NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5931
SPONSOR: Carroll R (MS) TITLE OF BILL:
An act to amend the real property tax law, in relation to providing a
tax abatement for geothermal well systems in cities of one million or
more
PURPOSE OR GENERAL IDEA OF BILL:
To amend the real property tax law to add a tax abatement for geothermal
well systems equipment for certain properties in a city of one million
or more persons. This will allow for the expenditures related to running
more energy efficient systems to be more affordable in the effort to
increase the use of these systems across New York City.
SUMMARY OF SPECIFIC PROVISIONS:
Section one of the bill is amends the title heading of title 4-C of
article 4 of the real property tax law to add a tax abatement for geoth-
ermal well systems equipment for certain properties in a city of one
million or more persons.
Section two subdivisions two and eight of section 499-aaaa of chapter
412 of the laws of 2008, are amended to include geothermal well systems
equipment and its expenditures to be eligible for a tax abatement.
Eligible geothermal well systems equipment includes reasonable expendi-
tures for materials, labor costs properly allocable to on-site prepara-
tion, assembly and original installation, architectural and engineering
services, and designs and plans directly related to the construction or
installation of the geothermal well systems equipment.
Section two adds subdivision twelve to section 499-aaaa of chapter 412
of the laws of 2008, to define geothermal well system equipment as a
system "which uses the earth's natural temperature under the ground.to
heat and/or cool a building."
Section 3 adds paragraph (g) to section 499-bbbb of the real property
tax law to state that on or after January 1, 2027 and before January 1,
2029, the amount of the tax abatement would be 10 percent of eligible
geothermal well systems equipment expenditures in each year of the
compliance period. However, the benefit in each tax year would be limit-
ed to the lesser of the amount of taxes payable or $62,500.
Section four amends subdivision one of section 499-cccc of the real
property tax law to require that applicants file the application for the
geothermal well systems equipment tax abatement no later than March 15,
2029 in order to receive the tax abatement.
Section four subdivision 3 paragraphs a,b,c and d of section 499-cccc of
the real property tax law are amended to add geothermal well systems
equipment as eligible to apply for the tax abatement.
Section five amends subdivision 1 of section 499-ddd of the real proper-
ty tax law of chapter 412 of the laws of 2018 to add geothermal well
systems equipment.
Section six amends paragraph c and d of subdivision 1 of section
499-eeee of the real property tax law of chapter 412 of the laws of.
2018, to add geothermal well systems equipment.
Section seven paragraphs b, c and d of subdivision 2 of section 499-ffff
of the real property tax law, as amended by chapter 412 of the laws of
2018, are amended to include geothermal well systems equipment.
Section eight sets the effective date.
JUSTIFICATION:
Geothermal well systems provide a high degree of energy savings over
traditional heating and cooling solutions for residential and business
structures. As New York enters a critical new phase in our efforts to
eliminate carbon from our energy economy it becomes increasingly neces-
sary to foster new solutions to achieve our net-zero goals. Widespread
implementation of geothermal systems will help dramatically reduce elec-
tric, gas, and oil consumption. These systems will lower the bar home-
owners and businesses face in meeting the energy requirements of a fully
carbon-free energy grid. Additionally these systems are highly resil-
ient, will provide additional local jobs, improve air quality and other
environmental factors, and create local jobs and economic activity:The
long term economic benefits for New York as a leader in the field will
extend with the technical expertise acquired in-state, as the implemen-
tation of the technology inevitably becomes widespread.
The most significant impact opportunities for geothermal well deployment
are within the greater New York City metropolitan area (NYISO Zone J),
based on the current and future heating and cooling demands and chal-
lenges that characterize this unique jurisdiction. During the early
phase of local geothermal market development, a temporary property tax
abatement to defray upfront costs for adopters would help catalyze site
installations in New York City, drive down unit and installation costs
through economies of scale and learning curve advances, and accelerate
the realization of the direct and indirect public benefits that result
from such- deployment.
PRIOR LEGISLATIVE HISTORY:
A.8558 of 2019-20, A.1433 of 2021-22, A.701 of 2023-24
FISCAL IMPLICATIONS:
TBD
EFFECTIVE DATE:
This act shall take effect immediately
STATE OF NEW YORK
________________________________________________________________________
5931
2025-2026 Regular Sessions
IN ASSEMBLY
February 25, 2025
___________
Introduced by M. of A. R. CARROLL, DINOWITZ, COLTON, EPSTEIN, SIMON,
HYNDMAN -- Multi-Sponsored by -- M. of A. DAVILA -- read once and
referred to the Committee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to providing a
tax abatement for geothermal well systems in cities of one million or
more
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The title heading of title 4-C of article 4 of the real
2 property tax law, as amended by chapter 412 of the laws of 2018, is
3 amended to read as follows:
4 SOLAR ELECTRIC GENERATING SYSTEM, GEOTHERMAL
5 WELL SYSTEM AND ELECTRIC ENERGY STORAGE EQUIPMENT
6 TAX ABATEMENT FOR CERTAIN PROPERTIES IN A CITY OF ONE MILLION OR MORE
7 PERSONS
8 § 2. Subdivisions 2 and 8 of section 499-aaaa of the real property tax
9 law, as amended by chapter 485 of the laws of 2023, are amended and a
10 new subdivision 12 is added to read as follows:
11 2. "Application for tax abatement" shall mean an application for a
12 solar electric generating system, geothermal well system, and/or elec-
13 tric energy storage equipment tax abatement pursuant to section four
14 hundred ninety-nine-cccc of this title.
15 8. "Eligible solar electric generating system expenditures", "eligible
16 geothermal well system expenditures" and "eligible electric energy stor-
17 age equipment expenditures" shall mean reasonable expenditures for mate-
18 rials, labor costs properly allocable to on-site preparation, assembly
19 and original installation, architectural and engineering services, and
20 designs and plans directly related to the construction or installation
21 of a solar electric generating system, geothermal well system and/or
22 electric energy storage equipment installed in connection with an eligi-
23 ble building. Solar parking canopy structures shall be considered a
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD07643-01-5
A. 5931 2
1 solar electric generating system for the purposes of this subdivision.
2 Such eligible expenditures shall not include interest or other finance
3 charges, or any expenditures incurred using a federal, state or local
4 grant.
5 12. "Geothermal well system" means a system which uses the earth's
6 natural temperature under the ground to heat and/or cool a building.
7 § 3. Paragraph (f) of subdivision 1 of section 499-bbbb of the real
8 property tax law, as amended by chapter 485 of the laws of 2023, is
9 amended and a new paragraph (g) is added to read as follows:
10 (f) if the solar electric generating system and/or electric energy
11 storage system is placed in service on or after January first, two thou-
12 sand twenty-four, and before January first, two thousand thirty-five,
13 for each year of the compliance period such tax abatement shall be the
14 lesser of (i) seven and one-half percent of eligible solar electric
15 generating system and/or energy storage system expenditures, (ii) the
16 amount of taxes payable in such tax year, or (iii) sixty-two thousand
17 five hundred dollars[.]; or
18 (g) if a geothermal well system is placed in service on or after Janu-
19 ary first, two thousand twenty-seven, and before January first, two
20 thousand twenty-nine, for each year of the compliance period such tax
21 abatement shall be the lesser of (i) ten percent of eligible geothermal
22 well system expenditures, (ii) the amount of taxes payable in such tax
23 year, or (iii) sixty-two thousand five hundred dollars.
24 § 4. Subdivisions 1 and 3 of section 499-cccc of the real property tax
25 law, subdivision 1 as amended by chapter 485 of the laws of 2023 and
26 subdivision 3 as amended by chapter 412 of the laws of 2018, are amended
27 to read as follows:
28 1. To obtain a tax abatement pursuant to this title, an applicant must
29 file an application for tax abatement, which may be filed on or after
30 January first, two thousand nine, and on or before January first, two
31 thousand thirty-six for eligible solar electric generating system
32 expenditures and eligible electric energy storage expenditures and on or
33 after January first, two thousand twenty-seven, and on or before March
34 fifteenth, two thousand twenty-nine for eligible geothermal well system
35 expenditures.
36 3. Such application shall contain the following:
37 (a) The name and address of the applicant and the location of the
38 solar electric generating system, geothermal well system or the electric
39 energy storage equipment.
40 (b) Proof that the applicant received all required certifications,
41 permits and other approvals to construct the solar electric generating
42 system, geothermal well system or the electric energy storage equipment.
43 (c) Certifications in a form prescribed by a designated agency, from
44 an architect, engineer or other certified or licensed professional whom
45 a designated agency designates by rule, that (i) a solar electric gener-
46 ating system, geothermal well system or electric energy storage equip-
47 ment has been placed in service in connection with an eligible building
48 in accordance with this title, the rules promulgated hereunder, and
49 local construction and fire codes, and (ii) if the solar electric gener-
50 ating system, geothermal well system or electric energy storage equip-
51 ment has been placed on the roof of a building or other structure, that
52 a structural analysis has been performed establishing that such building
53 or structure can sustain the load of such solar electric generating
54 system, geothermal well system or electric energy storage equipment. All
55 certifications required by this title or the rules promulgated hereunder
56 shall set forth the specific findings upon which the certification is
A. 5931 3
1 based, and shall include information sufficient to identify the eligible
2 building, the certifying engineer, architect or other professional, and
3 such other information as may be prescribed by a designated agency.
4 (d) An agreement to permit a designated agency or its designee to
5 inspect the solar electric generating system, geothermal well system or
6 electric energy storage equipment and any related structures and equip-
7 ment upon reasonable notice.
8 (e) Any other information or certifications required by a designated
9 agency pursuant to this title and the rules promulgated hereunder.
10 § 5. Subdivision 1 of section 499-dddd of the real property tax law,
11 as amended by chapter 412 of the laws of 2018, is amended to read as
12 follows:
13 1. continuing compliance during the compliance period with all appli-
14 cable provisions of law, including without limitation the local
15 construction and fire codes, maintaining the solar electric generating
16 system or electric energy storage equipment in such a manner that it
17 continuously constitutes a solar electric generating system, geothermal
18 well system or electric energy storage equipment within the meaning of
19 this title and the rules promulgated hereunder, and permitting a desig-
20 nated agency or its designee to inspect the solar electric generating
21 system, geothermal well system or electric energy storage equipment and
22 any related structures and equipment upon reasonable notice; and
23 § 6. Paragraphs (c) and (d) of subdivision 1 of section 499-eeee of
24 the real property tax law, as amended by chapter 412 of the laws of
25 2018, are amended to read as follows:
26 (c) the solar electric generating system, geothermal well system or
27 electric energy storage equipment for which a tax abatement was granted
28 has at any time during the compliance period failed to meet any require-
29 ment for a solar electric generating system, geothermal well system or
30 electric energy storage equipment pursuant to this title or any rule
31 promulgated hereunder;
32 (d) the solar electric generating system, geothermal well system or
33 electric energy storage equipment has become a fire or safety hazard at
34 any time during the compliance period; or
35 § 7. Paragraphs (b), (c) and (d) of subdivision 2 of section 499-ffff
36 of the real property tax law, as amended by chapter 412 of the laws of
37 2018, are amended to read as follows:
38 (b) to inspect solar electric generating systems, geothermal well
39 systems or electric energy storage equipment and any related structures
40 and equipment;
41 (c) to establish permit or certification requirements to determine
42 when the solar electric generating system, geothermal well system or
43 electric energy storage equipment has been placed in service, such as
44 certification by an architect, engineer or other certified or licensed
45 professional whom a designated agency designates by rule;
46 (d) to establish guidance and procedures for determining or certifying
47 eligible solar electric generating system, geothermal well system or
48 electric energy storage equipment expenditures;
49 § 8. This act shall take effect immediately.
