senate Bill S6833A

Authorizes the Ballston Spa Central School District to establish a semiconductor manufacturing tax stabilization reserve fund

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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

  • 17 / Mar / 2014
    • REFERRED TO LOCAL GOVERNMENT
  • 09 / Apr / 2014
    • COMMITTEE DISCHARGED AND COMMITTED TO EDUCATION
  • 29 / Apr / 2014
    • REPORTED AND COMMITTED TO FINANCE
  • 27 / May / 2014
    • AMEND AND RECOMMIT TO FINANCE
  • 27 / May / 2014
    • PRINT NUMBER 6833A
  • 02 / Jun / 2014
    • REPORTED AND COMMITTED TO RULES
  • 03 / Jun / 2014
    • ORDERED TO THIRD READING CAL.1120
  • 10 / Jun / 2014
    • PASSED SENATE
  • 10 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 10 / Jun / 2014
    • REFERRED TO EDUCATION

Summary

Authorizes the Ballston Spa Central School District to establish a semiconductor manufacturing tax stabilization reserve fund.

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Bill Details

See Assembly Version of this Bill:
A9151A
Versions:
S6833
S6833A
Legislative Cycle:
2013-2014
Current Committee:
Assembly Education
Law Section:
General Municipal

Sponsor Memo

BILL NUMBER:S6833A

TITLE OF BILL: An act to establish a semiconductor manufacturing tax
stabilization reserve fund in the Ballston Spa Central School District
to lessen or prevent increases in the school district's real property
tax levy

PURPOSE OF THE BILL: To authorize the Ballston Spa Central School
District to establish, subject to voter approval, a real property tax
stabilization fund out of a portion of the proceeds of a payment in
lieu of taxes (PILOT) agreement with the Global Foundries
semiconductor manufacturing facility.

SUMMARY OF SPECIFIC PROVISIONS: This measure enables the Board of
Education of the Ballston Spa Central School District to establish a
tax stabilization reserve fund to lessen or prevent increases in the
District's real property tax levy resulting from decreases in the
amount of, or termination of, the payments in lieu of taxes receivable
by the District over the years of a PILOT agreement with Global
Foundries. Such fund may only be established upon approval of a
majority of the voters of the District on a separate ballot
proposition conducted in accordance with the provisions of Article 41
of the Education Law.

The Board may determine that there shall be paid into the Fund all or
any portion of the amount by which the PILOT payments to the District
for each fiscal year is greater than the amount of such payments for
the previous fiscal year, provided that no payment into the fund
causes the total balance of the fund to exceed the amount approved in
the District referendum.

In any fiscal year in which the PILOT payments to the District are
less than the amount of such payments received in the preceding fiscal
year, or where the District does not anticipate any payment, the Board
may authorize withdrawal from the Fund in an amount not to exceed the
difference in payments between the two years. Additionally, moneys
may be withdrawn for any other lawful purpose, subject to voter
approval pursuant to the provisions of Article 41 of the Education
Law.

Finally, the measure provides that, when computing the District's tax
levy limit for a school year, the PILOT payments received shall be
decreased by any amount paid into the Fund for the prior school year
and increased by any amount withdrawn from the Fund in the prior
school year. Similarly, in any year that a portion of the PILOT
payments are added or removed from the Fund, that change will be
reflected in the tax levy limit calculation.

JUSTIFICATION: The Global Foundries semiconductor manufacturing
facility has proven to be a significant economic contributor to the
Capital Region generally, and the Towns of Malta, Ballston and
Stillwater specifically. Due to its disproportionate impact on local
taxing jurisdictions, the facility has entered into PILOT agreements
with each taxing jurisdiction. The largest impact, by far, is on the
tax base of the Ballston Spa Central School District.


The PILOT Agreement reflects the very nature of the semiconductor
industry, resulting in the establishment of a payment schedule for the
District which has a steep upward trajectory until 2016, followed by a
steady, and comparatively rapid, annual decrease in PILOT payments.
While this clearly represents a significant short-term benefit for the
District's taxpayers, it is the fiduciary duty of the School Board to
develop a strategy for long-term fiscal stability as the PILOT runs
its course. The most well-established vehicle for executing this type
of fiscal discipline is the creation of a tax stabilization reserve
fund. However, a special fund of this nature can only be established
by the Legislature.

There is significant precedent for this approach. Chapter 202 of the
Laws of 2001 established a nuclear energy facility tax stabilization
fund for the taxing communities in Westchester, Onondaga and Oswego
counties where the PILOT payments of nuclear power plants can dominate
the tax base. As a result of this enabling legislation, the Hendrick
Hudson School District (Westchester County) immediately established a
tax stabilization reserve fund to help manage the PILOT payments over
time. In a 2013 audit of that school district, the State Comptroller
reviewed their use of the fund and concluded:

"District officials have taken appropriate actions to manage the
District's financial condition. They recognized the need to be
proactive in budget development and expenditure controls We commend
District officials for their progressive involvement in managing the
District's financial condition. As a result, the District's financial
position has remained strong "

The PILOT payments of the semiconductor manufacturing facility have
the same, if not greater impact on the Ballston Spa CSD as Indian
Point has on the Hendrick Hudson CSD. The School Board in Ballston Spa
is looking for the same opportunity to exercise sound fiduciary
oversight as was provided to the several communities hosting nuclear
facilities. The existence of the two-percent tax cap makes it even
more imperative that sound fiscal policy be employed here. Moreover,
the establishment of a tax stabilization fund in this case, unlike
that in Hendrick Hudson, will be subject to a voter referendum.
Failure to act will subject the district taxpayers to potentially
devastating fiscal uncertainty.

PRIOR LEGISLATIVE HISTORY: New bill

FISCAL IMPLICATIONS: None to the State, while providing stability for
the taxpayers of the Ballston Spa Central School District

EFFECTIVE DATE: This act shall take effect immediately, and shall be
deemed to have been in full force and effect on and after May 19,
2014.

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

                                 6833--A

                            I N  S E N A T E

                             March 17, 2014
                               ___________

Introduced  by  Sen.  FARLEY -- read twice and ordered printed, and when
  printed to be committed  to  the  Committee  on  Local  Government  --
  committee  discharged  and  said  bill  committed  to the Committee on
  Education -- reported favorably from said committee and  committed  to
  the  Committee  on  Finance  --  committee  discharged,  bill amended,
  ordered reprinted as amended and recommitted to said committee

AN ACT to establish  a  semiconductor  manufacturing  tax  stabilization
  reserve  fund in the Ballston Spa 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  a  semiconductor manufacturing
project or projects located  within  the  Ballston  Spa  Central  School
District may result in the instability in the real property tax base and
the  budgets of the district due to the uncertainty with the assessments
of such semiconductor manufacturing project or projects  and  the  vari-
ability  of the payments in lieu of taxes prior to and at termination of
such payments.
  S 2. Definitions. As used in this act:
  (a) "Board of education" or "board" means the board  of  education  of
the Ballston Spa Central School District.
  (b)  "Semiconductor  manufacturing  tax stabilization reserve fund" or
"fund" means the semiconductor manufacturing 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 412-a of the real property  tax  law  or
section  858  of the general municipal law on any semiconductor manufac-
turing project or projects located wholly or partially within the  Ball-
ston Spa Central School District.
  (d)  "School  district"  or  "district" means the Ballston Spa Central
School District.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD14277-04-4

S. 6833--A                          2

  (e) "Semiconductor manufacturing project or projects" shall be defined
as in section 412-a of the real property tax law and shall  include  the
land  upon  which the project is located, buildings for use in the manu-
facturing of semiconductors and the acquisition and installation therein
of certain machinery and equipment.
  S  3.  The  board of education is hereby authorized to establish a tax
stabilization reserve fund 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 by the school district provided, however, that no such
fund shall be established unless approved by  a  majority  vote  of  the
qualified voters of the district present and voting on a separate ballot
proposition  therefor  at  either  a  special district meeting which the
board of education may call for such purposes, or at the annual district
meeting and election, to be noticed and  conducted  in  either  case  in
accordance  with  the  provisions  of  article  41 of the education law.
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 semiconductor manu-
facturing tax stabilization reserve fund, the  board  of  education  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  receivable  by  the
school  district for such fiscal year is greater than the amount of such
payments received by the school district for the preceding fiscal  year,
provided  that  no payment into the reserve fund shall cause the balance
of the fund to exceed  the  amount  approved  in  a  ballot  proposition
described above.
  (b)  The  board  of  education is hereby authorized to make a one-time
deposit into the semiconductor manufacturing tax  stabilization  reserve
fund  in  an  amount  not  to  exceed  the  amount of funds remaining in
reserves previously set aside in relation  to  article  VII  proceedings
related to the semiconductor manufacturing facility.
  (c)  Moneys  may be withdrawn from the semiconductor manufacturing 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  are  less  than  the  amount  of  such  payments
received  for  the  immediately  preceding  fiscal  year,  or the school
district does not anticipate receiving any payment, the board of  educa-
tion 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 determined.
  (2) Notwithstanding paragraph 1 of this subdivision, and  in  addition
to any withdrawal from the fund authorized pursuant to this subdivision,
moneys may be withdrawn from the fund for any fiscal year to be expended
for any other lawful purpose, provided, however, that no such withdrawal
and  expenditure shall be made unless approved by a majority vote of the
qualified voters of the district present and voting on a separate ballot
proposition therefor at either a  special  district  meeting  which  the
board  of education may call for such purpose, or at the annual district
meeting and election, to be noticed and  conducted  in  either  case  in
accordance with the provisions of article 41 of the education law.
  (d)  The  moneys  in the semiconductor manufacturing tax stabilization
reserve fund shall be deposited,  invested  and  accounted  for  in  the

S. 6833--A                          3

manner provided for in subdivisions 2 and 6 of section 3651, and section
3652 of the education law.
  S  4. When computing the school district's tax levy limit for a school
year pursuant to subdivision 3 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 semiconductor manufactur-
ing 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 semiconductor manu-
facturing tax stabilization reserve fund for such coming fiscal year and
increased by any amount to be withdrawn from the semiconductor  manufac-
turing tax stabilization reserve fund for such coming fiscal year.
  S  5.  This  act shall take effect immediately, and shall be deemed to
have been in full force and effect on and after May 19, 2014.

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