Senate Bill S6451

2015-2016 Legislative Session

Relates to property tax benefits for anaerobic digestion for agricultural waste; repealer

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Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 13, 2016	referred to local government

2015-S6451 (ACTIVE) - Details

Current Committee:: Senate Local Government
Law Section:: Real Property Tax Law
Laws Affected:: Amd §§483-a & 487, rpld §487 sub 1 ¶¶(e) & (f), RPT L

2015-S6451 (ACTIVE) - Summary

Relates to property tax benefits for anaerobic digestion for agricultural waste.

2015-S6451 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S6451

 TITLE OF BILL :  An act to amend the real property tax law, in
relation to property tax benefits for anaerobic digestion of
agricultural waste; and to repeal certain provisions of such law
relating thereto

 PURPOSE : The purpose of this bill is to amend the Real Property Tax
Law (RPTL) to clearly provide property tax benefits for anaerobic
digestion of agriculturally derived feedstocks that provide manure
management and renewable energy generation for use by a farm and/or
for sale through the grid; and to repeal those portions of RPTL § 487
that apply to farm waste energy systems to remove confusion with the
previously amended RPTL § 483-a.

 SUMMARY OF PROVISIONS :

Section 1 of the bill amends RPTL § 483-a to include language that
clearly allows for the sale of the energy generated by an anaerobic
digester through the grid (off-site) or to a farm (on-site), without
jeopardizing the tax exempt status of the anaerobic digester, the
equipment used to process the waste to energy and the property it is
located upon. The amendment includes the removal of the word
"agricultural" in reference to the land on which a digester is affixed
to ensure the tax exemption even if the land is zoned as other than
agricultural

Section 2 of the bill repeals the definitions of "farm waste electric
generating equipment" and "farm waste energy system" in RPTL § 487 to
remove confusion with the newly amended RPTL § 483-a.

Section 3 of the bill amends the definition of "incremental cost" in
paragraph (d) of subdivision 1 of RPTL § 487 to remove references to
farm waste energy systems.

Section 4 of the bill amends the section heading and subdivisions 2,
3, 4, 5 and 8 of RPTL § 487 to remove references to farm waste energy
equipment and systems.

Section 5 of the bill provides the effective date - immediately, and
applicable to the taxable year of 2014 and thereafter

 EXISTING LAW :  In 2013, the Legislature passed S. 4770-A/ A. 7982
(Gallivan/Magee) (Chapter 272 of the Laws of 2013) clarifying that
composting and anaerobic digestion of agricultural materials are
entitled to a real property tax exemption as "manure storage, handling
and treatment facilities" under RPTL § 483-a.

The Courts have since ruled that the existence of similar language is
RPTL § 487 is confusing and therefore have allowed the municipality of
Covington, NY (Wyoming County) to tax an anaerobic digester as Energy
Generation, an outcome unintended by previous legislation.

 JUSTIFICATION :  Anaerobic digestion of livestock manure and other
agriculturally derived organic materials provides multiple
environmental benefits including: water quality protection, air
quality improvement, reduction of greenhouse gases, energy efficiency
benefits, public health protection, natural resource conservation,
solid waste reduction and renewable energy generation. While the
benefits are many, farmers have been slow to adopt this technology due
to the high capital costs and tight financial margins of anaerobic
digestion.

To be eligible for tax benefits at least fifty percent by weight of
the anaerobic digester feedstock on an annual basis must consist of
livestock manure, farming wastes or crops grown specifically for use
as anaerobic digestion feedstock. This standard ensures that such
facilities maintain an important direct connection to farm operations,
helping them with critical nutrient management needs. The RPTL should
be revised and updated to include anaerobic digesters as integral
parts of agricultural manure management systems.

In light of the changes already made to RPTL § 483-a, which make
anaerobic digestion of agricultural materials eligible for a real
property tax exemption, the farm waste energy tax exemption in RPTL §
487 is no longer needed. Since any on-farm digester seeking a property
tax exemption will use § 483-a, keeping the § 487 exemption would be
confusing. That confusion could lead other municipalities to tax
anaerobic digesters as Energy Generation, potentially bankrupting
existing digesters and discouraging the development of new digesters
in New York State.

 LEGISLATIVE HISTORY : This is a new bill. It clarifies Chapter 272 of
the Laws of 2013 to state that composting and anaerobic digestion of
agricultural materials are entitled to a real property tax exemption
as "manure storage, handling and treatment facilities" under RPTL §
483-a.

 FISCAL IMPLICATIONS : None to the state.

 EFFECTIVE DATE : Immediately.

2015-S6451 (ACTIVE) - Bill Text download pdf

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

                                  6451

                            I N  S E N A T E

                            January 13, 2016
                               ___________

Introduced  by Sen. GALLIVAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Local Government

AN ACT to amend the real property tax law, in relation to  property  tax
  benefits  for anaerobic digestion of agricultural waste; and to repeal
  certain provisions of such law relating thereto

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

  Section  1.  Subdivision  1  of section 483-a of the real property tax
law, as amended by chapter 272 of the laws of 2013, is amended  to  read
as follows:
  1.  Structures  permanently  affixed  to  [agricultural]  land for the
purpose of preserving and storing forage in edible condition; farm  feed
grain storage bins; commodity sheds; manure storage, handling and treat-
ment  facilities,  including BUT NOT LIMITED TO, composting or anaerobic
digestion of agricultural materials, such as livestock manure and  farm-
ing  wastes, food residuals or other organic wastes associated with food
production or consumption with at least fifty percent by weight  of  its
feedstock  on an annual basis being livestock manure, farming wastes and
crops grown specifically for use as anaerobic  digestion  or  composting
feedstock  and  including  any  equipment  necessary  to  the process of
producing, collecting, storing,  cleaning  and  converting  biogas  into
forms  of  energy  and  GENERATION,  TRANSMISSION,  transporting, USE OF
AND/OR THE SALE OF biogas or energy on-site, OFF-SITE,  AND/OR  PURSUANT
TO  AN INTERCONNECTION AGREEMENT WITH A UTILITY; and bulk milk tanks and
coolers used to hold milk awaiting shipment to market  shall  be  exempt
from  taxation, special ad valorem levies and special assessments. "Food
residuals" means organic material, including, but not limited  to,  food
scraps,  food  processing  residue,  and  related soiled or unrecyclable
paper used in food packaging, preparation or cleanup.
  S 2. Paragraphs (e) and (f) of subdivision 1 of  section  487  of  the
real property tax law are REPEALED.
  S 3. Paragraph (d) of subdivision 1 of section 487 of the real proper-
ty tax law, as amended by chapter 515 of the laws of 2002, is amended to
read as follows:
  (d)  "Incremental  cost"  means  the increased cost of a solar or wind
energy system [or farm waste energy system] or component  thereof  which
also  serves  as  part of the building structure, above that for similar

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13434-01-5

S. 6451                             2

conventional construction, which enables its use  as  a  solar  or  wind
energy [or farm waste energy] system or component.
  S  4. The section heading and subdivisions 2, 3, 4, 5 and 8 of section
487 of the real property tax law, the section heading  and  subdivisions
2,  3  and  4 as amended by chapter 515 of the laws of 2002 and subdivi-
sions 5 and 8 as amended by chapter 344 of the laws of 2014, are amended
to read as follows:
  S 487. Exemption from  taxation  for  certain  solar  or  wind  energy
systems [or farm waste energy systems].
  2. Real property which includes a solar or wind energy system [or farm
waste  energy system] approved in accordance with the provisions of this
section shall be exempt from taxation to the extent of any  increase  in
the value thereof by reason of the inclusion of such solar or wind ener-
gy  system  [or farm waste energy system] for a period of fifteen years.
When a solar or wind energy system or components thereof [or farm  waste
energy  system]  also  serve  as  part  of  the  building structure, the
increase in value which shall be exempt from taxation shall be equal  to
the  assessed value attributable to such system or components multiplied
by the ratio of the incremental cost of such system or components to the
total cost of such system or components.
  3. The president of the authority shall provide definitions and guide-
lines for the eligibility for exemption of the  solar  and  wind  energy
equipment  and  systems  [and  farm  waste energy equipment and systems]
described in paragraphs (a) and (b) of subdivision one of this section.
  4. No solar or wind energy system [or farm waste energy system]  shall
be  entitled  to  any  exemption from taxation under this section unless
such system meets the guidelines set by the president of  the  authority
and all other applicable provisions of law.
  5. The exemption granted pursuant to this section shall only be appli-
cable  to  solar  or  wind energy systems [or farm waste energy systems]
which are (a) existing or constructed  prior  to  July  first,  nineteen
hundred  eighty-eight  or  (b)  constructed subsequent to January first,
nineteen hundred ninety-one and prior to  January  first,  two  thousand
twenty-five.
  8.  (a)  Notwithstanding  the  provisions  of  subdivision two of this
section, a county, city, town or village may by local law  or  a  school
district, other than a school district to which article fifty-two of the
education law applies, may by resolution provide that no exemption under
this section shall be applicable within its jurisdiction with respect to
any  solar  or  wind  energy  system [or farm waste energy system] which
began construction subsequent to January first, nineteen  hundred  nine-
ty-one or the effective date of such local law, ordinance or resolution,
whichever  is later. A copy of any such local law or resolution shall be
filed with the commissioner and with the president of the authority.
  (b) Construction of a solar or wind energy system  [or  a  farm  waste
energy  system] shall be deemed to have begun upon the full execution of
a contract or interconnection agreement with a utility; provided  howev-
er, that if such contract or interconnection agreement requires a depos-
it  to be made, then construction shall be deemed to have begun when the
contract or interconnection agreement is fully executed and the  deposit
is  made.  The owner or developer of such a system shall provide written
notification to the appropriate local jurisdiction or jurisdictions upon
execution of the contract or the interconnection agreement.
  S 5. This act shall take effect immediately.

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Senate Bill S6451

Sponsored By

Archive: Last Bill Status - In Senate Committee Local Government Committee

Actions

2015-S6451 (ACTIVE) - Details

2015-S6451 (ACTIVE) - Summary

2015-S6451 (ACTIVE) - Sponsor Memo

2015-S6451 (ACTIVE) - Bill Text download pdf

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Sponsored By

Patrick M. Gallivan

Archive: Last Bill Status - In Senate Committee Local Government Committee

Actions

2015-S6451 (ACTIVE) - Details

2015-S6451 (ACTIVE) - Summary

2015-S6451 (ACTIVE) - Sponsor Memo

2015-S6451 (ACTIVE) - Bill Text download pdf

Comments