NY State Senate Bill 2023-S9852

Senate Bill S9852

2023-2024 Legislative Session

Establishes an abatement and exemption from real property taxes for capital improvements to reduce carbon emissions

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Current Bill Status - In Senate Committee Rules 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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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jun 05, 2024	referred to rules

2023-S9852 (ACTIVE) - Details

See Assembly Version of this Bill:: A10536
Current Committee:: Senate Rules
Law Section:: Real Property Tax Law
Laws Affected:: Add §488-b, RPT L

2023-S9852 (ACTIVE) - Summary

Establishes an abatement and exemption from real property taxes for capital improvements to reduce carbon emissions in cities with a population of one million or more.

2023-S9852 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9852

SPONSOR: PARKER
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to establishing
an abatement and exemption from real property taxes for capital improve-
ments to reduce carbon emissions; and providing for the repeal of such
provisions upon expiration thereof

 
PURPOSE:

Relates to establishing an abatement and exemption from real property
taxes for capital improvements to reduce carbon emissions

 
SUMMARY OF PROVISIONS:

Section 1. Establishes the legislative intent.

Section 2. Creates a new section 488-b of the Real Property Tax Law.
That legislation:

1. Provides definitions for eligible real property, eligible improve-
ments, the Energy Efficiency Board, and permanent resident.

2. Establishes that the bill provides an abatement and exemption from
all taxes including ad valorem levies after the effective date of this
act.

3. Establishes an Energy Efficiency Board to administer the program,
which shall be located within the Office of Real Property Services.  The
Board shall consist of four members appointed by the Governor, and two
non-voting members appointed by the Mayor. The Board shall establish
rules and regulations to administer the program.

4. Creates a tax exemption equal to any assessed value increase for the
eligible improvement for a. period of twenty years provided that such
improvements are commenced on or after December 31, 2021 and completed
within 60 months of issuance of a permit. The act requires that all
taxes are current on property eligible, and that no tenant be evicted in
order to complete eligible improvements.

5. Creates a tax abatement equal to a share of the cost of the eligible
improvement, with the value of the benefit increasing for projects that
realize larger greenhouse gas emissions.  Such abatement shall generally
be in effect for 10 years with a value as follows:

5 percent for a greenhouse gas emission reduction of between 2-5% 6.5
percent for a greenhouse gas emission reduction of between 5-10% 7
percent for a greenhouse gas emission reduction of between 10-12%

7.5 percent for a greenhouse gas emission reduction of between 12-15% 8
percent for a greenhouse gas emission reduction of between 15-17%

8.5 percent for a greenhouse gas emission reduction of between 17-20% 9
percent for a greenhouse gas emission reduction of between 20-2S%

9.5 percent for a greenhouse gas emission reduction of between 25-30%
and 10 percent for a greenhouse gas emission reduction of in excess of
30% with these projects being eligible for a 20 year abatement. While
the abatement cannot exceed the amount of taxes owed for any year these
projects could carry forward additional benefits through the 20 year
period.

6. Requires an annual certification by the recipient of an abatement.

7. Requires that for continued receipt of the abatement all provisions
of housing maintenance code, building code, and the multiple dwelling
law shall be complied with.

8. Permits revocation or reduction of benefits where a misstatement of
any material matter, or false statements in the application is deter-
mined by the Board.

9. Allows for local agencies to enact rules and regulations to adminis-
ter aspects of the program.

Section 3. Provides an immediate effective date.

 
JUSTIFICATION:

New York State has an urgent need to reduce emissions from the building
stock through energy efficiency measures and efficient electrification
in order to meets the greenhouse gas emission goals established by the
CLCPA. The Climate Action Council (CAC) has noted that electrification
without the widespread adoption of efficiency measures will not realize
the goals as it will overburden the electricity system and fail to
achieve emissions reduction at the speed required by the CLCPA.

There are proposed building code changes coming from the CAC that will
create some reductions, which will be primarily related only to new
construction or those properties which are substantially renovated.
Those proposed changes will not have the rapid measurable impact on
building emissions. At the same time, New York City has adopted local
legislation, Local Law 97 of 2019, that also seeks to reduce greenhouse
gas emissions from buildings. As with the CLCPA, realizing these goals
will require buildings to both reduce their total energy use and move to
lower carbon energy sources. This legislation is intended to realize the
goals of the CLCPA and Local Law 97 by creating an incentive for a prop-
erty owner to create real meaningful reductions in the emissions profile
of the building. To do so, the legislation creates a tax benefit to help
offset the cost associated with work that reduces building emissions.
This type of tool is needed to ensure that buildings make the kinds of
investments that will be needed to combine energy efficiency with elec-
trification as those investments may not make financial sense in the
absence of an incentive.

The legislation proposes a two-fold approach. First, it provides an
exemption for any increased assessment for a period of twenty years, to
the extent that the improvement would otherwise increase the value of
the building. Many of these improvements would improve the property
value, but some do not. For that reason, the legislation includes a
second approach by also providing an abatement that provides a reduction
in taxes owed. This relates not to the cost of the work, e.g. a smart
thermostat, which is not costly, but can have a beneficial impact which
greatly reduces emissions. The abatement corresponds to the reduction in
greenhouse gas amount of the emissions.  Based on the social costs of
carbon avoided by virtue of financial benefits to the state and the City
of New York, the need for this bill cannot be overstated.

 
LEGISLATIVE HISTORY:

2021-2022: S9603 - REFERRED TO RULES

 
FISCAL IMPLICATIONS:

None to the State.

 
EFFECTIVE DATE:
Immediately, provided that any tax benefits shall be delayed until July
1 next succeeding enactment.

2023-S9852 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9852
 
                             I N  S E N A T E
 
                               June 5, 2024
                                ___________
 
 Introduced  by  Sen.  PARKER -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the real property tax law, in relation  to  establishing
   an  abatement  and  exemption  from  real  property  taxes for capital
   improvements to reduce carbon emissions; and providing for the  repeal
   of such provisions upon expiration thereof

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Legislative intent. New York's nation leading climate  law,
 the  climate  leadership  and  community protection act of 2019 (CLCPA),
 requires the state to reduce its greenhouse gas emissions to 40  percent
 below  1990  levels  by  2030, and 85 percent below 1990 levels by 2050,
 among other goals. At the same time, New York city's local law number 97
 for the year 2019 requires buildings over 25,000 square feet  to  reduce
 their  carbon  emissions to comply with increasingly stringent emissions
 limits. While New York's  building  stock  accounts  for  more  than  25
 percent  of  statewide  greenhouse gas emissions and transportation is a
 top emitter, in New York city that ratio  is  reversed,  with  buildings
 accounting  for approximately 70 percent of greenhouse gas emissions. As
 such, reaching the state and city's climate goals will  require  signif-
 icant investment to decarbonize buildings including through electrifica-
 tion,  energy  efficiency,  and  the  use of new technologies and energy
 sources. The use of this targeted abatement, which would be available to
 support all property owners that are meaningfully  engaged  in  reducing
 carbon  emissions will ensure the success of the CLCPA and local law 97.
 This legislation will benefit all  New  Yorkers  by  ensuring  that  our
 buildings can play a vital role in decarbonization.
   §  2.  The  real  property  tax law is amended by adding a new section
 488-b to read as follows:
   § 488-B. ABATEMENT AND EXEMPTION FROM REAL PROPERTY TAXES FOR  CAPITAL
 IMPROVEMENTS TO REDUCE CARBON EMISSIONS. 1. ANY CITY HAVING A POPULATION
 OF  ONE  MILLION  OR MORE, ACTING THROUGH ITS LOCAL LEGISLATIVE BODY, IS
 AUTHORIZED AND EMPOWERED TO DETERMINE THAT INCENTIVES  IN  THE  FORM  OF
 ABATEMENT  AND/OR  EXEMPTION  OF  REAL  PROPERTY  TAXES ARE NECESSARY TO
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD15839-01-4
 S. 9852                             2
 
 ENCOURAGE CARBON EMISSIONS REDUCTION IN SUCH CITY AND TO ENACT  A  LOCAL
 LAW  PROVIDING  THAT  SUCH  BENEFITS SHALL BE PROVIDED IN THE MANNER SET
 FORTH IN THIS TITLE.
   2.  FOR  THE  PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE
 THE FOLLOWING MEANINGS:
   (A) "ELIGIBLE REAL PROPERTY" SHALL MEAN A COVERED BUILDING AS  DEFINED
 IN  SECTION 28-320.1 OF THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK,
 OR AN APPROPRIATE SUBSET OF SUCH  COVERED  BUILDINGS  AS  DETERMINED  BY
 LOCAL LAW.
   (B)  "ELIGIBLE  IMPROVEMENTS" SHALL INCLUDE CATEGORIES OF WORK LOCATED
 AT ELIGIBLE REAL PROPERTY THAT ARE EXPECTED TO RESULT IN A REDUCTION  OF
 GREENHOUSE  GAS EMISSIONS FOR THE BUILDING, INCLUDING BUT NOT LIMITED TO
 FULL OR PARTIAL BUILDING  ELECTRIFICATION,  BUILDING  ENVELOPE  IMPROVE-
 MENTS,  THE  INSTALLATION OF ONSITE CLEAN ENERGY GENERATION, STORAGE, OR
 ELECTRIC VEHICLE CHARGING INFRASTRUCTURE, OR OTHER MEASURES THAT  REDUCE
 ENERGY CONSUMPTION AS DETERMINED BY LOCAL LAW PROVIDED HOWEVER THAT SUCH
 WORK  SHALL HAVE COMMENCED ON OR AFTER JANUARY FIRST, TWO THOUSAND TWEN-
 TY-TWO AND SHALL BE COMPLETED BY  DECEMBER  THIRTY-FIRST,  TWO  THOUSAND
 TWENTY-NINE.
   (C)  "FULL OR PARTIAL BUILDING ELECTRIFICATION" SHALL MEAN THE INSTAL-
 LATION AND USE OF ENERGY EFFICIENT ELECTRIC-BASED HEATING,  COOLING  AND
 DOMESTIC  HOT  WATER  SYSTEMS TO DISPLACE THE USE OF FOSSIL FUEL SOURCES
 (E.G. FUEL OIL, NATURAL GAS, DISTRICT STEAM) AND/OR LESS EFFICIENT ELEC-
 TRIC-BASED HEATING SYSTEMS.
   3. ELIGIBLE REAL PROPERTY RECONSTRUCTED, ALTERED  OR  IMPROVED  SUBSE-
 QUENT  TO  THE EFFECTIVE DATE OF THIS SECTION SHALL, UPON ENACTMENT OF A
 LOCAL LAW AUTHORIZING  SUCH  EXEMPTION,  BE  EXEMPT  FROM  TAXATION  AND
 SPECIAL  AD  VALOREM  LEVIES TO THE EXTENT PROVIDED IN THIS SECTION. ANY
 EXEMPTION AND/OR ABATEMENT PERMITTED PURSUANT TO THIS SECTION SHALL TAKE
 EFFECT NO SOONER THAN THE JULY FIRST NEXT SUCCEEDING THE EFFECTIVE  DATE
 OF THIS SECTION.
   4.  SUBJECT  TO  THE PROVISIONS OF LOCAL LAW, ANY INCREASE IN ASSESSED
 VALUATION OF ELIGIBLE REAL PROPERTY RESULTING FROM ELIGIBLE IMPROVEMENTS
 MAY BE EXEMPT FROM TAXATION FOR LOCAL PURPOSES FOR A  PERIOD  OF  UP  TO
 TWENTY YEARS.
   5.  SUBJECT  TO THE PROVISIONS OF LOCAL LAW, AN ELIGIBLE REAL PROPERTY
 MAY BE ELIGIBLE FOR AN ABATEMENT OF REAL PROPERTY TAXES  OF  NO  GREATER
 THAN  TWENTY  YEARS  THAT  SHALL  NOT  EXCEED  THE  COST OF THE ELIGIBLE
 IMPROVEMENTS.
   6. NOTWITHSTANDING THE PROVISIONS OF ANY STATE OR LOCAL LAW,  RULE  OR
 REGULATION  TO  THE CONTRARY, ANY EXEMPTION OR ABATEMENT SHALL BE AVAIL-
 ABLE NOTWITHSTANDING THE RECEIPT OF ANY OTHER BENEFIT UNDER STATE, LOCAL
 OR FEDERAL LAW.
   7. DURING THE PERIOD OF TAX EXEMPTION OR ABATEMENT  PURSUANT  TO  THIS
 SECTION,  THE  EXEMPTION OR ABATEMENT MAY BE REVOKED UPON A VIOLATION OF
 APPLICABLE OVERSIGHT LAWS, WHERE AN AGENCY WITH JURISDICTION TO  ENFORCE
 SUCH  LAWS  HAS  REQUESTED  A SUSPENSION OF ABATEMENT OR EXEMPTION BASED
 UPON VIOLATIONS OF THE MULTIPLE DWELLING LAW, THE  LOCAL  BUILDING  CODE
 AND THE LOCAL HOUSING MAINTENANCE CODE, OR OTHER APPLICABLE LAW OR REGU-
 LATION.    THE BENEFITS OF THIS SECTION MAY BE REVOKED OR REDUCED UPON A
 FINDING BY THE AGENCY WITH JURISDICTION TO ENFORCE SUCH LAWS THAT:
   (A) THE APPLICATION FOR BENEFITS HEREUNDER CONTAINS A FALSE  STATEMENT
 OR FALSE INFORMATION AS TO A MATERIAL MATTER OR OMITS A MATERIAL MATTER;
   (B)  REAL  ESTATE  TAXES, WATER AND SEWER CHARGES, PAYMENTS IN LIEU OF
 TAXES OR OTHER MUNICIPAL CHARGES ARE DUE AND OWING  FOR  MORE  THAN  ONE
 YEAR;
 S. 9852                             3
 
   (C)  THE  ELIGIBLE  REAL  PROPERTY FAILS TO SUBMIT A REPORT TO THE NEW
 YORK CITY DEPARTMENT OF BUILDINGS AS REQUIRED BY SECTION  28-320.3.7  OF
 THE ADMINISTRATIVE CODE OF THE CITY OF NEW YORK; OR
   (D)  AFTER  RECEIVING  NOTICE  OF  SUCH A FAILURE, THAT SUCH OWNER HAS
 FAILED TO CURE THE DEFICIENCY WITHIN NINETY DAYS.
   8. THE LOCAL AGENCIES OF GOVERNMENT CHARGED WITH THE ADMINISTRATION OF
 THIS SECTION MAY PROMULGATE RULES  AND  REGULATIONS  TO  CARRY  OUT  THE
 PROVISIONS OF THIS SECTION.
   §  3.  This  act shall take effect immediately and shall expire and be
 deemed repealed December 31, 2029.

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