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Department of Taxation and Finance

Nuclear Generating Plants and the Exemption Provided by Section 485 of the Real Property Tax Law

March 2002
  1. Background

    New York, like many other states, has restructured its electric industry in order to encourage the development of competition in the production and sale of electricity. It is generally believed that competition will provide opportunities for lower energy prices and new, innovative services. In addition, the move to competition is expected to attract new businesses and enhance the state's economic growth. Development of a competitive electricity marketplace involves the removal of the ownership and operation of electric generating facilities from electric utilities. Independent third parties now own and operate nearly all of the generating facilities and sell electricity in a competitive market.

    The Public Service Commission began examining competitive electric issues in 1993. In 1996, it issued a policy statement to guide New York's progress toward a competitive marketplace (Opinion No. 96-12, Opinion and Order Regarding Competitive Opportunities for Electric Service). In a series of environmental impact statements prepared in conjunction with consideration of plans to divest generation, it was concluded that, in general, assessments for power plants are likely to change as a result of the sales. In almost all cases, it was found that the assessments are likely to decrease, in some cases significantly.

    The Office of Real Property Tax Services (ORPTS) also studied the issue and the potential impact of divestiture on the appraisal method used for valuation of plants for assessment purposes, on the assessments, and on equalization rates. The existence of a market for electric generating facilities and the emergence of these facilities as income producing properties may impact the values of these facilities for real property tax purposes. In recognition of these factors, ORPTS is now considering all three approaches to valuation (e.g., cost, market and income), where appropriate data are available, in the appraisals it prepares for market value surveys and advisory appraisal purposes.

    Seeking to understand the impact of divestiture on real property values, the State directed ORPTS, in consultation with the Department of Public Service, to study these impacts and prepare a report that "shall review and detail the projected real property tax implications of the divestiture of generating assets by investor-owned utilities and make recommendations on ways to address any negative fiscal implications of such divestiture on local governments."1 This report, which also addressed "the effect of such divestiture on the methods of evaluation of such generating facilities and assets for real property tax purposes," was issued in December 1999.2

    The report found that significant changes in the market values of some plants for tax purposes could occur in the years following restructuring of the industry. The potential volatility would likely create an uncertain fiscal planning environment for local governments -- especially those heavily reliant on property taxes paid by generating plants -- in some areas of the state. Apportionment of property taxes between municipalities in the same school district or county would also likely experience volatility as value changes were incorporated into determination of the state equalization rates used in the apportionment process. The report also recommended establishment of a multi-year payment-in-lieu-of-taxes (PILOT) program for generating plants until such time as market conditions in the industry stabilize. In response to the report's recommendations, a program of this type was created for nuclear plants under Chapter 87 of the Laws of 2001. The legislation in question also requires ORPTS to issue a report annually on the factors affecting the market for these facilities and the impact of the PILOT program on local property taxes. The present report is intended to fulfill this obligation for 2002.


  2. Nuclear Power Plants in New York

    At the present time there are seven nuclear power plants located in New York State. Their locations are shown in Figure 1. Although there are seven plants, they are located in only three towns. Three are in the Town of Scriba, Oswego County (Nine Mile 1, Nine Mile 2, and Fitzpatrick); three more are in the Town of Cortlandt, Westchester County (Indian Point 1, Indian Point 2, and Indian Point 3); and the remaining one (Ginna) is in the Town of Ontario, Wayne County. Six of the seven plants are currently in operation, but the Indian Point 1 plant was shut down permanently in 1974. Two of the plants -- Fitzpatrick and Indian Point 3 -- were owned by the tax-exempt New York State Power Authority before their sale to a private sector buyer in November 2000, and the remainder were already taxable (to their utility owners) prior to sale.

    Chapter 87 of the Laws of 2001 enacted Section 485 of the Real Property Tax Law, which permits affected local governments to opt into a program that exempts nuclear generating facilities from the real property tax for a period that can extend through the 2015 roll year. Under this exemption statute, PILOTs are required for the duration of the exemption, and are based on the taxes that were paid in the last taxable year unless a different schedule of annual payments is agreed to by the plant owner and the affected local government. If the plant is subject to a PILOT based on the last taxable year, a court-ordered reduction in the (exempt) assessment will result in a proportionate reduction in the PILOT payment.

    If all the affected local governments adopt the provisions of Section 485, the wholly exempt status thereby conferred to the nuclear generating property effectively removes its assessment and market value from equalization rate calculations. However, any shift in tax apportionment of more than 2 percent can be phased in over a five-year period at the option of a county or school district. Further, the market value equivalent of any PILOT payment is added to the market value used in education aid determination in order to ensure that an affected school district's property wealth is measured appropriately.

    At time of writing, PILOT provisions have been triggered by Section 485 only in the case of Oswego County nuclear facilities. The Nine Mile 1, Nine Mile 2, and Fitzpatrick plants, are covered by an agreement between the plant owners and the County of Oswego, the Oswego and Mexico school districts, and the Town of Scriba. No agreements have been signed relative to the Indian Point plants in Westchester County or the Ginna plant in Wayne County.

    Figure 1. Location of Nuclear and Generating Plants in New York State


  3. Valuation of Nuclear Plants

    The available methods for determining market value for tax purposes are the "comparable sales," "income," and "cost" approaches. 3 Under the first approach, recent sales of similar properties are used to determine the value of the property being assessed. In the past, when generating plants were rarely sold, the standard comparable sales approach had limited relevance. The income approach is based on the idea that the value of the property reflects the net income it can earn in the future. The summation of annual future property income, discounted to its present value, plus any reversion value at the end of the holding period, determines what the property is worth at the present time. The cost approach, which is applicable to improvements only, focuses on the construction cost of the improvement when it was first built (original cost), what it would cost to build it today (reproduction cost), or what it would cost to replace it with the lowest cost structure having the same or better performance characteristics (replacement cost). Under any application of the cost approach, the estimated amount of depreciation must be subtracted from the estimated construction cost in determining value. This depreciation component can be large for some properties and it is often difficult to quantify, as it must include not only physical deterioration but also functional and economic obsolescence. These latter factors are reflective of not only the plant's particular characteristics but also external factors such as technological change and economic conditions in the industry.

    The existence of alternative methods to determine value (which, of course, may produce significantly different results), together with the lack of statutory valuation guidelines in New York, has led to litigation. New York's courts have frequently stepped in to specify the right approach in a particular instance. For example, in Brooklyn Union Gas v. State Board of Equalization and Assessment, the tangible component of special franchise property (utility equipment that is placed in the public way) was held to be "specialty property" and thus to be assessed using the reproduction cost method.4 Prior case law accepting assessment based on the income (net earnings) approach had only applied that approach to the intangible element, i.e., the value of the right of the utility to conduct business by placing its property in the public way. The court cited previous cases involving the valuation of railroad and utility property in reaching this determination, including Tenneco v. Town of Cazenovia.5 The court in Tenneco had refused to extend the net earnings approach to non-franchise utility property. In Brooklyn Union, the court also approved the state practice of computing the intangible element as a percentage of the value of the tangible. In another relevant case, National Fuel Gas Distribution Co. v. State Board of Equalization and Assessment, the rules of the State Board for implementing the reproduction cost method for the tangible component and allowing complaints against factors used in the computations were held to be neither arbitrary nor capricious.6 More recently (1994), in Long Island Lighting Company v. Assessor for Town of Brookhaven, the court held that a nuclear power plant was "specialty property," and was therefore to be assessed using the reproduction-cost-new-less depreciation method.7

    The courts' favoring of the reproduction cost approach in the case of power plants and other utility property is clearly reflective of the fact that there was no market for such property until very recently, and, perhaps, the fact that rates utilities were allowed to charge were, for the most part, a function of costs. However, with the onset of divestiture, sales of power plants, and deregulation of the rate structure, the essential facts have changed for these facilities, and prior case law may no longer be a clear standard for their assessment. While the views of courts in future cases remain to be seen, it may be expected that power plants will come to be viewed as being similar to most other types of property. Appraisal methodology generally favors use of all three approaches to valuation, provided appropriate data are available for each, and it is likely that courts would accept the relevance of this basic standard of professional practice.8 In valuing nuclear plants in New York in the post-deregulation era, it is thus considered prudent to use all the available valuation approaches and data.

    ORPTS has assembled data concerning transactions involving nuclear plants (Table 1). As evident from the data, the sales are often quite complex, involving special considerations such as agreements between the seller and buyer for purchase of power at specified prices during a given time period. Some transactions may also include fuel as well as the plant itself, and some may fail to meet the standard criteria for "arm's length" market transactions due to complicating factors specific to each case. Such complicating factors include the sale of multiple plants in a single transaction, and the matter of decommissioning costs and how such costs will be underwritten. In addition, the purchasers, operating in a competitive wholesale electric market, may consider certain information on the details of the transactions to be sensitive financial data that should be safeguarded from the eyes of potential competitors. Thus, some of the detailed information on a given sale may not be available to assessing officials, and this limits the usefulness of the sale in determining the plant's value.

    As indicated by the data in Table 1, the available plant sales average to about $218,000 per megawatt of generating capacity, exclusive of payments for fuel and not considering any additional factors such as electricity purchase agreements. However, there is considerable variation around this average. For example, the sale price citied for one of the Millstone plants in Connecticut was nearly $900,000 per megawatt, but several other plants sold in the $16,000 to $30,000 per megawatt range. Overall, the New York plants sold in the $360,000 to $435,000 per megawatt range. Some New York facilities, such as Indian Point, have favorable locations (in this case, proximity to the New York City metropolitan area) relative to other plants that were sold and this can influence the sale price. Please note that some of the transactions listed in Table 1, are yet to be completed. For example, the sale of the Vermont Yankee plant has not yet closed, and a re-evaluation of the terms of the sale agreement is being completed by the State of Vermont.


ORPTS has completed valuations for some of the New York plants over the past six years, and the resulting data are reported in Table 2. The plants for which values are available include Nine Mile 1, Nine Mile 2, and Indian Point 1 and 2 (appraised as a unit). The 1996 values given in the table reflect the pre-divestiture (i.e., rate regulation) situation, and are thus based on reproduction cost less depreciation. The 1999 values were determined after divestiture of plants had begun, but before any nuclear sales had been completed, and the 2001 values reflect a time period in which the plants were being sold. In addition to the recent sales data available for the plants in question, income data were also available in the form of power purchase contracts that were negotiated in conjunction with the sales agreements and market prices for electricity that are established on an ongoing basis through the New York State Independent System Operator (ISO), which manages a market mechanism whereby energy suppliers and purchasers bid in a competitive marketplace. This income information relating to the likely energy prices faced by a given generating plant can be used in developing an income-based value for the plant.

The ORPTS appraisals, based on consideration of all three valuation approaches, indicate that the value of the Nine Mile plants in Oswego County fell by about half over the period in question. However, the combined values of Indian Point 1 and 2 actually increased by approximately 11 percent over the same period. This reflects the advantageous location of the facility in relation to the New York City metropolitan area and the higher electricity prices that prevail in this area. Please note that the 2001 Indian Point valuation is tentative, pending resolution of an equalization rate complaint filed by the municipality. It may decrease as a result of this filing, but it is highly unlikely to show the same pattern of decline seen for the Nine Mile plants.

Table 2. Appraisals of Nuclear Generating Plants by
NYS Office of Real Property Tax Services
Market ValuePercent
Scriba Nine Mile 1 $340,466,146 $325,000,000 $186,000,000 -42.8%
Scriba Nine Mile 2 1,712,015,241 1,375,000,000 623,500,000 -54.7%
Cortlandt Indian Point 1+2 645,645,392 539,000,000 717,500,000* +11.1%
*Tentative valuation, pending resolution of equalization rate complaint.


  • Fiscal Impact of PILOT Agreements

    As indicated earlier in this report, the only nuclear plants currently subject to the provisions of RPTL Section 485 are those located in the Town of Scriba, Oswego County (see Figure 2). Agreements that have been negotiated between the owners of the Nine Mile and Fitzpatrick plants and the county, town, and school district governments are currently in place and they will last for the period 2001-02 through 2010-11 unless cancelled before then by the signatories. The agreements include the following schedules of PILOT payments (Table 3, 4, 5).


Table 3. PILOT Payment Schedule and Allocation -- Nine Mile 1 Plant
Fiscal YearTotal
School District
County ShareTown Share
2001-02 $5,000,000 $2,890,000 $1,860,000 $250,000
2002-03 4,500,000 2,600,000 1,680,000 220,000
2003-04 4,250,000 2,460,000 1,580,000 210,000
2004-05 4,000,000 2,310,000 1,490,000 200,000
2005-06 4,000,000 2,310,000 1,490,000 200,000
2006-07 4,000,000 2,310,000 1,490,000 200,000
2007-08 4,000,000 2,310,000 1,490,000 200,000
2008-09 4,000,000 2,310,000 1,490,000 200,000
2009-10 4,000,000 2,310,000 1,490,000 200,000

Table 4. PILOT Payment Schedule and Allocation -- Nine Mile 2 Plant
Fiscal YearTotal
School District
County ShareTown Share
2001-02 $31,500,000 $18,210,000 $11,730,000 $1,560,000
2002-03 27,500,000 15,900,000 10,240,000 1,360,000
2003-04 20,250,000 11,710,000 7,540,000 1,000,000
2004-05 17,000,000 9,830,000 6,330,000 840,000
2005-06 16,000,000 9,250,000 5,960,000 790,000
2006-07 16,000,000 9,250,000 5,960,000 790,000
2007-08 16,000,000 9,250,000 5,960,000 790,000
2008-09 16,000,000 9,250,000 5,960,000 790,000
2009-10 16,000,000 9,250,000 5,960,000 790,000
2010-11 16,000,000 9,250,000 5,960,000 790,000

Table 5. PILOT Payment Schedule and Allocation -- Fitzpatrick Plant
Fiscal YearTotal
School District
County ShareTown Share
2000-01 $7,277,000 $3,929,580 $2,910,800 $436,620
2001-02 $7,277,000 $3,929,580 $2,910,800 $436,620
2002-03 $7,277,000 $3,929,580 $2,910,800 $436,620
2003-04 $7,277,000 $3,929,580 $2,910,800 $436,620
2004-05 $7,277,000 $3,929,580 $2,910,800 $436,620
2005-06 $7,277,000 $3,929,580 $2,910,800 $436,620
2006-07 $7,277,000 $3,929,580 $2,910,800 $436,620
2007-08 $7,277,000 $3,929,580 $2,910,800 $436,620
2008-09 $7,277,000 $3,929,580 $2,910,800 $436,620
2009-10 $7,277,000 $3,929,580 $2,910,800 $436,620
Final Partial Tax Year
2001-11 N/A* N/A* 1,455,400 218,310
*PILOT Payment allocable to second half of 2010-2011 included in installment of PILOT Payment due on October 2010.

Taken together, the PILOT payments on the three plants in the first year amount to $43.8 million. This amount is phased down to $27.3 million by 2005-06 and it remains at that level for the remaining duration of the agreements. In each year, the total amount paid is allocated between the affected taxing units according to fixed ratios that are reflective of the relative tax collections of the taxing units prior to the agreements.

In relative terms, the biggest changes are for the Nine Mile 2 plant. Whereas it paid $31.5 million in 2001-02, total payments will shrink to $16.0 million by 2005-06, a reduction of about 50%. The next largest effect is that attributable to the Fitzpatrick plant. This facility was exempt prior to its sale, due to ownership by the New York State Power Authority, a government agency. It thus paid neither taxes nor PILOTS. The $7,277,000 level stream of annual PILOT payments for the Fitzpatrick plant is therefore a net revenue gain to the affected taxing units. In terms of school district payments, the PILOTS in this case accrue to the Mexico school district, whereas payments on the Nine Mile plants go to the Oswego City school district. Finally, changes in payments for the Nine Mile 1 plant are the least dramatic, falling from $5,000,000 to $4,000,000 or about 20% from 2001-02 and 2004-05.


Figure 2. Relationship of Nine Mile 1 and 2 and Fitzpatrick Nuclear Generating Plants to Area Local Governments (Oswego County)

Tables 6 through 8 show the effects of the change from taxes to PILOT payments using local data from the fiscal year ending in 2002 to simulate tax shifts. A simulation is necessary because 2001-02 was a transition year: whereas the Fitzpatrick plant paid PILOTS for school, county and town purposes, the two Nine Mile plants were still taxable property for purposes of the school levy but exempt for purposes of the county and town levy. The actual first-year implementation was thus partial, and not reflective of the true local fiscal impact of the shift from taxes to PILOTS.

In order to illustrate the true local fiscal impact of the first year of full implementation, the information presented in the tables is thus a simulation of the effect of moving to the first year of full PILOT payments, based on other local data for fiscal years ending in 2002. The effects are illustrated in terms of the changing tax bill on the typical residential property in each municipality. Please note that the median residential assessed values differ significantly by municipality, the primary reason for this being that a few are assessing at very low percentages of market value. For The Nine Mile plants, Table 6 indicates that the PILOT program would have the effect of reducing the school taxes on a typical home by an amount ranging from $230 to $409, with the exception of homes in the Town of Scriba, where the typical residential taxpayer would pay $558 more. This is the result of a shift in school taxes into Scriba and away from the other municipalities. The shift occurs because the (over-assessed) plant is no longer influencing the school tax apportionment (i.e., it is not raising the Town of Scriba equalization rate to a level that is not reflective of the level at which residential property in Scriba is assessed). It can be observed from Table 6 that school taxes on a typical home in Scriba were previously only one-third to one-sixth as high as the taxes on a typical home in other municipalities in the same school district. The PILOT program has corrected this mis-allocation, with the result that the allocation of taxes shows much smaller inter-municipal differences, with the remaining ones likely due primarily to local differences in property values.

A similar pattern can be seen in Table 7 with respect to the tax treatment of the Fitzpatrick plant in the Mexico school district. Were the plant to be taxed at the (now exempt) value listed on the assessment roll, there would be major inter-municipal divergence between the tax paid on typical homes in the same school district, ranging from $293 in Scriba to $1,448 in Hastings. However, with the PILOT program in effect, the inter-municipal differences in school taxes are far more moderate, ranging from $798 in Scriba to $1,083 in Hastings. This change reflects removal of the now-exempt plant from the school tax apportionment process, and the remaining inter-municipal differences in school taxes are undoubtedly reflective of local differences in property values rather than the plant assessment and value as such.


Table 6. Simulation of the Effect of the Nine Mile #1 ($2,890,000) and Nine Mile #2 ($18,210,000) PILOTS on the City of Oswego School Tax Levy*
MunicipalityMedian Residential
Taxable Assessed Value
Simulated Tax Rate
Per $1000 of
Assessed Value
School Tax Bill
Dollar Difference
With Plant TaxableWith PILOT on PlantsWith Plant TaxableWith PILOT on Plants
Sterling $97,450 $17.84 $13.65 $1,739 $1,330 ($409)
Oswego (c) 60,000 17.67 13.52 1,060 811 ($249)
Minetto 82,300 16.82 12.87 1,384 1,059 ($325)
Oswego 93,500 18.36 14.05 1,717 1,314 ($403)
Scriba 3,200 97.50 271.75 312 870 $558
Volney 59,750 16.38 12.53 979 749 ($230)
*Actual levy data for 2001-02 fiscal year used for simulation purposes; excludes library levy.

Table 7. Simulation of the Effect of the Fitzpatrick Plant PILOT ($3,929,580) on the
Mexico School District Tax Levy*
TownMedian Residential
Taxable Assessed
Simulated Tax Rate
Per $1000 of
Assessed Value
School Tax Bill
Dollar Difference
With Plant TaxableWith PILOT on PlantsWith Plant TaxableWith PILOT on Plants
Hastings $69,000 $20.98 $15.69 $1,448 $1,083 ($365)
Mexico 6,220 198.94 148.77 1,237 925 ($312)
New Haven 1,800 750.73 561.41 1,351 1,011 ($340)
Palermo 66,450 18.69 13.98 1,242 929 ($313)
Parish 53,150 19.89 14.88 1,057 791 ($266)
Richland 62,200 19.89 14.88 1,237 926 ($311)
Scriba 2,600 112.59 306.75 293 798 $505
Volney 58,000 18.92 14.15 1,097 821 ($276)
*Actual levy data for 2001-02 fiscal year used for simulation purposes; excludes library levy.


The PILOT program allowed under RPTL Section 485 will also affect apportionment of county taxes among municipalities assuming that the county in question has opted to participate in the program (as has Oswego County). Table 8 provides a simulation of the effect of the county choosing PILOT treatment rather than taxation for all three plants. Once again, the primary tax distribution impact that can be observed is that occurring between the Town Of Scriba and all other municipalities in the county. Were the plants to be taxable, the typical home in Scriba would pay about $152 in county taxes, while homes in the other municipalities would pay from $309 (in Orwell) to $745 (in Minetto). However, under the PILOT program, the disproportionately low tax in Scriba would approximately triple to $462, whereas county taxes in all of the remaining municipalities would decrease. Despite the increase in the Town of Scriba, county taxes there following the PILOT program would still be comparable to those in other municipalities in Oswego County.


Table 8. Simulation of the Effect of the Nine Mile #1 ($1,860,000), Nine Mile #2
($11,730,000) and Fitzpatrick Plant ($2,910,800) PILOTS on the
2002 Oswego County Tax Levy*
MunicipalityMedian Residential
Taxable Assessed
Simulated Tax Rate
Per $1000 of
Assessed Value
School Tax Bill
Dollar Difference
With Plant TaxableWith PILOT on PlantsWith Plant TaxableWith PILOT on Plants
Fulton (c) $50,000 $9.72 $7.76 $486 $388 ($98)
Oswego (c) 58,000 9.92 7.93 575 460 ($115)
Albion 48,000 9.51 7.61 456 365 ($91)
Amboy 47,500 9.48 7.57 450 360 ($90)
Boylston 44,313 9.45 7.55 419 335 ($84)
Constantia 54,900 11.02 8.81 605 484 ($121)
Granby 56,250 10.69 8.54 601 480 ($121)
Hannibal 56,000 9.60 7.69 538 431 ($107)
Hastings 65,000 10.04 8.03 653 522 ($131)
Mexico 5,880 95.69 76.49 563 450 ($113)
Minetto 77,125 9.66 7.73 745 596 ($149)
New Haven 1,700 364.68 292.07 620 497 ($123)
Orwell 45,630 6.78 5.42 309 247 ($62)
Oswego 86,500 10.30 8.23 891 712 ($179)
Palermo 63,500 8.96 7.17 569 455 ($114)
Parish 52,800 9.53 7.62 503 402 ($101)
Redfield 39,000 9.35 7.48 365 292 ($73)
Richland 57,035 9.52 7.61 543 434 ($109)
Sandy Creek 54,000 9.51 7.60 514 410 ($104)
Schroeppel 69,000 8.91 7.13 615 492 ($123)
Scriba 3,000 50.54 154.16 152 462 $310
Volney 61,000 9.07 7.26 553 443 ($110)
West Monroe 3,500 185.37 148.26 649 519 ($130)
Williamstown 45,500 10.16 8.13 462 370 ($92)
*Actual levy data for 2002 fiscal year used for simulation purposes.

The allocation differences engendered by the PILOT program are not as significant in the case of county taxes as they were for school taxes. There are two main reasons for this. First, school tax bills are higher than county tax bills, generally reaching four digits for the typical home in the Oswego County area rather that about $500 + or - for county taxes. Second, removal of the over-assessed plants from the school tax apportionment process has a disproportionately greater effect that it does for the county apportionment process because the county is larger than the school district and countywide fiscal effects will thus be more diluted.

RPTL Section 485 also contains language to the effect that the revenues received by the City of Oswego and Mexico school districts will be included in determining the property wealth of these districts for education aid formula purposes. Normally, only the value of taxable property is included in property wealth determination, but the magnitude of the PILOT payments for large facilities such as generation plants requires that this type of adjustment be made if the intent of the aid formula is to be preserved. However, because there is a multi-year delay in incorporating a given year's assessment roll into the aid formula computations, the effect of this provision will not be felt until future years. The aid effect will thus be considered in future versions of this report.


  • Findings and Conclusions

    This report has reviewed the current status of nuclear generating plants as related to Section 485 of the Real Property Tax Law. This statute gives local governments the option of choosing to exempt the plants in question from property taxes for a period that may extend to 2015 roll years, allowing instead a program of payments-in-lieu-of-taxes that may be determined under an agreement between the plant owner and the local government or, alternatively, is based on the amount of taxes paid in the last year of taxable status. To date, only the three nuclear plants, all located in the Town of Scriba, Oswego County were found to fall under the provisions of this statute. All affected levels of government (County of Oswego, Town of Scriba, and both the Oswego City School District and the Mexico School District) have opted to participate in the Section 485 PILOT program under the terms of agreements with plant owners.

    The report reviewed available sales of nuclear generating property and the value trends that have occurred, in the years that followed initiation of electric industry restructuring in New York, as well as the local fiscal impacts that can be attributed to the provisions of Section 485. The following are the major findings and conclusions.


    1. Based on appraisals completed in recent years by the Office of Real Property Services, the values of the Nine Mile 1 and 2 facilities in Oswego County declined substantially in the aftermath of restructuring. However, this trend was not universal for nuclear stations, as the Indian Point 1 and 2 properties in Westchester County actually increased in values based on the most recent (2001) appraisal data (still subject to changes as of the time of writing).


    2. For the Oswego County school districts opting to use the provisions of Section 485, there was a leveling effect on inter-municipal school tax apportionment. Prior to adoption of the PILOT program, there were differences of several hundred percent in the school taxes allocated to other municipalities in the same school district as compared to the taxes allocated to a home in the Town of Scriba, where the plants are located. With adoption of the PILOT program, these differences were dramatically reduced.


    3. For Oswego County itself (as a taxing unit), the PILOT program also noticeably reduced inter-municipal differences in tax apportionment. However, although the county tax effects were necessarily less dramatic than the school tax effects (due to the fact that the average county tax per parcel is much lower than the average school tax per parcel), the apportionment changes are diluted over a wider geographic area.



1Chapter 239 of the Laws of 1999.

2Id. See also Divestiture of Electric Generating Plants: Property Tax Implications, NYS Board of Real Property Services, December 31, 1999.

3Market value, or what a willing buyer would pay a willing seller, is distinct from "book value," an account concept.

465 N.Y.2d 472, 482 N.E.2d 77, 492 N.Y.S.2d 598 (1985), cert. den., 475 U.S. 1082, 106 S.Ct. 1461, 89 L.Ed.2d 718 (1986).

5104 A.D. 2d 511, 479 N.Y.S.2d 587 (3d Dept. 1984).

6117 A.D.2d 948, 499 N.Y.S.2d 260 (3d Dept. 1986).

7202 A.D.2d 32, 616 N.Y.S.2d 375 (2d Dept. 1994), leave to appeal denied, 85 N.Y.2d 809, 651 N.E.2d 920, 628 N.Y.S.2d52(1995).

8 See Standard on the Application of the Three Approaches to Value, International Association of Assessing Officers, Chicago, August 1985 (revised).