Job Incentives

Adopted March 30, 1999

The City of Mechanicville and Town of Stillwater Industrial Development Agency (the “Agency”) is a public benefit corporation established pursuant to Article 18-A of the General Municipal Law and Chapter 582 of the 1978 Laws of the State of New York.

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 City of Mechanicville and the Town of Stillwater.

The Agency 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 and new businesses.

The issuance of industrial revenue bonds generally results in the Agency taking title to the property, which it then leases back to the company under an installment sale agreement. Property owned by an Agency 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 economic development job incentive program.

Legislation enacted in July 1993 requires Agency’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 the 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 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 is also required to seek and consider input on its uniform tax exemption policy from affected taxing jurisdictions prior to its formal adoption.

State legislation additionally requires Agency’s to provide each affected tax jurisdiction with a copy of the PILOT agreement within 15 days of signing. Under the most recent legislation, PILOT payments must 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 property not been tax exempt All PILOT payments received by the Agency must be remitted to the affected taxing jurisdictions within 30 days of receipt.

Economic Development Job Incentive Program Policy: General Provisions

The Agency’s Economic Development Job Incentive Program Policy is segmented by classes of uses, but the following provisions are applicable to all PILOT agreements signed after the date of adoption of this policy. Projects, which were, induced prior to the date the IDA. “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.
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 to 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.

Economic Development Job Incentive Program Policy: Manufacturing

New Facilities

• Any new assessment resulting from improvements financed by bonds 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.

Economic Development Job Incentive Program Policy: Commercial Services

• Eligible commercial service sector projects include those in which the principle user of the facility being financed with industrial revenue bonds serves a market area broader than the City of Mechanicville and the Town of Stillwater or provides services within the City of Mechanicville and the Town of Stillwater 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  revenue bond financing will induce the location or expansion of the project in the City of Mechanicville or Town of Stillwater.
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 the City of Mechanicville or the Town of Stillwater.
4. Demonstration that the project will provide employment for the City of Mechanicville or Town of Stillwater 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 by bonds 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 by bonds shall be exempt from local, county and s ;:hoot property taxes at a rate ranging from 50% 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.

Economic Development Job Incentive Program 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 ta.x 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.

Economic Development Job Incentive Program 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 25% with 50% of that exempt from the first year’s computed tax. such exemption decreasing 5% each year thereafter.

Economic Development Job Incentive Program Policy: Cogeneration Facilities

The City of Mechanicville and Town of Stillwater 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 of 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 a bond issue 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.

Economic Development Job Incentive Program 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.

Economic Development Job Incentive Program 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 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 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. The Agency expects to adopt amendments to this Policy Statement. Also, the IDA expects to provide flexibility to the Program by allowing variances when and where the IDA after due consideration deems a variance justified. No amendment or variance will be adopted or allowed unless and until a public hearing has been held, appropriate input has been received from the taxing entities and the general public, and the reasons for any such amendment or variance are separately itemized and evaluated.
6. Notwithstanding any of the foregoing provisions the Agency, at its discretion, reserves the right to deviate from its Economic Development Job Incentive Program Policy.

All applicants are cautioned not to make substantial commitments or incur any costs unless and until the applicant is fully aware of the consequences of any formal action prior to consultation with representatives of the Agency.