Adopted12/17/93
As
Amended
Adopted03/11/99
As Amended
Adopted 06/21/04
As Amended
UNIFORM TAX EXEMPTION
POLICY
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
The I.D.A. 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 I.D.A. taking
title to the property which it then leases back to the company under an
installment sale agreement. Property owned by an I.D.A. 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 I.D.A.’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.
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 signed after 12/17/93. Projects which were
induced prior to the date the I.D.A. “Reform Bill” was signed into Law (July
21, 1993) are not subject to this policy.
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. (See Attachment A: Uniform Modification of Real Property Tax
Abatement).
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 obtain full term abatement for
additions which are financed or refinanced by the Agency.
6. Refinancing of existing
facilities: No tax abatement shall be
allowed unless refinancing results in physical improvements to the facility and
a measurable increase in employment.
7. The
Agency will consider special requests on a case by case basis.
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 company within
specified time period. (See Attachment B).
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 100% for a 10 year period.
* Local, county and school taxes for the
first 10 years will be based on the equalized value of the land purchased,
times the respective local tax rates. In no succeeding year shall the
assessment be less than the previous year as a result of declining equalization
rates.
* 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.
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 shall be exempt from local, county and school taxes at a rate of
100% for a 10 year period.
* 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.
New
Nanotech Manufacturing Facilities Located with
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
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
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
4. Demonstration that the project will
provide employment for
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 100% for a five year period.
From years six through ten any new
assessment resulting from improvements financed with Agency assistance shall be
exempt from local, county and school property taxes at a rate ranging from 0%
to 100% of such assessments as determined by the Agency.
Local, county and school taxes for
the first five years will be based on the equalized value of the land
purchased, times the respective local tax rates. In no succeeding year shall
the assessment be less than the previous year as a result of declining
equalization rates.
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.
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 will 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 lease 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 lease 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,
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.
Each company as agent of the Agency
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 may result in the removal of the company’s authority to act as agent of
the Agency.
Uniform
Tax Exemption Policy: N.Y.S. 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.
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 thirty (30) calendar days to provide written input regarding the
proposed deviation prior to final action by the Board.
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. Right of Reimbursement: The Agency reserves the right to use PILOT
revenues to reimburse itself or any other governmental Agency or political
subdivision of all or a portion of Agency and/or other public funds which were
invested in the construction of infrastructure which was instrumental in the
location decision of the company making the PILOT payments. Such reimbursement
shall not result in a reduction of existing tax revenues generated prior to
Agency involvement.
4. 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.
5. 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
ATTACHMENT A
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.
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.
Adopted
08/05/97
Adopted
03/11/99
As
Amended
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.
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.