You asked for a year-by-year summary of the changes in the state's Payment in Lieu of Taxes (PILOT) program in the last 10 years.

SUMMARY

PILOT reimburses towns for property taxes that would have been paid on state-owned and other tax-exempt property within their borders. The reimbursement percentage depends on the category of exempt property (CGS §§ 12-20a and 12-20b).

Since 1992, the General Assembly has passed 11 acts dealing with the PILOT reimbursement levels, eligibility, and program procedures. Changes over the past decade expanded eligibility to boroughs and districts and certain urgent care facilities, increased the basic PILOT from 25% to 45% of the tax that would have been payable, and increased PILOT for colleges and hospitals from 60% to 77% of the taxes payable. The General Assembly also established 100% PILOTs for Long Lane School and for Mashantucket Pequot settlement property.

The General Assembly did not enact any changes in the PILOT statutes in the 2002 regular session nor have any changes been passed as of the date of this report in the 2002 May Special Session.

1993

PA 93-434 required towns, when they report assessed values of state, hospital, and private college property for which they receive PILOT, to adjust the values to reflect assessment deferments that are part of a revaluation phase-in. They already had to adjust values for gradual increases that are part of a phase-in.

1994

PA 94-175 made boroughs and districts that contain a higher education or hospital facility eligible for PILOT grants.

PA 94-6, May Special Session, excluded from eligibility for PILOT grants any free-standing chronic disease hospital with an ownership affiliation with, and operated in the same location as, a chronic and convalescent nursing home.

1995

PA 95-283 limited to the Hartford-New Britain judicial district, the venue for appeals from decisions regarding the tax-exempt status of charitable property and state reimbursements for various property tax exemptions, including PILOT.

1996

PA 96-261 repealed the above provision of PA 95-283 and instead required PILOT decision appeals to be filed in the judicial district where the property in question is located.

1998

PA 98-217 added Long Lane School to the list of state-owned properties for which a municipality can receive a 100% PILOT grant from the state. Under previous law, this facility was eligible for only 20% of the property tax value. The act also made it clear that the prison ward at John Dempsey Hospital is eligible for the 100% grant. Finally, it codified an administrative hearing process for towns aggrieved by state reevaluations of tax-exempt property assessments eligible for PILOT relief.

PA 98-250 allowed towns that have an urgent care facility operating for at least 12 hours a day that was the location of a nonprofit hospital within the preceding two years to receive PILOT grants for the property.

1999

PA 99-1, June Special Session, increased the basic PILOT grant for municipalities with state property within their borders from 25% to 45% of the property taxes that would have been payable on the property. It increased the PILOT for towns with municipally owned airports also to 45% and, beginning July 1, 2001, set a 100% PILOT for towns with land designated as within the settlement boundary of the Mashantucket Pequot tribe.

The act also specified that the reimbursement rate paid from the Bradley International Airport Enterprise Fund to the state for the PILOT grants to East Granby, Suffield, Windsor, and Windsor Locks is 20%. Finally, it increased the PILOT for towns with colleges and hospitals from 60% to 77%.

PA 99-2, June Special Session, revised the eligibility criteria for PILOT grants for urgent care facilities that operate at least 12 hours a day. Instead of allowing a grant for any property owned by such a facility that had been the location of a nonprofit general hospital within the previous two years, the act allowed the grants if the facility had been the location of a nonprofit general hospital for at least a portion of calendar year 1996.

2001

Though the General Assembly passed two laws concerning PILOT in 2001, the second one repealed the first before it took effect, resulting in no change in the program.

PA 01-6, June Special Session eliminated the January 1 deadline for the OPM secretary to determine each municipality's PILOT grant for tax-exempt property owned by private colleges, general and chronic disease hospitals, and certain urgent care facilities. PA 01-09 restored the deadline.

PA 01-6, June Special Session spelled out the types of private college property eligible for PILOT grants, specifying that the eligible property must not only be owned by, but also be used as, a private nonprofit institution of higher learning.

In addition, PA 01-6, June Special Session specified that the institution offer, or accept transfer of, college-level credit and be either licensed or accredited by the Board of Governors of Higher Education to offer degrees, or meet the following conditions:

1. be established in Connecticut,

2. have degree-granting authority and its home campus here,

3. not be part of the state public higher education system, and

4. not have the primary function of preparing students for a religious vocation.

PA 01-09, June Special Session, eliminated these changes and restored prior law, which requires the state to pay PILOT grants on tax-exempt real property owned by any private nonprofit institution that is primarily engaged in post-secondary education.

JL: ro