What's happening
This bill expands property tax exemptions for agricultural waste composting facilities and removes exemptions for farm waste energy systems.
Why it matters
Encourages agricultural composting by broadening tax exemptions. The bill expands property tax exemptions to include a wider array of composting facilities that process agricultural materials, food scraps, and other organic wastes—potentially reducing costs for farms investing in sustainable waste management.
Removes financial incentives for farm waste-to-energy systems. By eliminating tax exemptions for farm waste energy systems (such as anaerobic digesters used for biogas), the bill may discourage new investments in on-farm renewable energy projects, possibly impacting farm revenue streams and local clean energy efforts.
Shifts policy focus toward composting over energy production. The change signals a legislative preference for composting as the primary method for agricultural waste management, which could influence farm practices, local environmental outcomes, and the development of related infrastructure.
May impact local governments and school districts’ tax bases. With expanded exemptions for composting facilities but removal for energy systems, local governments and school districts could see changes in their taxable property base, potentially affecting local revenues and fiscal planning.
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Who cares
Headline styles
Expand Farm Digester Tax Breaks
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Print number 3925a
- Amend and recommit to local government
- Referred to local government
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.785
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Property Tax Breaks for Biogas
In Assembly Committee · Real Property Taxation · Sponsor William Magee
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
3925--A
2017-2018 Regular Sessions
IN SENATE
January 30, 2017
Introduced by Sens. RITCHIE, RANZENHOFER -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -- recommitted to the Committee on Local Government in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property tax law, in relation to property tax benefits for anaerobic digestion of agricultural waste; and to repeal certain provisions of such law relating thereto
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Subdivision 1 of section 483-a of the real property tax law, as amended by section 1 of part P of chapter 57 of the laws of 2016, is amended to read as follows:
1. The following structures permanently affixed to [agricultural] land shall be exempt from taxation, special ad valorem levies and special assessments: (a) structures for the purpose of preserving and storing forage in edible condition; (b) farm feed grain storage bins; (c) commodity sheds; (d) bulk milk tanks and coolers used to hold milk awaiting shipment to market; and (e) manure storage, handling and treatment facilities, including but not limited to, composting of agricultural materials, such as livestock manure and farming wastes, food residuals or other organic wastes associated with food production or consumption with at least fifty percent by weight of its feedstock on an annual basis being livestock manure, farming wastes and crops grown specifically for use as composting feedstock. "Food residuals" means organic material, including, but not limited to, food scraps, food processing residue, and related soiled or unrecyclable paper used in food packaging, preparation or cleanup.
§ 2. Paragraphs (e) and (f) of subdivision 1 of section 487 of the real property tax law are REPEALED.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08793-02-8
S. 3925--A 2
§ 3. Paragraph (d) of subdivision 1 of section 487 of the real property tax law, as amended by chapter 515 of the laws of 2002, is amended to read as follows:
(d) "Incremental cost" means the increased cost of a solar or wind energy system [or farm waste energy system] or component thereof which also serves as part of the building structure, above that for similar conventional construction, which enables its use as a solar or wind energy [or farm waste energy] system or component.
§ 4. Subdivisions 2, 3, 4, 5 and 8 of section 487 of the real property tax law, subdivisions 2, 3, 4, and 5 and paragraph (a) of subdivision 8 as amended by chapter 336 of the laws of 2017 and subdivision 8 as amended by chapter 344 of the laws of 2014, are amended to read as follows:
2. Real property which includes a solar or wind energy system, [farm waste energy system,] micro-hydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system, or electric energy storage equipment and electric energy storage system approved in accordance with the provisions of this section shall be exempt from taxation to the extent of any increase in the value thereof by reason of the inclusion of such solar or wind energy system, [farm waste energy system,] micro-hydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system, or electric energy storage equipment and electric energy storage system for a period of fifteen years. When a solar or wind energy system or components thereof, [farm waste energy system,] micro-hydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system, or electric energy storage equipment and electric energy storage system also serve as part of the building structure, the increase in value which shall be exempt from taxation shall be equal to the assessed value attributable to such system or components multiplied by the ratio of the incremental cost of such system or components to the total cost of such system or components. The exemption provided by this section is inapplicable to any structure that satisfies the requirements for exemption under section four hundred eighty-three-e of this title.
3. The president of the authority shall provide definitions and guidelines for the eligibility for exemption of the solar and wind energy equipment and systems, [farm waste energy equipment and systems,] micro-hydroelectric equipment and systems, fuel cell electric generating equipment and systems, micro-combined heat and power generating equipment and systems and electric energy storage equipment and electric energy storage system described in paragraphs (a), (b), (e), (f), (g), (h), (i), (j), (k), (l), (m) and (n) of subdivision one of this section.
4. No solar or wind energy system, [farm waste energy system,] microhydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system, or electric energy storage equipment and electric energy storage system shall be entitled to any exemption from taxation under this section unless such system meets the guidelines set by the president of the authority and all other applicable provisions of law.
5. The exemption granted pursuant to this section shall only be applicable to (a) solar or wind energy systems [or farm waste energy systems] which are (i) existing or constructed prior to July first, nineteen hundred eighty-eight or (ii) constructed subsequent to January first, nineteen hundred ninety-one and prior to January first, two thousand twenty-five, and (b) micro-hydroelectric energy systems, fuel cell elec-
S. 3925--A 3
tric generating systems, micro-combined heat and power generating equipment systems, or electric energy storage equipment or electric energy storage system which are constructed subsequent to January first, two thousand eighteen and prior to January first, two thousand twenty-five.
8. (a) Notwithstanding the provisions of subdivision two of this section, a county, city, town or village may by local law or a school district, other than a school district to which article fifty-two of the education law applies, may by resolution provide either (i) that no exemption under this section shall be applicable within its jurisdiction with respect to any solar or wind energy system [or farm waste energy system] which began construction subsequent to January first, nineteen hundred ninety-one or the effective date of such local law, ordinance or resolution, whichever is later, and/or (ii) that no exemption under this section shall be applicable within its jurisdiction with respect to any micro-hydroelectric energy system, fuel cell electric generating system, micro-combined heat and power generating equipment system, or electric energy storage equipment or electric energy storage system constructed subsequent to January first, two thousand eighteen or the effective date of such local law, ordinance or resolution, whichever is later. A copy of any such local law or resolution shall be filed with the commissioner and with the president of the authority.
(b) Construction of a solar or wind energy system [or a farm waste energy system] shall be deemed to have begun upon the full execution of a contract or interconnection agreement with a utility; provided however, that if such contract or interconnection agreement requires a deposit to be made, then construction shall be deemed to have begun when the contract or interconnection agreement is fully executed and the deposit is made. The owner or developer of such a system shall provide written notification to the appropriate local jurisdiction or jurisdictions upon execution of the contract or the interconnection agreement.
§ 5. This act shall take effect immediately and shall apply to the taxable year of 2017 and thereafter.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to property tax benefits for anaerobic digestion of agricultural waste; and to repeal certain provisions of such law relating thereto
Purpose
The purpose of this bill is to amend the Real Property Tax Law (RPTL) to clearly provide property tax benefits for anaerobic digestion of agri- culturally derived feedstocks that provide manure management and renewa- ble energy generation for use by a farm and/or for sale through the grid; and to repeal those portions of RPTL § 487 that apply to farm waste energy systems to remove confusion with the previously amended RPTL § 483-a.
Summary of provisions
Section 1 of the bill amends RPTL § 483-a to include language that clearly allows for the sale of the energy generated by an anaerobic digester through the grid (off-site) or to a farm (on-site), without jeopardizing the tax exempt status of the anaerobic digester, the equip- ment used to process the waste to energy and the property it is located upon. The amendment includes the removal of the word "agricultural" in reference to the land on which a digester is affixed to ensure the tax exemption even if the land is zoned as other than agricultural
Read the full memo (803 words)
Section 2 of the bill repeals the definitions of "farm waste electric generating equipment" and "farm waste energy system" in RPTL § 487 to remove confusion with the newly amended RPTL § 483-a.
Section 3 of the bill amends the definition of "incremental cost" in paragraph (d) of subdivision 1 of RPTL § 487 to remove references to farm waste energy systems.
Section 4 of the bill amends the section heading and subdivisions 2, 3, 4, 5 and 8 of RPTL § 487 to remove references to farm waste energy equipment and systems.
Section 5 of the bill provides the effective date - immediately, and applicable to the taxable year of 2014 and thereafter
Existing law
In 2013, the Legislature passed S. 4770-A/ A. 7982 (Gallivan/Magee) (Chapter 272 of the Laws of 2013) clarifying that composting and anaero- bic digestion of agricultural materials are entitled to a real property tax exemption as "manure storage, handling and treatment facilities" under RPTL § 483-a.
The Courts have since ruled that the existence of similar language is RPTL § 487 is confusing and therefore have allowed the municipality of Covington, NY (Wyoming County) to tax an anaerobic digester as Energy Generation, an outcome unintended by previous legislation.
Justification
In 2013, the Legislature passed S. 4770-Al A. 7982 (Gallivan/Magee) (Chapter 272 of the Laws of 2013) clarifying that composting and anaero- bic digestion of agricultural materials are entitled to a real property tax exemption as "manure storage, handling and treatment facilities" under RPTL § 483-a.
Expanding the implementation of anaerobic digesters has also been prior- ity of Governor Cuomo as he affirmed at the NYS Yogurt Summit held in August of 2012, where he stated, "We, as an administration, want to encourage digesters."
Anaerobic digestion of livestock manure and other agriculturally derived organic materials provides multiple environmental benefits including: water quality protection, air quality improvement, reduction of green- house gases, energy efficiency benefits, public health protection, natural resource conservation, solid waste reduction and renewable ener- gy generation. While the benefits are many, farmers have been slow to adopt this technology due to the high capital costs and tight financial margins of anaerobic digestion.
To be eligible for tax benefits at least fifty percent by weight of the anaerobic digester feedstock on an annual basis must consist of live- stock manure, farming wastes or crops grown specifically for use as anaerobic digestion feedstock. This standard ensures that such facili- ties maintain an important direct connection to farm operations, helping them with critical nutrient management needs. The RPTL should be revised and updated to include anaerobic digesters as integral parts of agricul- tural manure management systems.
In light of the changes already made to RPTL § 483-a, which make anaero- bic digestion of agricultural materials eligible for a real property tax exemption, the farm waste energy tax exemption in RPTL § 487 is no long- er needed. Since any on-farm digester seeking a property tax exemption will use § 483-a, keeping the § 487 exemption would be confusing. That confusion could lead other municipalities to tax anaerobic digesters as Energy Generation, potentially bankrupting existing digesters and discouraging the development of new digesters in New York State.
Legislative history
2015-2016: S.5809/A.8062
Fiscal implications
None to the state. This bill clarifies existing state law. The clarifi- cation will prevent the taxing of anaerobic digesters as energy gener- ation, potentially bankrupting existing digesters and discouraging the development of new digesters in New York State.
Effective date
Immediately, and shall apply to the taxable year of 2017 and thereafter.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.