Lewiston City Council opposes change in property tax law
Fri Mar 12, 2021 7:00 AM
By Terry Duffy
In its working session on Monday, Lewiston City Council approved a resolution opposing Â§575-b, a proposed amendment to the New York State Property Tax Act Â§487 that, if approved, would dramatically change the way real estate is valued for wind and solar power systems.
City prosecutor Al Bax informed the board: âThis is in response to the state’s proposal to adopt what they call Â§575-b, which is an amendment to the property tax law. Indeed, this would allow the state to control, in effect, the taxes that can be imposed on properties that are alternative energy sources. So solar and wind, obviously, if they did, that would take away from our local government the power to locally control this issue.
“And indeed, if they reduce the tax below our local tax rate, then (it) would exhaust our tax base.”
As it stands, state law provides for a 15-year effective tax exemption on properties that contain wind and solar energy projects. However, this exemption is not compulsory. In fact, Â§487 allows local governments to opt out of the exemption and tax wind or solar power projects based on the estimated value of a property. If a municipality withdraws from Â§487, it can require that a wind or solar project enter into a payment in lieu of taxes (PILOT) agreement.
As part of the 2022 state budget preparation / review process, New York is now seeking to include Â§575-b in 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 to assessing property tax for wind and solar energy projects, âaccording to a state memo issued to city supervisors and provided by Cambria City Supervisor Wright Ellis.
“The governor introduced a budget bill this year that will abolish the city’s ability to value real estate used for renewable energy projects, including all projects with a rated capacity equal to or greater than one megawatt.” , Ellis wrote. “I am contacting colleagues from all over the state to do something about this”
According to the memo, “More specifically, the estimated value of wind and solar power projects will be determined by an income capitalization or discounted cash flow approach that takes into account a valuation model created by the Tax and Finance Department. New York State, and in consultation with the New York State Energy Research and Development Authority. The valuation will also include a discount rate for solar or wind power that is set annually by the New York State Department of Taxation and Finance. â¦ 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 power projects that can be built anywhere in New York City, and not just to proposed large Section 10 or 94-c projects in northern New York. the state or western state of New York.
“If this change is adopted, the state valuation model and state controlled discount rate will almost certainly provide the tax incentives that developers and state desire, and make the Â§487 waiver irrelevant.” . Developers will no longer need a PILOT to get a rebate, the rebate will be incorporated into tax law and controlled by the state.
Bax said: âWe have already (lost) a lot of interest in solar in this area. This is my opinion, and I think it is the opinion of the city council that we want to keep this local control with the city council.
With that, he introduced a resolution that âopposes the addition of Â§ 575-b for the property tax law in 2022 to the New York State budgetâ.
The resolution reads as follows:
âWhile the new Â§487 property tax law provides for a 15-year property tax exemption for properties on which wind or solar energy projects have been built.
âConsidering that the property tax exemption is not mandatory under current law, since Â§487 allows local governments to withdraw from the exemption and tax wind or solar energy projects on the basis of their total assessed value.
âAnd while the city is not withdrawing from current Â§487, then there is a need for wind or solar projects to be subject to payment in lieu of taxesâ¦ agreement.
âAnd while in the current provision of Â§487, cities have the option of negotiating a PILOT with a developer or requiring that the project pay the full tax, based on the estimated value. …
âAnd while. by the budget proves the state is seeking to add Â§ 575-b to the property tax law, which will radically change the way real estate is valued for wind and solar energy systems (equal to or greater to one megawatt) by establishing a standardized statewide approach for wind and solar energy projects.
âAnd while through the budget process, the state also seeks to require that the estimated value of wind or solar power projects be determined by a revenue capitalization or discounted tax flow approach that takes into account a valuation model created by the New York Department of Taxation. and Finance (in consultation with NYCERDA). …
âAnd while during the budget process, the state has determined that the assessment will also include a discount rate for solar or wind power that is set annually by the New Brunswick Department of Taxation and Finance. York.
Be it hereby resolved that the Town of Lewiston firmly respect the right to self-government, established … in the constitution of the State of New York, in particular with respect to land use and taxation. real estate.
“And be it further resolved, Governor Cuomo included Â§575-b in this year’s budget bill to abolish the ability of the Town of Lewiston to appraise real property used for construction projects. renewable energy and eliminate any control provided by Â§487. …
âAnd be it further resolved that the Town of Lewiston categorically oppose the addition of Section 575 to the Property Tax Act in Budget 2022.â¦
“And be it further resolved that the Town of Lewiston call upon the elected officials of Niagara County and the State of New York to oppose Section 575-b of the Property Tax Act before it is ‘it is not adopted in the budget process. “
In a recorded vote put forward by Councilor Bill Geiben, seconded by Councilor John Jacoby, the resolution was passed unanimously by City Council without comment.