BILL NUMBER: S3245A
SPONSOR: COONEY
 
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.
Section 1. amends the calculation of the quantity change factor for
local governments to provide that, where a local government has made an
election under new paragraph (e), the commissioner of taxation and
finance shall include the equivalent taxable value of PILOT property in
lieu of the full assessed value of such property.
Section 2. permits, but does not require, a local government to include
an "equivalent taxable value" for PILOT properties when calculating the
quantity change factor under the property tax cap. The equivalent taxa-
ble value is calculated by dividing the portion of the PILOT payment
attributable to real property taxation by the applicable tax rate or
rates for the levy year, as determined by the commissioner. The bill
expressly prohibits inclusion of the full assessed value of PILOT prop-
erties where this option is elected. This section also provides that the
election must be made by local law or resolution following a public
hearing, shall remain in effect unless repealed, and shall be imple-
mented pursuant to regulations promulgated by the commissioner, includ-
ing rules for allocating PILOT payments among affected taxing jurisdic-
tions and ensuring uniform application.
Section 3. amends the calculation of the quantity change factor for
school districts to provide that, where a school district has made an
election under new paragraph (d) of subdivision two-a of section 2023-a
of the education law, the commissioner shall include the equivalent
taxable value of PILOT property in lieu of the full assessed value of
such property.
Section 4. permits, but does not require, a school district to include
an "equivalent taxable value" for PILOT properties when calculating the
quantity change factor under the property tax cap, consistent with the
local government methodology in General Municipal Law section 3-c. The
election must be made by resolution of the board of education following
a public meeting and shall remain in effect unless rescinded by subse-
quent resolution. The section further provides that in no event shall
the full assessed value of property subject to a PILOT agreement be
included. It also states that nothing in the act shall be construed to
alter, repeal, or modify the allowable levy growth factor, override
requirements, or the inclusion and subtraction of payments in lieu of
taxes as otherwise required by law.
Section 5. Sets forth the effective date.
 
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 considers the payment of PILOTs in a comprehensive
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 residents 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 the community. This measure is not a tax increase,
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:
S.8480 FY21-22: Referred to Local Government
S.1045 FY22-23: Passed both houses, vetoed memo 110
S.8204 FY23-24: Referred to Local Government
 
FISCAL IMPLICATIONS:
This bill will have no fiscal impact on the State or Local Government.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
commencing on or after the first of January next succeeding the date
upon which it shall have become a law.

Statutes affected:
S3245: 3-c general municipal law, 3-c(3) general municipal law, 2023-a education law, 2023-a(2-a) education law
S3245A: 3-c general municipal law, 3-c(3) general municipal law, 2023-a education law, 2023-a(2-a) education law