Bill S1961B-2013

Establishes an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the real property tax levy

Establishes an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the school district's real property tax levy resulting from decreases in revenue due to changes in the amount of or termination of payments in lieu of taxes receivable.

Details

Actions

  • Jan 8, 2014: REFERRED TO EDUCATION
  • Jan 8, 2014: returned to senate
  • Jan 8, 2014: died in assembly
  • Jun 20, 2013: referred to education
  • Jun 20, 2013: DELIVERED TO ASSEMBLY
  • Jun 20, 2013: PASSED SENATE
  • Jun 17, 2013: AMENDED ON THIRD READING 1961B
  • Jun 12, 2013: ORDERED TO THIRD READING CAL.1313
  • Jun 12, 2013: COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • May 7, 2013: REPORTED AND COMMITTED TO FINANCE
  • Feb 25, 2013: PRINT NUMBER 1961A
  • Feb 25, 2013: AMEND AND RECOMMIT TO EDUCATION
  • Jan 9, 2013: REFERRED TO EDUCATION

Votes

Memo

BILL NUMBER:S1961B

TITLE OF BILL: An act to establish an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the school district's real property tax levy

PURPOSE: To allow the Lowville Central School District to establish a real property tax stabilization fund out of part of the proceeds of a payment in lieu of taxes (PILOT) agreement from the Maple Ridge Wind Farm. Upon termination or decrease of the PILOT payments, transfers from the fund would ease a transition in the tax levy so that taxpayers do not have to bear a sudden spike in real property taxes.

SUMMARY OF PROVISIONS:

Section one: The legislative findings section recognizes that the school district's current receipt of significant PILOT payments from the wind farm will at some point either terminate, or significantly decrease, which could result in a massive destabilization of the district's tax base and the amount of its tax levy to meet current budget levels.

Section two: This section makes definitions of important terms in the bill, including providing that PILOT payments may mean either PILOTS under Real Property Tax Law 487 (RPTL Section creating municipalities to enter into PILOT agreements for wind energy systems) or Subdivision fifteen of § 858 of the General Municipal Law (authorizing IDA created PILOTs) and adopting the definition of wind energy systems already found in Real Property Tax Law § 487.

Section three: (a) This subsection permits the school district to create a tax stabilization fund by paying into such funds the amount of PILOT payments received which is not required to prevent an increase from the real property tax levy over the preceding budget year.

(b) This subsection permits the deposit of PILOT payments already accrued into the stabilization fund.

(c) This subsection provides limitations on the ability to withdraw from the stabilization fund as follows (1) no withdrawal may be made in any year in which PILOT payments receivable equal or exceed those from the preceding year; (2) for any year in which the amount of payments is less than the preceding year, a withdrawal may be made in the amount of the decrease; (3) for any fiscal year in which no PILOT payment will be made, a withdrawal may be made in an amount not to exceed the PILOT payment for the preceding year plus the amount, if any, authorized to be withdrawn in such preceding year.

Other provisions require withdrawals for any other purpose would require voter approval submitted as a separate proposition and applies existing controls and reporting requirements over expenditure of district money.

Section four: Makes requirements for information concerning the fund, deposits into, expenditures from it, and the affect on the tax levy

for purposes of the property tax report card under subdivision seven of § 1716 of the Education Law.

Section five: Makes provisions with regard to the real property tax cap so that use of the fund does not facilitate avoiding such cap.

Section six: Should this act take effect after the last date for submission of the district's real property tax report card to the Department of Education, this section makes provision for public notice of a statement concerning payment into the fund and the effect on the tax levy.

Section seven: provides for an immediate effective date.

EXISTING LAW: A similar tax stabilization fund was established for the Oswego community as a result of large PILOT payments from a nuclear energy facility. (See Chapter 202, Laws of 2001).

JUSTIFICATION: The Maple Ridge Wind Farm in Lewis County, one of the largest and most successful wind energy enterprises in the United States, pays an annual PILOT payment of around $8.9 million to municipalities and school districts which host wind towers. This PILOT payment has been one of the leading causes for wide community acceptance and support of this important alternative energy project.

The Lowville Central School District receives about $3.9 million of this amount each year. The district has employed this money prudently, using about $2.7 million each year to keep the tax levy level and allowing the balance to accrue in fund balance. The PILOT agreement started in the 2006-2007 school year and will end in 2021-2022. At that point, the PILOT will either terminate completely or be replaced, perhaps by an IDA sponsored PILOT which would not be as generous. The result would be that the PILOT at that point would cease to be a windfall and its loss would become the source of wrenching dislocation in the district's finances.

The district requires the approval given in this bill to accumulate a tax stabilization fund which will one day be equal to the task of smoothing the transition that will be required by ramping up the tax levy over a period of time. Absorbing all of the loss or decrease in the PILOT in one or two years would cause a severe spike in the tax levy, dramatic slashing of programs or both. The bill contains significant safeguards to insure the dedication of PILOT funds for this purpose.

LEGISLATIVE HISTORY: 2011-12 S. 6835 - Passed Senate/A. 9859 - Real Property Taxation Committee.

FISCAL IMPLICATIONS: None for the State of New York. Positive impact on the district's fiscal and tax levy stability.

EFFECTIVE DATE: Immediate.


Text

STATE OF NEW YORK ________________________________________________________________________ 1961--B Cal. No. 1313 2013-2014 Regular Sessions IN SENATE (PREFILED) January 9, 2013 ___________
Introduced by Sen. GRIFFO -- read twice and ordered printed, and when printed to be committed to the Committee on Education -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged and said bill committed to the Committee on Rules -- ordered to a third read- ing, amended and ordered reprinted, retaining its place in the order of third reading AN ACT to establish an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the school district's real property tax levy THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Legislative findings. The legislature hereby finds that the private development and ownership of wind energy systems located within the Lowville Central School District may result in instability in the real property tax base and the budgets of the district due to the uncer- tainty with the assessments of such wind energy systems at the time the payments in lieu of taxes terminate. S 2. Definitions. As used in this act: (a) "Board of education" or "board" means the board of education of the Lowville Central School District. (b) "Energy system tax stabilization reserve fund" or "fund" means the energy system tax stabilization reserve fund established pursuant to this act. (c) "Payments in lieu of taxes" or "payments" means payments in lieu of taxes receivable by the school district pursuant to contracts entered into in accordance with section 487 of the real property tax law or subdivision 15 of section 858 of the general municipal law on any wind
energy system located wholly or partially within the Lowville Central School District. (d) "School district" or "district" means the Lowville Central School District. (e) "Wind energy systems" shall be defined as in section 487 of the real property tax law and shall include the land upon which the system is located, any equipment used in such generation, and equipment leading from the system to the interconnection with the transmission system. S 3. The board of education is hereby authorized to establish an ener- gy system tax stabilization reserve fund to lessen or prevent increases in the school district's real property tax levy resulting from decreases in revenue due to changes in the amount of or termination of payments in lieu of taxes receivable by the school district provided, however, that no such fund shall be established unless approved by a majority vote of the qualified voters of the district present and voting on a separate ballot proposition therefor at either a special district meeting which the board of education may call for such purposes, or at the annual district meeting and election, to be noticed and conducted in either case in accordance with the provisions of article 41 of the education law. Further, the notice of the special district meeting or annual district meeting and election, as applicable, at which such ballot proposition shall be presented to the voters, shall explain the means by which moneys shall be paid into and withdrawn from such fund as set forth hereinafter in subdivisions (a) and (c) of this section. Moneys shall be paid into and withdrawn from the fund, and the fund shall be administered, as follows: (a) For any school district fiscal year commencing after the effective date of this act and after the establishment of the energy system tax stabilization reserve fund, the board of education may determine that there shall be paid into the fund all or any portion of the amount by which the payments in lieu of taxes receivable by the school district for such fiscal year is not required to prevent an increase in the school tax levy from the immediately preceding fiscal year, provided that no payment into the reserve fund shall cause the balance of the fund to exceed the sum of twelve million dollars. Such determination may be amended to reduce the amount paid into the fund in the event that the district's original proposed budget is not approved by the voters. (b) The board of education is hereby authorized to make a one-time deposit into the energy system tax stabilization reserve fund in an amount not to exceed the balance over any maximum allowable balance authorized or required by any other law that accrued prior to the estab- lishment of the energy system tax stabilization reserve fund as a result of the receipt of any payment in lieu of taxes, provided, however, that no such deposit shall be made unless approved by a majority vote of the qualified voters of the district present and voting on a separate ballot proposition therefor at either a special district meeting which the board of education may call for such purpose, or at the annual district meeting and election, to be noticed and conducted in either case in accordance with the provisions of article 41 of the education law. Further, the notice of the special district meeting or annual district meeting and election, as applicable, at which such ballot proposition shall be presented to the voters, shall explain the means by which moneys shall be paid into and withdrawn from such fund as set forth hereinafter in subdivisions (a) and (c) of this section. (c) Moneys may be withdrawn from the energy system tax stabilization reserve fund subject to the following limitations:
(1) For any fiscal year for which payments in lieu of taxes receivable by the school district equal or exceed the amount of such payments received for the immediately preceding fiscal year, no amount shall be withdrawn from the fund. (2) For any fiscal year for which payments in lieu of taxes receivable by the school district are less than the amount of such payments received for the immediately preceding fiscal year, the board of educa- tion may authorize a withdrawal from the fund in an amount not to exceed the amount of the payments received for the immediately preceding year less the amount of the payments receivable for the fiscal year for which the budget and tax levy is being determined. (3) For any fiscal year for which the school district does not antic- ipate receiving any payments in lieu of taxes, the board of education may authorize a withdrawal from the fund in an amount not to exceed the amount of such payments received for the last preceding fiscal year for which such payments were received plus the amount, if any, which the board of education authorized to be withdrawn from the fund for such last preceding fiscal year. (4) Notwithstanding paragraph 1 of this subdivision, and in addition to any withdrawal from the fund authorized pursuant to paragraph 2 or 3 of this subdivision, moneys may be withdrawn from the fund for any fiscal year to be expended for any other lawful purpose, provided, however, that no such withdrawal and expenditure shall be made unless approved by a majority vote of the qualified voters of the district present and voting on a separate ballot proposition therefor at either a special district meeting which the board of education may call for such purpose, or at the annual district meeting and election, to be noticed and conducted in either case in accordance with the provisions of arti- cle 41 of the education law, such purposes as may be set forth in a separate proposition submitted by the board of education and approved by the qualified voters of the school district. (d) Determinations by the board of education to pay money into the energy system tax stabilization reserve fund, authorizations by the board to withdraw money from the fund, and decisions by the board to submit a ballot proposition to the voters authorizing a withdrawal from the fund shall be made on or before the last date provided by law for the submission to the state education department of the school district's property tax report card pursuant to subdivision 7 of section 1716 of the education law. (e) The moneys in the energy system tax stabilization reserve fund shall be deposited, invested and accounted for in the manner provided for in subdivisions 2 and 6 of section 3651 and section 3652 of the education law. S 4. At the same time that the property tax report card prepared by the school district pursuant to subdivision 7 of section 1716 of the education law is filed and made publicly available, the school district shall also prepare, file with the commissioner of education and make publicly available in the same manner as required for the property tax report card, a report which shall contain the following information relating to the energy system tax stabilization reserve fund: (a) the balance of the fund as of the start of the current fiscal year, (b) all deposits or withdrawals from the fund for the current fiscal year, (c) an analysis of the impact of such withdrawals on the school district's tax levy for the current fiscal year, (d) proposed deposits and with- drawals for the ensuing fiscal year, and (e) an analysis of the impact
of such proposed deposits and withdrawals on the projected tax levy for the ensuing fiscal year if the proposed budget is adopted. S 5. When computing the school district's tax levy limit for a school year pursuant to subdivision 3 of section 2023-a of the education law: (a) The payments in lieu of taxes receivable for the prior school year shall be decreased by any amount paid into the energy system tax stabilization reserve fund for such prior school year and increased by any amount withdrawn from the fund for such prior school year. (b) The payments in lieu of taxes receivable in the coming fiscal year shall be decreased by the amount to be paid into the energy system tax stabilization reserve fund for such coming fiscal year and increased by any amount to be withdrawn from the energy system tax stabilization reserve fund for such coming fiscal year. S 6. Notwithstanding the provisions of subdivision (c) of section three of this act and section four of this act, if this act shall take effect later than fourteen days prior to the last date provided by law for the submission to the state education department of the school district's property tax report card for the school district's ensuing fiscal year, then a determination by the board of education to pay money into the fund for the ensuing fiscal year may be made on or before the last date provided by law for the levy of taxes for such ensuing fiscal year. Upon making such determination to pay money into the fund, the board shall cause to be posted on the school district's website a state- ment containing the amount of the payment into the fund and the effect of the payment on the projected tax levy for the ensuing fiscal year. S 7. This act shall take effect immediately.

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