What's happening
This bill requires the Long Island Power Authority to enter written agreements for annual payments in lieu of taxes to municipalities and school districts, with specific schedules and limits.
Why it matters
Provides greater fiscal certainty for local governments and school districts. by requiring LIPA to formalize its annual payments in lieu of taxes (PILOTs) through written agreements, ensuring predictable revenue streams for municipal budgeting and planning.
Introduces a clear schedule for PILOT payments. mandating fixed annual payments be made by February 1 for the following fiscal year, based on prior tax rolls and subject to a maximum 2% year-over-year increase, which helps municipalities and school districts better anticipate and manage cash flow.
Limits LIPA’s ability to make mid-year changes to payments. by stipulating that any modifications must be finalized and communicated in writing by February 1, with changes after that date not taking effect until the subsequent fiscal year—protecting local entities from unexpected reductions or changes.
Strengthens the legal obligation for LIPA to enter into PILOT agreements. with municipalities and school districts, reducing ambiguity and potential disputes over whether such payments will be made and under what terms, thereby enhancing local government financial stability.
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Who cares
Headline styles
Cap School Tax Payments
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Reported and committed to finance
- Referred to energy and telecommunications
- Reported and committed to finance
- Referred to energy and telecommunications
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Guarantee School Tax Payments
In Assembly Committee · Corporations, Authorities And Commissions · Sponsor Charles Lavine
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
1295
2017-2018 Regular Sessions
IN SENATE
January 9, 2017
Introduced by Sen. MARCELLINO -- read twice and ordered printed, and when printed to be committed to the Committee on Energy and Telecommunications
AN ACT to amend the public authorities law, in relation to payments in lieu of taxes
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 1020-q of the public authorities law, as amended by section 8 of part A of chapter 173 of the laws of 2013, is amended to read as follows:
1. (a) Each year after property theretofore owned by LILCO is acquired by the authority by any means authorized by this title and, as a consequence, is removed from the tax rolls, the authority shall make payments in lieu of taxes to municipalities and school districts equal to the taxes and assessments which would have been received from year to year by each such jurisdiction if such acquisition had not occurred, provided, however, that for the calendar year starting on January first, two thousand fifteen, and for each calendar year thereafter, such payments in lieu of taxes shall not exceed the in lieu of tax payments made to such municipalities and school districts in the immediately preceding year by more than two percent.
(b) The authority shall enter into written agreements to make payments in lieu of taxes pursuant to section one thousand twenty-p of this title for all parcels of property subject to this section. Such agreements shall, without limitation, include an annual schedule of fixed payments in lieu of taxes on or before February first to be paid to municipalities and school districts for the following fiscal year of such municipalities and school districts based upon the two prior year's tax rolls consistent with the two percent calendar year limitation in paragraph (a) of this subdivision, which shall be paid by the authority to the assessing jurisdiction for the benefit of the municipalities and
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD05835-01-7
S. 1295 2
school districts and distributed to the municipalities and school districts as intended third party beneficiaries in accordance with the schedule for payment of taxes for each municipality and school district. If any annual payment in lieu of taxes is modified during the course of the written agreement, such modification must be made on or before February first of each year with written notice to the municipalities and school districts. Any modification made after February first shall not be deemed effective until the year subsequent to the ensuing fiscal year.
§ 2. Subdivision 2 of section 1020-p of the public authorities law, as added by chapter 517 of the laws of 1986, is amended to read as follows:
2. The authority shall be required to pay no taxes nor assessments upon any of the property acquired or controlled by it or upon its activities in the operation and maintenance thereof or upon income derived therefrom, provided that [nothing herein shall prevent] the authority [from entering] shall enter into agreements to make payments in lieu of taxes with the governing bodies of municipalities, as provided for in section one thousand twenty-q of this title.
§ 3. This act shall take effect immediately.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the public authorities law, in relation to payments in lieu of taxes
Purpose
This legislation would clarify the Long Island Power Authority's (LIPA) obligation to make timely payments in lieu of taxes
(PILOTs) for the benefit of various municipalities and school districts and to require LIPA to enter into written agreements with the assessing jurisdictions (towns in Suffolk and Nassau County) detailing such requirement. It will also help to create fiscal certainty during the school district budget process.
Read the full memo (771 words)
Summary of provisions
Section 1 of the bill amends subdivision 1020-q of the public authorities law by adding (b) to subdivision one which requires LIPA to enter into written PILOT payment agreements which shall include annual schedules of fixed payments. Such schedules shall be finalized on or before February 1 of the year prior to the fiscal year of the budget that the school district is in the process of developing.
This schedule will afford school districts fiscal certainty and ample time to comply with the Tax Cap Law's reporting requirements outlined in section 2023-a of the education law. In the event of a PILOT amount is modified contrary to the written agreement after February 1, the modification shall not be deemed effective until the year subsequent to the ensuing fiscal year so that school districts are not faced with a modification to the tax levy limit calculation, their voter-approved budgets and fixed levies.
Justification
The LIPA reform act effective as of the calendar year starting with January 1, 2015, attempts to limit the growth of the LIPA PILOT payments to no more than 2% of the immediately preceding calendar year to the detriment of the school districts and their taxpayers. The unilateral removal of approximately 614 LIPA properties from the tax roll by Nassau County in 2015, after school budgets were approved and school tax levies fixed by the school districts, the LIPA Reform Act and its implementation, which resulted in a unilateral reduction to school districts tax levies by Nassau County have not only cause school budget shortfalls, but have also created fiscal uncertainty. Without legislative intervention, this quandary will likely reoccur annually as school districts are unable to calculate their tax cap in accordance with section 2023-a of the education law due to the disputed total amounts of taxes levied for the prior year and PILOT payments receivable for the prior and coming fiscal years. Compounding the issue is the timing and process by which Nassau County delivers the assessment based PILOT amounts for the prior year under Nassau County Administrative Code tax calculation. This calculation does not occur until September, well after budgets have been submitted to the voters and the tax levies fixed by the school districts. Without legislative intervention providing for a mechanism to calculate these assessment based PILOTs, school districts in Nassau County will be faced with fiscal uncertainty for years to come and their educational programs placed in jeopardy. The pressure of State mandated deadlines of section 2023-a of the education law, also referred to as the Tax Cap Law require school districts to begin preparing their annual budgets much earlier in the school year. The Tax Cap Law limits increases of a school districts tax levy to no more than 2% or the rate of inflation, whichever is less, from the prior school year. By January of the year prior, school districts need to have fiscal certainty on tax levies received for the current year, and PILOT payments receivable for a current and upcoming school year. This is a result of the Tax Cap Law which requires that school districts submit to the State all relevant amounts, including tax revenue received and PILOT payments receivable for the prior and upcoming school year to ensure that the school districts comply with the tax cap. Without the fiscal certainty and timing provisions that written PILOT agreements provide, school districts cannot develop an accurate tax cap limit and as a result an accurate budget to be submitted to their voters.
Therefore this legislation would require that school districts be made aware of the amount of PILOTS in sufficient time to properly calculate its tax levy limit each year.
The proposed amendment would resolve the inherent inconsistency between the property tax laws and Administrative Code associated with these assessments based PILOTs, the Long Island Power Authority's LIPA Reform Act PILOT payments limits and the school district's fixed tax levy needs and their unique budget process.
Legislative history
S7909 of 2016
Fiscal implications
None.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.