Senate Bill S5660

                                BILL NUMBER:S5660               REVISED 01/31/12

TITLE OF BILL:
An act
relating to the qualification of payments made by
the taxpayer as eligible
real property tax payments for purposes of the QEZE Tax Credit

PURPOSE:
To mitigate the reversal of a decision made by the NYS Department of
Tax and Finance which negatively impacted a taxpayer.

SUMMARY OF PROVISIONS:
Section 1. Any payment in lieu of taxes made by a QEZE to the state,
municipal corporation, or public benefit corporation pursuant to a
lease agreement with a landlord that is party to a payment in lieu of
taxes agreement between the landlord and the state, municipal
corporation, or public benefit corporation shall be deemed to have
been made pursuant to a payment in lieu of taxes agreement and such
QEZE shall be eligible to claim the real property tax credit provided
that for each of such periods, the landlord has not filed a claim for
the real property tax credit for such payments nor made a payment in
lieu of taxes to the state, municipal corporation, or public benefit
corporation pursuant to its agreement with the state, municipal
corporation, or public benefit corporation for such payments.
Section 2. Effective date.
              

JUSTIFICATION:
Hammer Packaging Corporation's (HPC) facility at 230-234 Wallace Way,
Gates, NY (Rochester Tech Park) was designated a Qualified Empire
Zone Enterprise (QEZE) effective March 6, 2006. HPC increased/created
jobs in the Zone and in New York State. HPC was recertified and
received an Empire Zone Retention Certificate in the statewide review
process in 2009, as it met all employment and investment criteria.
HPC is a tenant at Rochester Tech Park. Per the term of its lease,
HPC is responsible for payment of all property taxes. Under NYS tax
law, a QEZE tenant that is responsible for property taxes under its
lease is eligible for a tax incentive, a refund for property taxes it
pays. Under NYS tax law, payments under a PILOT Program qualify as
property taxes eligible for the refund. HPC's landlord at Rochester
Tech Park has a PILOT Agreement with County Of Monroe Industrial
Development Agency (COMIDA).

HPC filed a refund claim for property taxes paid at Rochester Tech
Park in 2008 for $58,800 and in 2009 for $57,500. New York State Tax
Department of Finance (NYSDTF) audited the 2008 claim in a desk audit
and initially allowed the claim, refunding the $58,800. In late 2010,
NYSTDF audited the 2009 claim, denied it, and filed an assessment for
a return of the previous 2008 refund of $58,800, plus interest. The
stated reason
for denial of the claim is that HPC is not "party to" the existing

PILOT Agreement between the tax jurisdiction and the landlord. COMIDA
Board has amended the PILOT Agreement t.o include HPC. Results of the
NYSTDF policy is that HPC, a recertified QEZE, does not get the
credit for property taxes it paid. The landlord does not claim the
credit. The tax incentive for investing and increasing employment in
the Rochester Tech Park location is being disallowed based on the
form of this documentation.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable
years beginning on and after January 1, 2008.