ARTICLE 100 – DEFINITIONS
Unless the context requires a different meaning, the following terms shall have these definitions:
101. “Agency” shall mean the County of Sullivan Industrial Development Agency.
102. “Bond” shall mean the bonds, notes, interim certificates and other obligations issued by the Agency pursuant to the GML of the State of New York entitling such project to be exempt from taxation according to the provisions of GML Section 874.
103. “County” shall mean the County of Sullivan.
104. “State” shall mean the State of New York.
105. “Affected taxing jurisdiction” shall mean any municipality or school district, in which a project is located, which will fail to receive full real property tax payments or other tax payments which would otherwise be due, except for the tax exempt status of the Agency involved in the project.
106. “Financial Assistance” shall mean the proceeds of bonds issued by the Agency, straight leases, or exemption from taxation claimed by a project occupant as result of the Agency taking title, possession or control (by lease, license or otherwise) to the property or equipment of such project occupant acting as agent of the Agency.
107. “Tax Exemption” shall mean the financial assistance granted to a project which is based upon all or a portion of the taxes which would be levied and assessed against the project but for the involvement of the Agency.
108. “PILOT” shall mean any payment made to the Agency, or an affected tax jurisdiction equal to the amount, or a portion of, the real property taxes, or other taxes, which would have been levied by or on behalf of an affected tax jurisdiction if the project was not exempt because of Agency involvement. A PILOT payment shall not include payments on account of the “Buy-back fee.”
109. “Straight Lease” shall mean a transaction in which the Agency takes title, possession or control (by lease, license, or otherwise) to the property or the equipment of a project occupant, entitling such property or equipment to be exempt from taxation according to the provisions of GML§874, and no financial assistance in the form of proceeds of bonds issued by the Agency is provided to the project occupant.
110. “GML” shall mean the General Municipal Law of the State of New York.
111. “Project Occupant” shall mean a person under contract with the Agency who is receiving financial assistance as provided by law. The term project occupant shall include project developer, project tenant or any other similarly situated person.
ARTICLE 200 – TAX POLICIES AND PROCEDURES
201. Chapters 356 and 357 of the New York State laws of 1993, and Section 874 of the New York State General Municipal Law amended in 1997, require that the Agency adopt Uniform Tax Exemption Policies. This policy shall apply to the granting of a tax exemption for real estate, sales and mortgage taxes, the requirements for the payment in lieu of taxes and policies which may be carried out to modify such policies.
202. The general policy of the County of Sullivan Industrial Development Agency is to grant applicants real property tax abatements and exemptions from sales, use and mortgage recording taxes as described below. The Agency may grant enhanced benefits on a case by case basis for a project expected to have a significant economic impact on the County of Sullivan as determined by the Agency’s Board.
203. Considered factors: In approving a project and granting tax exemption, the Agency shall consider:
a. Permanent private sector job creation and retention, and business retention. The Agency will consider the number of permanent jobs created or retained in the private sector and also business retention when it considers approval of a project.
b. Estimated value of the tax exemption. The Agency will consider the value of all the tax exemptions when it considers approval of a project.
c. Whether the affected tax jurisdiction shall be reimbursed by project occupant if the project does not fulfill the purposes for which exemption was granted. The Agency will consider the recapture of tax exemptions granted in appropriate cases. The Agency will require reduction or revocation of any tax exemption granted or increase in or cancellation of any PILOT payment where the use of a project is substantially changed or abandoned or agreed upon goals are not satisfied because of the fault of the project occupant.
d. Impact of project on existing and proposed business or economic development projects. The Agency will consider the needs of the community and the impact on existing and proposed businesses or economic development projects when it considers approval of a project for the particular area where the project is located.
e. The amount of private sector investment generated or likely to be generated by the proposed project. The Agency will consider and favor projects which are likely to generate substantial private investment in the project and in related businesses in the area where the project is located.
f. Demonstrated public support for the proposed project. The Agency will consider the needs of the community and the demonstrated support for the proposed project by the public, government agencies and private organizations when it considers approval of a project. The Agency will accommodate in its consideration of an application for financial assistance those industries that apply for financial assistance and desire to locate in areas which are evidenced by high unemployment, high commercial real estate vacancies or other adverse economic conditions, or are industries which fulfill a need of such community or location.
g. Likelihood of accomplishing the proposed project in timely fashion. The Agency will consider the capital available to a project occupant and the ability of the project occupant to complete the project in a timely fashion.
h. Environmental impact. The Agency shall comply with all applicable laws related to determining the impact of a proposed project on the environment.
i. Extent to which the proposed project will require additional services including but not limited to educational, police, transportation, EMS, and fire. The Agency will consider the impact of the project on community services and may require payment of other taxes, fees and charges where a project will require such additional services arising from such project.
j. Extent to which proposed project will provide additional revenues. The Agency shall consider the size of the project and the revenues otherwise paid to the Agency or any other agency or organization.
k. A Cost Benefit Analysis. To be submitted by the applicant, the Agency shall consider an overall analysis of the costs and benefits of the proposed project as it affects the effected taxing jurisdictions.
204. Application for financial assistance from the Agency shall be made on applications supplied by the Agency and shall contain such information as may be requested. The applicant shall describe the proposed project and type of assistance sought. Agency assistance can take the form of real property tax abatement through either the issuance by the Agency of Tax Exempt Bonds and through a Straight Lease Agreement, Sales and Use Tax Exemption, and/or Mortgage Tax Exemption. Most of the policies herein stated are deemed to be guidelines and not rules of law. The intent of any Agency assistance is to promote economic development and growth of the Sullivan County economy.
ARTICLE 300 – REAL PROPERTY TAX EXEMPTION POLICY AND
PAYMENT IN LIEU OF TAXES
301. The Agency maintains this policy for the provision of real property tax abatements for qualified projects. Only facilities that qualify as a “project,” as defined in the New York State Industrial Development Agency Act, may be approved by the Agency. These include both industrial and non-industrial projects. Applicants can qualify for Real Property Tax Exemption through either Bonding or Straight Lease Agreements with the Agency. The project must be shown to serve a public purpose by creating or retaining employment. Additionally, State restrictions on applicants include prohibitions to projects that are extraterritorial (GML Section 854(4)), governmental projects (GML Section 854(B)), projects raided from outside Sullivan County except as allowed under GML Section 862(1), and the limitations on the Agency’s ability to provide assistance to retail projects (GML Section 862(2)).
The following are the Abatement Programs adopted by the County of Sullivan Industrial Development Agency.
a. General Abatement Program
After A Certificate of Establishment of the Agency was filed with the New York Secretary of State on November 6, 1970, an original tax abatement policy was adopted by the founding members of the Agency under authority granted pursuant to Section 906 of the General Municipal Law of the State of New York. That basic policy still exists today and is called the General Abatement Policy and it is the basic abatement schedule used by the County of Sullivan IDA. In this program, real estate taxes on the increased value resulting from improvements are abated at fifty (50%) percent for year one (1) with the abatement decreasing two and one-half (2½%) percent per year for years two (2) through twenty (20). This type of abatement program provides benefits similar to benefits that are available under New York Real Property Tax Law (RPTL) Section 485-b, but over a twenty (20) year period versus the ten (10) or less period provided for in the RPTL. Sales tax abatements are provided in connection with all taxable items purchased under this program. Mortgage tax on loans financing projects under this program is abated. Minimum employment goals are established for projects receiving benefits under this program. Employment goals are determined on a project by project basis. Real property tax abatements are reduced in future years if the project’s employment goals are not met. The Agency readopted its general abatement program as required by Law on December 28, 1993. The policy was amended in 1997, 1998, 1999, 2004, and 2008.
b. Retail Sales Program
Requirements for assistance to retail projects are set forth in Section 862 of the New York General Municipal Law, and additional requirements as adopted by the Agency on September 14, 2004.
Real estate taxes on the increased value resulting from improvements are abated at fifty (50%) percent for year one (1) with the abatement decreasing by five (5%) percent per year for years two (2) through ten (10). This abatement mirrors Section 485-b of the New York Real Property Tax Law. For years eleven (11) through fourteen (14), PILOT payments are equal to “full taxes”; although the value of the project for PILOT purposes remains fixed. Sales tax abatements are provided in connection with all taxable items purchased in connection with retail projects. All mortgage tax on loans necessary for retail projects is abated. There are no minimum employment goals associated with this program.
c. Tourism Industry Program
The Agency adopted its targeted tax abatement program for the tourism industry on December 31, 1998. Along with the Agricultural Industry, Tourism was recognized as historically being the backbone of Sullivan County’s economy. Tourism facilities typically purchase most of their goods and services locally while attracting customers and guests to the County from outside the region. Benefits of tourism industry projects include substantial employment and the import of tourism dollars into the Sullivan County economy. Real estate taxes on the increased value resulting from improvements are abated at one-hundred (100%) percent of years one (1) through five (5) with the abatement decreasing ten (10%) percent per year for years six (6) through fourteen (14). Sales tax abatements are provided in connection with all taxable items purchased in connection with tourism industry projects. All mortgage tax on loans necessary for tourism industry projects is abated. Minimum employment goals are established for projects receiving benefits under this program. Employment goals are determined on a project for project basis. Real property tax abatements are reduced in future years if the project’s employment goals are not met.
d. Agricultural Industry Program
The Agency adopted its targeted tax abatement program for the agricultural industry on September 14, 1998. This program was adopted recognizing that agriculture has historically been the backbone of Sullivan County’s economy. The agricultural industry provides the County with both substantial direct and indirect benefits including employment, agricultural products, and preservation of open space. Real estate taxes on the increased value resulting from improvements are abated at one-hundred (100%) percent for years one (1) through five (5) with the abatement decreasing ten (10%) percent per year for years six (6) through fourteen (14). It is noted that the abatement is of little benefit to production farms that qualify for agricultural value assessment. Sales tax abatements are provided in connection with all taxable items purchased in connection with the agricultural projects. Though this is of little benefit to production farms that are statutorily exempt from sales tax, it is an important benefit for services or suppliers to production farms and to businesses processing farm products. All mortgage tax on loans necessary for agricultural industry projects is abated. There are no minimum employment goals associated with this program.
e. Disaster Impacted Business Program
The Agency adopted its targeted tax abatement program for Disaster Impacted Businesses in July of 1998. The purpose of this tax exemption program is to provide incentives for businesses, which have been substantially destroyed by fire, flood, or other natural disasters, to rebuild in the County. Real estate taxes on the increased value resulting from improvements are abated at one-hundred (100%) percent for year one (1) with the abatement decreasing ten (10%) percent per year through year five (5) and then at five (5%) percent per year years six (6) through fifteen (15). Sales tax abatements are provided in connection with all taxable items purchased in connection with the rebuilding of disaster impacted business. All mortgage tax on loans necessary to rebuild the disaster impacted business is abated. Since the disaster impacted business program is a business retention tool, there are no minimum employment goals associated with this program.
f. Targeted Manufacturing Program
The Agency adopted its targeted tax abatement program for special manufacturing projects on May 11, 1999, amended on September 14, 2004. This program selected targeted tax incentives to promote particular businesses or industries in Sullivan County. These businesses were deemed especially well suited and beneficial to the economy of the County. This targeted tax abatement program is limited to the following types of manufacturing businesses only, all other manufacturing businesses would use one of the other applicable abatement programs:
SIC Code Name of Business
24 Lumber and Wood Products
2834 Pharmaceutical Preparations Manufacturing
2836 Biological Products Manufacturing
34 Fabricated Metal Products Manufacturing
36 Electronic, Electrical Equipment, and Components
Real estate taxes on the increased value resulting from improvements are abated in accordance with the following schedule:
Year % of Real Estate Taxes Abated
1 90
2 90
3 80
4 80
5 70
6 70
7 60
8 60
9 50
10 50
11 50
12 50
13 40
14 40
15 30
16 30
17 20
18 20
19 10
20 10
21 0
Sales tax abatements are provided in connection with all taxable items purchased in connection with the targeted manufacturing projects. All mortgage tax on loans necessary for those manufacturing projects is abated. Minimum employment goals are established for projects receiving benefits under this program. Employment goals are determined on a project for project basis. Real property tax abatements are reduced in future years if the project’s employment goals are not met.
g. Encouraging the Return of Tax Exempt Property to Taxable Status Program
The Agency adopted its targeted tax abatement program encouraging the return of tax exempt property to taxable status on June 8, 1999, and amended on April 8, 2008. In adopting this targeted tax exemption program, the IDA recognized that historically many properties within Sullivan County receive real property tax exemptions as result of ownership and use by not-for-profit organizations. Many of these properties, if returned to the tax rolls would require substantial improvements. In this program, real estate taxes are abated as follows. Real estate taxes are abated over fifteen (15) years as follows: at one-hundred (100%) percent for years one (1) through three (3), and years four (4) through fifteen (15) abated as follows: year four (4) at 91.67%, year five (5) at 83.33%, year six (6) at 75%, year seven (7) at 66.67%, year eight (8) at 58.33%, year nine (9) at 50%, year ten (10) at 41.67%, year eleven (11) at 33.33%, year twelve (12) at 25%, year thirteen (13) at 16.67%, year fourteen (14) at 8.33%, and ear fifteen (15) at 0.00%. The assessed value of the project used in the PILOT will be established by the assessing jurisdiction for the term of the abatement.
Sales tax abatements are provided in connection with all taxable items purchased in connection with this program. All mortgage tax on loans necessary for projects constructed under this program is abated. As this program focuses on taxable status, there are no minimum employment goals associated with this program.
h. Green Technology Manufacturing Program
Adopted by the Agency on April 8, 2008.
This program is targeted to businesses locating in the Green Technology Park located at
the Sullivan County Community College.
Real Estate: A twelve (12) year abatement schedule on real estate taxes on the increased value resulting from improvements are abated at one-hundred (100%) percent for first three (3) years, seventy-five (75%) percent the next three (3) years, fifty (50%) percent the following three (3) years, and , and twenty-five (25%) percent the last three (3) years.
Sales: Sales tax abatement on all taxable purchases made in connection with the acquisition, construction, installation, and equipping of the project.
Mortgage: Mortgage tax abatement on all loans financing projects under this program.
Minimum employment goals are established for projects receiving benefits under the Green Technology Manufacturing Program. Employment goals are determined on a project-by-project basis. Real property tax abatements are proportionally reduced if the project’s employment goals are not met.
i. Destination Resort Program
Adopted by the Agency on April 8, 2008.
To qualify for this program, a project must meet each of the following criteria:
1) $25,000,000 in total project costs.
2) Total project investment of not less than $250,000 per room; and
3) A minimum job creation of one full-time equivalent employee for every four rooms.
Real Estate: Real Estate taxes on the increased value resulting from improvements are abated over sixteen (16) years as follows: at one-hundred (100%) percent for years one (1) through eight (8), and years nine (9) through fifteen (15) abated as follows: year nine (9) at 87.50%, year ten (10) at 75%, year eleven (11) at 62.50%, year twelve (12) at 50%, year thirteen (13) at 37.50%, year fourteen (14) at 25%, year fifteen (15) at 12.50%, and year sixteen (16) at 0.00%.
Sales: Sales tax abatement on all taxable purchases made in connection with the acquisition, construction, installation, and equipping of the project.
Mortgage: Mortgage tax abatement on all loans financing projects under this program.
At least one (1) Full Time Equivalent Employee for every four (4) rooms must be created and maintained during the term of the project. Real property tax abatements are proportionally reduced if the project’s employment goals are not met.
j. Tax Credit Participation Program
Adopted by the Agency on April 13, 2010
Lenders underwriting requirements typically require participation in federal tax credit programs to form single purpose entities as conduit borrowers. Normally these single purpose entities are not exempt from taxation, even in cases where the entity is an affiliate or subsidiary of an entity entitled to exemption under RPTL § 420 and qualified and operating under Section 501(c)(3) of the Internal Revenue Code.
To facilitate participation in the Federal New Markets Tax Credit Program, the Federal Historic Tax Credits Program or similar federal and state programs involving the use of federal tax credits.
Real Estate: All real estate tax for the period of the financing program but not exceeding thirty (30) years are abated.
Sales: All sales tax on the lease or purchase of tangible personal property acquired under this program is abated.
Mortgage: All mortgage tax on loans financing projects under this program is abated.
Employment goals are not applicable.
Restriction: This program shall not apply to residential projects. All program participants must be an affiliate or subsidiary of an entity (i) exempt from real property taxes under RPTL § 420 and (ii) qualified and operating under Section 501(c)(3) of the Internal Revenue Code. An entity meeting the requirements of (i) and (ii) above shall be a qualifying subsidiary or affiliate if the applicable exempt entity is (x) the owner of or majority of the beneficial interest in such subsidiary or affiliate or (y) is the managing member of such subsidiary or affiliate.
k. Arts Industry Program.
Adopted by the Agency on June 13, 2016.This program will benefit for-profit businesses in the Arts Industry. Real estate taxes on the increased value resulting from improvements are abated over a fifteen year period as follows: one hundred percent (100%) for years one (1) through five (5); ninety percent (90%) for year six (6); eighty percent (80%) for year seven (7); seventy percent (70%) for year eight (8); sixty percent (60%) for year nine (9); fifty percent (50%) for year ten (10); forty percent (40%) for year eleven (11); thirty percent (30%) for year twelve (12); twenty percent (20%) for year thirteen (13); ten percent (10%) for year fourteen (14); and zero percent (0%) for year fifteen (15). All sales tax on the lease or purchase of tangible personal property acquired under this program is abated. All mortgage tax on loans financing projects under this program is abated.
l. Community Distributed Generation Program.
Adopted by the Agency on December 12, 2016. Amended on September 14, 2020. The purposes of this program are (i) to support New York State’s “Reforming the Energy Vision” Initiative, which is intended to encourage renewable energy development that will spur economic growth and develop new energy business models; (ii) to bring community distributed generation projects to Sullivan County, where existing low electricity rates would otherwise inhibit investment in solar installations; (iii) to administer a single County-wide uniform tax exempt policy, allowing municipalities to collect long-term predictable PILOT monies without the burden of developing and administering PILOT agreements at the local government or school district level; (iv) to respect variations in local policy by requiring that each project application includes a letter affirming that the host municipality supports the project; (v) to foster the development of residential and small business on-site solar energy systems, which are not eligible for IDA benefits, by requiring that 1) towns recommending projects to the IDA also participate in New York State’s Real Property Tax Law (RPTL) Section 487 program; and 2) school districts within which projects are proposed also participate in the RPTL Section 487 program; (vi) to assist project developers by offering a single County-wide uniform tax exempt policy, eliminating the need to negotiate PILOTs with the County and the various towns, villages, and school districts; (vii) to enhance developers’ prospects for financing community distributed generation projects by offering a uniform PILOT structure that is simple and therefore more appealing to lenders; (viii) to benefit Sullivan County residents and businesses by requiring community distributed generation projects to offer them a local buying preference and an electricity rate of ten (10%) percent less than the utility company’s default rate, averaged over a thirty-six (36) month period; (ix) to stimulate Sullivan County’s transition to a sustainable energy economy by fostering the generation of local solar energy that is purchased and used within the County; and (x) to bring short-term and long-term jobs to Sullivan County.
Sales: Sales tax abatement on all taxable purchases made in connection with the acquisition, construction, installation, and equipping of the project.
Mortgage: Mortgage tax abatement on all loans financing projects under this program.
Real Estate: Real estate taxes on the increased value resulting from improvements are abated over a twenty year period. The annual payment in lieu of taxes (PILOT) is expressed as a dollar value per megawatt (MW) of the facility’s nameplate capacity. The dollar value per megawatt depends upon the level of incentives the project receives from New York State through the Public Service Commission’s Value of Distributed energy Resources (VDER), or Value Stack, mechanism. The PILOT dollar value per MW is the same for all IDA projects receiving a particular level of incentives through VDER. The PILOT is divided among all affected taxing jurisdictions in proportion to their tax rates.
302. Each project receiving a real property tax exemption will be subject to a Payment in Lieu of Tax Agreement (“PILOT Agreement”) in a form acceptable to the Agency. The Agency may consider project factors, similar to those described in Paragraph 203 herein, when determining the amounts to be paid under the PILOT Agreement.
The abatement shall generally apply to value added by construction or renovation and the existing parcel involved. In most situations the involvement by the Agency will not result in revenue to the affected taxing jurisdictions in any tax year being less than the revenues received in the tax year preceding involvement by the Agency. The period of the exemption will not exceed the period of the respective financing or lease, and under no circumstances will the period of the exemption exceed twenty (20) years. The Agency’s Policy results in a tax schedule for an approved project starting at a base amount and increasing over the full period of the exemption up to 100% payment of the assessed value of the project. The PILOT is applicable to County, Municipal, and School Taxes.
Such payments shall be allocated among the affected taxing jurisdictions in proportion to the amount of real property tax and other taxes which would have been received by each affected taxing jurisdiction had the project not been tax exempt due to the status of the agency involved in the project.
ARTICLE 400 – SALES AND USE TAX EXEMPTION POLICY
401. Purchases. All purchases of construction materials and equipment rentals and purchases of project related equipment and furnishings are made as agent for the Agency, and are therefore afforded full exemption from local and New York State Sales and Use Taxes, as limited by Article 300 above. Operating and maintenance expenses of projects are not incurred as agent of the Agency, and no sales tax exemption is provided for those expenses. Letters of Sales Tax Exemption will be issued by the Agency for a predetermined length of time, or until the project certificate of occupancy is issued, whichever is a shorter period.
402. Filing. All project applicants must agree to file with the New York State Department of Taxation, in form and at times required, an annual statement of the value of all sales and use taxes exemption claimed in connection with the facility in full compliance with Section 874(8) of the NYS General Municipal Law.
ARTICLE 500 – MORTGAGE TAX EXEMPTION POLICY
501. The Agency’s Policy is to permit mortgage recording tax exemptions on all project related financing to the full extent permitted by New York State Law.
502. The Agency may, in its sole discretion, permit mortgage recording tax exemptions on non-project related financing (i.e. second mortgages on the project to secure subordinated indebtedness of the project applicant). In determining whether to permit such exemptions on non-project related financing, the Agency shall consider such factors as it deems appropriate, including but not limited to the use of the property, the degree of investment, the degree and nature of the employment and the economic condition of the areas in which the facility is located.
ARTICLE 600 – PROCEDURE FOR DEVIATION FROM TAX POLICIES
601. In addition to the foregoing, the Agency may determine, on a case by case basis, to deviate from the guidelines described above or provide enhanced benefits for a project expected to have a significant impact in the locality where the project will be located. Any deviation from the guidelines set forth above requires the written notification by the Agency to the chief executive officer of each affected taxing jurisdiction as required by law. The Agency may consider any or all of the factors stated in Paragraph 203 herein in making such determinations.
ARTICLE 700 – RECAPTURE OF BENEFITS
701. The Agency, at its sole discretion and on a case-by-case basis, may determine, (but shall not be required to do so) with respect to a particular project, that the project has failed to meet its intended goals and to require the project applicant to agree to the recapture by the Agency of the value of any or all exemptions from taxation granted with respect to the project by virtue of the Agency’s involvement. Events that the Agency may determine will trigger recapture may include, but is not limited to:
1) Sale or closure of facility;
2) Significant employment reduction;
3) Significant change in use in facility;
4) Significant change in business activities or project applicant or operator; or
5) Material noncompliance with or breach of terms of Agency transaction documents or of zoning or land use laws or regulations or federal, state, or local environmental laws or regulations.
If the Agency determines to provide for the recapture with respect to a particular project, the Agency also shall, in its sole discretion, and on a case-by-case basis, determine the timing and percentage of recapture.
ARTICLE 800 – AMENDMENTS
The Agency, by resolution of its members, and upon notice to all affected taxing jurisdictions as may be required by law, may amend or modify the foregoing policy as it may, from time to time, in its sole discretion determine.
ARTICLE 900 – EFFECTIVE DATE
This Uniform Tax Exemption Policy shall apply to all projects for which the Agency adopts an Inducement Resolution after 1993, and as amended in 1998, 1999, 2004, 2008, 2010, 2016, and 2020.