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JCIDA discusses revamping policy

In considering a revised uniform tax exempt policy for forgiving property, mortgage recording and sales taxes for developers, Jefferson County Industrial Development Agency board members disputed how much oversight local taxing jurisdictions should have on individual agreements.

PILOT AGREEMENTS: Panel weighs oversight of taxing jurisdictions

In considering a revised uniform tax exempt policy for forgiving property, mortgage recording and sales taxes for developers, Jefferson County Industrial Development Agency board members disputed how much oversight local taxing jurisdictions should have on individual agreements.

The agency's governance committee met Tuesday morning to discuss changes to the uniform tax exempt policy. That policy, which outlines standard payment-in-lieu-of-taxes agreements, last was updated in 2004.

Having a standard policy allows the agency to agree with developers and taxing jurisdictions on standard PILOT agreements for property taxes without seeking formal approval from each jurisdiction affected. But any deviations from the uniform policy require all jurisdictions to approve the PILOT.

Agency board member John Doldo Jr. wanted language included that would require each PILOT to be approved by all jurisdictions.

"I would never vote for a PILOT that a taxing jurisdiction didn't approve," he said. "I don't want them to be overwhelmed by this thing."

Mr. Doldo has been on the agency board for about 20 years.

The taxing jurisdictions... more [truncated due to possible copyright]  

PILOT AGREEMENTS: Panel weighs oversight of taxing jurisdictions

In considering a revised uniform tax exempt policy for forgiving property, mortgage recording and sales taxes for developers, Jefferson County Industrial Development Agency board members disputed how much oversight local taxing jurisdictions should have on individual agreements.

The agency's governance committee met Tuesday morning to discuss changes to the uniform tax exempt policy. That policy, which outlines standard payment-in-lieu-of-taxes agreements, last was updated in 2004.

Having a standard policy allows the agency to agree with developers and taxing jurisdictions on standard PILOT agreements for property taxes without seeking formal approval from each jurisdiction affected. But any deviations from the uniform policy require all jurisdictions to approve the PILOT.

Agency board member John Doldo Jr. wanted language included that would require each PILOT to be approved by all jurisdictions.

"I would never vote for a PILOT that a taxing jurisdiction didn't approve," he said. "I don't want them to be overwhelmed by this thing."

Mr. Doldo has been on the agency board for about 20 years.

The taxing jurisdictions can send the agency written comments or appear at public hearings for PILOTs, said attorney Justin S. Miller, Harris Beach PLLC, Albany.

"The IDA is not required to make changes forwarded by the taxing jurisdictions," he said. "There is no required consent or veto power of the taxing jurisdiction - you're just required to have a public process."

Mr. Doldo said, "I thought it was going to be clear that the taxing jurisdiction would not have to abide by the PILOT."

The projects must have environmental review and local zoning approvals before the agency can award a PILOT, other board members said. And the committee agreed to have the policy apply to all renewable energy development, including hydroelectric and photovoltaic power facilities.

On the wind farm aspect, the agency had worked for months on developing the uniform policy before Galloo Island Wind Farm's developer pressed for an individual payment-in-lieu-of-taxes agreement. That project's PILOT was different from the standard PILOT laid out in the agency's policy, and those changes were approved in February after months of intense pressure. And the proposed policy mirrors those differences.

The Galloo Island PILOT is 20 years instead of the standard 15 under the current uniform tax exempt policy. It also generates revenue based on a fixed base payment per megawatt, increasing each year, and supplemental payments based on high electricity prices. Under the current policy, standard PILOTs make projects pay 25 percent of what the property taxes would be for the first five years, 50 percent for years six through 10 and 75 percent for years 11 through 15 before going to full taxation.

And the Galloo Island PILOT also used a distribution that strayed from pro rata distribution among jurisdictions for property taxes in the current uniform tax exempt policy.

"I can't foresee any project being built without a deviation from the UTEP," board Vice Chairman David J. Converse said, based on the expected requests for different distribution of the proceeds. Deviations would require approval from taxing jurisdictions.

"When the agency approves a particular PILOT, we have to remain within the new ground rules, but the distribution question is a separate analysis," Mr. Miller said. "The IDA doesn't need the distribution resolution before a PILOT is put in place."

Board member WIlliam H. Fulkerson said, "Distribution is at least going to be discussed and approved before I vote for a PILOT."

Like the Galloo Island PILOT, the draft policy that would apply to all development would allow for agreements to run up to 20 years, instead of the previous 15.

"I have a problem with going to a 20-year PILOT right off the bat," Mrs. Pfaff said. "If we're doing something that liberal, it should be going back to the taxing jurisdictions for approval."

The policy would also allow for up to 100 percent tax cancellation, which the board could use at its discretion.

Agency Chief Executive Officer Donald C. Alexander said, "We've worked hand in hand from the very beginning with taxing jurisdictions. The PILOTs wouldn't happen if the staff hadn't thoroughly vetted the projects and the board and loan review committee hadn't considered and approved the PILOT."

Board secretary Kent D. Burto suggested sending outlines of the project and proposed PILOT agreement to each jurisdiction.

"There are such big changes over time on boards, they may not know about PILOTs," he said.

Timothy Q. Conboy, project manager for Acciona's proposed St. Lawrence Wind Farm, piped up to support getting the policy ironed out quickly.

Acciona first submitted an application for a PILOT in fall 2008, but now the developer is nearing the end of the environmental review process, so the time pressure increases.

"The PILOT agreement will be a critical part of the project," he said.

The committee tentatively scheduled another meeting for 8 a.m. Aug. 3 in the hopes of agreeing on a policy to send to the full board Aug. 5.

After the policy is agreed upon by the agency board, it will be sent to every taxing jurisdiction in the county. They will have 60 days to comment before the agency board makes a final decision.


Source: http://www.watertowndailyti...

JUL 14 2010
https://www.windaction.org/posts/27223-jcida-discusses-revamping-policy
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