Uniform Tax Exemption Policy (UTEP)

Advancing Job Opportunities, Business + Industrial Investment in Saratoga County, New York

INTRODUCTION

The Saratoga County Industrial Development Agency is a public benefit corporation established in 1971 pursuant to Article 18‑A of the General Municipal Law and Chapter 855 of the 1971 Laws of New York State.

The Agency possesses a broad range of powers to enable it to fulfill its purpose to promote, develop, encourage and assist in the construction, expansion and equipping of economically sound industrial and commercial facilities in order to advance the job opportunities, general prosperity, and economic welfare of the citizens of Saratoga County.

The IDA utilizes its financial and tax incentives to increase employment opportunities by attracting new development and to maintain the present employment base by stimulating reinvestment by existing County businesses.

The issuance of industrial revenue bonds or a straight lease transaction generally results in the IDA taking title to the property which it then leases back to the company under an installment sale agreement. Property owned by an IDA is exempt from local and school real estate taxes under the provisions of Section 412‑a of the Real Property Tax Law and Section 874 of the General Municipal Law. This exemption does not apply to special district taxes and/or special ad valorem levies. Real property owned by the Agency is listed on Roll Section 8 (wholly exempt).

The Agency and each recipient of its financial assistance enter into a payment in lieu of tax agreement (PILOT agreement), which provides for annual payments in lieu of taxes (PILOT), in amounts which are based on formulas contained in the Agency’s uniform tax exemption policy.

Legislation enacted in July 1993 required IDA’s to adopt a uniform tax exemption policy after considering issues involving the number of private sector jobs created or retained by a project; the value of tax exemptions to be provided; the project’s impact on existing businesses; the amount of private sector investment generated by a project; the additional public services which may be required to serve the project; and the additional revenues a project will provide for municipalities and school districts. The Agency was also required to seek and consider input on its uniform tax exemption policy from affected taxing jurisdictions prior to its formal adoption. The Agency shall provide a notice of public hearing for any proposed project to all local tax jurisdictions in which the proposed project is located.

1993 State legislation additionally required I.D.A.’s to provide each affected tax jurisdiction with a copy of the PILOT agreement within 15 days of signing. Under that legislation, PILOT payments must also be allocated to affected taxing jurisdictions in the same proportion to the amount of real property tax which would have been received by the taxing jurisdiction had the project not been tax exempt. All PILOT payments received by the Agency must be remitted to the affected taxing jurisdictions within 30 days of receipt.

Pursuant to State legislation, (Chapter 444 of the Laws of 1999), the Saratoga County Industrial Development Agency was required to review and readopt its U.T.E.P. on or before April 1, 1999 following a public hearing for which a sixty (60) day written notice was provided to each affected local taxing jurisdiction.

UNIFORM TAX EXEMPTION POLICY: General Provisions

The Agency’s Uniform Tax Exemption Policy is segmented by classes of uses, but the following provisions are applicable to all PILOT agreements.

  1. The Agency shall attempt to secure its PILOT agreements as a first lien on the real property.
  2. Closure; relocation of a company’s operations; failure of a company to make PILOT payments; or failure of a company to reasonably meet its employment projections in its application may result in a cessation of real property tax abatements, transfer of title from the Agency to the company, or such other penalties as may be determined by the Agency, including the claw back or repayment of property taxes abated pursuant to the PILOT Agreement.. (See Attachment A: Uniform Modification of Real Property Tax Abatement/ Claw Back Penalty).
  3. PILOT payments which become delinquent will be subject to a late penalty charge of 5% of the amount due and interest charges of 1% per month. Penalty and interest shall accrue to and be paid to the affected tax jurisdiction(s).  Any increase in late charges and interest which may be authorized by the legislature shall be applicable to this policy.
  4. Maintenance of tax base:  I.D.A. financial assistance shall not result in a reduction of existing tax revenues generated prior to Agency involvement.
  5. Additions:  Project sponsors who add to existing facilities originally financed by the Agency may apply for sales, mortgage and real property tax abatements for said  additions which are financed or refinanced by the Agency.
  6. Refinancing of existing facilities:  No tax abatement shall be allowed unless refinancing results in significant physical improvements to the facility and a measurable increase in employment.
  7. The Agency will consider special requests on a case by case basis consistant with the general purposes of the IDA enabling legislation as amended.
  8. In areas of overlapping jurisdictions between the County and a local I.D.A. the S.C.I.D.A. reserves the option to utilize whichever uniform tax exemption policy or a combination of those policies which it deems most applicable.
  9. Assessment challenges by a company during the term of the PILOT Agreement must be made within specified time period. (See Attachment B).
  10. Project Benefit Criteria
    All applications for sales, mortgage and real property tax abatement will be reviewed by the Board utilizing the following project benefit criteria to determine the percentage and length of abatements to be provided:
  • Jobs created: salaries, benefits, payroll and importance to local economy.
  • Jobs retained: salaries, benefits, payroll and importance to local economy
  • Capital Investment
  • Impact of project on existing business or segment of local economy.
  • Impact of project on public infrastructure and services.
  • Project involves redevelopment of distressed or underutilized property.
  1. This policy may be amended by the Agency following certified notice of the required public hearing to all affected taxing jurisdictions within the Agency’s jurisdiction. The notice period shall be in accordance with applicable statute.

UNIFORM TAX EXEMPTION POLICY: Manufacturing

NEW FACILITIES

Any new assessment resulting from improvements financed with Agency assistance shall be exempt from local, county and school property taxes at a rate of 50-100% for a 5 year period. The percentage of abatement from years 6 through 10 will be from 0 to 100% as determined by the Board based on its review of the public benefits demonstrated by the project.

All projects shall make annual pilot payments based on the assessed land value based on the project  purchase amount (assessment to be determined by the local assessor), in addition to the amount of the assessed value of the improvements not subject to an abatement.

In cases where a full 10 year abatement is granted beginning in year 11 and continuing for the term of the PILOT Agreement the company shall pay annual local, county and school taxes as if the property were on the taxable roll. This will not apply when real property tax abatements are granted for a term exceeding ten years.

EXISTING FACILITIES

Existing buildings shall continue to be subject to local, county and school taxes based on the current assessment. Any increase in assessment resulting from improvements financed with Agency assistance may be exempted from local, county and school taxes at the annual rate and term as determined by the Board using the formula for new facilities above and its review of the project criteria above.

Upon completion of the abatement period and continuing for the term of the PILOT agreement the company shall pay annual local, county and school taxes as if the property were on the taxable roll.

New Nanotech Manufacturing Facilities Located with Luther Forest Technology Campus Development Area 1

SEE ATTACHMENT C

New Nanotech Manufacturing Facilities located within Luther Forest Technology Campus Development Area 1

UNIFORM TAX EXEMPTION POLICY: Commercial Service

Eligible commercial service sector projects include those in which the principle user of the facility seeking I.D.A. financial assistance serves a market area broader than Saratoga County or provides services within Saratoga County that are not adequately provided for by existing local facilities.

Eligible Determination

A favorable determination of the eligibility of commercial service projects for a tax incentive is made upon evidence of the following factors:

  1. Demonstration that Industrial Development Agency assistance will induce the location or expansion of the project in Saratoga County.
  2. Demonstration of the need for the project and the economic benefits it represents.
  3. Demonstration that the project will not cause substantial disruption of existing employment at similar facilities in Saratoga County.
  4. Demonstration that the project will provide employment for Saratoga County residents or provide a service which is demonstrated to be in the best interest of the public and the taxpayer.
  5. Demonstration that the project involves the development of new facilities.

Any new assessment resulting from improvements financed with Agency assistance shall be exempt from local, county and school property taxes at a rate of 0 – 100% for years 1 through 10 of such assessments as determined by the Board based on its review of the project benefit criteria above.

All projects shall make annual pilot payments based on the assessed land value based on the project purchase amount (assessment to be determined by the local assessor), in addition to the amount of the assessed value of the improvements not subject to an abatement.

Upon completion of the abatement period and continuing for the term of the PILOT agreement the company shall pay annual local, county and school taxes as if the property were on the taxable roll.

UNIFORM TAX EXEMPTION POLICY: Commercial Retail

Only those commercial retail facilities enumerated in Section 862 of the General Municipal Law will be considered eligible for financial assistance.

Eligible facilities may be granted a partial abatement on any assessment attributed to improvements financed with Agency assistance. The abatement for local, county and school tax purposes will be limited to 50% of assessment in year #1, 40% in year #2, 30% in year #3, 20% in year #4, and 10% in year #5. Thereafter all real property taxes will be calculated on 100% of the property’s assessment.

UNIFORM TAX EXEMPTION POLICY: Hydroelectric Facilities

Annual payments will be based on an increasing percentage of the gross annual income for a ten year period beginning with the first full year in which electric revenue is generated. should the initial generation period be less than 12 months during the first calendar year it shall be added to the first full year period for purposes of calculating the PILOT payment. The Agency shall require submission of independent audited statements or such other appropriate documentation of annual revenues and expenses as may be requested by the Agency. Project sponsors shall secure business interruption insurance and assign to the Agency the right to recover PILOT payments from the proceeds of such insurance policy so as to insure PILOT payment is at least equal to the prior year’s full PILOT payment.

Base percentage is 2.5% with 50% of that exempt from the first year’s computed tax, such exemption decreasing 5% each year thereafter.

Year

1      Annual Electric Revenue x 2.5%   x    50% =  1.250%    –       or minimum amount
2                       “                                          55% =  1.375%            established by the
3                       “                                          60% =  1.500%            Agency, whichever
4                       “                                          65% =  1.625%            is higher
5                       “                                          70% =  1.750%
6                       “                                          75% =  1.875%
7                       “                                          80% =  2.000%
8                       “                                          85% =  2.125%
9                       “                                          90% =  2.250%
10                       “                                          95% =  2.375%

In year 11 and thereafter the PILOT will be based on the assessed value of the property.

Should unforeseen market conditions result in a substantial (30% or >) reduction in operations that have the effect of reducing the facility’s revenues, annual PILOT payments shall be based on a percentage of the facility’s revenue, the minimum or the facility’s full value assessment times the applicable tax rates, whichever is the higher.

UNIFORM TAX EXEMPTION POLICY: Cogeneration Facilities

Annual payments will be based on an increasing percentage of net revenue (i.e., gross annual income minus the base fuel cost), for a ten year period beginning with *the first full year in which electric and steam revenue are generated. Should the initial generation period be less than 12 months during the first calendar year it shall be added to the first full year period for purposes of calculating the PILOT payment. For years 12 thru 15 annual payments will be based on a minimum 2.5% of the net annual revenue with the Agency reserving the right to increase the annual payment during years 12‑15. Beginning in year 16, annual PILOT’s will be equal to the real property taxes which would be due if the facility were not tax exempt.

The Agency shall require submission of independent audited statements or such other appropriate documentation of annual revenues and expenses as may be requested by the Agency. Project sponsors shall secure business interruption insurance and assign to the Agency the right to recover PILOT payments from the proceeds of such insurance policy so as to insure PILOT payment is at least equal to the prior years full PILOT payment.

Base percentage is 2.5% with 50% of that exempt from the first year’s computed tax, such exemption decreasing 5% each year thereafter.

YEAR
1      Annual Electric Revenue x 2.5%   x    50% =  1.250%    –       or minimum amount
2                       “                                          55% =  1.375%            established by the
3                       “                                          60% =  1.500%            Agency, whichever
4                       “                                          65% =  1.625%            is higher
5                       “                                          70% =  1.750%
6                       “                                          75% =  1.875%
7                       “                                          80% =  2.000%
8                       “                                          85% =  2.125%
9                       “                                          90% =  2.250%
10                       “                                          95% =  2.375%
11                       “                                          100% = 2.500%
12                       “                                                      2.5%}
13                       “                                                      2.5%} Minimum
14                       “                                                      2.5%}
15                       “                                                      2.5%}

Should unforeseen market conditions result in a substantial (30% or >) reduction in operations that have the effect of reducing the facility’s revenues, annual PILOT payments shall be based on a percentage of the facility’s revenue, the minimum or the facility’s full value assessment times the applicable tax rates, whichever is the higher.

UNIFORM TAX EXEMPTION POLICY: Sales Tax

The Saratoga County Industrial Development Agency as a public benefit corporation of the State of, New York is exempt from the imposition of sales tax on the purchase or rental of materials, supplies, tools, equipment, or services to be incorporated into the facility or to be used exclusively in connection with the constructing or equipping of such facility. It is the intent of this policy to permit agents of the Agency to obtain the full sales tax exemption permitted by law during the construction period of the project. Any exemption of sales tax beyond the construction period must involve the repair of buildings or replacement of tangible personal property that becomes obsolete. Exemptions beyond the construction period are subject to Board approval.

A company’s failure to close on Agency financial assistance within six months of the adoption of an inducement resolution may require the repayment of all sales tax previously exempted. Should there be a failure to make restitution, the Agency may notify the N.Y. S. Department of Taxation and Finance of sales taxes due.

As agent of the Agency, each company must file an annual statement of the value of all sales tax exemptions claimed. Failure to file such statement with the N.Y.S. Department of Taxation and Finance (in the form and time period required), may result in the removal of the company’s authority to act as agent of the Agency. A detailed report on sales tax savings (see Agency application), must be filed with the Agency concurrent with the annual report to the NYS Department of tax and Finance.

In accordance with state statute, companies will be required to certify that any sales tax benefits gained in excess of the amount authorized by the Agency are subject to repayment to the Agency.

UNIFORM TAX EXEMPTION POLICY: NYS Mortgage Recording Tax

Mortgages executed by an Industrial Development Agency in furtherance of its lawful purposes are exempted by section 874 of the General Municipal Law from the N.Y.S. Mortgage Recording Tax.

It is the policy of the Agency that all of its projects should receive the full exemption from the N.Y.S. Mortgage Recording Tax allowed by law. Refinancing of existing projects are not eligible for an exemption unless the Board makes a finding of the project’s unique public benefit.

UNIFORM TAX EXEMPTION POLICY: Deviation Procedures
  1. All affected tax jurisdictions shall be notified by certified mail of any proposed deviation of the Uniform Tax Exemption Policy and the reasons for such deviation. Affected tax jurisdictions shall have ten (10) calendar days,(or whatever other minimum period may be required by statute in effect at the time of the notice),  to provide written input regarding the proposed deviation prior to final action by the Board. This comment period may be extended at the Board’s discretion.
  2. Decrease in Abatement:  The Agency may at any time and for any class of use determine that its uniform tax exemption policy should be deviated from to provide for an increase in the amount of payment in lieu of tax. These increases would be remitted to affected taxing jurisdictions in the same proportion as the real property tax levy.
  3. Hydroelectric Facilities:  The Agency may consider extending the abatement period from 10 to 15 years for hydroelectric facilities if the project sponsor can demonstrate an extension is critical to the economic viability of the project.
  4. Notwithstanding any of the foregoing provisions the Agency, at its discretion, reserves the right to deviate from its Uniform Tax Exemption Policy.

Adopted 02/28/97 Resolution #587
Adopted 03/11/99 As Amended
Adopted 10/14/14

ATTACHMENT A - UNIFORM MODIFICATION OF REAL PROPERTY TAX ABATEMENT

ATTACHMENT A  As Amended
COUNTY OF SARATOGA INDUSTRIAL DEVELOPMENT AGENCY
UNIFORM MODIFICATION OF REAL PROPERTY TAX ABATEMENT

For companies receiving real property tax abatements the modification of benefits schedule (applicable to the real property tax abatements) is as follows:

REDUCTION IN TAX ABATEMENT BENEFITS
Year(s)                   1 – 5                 50% to 100%
Year                       6                      50%
Year                       7                      40%
Year                       8                      30%
Year                       9                      20%
Year                       10                    10%

The time period utilized above begins with the effective date of the PILOT Agreement. Imposition of any modification is at the sole discretion of the Agency and is reviewed/considered on a case by case basis. Prior to making a determination on the modification of property tax abatements the Agency shall offer the company the opportunity to present its position. Reasons for the modification of benefits include the following:

  1. Sale or closure of the facility and departure of the company from Saratoga County.
  2. Significant change in the use of the facility and/or the business activities of the company.
  3. Significant employment reductions not reflective of the company’s (normal) business cycle and/or local and national economic conditions or inconsistent with employment levels presented to the Agency at the time the PILOT was agreed to by the Agency.

Reporting requirements: The company shall, by December 1st of each year this Agreement is in effect, submit an employment report to the Saratoga County Industrial Development Agency detailing the number of full and part time positions by category: professional/managerial, clerical, skilled and unskilled.  Any projected increases or reductions in the work force for the upcoming year should also be reported. Failure to report may be considered an event of default.

CLAW BACK PENALTY FOR FAILURE TO MEET EMPLOYMENT LEVELS

“Company”                             is the entity that applied for and received the benefit from the Agency.
“Agency”                                 is the Saratoga County Industrial Development Agency
“AER”                                     is the Company’s annual report of employment required to be provided by the Agency.
“Employment Obligation        Shall mean the period during which the Company is receiving a benefit in
Term”                                     the form of lower payment in lieu of taxes than their real estate taxes would be.
“Employment Obligation”       Shall mean the number of FTEs selected by the Agency based on what the Company represents is the  FTEs it will hire and the number of FTEs retained, as set forth in its application for financial assistance.

“FTE”                                      Shall mean a full time employee that has a minimum of thirty-five (35) scheduled hours per week, or such other number of hours per week (but not less than twenty-five (25) hours) as established by existing written policies of the Company, and whose workplace location is the project facility.

“Benefit”                                  Shall mean the amount the Company saved by making payments in lieu of real property taxes in a particular year.  For example, if a Company’s PILOT payment is equal to 75% of normal real property taxes, then the Company’s Benefit for that year would be an amount equal to 25% of normal real property taxes.

“Per Employee Amount”       Shall mean an amount equal to the Benefit for the year after the year of the shortfall divided by the “Employment Obligation”.

“Shortfall”                               Shall mean the difference between the Employment Obligation and the actual number of FTEs per the AER for the applicable year.

“Major Shortfall”                   Shall mean any number of FTEs that is less than 50% of the Employment Obligation.

“Cure Period”                        Shall mean the period ending June 30th of the year following the Shortfall

1. Job Creation and Retention Obligations

After the expiration of the Employment Oblidation Term, the Company shall have no further obligation with respect to the Employment Obligation  and shall not be liable for any of the

Payments described below.

The failure of the Company to satisfy the Employment Obligation shall subject the Company to payments to the Agency.  The Company shall be deemed to have failed to satisfy its Employment Obligation sa of the beginning of the year subsequent to the year for which  the Company files an AER; if the total number of FTEs shown on such report for the applicable year is less than 80% of the applicable

Employment Obligation (payments are only required if the Shortgall is more than 20% of the Employment Obligation).

1. Shortfall Payments

(1)        If the number of actual FTEs for any calendar year shall be a Shortfall then the Company shall pay to the Agency an amount equal to the Per Employee Amount Multiplied by the number of FTEs less than the employment obligation.

(2)         Not withstanding any of the foregoing, a Shortfall shall not apply where the Shortfall is a result of a major casualty to or condemnation of the facility. In the event of such major casualty or condemnation, the Company shall have no obligation to pay the Shortfall Payment.

The Agency shall have the right to reduce any payments required, under this policy, in extraordinary circumstances, in its sole discretion.

Adopted 08/05/97
Adopted 03/11/99
As Amended

ATTACHMENT B - ASSESSMENT CHALLENGES BY COMPANY

ATTACHMENT B
SARATOGA COUNTY INDUSTRIAL DEVELOPMENT AGENCY
ASSESSMENT CHALLENGES BY COMPANY

Resolution #612

RESOLVED, that if a company operating under a 10‑year PILOT Agreement is dissatisfied with the amount of assessed value of its project facility as initially established, (1) the company may pursue a review to dispute that assessed value for a period of up to seven (7) years from the date, such assessed value is established within the Agreement. The company waives any right to contest or dispute such assessed value during the seven (7) years following the end of the 10‑year PILOT term, and be it further

RESOLVED, that if a company operating under a 5‑year PILOT Agreement is dissatisfied with the amount of assessed value of its project facility as initially established, the company may pursue a review to dispute that assessed value for a period of up to three (3) years from the date such assessed value is established within the Agreement.  The company waives any right to contest or dispute such assessed value during the three (3) years following the end of the 5‑year PILOT term.

Ayes:  6
Noes:  0
Adopted:  6‑0

(1)   “initially established,” shall include any subsequent change in assessment.

ATTACHMENT C - New Nanotech Manufacturing Facilities located within Luther Forest Technology Campus Development Area 1
Attachment C Resolution #144 Adopted 6/21/04                                                                                                                     
  • All buildings and other improvements shall be subject to PILOT payments equal to 100% of the town, county and school taxes based on the current assessment as of the time of calculation, however, for the purposes of calculating the PILOT payments to the taxing jurisdictions, the following formula shall be used during the term of the PILOT:

Step 1, determine Total Tax Amount, Pod 1:

Malta Tax Amount (Malta Pod 1 Parcel(s)), i.e. Malta Assessed Valuation * Malta Taxing Jurisdiction Tax Rates
Stillwater Tax Amount (Stillwater Pod 1 Parcel(s), i.e. Stillwater Assessed Valuation * Stillwater Taxing Jurisdiction Tax Rates

Total Tax Amount, Both Towns, Pod 1

Step 2, allocate Total Tax Amount between Towns:

Payment to Malta taxing jurisdictions = Total Tax Amount Pod 1 * (0.75) with the payment to be allocated between the Town of Malta and the Ballston Spa Central School District proportionately based upon their respective tax rates.

Payment to Stillwater taxing jurisdictions = Total Tax Amount Pod 1 * (0.25) with the payment to be allocated between the Town of Stillwater and the Stillwater Central School District proportionately based upon their respective tax rates.

“Malta Taxing Jurisdiction” shall refer to the Town of Malta, New York and the Ballston Spa Central School District.
“Stillwater Taxing Jurisdiction” shall refer to the Town of Stillwater, New York and the Stillwater Central School District.

Payments to Saratoga County shall be in the same proportion as if the subject parcel was not owned by the Agency.

  • All taxing jurisdictions involved must consent to the terms of this policy in order to effectuate this policy
  • The term of any PILOT agreement adopted under this uniform policy shall be for 49 years, provided, however, that as of the first tax status date following the issuance of a certificate of occupancy with respect to at least one nanotech manufacturing facility located entirely within the jurisdictional boundaries of each of the Towns of Malta and Stillwater, the use of the above formula will terminate and the PILOT payments regarding Development Area 1 will be allocated in the same proportion to the amount of real property tax which would have been received by the taxing jurisdiction had the property not been tax exempt.
  • Real Property owned by the Agency is not exempt from the payment of special district taxes and thus the provisions of this Policy shall be inapplicable to any special district taxes imposed upon the subject property.
  • This policy may not be amended or deviated from without the consent of the County of Saratoga, New York, the Town of Malta, New York, the Town of Stillwater, New York, the Ballston Spa Central School District and the Stillwater Central School District.
  • Notwithstanding anything else to the contrary in this Attachment C, the Agency may execute a PILOT modification agreement or an amended PILOT, the terms of which  include a schedule of annual assessment amounts and valuation methodology for future development, which assessment amounts and valuation methodology have been  approved by County of Saratoga, New York, the Town of Malta, New York, the Town of Stillwater, New York, the Ballston Spa Central School District and the Stillwater Central School District as a part of a stipulation and order which permits and orders the discontinuance of an RPTL Article 7 proceeding or proceedings commenced with regard to the assessment of improvements constructed within Luther Forest Technology Campus Development Area 1.Adopted 05/14/12 : Resolution # 1145