Authorizes tax increment bonds payable from real property taxes levied by a school district within a blighted project area.
Ayes (5): Martins, Ball, McDonald, Ritchie, Klein
Ayes W/R (2): Little, Stewart-Cousins
Excused (1): Oppenheimer
Ayes (61): Adams, Addabbo, Alesi, Avella, Bonacic, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Duane, Espaillat, Farley, Flanagan, Fuschillo, Gallivan, Gianaris, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Huntley, Johnson, Kennedy, Klein, Krueger, Kruger, Lanza, Larkin, LaValle, Libous, Little, Marcellino, Martins, Maziarz, McDonald, Montgomery, Nozzolio, O'Mara, Oppenheimer, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Saland, Sampson, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Valesky, Young, Zeldin
Nays (1): Ball
TITLE OF BILL:
An act to amend the general municipal law, in relation to the municipal redevelopment law authorizing tax increment bonds payable from and secured by real property taxes levied by a school district within a project area
PURPOSE OF THE BILL:
The purpose of the bill is to include a school district's real estate taxes in the allocation of taxes available to pay bonds authorized and issued under the Municipal Redevelopment Law (MRL), to expand the purposes for which proceeds of such bonds may be applied, provide alternative sources for payment of tax increment finance (TIF) bonds, and to clarify the process of allocation of taxes.
SUMMARY OF SPECIFIC PROVISIONS:
º 1- Includes findings and determinations that sound development and redevelopment of blighted areas increases public school enrollment by providing affordable housing and employment opportunities and the need for expanded public education facilities and services.
º 2- Amends subdivisions (b) and (f) of º 970-c of the General Municipal Law to expand the definition of a "Legislative body" and a "Planning Agency" to include the board of education of a school district which consents to participate in TIF and adds a new subdivision (i) to define the term "school district."
º 3- Amends subdivision (1) and (n) of º 970-f of the General Municipal Law in regard to the amount of bonds which may be issued and the plan for the relocation of families and persons who may be temporarily or permanently displaced from housing facilities in a project area and adds a new Subdivision (0) to provide that each redevelopment plan may provide for the consent to and approval of the project area and the redevelopment plan by the board of education of the school district.
º 4- Amends subdivisions (b) and (c) of º 970-h of the General Municipal Law to provide that public notice of the establishment of a project area must include a disclosure of whether one or more school districts have consented to participate in TIF.
º 5- Amends º 970-m of the General Municipal Law in regard to the amendment of a redevelopment plan.
º 6- Amends paragraphs (iii), (iv) and (v) of subdivision (a) of 970-n of the General Municipal Law in regard to joint undertakings.
º 7- Amends paragraphs (ii) and (iii) and subparagraph 1 of paragraph (v) of subdivision (b) of º 970-n of the General Municipal Law to include school districts as entities that may be a member of a municipal redevelopment authority and to stipulate that such school
districts would, by resolution of the board of education, have a say in the selection of a chairman to such authority.
º 8- Amends subdivision (a), (b), and (g) and (i) of º 970-0 of the General Municipal Law to provide that TIF bonds are not the debt of a municipality or the State of New York and that no entity pledges its faith and credit to the payment of such debt. This section also clarifies that a school district is not issuing debt by consenting to an allocation of taxes and that a school district's participation in TIF is not dependent on the authorizing of º 6 of Article XVI of the New York State Constitution. In addition, this section expands the purposes for which TIF bonds may be issued and determines that such purposes shall be for a public use and a public purpose including environmental remediation and brownfield redevelopment, and distributed generation of electric power.
This section also adds a new subdivision (j) to provide for additional sources of security for TIF bonds, including a pledge of up to 10% of county sales tax receipts, annual appropriations assistance payments up to 10% of annual debt service, the establishment of an assessment area coterminus with the project area to provide revenues for debt service if incremental real property taxes are deficient, and the establishment of reserve funds up to 10% of the maximum annual debt service on the TIF bonds.
º 9- Amends paragraph (i) of subdivision (d) of º 970-0 of the General Municipal Law.
º 10- Amends º 970-p of the General Municipal Law to provide that reference to both a municipality and a school district are applicable in approving an allocation of real property taxes and issuance of TIF bonds and that incremental taxes in excess of the amount required for annual debt service of the TIF bonds may be appropriated to a debt service reserve fund rather than paid back to the municipality or school district. In addition, this section provides that the allocation of taxes be estimated by the assessor for each year the TIF bonds are outstanding before the TIF bonds are issued and places a standard of good faith effort on the assessor to make such allocation in such years.
This section also repeals subdivision (b) of º 970-p of the General Municipal Law. In addition, this section provides that an exception in the MRL that TIF bonds are not subject to the rules regarding reserve funds since proposed subdivision (j) (iii) of º 970-0 permits a reserve fund to be established to provide for payment of TIF bonds.
Also, this section provides that a redevelopment object or purpose is a school building purpose for a school district consenting to an allocation of taxes under the MRL. This section provides authority for the allocation of taxes for TIF bonds by a school district to be reimbursed under the provisions of the Education Law relating to building aid. In this way, the school district may recoup a substantial amount of its allocation of taxes similar to recouping debt service costs in a school facilities project.
Finally, this section provides that the amount of taxes allocated to debt service on TIF bonds is not available for treatment under a
PILOT agreement otherwise the allocated taxes would be insufficient to pay debt service on TIF bonds.
º 11- Effective date.
New York's TIF statute, the MRL, has been in effect since 1973. It was considered such a significant financing mechanism for economic development when enacted that the state constitution was amended to allow municipalities to issue TIF bonds payable from allocated real property taxes as an express exception to the constitutional rule that all real property taxes be available under the full faith and credit pledge for general obligations authorized by municipalities. However, the MRL has been used very little even though TIF has become a popular and successful economic development infrastructure financing regime in many states.
The principal deficiencies with the MRL which these amendments address are as follows: (i) unavailability of real property taxes from the school district levy (usually, the largest single line on the tax bill) which has prevented issuance of larger TIF bonds in significant redevelopments; (ii) narrow purposes for which TIF bonds may be issued, (iii) unavailability of alternative revenue sources to pay debt services on TIF bonds, and (iv) uncertainty of future years assessments while TIF bonds are outstanding to raise adequate amounts of incremental tax for debt service on TIF bonds.
These amendments address foregoing issues. School districts are not required to participate in the tax increment financing process. However, they may elect to do so by resolution of their boards of education. To participate, a school district must receive all notices and approve all proceedings (including establishment of the redevelopment plan, setting the boundaries of the project area, and electing members to an authority, if used, and allocating taxes and certifying to the assessor's estimate of future year allocations). As an inducement to encourage school districts to participate in tax increment financing, their allocations are made eligible for state building aid reimbursement using current methods under the Education Law.
The purposes for which TIF bonds may be issued are expanded to include environment remediation and brownfields redevelopment purposes under the Environmental Conservation Law, and distributed energy generation 11sing non-fossil fuel sources for electric generation. These purposes further both economic development projects and governmental infrastructure requirements so that TIF bonds may be an important financing regime for modern technological projects that benefit both private sector and public sector entities.
The amendments provide several alternative revenue sources to support debt service on TIF bonds. All of these sources are currently authorized and available in various forms to support state and local government debt. Trapping sales tax receipts is currently employed by certain state public benefit corporations. Municipal assistance agreements when limited to annual appropriations are used to support projects that benefit
the public sector when project revenues are insufficient. special benefit assessments in support of debt service have long been available to villages and improvement districts in towns and counties. These amendments apply the procedures in the village Law to the MRL. Assessments are sometimes referred to as "service payments" and are available to raise additional revenue each year if the allocation of taxes is insufficient to meet TIF bonds debt service. The purposes for reserve funds have expanded in recent years and are available for municipalities and school districts. Their application, funded through discretionary budget appropriations, is a rational extension of their purposes and a prudent means of securing TIF bonds.
The MRL is silent on the responsibility of assessors to allocate real property taxes during the years TIF bonds are outstanding. These amendments require that an estimate of allocations for such years be made before TIF bonds are issued to provide investors with material information about the creditworthiness of TIF bonds. The assessor is also charged with a good faith effort standard to assess properties in the project area to realize the tax allocation estimated.
PRIOR LEGISLATIVE HISTORY:
2009-10: S.1716-A - Advanced to Third Reading Senate Cal. 43 A.2378-A - Reported to Assembly Ways & Means Committee 2007-08: S.371 - Passed Senate A.2358 - Reported to Assembly Ways & Means Committee 2005-06: S.8192 - Referred to Senate Rules Committee A.10365 - Reported to Assembly Local Governments Committee
These amendments would stimulate economic development infrastructure financing, enhance tax bases, and lead to increased governmental revenues.
This act shall take effect immediately and shall apply to any indebtedness incurred by a municipality pursuant to section 970-o of the General Municipal Law on or after July 30, 1986.
STATE OF NEW YORK ________________________________________________________________________ 2446 2011-2012 Regular Sessions IN SENATE January 21, 2011 ___________Introduced by Sen. YOUNG -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government AN ACT to amend the general municipal law, in relation to the municipal redevelopment law authorizing tax increment bonds payable from and secured by real property taxes levied by a school district within a project area THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The first undesignated paragraph of section 970-b of the general municipal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, is amended and a new fourth undesignated paragraph is added to read as follows: It is hereby found and declared that there exists in many communities blighted areas which threaten the economic and social well-being of the people of the state. Blighted areas are characterized by one or more of the conditions set forth in subdivision (a) of section nine hundred
[sixty-c]SEVENTY-C of this article. IT IS FURTHER FOUND AND DECLARED THAT SOUND DEVELOPMENT AND REDEVELOP- MENT OF BLIGHTED AREAS INCREASES PUBLIC SCHOOL ENROLLMENT BY PROVIDING AFFORDABLE HOUSING AND EMPLOYMENT OPPORTUNITIES AND THE NEED FOR EXPANDED PUBLIC EDUCATION FACILITIES AND SERVICES. S 2. Subdivisions (b) and (f) of section 970-c of the general munici- pal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended and a new subdivision (i) is added to read as follows: (b) "Legislative body" means (I) the governing body of a municipality empowered to adopt and amend local laws and ordinances [; provided, however, that in the case of the city of New York, the legislative body shall, for the purposes of this article be the board of estimate], AND (II) THE BOARD OF EDUCATION OF A SCHOOL DISTRICT OF WHICH CONSENTS TO ANEXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD08033-01-1 S. 2446 2
ALLOCATION OF TAXES PRESCRIBED IN SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE. (f) "Planning agency" means the planning board or commission of
[the]A municipality OR THE PLANNING BOARD OR COMMITTEE OF A SCHOOL DISTRICT. (I) "SCHOOL DISTRICT" MEANS ANY SCHOOL DISTRICT, A CITY SCHOOL DISTRICT OR A SCHOOL DISTRICT IN A CITY, AS THOSE TERMS ARE DEFINED IN SECTION 2.00 OF THE LOCAL FINANCE LAW, WHICH APPROVES THE REDEVELOPMENT PLAN AND CONSENTS TO AN ALLOCATION OF TAXES PRESCRIBED IN SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE. S 3. Subdivisions (l) and (n) of section 970-f of the general munici- pal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended and a new subdivision (o) is added to read as follows: (l) shall provide a limitation on the amount of bonds which may be issued pursuant to section nine hundred [sixty-o]SEVENTY-O of this article for the purpose of carrying out or administering the redevelop- ment plan; (n) shall provide a plan for the relocation of families and persons to be temporarily or permanently displaced from housing facilities in the project area, which plan shall include the provision required by section nine hundred [sixty-j]SEVENTY-J OF THIS ARTICLE that no person or fami- ly of low and moderate income shall be displaced unless and until there is suitable housing available and ready for occupancy by such displaced person or family at rents comparable to those paid at the time of their displacement. (O) MAY PROVIDE FOR THE CONSENT TO AND APPROVAL OF THE PROJECT AREA AND THE REDEVELOPMENT PLAN BY THE BOARD OF EDUCATION OF THE SCHOOL DISTRICT. S 4. Subdivisions (b) and (c) of section 970-h of the general munici- pal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended to read as follows: (b) Notice of the hearing shall be posted in at least four prominent places within the project area for a period of three weeks prior to such hearing and shall be published not less than once a week for three successive weeks prior to the hearing in a newspaper of general circu- lation in the municipality involved. The notice of hearing shall include a legal description of the boundaries of the PROJECT area [or areas]designated in the proposed redevelopment plan [and], a general statement of the scope and objectives of the plan, AND A STATEMENT WHETHER ONE OR MORE SCHOOL DISTRICTS HAVE CONSENTED TO AN ALLOCATION OF TAXES PRESCRIBED IN SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE. A copy of the notices shall be mailed to the last known owner of each parcel of land in the area designated in the redevelopment plan. A copy of the notice shall also be mailed to the legislative body of each of the taxing jurisdictions which levies taxes upon any real property in the project area designated in the proposed redevelopment plan. (c) Any and all persons who have any objections to the proposed rede- velopment plan or who deny the existence of blight as defined by subdi- vision (a) of section nine hundred [sixty-c]SEVENTY-C of this article, in the proposed project area, or the legality or appropriateness of any of the prior proceedings, may appear before the legislative body at such public hearing and show cause why the proposed plan should not be adopted. At any time not later than the hour set for hearing objections to the proposed redevelopment plan, any person may file in writing withS. 2446 3
the clerk of the legislative body a statement of such person's objections to the proposed plan. S 5. Section 970-m of the general municipal law, as added by chapter 916 of the laws of 1984 and as renumbered by chapter 686 of the laws of 1986, is amended to read as follows: S 970-m. Amendment of redevelopment plan. If at any time after the adoption of a redevelopment plan for a project area by the legislative body, it becomes necessary or desirable to amend or modify such plan, the legislative body may by resolution amend such plan. Such amendments may include a change in the boundaries of the project area to add land to or, prior to the issuance of indebtedness pursuant to section nine hundred
[sixty-o]SEVENTY-O OF THIS ARTICLE as provided by such redevel- opment plan, exclude land from the project area. An amendment or modifi- cation of the plan shall be approved pursuant to subdivisions (a) through (g) of section nine hundred [sixty-h]SEVENTY-H of this article. Upon adoption of the amended plan by the legislative body the legisla- tive body shall transmit the amended plan as provided by subdivision (h) of such section. S 6. Paragraphs (iii), (iv) and (v) of subdivision (a) of section 970-n of the general municipal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended to read as follows: (iii) If two or more municipalities jointly exercise the powers grant- ed under this subdivision and a redevelopment plan as adopted provides for the allocation of real property tax revenues pursuant to section nine hundred [sixty-o]SEVENTY-O of this article the real property taxes of each municipality shall be allocated pursuant to such section. (iv) If two or more municipalities jointly exercise the powers granted under this subdivision and the redevelopment plan as adopted provides for the issuance of indebtedness pursuant to section nine hundred [sixty-o]SEVENTY-O of this article, such indebtedness shall either be issued jointly by the municipalities and the resolution authorizing the issuance of such indebtedness must be approved by the legislative body of each municipality acting separately or shall be issued by resolution of the [the]designated agent on behalf of the municipality it repres- ents and, by resolution of its legislative body, each municipality shall irrevocably pledge the revenues allocated pursuant to section nine hundred [sixty-p]SEVENTY-P of this article to the repayment of such indebtedness and any interest thereon. (v) The joint exercise of powers authorized by this subdivision shall be permitted only for the purpose of redevelopment of an area located wholly within each municipality AND WITHIN ONE OR MORE SCHOOL DISTRICTS. S 7. Paragraphs (ii) and (iii) and subparagraph 1 of paragraph (v) of subdivision (b) of section 970-n of the general municipal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended to read as follows: (ii) A municipal redevelopment authority shall be a corporate govern- mental agency constituting a public benefit corporation. Except as otherwise provided by special act of the legislature, an authority shall consist of not less than five nor more than nine members. Membership shall be apportioned among the municipalities AND SCHOOL DISTRICTS, and the manner of selection of a chairman determined by an [intermunicipal]agreement approved by local law by each such municipality, AND BY RESOL- UTION OF THE BOARD OF EDUCATION OF EACH SCHOOL DISTRICT. Members shall serve at the pleasure of the appointing authority, and each member shall continue to hold office until his successor is appointed and has quali-S. 2446 4
[governing]LEGISLATIVE body shall file with the secretary of state a certificate of appointment or reappointment of any member appointed or reappointed by it. Members shall receive no compensation for their services but shall be entitled to reimbursement of the neces- sary expenses, including traveling expenses, incurred in the discharge of their duties. No action shall be taken by an authority except pursu- ant to the favorable vote of a majority of the members then in office. Any one or more of the members of an authority may be an official or an employee of such municipality. In the event that an official or an employee of such municipality shall be appointed as a member of the agency, acceptance or retention of such appointment shall not be deemed a forfeiture of his OR HER municipal office or employment, or incompat- ible therewith or affect his OR HER tenure or compensation in any way. The term of office of a member of an authority who is an official or an employee of such municipality when appointed as a member thereof by special act of the legislature creating the authority shall terminate at the expiration of the term of his OR HER municipal office. Upon THE creation of an authority, from time to time the [governing]LEGISLATIVE body of a municipality OR A SCHOOL DISTRICT, may, by resolution, appro- priate sums of money to defray the expenses of the authority. (iii) Unless otherwise provided by this subdivision or by the special act of the legislature establishing a municipal redevelopment authority or empowering an existing public corporation to carry out the purposes and provisions of this article, such authority or public corporation shall have the powers, duties and responsibilities granted a munici- pality AND SCHOOL DISTRICT and its legislative body pursuant to sections nine hundred [sixty-d]SEVENTY-D through nine hundred [sixty-m]SEVEN- TY-M of this article, as well as the authority to receive the taxes of each municipality AND SCHOOL DISTRICT allocated and paid pursuant to section nine hundred [sixty-p]SEVENTY-P of this article. Such authority or public corporation shall have the power to designate survey areas and select project areas as provided by sections nine hundred [sixty-d]SEVENTY-D and nine hundred [sixty-e]SEVENTY-E of this article. Such authority or public corporation shall obtain the report and recommenda- tion of the planning agency of each municipality OR SCHOOL DISTRICT on the redevelopment plan and its conformity to the master plan of each municipality AND SCHOOL DISTRICT before presenting the redevelopment plan to the legislative body of each municipality OR SCHOOL DISTRICT. In order for a preliminary plan to be adopted or for a redevelopment plan to be adopted or amended approval must be obtained by resolution of the legislative body of each municipality AND SCHOOL DISTRICT acting separately. (1) An authority or public corporation shall have the powers and duties granted municipalities pursuant to section nine hundred [sixty-o]SEVENTY-O of this article to issue tax increment bonds and tax increment bond anticipation notes. Such bonds and notes shall be bonds and notes of the authority or public corporation and neither the state nor any municipality shall be liable on such bonds and notes and such bonds and notes shall not be a debt of the state or of any municipality. S 8. Subdivisions (a), (b), (g) and (i) of section 970-o of the gener- al municipal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, are amended and a new subdivision (j) is added to read as follows: (a) For the purpose of carrying out or administering a redevelopment plan adopted by the legislative body, a municipality is hereby author- ized, without limiting its authority under other provisions of law, toS. 2446 5
issue by resolution of its legislative body tax increment bonds or tax increment bond anticipation notes of the municipality which are payable from and secured by real property taxes, in whole or in part, allocated to and paid pursuant to the provisions of section nine hundred
[sixty-p]SEVENTY-P of this article. The pledge of such real property taxes allo- cated and paid shall constitute a first lien on the revenues derived therefrom and tax increment bonds or tax increment bond anticipation notes, the repayment of which is secured by such revenues shall not be subordinate to any other indebtedness of the municipality with respect to the pledge of such revenues. The municipality shall have the power to issue renewal notes, to issue bonds to pay notes and whenever it deems refunding expedient, to refund any bonds by the issuance of new bonds, whether the bonds to be refunded have or have not matured, and to issue bonds partly to refund bonds then outstanding and partly for any other purposes. (b) In contracting indebtedness pursuant to subdivision (a) of this section NEITHER a municipality NOR A SCHOOL DISTRICT shall [not]pledge its faith and credit or the faith and credit of the state to the payment of THE principal thereof and the interest thereon. INDEBTEDNESS REFERRED TO IN SECTION SIX OF ARTICLE XVI OF THE STATE CONSTITUTION SHALL NOT APPLY TO A SCHOOL DISTRICT. (g) The amount of any indebtedness contracted under this section shall be excluded in ascertaining the power of the municipality OR A SCHOOL DISTRICT to contract indebtedness within the provisions of the state constitution or the local finance law relating thereto. (i) The municipality may [only]contract indebtedness pursuant to this section for the following objects [and]OR purposes, EACH OF WHICH SHALL BE A PUBLIC USE AND A PUBLIC PURPOSE: (i) acquisition AND ASSEMBLAGE of land INCLUDING ENVIRONMENTAL REMEDI- ATION AND BROWNFIELD REDEVELOPMENT AUTHORIZED IN THE ENVIRONMENTAL CONSERVATION LAW; (ii) demolition and removal of buildings, structures and improvements and site preparation; (iii) installation, construction or reconstruction of streets, walk- ways, docks, drainage, parking facilities, flood control facilities, water and sewer systems and other [public]utilities, parks and play- grounds; (iv) other public improvements or services integral to the redevelop- ment plan authorized by or for which a period of probable usefulness has been established by section 11.00 of the local finance law. [Such objects]OBJECTS and purposes REFERRED TO IN THIS SUBDIVISION shall be deemed to have the period of probable usefulness as provided GENERALLY for such objects and purposes by such section. (J) IN ADDITION TO THE ALLOCATION OF TAXES AUTHORIZED IN SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE, INDEBTEDNESS AUTHORIZED PURSUANT TO THIS SECTION MAY BE SECURED BY A MUNICIPALITY AS FOLLOWS: (I) PURSUANT TO SECTION ONE HUNDRED NINETEEN-O OF THIS CHAPTER, A MUNICIPALITY MAY BY RESOLUTION OF ITS GOVERNING BOARD, PLEDGE A PORTION OF THE SALES TAX RECEIVED IN ANY FISCAL YEAR PURSUANT TO SECTION TWELVE HUNDRED SIXTY-ONE OF THE TAX LAW FROM BUSINESSES OPERATING IN THE PROJECT AREA AND BENEFITTING FROM THE REDEVELOPMENT PLAN TO THE PAYMENT OF THE PRINCIPAL OF AND INTEREST ON SUCH INDEBTEDNESS; (II) A MUNICIPALITY MAY ESTABLISH AN ASSESSMENT AREA, PURSUANT TO THE PROCEDURES IN SECTION 22-2200 OF THE VILLAGE LAW TO ACCESS PARCELS IN THE PROJECT AREA AS BENEFITED PROPERTIES IN THE AMOUNTS AND IN THE YEARSS. 2446 6
EQUAL TO THE ALLOCATION OF TAXES PROJECTED TO BE COLLECTED AS DETERMINED UNDER SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE. S 9. Paragraph (i) of subdivision (d) of section 970-o of the general municipal law, as added by chapter 916 of the laws of 1984 and such section as renumbered by chapter 686 of the laws of 1986, is amended to read as follows: (i) pledging all or a part of the taxes allocated pursuant to section nine hundred
[sixty-p]SEVENTY-P of this article or the proceeds from the sale of property acquired with the proceeds of such notes or bonds to secure the payment of such notes or bonds or of any issue thereof, subject to such agreements with bondholders or noteholders as may exist; S 10. Section 970-p of the general municipal law, as added by chapter 916 of the laws of 1984 and as renumbered by chapter 686 of the laws of 1986, is amended to read as follows: S 970-p. Allocation of taxes. (a) Any redevelopment plan may contain a provision that real property taxes levied upon taxable real property in the project area each year by or for the benefit of the municipality or municipalities AND SCHOOL DISTRICTS after the effective date of the resolution approving the redevelopment plan, shall be divided as follows: (i) that portion of the real property taxes not in excess of the amount which would be produced by applying the rate upon which the tax is levied each year by or for each municipality AND SCHOOL DISTRICT to the total sum of the assessed value of the taxable real property in the project area as shown upon the assessment roll used in connection with the taxation of such property by such municipality AND SCHOOL DISTRICT, last adopted prior to the effective date of the resolution approving such plan, shall be allocated to and when collected shall be paid into the funds of the respective municipalities AND SCHOOL DISTRICTS as real property taxes collected by or for said municipalities AND SCHOOL DISTRICTS adopting the redevelopment plan; (ii) that portion of the real property taxes levied each year in excess of the portion allocated and paid pursuant to paragraph (i) of this subdivision shall be allocated to and when collected shall be paid into the fund or funds established for such purposes to pay the princi- pal and interest on indebtedness incurred by such municipality OR SCHOOL DISTRICT pursuant to section nine hundred [sixty-o]SEVENTY-O of this article or, if the redevelopment plan so provides, the amount allocated and paid in excess of interest and principal and necessary reserves may be expended for amounts of money to be paid in lieu of taxes. Unless and until the total assessed valuation of the taxable property in a project area exceeds the total assessed value of the taxable real property in such project area as shown by the last assessment roll referred to in paragraph (i) of this subdivision, all of the real property taxes levied and collected upon the taxable real property in such project area shall be paid into the funds of the respective municipalities AND SCHOOL DISTRICTS. When such indebtedness, if any and interest thereon, have been paid, all moneys thereafter received from real property taxes upon the taxable real property in such project area shall be paid into the funds of the respective municipalities AND SCHOOL DISTRICTS as real property taxes on all other real property are paid; (iii) whenever the total amount of real property taxes allocated pursuant to paragraph (ii) of this subdivision exceeds the amounts allo- cated and paid for interest and principal and necessary reserves, and for amounts to be paid in lieu of taxes, the amount of taxes in excessS. 2446 7
of such amounts shall be paid into the funds of the respective munici- palities as taxes on all other real property are paid; (iv) the allocation of taxes authorized by this section (1) shall apply to taxable years beginning after the effective date of the resol- ution approving the redevelopment plan, AND (2) SHALL BE ESTIMATED BY THE APPROPRIATE REAL PROPERTY ASSESSMENT OFFICER PRIOR TO THE ISSUANCE OF SUCH INDEBTEDNESS FOR EACH YEAR THE INDEBTEDNESS TO BE INCURRED BY SUCH MUNICIPALITY PURSUANT TO SECTION NINE HUNDRED SEVENTY-O OF THIS ARTICLE IS SCHEDULED TO BE OUTSTANDING IN AN AMOUNT SUFFICIENT TO PAY THE PRINCIPAL OF AND INTEREST ON SUCH INDEBTEDNESS IN EACH YEAR REAL PROPERTY TAXES OF THE MUNICIPALITY OR THE SCHOOL DISTRICT LEVIED UPON TAXABLE PROPERTY IN THE PROJECT AREA IS DIVIDED PURSUANT TO THIS SECTION. DURING THE PERIOD SUCH INDEBTEDNESS IS OUTSTANDING, THE APPROPRIATE REAL PROPERTY ASSESSMENT OFFICER SHALL ENDEAVOR IN GOOD FAITH TO DETERMINE ASSESSED VALUES ON PARCELS IN THE PROJECT AREA TO ACHIEVE SUCH ESTIMATE IN EACH SUCH YEAR. UPON REQUEST BY A MUNICIPALITY OR SCHOOL DISTRICT, THE OFFICE OF REAL PROPERTY SERVICES SHALL PROVIDE GUIDANCE ON METHODOLOGIES FOR ASSESSMENTS AND/OR REVIEW SUCH ESTIMATES. (b)
[Whenever real property in any redevelopment project has been redeveloped and thereafter is leased by the municipality to any person or persons or whenever the agency leases real property in any redevelop- ment project to any person or persons for redevelopment, the property shall be assessed and taxed in the same manner as privately owned real property and the lease or contract shall provide that the lessee shall pay real property taxes upon the assessed value of the entire real prop- erty and not merely the assessed value of his or her leasehold interest. (c)]In any municipality OR SCHOOL DISTRICT subject to the allocation of revenues pursuant to this section the assessed value of taxable real property located in a project area shall be included on the taxable portion of the assessment roll, provided, however, that notwithstanding any provision of law to the contrary, the assessed value determined in accordance with paragraph (ii) of subdivision (a) of this section shall not be included in the taxable value of real property when determining the tax rate for such municipality OR SCHOOL DISTRICT. [(d)](C) The rate of tax resulting from the levy of real property taxes shall be applied to the assessed value of any real property subject to the allocation provisions of this section as determined pursuant to subdivision (a) of this section, however, the amount of tax levied as a result of the application of the tax rate to the increase in assessed value determined in accordance with paragraph (ii) of subdivi- sion (a) of this section shall not be paid into the fund of the munici- pality OR THE SCHOOL DISTRICT as real property taxes but shall be allo- cated pursuant to that paragraph. [(e)](D) The official or officials responsible for the preparation of the assessment roll or rolls specified in subdivision (a) of this section shall provide to the municipality or municipalities AND SCHOOL DISTRICTS, in addition to the assessment roll or rolls, such information as is deemed necessary by the legislative bodies of the municipality or municipalities AND SCHOOL DISTRICTS to effectuate the purpose of this section. [(f)](E) The allocation of real property taxes authorized by this section shall be permitted only with respect to municipalities AND SCHOOL DISTRICTS which have adopted a redevelopment plan providing for such allocation pursuant to section nine hundred [sixty-h]SEVENTY-H or section nine hundred [sixty-n]SEVENTY-N of this article and such allo-S. 2446 8
cation shall not apply to special ad valorem levies and special assess- ments as defined by subdivisions fourteen and fifteen of section one hundred two of the real property tax law, EXCEPT AS PROVIDED IN PARA- GRAPH (III) OF SUBDIVISION (J) OF SECTION NINE HUNDRED SEVENTY-O OF THIS ARTICLE.
[(g)](F) If, after adoption of a redevelopment plan, the official or officials responsible for the preparation of the assessment roll or rolls specified in subdivision (a) of this section undertake to revalue real property for real property tax purposes by altering the standard of assessment utilized to establish the value of real property for assess- ment purposes, the assessment of real property within a project area as provided by paragraph (i) of subdivision (a) of this section shall be adjusted in such manner as if such new standard of assessment had been utilized in the preparation of the assessment roll last adopted prior to adoption of the redevelopment plan. (G) WITH RESPECT TO A SCHOOL DISTRICT WHICH CONSENTS TO AN ALLOCATION OF TAXES PRESCRIBED IN THIS SECTION, THE OBJECT OR PURPOSE OF WHICH SUCH INDEBTEDNESS MAY BE INCURRED BY A MUNICIPALITY SHALL BE A SCHOOL BUILD- ING. HOWEVER, THERE SHALL BE NO APPORTIONMENT OF PUBLIC MONEYS UNDER SECTION THREE THOUSAND SIX HUNDRED ONE OF THE EDUCATION LAW WITH RESPECT TO SUCH ALLOCATION OF TAXES LEVIED BY A SCHOOL DISTRICT. (H) IN ESTABLISHING A UNIFORM TAX EXEMPTION POLICY PURSUANT TO SECTION EIGHT HUNDRED SEVENTY-FOUR OF THIS CHAPTER, AN AGENCY SHALL NOT TAKE INTO ACCOUNT THE PORTION OF REAL PROPERTY TAXES MEASURED UNDER PARAGRAPH (II) OF SUBDIVISION (A) OF THIS SECTION IN COMPUTING A PAYMENT IN LIEU OF TAXES AGREEMENT. S 11. This act shall take effect immediately and shall apply to any indebtedness incurred by a municipality pursuant to section 970-o of the general municipal law on or after July 30, 1986.