BILL NUMBER: S8012

SPONSOR: HARCKHAM
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to the assessment
of solar or wind energy systems

 
PURPOSE OR GENERAL IDEA OF BILL:

This legislation would codify an appraisal method for New York's wind
and solar projects.

 
SUMMARY OF SPECIFIC PROVISIONS:

Section 1 amends section 575-b of the real property tax law to add new
subsections (d) and (e).

Subsection (d) describes that expenses associated with certain host
community benefits, the decommissioning of solar and wind energy systems
and community solar subscriber management costs associated with solar
energy systems shall be included as expenses.
              

Subsection (e) describes that federal investment and production tax
credits granted by the Internal Revenue Code and environmental values,
including but not limited to renewable energy credits, shall be deemed
intangible assets and not included as revenue streams.

Section 2 amends section 575-b of the real property tax law to add new
subdivision 5.  Subdivision 5 states that any assessing unit establish-
ing valuations on the basis of the model published by the department of
tax and finance in 2025, including an assessing unit that has stipulated
to rely on such model to settle a proceeding to review an assessment of
real property pursuant to article seven of chapter 59, shall not be
subject to imposition of costs pursuant to section seven hundred twen-
ty-two of this chapter.

Section 3 states that this act shall take effect immediately.

 
JUSTIFICATION:

New York is in the midst of an affordability crisis. Incentivizing and
encouraging the expansion of wind and solar projects expands access to
cheap and reliable wind and solar energy to all New Yorkers, yet the
financial viability of these projects is threatened by the lack of clar-
ity surrounding the appraisal methodology currently used in New York.
Also, the urgent transition to clean energy and meeting ambitious renew-
able energy goals are crucial steps in combating climate change, the
scale and severity of which is widely known, and deeply felt, here in
New York State.

The predictable and stable taxation for renewable energy projects is
necessary to ensure the financial viability of wind and solar develop-
ments. The Albany County Supreme Court's recent decision, in Airey, et
al. v. State of New York, that ruled the Department of Taxation and
Finance exceeded the powers granted by the Legislature and ruled section
575-b of the Real Property Tax Law unconstitutional. This ruling has
created great uncertainty over how to value and assess renewable energy
projects in New York State, resulting in increased risk and exposure to
both renewable energy developers and local taxing jurisdictions. This
uncertainty disincentivizes investments in the solar and wind sector,
delaying critically needed projects that will help New York transition
to renewable energy sources. The implementation of a reliable appraisal
model will fill in the current gaps and further New York's progress
towards its affordability and clean energy goals.

It is important that the uncertainty created by the recent court deci-
sion be quickly resolved because NYSERDA is expected to issue a solic-
itation for Large-Scale Renewables within the next few months.  Without
the predictability of the tax assessment model, renewable energy project
developers will have to estimate future tax costs at an increased rate
over the life of their projects, which will lead to increased
bid/Renewable Energy Certificate (REC) prices, and potentially higher
electric costs. Even if a "stay" is granted in the court case, the
uncertainty isn't resolved, since "stays" are temporary, and project
developers are bidding based on the full 20 year life of a REC contract.
This bill will clarify the issues raised by the court, and will stabi-
lize REC bid prices this year, and for future years.

 
PRIOR LEGISLATIVE HISTORY:

This is a new bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effect immediately.