senate Bill S6835

Establishes an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the real property tax levy

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 28 / Mar / 2012
    • REFERRED TO EDUCATION
  • 31 / May / 2012
    • 1ST REPORT CAL.981
  • 04 / Jun / 2012
    • 2ND REPORT CAL.
  • 05 / Jun / 2012
    • ADVANCED TO THIRD READING
  • 11 / Jun / 2012
    • PASSED SENATE
  • 11 / Jun / 2012
    • DELIVERED TO ASSEMBLY
  • 11 / Jun / 2012
    • REFERRED TO REAL PROPERTY TAXATION

Summary

Establishes an energy system tax stabilization reserve fund in the Lowville Central School District to lessen or prevent increases in the school district's real property tax levy resulting from decreases in revenue due to changes in the amount of or termination of payments in lieu of taxes receivable.

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Bill Details

See Assembly Version of this Bill:
A9859
Versions:
S6835
Legislative Cycle:
2011-2012
Current Committee:
Law Section:
Real Property Taxation

Sponsor Memo

BILL NUMBER:S6835

TITLE OF BILL:
An act
to establish an energy system tax stabilization reserve fund in the
Lowville Central School District to lessen or prevent increases in the
school district's real property tax levy

PURPOSE:
To allow the Lowville Central School District to establish a
real property tax stabilization fund out of part of the proceeds of a
payment in lieu of taxes (PILOT) agreement from the Maple Ridge Wind
Farm. Upon termination or decrease of the PILOT payments, transfers
from the fund would ease a transition in the tax levy so that
taxpayers do not have to bear a sudden spike in real property taxes.

SUMMARY OF PROVISIONS:
§1. The legislative findings section recognizes that the school
district's current receipt of significant PILOT payments from the
wind farm will at some point either terminate, or significantly
decrease, which could result in a massive destabilization of the
district's tax base and the amount of its tax levy to meet current
budget levels.

§2. This section makes definitions of important terms in the bill,
including providing that PILOT payments may mean either PILOTS under
Real Property Tax Law 487 (RPTL Section creating municipalities to
enter into PILOT agreements for wind energy systems) or Subdivision
fifteen of § 858 of the General Municipal Law (authorizing IDA
created PILOT's) and adopting the definition of wind energy systems
already found in Real Property Tax Law §487.

§3. (a) This sub-section permits the school district to create a tax
stabilization fund by paying into such funds the amount of PILOT
payments received which is not required to prevent an increase from
the real property tax levy over the preceding budget year.

§3. (b) This sub-section permits the deposit of PILOT payments already
accrued into the stabilization fund.

§3. (c) This subsection provides limitations on the ability to
withdraw from the stabilization fund as follows (1) no withdrawal may
be made in any year in which PILOT payments receivable equal or
exceed those from the preceding year; (2) for any year in
which the amount of payments is less than the preceeding year, a
withdrawal may be made in the amount of the decrease; (3) for any
fiscal year in which no PILOT payment will be made, a withdrawal may
be made in an amount not to exceed the PILOT payment for the
preceding year plus the amount, if any, authorized to be withdrawn in
such preceding year.

Other provisions require withdrawals for any other purpose would
require voter approval submitted as a separate proposition and
applies existing controls and reporting requirements over expenditure
of district money.


§4. Makes requirements for information concerning the fund, deposits
into, expenditures from it, and the affect on the tax levy for
purposes of the property tax report card under subdivision seven of
§1716 of the Education Law.

§5. Makes provisions with regard to the real property tax cap so that
use of the fund does not facilitate avoiding such cap.

§6. Should this act take effect after the last date for submission of
the district's real property tax report card to the Department of
Education, this section makes provision for public notice of a
statement concerning payment into the fund and the effect on the tax
levy.

§7. Provides the act shall take effect immediately.

EXISTING LAW:
A similar tax stabilization fund was established for the
Oswego community as a result of large PILOT payments from a nuclear
energy facility. (See Chapter 202, Laws of 2001)

JUSTIFICATION:
The Maple Ridge Wind Farm in Lewis County, one of the largest and most
successful wind energy enterprises in the United States, pays an
annual PILOT payment of around $8.9 million to municipalities and
school districts which host wind towers. This PILOT payment has been
one of the leading causes for wide community acceptance and support
of this important alternative energy project. The Lowville Central
School District receives about $3.9 million of this amount each year.
The district has employed this money prudently, using about $2.7
million each year to keep the tax levy level and allowing the balance
to accrue in fund balance. The PILOT agreement started in the
2006-2007 school year and will end in 2021-2022. At that point, the
PILOT will either terminate completely or be replaced, perhaps by an
IDA sponsored PILOT which would not be as generous. The result would
be that the PILOT at that point would cease to be a windfall and its
loss would become the source of wrenching dislocation in the
district's finances. The district requires the approval given in this
bill to accumulate a tax stabilization fund which will one day be
equal to the task of smoothing the transition that will be required
by ramping up the tax levy over a period
of time. Absorbing all of the loss or decrease in the PILOT in one
or two years would cause a severe spike in the tax
levy, dramatic slashing of programs or both. The bill contains
significant safeguards to insure the dedication of PILOT funds for
this purpose.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None for the State of New York. Positive impact on the district's
fiscal and tax levy stability.

EFFECTIVE DATE:
Immediately.


view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  6835

                            I N  S E N A T E

                             March 28, 2012
                               ___________

Introduced  by  Sen.  GRIFFO -- read twice and ordered printed, and when
  printed to be committed to the Committee on Education

AN ACT to establish an energy system tax stabilization reserve  fund  in
  the Lowville Central School District to lessen or prevent increases in
  the school district's real property tax levy

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings. The legislature hereby finds that the
private development and ownership of wind energy systems located  within
the  Lowville  Central  School District may result in instability in the
real property tax base and the budgets of the district due to the uncer-
tainty with the assessments of such wind energy systems at the time  the
payments in lieu of taxes terminate.
  S 2. Definitions. As used in this act:
  (a)  "Board  of  education" or "board" means the board of education of
the Lowville Central School District.
  (b) "Energy system tax stabilization reserve fund" or "fund" means the
energy system tax stabilization reserve  fund  established  pursuant  to
this act.
  (c)  "Payments  in lieu of taxes" or "payments" means payments in lieu
of taxes receivable by the school district pursuant to contracts entered
into in accordance with section 487 of the  real  property  tax  law  or
subdivision  15  of section 858 of the general municipal law on any wind
energy system located wholly or partially within  the  Lowville  Central
School District.
  (d)  "School district" or "district" means the Lowville Central School
District.
  (e) "Wind energy systems" shall be defined as in section  487  of  the
real  property  tax law and shall include the land upon which the system
is located, any equipment used in such generation, and equipment leading
from the system to the interconnection with the transmission system.
  S 3. The board of education, without voter approval, is hereby author-
ized to establish an energy system tax  stabilization  reserve  fund  to
lessen  or  prevent increases in the school district's real property tax

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15172-01-2

S. 6835                             2

levy resulting from decreases in revenue due to changes in the amount of
or termination of payments in lieu of taxes  receivable  by  the  school
district. Moneys shall be paid into and withdrawn from the fund, and the
fund shall be administered, as follows:
  (a) For any school district fiscal year commencing after the effective
date  of  this  act and after the establishment of the energy system tax
stabilization reserve  fund,  the  board  of  education,  without  voter
approval,  may  determine  that there shall be paid into the fund all or
any portion of the amount by which the payments in lieu of taxes receiv-
able by the school district for such fiscal  year  is  not  required  to
prevent  an increase in the school tax levy from the immediately preced-
ing fiscal year, provided that no payment into the  reserve  fund  shall
cause  the  balance  of the fund to exceed 100 percent of the budget for
such immediately  preceding  fiscal  year.  Such  determination  may  be
amended  to  reduce  the amount paid into the fund in the event that the
district's original proposed budget is not approved by the voters.
  (b) The board of education, without voter approval, is hereby  author-
ized to make a one-time deposit into the energy system tax stabilization
reserve  fund  in  an  amount not to exceed the balance over any maximum
allowable balance as required by any other law that accrued prior to the
establishment of the energy system tax stabilization reserve fund  as  a
result of the receipt of any payment in lieu of taxes.
  (c)  Moneys  may be withdrawn from the energy system tax stabilization
reserve fund subject to the following limitations:
  (1) For any fiscal year for which payments in lieu of taxes receivable
by the school district equal or  exceed  the  amount  of  such  payments
received  for  the immediately preceding fiscal year, no amount shall be
withdrawn from the fund.
  (2) For any fiscal year for which payments in lieu of taxes receivable
by the school district  are  less  than  the  amount  of  such  payments
received  for the immediately preceding fiscal year, the board of educa-
tion, without voter approval, may authorize a withdrawal from  the  fund
in  an  amount not to exceed the amount of the payments received for the
immediately preceding year less the amount of  the  payments  receivable
for  the  fiscal  year for which the budget and tax levy is being deter-
mined.
  (3) For any fiscal year for which the school district does not  antic-
ipate  receiving  any payments in lieu of taxes, the board of education,
without voter approval, may authorize a withdrawal from the fund  in  an
amount  not  to exceed the amount of such payments received for the last
preceding fiscal year for which such payments  were  received  plus  the
amount,  if any, which the board of education authorized to be withdrawn
from the fund for such last preceding fiscal year.
  (4) Notwithstanding paragraph one of this subdivision, and in addition
to any withdrawal from the fund authorized pursuant to paragraph two  or
three of this subdivision, moneys may be withdrawn from the fund for any
fiscal  year in such amount and for such purposes as may be set forth in
a separate proposition submitted by the board of education and  approved
by the qualified voters of the school district.
  (c)  Determinations  by  the  board of education to pay money into the
energy system tax stabilization  reserve  fund,  authorizations  by  the
board  to  withdraw  money  from the fund, and decisions by the board to
submit a proposition to the voters authorizing  a  withdrawal  from  the
fund  shall  be  made on or before the last date provided by law for the
submission to the state education department of  the  school  district's

S. 6835                             3

property  tax  report card pursuant to subdivision seven of section 1716
of the education law.
  (d)  The  moneys  in  the energy system tax stabilization reserve fund
shall be deposited, invested and accounted for in  the  manner  provided
for  in subdivisions two and six of section 3651 and section 3652 of the
education law.
  S 4. The property tax report card  prepared  by  the  school  district
pursuant to subdivision seven of section 1716 of the education law shall
contain  the  following  information  relating  to the energy system tax
stabilization reserve fund: (a) the balance of the fund as of the  start
of  the  current  fiscal  year, (b) all deposits or withdrawals from the
fund for the current fiscal year, (c) an analysis of the impact of  such
withdrawals  on  the  school  district's tax levy for the current fiscal
year, (d) proposed deposits and withdrawals for the ensuing fiscal year,
and (e) an analysis of the impact of such proposed  deposits  and  with-
drawals  on  the  projected  tax levy for the ensuing fiscal year if the
proposed budget is adopted.
  S 5. When computing the school district's tax levy limit for a  school
year  pursuant  to  subdivision three of section 2023-a of the education
law:
  (a) The payments in lieu of taxes receivable for the prior school year
shall be decreased by  any  amount  paid  into  the  energy  system  tax
stabilization  reserve  fund for such prior school year and increased by
any amount withdrawn from the fund for such prior school year.
  (b) The payments in lieu of taxes receivable in the coming fiscal year
shall be decreased by the amount to be paid into the energy  system  tax
stabilization  reserve fund for such coming fiscal year and increased by
any amount to be withdrawn from  the  energy  system  tax  stabilization
reserve fund for such coming fiscal year.
  S  6.  Notwithstanding  the  provisions  of subdivision (c) of section
three of this act and section four of this act, if this act  shall  take
effect  later  than fourteen days prior to the last date provided by law
for the submission to the  state  education  department  of  the  school
district's  property  tax  report card for the school district's ensuing
fiscal year, then a determination by the board of education to pay money
into the fund for the ensuing fiscal year may be made on or  before  the
last  date provided by law for the levy of taxes for such ensuing fiscal
year. Upon making such determination to pay money  into  the  fund,  the
board shall cause to be posted on the school district's website a state-
ment  containing  the amount of the payment into the fund and the effect
of the payment on the projected tax levy for the ensuing fiscal year.
  S 7. This act shall take effect immediately.

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