New York’s highest court has ruled that the state violated the Constitution when it retroactively denied tax credits to businesses under the 2009 amendments to the state’s Empire Zone Program. The Empire Zone Program is designed to stimulate private investment and job creation in designated areas throughout the state by requiring that businesses show actual job creation (as opposed to reincorporating or transferring employees between related entities) and actual economic return to New York in excess of the tax benefits granted. The amendments altered the eligibility requirements and specifically allowed the state to decertify businesses as Empire Zone eligible on a retroactive basis beginning January 1, 2008. The Court of Appeals held that the state’s retroactive decertification of the plaintiffs in the lawsuit violated the Due Process Clause of the Fifth Amendment because: (a) the plaintiffs had no warning or opportunity to alter their behavior in 2008 to meet the criteria of the amendments; (b) the retroactive period was long enough that the plaintiffs had a reasonable expectation of security in the tax credits taken; and (c) there was no valid public purpose for the retroactive application of the law. Notably, the court held that the government’s need to raise money could not—absent an unexpected loss of revenue—justify retroactivity since other factors present in the case weighed in favor of the plaintiffs. James Square Associates, L.P., v. Mullen, No. 87-91, 2013 N.Y. Slip Op 03935 (Ct. of App., June 4, 2013).