Establishes assessment ceilings for local public utility mass real property

BILL NUMBER:A10264

Title of bill

An act to amend the real property tax law, in relation to the establishment of assessment ceilings for local public utility mass real property

Purpose or general idea of bill

To provide for a uniform process for the taxation of the transmission and distribution property of utilities across the State.

Summary of specific provisions

Section 1: Amends Article 6 of the Real Property Tax Law by adding Sections 630 - 650 creating a definition of "Public Utility Mass Real Property" and establishing an assessment ceil- ing system for such property administered by the State Office of Real Property Tax Services (ORPS). Property owners would be required to pay an annual fee to ORPS incurred in the establishment of such assessment ceilings. Assessment ceilings would be calculated to be no less than 90% and not more than 110% of the existing assessments. ORPS would utilize the local reproduction cost new, less depreciation of the property and equalization rates to determine the assessment ceiling. A process is established to set tentative assessment levels and to allow hearings and complaints to be considered, with challenges to assessment determination being heard pursuant to Article 7 of the Real Property Tax Law. Local assessors shall utilize the ceilings as determined by ORPS in the calcu- lation of the valuations to be placed upon the local tax roll. Owners of the public utility mass real property are required to furnish annual reports to ORPS containing data and information from which assessment ceilings are determined.

Section 2: Establishes the effective date as the first day of January of the third calendar year commencing after this act shall become law.

Justification

Currently in New York, utility property located in the public way, known as special franchise property, is assessed by the State, while utility property located on private property is assessed by the local assessor. In almost every other state, the responsibility for assessing utility property, both in the public way and on private prop- erty, has been assigned to a state agency. This is due to the complexity of valuing such properties and the lack of technical training and required information that exists in many localities. Preliminary analy- sis of local data shows that assessments of transmission and distrib- ution property by local assessors vary greatly, with little apparent pattern. This divergence of assessment practices places a heavy burden on utilities that must deal with over 1,200 independent, individual assessing units. This bill addresses this issue by authorizing the State Board of Real Property Services to establish annual assessment ceilings for each utility's transmission and distribution property in each assessing unit thereby creating consistency throughout the State. Because ORPS already values similar properties located in the public way and conducts advisory appraisals of transmission and distribution prop- erty on private land for several hundred assessing units that are imple- menting reassessments each year, it already has a pre-existing appraisal

methodology to create assessment ceilings for public utility mass real property.

Prior legislative history

A. 8030-D of 2007/2008

Fiscal implications

Impact would vary throughout the State.

Effective date

This act shall take effect the first day of January of the third calendar year commencing after this act shall become law and shall apply to assessment rolls with taxable status dates on or after such date, except that nothing in this act shall be deemed to invalidate any assessment appearing on any assessment roll with a taxable status date prior to such date.