BILL NUMBER:  S7325A

 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 :

Section one: 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.

              

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

Section three: This section permits the school district to create a
tax stabilization fund if the fund shall be approved in a separate
ballot proposition by a majority of voters in a special district
election or in the annual district meeting and election. The
proposition must set forth the maximum allowable balance for the fund.
After the establishment of the fund, the board of education may make
payments into the fund in the following manner and from the following
sources: (a) money from the district's unassigned fund balance which
accrued prior to the establishment of the tax stabilization fund in an
amount not to exceed the amount over any maximum allowable balance in
the unassigned fund balance and/or money from authorized or required
reserve funds which accrued prior to the establishment of the tax
stabilization fund and in amounts which the Board of Education are not
necessary for the purpose of such fund or funds and (b) all or part of
any portion of the amount by which the amount of the PILOT payment
received in any budget year exceeds the amount of PILOT payment
received in the preceding budget year. No such payment may cause the
fund to exceed the maximum balance approved by the voters. This
section further provides that funds may be withdrawn from the fund for
any lawful purpose. Such withdrawals would be subject to the usual
disclosures required for withdrawals from other reserve funds
including disclosures required by the property tax report card.
Deposits and withdrawals would be subject to the district's normal
annual budget process. All money in the fund is to be deposited,
invested, and accounted for under the requirements of subdivisions 2
and 6 of section 3651 and 3652 of the Education Law

Section four: provides for an immediate effective date.

 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 which is presently around $7.8 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 presently receives about $3.5
million of this amount each year. The district has employed this money
prudently, presently using all of the PILOT payment each year to keep
the tax levy level and allowing any balance to accrue in fund balance.
However, over the years, the volume of PILOT payments has led to an
accumulated unassigned 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 use
accumulated fund balance and PILOT revenues to establish 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.

At present, the district is accumulating significant funds from the
PILOT which exceed allowable fund balance. This legislation seeks
authorization to establish a tax stabilization reserve fund to insure
that future decrease or loss of the PILOT payments will not cause a
dramatic and onerous spike in the real property tax levy. The district
seeks permission through this legislation to prudently use these funds
to promote fiscal and tax stability. The Senate and Assembly
authorized just such a fund last year for the Ballston Spa school
district.

 LEGISLATIVE HISTORY :

2013 - S. 1961B/A. 7760a - Passed Senate/Assembly - Education
Committee. Died in Assembly.
2011-12 S. 6835 - Passed Senate/A. 9859 - Real Property Taxation
Committee. Died in Assembly.

Legislation similar to this bill was passed last year to deal with a
comparable situation for the Ballston Spa School District as a result
of PILOT payments received from the Global Foundries semiconductor
manufacturing facility. See S. 5501A/A7622B, signed into law as
Chapter 506, Laws of 2015.

 FISCAL IMPLICATIONS :

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

 EFFECTIVE DATE :
Immediate.

                                 BILL NUMBER:  S7325B

 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 :

Section one: 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.

Section two: This section makes definitions of important terms in the
              

bill, including providing that PILOT payments may mean either PILOTS
under Real Property Tax Law Section 487 permitting municipalities to
enter into PILOT agreements for wind energy systems) or Subdivision
fifteen of § 858 of the General Municipal Law (authorizing IDA created
PILOTs) and adopting the definition of wind energy systems already
found in Real Property Tax Law § 487.

Section three: This section permits the school district to create a
tax stabilization fund if the fund shall be approved in a separate
ballot proposition by a majority of voters in a special district
election or in the annual district meeting and election. The
proposition must set forth the maximum allowable balance for the fund.
After the establishment of the fund, the board of education may make
payments into the fund in the following manner and from the following
sources: (a) money from the district's unassigned fund balance which
accrued prior to the establishment of the tax stabilization fund in an
amount not to exceed the amount over any maximum allowable balance in
the unassigned fund balance and/or money from authorized or required
reserve funds which accrued prior to the establishment of the tax
stabilization fund and in amounts which the Board of Education are not
necessary for the purpose of such fund or funds and (b) all or part of
any portion of the amount by which the amount of the PILOT payment
received in any budget year exceeds the amount of PILOT payment
received in the preceding budget year. No such payment may cause the
fund to exceed the maximum balance approved by the voters. This
section further provides that funds may be withdrawn from the fund for
any lawful purpose. Such withdrawals would be subject to the usual
disclosures required for withdrawals from other reserve funds
including disclosures required by the property tax report card.
Deposits and withdrawals would be subject to the district's normal
annual budget process. All money in the fund is to be deposited,
invested, and accounted for under the requirements of subdivisions 2
and 6 of section 3651 and 3652 of the Education Law

Section four: provides for an immediate effective date.

 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 which is presently around $7.8 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 presently receives about $3.5
million of this amount each year. The district has employed this money
prudently, presently using all of the PILOT payment each year to keep
the tax levy level and allowing any balance to accrue in fund balance.
However, over the years, the volume of PILOT payments has led to an
accumulated unassigned fund balance. The PILOT agreement started in
the 2006-2007 school year and will end in 20212022. 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 use
accumulated fund balance and PILOT revenues to establish 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.

At present, the district is accumulating significant funds from the
PILOT which exceed allowable fund balance. This legislation seeks
authorization to establish a tax stabilization reserve fund to insure
that future decrease or loss of the PILOT payments will not cause a
dramatic and onerous spike in the real property tax levy. The district
seeks permission through this legislation to prudently use these funds
to promote fiscal and tax stability. The Senate and Assembly
authorized just such a fund last year for the Ballston Spa school
district.

 LEGISLATIVE HISTORY :

2013 - S. 1961B/A. 7760a - Passed Senate/Assembly - Education
Committee. Died in Assembly.
2011-12 S. 6835 - Passed Senate/A. 9859 - Real Property Taxation
Committee. Died in Assembly.

Legislation similar to this bill was passed last year to deal with a
comparable situation for the Ballston Spa School District as a result
of PILOT payments received from the Global Foundries semiconductor
manufacturing facility. See S. 5501A/A7622B, signed into law as
Chapter 506, Laws of 2015.

 FISCAL IMPLICATIONS :

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

 EFFECTIVE DATE :
Immediate.