NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8030D
SPONSOR: Galef TITLE OF BILL: An act to amend the real property tax law, in relation
to the establishment of assessment ceilings for public utility mass real
property
PURPOSE OR GENERAL IDEA OF BILL: To provide for a uniform process for
the taxation of the transmission and distribution property of utilities
across the State.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Amends Article 6 of the Real Property Tax Law by adding
Sections 630 through 650 creating a definition of "Public Utility Mass
Real Property" and establishing an assessment ceiling system for such
property administered by the State Office of Real Property Tax Services
(ORPS). Property owners would be required to pay an annual fee to ORPS
incurred in the establishment of such assessment ceilings. Assessment
ceilings would be calculated to be no less than 90% and not more than
110% of existing assessments. ORPS would utilize the local reproduction
cost new, less depreciation of the property and equalization rates to
determine the assessment ceiling. A process is established to set
tentative assessment levels and to allow hearings and complaints to be
considered, with challenges to assessment determinations being heard
pursuant to Article 7 of the Real Property Tax Law. Local assessors
shall utilize the ceilings as determined by ORPS in the calculation of
the valuations to be placed upon the local tax roll. Owners of the
public utility mass real property are required to furnish annual reports
to ORPS containing data and information from which assessment ceilings
are determined.
Section 2: Effective date is the first day of January of the third
calendar year commencing after this act shall become law.
JUSTIFICATION: Currently in New York, utility property located in the
public way, known as special franchise property, is assessed by the
State, while utility property located on private property is assessed by
the local assessor. In almost every other state, the responsibility for
assessing utility property, both in the public way and on private prop-
erty, has been assigned to a state agency. This is due to the complexity
of valuing such properties and the lack of technical training and
required information that exists in many localities. Preliminary analy-
sis of local data shows that assessments of transmission and distrib-
ution property by local assessors vary greatly, with little apparent
pattern. This divergence of assessment practices places a heavy burden
on utilities that must deal with over 1,200 independent, individual
assessing units. This bill addresses this issue by authorizing the State
Board of Real Property Services to establish annual assessment ceilings
for each utility's transmission and distribution property in each
assessing unit thereby creating consistency throughout the state.
Because ORPS already values similar properties located in the public way
and conducts advisory appraisals of transmission and distribution prop-
erty on private land for several hundred assessing units that are imple-
menting reassessments each year, it already has a pre-existing appraisal
methodology to create assessment ceilings for public utility mass real
property.
PRIOR LEGISLATIVE HISTORY: New Legislation.
FISCAL IMPLICATIONS: Impact would vary throughout the State.
EFFECTIVE DATE: This act shall take effect the first day of January of
the third calendar year commencing after this act shall become law and
shall apply to assessment rolls with taxable status dates on or after
such date, except that nothing in this act shall be deemed to invalidate
any assessment appearing on any assessment roll with a taxable status
date prior to such date.
STATE OF NEW YORK
________________________________________________________________________
8030--D
2007-2008 Regular Sessions
IN ASSEMBLY
May 2, 2007
___________
Introduced by M. of A. GALEF, CALHOUN -- Multi-Sponsored by -- M. of A.
CHRISTENSEN -- read once and referred to the Committee on Real Proper-
ty Taxation -- committee discharged, bill amended, ordered reprinted
as amended and recommitted to said committee -- reported and referred
to the Committee on Ways and Means -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- recommitted to the Committee on Real Property Taxation in
accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill
amended, ordered reprinted as amended and recommitted to said commit-
tee -- reported and referred to the Committee on Codes -- 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 the establish-
ment of assessment ceilings for public utility mass real property
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The real property tax law is amended by adding a new arti-
2 cle 6-A to read as follows:
3 ARTICLE 6-A
4 ASSESSMENT CEILINGS FOR PUBLIC
5 UTILITY MASS REAL PROPERTY
6 Section 630. Definitions.
7 632. Annual fee.
8 634. Assessment of public utility mass real property.
9 636. Assessment ceiling.
10 638. Local reproduction cost.
11 640. Equalization rate.
12 642. Tentative determination of assessment ceiling; notice,
13 complaints and hearing.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11647-09-8
A. 8030--D 2
1 644. Final determination of assessment ceiling; certificate.
2 646. Application of assessment ceiling; computation of
3 exemption.
4 648. Reports to state board.
5 650. Inspection of accounts and property of public utilities.
6 § 630. Definitions. When used in this article:
7 1. "Public utility mass real property" means real property which is
8 owned by a company that is required to make annual inventory reports to
9 the state board pursuant to article six of this chapter, and which is
10 used in or supports the transmission and distribution of electricity,
11 water, gas, steam, petroleum products, and chemicals, or is used in or
12 supports the transmission of communication signals whether by electro-
13 magnetic or optical means. Utility mass property for the purposes of
14 this section shall not include land or a site which is primarily used as
15 a power generation facility, cell tower, office building, equipment
16 storage facility, gas manufacturing plant or product storage facility,
17 nor shall it include property which is not real property by virtue of
18 paragraph (i) of subdivision twelve of section one hundred two of this
19 chapter.
20 2. "Taxation" means any tax or special ad valorem levy or special
21 assessment for which public utility mass real property is otherwise
22 liable.
23 § 632. Annual fee. Each owner of public utility mass real property
24 shall pay an annual charge to the office of real property services. All
25 costs and expenses of the office of real property services, direct and
26 indirect, incurred in the establishment of assessment ceilings for
27 public utility mass real property shall be paid from the collection of
28 an annual charge upon the owners of public utility mass real property.
29 The state board shall provide by rule for computation of such charge
30 through the apportionment of these costs and expenses to owners of
31 public utility mass real property in relation to the total full value of
32 the public utility mass real property eligible for an assessment ceiling
33 pursuant to this article. The charges established pursuant to this
34 section shall be subject to the approval of the director of the budget.
35 Any unpaid fee shall be a lien upon the assets of an owner of public
36 utility mass real property and may be enforced by appropriate adminis-
37 trative or judicial proceedings commenced by counsel to the office of
38 real property services.
39 § 634. Assessment of public utility mass real property. 1. Subject to
40 the provisions of section six hundred forty-six of this article, the
41 assessor in each city, town and village, and in each county having a
42 county department of assessment, shall annually assess all public utili-
43 ty mass real property situated in such city, town, village or county, as
44 the case may be. Where a village has enacted a local law as provided in
45 subdivision three of section fourteen hundred two of this chapter, the
46 town or county assessor shall apportion that part of the assessment of
47 public utility mass real property applicable to the village for purposes
48 of the copy of the part of the town or county assessment roll used for
49 village tax purposes.
50 § 636. Assessment ceiling. 1. For the purpose of determining the
51 extent to which public utility mass real property shall be exempt under
52 this article, an assessment ceiling for the public utility mass real
53 property situated in each assessing unit and under the same ownership,
54 shall be established annually by the state board as follows:
55 (a) Determine the local reproduction cost in accordance with the
56 provisions of section six hundred thirty-eight of this article; and
A. 8030--D 3
1 (b) Multiply the local reproduction cost by the equalization factor
2 determined or established in accordance with the provisions of section
3 six hundred forty of this article. The result shall be the assessment
4 ceiling.
5 2. The valuation date for public utility mass real property shall be
6 January first of the year preceding the year in which the assessment
7 roll on which such property is to be assessed is completed and filed in
8 the office of the city or town clerk. The taxable status of such proper-
9 ty shall be based upon its condition as of such valuation date and its
10 ownership as of the taxable status date applicable to the assessment
11 roll on which it is to appear.
12 3. For assessment rolls with taxable status dates in the calendar year
13 in which this section shall take effect, the state board shall establish
14 no assessment ceiling that is less than ninety percent or more than one
15 hundred ten percent of the assessment of such public utility mass real
16 property appearing on the municipal assessment roll with a taxable
17 status date occurring in the third preceding calendar year, except that
18 the state board may establish assessment ceilings below the ninety
19 percent level or above the one hundred ten percent level to take into
20 account any change in level of assessment, and/or to take into account
21 any additions or retirements to public utility mass real property or
22 litigation affecting the value or taxable status of the public utility
23 mass real property initiated prior to the effective date of this
24 section. Thereafter, no assessment ceiling may decline or increase by
25 more than ten percent of the assessment ceiling established for the
26 prior roll except as is necessary to take into account any change in
27 level of assessment, the additions or retirements of property or a
28 settlement or court order addressing the value or taxable status of the
29 public utility mass real property.
30 § 638. Local reproduction cost. 1. The local reproduction cost of the
31 public utility mass real property of each public utility mass real prop-
32 erty owner in every assessing unit is the cost of reproduction, less
33 depreciation of that public utility mass real property.
34 2. In ascertaining depreciation of property under this section,
35 consideration may be given to the age, physical condition, average
36 service lives of assets and other relevant factors. Adjustments for
37 economic or functional obsolescence shall only be made upon application
38 of a public utility mass real property owner. Every such application
39 shall be submitted with the annual report required by section six
40 hundred forty-eight of this article.
41 3. As a part of its annual report to the state board due in two thou-
42 sand ten, each owner of public utility mass real property shall include
43 a summary of its experience in the prior five years in retiring assets.
44 Every fifth year thereafter each public utility shall file a similar
45 report detailing its experience in the preceding five years. These
46 reports shall be considered when establishing service lives and salvage
47 factors applied in calculating local reproduction costs.
48 § 640. Equalization rate. 1. In determining assessment ceilings, the
49 state board shall apply the state equalization rate for the assessment
50 roll for which the ceiling is established. If that rate is not avail-
51 able, the state board shall apply the latest state equalization rate for
52 the assessing unit, except that, if a special equalization rate has been
53 established as provided in subdivision two of this section, such rate
54 shall be applied. In the case of a special assessing unit as defined in
55 section eighteen hundred one of this chapter, the equalization rate to
A. 8030--D 4
1 be applied for this purpose shall be the applicable class equalization
2 rate.
3 2. The state board shall establish a special equalization rate, as
4 provided in title two of article twelve of this chapter, for the
5 purposes of this section where there has been a change in level of
6 assessment on the assessment roll for which an assessment ceiling is to
7 be determined or there has been a reassessment. No such special rate
8 shall be established for an assessment roll if the final state equaliza-
9 tion rate has been established for that roll.
10 § 642. Tentative determination of assessment ceiling; notice,
11 complaints and hearing. 1. Each year the state board shall make a tenta-
12 tive determination of each assessment ceiling for public utility mass
13 real property. Thereafter, the board shall give notice, in writing, to
14 each assessing unit and each owner of public utility mass real property
15 for which such tentative determination of an assessment ceiling shall
16 have been made specifying the amount of such ceiling and the time and
17 place where the state board or its designee will meet to hear any
18 complaint concerning such tentative determination. Such notice must be
19 served at least forty-five days prior to the date specified for such
20 hearing.
21 2. An owner of public utility mass real property or assessing unit
22 objecting to a tentative ceiling must serve its complaint upon the state
23 board, in writing, and a copy thereof upon the assessing unit or public
24 utility mass real property owner, as the case may be, at least five days
25 before the day specified for the hearing, specifying its objections to
26 such tentative determination. Service may be made either in person or by
27 mail.
28 On or before the date specified for the hearing an affidavit of
29 service shall be filed with the state board stating in substance that
30 service has been made in accordance with the provisions of this section.
31 3. The state board or its designee shall meet at the time and place
32 specified in such notice to hear complaints in relation to the tentative
33 determination of the assessment ceiling. The provisions of section five
34 hundred twelve of this chapter shall apply so far as may be practicable
35 to a hearing under this section.
36 § 644. Final determination of assessment ceiling; certificate. 1.
37 After the hearing provided for in section six hundred forty-two of this
38 article, the state board shall finally determine the assessment ceiling
39 for the public utility mass real property of each public utility mass
40 real property owner situated in each assessing unit. Whenever upon
41 complaint the state board shall revise the local reproduction cost of
42 public utility mass real property in an assessing unit, it shall revise
43 the assessment ceiling therefor to reflect such revision, but it shall
44 not, on account of such revision, modify any other determination with
45 respect to the assessment ceilings for other public utility mass real
46 property for such year for which no complaint was filed. Notwithstanding
47 the fact that no complaint shall have been filed with respect to a
48 tentative determination of an assessment ceiling, the state board shall
49 give effect to any special equalization rate established pursuant to
50 section twelve hundred twenty-four of this chapter or the final state
51 equalization rate for the assessment roll for which the ceiling is
52 established prior to the date for the final determination of the assess-
53 ment ceiling as provided in subdivision two of this section.
54 2. No later than ten days before the last date prescribed by law for
55 the levy of taxes, the state board shall file a certificate setting
56 forth each assessment ceiling as finally determined with the assessor of
A. 8030--D 5
1 the appropriate assessing unit or the town or county assessor who
2 prepares a copy of the applicable part of the town or county assessment
3 roll for village tax purposes as provided in subdivision three of
4 section fourteen hundred two of this chapter, and at the same time shall
5 transmit to each public utility mass real property owner for which such
6 ceiling has been determined a duplicate copy of such certificate.
7 3. Any final determination of an assessment ceiling by the state board
8 pursuant to subdivision one of this section shall be subject to judicial
9 review in a proceeding under article seven of this chapter. Such
10 proceeding shall be brought, in accordance with such article, within
11 sixty days of the issuance of the final assessment ceiling certificate.
12 Any such proceeding shall be brought in the supreme court for Albany
13 county.
14 § 646. Application of assessment ceiling; computation of exemption. 1.
15 Upon receipt of a certificate setting forth the assessment ceiling for a
16 public utility mass real property owner, the assessor shall compute for
17 the assessing unit the aggregate of the assessed valuations and portions
18 thereof attributable to the public utility mass real property of such
19 public utility mass real property owner included in the assessment ceil-
20 ing. If the aggregate of such assessed valuations, as so computed, does
21 not exceed the ceiling as set forth in the certificate for the public
22 utility mass real property owner, the assessor shall make no adjustment
23 in such assessed valuations. If, however, the aggregate of such assessed
24 valuations, as so computed, shall exceed the amount of such ceiling as
25 set forth in the certificate, such public utility mass real property
26 shall be exempt from taxation to the extent of such excess and the
27 assessor shall forthwith reduce the assessments of such public utility
28 mass real property, so that the aggregate of the taxable assessed valu-
29 ations of such property shall not exceed such ceiling. In reducing such
30 assessments for the purpose of giving effect to exemptions granted by
31 this article, the assessor shall distribute such reduction to the
32 assessments affected in direct proportion to the assessed valuations of
33 such public utility mass real property included in the assessments
34 initially determined by the assessor. The taxable portion of the assess-
35 ment remaining on public utility mass real property shall be apportioned
36 among the school districts and special districts directly in proportion
37 to the apportionments of the assessed valuations of such public utility
38 mass real property made by the assessor prior to the adjustment for the
39 exemption resulting from application of the assessment ceiling. All
40 certificates of assessment ceilings shall be attached to the assessment
41 roll or filed therewith as provided in article fifteen-C of this chap-
42 ter.
43 2. The assessor is hereby authorized and directed to make the
44 reductions, if any, provided for in this section on the assessment roll
45 notwithstanding the fact that he or she may receive the certificate of
46 the assessment ceiling after the final completion, verification and
47 filing of such assessment roll. Other local officers, including school
48 authorities having custody and control of such roll, are hereby author-
49 ized and directed, on the basis of information which shall be furnished
50 by the assessor, to make the reductions provided for in this section.
51 3. In assessing units for which he or she is required by law to
52 prepare an assessment roll, the assessor of a county having a county
53 department of assessment shall perform all the acts prescribed for an
54 assessor by this article. Where a village has enacted a local law as
55 provided in subdivision three of section fourteen hundred two of this
56 chapter, the assessor of the town or county who prepares a copy of this
A. 8030--D 6
1 applicable part of the town or county assessment roll for village tax
2 purposes shall also perform the acts prescribed for assessors by this
3 article on behalf of the village.
4 § 648. Reports to state board. 1. The state board may require from any
5 owner of public utility mass real property an annual report and, from
6 time to time, a further or supplement report, containing such informa-
7 tion and data as it may specify.
8 2. Every report required by or pursuant to this section shall be
9 subscribed by the person, one of the members of the partnership or the
10 president, vice-president, secretary or treasurer of the association or
11 corporation, or anyone so designated by an officer of the association or
12 corporation, as the case may be, making the same and affirmed by him or
13 her as true under the penalties of perjury. The state board may prepare
14 and require the use of forms for making such reports.
15 3. Every owner of public utility mass real property failing to make
16 the annual report required by this section, or failing to make any
17 report required by the state board pursuant to this section within the
18 time specified by it, shall forfeit to the people of the state the sum
19 of one hundred dollars for each day that such failure continues, and
20 shall not be entitled to judicial review of an assessment ceiling that
21 would have been the subject of such report as provided in this article.
22 Acknowledgement of receipt of blank reports which contain the penalty
23 provisions of this section shall be deemed sufficient notice of such
24 penalties.
25 4. In addition to the provisions of subdivision three of this section,
26 if an owner of public utility mass real property fails to furnish a
27 report required by this section, or fails to make any report required by
28 the state board pursuant to this section within the time specified, the
29 state board may commence a special proceeding in the supreme court to
30 compel such owner to furnish the report.
31 5. Any public utility mass real property owner that fails to submit
32 an annual report as required by this section shall receive an assessment
33 ceiling on the next annual assessment roll calculated using the best
34 information available to the state board.
35 6. Any report submitted by a public utility mass real property owner
36 pursuant to this section that has been excepted pursuant to subdivision
37 five of section eighty-nine of the public officers law may be disclosed,
38 in whole or in part, pursuant to such subdivision; provided, however,
39 that a copy of the portion or part of any such report that pertains to
40 the public utility mass real property situated in an assessing unit
41 shall be provided by the state board upon written request by the chief
42 executive officer of that assessing unit containing such public utility
43 mass real property for the purpose of administrative or judicial review
44 of assessment ceilings. Any such report shall not be disclosed, in
45 whole or in part, by such assessing unit or any of its officers, employ-
46 ees or contractors, except for any disclosure necessary in administra-
47 tive or judicial review of an assessment ceiling. Upon receipt of a
48 request for disclosure, an assessing unit that has been provided a copy
49 of such report, or a portion or part thereof, shall not disclose the
50 report, in whole or in part, but shall forward the request to the state
51 board, which shall treat the request as a request made to the state
52 board. Any unauthorized disclosure of a report, in whole or in part,
53 shall be subject to penalty pursuant to section eight hundred five-a of
54 the general municipal law.
55 § 650. Inspection of accounts and property of public utilities. 1. The
56 state board or its authorized representative shall upon reasonable prior
A. 8030--D 7
1 notice have access at reasonable times to all accounts and records
2 established and maintained by a public utility mass real property owner
3 relating to its public utility mass real property.
4 2. The state board or its authorized representative shall have the
5 power at reasonable times and with prior notice and appointment to enter
6 in or upon and to inspect locations where public utility mass real prop-
7 erty is situated.
8 § 2. This act shall take effect on the first day of January of the
9 third calendar year commencing after this act shall have become a law
10 and shall apply to assessment rolls with taxable status dates on or
11 after such date, except that nothing in this act shall be deemed to
12 invalidate any assessment appearing on any assessment roll with a taxa-
13 ble status date prior to such date.
