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Court of Appeals affirms unconstitutionality of GML Section 959

June 4, 2013

White Plains litigation law firm, Collier Halpern & Newberg, LLP, extends congratulations to our managing partner, Philip Halpern, on his latest decision, in which the New York State Court of Appeals affirmed the decision of the Appellate Division and declared General Municipal Law §959 unconstitutional.  Mr. Halpern, who specializes in business, commercial, employment, estates, real estate and securities litigation in Westchester County, New York, is distinguished by a lengthy list of reported decisions to which he now adds this landmark constitutional decision.

General Municipal Law §959 governs certification criteria for the Empire Zone Program which provides tax benefits and credits to businesses that invest capital and create jobs in economically distressed areas of New York.  In April 2009, the New York Legislature amended portions of General Municipal Law §959 in response to concerns about the cost effectiveness of the Empire Zone Program.  Pursuant to the amendments, new standards for program eligibility were established under which non-compliant businesses would lose their Empire Zone certification retroactive to January 1, 2008.  On May 3, 2012, the Appellate Division, Third Department, inter alia, reversed the trial court and held that the revocation of Mr. Halpern's client's Empire Zone certification could not be made retroactive to January 1, 2008, and that the retroactive application of the amendments constituted an unlawful taking of property that violated due process. On June 4, 2013, the New York State Court of Appeals upheld this Third Department decision in a lengthy opinion discussing the constitutional law issues presented. The decision may be read in full here.

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