What's happening
This bill makes certain peaking power plants in New York City retroactively eligible for industrial and commercial property tax abatement benefits.
Why it matters
Addresses a legislative oversight. by making a specific peaking power plant in NYC, which began operating after the 2011 law change, retroactively eligible for tax abatement benefits that were intended for such facilities, correcting what lawmakers describe as an unintended exclusion.
Potentially reduces operating costs for the affected plant. , which may stabilize or lower electricity costs for ratepayers by making the plant's financial situation more sustainable—especially important for reliability in NYC's energy grid.
Clarifies and extends the legal definition of "peaking unit". to include certain facilities that were planned, approved, and under construction during a particular time window, ensuring they are not penalized due to the timing of legislative amendments.
Signals to energy investors and developers. that the state is willing to retroactively correct policy gaps, potentially improving confidence in future infrastructure investments by demonstrating legislative responsiveness to industry needs.
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Who cares
Headline styles
Tax Breaks for Power Plants
Plain English, a few words. Used as the page title.
Sponsors
2 Co-sponsors
History
- Committed to rules
- Advanced to third reading
- 2nd report cal.
- 1st report cal.1439
- Referred to cities
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.
Expand Tax Breaks for Power Plants
In Assembly Committee · Ways And Means · Sponsor Michael Cusick
Full text
3 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
7615
IN SENATE
January 31, 2018
Introduced by Sen. LANZA -- read twice and ordered printed, and when printed to be committed to the Committee on Cities
AN ACT to amend the real property tax law and the administrative code of the city of New York, in relation to applications by certain electric generating facilities for tax abatements for industrial and commercial construction work on properties in a city of one million or more persons
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Legislative findings. The legislature hereby finds that the 2011 amendment to the industrial and commercial abatement program was succesful in preventing a large increase in capacity rates for electricity that would have cost ratepayers in the city of New York hundreds of millions of dollars had the law not been changed. However, in the haste to adopt that law, a new peaking power plant fell through the cracks and has been paying property taxes since it began operations in 2012, even though the 2011 statute clearly intended that industrial and commercial abatement program benefits be provided to peaking power plants as a right. This act would correct that defect in the statute and enable the facility to receive industrial and commercial abatement program benefits prospectively.
§ 2. Subdivision 17 of section 489-aaaaaa of the real property tax law, as amended by chapter 28 of the laws of 2011, is amended to read as follows:
17. "Utility property" means property and equipment as described in paragraphs (c), (d), (e), (f) and (i) of subdivision twelve of section one hundred two of this chapter that is used in the ordinary course of business by its owner or any other entity or property as described in paragraphs (a) and (b) of subdivision twelve of section one hundred two of this chapter that is owned by any entity that uses in the ordinary course of business property and equipment as described in paragraphs (c), (d), (e), (f) and (i) of subdivision twelve of section one hundred two of this chapter, without regard to the classification of such property and equipment for real property tax purposes pursuant to section
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD14515-01-8
S. 7615 2
eighteen hundred two of this chapter, except that any such property and equipment used solely to serve the building to which they are attached shall not be deemed utility property. Notwithstanding any provision of this title to the contrary, peaking units shall not be considered utility property. For purposes of this title, "peaking unit" shall mean a generating unit that: (a) is determined by the New York independent system operator or a federal or New York state energy regulatory commission to constitute a peaking unit as set forth in section 5.14.1.2 of the New York independent system operator's market administration and control area services tariff, as such term existed as of April first, two thousand eleven; or (b) has an annual average operation, during the calendar year preceding the taxable status date, of less than eighteen hours following each start of the unit; for purposes of calculating the annual average, operations during any period covered by any major emergency declaration issued by the New York independent system operator, northeast power coordinating council, or other similar entity shall be excluded; or (c) notwithstanding the requirements and provisions of this title, any peaking unit that was planned, approved and under construction between the effective date of this title and the effective date of chapter twenty-eight of the laws of two thousand eleven, and upon going into service exclusively provides electricity to Zone J, shall be deemed eligible for the benefits of this title; provided, however, that the benefit period for a peaking unit shall be as set forth in paragraph (b-1) of subdivision three of section four hundred eighty-nine-bbbbbb of this title; and provided, further, that such benefits shall commence upon the effective date of this paragraph. A "peaking unit" under this title shall include all real property used in connection with the generation of electricity, and any facilities used to interconnect the peaking unit with the electric transmission or distribution system, but shall not include any facilities that are part of the electric transmission or distribution system; it may be comprised of a single turbine and generator or multiple turbines and generators located at the same site. Notwithstanding any provision of this title to the contrary, a peaking unit shall be considered industrial property, provided however that the benefit period for a peaking unit shall be as set forth in paragraph (b-1) of subdivision three of section four hundred eighty-nine-bbbbbb of this title.
§ 3. Subdivision q of section 11-268 of the adminsitrative code of the city of New York, as amended by chapter 28 of the laws of 2011, is amended to read as follows:
q. "Utility property" means property and equipment as described in paragraphs (c), (d), (e), (f) and (i) of subdivision twelve of section one hundred two of the real property tax law that is used in the ordinary course of business by its owner or any other entity or property as described in paragraphs (a) and (b) of subdivision twelve of section one hundred two of such law that is owned by any entity that uses in the ordinary course of business property and equipment as described in paragraphs (c), (d), (e), (f) and (i) of subdivision twelve of section one hundred two of such law, without regard to the classification of such property and equipment for real property tax purposes pursuant to section eighteen hundred two of such law, except that any such property and equipment used solely to serve the building to which they are attached shall not be deemed utility property. Notwithstanding any provision of this part to the contrary, peaking units shall not be considered utility property. For purposes of this part, "peaking unit" shall mean a generating unit that: (a) is determined by the New York
S. 7615 3
independent system operator or a federal or New York state energy regulatory commission to constitute a peaking unit as set forth in section 5.14.1.2 of the New York independent system operator's market administration and control area services tariff, as such term existed as of April first, two thousand eleven; or (b) has an annual average operation, during the calendar year preceding the taxable status date, of less than eighteen hours following each start of the unit; for purposes of calculating the annual average, operations during any period covered by any major emergency declaration issued by the New York independent system operator, northeast power coordinating council, or other similar entity shall be excluded; or (c) notwithstanding the requirements and provisions of this part, any peaking unit that was planned, approved and under construction between the effective date of title two-F of article four of the real property tax law and the effective date of chapter twenty-eight of the laws of two thousand eleven, and upon going into service exclusively provides electricity to Zone J, shall be deemed eligible for the benefits of this part; provided, however, that the benefit period for a peaking unit shall be as set forth in subparagraph (a) of paragraph two of subdivision c of section 11-269 of this part; and provided, further, that such benefits shall commence upon the effective date of this paragraph. A "peaking unit" under this part shall include all real property used in connection with the generation of electricity, and any facilities used to interconnect the peaking unit with the electric transmission or distribution system, but shall not include any facilities that are part of the electric transmission or distribution system; it may be comprised of a single turbine and generator or multiple turbines and generators located at the same site. Notwithstanding any provision of this part to the contrary, a peaking unit shall be considered industrial property, provided however that the benefit period for a peaking unit shall be as set forth in paragraph two-a of subdivision c of section 11-269 of this part.
§ 4. This act shall take effect immediately.
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 and the administrative code of the city of New York, in relation to applications by certain electric generating facilities for tax abatements for industrial and commercial construction work on properties in a city of one million or more persons
Purpose
This bill would amend the Real Property Tax Law and the Administrative Code of the City of New York to reauthorize the Industrial and Commer- cial Abatement Program (ICAP) to correct a defect in the 2011 amendment that provides as-a-right ICAP benefits to electric peaking generating facilities.
Summary of provisions
Section 1 of the bill sets forth the bill's legislative findings.
Section 2
Existing law
Currently, there is a tax abatement program, the Industrial and Commer- cial Abatement Program (ICAP), for eligible industrial or commercial work on properties in New York City established pursuant to Chapter 119 of the Laws of 2008. In 2011, ICAP was amended to enable the owners of peaking units to be eligible to receive ICAP abatements from New York City as a right.
Justification
Chapter 28 of 2011, a Governor's program bill was adopted to ensure that New York City ratepayers didn't face a large unwarranted rate increase that would have occurred if not for the adoption of the law. The legis- lation and it's supporting documents clearly stated to the Federal Ener- gy Regulatory Commission that any new peaking facility that comes online after the effective date of Chapter 28 is eligible for benefits of the Industrial and Commercial Abatement Program (ICAP) as a right. The chap- ter and subsequent action by the FERC prevented property taxes from being included in the rate curve and since it's adoption has saved New York City Ratepayers hundreds of millions of dollars on their electric bills. A peaking facility was under construction and nearly complete when Chapter 28 was adopted and came online later in 2012. It is the only "in city" generating facility that hasn't received ICAP or its predecessor ICIP benefits. The adoption of this amendment will fix an unintended defect in the statute and provide the peaking facility with the tax relief that the State and City promised in 2012.
The sponsor's memo to chapter 28 of 2011 states:
"This bill would remove the uncertainty with respect to property tax assessments on peaking units by returning to an as of right property tax abatement program leaving the City of New York with no discretion in awarding the abatement if the peaking unit satisfies the objective eligibility criteria established in the legislation." The adoption of this amendment will make this statement true of the first and only new peaking unit to serve Zone J since the adoption of the 2011 law. No other legislation is required in the future as any new plant would be eligible for ICAP benefits.
Legislative history
This is a new bill.
Fiscal implications
This bill would have no fiscal impact on the State.
Effective date
This bill would take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.