Requires businesses that make payments in lieu of taxes to provide local governments and school districts with notice of their intention to change assessment

Title of bill

An act to amend the real property tax law, in relation to changes in assessment for businesses that make payments in lieu of taxes

Purpose

This bill requires businesses that make payments in lieu of taxes (PILOTs) to provide local governments and school districts with notice of their intention to change assessment.

Summary of provisions

The real property tax law is amended by adding a new section 561 to require businesses that make payments in lieu of taxes (PILOTs) to provide local governments and school districts with notice of their intention to change assessment.

Such notification must be made in writing and must be made at least thirty days prior to such filing for change of assessment.

Justification

Many businesses have been enticed to areas through a development program known as 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 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 should be given the courtesy of previous notice that the business is filing an assessment challenge. Notification would allow for planning and budgeting decisions to be made that would reflect a possible reduction in PILOT payments.

Legislative history

S.1526 of 2013/14.

Fiscal implications

None.

Effective date

This act shall take effect immediately.