senate Bill S2446

2011-2012 Legislative Session

Authorizes tax increment bonds payable from real property taxes levied by a school district within a blighted project area

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 04, 2012 referred to local government
returned to senate
died in assembly
Jun 15, 2011 referred to ways and means
delivered to assembly
passed senate
May 17, 2011 advanced to third reading
May 16, 2011 2nd report cal.
May 11, 2011 1st report cal.625
Jan 21, 2011 referred to local government

Votes

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May 11, 2011 - Local Government committee Vote

S2446
5
0
committee
5
Aye
0
Nay
2
Aye with Reservations
0
Absent
1
Excused
0
Abstained
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Local Government Committee Vote: May 11, 2011

aye wr (2)
excused (1)

Co-Sponsors

S2446 - Bill Details

See Assembly Version of this Bill:
A5296
Current Committee:
Senate Local Government
Law Section:
General Municipal Law
Laws Affected:
Amd §§970-b, 970-c, 970-f, 970-h, 970-m, 970-n, 970-o & 970-p, Gen Muni L
Versions Introduced in 2009-2010 Legislative Session:
S1716A, A2378A

S2446 - Bill Texts

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Authorizes tax increment bonds payable from real property taxes levied by a school district within a blighted project area.

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BILL NUMBER:S2446

TITLE OF BILL:

An act
to amend the general municipal law, in relation to the municipal
redevelopment law authorizing tax increment bonds payable from and
secured by real property taxes levied by a school district within a
project area

PURPOSE OF THE BILL:

The purpose of the bill is to include a school district's real estate
taxes in the allocation of taxes available to pay bonds authorized
and issued under the Municipal Redevelopment Law (MRL), to expand the
purposes for which proceeds of such bonds may be applied, provide
alternative sources for payment of tax increment finance (TIF) bonds,
and to clarify the process of allocation of taxes.

SUMMARY OF SPECIFIC PROVISIONS:

§ 1- Includes findings and determinations that sound development and
redevelopment of blighted areas increases public school enrollment by
providing affordable housing and employment opportunities and the
need for expanded public education facilities and services.

§ 2- Amends subdivisions (b) and (f) of § 970-c of the General
Municipal Law to expand the definition of a "Legislative body" and a
"Planning Agency" to include the board of education of a school
district which consents to participate in TIF and adds a new
subdivision (i) to define the term "school district."

§ 3- Amends subdivision (1) and (n) of § 970-f of the General
Municipal Law in regard to the amount of bonds which may be issued
and the plan for the relocation of families and persons who may be
temporarily or permanently displaced from housing facilities in a
project area and adds a new Subdivision (0) to provide that each
redevelopment plan may provide for the consent to and approval of the
project area and the redevelopment plan by the board of education of
the school district.

§ 4- Amends subdivisions (b) and (c) of § 970-h of the General
Municipal Law to provide that public notice of the establishment of a
project area must include a disclosure of whether one or more school
districts have consented to participate in TIF.

§ 5- Amends § 970-m of the General Municipal Law in regard to the
amendment of a redevelopment plan.

§ 6- Amends paragraphs (iii), (iv) and (v) of subdivision (a) of
970-n of the General Municipal Law in regard to joint undertakings.

§ 7- Amends paragraphs (ii) and (iii) and subparagraph 1 of paragraph
(v) of subdivision (b) of § 970-n of the General Municipal Law to
include school districts as entities that may be a member of a
municipal redevelopment authority and to stipulate that such school


districts would, by resolution of the board of education, have a say
in the selection of a chairman to such authority.

§ 8- Amends subdivision (a), (b), and (g) and (i) of § 970-0 of the
General Municipal Law to provide that TIF bonds are not the debt of a
municipality or the State of New York and that no entity pledges its
faith and credit to the payment of such debt. This section also
clarifies that a school district is not issuing debt by consenting to
an allocation of taxes and that a school district's participation in
TIF is not dependent on the authorizing of § 6 of Article XVI of the
New York State Constitution. In addition, this section expands the
purposes for which TIF bonds may be issued and determines that such
purposes shall be for a public use and a public purpose including
environmental remediation and brownfield redevelopment, and
distributed generation of electric power.

This section also adds a new subdivision (j) to provide for additional
sources of security for TIF bonds, including a pledge of up to 10% of
county sales tax receipts, annual appropriations assistance payments
up to 10% of annual debt service, the establishment of an assessment
area coterminus with the project area to provide revenues for debt
service if incremental real property taxes are deficient, and the
establishment of reserve funds up to 10% of the maximum annual debt
service on the TIF bonds.

§ 9- Amends paragraph (i) of subdivision (d) of § 970-0 of the General
Municipal Law.

§ 10- Amends § 970-p of the General Municipal Law to provide that
reference to both a municipality and a school district are applicable
in approving an allocation of real property taxes and issuance of TIF
bonds and that incremental taxes in excess of the amount required for
annual debt service of the TIF bonds may be appropriated to a debt
service reserve fund rather than paid back to the municipality or
school district. In addition, this section provides that the
allocation of taxes be estimated by the assessor for each year the
TIF bonds are outstanding before the TIF bonds are issued and places
a standard of good faith effort on the assessor to make such
allocation in such years.

This section also repeals subdivision (b) of § 970-p of the General
Municipal Law. In addition, this section provides that an exception
in the MRL that TIF bonds are not subject to the rules regarding
reserve funds since proposed subdivision (j) (iii) of § 970-0 permits
a reserve fund to be established to provide for payment of TIF bonds.

Also, this section provides that a redevelopment object or purpose is
a school building purpose for a school district consenting to an
allocation of taxes under the MRL. This section provides authority
for the allocation of taxes for TIF bonds by a school district to be
reimbursed under the provisions of the Education Law relating to
building aid. In this way, the school district may recoup a
substantial amount of its allocation of taxes similar to recouping
debt service costs in a school facilities project.

Finally, this section provides that the amount of taxes allocated to
debt service on TIF bonds is not available for treatment under a


PILOT agreement otherwise the allocated taxes would be insufficient
to pay debt service on TIF bonds.

§ 11- Effective date.

JUSTIFICATION:

New York's TIF statute, the MRL, has been in effect since 1973. It was
considered such a significant financing mechanism for economic
development when enacted that the state constitution was amended to
allow municipalities to issue TIF bonds payable from allocated real
property taxes as an express exception to the constitutional rule
that all real property taxes be available under the full faith and
credit pledge for general obligations authorized by municipalities.
However, the MRL has been used very little even though TIF has become
a popular and successful economic development infrastructure
financing regime in many states.

The principal deficiencies with the MRL which these amendments address
are as follows: (i) unavailability of real property taxes from the
school district levy (usually, the largest single line on the tax
bill) which has prevented issuance of larger TIF bonds in significant
redevelopments; (ii) narrow purposes for which TIF bonds may be
issued, (iii) unavailability of alternative revenue sources to pay
debt services on TIF bonds, and (iv) uncertainty of future years
assessments while TIF bonds are outstanding to raise adequate amounts
of incremental tax for debt service on TIF bonds.

These amendments address foregoing issues. School districts are not
required to participate in the tax increment financing process.
However, they may elect to do so by resolution of their boards of
education. To participate, a school district must receive all notices
and approve all proceedings (including establishment of the
redevelopment plan, setting the boundaries of the project area, and
electing members to an authority, if used, and allocating taxes and
certifying to the assessor's estimate of future year allocations). As
an inducement to encourage school districts to participate in tax
increment financing, their allocations are made eligible for state
building aid reimbursement using current methods under the Education
Law.

The purposes for which TIF bonds may be issued are expanded to include
environment remediation and brownfields redevelopment purposes under
the Environmental Conservation Law, and distributed energy generation
11sing non-fossil fuel sources for electric generation. These
purposes further both economic development projects and governmental
infrastructure requirements so that TIF bonds may be an important
financing regime for modern technological projects that benefit both
private sector and public sector entities.

The amendments provide several alternative revenue sources to support
debt service on TIF bonds. All of these sources are currently
authorized and available in various forms to support state and local
government debt. Trapping sales tax receipts is currently employed by
certain state public benefit corporations. Municipal assistance
agreements when limited
to annual appropriations are used to support projects that benefit


the public sector when project revenues are insufficient. special
benefit assessments in support of debt service have long been
available to villages and improvement districts in towns and
counties. These amendments apply the procedures in the village Law to
the MRL. Assessments are sometimes referred to as "service payments"
and are available to raise additional revenue each year if the
allocation of taxes is insufficient to meet TIF bonds debt service.
The purposes for reserve funds have expanded in recent years and are
available for municipalities and school districts. Their application,
funded through discretionary budget appropriations, is a rational
extension of their purposes and a prudent means of securing TIF bonds.

The MRL is silent on the responsibility of assessors to allocate real
property taxes during the years TIF bonds are outstanding. These
amendments require that an estimate of allocations for such years be
made before TIF bonds are issued to provide investors with material
information about the creditworthiness of TIF bonds. The assessor is
also charged with a good faith effort standard to assess properties
in the project area to realize the tax allocation estimated.

PRIOR LEGISLATIVE HISTORY:

2009-10: S.1716-A - Advanced to Third Reading Senate Cal. 43
A.2378-A - Reported to Assembly Ways & Means Committee
2007-08: S.371 - Passed Senate
A.2358 - Reported to Assembly Ways & Means Committee
2005-06: S.8192 - Referred to Senate Rules Committee
A.10365 - Reported to Assembly Local Governments Committee

FISCAL IMPLICATIONS:

These amendments would stimulate economic development infrastructure
financing, enhance tax bases, and lead to increased governmental
revenues.

EFFECTIVE DATE:

This act shall take effect immediately and shall apply to any
indebtedness incurred by a municipality pursuant to section 970-o of
the General Municipal Law on or after July 30, 1986.

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

                                  2446

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 21, 2011
                               ___________

Introduced  by  Sen.  YOUNG  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Local Government

AN ACT to amend the general municipal law, in relation to the  municipal
  redevelopment  law  authorizing  tax  increment bonds payable from and
  secured by real property taxes levied by a school  district  within  a
  project area

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

  Section 1. The first undesignated paragraph of section  970-b  of  the
general  municipal  law, as added by chapter 916 of the laws of 1984 and
such section as renumbered by chapter  686  of  the  laws  of  1986,  is
amended  and  a  new  fourth  undesignated paragraph is added to read as
follows:
  It is hereby found and declared that there exists in many  communities
blighted  areas which threaten the economic and social well-being of the
people of the state. Blighted areas are characterized by one or more  of
the  conditions  set  forth  in  subdivision (a) of section nine hundred
[sixty-c] SEVENTY-C of this article.
  IT IS FURTHER FOUND AND DECLARED THAT SOUND DEVELOPMENT AND REDEVELOP-
MENT OF BLIGHTED AREAS INCREASES PUBLIC SCHOOL ENROLLMENT  BY  PROVIDING
AFFORDABLE  HOUSING  AND  EMPLOYMENT  OPPORTUNITIES  AND  THE  NEED  FOR
EXPANDED PUBLIC EDUCATION FACILITIES AND SERVICES.
  S 2. Subdivisions (b) and (f) of section 970-c of the general  munici-
pal law, as added by chapter 916 of the laws of 1984 and such section as
renumbered  by  chapter  686  of the laws of 1986, are amended and a new
subdivision (i) is added to read as follows:
  (b) "Legislative body" means (I) the governing body of a  municipality
empowered  to  adopt  and  amend  local  laws and ordinances[; provided,
however, that in the case of the city of New York, the legislative  body
shall,  for  the purposes of this article be the board of estimate], AND
(II) THE BOARD OF EDUCATION OF A SCHOOL DISTRICT OF WHICH CONSENTS TO AN

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD08033-01-1

S. 2446                             2

ALLOCATION OF TAXES PRESCRIBED IN SECTION NINE HUNDRED SEVENTY-P OF THIS
ARTICLE.
  (f)  "Planning agency" means the planning board or commission of [the]
A municipality OR THE PLANNING BOARD OR COMMITTEE OF A SCHOOL DISTRICT.
  (I) "SCHOOL  DISTRICT"  MEANS  ANY  SCHOOL  DISTRICT,  A  CITY  SCHOOL
DISTRICT  OR  A SCHOOL DISTRICT IN A CITY, AS THOSE TERMS ARE DEFINED IN
SECTION 2.00 OF THE LOCAL FINANCE LAW, WHICH APPROVES THE  REDEVELOPMENT
PLAN  AND  CONSENTS TO AN ALLOCATION OF TAXES PRESCRIBED IN SECTION NINE
HUNDRED SEVENTY-P OF THIS ARTICLE.
  S 3. Subdivisions (l) and (n) of section 970-f of the general  munici-
pal law, as added by chapter 916 of the laws of 1984 and such section as
renumbered  by  chapter  686  of the laws of 1986, are amended and a new
subdivision (o) is added to read as follows:
  (l) shall provide a limitation on the amount of  bonds  which  may  be
issued  pursuant  to  section  nine  hundred [sixty-o] SEVENTY-O of this
article for the purpose of carrying out or administering the  redevelop-
ment plan;
  (n) shall provide a plan for the relocation of families and persons to
be  temporarily  or permanently displaced from housing facilities in the
project area, which plan shall include the provision required by section
nine hundred [sixty-j] SEVENTY-J OF THIS ARTICLE that no person or fami-
ly of low and moderate income shall be displaced unless and until  there
is  suitable housing available and ready for occupancy by such displaced
person or family at rents comparable to those paid at the time of  their
displacement.
  (O)  MAY  PROVIDE  FOR THE CONSENT TO AND APPROVAL OF THE PROJECT AREA
AND THE REDEVELOPMENT PLAN BY THE  BOARD  OF  EDUCATION  OF  THE  SCHOOL
DISTRICT.
  S  4. Subdivisions (b) and (c) of section 970-h of the general munici-
pal law, as added by chapter 916 of the laws of 1984 and such section as
renumbered by chapter 686 of the laws of 1986, are amended  to  read  as
follows:
  (b)  Notice  of the hearing shall be posted in at least four prominent
places within the project area for a period of three weeks prior to such
hearing and shall be published not less  than  once  a  week  for  three
successive  weeks  prior to the hearing in a newspaper of general circu-
lation in the municipality involved. The notice of hearing shall include
a legal description of the boundaries of the  PROJECT  area  [or  areas]
designated in the proposed redevelopment plan [and], a general statement
of  the scope and objectives of the plan, AND A STATEMENT WHETHER ONE OR
MORE  SCHOOL  DISTRICTS  HAVE  CONSENTED  TO  AN  ALLOCATION  OF   TAXES
PRESCRIBED  IN SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE. A copy of
the notices shall be mailed to the last known owner of  each  parcel  of
land  in  the  area designated in the redevelopment plan.  A copy of the
notice shall also be mailed to the  legislative  body  of  each  of  the
taxing  jurisdictions  which  levies taxes upon any real property in the
project area designated in the proposed redevelopment plan.
  (c) Any and all persons who have any objections to the proposed  rede-
velopment  plan or who deny the existence of blight as defined by subdi-
vision (a) of section nine hundred [sixty-c] SEVENTY-C of this  article,
in  the proposed project area, or the legality or appropriateness of any
of the prior proceedings, may appear before the legislative body at such
public hearing and show cause  why  the  proposed  plan  should  not  be
adopted.  At any time not later than the hour set for hearing objections
to the proposed redevelopment plan, any person may file in writing  with

S. 2446                             3

the  clerk  of  the  legislative  body  a  statement  of  such  person's
objections to the proposed plan.
  S  5.  Section 970-m of the general municipal law, as added by chapter
916 of the laws of 1984 and as renumbered by chapter 686 of the laws  of
1986, is amended to read as follows:
  S  970-m.  Amendment  of  redevelopment plan. If at any time after the
adoption of a redevelopment plan for a project area by  the  legislative
body,  it  becomes  necessary or desirable to amend or modify such plan,
the legislative body may by resolution amend such plan. Such  amendments
may  include  a change in the boundaries of the project area to add land
to or, prior to the issuance of indebtedness pursuant  to  section  nine
hundred [sixty-o] SEVENTY-O OF THIS ARTICLE as provided by such redevel-
opment plan, exclude land from the project area. An amendment or modifi-
cation  of  the  plan  shall  be  approved  pursuant to subdivisions (a)
through (g) of section nine hundred [sixty-h] SEVENTY-H of this article.
Upon adoption of the amended plan by the legislative body  the  legisla-
tive body shall transmit the amended plan as provided by subdivision (h)
of such section.
  S  6.  Paragraphs  (iii),  (iv)  and (v) of subdivision (a) of section
970-n of the general municipal law, as added by chapter 916 of the  laws
of  1984  and  such  section as renumbered by chapter 686 of the laws of
1986, are amended to read as follows:
  (iii) If two or more municipalities jointly exercise the powers grant-
ed under this subdivision and a redevelopment plan as  adopted  provides
for  the  allocation  of  real property tax revenues pursuant to section
nine hundred [sixty-o] SEVENTY-O of this article the real property taxes
of each municipality shall be allocated pursuant to such section.
  (iv) If two or more municipalities jointly exercise the powers granted
under this subdivision and the redevelopment plan  as  adopted  provides
for  the  issuance  of  indebtedness  pursuant  to  section nine hundred
[sixty-o] SEVENTY-O of this article, such indebtedness shall  either  be
issued  jointly by the municipalities and the resolution authorizing the
issuance of such indebtedness must be approved by the  legislative  body
of  each municipality acting separately or shall be issued by resolution
of the [the] designated agent on behalf of the municipality  it  repres-
ents and, by resolution of its legislative body, each municipality shall
irrevocably  pledge  the  revenues  allocated  pursuant  to section nine
hundred [sixty-p] SEVENTY-P of this article to  the  repayment  of  such
indebtedness and any interest thereon.
  (v)  The joint exercise of powers authorized by this subdivision shall
be permitted only for the purpose of redevelopment of  an  area  located
wholly within each municipality AND WITHIN ONE OR MORE SCHOOL DISTRICTS.
  S  7. Paragraphs (ii) and (iii) and subparagraph 1 of paragraph (v) of
subdivision (b) of section 970-n of the general municipal law, as  added
by  chapter  916  of  the laws of 1984 and such section as renumbered by
chapter 686 of the laws of 1986, are amended to read as follows:
  (ii) A municipal redevelopment authority shall be a corporate  govern-
mental  agency  constituting  a  public  benefit  corporation. Except as
otherwise provided by special act of the legislature, an authority shall
consist of not less than five nor more  than  nine  members.  Membership
shall  be apportioned among the municipalities AND SCHOOL DISTRICTS, and
the manner of selection of a chairman determined by an  [intermunicipal]
agreement approved by local law by each such municipality, AND BY RESOL-
UTION  OF THE BOARD OF EDUCATION OF EACH SCHOOL DISTRICT.  Members shall
serve at the pleasure of the appointing authority, and each member shall
continue to hold office until his successor is appointed and has  quali-

S. 2446                             4

fied.  The [governing] LEGISLATIVE body shall file with the secretary of
state a certificate  of  appointment  or  reappointment  of  any  member
appointed  or  reappointed  by it. Members shall receive no compensation
for  their services but shall be entitled to reimbursement of the neces-
sary expenses, including traveling expenses, incurred in  the  discharge
of  their duties. No action shall be taken by an authority except pursu-
ant to the favorable vote of a majority of the members then  in  office.
Any  one or more of the members of an authority may be an official or an
employee of such municipality. In the  event  that  an  official  or  an
employee  of  such  municipality  shall  be appointed as a member of the
agency, acceptance or retention of such appointment shall not be  deemed
a  forfeiture of his OR HER municipal office or employment, or incompat-
ible therewith or affect his OR HER tenure or compensation in  any  way.
The  term of office of a member of an authority who is an official or an
employee of such municipality when appointed  as  a  member  thereof  by
special act of the legislature creating the authority shall terminate at
the  expiration  of  the  term  of his OR HER municipal office. Upon THE
creation of an authority, from time to time the [governing]  LEGISLATIVE
body  of a municipality OR A SCHOOL DISTRICT, may, by resolution, appro-
priate sums of money to defray the expenses of the authority.
  (iii) Unless otherwise provided by this subdivision or by the  special
act  of the legislature establishing a municipal redevelopment authority
or empowering an existing public corporation to carry out  the  purposes
and  provisions  of  this  article, such authority or public corporation
shall have the powers, duties and  responsibilities  granted  a  munici-
pality AND SCHOOL DISTRICT and its legislative body pursuant to sections
nine  hundred  [sixty-d] SEVENTY-D through nine hundred [sixty-m] SEVEN-
TY-M of this article, as well as the authority to receive the  taxes  of
each  municipality  AND  SCHOOL  DISTRICT allocated and paid pursuant to
section nine hundred [sixty-p] SEVENTY-P of this article. Such authority
or public corporation shall have the power to designate survey areas and
select project areas as provided  by  sections  nine  hundred  [sixty-d]
SEVENTY-D  and  nine  hundred  [sixty-e] SEVENTY-E of this article. Such
authority or public corporation shall obtain the report and  recommenda-
tion  of  the planning agency of each municipality OR SCHOOL DISTRICT on
the redevelopment plan and its conformity to the  master  plan  of  each
municipality  AND  SCHOOL  DISTRICT  before presenting the redevelopment
plan to the legislative body of each municipality  OR  SCHOOL  DISTRICT.
In  order  for  a  preliminary plan to be adopted or for a redevelopment
plan to be adopted or amended approval must be obtained by resolution of
the legislative body of each municipality  AND  SCHOOL  DISTRICT  acting
separately.
  (1)  An  authority  or  public  corporation  shall have the powers and
duties granted municipalities pursuant to section nine hundred [sixty-o]
SEVENTY-O of this article to issue tax increment bonds and tax increment
bond anticipation notes.  Such bonds and notes shall be bonds and  notes
of  the  authority  or  public corporation and neither the state nor any
municipality shall be liable on such bonds and notes and such bonds  and
notes shall not be a debt of the state or of any municipality.
  S 8. Subdivisions (a), (b), (g) and (i) of section 970-o of the gener-
al  municipal  law, as added by chapter 916 of the laws of 1984 and such
section as renumbered by chapter 686 of the laws of  1986,  are  amended
and a new subdivision (j) is added to read as follows:
  (a)  For  the purpose of carrying out or administering a redevelopment
plan adopted by the legislative body, a municipality is  hereby  author-
ized,  without  limiting its authority under other provisions of law, to

S. 2446                             5

issue by resolution of its legislative body tax increment bonds  or  tax
increment  bond anticipation notes of the municipality which are payable
from and secured by real property taxes, in whole or in part,  allocated
to and paid pursuant to the provisions of section nine hundred [sixty-p]
SEVENTY-P  of this article. The pledge of such real property taxes allo-
cated and paid shall constitute a first lien  on  the  revenues  derived
therefrom  and  tax  increment  bonds or tax increment bond anticipation
notes, the repayment of which is secured by such revenues shall  not  be
subordinate  to  any other indebtedness of the municipality with respect
to the pledge of such revenues. The municipality shall have the power to
issue renewal notes, to issue bonds to pay notes and whenever  it  deems
refunding  expedient,  to refund any bonds by the issuance of new bonds,
whether the bonds to be refunded have or have not matured, and to  issue
bonds  partly  to refund bonds then outstanding and partly for any other
purposes.
  (b) In contracting indebtedness pursuant to subdivision  (a)  of  this
section  NEITHER a municipality NOR A SCHOOL DISTRICT shall [not] pledge
its faith and credit or the faith and credit of the state to the payment
of THE  principal  thereof  and  the  interest  thereon.    INDEBTEDNESS
REFERRED  TO  IN  SECTION  SIX  OF ARTICLE XVI OF THE STATE CONSTITUTION
SHALL NOT APPLY TO A SCHOOL DISTRICT.
  (g) The amount of any indebtedness contracted under this section shall
be excluded in ascertaining the power of the municipality  OR  A  SCHOOL
DISTRICT  to  contract  indebtedness  within the provisions of the state
constitution or the local finance law relating thereto.
  (i) The municipality may [only] contract indebtedness pursuant to this
section for the following objects [and] OR purposes, EACH OF WHICH SHALL
BE A PUBLIC USE AND A PUBLIC PURPOSE:
  (i) acquisition AND ASSEMBLAGE of land INCLUDING ENVIRONMENTAL REMEDI-
ATION AND  BROWNFIELD  REDEVELOPMENT  AUTHORIZED  IN  THE  ENVIRONMENTAL
CONSERVATION LAW;
  (ii)  demolition and removal of buildings, structures and improvements
and site preparation;
  (iii) installation, construction or reconstruction of  streets,  walk-
ways,  docks,  drainage,  parking  facilities, flood control facilities,
water and sewer systems and other [public] utilities,  parks  and  play-
grounds;
  (iv)  other public improvements or services integral to the redevelop-
ment plan authorized by or for which a period of probable usefulness has
been established by section  11.00  of  the  local  finance  law.  [Such
objects]  OBJECTS  and purposes REFERRED TO IN THIS SUBDIVISION shall be
deemed to have the period of probable usefulness as  provided  GENERALLY
for such objects and purposes by such section.
  (J)  IN ADDITION TO THE ALLOCATION OF TAXES AUTHORIZED IN SECTION NINE
HUNDRED SEVENTY-P OF THIS ARTICLE, INDEBTEDNESS AUTHORIZED  PURSUANT  TO
THIS SECTION MAY BE SECURED BY A MUNICIPALITY AS FOLLOWS:
  (I)  PURSUANT  TO  SECTION  ONE  HUNDRED NINETEEN-O OF THIS CHAPTER, A
MUNICIPALITY MAY BY RESOLUTION OF ITS GOVERNING BOARD, PLEDGE A  PORTION
OF  THE SALES TAX RECEIVED IN ANY FISCAL YEAR PURSUANT TO SECTION TWELVE
HUNDRED SIXTY-ONE OF THE  TAX  LAW  FROM  BUSINESSES  OPERATING  IN  THE
PROJECT  AREA AND BENEFITTING FROM THE REDEVELOPMENT PLAN TO THE PAYMENT
OF THE PRINCIPAL OF AND INTEREST ON SUCH INDEBTEDNESS;
  (II) A MUNICIPALITY MAY ESTABLISH AN ASSESSMENT AREA, PURSUANT TO  THE
PROCEDURES  IN  SECTION  22-2200 OF THE VILLAGE LAW TO ACCESS PARCELS IN
THE PROJECT AREA AS BENEFITED PROPERTIES IN THE AMOUNTS AND IN THE YEARS

S. 2446                             6

EQUAL TO THE ALLOCATION OF TAXES PROJECTED TO BE COLLECTED AS DETERMINED
UNDER SECTION NINE HUNDRED SEVENTY-P OF THIS ARTICLE.
  S  9. Paragraph (i) of subdivision (d) of section 970-o of the general
municipal law, as added by chapter 916 of the  laws  of  1984  and  such
section  as renumbered by chapter 686 of the laws of 1986, is amended to
read as follows:
  (i) pledging all or a part of the taxes allocated pursuant to  section
nine  hundred  [sixty-p]  SEVENTY-P of this article or the proceeds from
the sale of property acquired with the proceeds of such notes  or  bonds
to  secure  the  payment of such notes or bonds or of any issue thereof,
subject to such agreements with bondholders or noteholders as may exist;
  S 10. Section 970-p of the general municipal law, as added by  chapter
916  of the laws of 1984 and as renumbered by chapter 686 of the laws of
1986, is amended to read as follows:
  S 970-p. Allocation of taxes. (a) Any redevelopment plan may contain a
provision that real property taxes levied upon taxable real property  in
the  project area each year by or for the benefit of the municipality or
municipalities AND SCHOOL DISTRICTS after  the  effective  date  of  the
resolution  approving  the  redevelopment  plan,  shall  be  divided  as
follows:
  (i) that portion of the real property  taxes  not  in  excess  of  the
amount  which  would be produced by applying the rate upon which the tax
is levied each year by or for each municipality AND SCHOOL  DISTRICT  to
the  total sum of the assessed value of the taxable real property in the
project area as shown upon the assessment roll used in  connection  with
the  taxation of such property by such municipality AND SCHOOL DISTRICT,
last adopted prior to the effective date  of  the  resolution  approving
such  plan,  shall be allocated to and when collected shall be paid into
the funds of the respective municipalities AND SCHOOL DISTRICTS as  real
property  taxes  collected  by  or  for  said  municipalities AND SCHOOL
DISTRICTS adopting the redevelopment plan;
  (ii) that portion of the real  property  taxes  levied  each  year  in
excess  of  the  portion allocated and paid pursuant to paragraph (i) of
this subdivision shall be allocated to and when collected shall be  paid
into  the fund or funds established for such purposes to pay the princi-
pal and interest on indebtedness incurred by such municipality OR SCHOOL
DISTRICT pursuant to section nine hundred [sixty-o]  SEVENTY-O  of  this
article  or, if the redevelopment plan so provides, the amount allocated
and paid in excess of interest and principal and necessary reserves  may
be expended for amounts of money to be paid in lieu of taxes. Unless and
until  the total assessed valuation of the taxable property in a project
area exceeds the total assessed value of the taxable  real  property  in
such  project  area  as shown by the last assessment roll referred to in
paragraph (i) of this subdivision, all of the real property taxes levied
and collected upon the taxable real property in such project area  shall
be  paid  into  the  funds  of  the respective municipalities AND SCHOOL
DISTRICTS.  When such indebtedness, if any and  interest  thereon,  have
been  paid, all moneys thereafter received from real property taxes upon
the taxable real property in such project area shall be  paid  into  the
funds  of  the  respective  municipalities  AND SCHOOL DISTRICTS as real
property taxes on all other real property are paid;
  (iii) whenever the total  amount  of  real  property  taxes  allocated
pursuant to paragraph (ii) of this subdivision exceeds the amounts allo-
cated  and  paid  for interest and principal and necessary reserves, and
for amounts to be paid in lieu of taxes, the amount of taxes  in  excess

S. 2446                             7

of  such  amounts shall be paid into the funds of the respective munici-
palities as taxes on all other real property are paid;
  (iv)  the  allocation  of  taxes  authorized by this section (1) shall
apply to taxable years beginning after the effective date of the  resol-
ution approving the redevelopment plan, AND
  (2)  SHALL  BE  ESTIMATED  BY THE APPROPRIATE REAL PROPERTY ASSESSMENT
OFFICER PRIOR TO THE ISSUANCE OF SUCH INDEBTEDNESS  FOR  EACH  YEAR  THE
INDEBTEDNESS  TO  BE  INCURRED  BY SUCH MUNICIPALITY PURSUANT TO SECTION
NINE HUNDRED SEVENTY-O OF THIS ARTICLE IS SCHEDULED TO BE OUTSTANDING IN
AN AMOUNT SUFFICIENT TO PAY  THE  PRINCIPAL  OF  AND  INTEREST  ON  SUCH
INDEBTEDNESS IN EACH YEAR REAL PROPERTY TAXES OF THE MUNICIPALITY OR THE
SCHOOL  DISTRICT  LEVIED  UPON  TAXABLE  PROPERTY IN THE PROJECT AREA IS
DIVIDED PURSUANT TO THIS SECTION. DURING THE PERIOD SUCH INDEBTEDNESS IS
OUTSTANDING, THE APPROPRIATE  REAL  PROPERTY  ASSESSMENT  OFFICER  SHALL
ENDEAVOR  IN  GOOD  FAITH TO DETERMINE ASSESSED VALUES ON PARCELS IN THE
PROJECT AREA TO ACHIEVE SUCH ESTIMATE IN EACH SUCH YEAR.   UPON  REQUEST
BY  A  MUNICIPALITY  OR  SCHOOL  DISTRICT,  THE  OFFICE OF REAL PROPERTY
SERVICES SHALL PROVIDE GUIDANCE ON METHODOLOGIES FOR ASSESSMENTS  AND/OR
REVIEW SUCH ESTIMATES.
  (b)  [Whenever  real  property  in  any redevelopment project has been
redeveloped and thereafter is leased by the municipality to  any  person
or persons or whenever the agency leases real property in any redevelop-
ment  project  to  any person or persons for redevelopment, the property
shall be assessed and taxed in the same manner as privately  owned  real
property  and  the lease or contract shall provide that the lessee shall
pay real property taxes upon the assessed value of the entire real prop-
erty and not merely the assessed value of his or her leasehold interest.
  (c)] In any municipality OR SCHOOL DISTRICT subject to the  allocation
of  revenues pursuant to this section the assessed value of taxable real
property located in a project area shall  be  included  on  the  taxable
portion  of the assessment roll, provided, however, that notwithstanding
any provision of law to the contrary, the assessed value  determined  in
accordance  with paragraph (ii) of subdivision (a) of this section shall
not be included in the taxable value of real property  when  determining
the tax rate for such municipality OR SCHOOL DISTRICT.
  [(d)]  (C)  The  rate  of tax resulting from the levy of real property
taxes shall be applied to  the  assessed  value  of  any  real  property
subject  to  the  allocation  provisions  of  this section as determined
pursuant to subdivision (a) of this section, however, the amount of  tax
levied as a result of the application of the tax rate to the increase in
assessed  value determined in accordance with paragraph (ii) of subdivi-
sion (a) of this section shall not be paid into the fund of the  munici-
pality  OR THE SCHOOL DISTRICT as real property taxes but shall be allo-
cated pursuant to that paragraph.
  [(e)] (D) The official or officials responsible for the preparation of
the assessment roll or  rolls  specified  in  subdivision  (a)  of  this
section  shall  provide to the municipality or municipalities AND SCHOOL
DISTRICTS, in addition to the assessment roll or rolls, such information
as is deemed necessary by the legislative bodies of the municipality  or
municipalities  AND  SCHOOL  DISTRICTS to effectuate the purpose of this
section.
  [(f)] (E) The allocation of real property  taxes  authorized  by  this
section  shall  be  permitted  only  with  respect to municipalities AND
SCHOOL DISTRICTS which have adopted a redevelopment plan  providing  for
such  allocation pursuant to section nine hundred [sixty-h] SEVENTY-H or
section nine hundred [sixty-n] SEVENTY-N of this article and such  allo-

S. 2446                             8

cation  shall not apply to special ad valorem levies and special assess-
ments as defined by subdivisions fourteen and  fifteen  of  section  one
hundred  two  of  the real property tax law, EXCEPT AS PROVIDED IN PARA-
GRAPH (III) OF SUBDIVISION (J) OF SECTION NINE HUNDRED SEVENTY-O OF THIS
ARTICLE.
  [(g)]  (F) If, after adoption of a redevelopment plan, the official or
officials responsible for the preparation  of  the  assessment  roll  or
rolls  specified in subdivision (a) of this section undertake to revalue
real property for real property tax purposes by altering the standard of
assessment utilized to establish the value of real property for  assess-
ment  purposes, the assessment of real property within a project area as
provided by paragraph (i) of subdivision (a) of this  section  shall  be
adjusted  in  such manner as if such new standard of assessment had been
utilized in the preparation of the assessment roll last adopted prior to
adoption of the redevelopment plan.
  (G) WITH RESPECT TO A SCHOOL DISTRICT WHICH CONSENTS TO AN  ALLOCATION
OF TAXES PRESCRIBED IN THIS SECTION, THE OBJECT OR PURPOSE OF WHICH SUCH
INDEBTEDNESS  MAY BE INCURRED BY A MUNICIPALITY SHALL BE A SCHOOL BUILD-
ING. HOWEVER, THERE SHALL BE NO APPORTIONMENT  OF  PUBLIC  MONEYS  UNDER
SECTION THREE THOUSAND SIX HUNDRED ONE OF THE EDUCATION LAW WITH RESPECT
TO SUCH ALLOCATION OF TAXES LEVIED BY A SCHOOL DISTRICT.
  (H) IN ESTABLISHING A UNIFORM TAX EXEMPTION POLICY PURSUANT TO SECTION
EIGHT  HUNDRED  SEVENTY-FOUR  OF  THIS CHAPTER, AN AGENCY SHALL NOT TAKE
INTO ACCOUNT THE PORTION OF REAL PROPERTY TAXES MEASURED UNDER PARAGRAPH
(II) OF SUBDIVISION (A) OF THIS SECTION IN COMPUTING A PAYMENT  IN  LIEU
OF TAXES AGREEMENT.
  S  11.  This  act shall take effect immediately and shall apply to any
indebtedness incurred by a municipality pursuant to section 970-o of the
general municipal law on or after July 30, 1986.

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