senate Bill S5353

Relates to applications for certain tax abatements for industrial and commercial construction work on properties in certain cities

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 11 / May / 2011
    • REFERRED TO FINANCE
  • 16 / May / 2011
    • REPORTED AND COMMITTED TO RULES
  • 18 / May / 2011
    • ORDERED TO THIRD READING CAL.791
  • 18 / May / 2011
    • SUBSTITUTED BY A7511

Summary

Relates to applications for certain tax abatements for industrial and commercial construction work on properties in cities of one million or more persons and tax abatements for certain electricity generating facilities in such city.

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Bill Details

See Assembly Version of this Bill:
A7511
Versions:
S5353
Legislative Cycle:
2011-2012
Law Section:
Real Property Tax Law
Laws Affected:
Amd §§489-aaaaaa, 489-bbbbbb, 489-dddddd, 489-eeeeee & 489-ffffff, RPT L; amd §§11-268, 11-269, 11-271, 11-272 & 11-273, NYC Ad Cd

Sponsor Memo

BILL NUMBER:S5353

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 for tax abatements for
industrial and commercial construction work on properties in
a city of one million or more persons and to tax
abatements for certain electricity generating
facilities in such city

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
Commercial Abatement Program (ICAP) for an additional four years to
provide tax abatements pursuant to such program and to further modify
such program to provide tax abatements for certain electric
generating facilities, reducing the cost of electricity in New York
City.

SUMMARY OF PROVISIONS:

Section 1 of the bill sets forth the bill's legislative findings
including the need to reduce energy capacity prices in New York City.

Section 2 of the bill amends Real Property Tax Law (RPTL) §489-aaaaaa
to amend the definition of "utility property" to exclude peaking
units from such definition.
Peaking units would be defined as generating units determined by the
New York Independent System Operator (NYISO), or other federal or New
York State energy regulatory body, that constitutes a peaking unit as
set forth in §5.14.1.2 of NYISO's Market Administration and Control
Area Services Tariff as such term existed on April 1, 2011, or has
an annual average operation of less than 18 hours following each start.
Section 2 further exempts from calculations of annual averages, major
emergency declarations by NYISO, the Northeast Power Coordinating
Council (NPCC) or other similar entity. Peaking units shall include
all real property used in connection with the facility, but shall
exclude transmission and distribution facilities.

Section 3 of the bill amends RPTL §489-bbbbbb(3) to add a new
paragraph (b-1) to provide that the amount of the abatement shall be
100% for 15 years with the first year of the abatement beginning in
the tax year that is the sooner of the completion of construction or
four years from the issuance of the first building permit, or if no
permit is required, the commencement of construction. Section 3
further provides for protection against tax increases for inflation
and increases and decreases in the taxable assessed value of the
property. Section 3 further provides that the minimum required
expenditure is 30% of the property's taxable value, as assessed in
the tax year immediately preceding
the issuance of the first building permit, or if no permit is
required, the commencement of construction.


Section 4 of the bill amends RPTL §489-dddddd(1) to extend the
application deadline of the Industrial and Commercial Abatement
Program from March 1, 2011 to March 1, 2015.

Section 5 of the bill amends RPTL §489-dddddd to add a new subdivision
3 that would prohibit granting benefits under ICAP for construction
work performed pursuant to a building permit issued after April
1, 2015. Section 4 further provides where building permits are not
required, no benefits shall be granted for construction work
commenced after April 1, 2015.

Section 6 of the bill amends RPTL §489-eeeeee to require that
recipients of abatement benefits for peaking units file biannually
(rather than biennially) a statement of the continuing use of such
property and any changes in use.

Section 7 of the bill amends RPTL §489-ffffff to add a new subdivision
5-a to provide that recipients of abatement benefits who convert the
property with the peaking unit to a use that no longer qualifies such
facility as a peaking unit, as defined in section two of the bill, or
who uses such units in a manner inconsistent with the definition of a
peaking unit, shall be ineligible for such tax benefits during such
tax year and shall pay, with interest, taxes for which an abatement
was claimed during any portion of such tax year. This subdivision
will apply the eligibility requirement in an administrative manner.

Section 8 of the bill amends §11-268(q) of the Administrative
Code of the City of New York (Administrative Code) to amend the
definition of "utility property" to exclude peaking units from such
definition, consistent with that established in §2 of the bill.

Section 9 of the bill amends §11-269(c) of the Administrative Code to
add a new paragraph (2-a) to provide that the amount of the abatement
shall be 100% for 15 years with the first year of the abatement
beginning in the tax year that is the sooner of the completion of
construction or four years from the issuance of the first building
permit, or if no permit is required, the commencement of
construction. Section 3 further provides for protection against tax
increases for inflation and increases and decreases in the taxable
assessed value of the property. Section 3 further provides that the
minimum required expenditure is 30% of the property's taxable value,
as assessed in the tax year immediately preceding the issuance of the
first building permit, or if no permit is required, the commencement
of construction.

Section 10 of the bill amends §11-271(1) of the Administrative Code to
extend the application date for benefits from March 1, 2011 to March
1, 2015.

Section 11 of the bill amends §11-271 of the Administrative Code to
add a new subdivision (c) which would prohibit granting benefits for
construction work performed pursuant to a building permit issued
after April 1, 2015; where building permits were not required, no
benefits shall be granted for construction work commenced after such
date.


Section 12 of the bill amends §11-272(a) of the Administrative Code to
require that recipients of abatement benefits for peaking units file
biannually (rather than biannually) a statement of the continuing use
of such property and any changes in use.

Section 13 of the bill amends § 11-273 of the Administrative Code to
provide that recipients of abatement benefits who convert the
property with the peaking unit to a use that no longer qualifies such
facility as a peaking unit, or who,uses such units in a manner
inconsistent with the definition of a peaking unit, as defined in
section two of the bill, shall be ineligible for such tax benefits
during such tax year and shall pay, with interest, taxes for which an
abatement was claimed during any portion of such tax year.
This subdivision will apply the eligibility requirement in an
administrative manner.

Section 14 of the bill provides that the bill shall take effect
immediately and shall be deemed to have been in full force and effect
on March 1, 2011.

EXISTING LAW:

Currently, there is a tax abatement program, the Industrial and
Commercial 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. ICAP currently excludes electric
peaking generating facilities from eligibility. Owners of peaking
units are eligible to apply for tax abatements from New York City for
construction, alterations or improvements. Those tax abatements are
awarded through a discretionary process.

JUSTIFICATION:

New York City previously granted property tax abatement as-of-right to
electric generating facilities pursuant to the Industrial and
Commercial Incentive Program (ICIP) for commercial and industrial
properties contained in Title 2-D to Article 4 of the Real Property
Tax Law. In 2008, ICIP was allowed to sunset and legislation was
enacted that created a new tax abatement program for commercial and
industrial properties, which excluded electric generating facilities
from eligibility. Owners of electric generating facilities are
eligible to apply for tax abatements through a discretionary process.

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.

Recently, the Federal Energy Regulatory Commission (FERC) issued a
ruling significantly increasing the energy capacity prices for power
generators on the grounds that the price now had to incorporate the
hypothetical property taxes that a power generator entering the
market today could face under a discretionary property tax abatement
program. The increased capacity prices will be passed on to the
consumers through higher electric rates and will simultaneously
result in a windfall for the existing plants that do not pay property


taxes. The precise increase in electric rates cannot be determined
today, but it has been estimated that the new capacity price curve
could increase the electric bills for residents and businesses in
New York City by approximately $500 million to as much as $1 billion
over the next three years.

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 and shall be deemed to have
been in full force and effect on and after March 1, 2011.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5353

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              May 11, 2011
                               ___________

Introduced  by  Sens.  LANZA,  GOLDEN -- (at request of the Governor) --
  read twice and ordered printed, and when printed to  be  committed  to
  the Committee on Finance

AN ACT to amend the real property tax law and the administrative code of
  the  city  of New York, in relation to applications for tax abatements
  for industrial and commercial construction work  on  properties  in  a
  city  of one million or more persons and to tax abatements for certain
  electricity generating facilities in such city

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings. The legislature hereby finds that the
New York city industrial and commercial incentive program granted, as of
right,  reductions  in real property taxes to new industrial and commer-
cial projects, including power plants. That program lapsed in  2008  and
its  successor, the industrial and commercial abatement program, enacted
by chapter 119 of the laws of 2008, did not provide for  tax  abatements
for  new  electricity  generating facilities in New York city. In August
2010 the board of directors of the New York city industrial  development
agency revised its uniform tax exemption policy to provide a discretion-
ary  tax  abatement  program,  and  other  benefits, for certain peaking
generating facilities.  However, the tax benefits of  the  program  were
not  recognized  by  the federal energy regulatory commission in setting
the installed capacity demand curves  for  the  City  of  New  York  for
2011/2012,  2012/2013  and 2013/2014, potentially resulting in a signif-
icant increase in the level  of  the  demand  curves  and  corresponding
capacity  prices paid by customers in the city of New York. The legisla-
ture further finds that it is in  the  best  interest  of  customers  to
prevent  such  impacts  by  amending  the  real property tax law for the
purpose of making peaking units eligible  for  benefits,  as  of  right,
under the industrial and commercial abatement program.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD12038-06-1

S. 5353                             2

  S  2.  Subdivision  17  of section 489-aaaaaa of the real property tax
law, as added by chapter 119 of the laws of 2008, 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 prop-
erty 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 UTILI-
TY 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 COMMIS-
SION 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  EMER-
GENCY  DECLARATION  ISSUED  BY THE NEW YORK INDEPENDENT SYSTEM OPERATOR,
NORTHEAST POWER COORDINATING COUNCIL, OR OTHER SIMILAR ENTITY  SHALL  BE
EXCLUDED. A "PEAKING UNIT" UNDER THIS TITLE SHALL INCLUDE ALL REAL PROP-
ERTY  USED  IN  CONNECTION  WITH  THE GENERATION OF ELECTRICITY, AND ANY
FACILITIES USED TO INTERCONNECT THE PEAKING UNIT WITH THE ELECTRIC TRAN-
SMISSION 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 INDUS-
TRIAL 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.
  S 3. Subdivision 3 of section 489-bbbbbb of the real property tax  law
is amended by adding a new paragraph (b-1) to read as follows:
  (B-1)  ABATEMENT  FOR  INDUSTRIAL CONSTRUCTION WORK ON A PEAKING UNIT.
UPON APPROVAL BY THE DEPARTMENT OF A FINAL APPLICATION FOR BENEFITS,  AN
APPLICANT  WHO HAS PERFORMED INDUSTRIAL CONSTRUCTION WORK IN ANY AREA ON
A PEAKING UNIT, SHALL BE ELIGIBLE FOR  AN  ABATEMENT  OF  REAL  PROPERTY
TAXES, AS FOLLOWS:
  (I)  AMOUNT OF ABATEMENT. THE FIRST YEAR OF THE ABATEMENT SHALL BE THE
TAX YEAR WITH THE FIRST TAXABLE STATUS DATE THAT FOLLOWS THE  SOONER  OF
(A)  COMPLETION  OF  CONSTRUCTION;  OR  (B) FOUR YEARS FROM THE DATE THE
FIRST BUILDING PERMIT WAS ISSUED, OR IF  NO  PERMIT  WAS  REQUIRED,  THE
COMMENCEMENT  OF CONSTRUCTION. FOR YEARS ONE THROUGH FIFTEEN, THE ABATE-
MENT SHALL BE THE AMOUNT OF THE ABATEMENT BASE. THE ABATEMENT  SHALL  BE
ADJUSTED  FOR  INFLATION  PROTECTION AS PROVIDED IN SUBPARAGRAPH (II) OF
THIS PARAGRAPH. THE FOLLOWING TABLE ILLUSTRATES THE  ABATEMENT  COMPUTA-
TION:

S. 5353                             3

TAX YEAR DURING BENEFIT PERIOD:         AMOUNT OF ABATEMENT:
YEARS 1 THROUGH 15                      100% OF ABATEMENT BASE
  (II) INFLATION PROTECTION. (A) INDUSTRIAL CONSTRUCTION WORK, EFFECT OF
ASSESSED  VALUATION  INCREASES.  FOR  YEARS  TWO THROUGH THIRTEEN OF THE
BENEFIT PERIOD, EXCEPT AS PROVIDED IN CLAUSE (B) OF  THIS  SUBPARAGRAPH,
IF  THERE  IS  ANY  INCREASE  IN  TAX  IN  THAT YEAR THAT IS BASED ON AN
INCREASE OF TAXABLE ASSESSED VALUATION SINCE THE IMMEDIATELY  PRIOR  TAX
YEAR,  SUCH  EXCESS  TAX  LIABILITY  SHALL BE ADDED TO THE AMOUNT OF THE
ABATEMENT BASE. SUCH ADDITION TO THE AMOUNT OF THE ABATEMENT BASE  SHALL
BE DETERMINED USING THE INITIAL TAX RATE.
  (B)  PHYSICAL  INCREASES. NOTWITHSTANDING THE PROVISIONS OF CLAUSE (A)
OF THIS SUBPARAGRAPH, IF IN ANY OF YEARS TWO  THROUGH  THIRTEEN  OF  THE
BENEFIT PERIOD, A PHYSICAL CHANGE TO THE PROPERTY RESULTS IN AN INCREASE
IN  THE TAXABLE ASSESSED VALUE OF THE PROPERTY OF MORE THAN FIVE PERCENT
FOR THAT YEAR, THEN ANY INCREASE IN TAXES FOR THAT  YEAR  SHALL  NOT  BE
ADDED TO THE AMOUNT OF THE ABATEMENT BASE IN ANY YEAR.
  (C)  IF  THE  TAXABLE  ASSESSED  VALUE UPON WHICH AN ADJUSTMENT TO THE
ABATEMENT UNDER THIS PARAGRAPH IS BASED IS  LATER  REDUCED  BY  A  COURT
ORDER OR APPLICATION TO THE TAX COMMISSION, THEN THE APPROPRIATE ADJUST-
MENT  TO THE ABATEMENT BASE SHALL BE MADE IN ACCORDANCE WITH THE REDUCED
TAXABLE ASSESSED VALUE.
  (III) MINIMUM REQUIRED EXPENDITURE. FOR INDUSTRIAL  CONSTRUCTION  WORK
ON A PEAKING UNIT, THE MINIMUM REQUIRED EXPENDITURE IS THIRTY PERCENT OF
THE  PROPERTY'S  TAXABLE  ASSESSED  VALUE IN THE TAX YEAR WITH A TAXABLE
STATUS DATE IMMEDIATELY PRECEDING THE ISSUANCE  OF  THE  FIRST  BUILDING
PERMIT,  OR IF NO PERMIT WAS REQUIRED, THE COMMENCEMENT OF CONSTRUCTION.
EXPENDITURES FOR RESIDENTIAL CONSTRUCTION WORK OR CONSTRUCTION  WORK  ON
PORTIONS  OF  PROPERTY TO BE USED FOR RESTRICTED ACTIVITIES SHALL NOT BE
INCLUDED IN THE MINIMUM REQUIRED EXPENDITURE.
  S 4. Paragraph (a) of subdivision 1 of section 489-dddddd of the  real
property  tax  law,  as  amended  by chapter 138 of the laws of 2008, is
amended to read as follows:
  (a) Application for benefits pursuant to this title may be made  imme-
diately  following the effective date of a local law enacted pursuant to
this title and continuing  until  March  first,  two  thousand  [eleven]
FIFTEEN.
  S  5.  Section  489-dddddd  of the real property tax law is amended by
adding a new subdivision 3 to read as follows:
  3. (A) NO BENEFITS  PURSUANT  TO  THIS  TITLE  SHALL  BE  GRANTED  FOR
CONSTRUCTION  WORK  PERFORMED PURSUANT TO A BUILDING PERMIT ISSUED AFTER
APRIL FIRST, TWO THOUSAND FIFTEEN.
  (B) IF NO BUILDING PERMIT WAS REQUIRED, THEN NO BENEFITS  PURSUANT  TO
THIS  TITLE  SHALL  BE  GRANTED  FOR CONSTRUCTION WORK THAT IS COMMENCED
AFTER APRIL FIRST, TWO THOUSAND FIFTEEN.
  S 6. Subdivision 1 of section 489-eeeeee of the real property tax law,
as added by chapter 119 of the laws of  2008,  is  amended  to  read  as
follows:
  1. Continuing use. For the duration of the benefit period, the recipi-
ent  of benefits shall file biennially with the department, on or before
the appropriate taxable status date, a statement of the  continuing  use
of  such  property  and any changes in use that have occurred, PROVIDED,
HOWEVER, THAT ANY RECIPIENT OF BENEFITS RECEIVING BENEFITS FOR  PROPERTY
DEFINED  AS  A  PEAKING UNIT SHALL FILE SUCH STATEMENT BIANNUALLY.  This
statement shall be in a form determined by the department and may be  in
any format the department determines, in its discretion, is appropriate,
including  electronic  format.  The  department  shall have authority to

S. 5353                             4

terminate such benefits upon failure of a recipient to file such  state-
ment  by the appropriate taxable status date.  The burden of proof shall
be on the recipient to establish continuing eligibility for benefits and
the department shall have the authority to require that statements filed
under this subdivision be certified.
  S  7.  Section  489-ffffff  of the real property tax law is amended by
adding a new subdivision 5-a to read as follows:
  5-A. CONVERSION OF USE BY PEAKING UNITS. ANY APPLICANT WHOSE  PROPERTY
HAS  BEEN  GRANTED BENEFITS UNDER THIS TITLE FOR INDUSTRIAL CONSTRUCTION
WORK AS A PEAKING UNIT AND WHO CONVERTS SUCH PROPERTY IN ANY TAX YEAR TO
A USE THAT NO LONGER QUALIFIES IT AS A PEAKING UNIT, OR  WHO  USES  SUCH
PROPERTY IN A MANNER INCONSISTENT WITH THE DEFINITION OF A PEAKING UNIT,
SHALL BE INELIGIBLE FOR ABATEMENT BENEFITS DURING ANY SUCH TAX YEAR. ANY
SUCH  RECIPIENT  OF  BENEFITS SHALL PAY WITH INTEREST TAXES FOR WHICH AN
ABATEMENT WAS CLAIMED DURING ANY PORTION OF SUCH TAX YEAR.
  S 8. Subdivision q of section 11-268 of the administrative code of the
city of New York, as added by local law number 47 of  the  city  of  New
York for the year 2008, 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 ordi-
nary 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 para-
graphs (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
INDEPENDENT  SYSTEM OPERATOR OR A FEDERAL OR NEW YORK STATE ENERGY REGU-
LATORY COMMISSION TO CONSTITUTE A PEAKING UNIT AS SET FORTH  IN  SECTION
5.14.1.2  OF  THE NEW YORK INDEPENDENT SYSTEM OPERATOR'S MARKET ADMINIS-
TRATION AND CONTROL AREA SERVICES TARIFF, AS SUCH  TERM  EXISTED  AS  OF
APRIL  FIRST,  TWO  THOUSAND ELEVEN; OR (B) HAS AN ANNUAL AVERAGE OPERA-
TION, 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. 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 ELEC-
TRIC 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  MULTI-
PLE  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 SUBDIVI-
SION C OF SECTION 11-269 OF THIS PART.

S. 5353                             5

  S 9. Subdivision c of section 11-269 of the administrative code of the
city of New York is amended by adding a new paragraph  2-a  to  read  as
follows:
  (2-A)  ABATEMENT  FOR  INDUSTRIAL CONSTRUCTION WORK ON A PEAKING UNIT.
UPON APPROVAL BY THE DEPARTMENT OF A FINAL APPLICATION FOR BENEFITS,  AN
APPLICANT  WHO HAS PERFORMED INDUSTRIAL CONSTRUCTION WORK IN ANY AREA ON
A PEAKING UNIT, SHALL BE ELIGIBLE FOR  AN  ABATEMENT  OF  REAL  PROPERTY
TAXES, AS FOLLOWS:
  (A)  AMOUNT OF ABATEMENT. THE FIRST YEAR OF THE ABATEMENT SHALL BE THE
TAX YEAR WITH THE FIRST TAXABLE STATUS DATE THAT FOLLOWS THE  SOONER  OF
(I)  COMPLETION  OF  CONSTRUCTION;  OR (II) FOUR YEARS FROM THE DATE THE
FIRST BUILDING PERMIT WAS ISSUED, OR IF  NO  PERMIT  WAS  REQUIRED,  THE
COMMENCEMENT  OF CONSTRUCTION. FOR YEARS ONE THROUGH FIFTEEN, THE ABATE-
MENT SHALL BE THE AMOUNT OF THE ABATEMENT BASE. THE ABATEMENT  SHALL  BE
ADJUSTED  FOR  INFLATION  PROTECTION  AS PROVIDED IN SUBPARAGRAPH (B) OF
THIS PARAGRAPH. THE FOLLOWING TABLE ILLUSTRATES THE  ABATEMENT  COMPUTA-
TION:
TAX YEAR DURING BENEFIT PERIOD:         AMOUNT OF ABATEMENT:
YEARS 1 THROUGH 15                      100% OF ABATEMENT BASE
  (B)  INFLATION PROTECTION. (I) INDUSTRIAL CONSTRUCTION WORK, EFFECT OF
ASSESSED VALUATION INCREASES. FOR YEARS  TWO  THROUGH  THIRTEEN  OF  THE
BENEFIT  PERIOD, EXCEPT AS PROVIDED IN CLAUSE (II) OF THIS SUBPARAGRAPH,
IF THERE IS ANY INCREASE IN TAX  IN  THAT  YEAR  THAT  IS  BASED  ON  AN
INCREASE  OF  TAXABLE ASSESSED VALUATION SINCE THE IMMEDIATELY PRIOR TAX
YEAR, SUCH EXCESS TAX LIABILITY SHALL BE ADDED  TO  THE  AMOUNT  OF  THE
ABATEMENT  BASE. SUCH ADDITION TO THE AMOUNT OF THE ABATEMENT BASE SHALL
BE DETERMINED USING THE INITIAL TAX RATE.
  (II) PHYSICAL INCREASES. NOTWITHSTANDING THE PROVISIONS OF CLAUSE  (I)
OF  THIS  SUBPARAGRAPH,  IF  IN ANY OF YEARS TWO THROUGH THIRTEEN OF THE
BENEFIT PERIOD, A PHYSICAL CHANGE TO THE PROPERTY RESULTS IN AN INCREASE
IN THE TAXABLE ASSESSED VALUE OF THE PROPERTY OF MORE THAN FIVE  PERCENT
FOR  THAT  YEAR,  THEN  ANY INCREASE IN TAXES FOR THAT YEAR SHALL NOT BE
ADDED TO THE AMOUNT OF THE ABATEMENT BASE IN ANY YEAR.
  (III) IF THE TAXABLE ASSESSED VALUE UPON WHICH AN  ADJUSTMENT  TO  THE
ABATEMENT  UNDER  THIS  PARAGRAPH  IS  BASED IS LATER REDUCED BY A COURT
ORDER OR APPLICATION TO THE TAX COMMISSION, THEN THE APPROPRIATE ADJUST-
MENT TO THE ABATEMENT BASE SHALL BE MADE IN ACCORDANCE WITH THE  REDUCED
TAXABLE ASSESSED VALUE.
  (C)  MINIMUM REQUIRED EXPENDITURE. FOR INDUSTRIAL CONSTRUCTION WORK ON
A PEAKING UNIT, THE MINIMUM REQUIRED EXPENDITURE IS  THIRTY  PERCENT  OF
THE  PROPERTY'S  TAXABLE  ASSESSED  VALUE IN THE TAX YEAR WITH A TAXABLE
STATUS DATE IMMEDIATELY PRECEDING THE ISSUANCE  OF  THE  FIRST  BUILDING
PERMIT,  OR IF NO PERMIT WAS REQUIRED, THE COMMENCEMENT OF CONSTRUCTION.
EXPENDITURES FOR RESIDENTIAL CONSTRUCTION WORK OR CONSTRUCTION  WORK  ON
PORTIONS  OF  PROPERTY TO BE USED FOR RESTRICTED ACTIVITIES SHALL NOT BE
INCLUDED IN THE MINIMUM REQUIRED EXPENDITURE.
  S 10. Paragraph 1 of subdivision a of section 11-271 of  the  adminis-
trative code of the city of New York, as added by local law number 47 of
the city of New York for the year 2008, is amended to read as follows:
  (1)  Application  for benefits pursuant to this part may be made imme-
diately following the effective date of the local law  that  added  this
section and continuing until March first, two thousand [eleven] FIFTEEN.
  S  11.  Section  11-271  of the administrative code of the city of New
York is amended by adding a new subdivision c to read as follows:

S. 5353                             6

  C. (1) NO  BENEFITS  PURSUANT  TO  THIS  PART  SHALL  BE  GRANTED  FOR
CONSTRUCTION  WORK  PERFORMED PURSUANT TO A BUILDING PERMIT ISSUED AFTER
APRIL FIRST, TWO THOUSAND FIFTEEN.
  (2)  IF  NO BUILDING PERMIT WAS REQUIRED, THEN NO BENEFITS PURSUANT TO
THIS PART SHALL BE GRANTED FOR CONSTRUCTION WORK THAT IS COMMENCED AFTER
APRIL FIRST, TWO THOUSAND FIFTEEN.
  S 12. Subdivision a of section 11-272 of the  administrative  code  of
the city of New York, as added by local law number 47 of the city of New
York for the year 2008, is amended to read as follows:
  a. Continuing use. For the duration of the benefit period, the recipi-
ent  of benefits shall file biennially with the department, on or before
the appropriate taxable status date, a statement of the  continuing  use
of  such  property  and any changes in use that have occurred, PROVIDED,
HOWEVER, THAT ANY RECIPIENT OF BENEFITS RECEIVING BENEFITS FOR  PROPERTY
DEFINED  AS  A  PEAKING UNIT SHALL FILE SUCH STATEMENT BIANNUALLY.  This
statement shall be in a form determined by the department and may be  in
any format the department determines, in its discretion, is appropriate,
including  electronic  format.  The  department  shall have authority to
terminate such benefits upon failure of a recipient to file such  state-
ment  by the appropriate taxable status date.  The burden of proof shall
be on the recipient to establish continuing eligibility for benefits and
the department shall have the authority to require that statements filed
under this subdivision be certified.
  S 13. Section 11-273 of the administrative code of  the  city  of  New
York is amended by adding a new subdivision e-1 to read as follows:
  E-1. CONVERSION OF USE BY PEAKING UNITS.  ANY APPLICANT WHOSE PROPERTY
HAS  BEEN  GRANTED  BENEFITS UNDER THIS PART FOR INDUSTRIAL CONSTRUCTION
WORK AS A PEAKING UNIT AND WHO CONVERTS SUCH PROPERTY IN ANY TAX YEAR TO
A USE THAT NO LONGER QUALIFIES IT AS A PEAKING UNIT, OR  WHO  USES  SUCH
PROPERTY IN A MANNER INCONSISTENT WITH THE DEFINITION OF A PEAKING UNIT,
SHALL BE INELIGIBLE FOR ABATEMENT BENEFITS DURING ANY SUCH TAX YEAR. ANY
SUCH  RECIPIENT  OF  BENEFITS SHALL PAY WITH INTEREST TAXES FOR WHICH AN
ABATEMENT WAS CLAIMED DURING ANY PORTION OF SUCH TAX YEAR.
  S 14. This act shall take effect immediately and shall  be  deemed  to
have been in full force and effect on and after March 1, 2011.

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