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Lewiston Town Board opposes change in real property tax law

Fri, Mar 12th 2021 07:00 am

By Terry Duffy

Editor-in-Chief

At its Monday work session, the Lewiston Town Board approved a resolution in opposition to §575-b, a proposed amendment to New York State Real Property Tax Law §487 that, if approved, would drastically alter how real property is assessed for wind and solar energy systems.

Town Attorney Al Bax apprised the board, “This is in response to the proposal from the state to enact what they’re calling §575-b, which is an amendment to the real property tax law. Effectively, it would allow the state to, in effect, control the taxes that can be imposed on properties that are alternative energy sources. So, solar and wind, obviously, if they would do so, it would take our local government power away on local control over that issue.

“And in effect, if they reduce the tax below our local tax rate, (it) would be then depleting our tax base.”

As it currently stands, the state law provides for a 15-year real tax exemption on properties that contain wind and solar energy projects. This exemption is not mandatory, however. In fact, §487 allows for local governments to opt out of the exemption, and tax wind or solar energy projects based on a property’s assessed value. If a municipality does opt out of §487, it can require a wind or solar project to enter into a payment in lieu of taxes (PILOT) agreement.

As part of the state’s 2022 budget preparation/review process, New York is now seeking to include §575-b in the Real Property Tax Law. If passed by both houses, signed by the governor and enacted into law, it would allow New York “to establish a statewide standardized approach for real property tax assessment for wind and solar energy projects,” according to a state memo issued to town supervisors and provided by Town of Cambria Supervisor Wright Ellis.

“The governor has introduced a budget bill this year that will abolish the town’s ability to assess real property used for renewable energy projects, including all projects with a nameplate capacity equal to or greater than one megawatt,” Ellis wrote. “I’m reaching out to colleagues across the state to do something about it”

According to the memo, “Specifically, the assessed value for wind and solar energy projects will be determined by an income capitalization or discounted cash approach that considers an appraisal model created by the New York State Department of Taxation and Finance, and in consultation with the New York State Energy Research and Development Authority. The assessment will also include a solar or wind energy discount rate that is set annually by the New York State Department of Taxation and Finance. … The proposed change will apply to all solar and wind energy projects with a nameplate equal to or greater than one megawatt.”

The memo said the provision would “apply to wind or solar energy projects that can be built anywhere in New York, not just large Article 10 or 94-c projects proposed in upstate or Western New York.

“If this change is adopted, the state appraisal model and the state-controlled discount rate will almost certainly provide the tax incentives desired by the developers and the state, and make the §487 opt out irrelevant. Developers will no longer need a PILOT to get a discount, the discount will be built into the tax law and controlled by the state.”

Bax said, “We already (lost) a lot of interest in solar in this area. It is my opinion, and I think it’s the Town Board’s opinion that we want to keep that local control with the Town Board.”

With that, he presented a resolution that “is in opposition to the addition of § 575-b for the real property tax law in 2022 of the New York state budget.”

The resolution reads as follows:

“Whereas the New Real Property Tax Law §487 provides a 15-year real property tax exemption for properties on which wind or solar energy projects were built.

“Whereas the real property tax exemption is not mandatory under current law, since §487 allows local governments to opt out of the exemption and tax wind or solar energy projects based on their full assessed value.

“And whereas the town does not opt out of the current §487, it’s then required the wind or solar energy projects into a payment of lieu of taxes … agreement.

“And whereas in the current §487 provision, towns have the ability to negotiate a PILOT with a developer or require that at project pay full taxation, based on the assessed value. …

“And whereas. through the budget proves the state seek to add § 575-b to the real property tax law, which will drastically change the way real property is assessed for wind and solar energy systems (equal to or greater than one megawatt) by establishing a statewide standardized approach for wind and solar energy projects.

“And whereas through the budget process the state also seeks to mandate that the assessed value for wind or solar energy projects will be determined by an income capitalization of income or discounted tax flow approach that considers an appraisal model created by the New York Department of Taxation and Finance (in consultation with NYCERDA). …

“And whereas the through the budget process the state determined the assessment will also include a solar or wind energy discount rate that is set annually by the New York Department of Taxation and Finance.

“Hereby be it resolved the Town of Lewiston holds strongly to the right to home rule, established … in the New York state constitution, especially in with regards to land use and real property taxation.

“And be it further resolved Gov. Cuomo has included §575-b in this year’s budget bill in order to abolish the Town of Lewiston’s ability to assess real property used for renewable energy projects and eliminate any control provided by §487. …

“And be it further resolved the Town of Lewiston is adamantly opposed to the addition of §575 to the real property tax law in the 2022 budget. …

“And be it further resolved the Town of Lewiston calls upon Niagara County and New York state elected officials to oppose §575-b of the real property tax law before it is enacted in the budget process.”

On a roll call vote presented by Councilman Bill Geiben, seconded by Councilman John Jacoby, the resolution was unanimously passed by the Town Board without comment.

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