York companies.

The Assembly also expanded its successful Empire Zones program by increasing the number of new zones to be created in the current designation round from six to 14. Empire Zones are virtually tax-free areas designed to attract businesses and jobs to struggling areas of the state. In November, the state’s Empire Zone Designation Board, of which Assemblyman Schimminger is a member, voted to create a new zone in the Town and City of Tonawanda, and earlier this month voted to create a new second zone in Buffalo. The other new zones designated so far are Hornell/Corning, Cortland County, Sullivan County, Staten Island, Columbia County Monroe County, Saratoga County and Warren County, bringing the total number of Empire Zones in the state to 62.

Other provisions of the economic package include:

an Upstate Tourism Council initiative, dedicated solely to promoting and expanding tourism upstate, which will include the establishment of a state-of-the-art tourism center at the expanded Carousel Center mega-mall in Syracuse; and,

a measure directing the New York Power Authority (NYPA) to safeguard 80 megawatts of low-cost electricity, which had been reserved for use at the World Trade Center, for businesses relocating elsewhere in lower Manhattan due to the destruction of the World Trade Center complex.

Please contact the committee with any name/address changes, or if you received more than one copy of this report. Send changes to:

The award-winning Linked Deposit Program (LDP) has been made permanent. LDP leverages low-cost loans to businesses to improve their performance and competitiveness from participating banks that agree to accept a lower rate of return on state deposits. Additionally, as businesses in distressed areas are eligible for an even lower interest rate, the definition of distressed area has been conformed to the most recent census and property wealth data to ensure that the enhanced benefit reaches the companies which need it most (Chapter 14, Laws of 2001).

As of September 19, 2001, the Commissioner of Taxation and Finance is now required to notify taxpayers if they have overpaid taxes and give them 120 days to make a claim for a refund (Chapter 307, Laws of 2001).

A new law passed by the Assembly will require all state agencies to develop on-line Internet privacy disclosure policies. Information that is intended for transactions of a personal and confidential nature must be private and should be accessible by the intended receiver only. Eliminating privacy concerns will promote the use of the Internet. (Chapter 578, Laws of 2001).

The Assembly passed a law that will allow two or more municipalities to work together to establish a business improvement district — helping communities work together more cooperatively and creatively to attract businesses (Chapter 328, Laws of 2001).

The Assembly enacted a new statute consolidating state programs that aid waterfront development efforts in coastal areas, while also including inland waterways, encouraging inter-municipal agreements and providing technical assistance to local governments (Chapter 454, Laws of 2001).

It is evident that New York is facing some difficult financial challenges in the aftermath of September 11th. Fortunately, the $1.8 billion in previously enacted state tax cuts aproved by the Assembly that were scheduled to take effect in the 2001-02 state fiscal year will remain in place to act as a positive influence on the economy. Further reductions in these and other taxes are scheduled to take place in the future.

Manufacturers and industrial energy consumers have been saving money since January 2000 through the elimination of the Gross Receipts Tax (GRT). Commercial customers will continue to benefit from the phased elimination of the GRT on their energy bills, including the reduction that became effective on January 1, 2002.

Sales taxes on the transportation, transmission or distribution of gas or electricity when purchased through non-utility retail access are being phased out over a four-year period, with the first 25% rate reduction taking effect on September 1, 2001.

The corporate franchise tax rate dropped to 7.5% from 8% in July 2001, and the tax equivalent on Subchapter S corporations was cut to .65% from .825%.

The tax rates on banking and insurance corporations dropped to 8% for tax years beginning on or after July 1, 2001.