Relates to utility real property

BILL NUMBER:S5234

Title of bill

An act to amend the public service law and the real property tax law, in relation to utility real property

Purpose or general idea of bill

To provide for the merger of class three and four into a new single class for the special assessing unit of New York city. The merger of class shares of present classes three and four results in no revenue loss to New York city.

Summary of specific provisions

Section 1 of the bill amends the public service law to add a definition of "utility real property".

Section 2 of the bill amends the public service law in relation to data on utility real property.

Sections 3, 4 and 5 of the bill amend Article 18 of the Real Property Tax Law to eliminate the definition and references to the utility property class and to create a three class system with the present class three and class four merged in New York city.

Section 6 of the bill is the effective date.

Justification

In New York City, Con Edison constitutes seventy seven percent of the assessed valuation of class three. Reductions in assessed values have produced little or no tax relief because of increases in the class three tax rates which have nullified the assessment reductions. Most important, lower property taxes for public utilities mean lower energy costs which provides relief to utility customers and helps New York City attract and retain business.

As a practical matter because of the limited number of taxpayers in the class there is no way under existing law for the public utilities to challenge the assessed valuations of their properties within the separate utility class and permanently reduce their property taxes below the 1981-82 fixed share of the real property tax levy. This is regardless of how meritorious their case may be.

Even the relief provided by the 1990 amendment to the real property tax law which permitted land, buildings, and structures to be transferred to class four from class three, did not include a great portion of public utility property, mainly the special franchise properties which are located in the public streets and ways.

This proposed legislation does not purport to create a fully equitable taxation system among all classes of taxpayers in the special assessing unit, but it would at least place public utilities on the same basis as other commercial and industrial taxpayers.

More important, lower property taxes for public utilities mean lower energy costs which in turn will help New York city keep existing business and attract new businesses as well as give some relief to all existing customers.

Prior legislative history

New bill.

Effective date

Immediately and applicable to assessment rolls with a taxable status date following its effective date.