Update on the New York State Public Authorities Law Requirements Affecting Industrial Development Agencies (IDA) and Land Banks

Jan 19, 2016

Update on the New York State Public Authorities Law Requirements Affecting Industrial  Development Agencies (IDA) and Land Banks

As the NYMuniBlog reported in July 2015 in the article, “Summary of 2015 Reform Legislation for Industrial Development Agencies (IDAs),” legislation demands IDAs adopt certain standardized policies and procedures. Below is an update on New York State Public Authorities Law regarding website audits, land banks, financial reports, and IDA accountability and efficiency.

Authorities Budget Office Website Audits

Pursuant to Section 2800 of the New York State Public Authorities Law, state and local authorities are to make certain documents pertaining to their activities accessible to the public on the authority’s website. To assist authorities in meeting this obligation the Authorities Budget Office issued Policy Guidance No. 10-03 on April 12, 2010, which contains a checklist of items to be posted on the authority’s website. The Authorities Budget Office has recently begun conducting authority website reviews for compliance with its published guidance and posting the results on its website. We recommend that all authorities review the posting requirements and their websites for compliance.

Land Banks

Sections 1608 and 1609 of the Not-for-Profit Corporations Law was amended by Chapter 407 of the Laws of 2015 (enacted on October 26, 2015) to exclude dispositions of real property by land banks from the Public Authorities Accountability Act (PAAA) requirements contained in section 2897 of the Public Authorities Law and provides for no filing or recording fees for land banks.  Furthermore, in accordance with the revision to section 1609 of the Not-For-Profit Law, the Authorities Budget Office issued Policy Guidance No. 15-03 on November 3, 2015 concerning explanatory statements for property dispositions by authorities (supercedes Guidance 14-01), which states “[S]ection 1609 of the Not-for-Profit Law excludes entities established under Article 16 (land banks) from the requirements of Section 2897 of the Public Authorities Law.” We recommend that all land banks review and revise their property disposition policies accordingly.

Statement No. 77 of the Governmental Accounting Standards Board (GASB)

Pronouncements of GASB apply to financial reports of all state and local governmental entities, including public benefit corporations and authorities. GASB statement No. 77 is effective for financial statements for periods beginning after December 15, 2015 and requires disclosure of tax abatement information about a reporting government’s own tax abatement agreements and those that are entered into by other governments and that reduce the reporting government’s tax revenues. This Statement requires the following information about the tax abatement agreements:

(i) Brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligible criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients; and

(ii) The gross dollar amount of taxes abated during the period; and

(iii) Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement.

We recommend that all IDAs discuss GASB Statement No. 77 with their independent financial auditors and establish a plan for compiling the required information for their own as well as their benefitted municipality’s annual financial statements.

IDA Accountability and Efficiency Legislation

The General Municipal Law was amended on December 18, 2015 by Chapter 563 of the Laws of 2015 to require common standards for IDA applications and project agreements; the adoption of criteria for the evaluation and selection of IDA projects, including a written cost benefit analysis; the adoption of policies for the suspension, discontinuance or modification of IDA financial assistance and the return of all or a part of the IDA financial assistance provided; and an annual assessment by IDAs of the progress of each project approved after January 1, 2016 toward achieving the stated goals. The new provisions take effect on June 15, 2016.

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