BILL NUMBER:S5822

TITLE OF BILL:

An act to amend the real property tax law, in relation to the
definition of "public utility mass real property" for purposes of
assessment ceilings for local public utility mass real property

SUMMARY OF SPECIFIC PROVISIONS:

This bill amends subdivision 3 of § 499-hhhh of Real Property Tax Law
to include gas, steam, and electric utility real property in the
definition of "Public Utility Mass Real Property".

JUSTIFICATION:

The State Department of Taxation and Finance (the Department) provides
assessments on special franchise properties (utility and
telecommunications) on public rights of way. However, assessments on
similar properties located on private lands are performed locally.

In almost every other state, the responsibility for assessing utility
property, both in the public way and on private property, is assigned
to a state agency. This is largely due to the complexity of valuing
such properties and the lack of technical training that oftentimes
exists in many localities. As a result, assessments of transmission
              

and distribution property by local assessors varies greatly, with
little apparent pattern.

In November 2013, Governor Cuomo approved legislation that
consolidates the assessment function of all telecommunications utility
real property under the Department because it will result in
significant savings to localities, taxpayers, and customers. Because
the utility is required to pay an assessment to the Department to
support the Department's newly-expanded role, the savings can be
achieved at no additional cost to the State. The New York State Tax
Reform and Fairness Commission also recently recommended that the
State assess complex real property, including all utilities, for the
same reason.

The benefits recognized in consolidating assessments for
telecommunications real property would also be realized for real
property owned and operated by gas, steam, and electric utilities.
This proposal would provide significant relief to localities and
result in savings to utility customers at no cost to the State.

The Department is already well qualified to assess complex properties
since it currently values similar properties located in the public
rights of way and conducts advisory appraisals of transmission and
distribution property on private land for assessing units throughout
the State. Allowing the Department to provide assessments on real
property owned and operated by gas, steam, and electric utilities
would provide financial relief to local governments who must expend
scarce resources to secure the expertise the Department already
possesses.


This proposal would also help local governments avoid expensive
litigation to defend the assessments in court and pay costly refunds,
thereby further saving taxpayers money. According to a March 2012
preliminary report issued by the Governor's Mandate Relief Redesign
Team, transferring this assessment responsibility from local assessors
to the State will save local governments up to $2million per year.

Centralized assessments would also provide assessment certainty to
utilities which must deal with multiple independent, individual
assessing units and reduce the need to challenge assessments in court.
The administrative and litigation-related savings would be passed on
to utility customers.

PRIOR LEGISLATIVE HISTORY:

Chapter 475 of the Laws of 2013

FISCAL IMPLICATIONS:

Undetermined.

EFFECTIVE DATE:

Immediately; provided that the amendments to subdivision 3 section
499-hhhh of the real property tax law made be section one of this act
shall not affect the repeal of such section and shall be deemed
repealed therewith.