NY State Senate Bill 2023-S9691

Senate Bill S9691

2023-2024 Legislative Session

Establishes an exemption from taxation for energy-related public utility real property related to attaining state climate goals

download bill text pdf

Current Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 21, 2024	referred to energy and telecommunications

2023-S9691 (ACTIVE) - Details

See Assembly Version of this Bill:: A10619
Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Add §28, Pub Serv L; add §487-b, RPT L

2023-S9691 (ACTIVE) - Summary

Establishes an exemption from taxation for energy-related public utility real property related to attaining state climate goals; provides that such exemption shall remain in effect until it is retired or removed from service.

2023-S9691 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9691

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the public service law and the real property tax law, in
relation to establishing an exemption from taxation for energy-related
public utility real property related to attaining state climate goals

 
PURPOSE OR GENERAL IDEA OF BILL:

This bill will benefit ratepayers and reduce future utility bills by
providing a real property tax exemption for utility property on which
projects or improvements are built for which the only purpose is to
provide necessary grid improvements in order to meet the state's renewa-
ble energy goals, as set forth by the Climate Leadership and Community
Protection Act (CLCPA).

 
SUMMARY OF PROVISIONS:

Section one adds a new section 28 to the public service law to outline
the responsibilities of the department of public service under the

provisions of this bill. The department would be required to, in consul-
tation with taxation and finance, create definitions and guidelines for
eligibility and would be required to make a determination on adherence
to such for each application.

Section two adds a new section 489-a to the real property tax law (RPTL)
to provide a property tax exemption for utility property that is
utilized for a project or improvements that are only necessary to meet
climate goals in the CLCPA. For property that is owned by the utility
corporation prior to the addition of such qualifying project, the utili-
ty would be exempt from taxation to the extent of any increase in the
value thereof. The Department of Public Service (DPS), in consultation
with the Commissioner of the Department of Taxation and Finance would be
required to create guidelines and each application would need to be
approved by DPS as being necessary to meet CLCPA goals. Any net decrease
in a utility's real property tax liability would be required to inure to
the benefit of its ratepayers.

Section three sets forth the effective date.

 
JUSTIFICATION:

The New York Power Grid Study was undertaken in 2020-21 by the Depart-
ment of Public Service, the New York State Energy Research and Develop-
ment Authority (NYSERDA), the New York Power Authority (NYPA), the New
York Independent System Operator (NYISO), and New York's investor-owned
utilities (Utilities) to determine necessary grid upgrades in order to
meet CLCPA goals. That report highlighted the need for a multitude of
future utility projects that will be necessary to meet our ambitious
climate goals.

One such project highlighted by the report was Con Edison's renewable
energy interconnection hub in Brooklyn, NY. The Brooklyn Clean Energy
Hub is an $810 million transmission substation that will rise where
three gas combustion turbines once stood near the East River in the
Vinegar Hill neighborhood.

The Hub will serve as an interconnection point for offshore wind or
other clean energy resources that can feed directly into the grid to
provide clean energy to millions of homes and businesses. Further, this
project will allow Con Edison to retire peaker plants that until this
project would have been impossible due to reliability concerns.

This project, necessary to meet our CLCPA goals, comes with a large
price tag which is a necessary price we must pay to combat the realities
of climate change. Unfortunately, this project will also come with a
roughly $50 million per year property tax bill, which will be paid by
Con Edison ratepayers in New York City and Westchester County. This is
just one example of the many similar projects that will be necessary for
utilities to undertake to meet these goals.

This bill is necessary to keep utility bills affordable as we begin the
process of building a new grid to meet the demands that will be placed
on it in the future. The bill is not a blanket tax exemption for all
utility property and will not create holes in local government budgets.
Rather, this bill addresses specific projects, like the one highlighted
above, that would not otherwise be needed or built unless necessary to
meet the goals of the CLCPA. Each and every exemption granted would need
to be approved by the DPS as necessary to meet our goals and the result-
ing savings would be passed on to ratepayers.

 
PRIOR LEGISLATIVE HISTORY:

New Bill

 
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:

None. This bill would only provide prospective relief to utility real
property tax liabilities, which in turn would help keep utility bills
affordable for ratepayers as utilities undertake projects necessary to
meet climate goals.

 
EFFECTIVE DATE:
First of January next succeeding the date on which it shall have become
a law and shall apply to taxable years beginning on or after such date.
Effective immediately the commissioner of taxation and finance and the
department of public service are authorized to and shall promulgate any
and all rules and regulations or take any other measures necessary to
implement this act on its effective date on or before such date.

2023-S9691 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9691
 
                             I N  S E N A T E
 
                               May 21, 2024
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on  Energy  and  Telecommuni-
   cations
 
 AN ACT to amend the public service law and the real property tax law, in
   relation to establishing an exemption from taxation for energy-related
   public utility real property related to attaining state climate goals

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The public service law is amended by adding a  new  section
 28 to read as follows:
   §  28.  UTILITY  TAX  EXEMPTION FOR ENERGY-RELATED PUBLIC UTILITY REAL
 PROPERTY RELATED TO ATTAINING STATE CLIMATE GOALS. 1. THE DEPARTMENT  IS
 AUTHORIZED AND DIRECTED TO CONSULT WITH THE COMMISSIONER OF TAXATION AND
 FINANCE IN DEVELOPING DEFINITIONS AND GUIDELINES FOR THE ELIGIBILITY FOR
 EXEMPTION OF ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY AS DESCRIBED IN
 SUBDIVISIONS TWO AND THREE OF SECTION FOUR HUNDRED EIGHTY-SEVEN-B OF THE
 REAL  PROPERTY  TAX  LAW. NO ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY
 SHALL BE ENTITLED TO ANY EXEMPTION  FROM  TAXATION  UNDER  SECTION  FOUR
 HUNDRED  EIGHTY-SEVEN-B OF THE REAL PROPERTY TAX LAW UNLESS SUCH PROJECT
 MEETS THE GUIDELINES SET BY THE COMMISSIONER OF TAXATION AND FINANCE  IN
 CONSULTATION WITH THE DEPARTMENT.
   2.  THE  DEPARTMENT  SHALL  ENSURE  THAT ANY NET DECREASE IN A UTILITY
 COMPANY'S REAL PROPERTY TAX EXPENSE RESULTING  FROM  THE  PROVISIONS  OF
 SECTION  FOUR  HUNDRED EIGHTY-SEVEN-B OF THE REAL PROPERTY TAX LAW SHALL
 INURE TO THE BENEFIT OF THE RATEPAYERS OF SUCH COMPANY.
   § 2. The real property tax law is amended  by  adding  a  new  section
 487-b to read as follows:
   §  487-B.  EXEMPTION  FROM  TAXATION FOR ENERGY-RELATED PUBLIC UTILITY
 REAL PROPERTY RELATED TO ATTAINING STATE CLIMATE GOALS. 1.  AS  USED  IN
 THIS SECTION:
   (A)  "ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY" MEANS REAL PROPERTY
 THAT IS OWNED BY A UTILITY CORPORATION AND USED IN THE  STORAGE,  TRANS-
 MISSION  AND  DISTRIBUTION  OF ELECTRICITY, OR STEAM INCLUDING CONDUITS,
 CABLES, LINES, WIRES, POLES, MAINS, PIPES, SUBSTATIONS, TANKS,  SUPPORTS
 AND  ENCLOSURES  FOR  ELECTRICAL  CONDUCTORS LOCATED ON, ABOVE AND BELOW
 REAL PROPERTY.
   (B) "DEPARTMENT" MEANS THE DEPARTMENT OF PUBLIC SERVICE.

 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD15726-01-4
 S. 9691                             2
 
   (C) "UTILITY CORPORATION" SHALL HAVE THE SAME MEANING  AS  DEFINED  IN
 SECTION TWO OF THE PUBLIC SERVICE LAW.
   (D)  "STATE CLIMATE GOALS" SHALL MEAN THE CLIMATE JUSTICE AND EMISSION
 REDUCTION GOALS IN ARTICLE SEVENTY-FIVE OF THE  ENVIRONMENTAL  CONSERVA-
 TION  LAW  AND  THE RENEWABLE ENERGY GOALS IN SECTION SIXTY-SIX-P OF THE
 PUBLIC SERVICE LAW.
   2. ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY, THE PRIMARY PURPOSE OF
 WHICH IS TO AID IN MEETING STATE CLIMATE GOALS,  SHALL  BE  EXEMPT  FROM
 TAXATION,  SPECIAL  AD  VALOREM  LEVIES,  AND  SPECIAL ASSESSMENTS. SUCH
 EXEMPTION SHALL REMAIN IN EFFECT UNTIL SUCH ENERGY-RELATED PUBLIC UTILI-
 TY REAL PROPERTY IS RETIRED AND REMOVED FROM SERVICE.
   3. ENERGY-RELATED PUBLIC UTILITY REAL  PROPERTY  OWNED  BY  A  UTILITY
 CORPORATION PRIOR TO JANUARY FIRST, TWO THOUSAND TWENTY-FOUR, THE PRIMA-
 RY  PURPOSE  OF WHICH IS TO AID IN MEETING STATE CLIMATE GOALS, SHALL BE
 EXEMPT FROM TAXATION, SPECIAL AD VALOREM LEVIES, AND SPECIAL ASSESSMENTS
 TO THE EXTENT OF ANY INCREASE IN THE VALUE  THEREOF  BY  REASON  OF  THE
 INCLUSION OF NEW ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY DESIGNED TO
 MEET  STATE  CLIMATE  GOALS. SUCH EXEMPTION SHALL REMAIN IN EFFECT UNTIL
 SUCH ASSETS OR INSTALLATIONS ARE RETIRED AND REMOVED FROM SERVICE.
   4. THE COMMISSIONER, IN CONSULTATION WITH THE DEPARTMENT, SHALL, AFTER
 NOTICE AND OPPORTUNITY  FOR  PUBLIC  COMMENT,  PROVIDE  DEFINITIONS  AND
 GUIDELINES  FOR  THE  ELIGIBILITY FOR EXEMPTION OF ENERGY-RELATED PUBLIC
 UTILITY REAL PROPERTY DESCRIBED IN SUBDIVISIONS TWO AND  THREE  OF  THIS
 SECTION.  NO  ENERGY-RELATED PUBLIC UTILITY REAL PROPERTY SHALL BE ENTI-
 TLED TO ANY EXEMPTION FROM  TAXATION  UNDER  THIS  SECTION  UNLESS  SUCH
 PROJECT  MEETS  THE  GUIDELINES SET BY THE COMMISSIONER, IN CONSULTATION
 WITH THE DEPARTMENT, AND ALL OTHER APPLICABLE  PROVISIONS  OF  LAW.  THE
 COMMISSIONER,  IN  CONSULTATION  WITH  THE  DEPARTMENT,  SHALL DETERMINE
 ADHERENCE TO SUCH DEFINITIONS AND GUIDELINES FOR  EACH  APPLICATION  AND
 SHALL CERTIFY OR WITHHOLD CERTIFICATION FOR EACH APPLICATION.
   5.  SUCH  EXEMPTION SHALL BE GRANTED UPON APPLICATION BY THE OWNER AND
 CERTIFICATION BY THE COMMISSIONER, IN CONSULTATION WITH THE  DEPARTMENT.
 SUCH  APPLICATION BY THE OWNER OF THE ENERGY-RELATED PUBLIC UTILITY REAL
 PROPERTY SHALL BE ON A FORM PRESCRIBED AND MADE AVAILABLE BY THE COMMIS-
 SIONER, IN CONSULTATION WITH THE DEPARTMENT. THE APPLICANT SHALL FURNISH
 SUCH INFORMATION AS THE  COMMISSIONER  SHALL  REQUIRE.  THE  APPLICATION
 SHALL  BE  FILED WITH THE ASSESSOR OF THE APPROPRIATE COUNTY, CITY, TOWN
 OR VILLAGE HAVING THE POWER TO ASSESS PROPERTY FOR TAXATION ON OR BEFORE
 THE TAXABLE STATUS DATE OF SUCH COUNTY, CITY, TOWN OR VILLAGE. A COPY OF
 SUCH APPLICATION SHALL BE FILED WITH THE COMMISSIONER WHO SHALL  PROVIDE
 IT TO THE DEPARTMENT.
   6.  THE  ASSESSOR  SHALL APPROVE APPLICATIONS CERTIFIED BY THE COMMIS-
 SIONER.  IN THE EVENT THAT ENERGY-RELATED PUBLIC UTILITY  REAL  PROPERTY
 GRANTED AN EXEMPTION PURSUANT TO THIS SECTION CEASES TO BE USED PRIMARI-
 LY FOR ELIGIBLE PURPOSES, THE EXEMPTION GRANTED PURSUANT TO THIS SECTION
 SHALL CEASE.
   7.  ANY  NET DECREASE IN A UTILITY COMPANY'S REAL PROPERTY TAX EXPENSE
 RESULTING FROM THE PROVISIONS OF THIS SECTION SHALL INURE TO THE BENEFIT
 OF THE RATEPAYERS OF SUCH COMPANY.
   § 3. This act shall take effect on the first of January next  succeed-
 ing  the  date  on  which  it shall have become a law and shall apply to
 taxable years beginning on or after such  date.  Effective  immediately,
 the  addition,  amendment and/or repeal of any rule or regulation neces-
 sary for the implementation of  this  act  on  its  effective  date  are
 authorized to be made and completed on or before such effective date.

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