ROCKLAND COUNTY INDUSTRIAL DEVELOPMENT AGENCY

 

Payment In Lieu of Tax Agreement (PILOT)

Policies & Process Guidelines

 

A Payment In Lieu of Tax Agreement (PILOT) is a negotiated tax abatement or structured property tax schedule which may be obtained under the authority of the IDA.  (Please see the IDA’s Uniform Tax Exemption Policy for more detail regarding IDA real property tax abatements and other incentives at www.rocklandida.com.)

 

Unlike many industrial development agencies, the Rockland IDA does not have the authority to impose a PILOT, or any type of property tax abatement or condition, on the local taxing jurisdictions.  Further, it is at the sole discretion of the local taxing jurisdictions to participate or not.

 

However, the Rockland IDA does have the authority to facilitate and implement a PILOT should the project applicant and taxing jurisdictions agree to the terms and structure of a property tax agreement.

 

Given the above, the IDA does not either advocate for or against a PILOT.  As such, it is the sole responsibility of the IDA project applicant to determine if the involved tax jurisdictions choose to participate in a PILOT agreement and then negotiate the terms of the agreement.

 

To assist IDA project applicants in the PILOT process, however, the following guidelines are provided:

 

  • Provided the project is eligible for consideration to receive IDA incentives, the applicant must indicate “yes” or “no” that a PILOT is requested on the IDA’s “Application For Financial Incentives”, Section D, Page I-5.

  • If the project is eligible for consideration, the IDA board will consider an Inducement Resolution that authorizes the applicant to request and negotiate a PILOT with the local taxing jurisdictions.

  • Taxing jurisdictions eligible to participate in a PILOT include the town in which the project is located, the affected village (if applicable), and the affected school district.  The County does not participate in PILOTs (unless the project has a unique County-wide impact).  The IDA can assist in identifying the affected taxing entities and the individuals from the taxing jurisdictions that should be contacted regarding a proposed PILOT.

  • The first step in the PILOT process is arranging an (informal) meeting with all the taxing jurisdictions, the IDA, and the applicant so a discussion can be held regarding the applicability of a PILOT and what structure may be considered.  It is recommended that this meeting take place following IDA inducement (which confirms the project’s eligibility for incentives and a PILOT).

  • While the IDA Executive Director can assist in arranging this first meeting, it is ultimately the responsibility of the applicant.  It is recommended that the meeting include representatives from all the taxing jurisdictions and the IDA.

  • Each PILOT structure is unique.  As such, each PILOT – if agreeable to the taxing jurisdictions – reflects a negotiated structure that addresses the financial need of the applicant, while meeting the economic development objectives of the taxing jurisdictions and the IDA.

  • A strong, stable tax ratable base and revenue predictability are often key objectives of the taxing jurisdictions.  It is recommended that the applicant recognize and address both of these elements when proposing a property tax structure.  While the applicant is responsible for proposing and negotiating a PILOT, the IDA and town assessors are often resources that can assist in providing historical references of similar project PILOTs, current assessed value of the site, etc.

  • Special Note: Taxing jurisdictions will not formally consider a PILOT that involves a property that has a pending tax grievance.  While a PILOT may resolve issues involving a tax dispute, any pending grievance(s) must be withdrawn by the property owner prior to final PILOT approval.

  • Each taxing jurisdiction has the individual choice to participate (or not) in a PILOT.  It is not required that all taxing entities participate in a PILOT.

  • If and when a PILOT is informally agreed to by the participating parties, the IDA counsel will prepare a draft agreement for review by all.

  • A formal resolution for PILOT approval is required of all taxing jurisdictions.  A copy of the resolution(s) must be provided to the IDA.  It is the responsibility of the applicant to ensure the matter is formally considered and adopted by the involved taxing jurisdictions. While the County does not provide tax abatements (unless specifically included), the County does participate in the approval process, by both formal resolution and signing of agreements.  The County will only consider approval after all the other local taxing jurisdictions have approving resolutions in place.

  • It is important to note that the PILOT is not considered to be approved until all participating parties have passed approving resolutions and have signed a final PILOT agreement. 

  • Regardless of when a PILOT is formally approved, it will not go into effect until the next March 1 taxable status date.

 

As with each of its incentives, the IDA has a fee schedule for PILOTs.  The applicant is required to pay all applicable fees upon project/PILOT closing.  Please refer to the PILOT fee schedule at www.rocklandida.com to determine applicable fees.

As a final note, because each Rockland IDA PILOT is unique, there is an inherent flexibility in the (informal) negotiating and meeting process.  To this end, the IDA encourages the applicant to discuss the matter with the IDA Executive Director and IDA Counsel to ensure that the process is as effective and efficient as possible for all parties.

 

ACKNOWLEDGED AND AGREED TO: ________________________________________

      Applicant Name/Title