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.
