NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A1567
SPONSOR: McDonald
 
TITLE OF BILL:
An act to amend the general municipal law and the education law, in
relation to payments in lieu of taxes
 
PURPOSE:
This bill amends the general municipal law and education law to provide
that the tax base growth factor (or quantity change factor) includes the
value of new assessment exempted under a Payment In Lieu of Taxes agree-
ment being added to a community.
 
SUMMARY OF SPECIFIC PROVISIONS:
Section 1 amends section 3-c of the general municipal law to include the
change in assessed value for each property on the exempt side of the tax
rolls under PILOT agreements when the commissioner of taxation and
finance calculates the quantity change factor for each local government.
Section 2 amends section 2023-a of the education law to provide that the
change in assessed value for each property on the exempt side of the tax
rolls under PILOT agreements is included when the commissioner of taxa-
tion and finance calculates the quantity change factor for each local
government.
Section 3 provides an effective date one hundred twenty days after
enactment.
 
JUSTIFICATION:
The current tax cap law ignores increases to the tax base of a community
if that increase in tax base occurs under a PILOT agreement. The mechan-
ics of the law takes into account the payment of PILOTs in a comprehen-
sive manner, whereby each dollar of the "new" PILOT payments made
reduces the amount of tax an entity can levy by a dollar. In other
words, the law sets the Property Tax and PILOT payments cap by fixing a
maximum levy amount after netting out the effects of any PILOT payments
received.
The issue is that the real property improvements made under a PILOT are
not counted under the law. The intent of Tax Base Growth Factor is to
ensure that as a community grows, so too should its revenues to recog-
nize that the community is providing services to more residences and
businesses. By not recognizing PILOT-exempted projects, the law does not
properly capture this contradiction and a community is restricted in
providing resources in proportion to service demand increases. This
issue can be resolved by amending the law to have the quantity change
factor include the value of new assessment exempted under a PILOT agree-
ment being added to a community. This measure is not a tax increase,
instead it recognizes growth to be factored into the 2% cap which
provides school districts and municipalities more flexibility to stay
under the cap.
 
LEGISLATIVE HISTORY:
A.8038 2013- Referred to local governments
A.3611 2015/16 - Referred to local governments
A.1481A 2017 - Veto message 208
A.7091 2021-2022
 
FISCAL IMPLICATIONS:
None
 
EFFECTIVE DATE:
This act shall take effect on the hundred twentieth day after it shall
have become law.
STATE OF NEW YORK
________________________________________________________________________
1567
2023-2024 Regular Sessions
IN ASSEMBLY
January 17, 2023
___________
Introduced by M. of A. McDONALD -- read once and referred to the Commit-
tee on Local Governments
AN ACT to amend the general municipal law and the education law, in
relation to payments in lieu of taxes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Subparagraph (i) of paragraph (b) of subdivision 3 of
2 section 3-c of the general municipal law, as amended by section 2 of
3 subpart C of part C of chapter 20 of the laws of 2015, is amended to
4 read as follows:
5 (i) The commissioner of taxation and finance shall calculate a quanti-
6 ty change factor for each local government for the coming fiscal year
7 based upon the physical or quantity change, as defined by section twelve
8 hundred twenty of the real property tax law, reported to the commission-
9 er of taxation and finance by the assessor or assessors pursuant to
10 section five hundred seventy-five of the real property tax law. The
11 quantity change factor shall show the percentage by which the full value
12 of the taxable real property in the local government has changed due to
13 physical or quantity change between the second final assessment roll or
14 rolls preceding the final assessment roll or rolls upon which taxes are
15 to be levied, and the final assessment roll or rolls immediately preced-
16 ing the final assessment roll or rolls upon which taxes are to be
17 levied[. The commissioner of taxation and finance shall, as appropriate,
18 promulgate rules and regulations regarding the calculation of the quan-
19 tity change factor which may adjust the calculation based on the devel-
20 opment on tax exempt land], and shall include the change in assessed
21 value for each property on the exempt side of the tax rolls under a
22 payment in lieu of tax agreement.
23 § 2. Paragraph b of subdivision 2-a of section 2023-a of the education
24 law, as amended by section 3 of subpart C of part C of chapter 20 of the
25 laws of 2015, is amended to read as follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD02678-01-3
A. 1567 2
1 b. The commissioner of taxation and finance shall calculate a quantity
2 change factor for the coming school year for each school district based
3 upon the physical or quantity change, as defined by section twelve
4 hundred twenty of the real property tax law, reported to the commission-
5 er of taxation and finance by the assessor or assessors pursuant to
6 section five hundred seventy-five of the real property tax law. The
7 quantity change factor shall show the percentage by which the full value
8 of the taxable real property in the school district has changed due to
9 physical or quantity change between the second final assessment roll or
10 rolls preceding the final assessment roll or rolls upon which taxes are
11 to be levied, and the final assessment roll or rolls immediately preced-
12 ing the final assessment roll or rolls upon which taxes are to be
13 levied[. The commissioner of taxation and finance shall, as appropriate,
14 promulgate rules and regulations regarding the calculation of the quan-
15 tity change factor which may adjust the calculation based on the devel-
16 opment on tax exempt land], and shall include the change in assessed
17 value for each property on the exempt side of the tax rolls under a
18 payment in lieu of tax agreement.
19 § 3. This act shall take effect on the one hundred twentieth day after
20 it shall have become a law. Effective immediately, the addition, amend-
21 ment and/or repeal of any rule or regulation necessary for the implemen-
22 tation of this act on its effective date are authorized to be made and
23 completed on or before such effective date.