What's happening
This bill allows certain peaking power plants in New York City that missed previous eligibility to receive industrial and commercial property tax abatements.
Why it matters
Addresses an unintentional gap. The bill specifically targets a peaking power plant that began operating in 2012 but was excluded from property tax abatement benefits due to a technical oversight in the 2011 law, correcting what lawmakers describe as an unintended consequence.
Limits eligibility to a narrow category. Only peaking units that were planned, approved, and under construction during a specific window (between the enactment of the original abatement law and its 2011 amendment), and that supply electricity exclusively to Zone J (New York City) are eligible—making the bill highly targeted and not a broad policy change.
Aims to reduce operating costs for eligible plants. By allowing these facilities to access industrial and commercial tax abatements going forward, the bill may help lower their property tax burden, potentially keeping electricity capacity costs lower for New York City ratepayers.
Highlights legislative intent and potential precedent. The bill underscores the legislature’s intent to support new peaking facilities as a matter of policy, which could encourage future investment in local generation but also sets a precedent for correcting narrowly-missed eligibility in other sectors.
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Who cares
Owners of qualifying peaking power plants
The bill would grant prospective industrial and commercial tax abatement eligibility to units planned, approved and under construction during the specified statutory window that exclusively supply Zone J upon entering service.
New York City property tax administrators
They would apply the expanded eligibility rules, with benefits beginning when the bill takes effect rather than covering prior tax payments.
New York City electricity ratepayers
The bill targets peaking-plant tax relief, which its legislative findings link to preventing increases in electricity capacity rates.
Headline styles
Expand Tax Breaks for Power Plants
Plain English, a few words. Used as the page title.
Sponsors
History
- Recommit, enacting clause stricken
- Referred to cities
- 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.
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
2389
2019-2020 Regular Sessions
IN SENATE
January 24, 2019
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 successful 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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08403-01-9
S. 2389 2
(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 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 administrative 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
S. 2389 3
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 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 paragraph two-a 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 one sets forth the bill's legislative findings.
Section two amends subdivision 17 of section 489-aaaaaa of the real property tax law.
Section three amends subdivision q of section 11-268 of the administra- tive code of the city of New York.
Section four provides the effective date.
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
2018: S.7615 - Third Reading Calendar / A.9827 - Referred to Ways & Means
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.