Senate Bill S4452B

2019-2020 Legislative Session

Authorizes funds in the case of certain tax certiorari challenges or agreed upon settlements; authorizes a board of education to establish a tax certiorari stabilization reserve fund

download bill text pdf

Archive: Last Bill Status - In Senate Committee Education Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 29, 2020	print number 4452b
Jun 29, 2020	amend and recommit to education
Jan 08, 2020	referred to education
Apr 08, 2019	print number 4452a
Apr 08, 2019	amend and recommit to education
Mar 11, 2019	referred to education

Bill Amendments

Original

B (Active)

2019-S4452 - Details

See Assembly Version of this Bill:: A7243
Current Committee:: Senate Education
Law Section:: Education Law
Laws Affected:: Add §3654, Ed L

2019-S4452 - Summary

Authorizes funds in the case of certain tax certiorari challenges or agreed upon settlements; authorizes the board of education to establish a tax certiorari stabilization reserve fund.

2019-S4452 - Sponsor Memo

                                
 
BILL NUMBER: S4452

SPONSOR: GAUGHRAN
 
TITLE OF BILL:  An act authorizing funds in the case of certain tax
certiorari challenges or agreed upon settlements; and to amend the
education law, in relation to authorizing a board of education to estab-
lish a tax certiorari stabilization reserve fund

 
PURPOSE:

The purpose of this bill is to establish a source of funding for local
governmental entities and school districts substantially impacted by tax
certiorari challenges or settlements and to allow school districts to
establish tax certiorari stabilization reserve funds.

 
SUMMARY OF PROVISIONS:

Section one establishes a $69 Million Dollar fund, which is to be made
available to local governments and school districts negatively and
substantially impacted by a successful tax certiorari challenge or an
agreed upon settlement. Funding would be available if the decision or

settlement resulted in either a reduction of real property tax
collections or payments in lieu of taxes amounting to at least 20% to
the governmental entity. This provision would apply to challenges
decided and settlements entered in to on or after April 1, 2019, and
funding availability would be subject to appropriation. Funding would be
available for up to fifteen years. The maximum award allowed would be
dependent on the percentage of revenue lost, and would phase out over
the course of fifteen years for an effected local governmental entity.

Section two provides that school districts may establish tax certiorari
stabilization reserve funds in order to lessen or prevent increases in
the school district's real property tax levy resulting from decreases in
revenue due to a tax certiorari settlement or judgment. The establish-
ment of such fund would need to be approved on the consent of the major-
ity of the voters present at either a special district meeting or at the
annual district meeting.

 
JUSTIFICATION:

Tax certiorari challenges present a significant obstacle for our local
governments and school districts in their ability to remain fiscally
stable. When faced with a tax certiorari challenge, these entities must
decide whether to negotiate a settlement and suffer potentially large
losses in revenue, or to progress with costly legal proceedings. Adverse
judgments of this magnitude could have a crippling on taxpayers. Towns
and districts would be forced to cut services and programs that are so
desperately needed by residents and our children, respectively. Given
the financial burden that these entities face when such challenges
arise, the establishment of a state funding source will assist them in
mitigating the loss in tax revenue over the course of several years.
Additionally, allowing school districts the ability to plan for such
challenges will protect taxpayers. This bill will help decrease the
impact of such settlements or adverse judgments when such actions arise.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

This legislation is subject to appropriation.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S4452 - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4452
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2019
                                ___________
 
 Introduced  by Sen. GAUGHRAN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Education
 
 AN ACT authorizing funds in the case of  certain  tax  certiorari  chal-
   lenges  or agreed upon settlements; and to amend the education law, in
   relation to authorizing a  board  of  education  to  establish  a  tax
   certiorari stabilization reserve fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. 1. Contingent upon available funding,  and  not  to  exceed
 $69,000,000,  moneys  shall  be available for a local government entity,
 which for the purposes of this section shall mean a county, city,  town,
 village,  school  district or special district, where, on or after April
 1, 2019, a successful tax certiorari challenge or an agreed upon settle-
 ment that has resulted in either a reduction in the  real  property  tax
 collections  or payments in lieu of taxes of at least twenty percent, or
 in regard to a settlement agreement a reduction in real  property  taxes
 or payments in lieu of taxes of at least twenty percent in the aggregate
 over  the  term of the settlement agreement, that has resulted in a real
 property tax levy increase of over twenty percent of a local  government
 entity.  Such  moneys  attributable to a successful tax certiorari chal-
 lenge, or an agreed upon settlement, shall be paid annually on  a  first
 come,  first  serve basis by the New York state urban development corpo-
 ration to such local  government  entity  within  reasonable  time  upon
 confirmation  from the state office of real property tax services or the
 local industrial development authority established pursuant to the local
 industrial development agency pursuant  to  article  eighteen-A  of  the
 general  municipal  law  that such tax certiorari judgment, or an agreed
 upon settlement, has resulted in a reduction in the  real  property  tax
 collections  or  payment  in  lieu of taxes, provided, however, that the
 urban development corporation shall not provide assistance to such local
 government entity for more than fifteen years  in  the  case  of  a  tax
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10714-01-9

 S. 4452                             2
 
 certiorari  judgment or agreed upon settlement, and shall award payments
 reflecting the loss of revenues due to the tax certiorari judgment or an
 agreed upon settlement as follows:
   (a)  for  award  year  one,  a maximum potential award of no more than
 eighty percent of loss of revenues;
   (b) for award year two, a maximum potential  award  of  no  more  than
 seventy percent of loss of revenues;
   (c)  for  award  year three, a maximum potential award of no more than
 sixty percent of loss of revenues;
   (d) for award year four, a maximum potential award  of  no  more  than
 fifty percent of loss of revenues;
   (e)  for  award  year  five, a maximum potential award of no more than
 forty percent of loss of revenues;
   (f) for award year six, a maximum potential  award  of  no  more  than
 thirty percent of loss of revenues; and
   (g)  for  award years seven through fifteen, a maximum potential award
 of no more than twenty percent of loss of revenues.
   2. A local government entity shall be eligible for only one payment of
 funds hereunder per year. A local government entity may seek  assistance
 under  the  tax  certiorari  mitigation  fund  once  a final judgment or
 settlement agreement in a tax certiorari proceeding has  been  filed  or
 executed. The date of submission of a local government entity's applica-
 tion  for  assistance  shall  establish the order in which assistance is
 paid to program applicants, except that in no event shall assistance  be
 paid  to a local government entity until such time that a final judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.  For purposes of this section,  any  local  government  entity
 seeking  assistance under the tax certiorari mitigation fund must submit
 an attestation to the department of public service that a final judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.
   3. For a facility with a tax certiorari judgment  or  settlement,  the
 appropriate  agency  shall submit such attestation to the urban develop-
 ment corporation upon receipt of the determination of the amount of such
 annual payment which shall be determined by the president of  the  urban
 development  corporation based on the amount of the differential between
 the annual real property taxes and payments in  lieu  of  taxes  imposed
 upon  the facility, exclusive of interest and penalties, during the last
 year of operations and the annual reduction on real  property  taxes  or
 payments in lieu of taxes during the term of a settlement agreement from
 a  tax certiorari proceeding. The total amount awarded from this program
 shall not exceed $69,000,000.
   § 2. The education law is amended by adding a new section 3654 to read
 as follows:
   § 3654. TAX CERTIORARI STABILIZATION RESERVE FUND. (A) DEFINITIONS. AS
 USED IN THIS SECTION:
   (I) "BOARD OF EDUCATION" OR "BOARD" SHALL MEAN THE BOARD OF  EDUCATION
 OF ANY SCHOOL DISTRICT IMPACTED BY A TAX CERTIORARI ACTION;
   (II)  "TAX CERTIORARI STABILIZATION RESERVE FUND" OR "FUND" SHALL MEAN
 THE TAX CERTIORARI STABILIZATION RESERVE FUND  ESTABLISHED  PURSUANT  TO
 THIS SECTION; AND
   (III)  "SCHOOL  DISTRICT"  OR  "DISTRICT"  SHALL MEAN ANY OTHER SCHOOL
 DISTRICT THAT IS IMPACTED BY A TAX CERTIORARI ACTION.
   (B) THE BOARD OF EDUCATION IS HEREBY AUTHORIZED  TO  ESTABLISH  A  TAX
 CERTIORARI  STABILIZATION RESERVE FUND TO LESSEN OR PREVENT INCREASES IN
 THE SCHOOL DISTRICT'S REAL PROPERTY TAX LEVY RESULTING FROM DECREASES IN

 S. 4452                             3
 
 REVENUE DUE TO A TAX CERTIORARI SETTLEMENT OR JUDGMENT PROVIDED,  HOWEV-
 ER, THAT NO SUCH FUND SHALL BE ESTABLISHED UNLESS APPROVED BY A MAJORITY
 VOTE  OF  THE VOTERS PRESENT AND VOTING ON A SEPARATE BALLOT PROPOSITION
 THEREFOR  AT EITHER A SPECIAL DISTRICT MEETING WHICH THE BOARD OF EDUCA-
 TION MAY CALL FOR SUCH PURPOSE OR AT THE  ANNUAL  DISTRICT  MEETING  AND
 ELECTION,  TO BE NOTICED AND CONDUCTED IN EITHER CASE IN ACCORDANCE WITH
 ARTICLE FORTY-ONE OF THIS CHAPTER. SUCH SEPARATE PROPOSITION  SHALL  SET
 FORTH  THE MAXIMUM ALLOWABLE BALANCE TO BE DEPOSITED AND HELD IN THE TAX
 CERTIORARI STABILIZATION RESERVE FUND.  MONEYS SHALL BE  PAID  INTO  AND
 WITHDRAWN FROM THE FUND AND THE FUND SHALL BE ADMINISTERED AS FOLLOWS:
   (I)  THE  BOARD  OF EDUCATION IS HEREBY AUTHORIZED TO RECEIVE PAYMENTS
 INTO ITS TAX CERTIORARI STABILIZATION RESERVE FUND  FROM  ANY  AVAILABLE
 FUNDS.
   (II)  MONEYS  MAY  BE  WITHDRAWN FROM THE TAX CERTIORARI STABILIZATION
 RESERVE FUND FOR ANY FISCAL YEAR TO BE EXPENDED FOR ANY  LAWFUL  PURPOSE
 TO  LESSEN  OR PREVENT INCREASES IN THE DISTRICT'S TAX LEVY. WITHDRAWALS
 FROM THE FUND SHALL  BE  DISCLOSED  IN  A  MANNER  CONSISTENT  WITH  THE
 REQUIRED  DISCLOSURES  OF  SIMILAR  RESERVE  FUNDS HELD BY THE DISTRICT,
 INCLUDING DISCLOSURES OF SIMILAR RESERVE FUNDS  HELD  BY  THE  DISTRICT,
 INCLUDING  DISCLOSURES REQUIRED BY THE PROPERTY TAX REPORT CARD PREPARED
 BY THE DISTRICT PURSUANT TO  THE  PROVISIONS  OF  SUBDIVISION  SEVEN  OF
 SECTION  SEVENTEEN  HUNDRED  SIXTEEN  OF  THIS CHAPTER; AND DEPOSITS AND
 WITHDRAWALS MADE IN EACH FISCAL YEAR SHALL BE SUBJECT TO THE  DISTRICT'S
 ANNUAL BUDGET APPROVAL PROCESS.
   § 3. This act shall take effect immediately.

2019-S4452A - Details

See Assembly Version of this Bill:: A7243
Current Committee:: Senate Education
Law Section:: Education Law
Laws Affected:: Add §3654, Ed L

2019-S4452A - Summary

Authorizes funds in the case of certain tax certiorari challenges or agreed upon settlements; authorizes the board of education to establish a tax certiorari stabilization reserve fund.

2019-S4452A - Sponsor Memo

                                
 
BILL NUMBER: S4452A

SPONSOR: GAUGHRAN
 
TITLE OF BILL:  An act authorizing funds in the case of certain tax
certiorari challenges or agreed upon settlements; and to amend the
education law, in relation to authorizing a board of education to estab-
lish a tax certiorari stabilization reserve fund

 
PURPOSE:

The purpose of this bill is to establish a source of funding for local
governmental entities and school districts substantially impacted by tax
certiorari challenges or settlements and to allow school districts to
establish tax certiorari stabilization reserve funds.

 
SUMMARY OF PROVISIONS:

Section one establishes a $69 Million Dollar fund, which is to be made
available to local governments and school districts negatively and
substantially impacted by a successful tax certiorari challenge or an
agreed upon settlement. Funding would be available if the decision or

settlement resulted in either a reduction of real property tax
collections or payments in lieu of taxes amounting to at least 20% to
the governmental entity. This provision would apply to challenges
decided and settlements entered in to on or after April 1, 2019, and
funding availability would be subject to appropriation.  Funding would
be available for up to fifteen years. The maximum award allowed would be
dependent on the percentage of revenue lost, and would phase out over
the course of fifteen years for an effected local governmental entity.

Section two provides that school districts may establish tax certiorari
stabilization reserve funds in order to lessen or prevent increases in
the school district's real property tax levy resulting from decreases in
revenue due to a tax certiorari settlement or judgment.  The establish-
ment of such fund would need to be approved on the consent of the major-
ity of the voters present at either a special district meeting or at the
annual district meeting.

 
JUSTIFICATION:

Tax certiorari challenges present a significant obstacle for our local
governments and school districts in their ability to remain fiscally
stable. When faced with a tax certiorari challenge, these entities must
decide whether to negotiate a settlement and suffer potentially large
losses in revenue, or to progress with costly legal proceedings. Adverse
judgments of this magnitude could have a crippling on taxpayers. Towns
and districts would be forced to cut services and programs that are so
desperately needed by residents and our children, respectively. Given
the financial burden that these entities face when such challenges
arise, the establishment of a state funding source will assist them in
mitigating the loss in tax revenue over the course of several years.
Additionally, allowing school districts the ability to plan for such
challenges will protect taxpayers. This bill will help decrease the
impact of such settlements or adverse judgments when such actions arise.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

This legislation is subject to appropriation.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S4452A - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4452--A
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2019
                                ___________
 
 Introduced  by Sen. GAUGHRAN -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Education  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to said committee
 
 AN  ACT  authorizing  funds  in the case of certain tax certiorari chal-
   lenges or agreed upon settlements; and to amend the education law,  in
   relation  to  authorizing  a  board  of  education  to establish a tax
   certiorari stabilization reserve fund
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  1.  Contingent  upon available funding, and not to exceed
 $69,000,000, moneys shall be available for a  local  government  entity,
 which  for the purposes of this section shall mean a county, city, town,
 village, school district or special district, where, on or  after  April
 1, 2019, a successful tax certiorari challenge or an agreed upon settle-
 ment  that  has  resulted in either a reduction in the real property tax
 collections or payments in lieu of taxes of at least twenty percent,  or
 in  regard  to a settlement agreement a reduction in real property taxes
 or payments in lieu of taxes of at least twenty percent in the aggregate
 over the term of the settlement agreement, or that  has  resulted  in  a
 real  property  tax  levy  increase  of  over  twenty percent of a local
 government entity. Such moneys attributable to a successful tax certior-
 ari challenge, or an agreed upon settlement, shall be paid annually on a
 first come, first serve basis by the New York  state  urban  development
 corporation  to such local government entity within reasonable time upon
 confirmation from the state office of real property tax services or  the
 local industrial development authority established pursuant to the local
 industrial  development  agency  pursuant  to  article eighteen-A of the
 general municipal law that such tax certiorari judgment,  or  an  agreed
 upon  settlement,  has  resulted in a reduction in the real property tax
 collections or payment in lieu of taxes,  provided,  however,  that  the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10714-03-9

 S. 4452--A                          2
 
 urban development corporation shall not provide assistance to such local
 government  entity  for  more  than  fifteen  years in the case of a tax
 certiorari judgment or agreed upon settlement, and shall award  payments
 reflecting the loss of revenues due to the tax certiorari judgment or an
 agreed upon settlement as follows:
   (a)  for  award  year  one,  a maximum potential award of no more than
 eighty percent of loss of revenues;
   (b) for award year two, a maximum potential  award  of  no  more  than
 seventy percent of loss of revenues;
   (c)  for  award  year three, a maximum potential award of no more than
 sixty percent of loss of revenues;
   (d) for award year four, a maximum potential award  of  no  more  than
 fifty percent of loss of revenues;
   (e)  for  award  year  five, a maximum potential award of no more than
 forty percent of loss of revenues;
   (f) for award year six, a maximum potential  award  of  no  more  than
 thirty percent of loss of revenues; and
   (g)  for  award years seven through fifteen, a maximum potential award
 of no more than twenty percent of loss of revenues.
   2. A local government entity shall be eligible for only one payment of
 funds hereunder per year. A local government entity may seek  assistance
 under  the  tax  certiorari  mitigation  fund  once  a final judgment or
 settlement agreement in a tax certiorari proceeding has  been  filed  or
 executed. The date of submission of a local government entity's applica-
 tion  for  assistance  shall  establish the order in which assistance is
 paid to program applicants, except that in no event shall assistance  be
 paid  to a local government entity until such time that a final judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.  For purposes of this section,  any  local  government  entity
 seeking  assistance under the tax certiorari mitigation fund must submit
 an attestation to the department of public service that a final judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.
   3. For a facility with a tax certiorari judgment  or  settlement,  the
 appropriate  agency  shall submit such attestation to the urban develop-
 ment corporation upon receipt of the determination of the amount of such
 annual payment which shall be determined by the president of  the  urban
 development  corporation based on the amount of the differential between
 the annual real property taxes and payments in  lieu  of  taxes  imposed
 upon  the  facility, exclusive of interest and penalties, and the annual
 reduction on real property taxes or payments in lieu of taxes during the
 term of a settlement agreement from a  tax  certiorari  proceeding.  The
 total amount awarded from this program shall not exceed $69,000,000.
   § 2. The education law is amended by adding a new section 3654 to read
 as follows:
   § 3654. TAX CERTIORARI STABILIZATION RESERVE FUND. (A) DEFINITIONS. AS
 USED IN THIS SECTION:
   (I)  "BOARD OF EDUCATION" OR "BOARD" SHALL MEAN THE BOARD OF EDUCATION
 OF ANY SCHOOL DISTRICT IMPACTED BY A TAX CERTIORARI ACTION;
   (II) "TAX CERTIORARI STABILIZATION RESERVE FUND" OR "FUND" SHALL  MEAN
 THE  TAX  CERTIORARI  STABILIZATION RESERVE FUND ESTABLISHED PURSUANT TO
 THIS SECTION; AND
   (III) "SCHOOL DISTRICT" OR "DISTRICT"  SHALL  MEAN  ANY  OTHER  SCHOOL
 DISTRICT THAT IS IMPACTED BY A TAX CERTIORARI ACTION.
   (B)  THE  BOARD  OF  EDUCATION IS HEREBY AUTHORIZED TO ESTABLISH A TAX
 CERTIORARI STABILIZATION RESERVE FUND TO LESSEN OR PREVENT INCREASES  IN

 S. 4452--A                          3
 
 THE SCHOOL DISTRICT'S REAL PROPERTY TAX LEVY RESULTING FROM DECREASES IN
 REVENUE  DUE TO A TAX CERTIORARI SETTLEMENT OR JUDGMENT PROVIDED, HOWEV-
 ER, THAT NO SUCH FUND SHALL BE ESTABLISHED UNLESS APPROVED BY A MAJORITY
 VOTE  OF  THE VOTERS PRESENT AND VOTING ON A SEPARATE BALLOT PROPOSITION
 THEREFOR AT EITHER A SPECIAL DISTRICT MEETING WHICH THE BOARD OF  EDUCA-
 TION  MAY  CALL  FOR  SUCH PURPOSE OR AT THE ANNUAL DISTRICT MEETING AND
 ELECTION, TO BE NOTICED AND CONDUCTED IN EITHER CASE IN ACCORDANCE  WITH
 ARTICLE  FORTY-ONE  OF THIS CHAPTER. SUCH SEPARATE PROPOSITION SHALL SET
 FORTH THE MAXIMUM ALLOWABLE BALANCE TO BE DEPOSITED AND HELD IN THE  TAX
 CERTIORARI  STABILIZATION  RESERVE FUND.   MONEYS SHALL BE PAID INTO AND
 WITHDRAWN FROM THE FUND AND THE FUND SHALL BE ADMINISTERED AS FOLLOWS:
   (I) THE BOARD OF EDUCATION IS HEREBY AUTHORIZED  TO  RECEIVE  PAYMENTS
 INTO  ITS  TAX  CERTIORARI STABILIZATION RESERVE FUND FROM ANY AVAILABLE
 FUNDS.
   (II) MONEYS MAY BE WITHDRAWN FROM  THE  TAX  CERTIORARI  STABILIZATION
 RESERVE  FUND  FOR ANY FISCAL YEAR TO BE EXPENDED FOR ANY LAWFUL PURPOSE
 TO LESSEN OR PREVENT INCREASES IN THE DISTRICT'S TAX  LEVY.  WITHDRAWALS
 FROM  THE  FUND  SHALL  BE  DISCLOSED  IN  A  MANNER CONSISTENT WITH THE
 REQUIRED DISCLOSURES OF SIMILAR RESERVE  FUNDS  HELD  BY  THE  DISTRICT,
 INCLUDING  DISCLOSURES  OF  SIMILAR  RESERVE FUNDS HELD BY THE DISTRICT,
 INCLUDING DISCLOSURES REQUIRED BY THE PROPERTY TAX REPORT CARD  PREPARED
 BY  THE  DISTRICT  PURSUANT  TO  THE  PROVISIONS OF SUBDIVISION SEVEN OF
 SECTION SEVENTEEN HUNDRED SIXTEEN OF  THIS  CHAPTER;  AND  DEPOSITS  AND
 WITHDRAWALS  MADE IN EACH FISCAL YEAR SHALL BE SUBJECT TO THE DISTRICT'S
 ANNUAL BUDGET APPROVAL PROCESS.
   § 3. This act shall take effect immediately.

2019-S4452B (ACTIVE) - Details

See Assembly Version of this Bill:: A7243
Current Committee:: Senate Education
Law Section:: Education Law
Laws Affected:: Add §3654, Ed L

2019-S4452B (ACTIVE) - Summary

Authorizes funds in the case of certain tax certiorari challenges or agreed upon settlements; authorizes the board of education to establish a tax certiorari stabilization reserve fund.

2019-S4452B (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S4452B

SPONSOR: GAUGHRAN
 
TITLE OF BILL:

An act authorizing funds in the case of certain tax certiorari chal-
lenges or agreed upon settlements; and to amend the education law, in
relation to authorizing a board of education to establish a tax certior-
ari stabilization reserve fund

 
PURPOSE:  The purpose of this bill is to establish a source of funding
for local governmental entities and school districts substantially
impacted by tax certiorari challenges or settlements and to allow school
districts to establish tax certiorari stabilization reserve funds.

 
SUMMARY OF PROVISIONS:

Section one establishes a $69 Million Dollar fund, which is to be made
available to local governments, school districts, special districts and
library districts negatively and substantially impacted by a successful
tax certiorari challenge or an agreed upon settlement.  Funding would be

available if the decision or settlement resulted in either a reduction
of real property tax collections or payments in lieu of taxes amounting
to at least 20% to the governmental entity.  This provision would apply
to challenges decided and settlements entered in to on or after April 1,
2019, and funding availability would be subject to appropriation. Fund-
ing would be available for up to fifteen years. The maximum award
allowed would be dependent on the percentage of revenue lost, and would
phase out over the course of fifteen years for an effected local govern-
mental entity.

Section two provides that school districts may establish tax certiorari
stabilization reserve funds in order to lessen or prevent increases in
the school district's real property tax levy resulting from decreases in
revenue due to a tax certiorari settlement or judgment. The establish-
ment of such fund would need to be approved on the consent of the major-
ity of the voters present at either a special district meeting or at the
annual district meeting.

 
JUSTIFICATION:

Tax .certiorari challenges present a significant obstacle for our local
governments and school districts in their ability to remain fiscally
stable. When faced with a tax certiorari challenge, these entities must
decide whether to negotiate a settlement and suffer potentially large
losses in revenue,, or to progress with costly legal proceedings.
Adverse judgments of this magnitude could have a crippling on taxpayers.
Towns and districts would be forced to cut services,and programs that
are so desperately needed by residents and our children, respectively.
Given the financial burden that these entities face when such challenges
arise, the establishment of a state funding source will assist them in
mitigating the loss in tax revenue over the course of several years.

Additionally, allowing school districts the ability to plan for such
challenges will protect taxpayers. This bill will help decrease the
impact of such settlements or adverse judgments when such actions arise.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

This legislation is subject to appropriation.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2019-S4452B (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  4452--B
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                              March 11, 2019
                                ___________
 
 Introduced  by Sen. GAUGHRAN -- read twice and ordered printed, and when
   printed to be committed to the Committee  on  Education  --  committee
   discharged, bill amended, ordered reprinted as amended and recommitted
   to  said  committee  --  recommitted  to the Committee on Education in
   accordance with Senate Rule 6, sec. 8 --  committee  discharged,  bill
   amended,  ordered reprinted as amended and recommitted to said commit-
   tee
 
 AN ACT authorizing funds in the case of  certain  tax  certiorari  chal-
   lenges  or agreed upon settlements; and to amend the education law, in
   relation to authorizing a  board  of  education  to  establish  a  tax
   certiorari stabilization reserve fund
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. 1. Contingent upon available funding,  and  not  to  exceed
 $69,000,000,  moneys  shall  be available for a local government entity,
 which for the purposes of this section shall mean a county, city,  town,
 village,  school  district,  special  district,  school  district public
 library or municipal public library where, on or after April 1, 2019,  a
 successful  tax  certiorari  challenge or an agreed upon settlement that
 has resulted in either a reduction in the real property tax  collections
 or payments in lieu of taxes of at least twenty percent, or in regard to
 a settlement agreement a reduction in real property taxes or payments in
 lieu  of taxes of at least twenty percent in the aggregate over the term
 of the settlement agreement, or that has resulted in a real property tax
 levy increase of over twenty percent of a local government entity.  Such
 moneys  attributable  to  a  successful  tax certiorari challenge, or an
 agreed upon settlement, shall be paid annually on a  first  come,  first
 serve  basis by the New York state urban development corporation to such
 local government entity within reasonable time  upon  confirmation  from
 the  state  office of real property tax services or the local industrial
 development authority  established  pursuant  to  the  local  industrial
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD10714-05-0

 S. 4452--B                          2
 
 development agency pursuant to article eighteen-A of the general munici-
 pal law that such tax certiorari judgment, or an agreed upon settlement,
 has  resulted  in  a  reduction  in the real property tax collections or
 payment  in lieu of taxes, provided, however, that the urban development
 corporation shall not provide assistance to such local government entity
 for more than fifteen years in the case of a tax certiorari judgment  or
 agreed  upon settlement, and shall award payments reflecting the loss of
 revenues due to the tax certiorari judgment or an agreed upon settlement
 as follows:
   (a) for award year one, a maximum potential  award  of  no  more  than
 eighty percent of loss of revenues;
   (b)  for  award  year  two,  a maximum potential award of no more than
 seventy percent of loss of revenues;
   (c) for award year three, a maximum potential award of  no  more  than
 sixty percent of loss of revenues;
   (d)  for  award  year  four, a maximum potential award of no more than
 fifty percent of loss of revenues;
   (e) for award year five, a maximum potential award  of  no  more  than
 forty percent of loss of revenues;
   (f)  for  award  year  six,  a maximum potential award of no more than
 thirty percent of loss of revenues; and
   (g) for award years seven through fifteen, a maximum  potential  award
 of no more than twenty percent of loss of revenues.
   2. A local government entity shall be eligible for only one payment of
 funds  hereunder per year. A local government entity may seek assistance
 under the tax certiorari  mitigation  fund  once  a  final  judgment  or
 settlement  agreement  in  a tax certiorari proceeding has been filed or
 executed. The date of submission of a local government entity's applica-
 tion for assistance shall establish the order  in  which  assistance  is
 paid  to program applicants, except that in no event shall assistance be
 paid to a local government entity until such time that a final  judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.    For  purposes  of this section, any local government entity
 seeking assistance under the tax certiorari mitigation fund must  submit
 an attestation to the department of public service that a final judgment
 or settlement agreement in a tax certiorari proceeding has been filed or
 executed.
   3.  For  a  facility with a tax certiorari judgment or settlement, the
 appropriate agency shall submit such attestation to the  urban  develop-
 ment corporation upon receipt of the determination of the amount of such
 annual  payment  which shall be determined by the president of the urban
 development corporation based on the amount of the differential  between
 the  annual  real  property  taxes and payments in lieu of taxes imposed
 upon the facility, exclusive of interest and penalties, and  the  annual
 reduction on real property taxes or payments in lieu of taxes during the
 term  of  a  settlement  agreement from a tax certiorari proceeding. The
 total amount awarded from this program shall not exceed $69,000,000.
   § 2. The education law is amended by adding a new section 3654 to read
 as follows:
   § 3654. TAX CERTIORARI STABILIZATION RESERVE FUND. (A) DEFINITIONS. AS
 USED IN THIS SECTION:
   (I) "BOARD OF EDUCATION" OR "BOARD" SHALL MEAN THE BOARD OF  EDUCATION
 OF ANY SCHOOL DISTRICT IMPACTED BY A TAX CERTIORARI ACTION;
   (II)  "TAX CERTIORARI STABILIZATION RESERVE FUND" OR "FUND" SHALL MEAN
 THE TAX CERTIORARI STABILIZATION RESERVE FUND  ESTABLISHED  PURSUANT  TO
 THIS SECTION; AND

 S. 4452--B                          3
 
   (III)  "SCHOOL  DISTRICT"  OR  "DISTRICT"  SHALL MEAN ANY OTHER SCHOOL
 DISTRICT THAT IS IMPACTED BY A TAX CERTIORARI ACTION.
   (B)  THE  BOARD  OF  EDUCATION IS HEREBY AUTHORIZED TO ESTABLISH A TAX
 CERTIORARI STABILIZATION RESERVE FUND TO LESSEN OR PREVENT INCREASES  IN
 THE SCHOOL DISTRICT'S REAL PROPERTY TAX LEVY RESULTING FROM DECREASES IN
 REVENUE  DUE TO A TAX CERTIORARI SETTLEMENT OR JUDGMENT PROVIDED, HOWEV-
 ER, THAT NO SUCH FUND SHALL BE ESTABLISHED UNLESS APPROVED BY A MAJORITY
 VOTE OF THE VOTERS PRESENT AND VOTING ON A SEPARATE  BALLOT  PROPOSITION
 THEREFOR  AT EITHER A SPECIAL DISTRICT MEETING WHICH THE BOARD OF EDUCA-
 TION MAY CALL FOR SUCH PURPOSE OR AT THE  ANNUAL  DISTRICT  MEETING  AND
 ELECTION,  TO BE NOTICED AND CONDUCTED IN EITHER CASE IN ACCORDANCE WITH
 ARTICLE FORTY-ONE OF THIS CHAPTER. SUCH SEPARATE PROPOSITION  SHALL  SET
 FORTH  THE MAXIMUM ALLOWABLE BALANCE TO BE DEPOSITED AND HELD IN THE TAX
 CERTIORARI STABILIZATION RESERVE FUND.  MONEYS SHALL BE  PAID  INTO  AND
 WITHDRAWN FROM THE FUND AND THE FUND SHALL BE ADMINISTERED AS FOLLOWS:
   (I)  THE  BOARD  OF EDUCATION IS HEREBY AUTHORIZED TO RECEIVE PAYMENTS
 INTO ITS TAX CERTIORARI STABILIZATION RESERVE FUND  FROM  ANY  AVAILABLE
 FUNDS.
   (II)  MONEYS  MAY  BE  WITHDRAWN FROM THE TAX CERTIORARI STABILIZATION
 RESERVE FUND FOR ANY FISCAL YEAR TO BE EXPENDED FOR ANY  LAWFUL  PURPOSE
 TO  LESSEN  OR PREVENT INCREASES IN THE DISTRICT'S TAX LEVY. WITHDRAWALS
 FROM THE FUND SHALL  BE  DISCLOSED  IN  A  MANNER  CONSISTENT  WITH  THE
 REQUIRED  DISCLOSURES  OF  SIMILAR  RESERVE  FUNDS HELD BY THE DISTRICT,
 INCLUDING DISCLOSURES OF SIMILAR RESERVE FUNDS  HELD  BY  THE  DISTRICT,
 INCLUDING  DISCLOSURES REQUIRED BY THE PROPERTY TAX REPORT CARD PREPARED
 BY THE DISTRICT PURSUANT TO  THE  PROVISIONS  OF  SUBDIVISION  SEVEN  OF
 SECTION  SEVENTEEN  HUNDRED  SIXTEEN  OF  THIS CHAPTER; AND DEPOSITS AND
 WITHDRAWALS MADE IN EACH FISCAL YEAR SHALL BE SUBJECT TO THE  DISTRICT'S
 ANNUAL BUDGET APPROVAL PROCESS.
   § 3. This act shall take effect immediately.

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Sponsored By

James Gaughran

Archive: Last Bill Status - In Senate Committee Education Committee

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