Relates to reductions of payments in lieu of taxes; provides that where such payment agreement is to be reduced due to a reassessment of the parcel of real property such agreement is related to, such reduction shall be phased in over 10 years if the reduction would negatively affect the revenues of a local government by more than 5%.
TITLE OF BILL: An act to amend the real property tax law, in relation to payment in lieu of taxes agreements
PURPOSE: This bill requires businesses that make payments in lieu of taxes (PILOTs) to local governments and school districts to spread the negative impact of a reassessment over a ten year period.
SUMMARY OF PROVISIONS: The real property tax law is amended by adding a new article 3-A to require businesses that make payments in lieu of taxes (PILOTs) to provide local governments and school districts to spread the negative impact of a reassessment over a ten year period. Ten year phase out period would only come into affect if the negative financial impact
JUSTIFICATION: Many businesses have been enticed to areas through a development program known as a PILOT, payment in lieu of taxes. The program exempts certain businesses from property taxes in exchange for payments to the county, towns and school districts where they are located. Some PILOT agreements have provisions that allow the business to challenge property tax assessments and win a credit against future payments if found to be a valid challenge.
A successful challenge would create a substantial and potentially crushing reduction in revenue to a locality and school district that relies on PILOT payments. The potential impact to a school district or locality could be devastating. Localities and school districts, in these most difficult financial times, should be allowed to spread the impact over a ten year period if the reduction would constitute 5% or more of total revenue. Such a phase out would allow for planning and budgeting decisions to be made that would reflect the reduction in PILOT payments and lessen the impact on the taxpayer.
LEGISLATIVE HISTORY: S.5872 of 2011/12.
FISCAL IMPLICATIONS: None.
EFFECTIVE DATE: This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 1488 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________Introduced by Sen. MARCELLINO -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the real property tax law, in relation to payment in lieu of taxes agreements THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property tax law is amended by adding a new arti- cle 3-A to read as follows: ARTICLE 3-A PAYMENT IN LIEU OF TAXES AGREEMENTS SECTION 370. PAYMENT IN LIEU OF TAXES AGREEMENTS. S 370. PAYMENT IN LIEU OF TAXES AGREEMENTS. 1. FOR THE PURPOSES OF THIS SECTION: (A) "LOCAL GOVERNMENT" SHALL MEAN ANY MUNICIPAL CORPORATION AS DEFINED PURSUANT TO SECTION TWO OF THE GENERAL MUNICIPAL LAW OR ANY SCHOOL DISTRICT OR BOARD OF COOPERATIVE EDUCATIONAL SERVICES. (B) "PAYMENT IN LIEU OF TAXES AGREEMENT" OR "PILOT AGREEMENT" SHALL MEAN AN AGREEMENT ENTERED INTO BETWEEN A LOCAL GOVERNMENT AND ANOTHER PARTY WHEREBY SUCH OTHER PARTY COMPENSATES SUCH LOCAL GOVERNMENT FOR SOME OR ALL OF THE TAX REVENUE LOST DUE TO THE NATURE OF THE USE OR OWNERSHIP OF A PARCEL OF REAL PROPERTY BY SUCH OTHER PARTY. THE AMOUNT OF SUCH PAYMENT IN LIEU OF TAXES IS BASED ON AN ASSESSMENT OF SUCH PARCEL OF REAL PROPERTY. 2. IF THE AMOUNT OF ANY PAYMENT IN LIEU OF TAXES IS REDUCED, DUE TO A REASSESSMENT OF THE PARCEL OF REAL PROPERTY SUCH AGREEMENT IS RELATED TO, AND SUCH REDUCTION WOULD NEGATIVELY IMPACT THE TOTAL REVENUE OF ANY LOCAL GOVERNMENT BY MORE THAN FIVE PERCENT, SUCH REDUCTION IN PAYMENTS IN LIEU OF TAXES SHALL BE PHASED IN OVER A TEN YEAR PERIOD. S 2. This act shall take effect immediately.EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD03300-01-3