What's happening
This bill requires assessments and public notice of direct and indirect property tax impacts before awarding local financial assistance or tax exemptions.
Why it matters
Ensures Greater Transparency for Taxpayers and Local Entities. By requiring detailed written notice and assessment of the direct and indirect property tax impacts—including effects on entities relying on payments in lieu of taxes—communities and stakeholders can better understand how proposed financial assistance or exemptions might affect local budgets and services.
Improves Informed Decision-Making by Local Governments. The mandated cost-benefit analysis, with explicit inclusion of indirect property tax impacts, gives decision-makers a fuller picture of the potential ripple effects of granting tax exemptions, helping avoid unintended consequences for schools, fire districts, and other entities funded by property taxes.
Enhances Public Accountability and Participation. The bill requires written notification to all potentially affected persons or entities, allowing those impacted by possible tax revenue changes to weigh in or plan accordingly, strengthening democratic oversight of local development incentives.
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Who cares
Headline styles
Require PILOT Tax Impact Study
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to local government
- Referred to local government
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
92
2019-2020 Regular Sessions
IN SENATE (Prefiled)
January 9, 2019
Introduced by Sen. KAMINSKY -- 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 requiring an assessment of the direct and indirect property tax impact before awarding financial assistance
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (b) of subdivision 5 of section 859-a of the general municipal law, as added by chapter 563 of the laws of 2015, is amended to read as follows:
(b) a written cost-benefit analysis by the agency that identifies the extent to which a project will create or retain permanent, private sector jobs; the estimated value of any tax exemptions to be provided; the estimated direct and indirect property tax impact of any tax exemptions, including the indirect impact to entities benefiting from revenues derived from payments in lieu of taxes; the amount of private sector investment generated or likely to be generated by the proposed project; the likelihood of accomplishing the proposed project in a timely fashion; and the extent to which the proposed project will provide additional sources of revenue for municipalities and school districts; and any other public benefits that might occur as a result of the project;
§ 2. Section 859-a of the general municipal law is amended by adding a new subdivision 3-a to read as follows:
3-a. The agency must provide written notice of the project to any person or entity who may be impacted by such project due to the estimated direct and indirect property tax impact of any tax exemptions, including the indirect impact to entities benefitting from revenues derived from payments in lieu of taxes. Such notice must contain a general, functional description of the project, describe the prospective
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03469-01-9
S. 92 2
location of the project, identify the initial owner, operator or manager of the project, describe the estimated direct and indirect property tax impact of any tax exemptions, including the indirect impact to entities benefitting from revenues derived from payments in lieu of taxes and generally describe the financial assistance contemplated by the agency with respect to the project.
§ 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 general municipal law, in relation to requiring an assessment of the direct and indirect property tax impact before awarding financial assistance
Purpose
To provide greater transparency and accountability in Industrial Devel- opment Agency financial assistance by requiring IDAs to include an esti- mation of direct and indirect property tax impacts of any tax exemptions in the agency's written cost-benefit analysis for a major project.
Summary of provisions
Section 1 amends General Municipal Law § 859-a(5)(b) to require Indus- trial Development Agencies to include the estimated direct and indirect property tax impact of any tax exemptions, including the indirect impact to entities benefiting from revenues derived from payments in lieu of taxes, in the written cost-benefit analysis published before a major project is approved.
Read the full memo (678 words)
Section 2 amends General Municipal Law § 859-a by adding new subdivision 3-a to require Industrial Development Agencies to provide written notice of the project to entities who may be impacted.
Section 3 establishes the effective date.
Existing law
The written cost-benefit analysis currently identifies the extent to which a project will create or retain permanent, private sector jobs; the estimated value of any tax exemptions to be provided; the amount of private sector investment generated or likely to be generated by the proposed project; the likelihood of accomplishing the proposed project in a timely fashion; and the extent to which the proposed project will provide additional sources of revenue for municipalities and school districts; and any other public benefits that might occur as a result of the project.
Justification
In 2014 and 2015, the Town of Hempstead Industrial Development Agency (TOHIDA) authorized two Payment In Lieu Of Taxes (PILOT) agreements relating to the Green Acres Mall and the Green Acres Commons. These PILOT agreements resulted in a significant loss of revenue to Valley Stream Union Free School District 30 (District 30) and the Central High School District (CHSD), among others, and therefore a significant increase in property taxes in those districts. The PILOT agreements also had the effect of raising taxes in Valley Stream Union Free School Districts 13 and 24, even though the Mall is not in those districts and contributed no property taxes directly to the districts.
According to a recent State Comptroller report on the PILOT agreements, the TOHIDA considers property tax implications when developing PILOT programs but does not have policies or procedures to conduct a review of the direct and indirect property tax impact. In this case, the Comp- troller found that the PILOT agreements effectively raised taxes in Districts 13 and 24 because of their CHSD revenue agreement with District 30. The decreased tax revenue due to the PILOT agreements affected District 30's ability to contribute to the CHSD and affected the proportion of the CHSD's budget attributable to each District; as a result, Districts 13 and 24 had to make up a larger share of CHSD's budget and raise taxes.
Local officials need the complete picture when looking at the impact of a PILOT agreement on their budgets and services. In the Comptroller's audit, the Comptroller suggested that TOHIDA should "(d)evelop addi- tional policies and procedures requiring TOHIDA officials to document the direct and indirect property tax impact of significant PILOT agree- ments and implement methods to communicate this information to all affected taxing entities and taxpayers." This legislation seeks to apply this common-sense suggestion to IDAs statewide for all future projects receiving over $100,000 in financial assistance.
Taxpayers and local officials should not be subject to surprise increases in the tax levy based on the decision of an IDA in which they were not consulted or considered. This legislation will ensure that the IDA must consider the full impact of their decisions, direct and indi- rect, on all taxpayers. Furthermore, by including this impact in the written cost-benefit analysis, taxpayers and officials will be able to more easily hold IDA officials to account for their actions.
Legislative history
S.7258-A-2018
Fiscal implications
To be determined.
Local fiscal implications
To be determined.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.