Governor Paterson Issues Executive Order to Advance Economic Development Efforts with Unused RZFB Bonds

Governor David A. Paterson today announced that he has signed Executive Order No. 44, which provides for the reallocation of unused Recovery Zone Facility Bond (RZFB) authorizations. This Executive Order will help ensure that the State and its localities take advantage of the federally enacted RZFB program.

"During this time of economic uncertainty, it is vital that we take advantage of the Recovery Zone Facility Bond program to help create jobs, foster economic development and develop critical infrastructure," Governor Paterson said. "This Executive Order facilitates the timely use of the Recovery Zone financing authorized by Congress, which must be utilized before January 1, 2011. Specifically the Executive Order will facilitate the sale of over $250 million of Recovery Zone Facility Bonds by the end of Calendar year 2010. Without the Executive Order the Recovery Zone Bond capacity could not be used and would be lost to the State."

The American Recovery and Reinvestment Act of 2009 (ARRA) created the RZFB program in order to support private business development projects and trade activity in designated economically distressed areas termed "Recovery Zones." Under the ARRA, New York received an allocation of RZFB Volume Cap of $555,147,000, which is allocated among counties and certain large municipalities. More than half of the RZFB authorizations have gone unused. As a substantial portion of these allocations will not be used by the end of the year, the Executive Order deems them waived and directs the Empire State Development Corporation to reallocate them for use for eligible costs for qualified Recovery Zone purposes. The bonds will help to reduce the cost of financing the more than $2 billion cost to construct building 3 at the World Trade Center site.

Recovery Zone Facility Bonds are designed to provide tax incentives for the State and local governments to help restore areas suffering from significant poverty and high unemployment and home foreclosures. Through lower borrowing costs, the bonds help spur job creation and economic recovery in distressed areas. The Governor's Executive Order will help continue and expedite the program as bonds must be issued and closed before January 1, 2011, when the program ends. These bonds have been used to finance significant infrastructure projects and help retain positions and continue job growth throughout the State.

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