By Peter Kiefer

The state Senate majority leader is seeking the dissolution of the state’s Empire Zone program, the $600-million-a-year economic stimulus effort that has been widely criticized as inefficient.

During a speech yesterday outlining a new job-creation plan, Majority Leader Dean Skelos proposed phasing out the Empire Zone program and replacing it with a statewide tax credit plan for small businesses.

The proposal would end the eight-year-old program that was designed to provide relief in the form of tax credits to economically distressed regions of the state. In return for the tax credits, participant companies are required to show some form of job or capital growth, a requirement that is rarely monitored.

“Everyone knows that no one measured the results,” the president of the Partnership for New York City, Kathryn Wylde, said. “This has been an as-of-right tax windfall to any company that moved into one of these geographic areas. When it started out it was a big subsidy that was dedicated to nine impoverished areas, and now there are 82.”

A spokesman for the Empire State Development Corp., Warner Johnston, said Governors Paterson and his predecessor, Eliot Spitzer, have each sought to alter the program.

In an audit conducted last year, the ESDC found that of the 9,000 businesses participating in the Empire Zone Program, 3,000 had failed to meet the necessary requirements. Twenty-four companies have recently been decertified. “We are planning a second round of decertification, and we firmly expect that it will become a speedier process once we have finalized the first round,” Mr. Johnston said.

The program has also been criticized for pitting municipalities against one another as they vie to attract tax credits. To participate, a business must first be situated in an Empire Zone or qualify as a regionally significant project.

Mr. Skelos’s proposals came as part of the outline for the Senate’s new job growth plan, which aims to cut the corporate franchise tax in half for small businesses in the plan’s first year, create and expand tax credits tied to job creation and emerging technologies, and help ease health insurance costs for small-business owners.

A spokesman for Mr. Skelos, Mark Hansen, said the new proposals would not require any new money, as the funding used for the Empire Zone program would be diverted.

“With this plan we are taking the next step towards a more effective and accountable way to help businesses grow and create jobs,” Mr. Skelos said in a statement.