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Town Effort to Control IDA PILOTs Meets With Veto

October 4, 2011

Towns have, on occasion, questioned whether PILOT Agreements erode the tax role. The Town of Chester decided to take the next step and have legislation introduced (A.3146/S.5666) which would give the Town Board the opportunity to veto proposed PILOTs (and also require applicants to provide an impact analysis).  In vetoing the legislation, the Governor concluded the proposed legislation could interfere with PILOT agreements, undermine economic development, and increase the cost of doing business. A copy of the Governor’s Veto Message is included below.




I am returning herewith, without my approval, the following bill:

Assembly Bill Number 3146, entitled:

“AN ACT to amend the general municipal law, in relation to the town of Chester and the Orange county industrial agency”


This bill empowers the Town of Chester (“the Town”), through its supervisor and town board, to veto any payment in lieu of taxes (“PILOT”) agreement entered into between the Orange County Industrial Development Agency (“IDA”) and a prospective applicant for business assistance for projects to be developed within the Town. It would also require such applicant to pay for an impact analysis before the granting of a PILOT agreement and every three years thereafter to see if such agreement should be continued or otherwise modified. Finally, it attempts to alter the composition of the IDA by placing members of the Town on the body whenever PILOTs within the Town are to be considered. These proposals are unprecedented, and contrary to the purposes of IDAs.

This legislation adds uncertainty concerning the future viability of IDAs, PILOTs and other mechanisms for tax relief and economic growth. In addition, it would increase the cost of doing business through an IDA and potentially adds gridlock to the process. Furthermore, it places a burden on businesses which would discourage, rather than encourage, investment in a community. For these reasons, I am constrained to disapprove the bill.

The bill is disapproved. (signed) ANDREW M. CUOMO

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