S T A T E O F N E W Y O R K
________________________________________________________________________
7698
2019-2020 Regular Sessions
I N A S S E M B L Y
May 16, 2019
___________
Introduced by M. of A. RAIA -- read once and referred to the Committee
on Corporations, Authorities and Commissions
AN ACT to amend the public authorities law, in relation to prohibiting
the Long Island power authority from bringing a tax certiorari chal-
lenge against a municipality; and providing for the repeal of certain
provisions upon expiration thereof
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Legislative intent. The legislature finds and declares that
the Long Island power authority ("LIPA") took over the Long Island
lighting company ("LILCO") in 1998. As part of that takeover, represen-
tatives from both LILCO and LIPA made repeated public representations
that LIPA would drop all outstanding tax certiorari challenges previous-
ly initiated by LILCO, and would not challenge the assessments on its
four "legacy" power plants ("plants") in the future. For over a decade
LIPA adhered to its commitment. In 2010, however, LIPA brought suit
against the county of Nassau, the towns of Brookhaven and Huntington,
and the village of Port Jefferson ("the assessing municipalities"),
alleging that the assessing municipalities have over valued the plants
thereby seeking a reduction in their assessed value and a repayment of
the over-taxes they paid.
The legislature further finds that according to LIPA, if these tax
certiorari challenges are successful against the assessing munici-
palities, in addition to a significant reduction in the assessed value
of each plant going forward, the "back-taxes" owed to it would be:
$500,000,000 from Huntington; $200,000,000 from Nassau County; and
$300,000,000 from Brookhaven/Port Jefferson. That refund would be borne
by all taxpayers across the respective municipality, and would be due
immediately. If the assessing municipalities lose at trial, in order to
refund that exorbitant amount of money would require a massive increase
in property taxes for residents in the respective municipality. In addi-
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD11137-01-9
A. 7698 2
tion, the drastic reduction in the value of each plant would immediately
wipe out a significant amount of school taxes generated by such plant to
the school district in which the respective plant is located. In the
Northport-East Northport school district, if the Northport plant were
found to be valued at what LIPA alleges its value to be, the school
district would immediately lose one-third of its tax base.
Therefore, the legislature finds LIPA made a number of promises to the
Long Island community, federal, state and local elected officials,
school districts, and taxpayers in the assessing municipalities that it
would not challenge its taxes. That promise was relied upon by the
community and upheld by LIPA for years. LIPA broke that promise and
therefore the legislature finds it necessary to codify in statute the
promises LIPA agreed to before significant financial harm is brought
upon the assessing municipalities.
§ 2. Section 1020-f of the public authorities law is amended by adding
a new subdivision (a-1) to read as follows:
(A-1) 1. NOTWITHSTANDING SUBDIVISION (A) OF THIS SECTION, THE AUTHORI-
TY SHALL NOT AND IS PROHIBITED FROM BRINGING A TAX CERTIORARI CHALLENGE
AGAINST ANY MUNICIPALITY IN WHICH ONE OR MORE OF ITS ELECTRIC GENERATING
FACILITIES ARE LOCATED, UNLESS THE MUNICIPALITY ABUSIVELY INCREASES THE
ASSESSMENT ON THE AUTHORITY'S PROPERTY IN WHICH SUCH ELECTRIC GENERATING
FACILITY IS LOCATED.
2. ANY TAX CERTIORARI CHALLENGES THE AUTHORITY, OR ITS PREDECESSOR IN
INTEREST, INITIATED PRIOR TO OR AFTER THE ENACTMENT OF THE CHAPTER OF
THE LAWS OF TWO THOUSAND NINETEEN THAT ADDED THIS SUBDIVISION AGAINST
ANY MUNICIPALITY THAT WAS NOT THE RESULT OF AN ABUSIVE ASSESSMENT
INCREASE ARE DEEMED VOID AND NON-JUSTICIABLE.
§ 3. This act shall take effect immediately; provided, that this act
shall be deemed to have been in full force and effect on and after Janu-
ary 1, 2009; provided further, that any memorandum of understanding or
settlement agreement previously entered into between a municipality and
the authority as a result of a tax certiorari challenge reducing the
assessed value of one of the authority's electric generating facilities
shall be deemed void; and provided further, that paragraph 2 of subdivi-
sion (a-1) of section 1020-f of the public authorities law added by
section two of this act shall expire and be deemed repealed one year
after the effective date of this act.