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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Industrial, Commercial, and Public Service

Section 4.06 - RPTL Section 485

Nuclear Powered Electric Generating Facilities

Exemption Code(s): 2745_ Year Originally Enacted: 2001, reenacted 2014

Related Statutes: RPTL §§490, 520, 1200, 1227; Publ Auth L §1012; Ed L §3602(7)(a)

SUMMARY: If allowed by local option, nuclear powered electric generating facilities located outside of New York City and Nassau County are wholly exempt from taxation and are exempt, for certain purposes, from special ad valorem levies and special assessments. The taxing district in which the facility is located may only exempt the facility from real property taxes imposed by the taxing district granting the exemption. Whenever the exemption is granted, a facility will remain exempt through 2030, unless the taxing jurisdiction provides for an earlier termination year in its own law or resolution. However, if the exemption is granted, it must remain in effect for at least five years.

During the term of the exemption, the owner or owners of the exempt facility must make payments in lieu of taxes (PILOTs). The PILOT may be based on a plan negotiated between the taxing jurisdiction and the owner(s), however, if an agreement cannot be reached between the two parties, the PILOT will be based on a statutory formula based on taxes that would have been paid if the plant been taxable. This exemption also applies to plants sold by the New York Power Authority, even though they were exempt from taxation prior to the sale. If there is a dispute regarding the assessment of the plant, the owner(s) may challenge the assessment in accordance with provisions in Article 7 of the Real Property Tax Law. Consequently, if the owner(s) obtain a court-ordered assessment reduction, the PILOT obligation will be reduced accordingly.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be owned by a private individual or organization.
       
    2. Property Location Requirements: Property must be located outside a special assessing unit (New York City or Nassau County).
       
    3. Property Use Requirements: Property must be used to generate electricity by nuclear power. For purposes of this exemption a nuclear powered electric generating facility means a facility that generates electricity using nuclear power for sale, directly or indirectly, to the public, including the land upon which the facility is located, any equipment used in such generation, and equipment leading from the facility to the interconnection with the electric transmission system, but does not include any equipment in the electric transmission system.
       
    4. Certification by State or Local Government:  A copy of the local law or resolution authorizing this exemption (see Local Option below) must be filed no later than 30 days after its adoption with the clerk of each municipality in which the facility is located and also with the Office of Real Property Tax Services.
       
    5. Required Construction Start Date or Other Time Requirement:  : The owner(s) of the facility and the affected taxing district must sign an agreement for the required PILOT by the date specified in the local law or resolution once the exemption is granted. Otherwise, the required PILOT will be based on a statutory formula (see Payments in Lieu of Taxes below).
       
  2. LOCAL OPTION: Yes 

    Each county, city, town, village, and school district (except within New York City or Nassau County) which contains a nuclear powered electric generating facility may choose whether or not to allow the exemption. The option to exempt must be exercised through adoption of a local law or school district resolution after a public hearing. The local law or resolution must state the date on which the exemption commences.
     
  3. LIMITATION ON EXEMPTION  
      General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount No
    limit
    No
    limit
    No
    limit
    No
    limit
    2. Duration Through
    2030*
    Through
    2030*
    Through
    2030*
    Through
    2030*
    3. Taxing Jurisdiction
    a. County or County
    Special Districts
    Ex** NA L*** L***
    b. City Ex** NA NA Tax
    c. Town or Town
    Special District
    Ex** NA L*** L***
    d. Village Ex** NA NA Tax
    e. School District NA Ex** NA NA
      Ex-Exempt  Tax-Taxable  NA-Not Applicable
      L - Liable only for (1) county and town charges for capital
    costs of sewer systems, water supply systems, waterways
    and drainage improvements, and streets and highways,
    plus (2) special assessments for indebtedness contracted before 7/1/53.

    *Taxing district offering the exemption may provide in its local law or resolution that the exemption will terminate in an earlier year; however, the exemption must remain in effect for at least five years.

    ** If allowed by local option.

    *** Only if exemption from general municipal taxes is allowed by taxing jurisdiction. If exemption from taxes is disallowed, property is liable for all special ad valorem levies and special assessments imposed by or on behalf of the taxing jurisdictions.


     
  4. PAYMENTS IN LIEU OF TAXES: Yes -- During the term of the exemption, the owner(s) of the facility must make payments in lieu of taxes (PILOTs) to each taxing jurisdiction with which an exemption has been granted, in an amount agreed to by each taxing jurisdiction that has granted the exemption. The PILOT agreement procedure is as follows:
    1. The PILOT agreement may be negotiated between the owner or owners of the exempt facility and the taxing jurisdiction granting the exemption. The payment period is limited to the period for which the facility is exempt. Before a taxing district can execute an agreement for such payments, the taxing district must hold a public hearing on the proposed agreement.
       
    2. If the taxing district and the owner(s) of the facility have not signed a PILOT agreement by the date specified in the local law or resolution, or if the owners(s) and the taxing district agree to cancel such an agreement, or if such an agreement does not apply to an assessment roll on which the facility is exempt for purposes of this section, the owner(s) of such a facility must make PILOTs in one of two ways:

    a. in the base amount, which is equal to the amount of taxes levied against the facility on the last assessment roll it was taxable or liable for special ad valorem levies and special assessments. However, if no taxes or levies have been or will be levied on the facility within one year of the effective date of the local law or resolution authorizing the exemption, the base amount is then equal to the amount of taxes or special ad valorem levies that would have been levied against the facility on the assessment roll based on the first taxable status date occurring on or before the effective date of the local law or resolution (This assumes that the facility was taxable on that assessment roll, and that the applicable tax rate was determined accordingly). For purposes of calculating a PILOT under these provisions, the assessment roll that is used to determine the base amount, as defined above, is the "base assessment roll;" or

    b. in the base amount for payments on the current assessment roll, adjusted as follows:

    (1) by the percentage change between the assessment of the facility on the current roll and on the base assessment roll, adjusted for any change in level of assessment in accordance with RPTL §1200;
     
    (2) in the case of a municipal corporation, by the percentage change between the total amount of taxes levied against all taxable real property on the current roll and on the base assessment roll by that municipal corporation;
     
    (3) in the case of a special district, by the percentage change between the total amount of special ad valorem levies and special assessments imposed against all taxable real property on the current roll and on the base assessment roll by that special district; and
     
    (4) if the municipal corporation also contains a facility which had been wholly exempt from taxation on the base assessment roll under the provision of Public Authorities Law §1012 but which is no longer eligible for that exemption because of a change in ownership (i.e., facilities sold by the New York Power Authority), the base amount will be adjusted to reflect the fact that the formerly exempt facility is now either subject to taxation or liable to make PILOTs , as the case may be.

    If the facility was not taxable on a prior assessment roll, and no exemption is then in effect, the assessor of each assessing unit in which the facility is located is authorized to immediately subject the facility to taxation under the provisions of RPTL §520.

    For assessment rolls with taxable status dates on or after January 1, 2031, or such earlier year as may be specified in the local law or resolution authorizing the exemption (provided that the term of the exemption may not be reduced to less than 5 years), this exemption will no longer apply and any PILOT agreement on a facility theretofore exempt under this section will no longer be in effect. Upon the request of the assessor of an assessing unit containing a facility, the Office of Real Property Tax Services must provide an advisory appraisal of such a facility for use on the municipal assessment roll with a taxable status on or after January 1, 2031.

    Payments in lieu of taxes should not be entered on the tax roll. Such payments are collected in the same manner as are other payments due the municipality under contract.

    Note: This section does not prevent an owner of a nuclear powered electrical generating facility from seeking judicial review of an assessment, under provisions of Article 7 of the Real Property Tax Law. Any determination of the proper assessment of such a facility as a result of such a proceeding must be reflected in any PILOT including the refund of such payments, as provided in the judgment and court order.


    CALCULATION OF EXEMPTION:

    General Municipal and School District Taxes: 100% of assessed value. 

    •  
      1. Special Ad Valorem Levies and Special Assessments: : 100% of assessed value or other basis of assessment. The exemption applies to all levies and assessments imposed by counties, county special districts, towns, and town special districts except (1) charges levied to pay for the capital costs of sewer systems, water supply systems, waterways and drainage improvements, and streets and highways, and (2) special assessments for indebtedness contracted before 7/1/53. The exemption does not apply to special assessments imposed by cities or villages.
         
  5. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    2745_ 

    Assessment Roll Section(s): Exempt (RPS Section 8).

  6. FILING REQUIREMENTS (Owner or Occupant of Property): Any agreement for payments in lieu of taxes must be filed with the Office of Real Property Tax Services and the clerk of each municipal corporation in which the facility is located within 30 days of executing the agreement.
     
  7. REPORTING REQUIREMENTS (Assessor): None.
     
  8. SIMILAR EXEMPTIONS: None.

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