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Department of Taxation and Finance

Advisory appraisal

New York State advisory appraisal service

For more information see: Municipalities requesting advisory appraisals (listed by company).

Advisory appraisal program

This program was founded as a service to local governments with the enactment of the assessment improvement legislation of 1970; Article 15-A section 1544 of the Real Property Tax Law.  It requires the Office of Real Property Tax Services to provide advisory appraisals upon request for taxable public utility properties and other highly complex properties that meet certain requirements.   Though the property tax is purely a local tax, by its pervasiveness and size of collections, it is a key component of the state-local fiscal relationship. Because both the State and local governments have a stake in the fair administration of the tax, the 1970 Act sought to build capacity in both levels of government. The state was to have a role in providing specialized technical advice to local governments that their own resources would not allow them to otherwise obtain. 

Utility property

Definition

Public utility property as defined in 20 NYCRR 8185-1.1(199) means any property owned by persons or corporations which is used for electric and gas production; transmission or distribution of electric, gas, water, and other products (such as brine, petroleum); communications including cable television; transportation pipelines; and waste disposal.  This generally would include properties with classification codes in the 740 and 800 series.

Utility property can be categorized into three broad categories — structural property, mass property, and land.  Structural property is typically sited while mass property is generally not specific and land is, by its nature, sited.  The following will provide you with a definition for the property related to each category.

Land property

A portion of the earth's solid surface distinguishable by boundaries or ownership.  In the appraisal of real estate, land is the non-wasting form of the asset (it is not subject to depreciation).  If the land is a site with an improvement, the total property must, in the final analysis, be considered as an integral unit.

Structural property

Improvements generally sited to a specific parcel.  Utility structural property typically consists of office buildings, generating stations, gas manufacturing plants, dams and reservoirs and water or sewer treatment plants.  They have characteristics relevant to their particular group or use, such as type of construction, date of construction, grade, condition, size, and present use, and do not have the homogeneity that typically characterizes mass property.

Mass property

Improvements that have physical and functional characteristics that are so similar to other improvements of the same group (that is, poles, wires, and so on) that they are accounted for as a group or class.  Mass property is generally not sited and consists predominantly of transmission and distribution facilities but occasionally includes certain items outside those categories.  Mass property can be further categorized into special franchise and non-special franchise property.  Most utility companies have a potential for sited and non-sited (mass) property. Utility-owned mass property can also be segmented into special franchise property in Roll Section 5 (RS5), as well as non-special franchise in Roll Section 6 (RS6), for example an electric transmission line with rights of way through private property.

A special franchise, in the context of real property taxation in New York State, is (1) the right to place, maintain and operate mains, pipes, wires and the like for conducting water, steam, light, sewer, and so on,  on, under, or over publicly-owned land such as streets and waterways, and (2) the physical equipment so placed, maintained and operated.  Common examples of such improvements are telephone and power-line poles, wires and cables, water pipes, and gas mains.

A special franchise, in general terms, consists of the tangible real property of a utility, which is situated in public places, together with the value of the intangible right or franchise to operate in the public place.  Property of a utility company located in public places is special franchise property subject to assessment by the State Board in accordance with section 600 of the Real Property Tax Law.  The Board establishes special franchise assessments and files a certificate of the special franchise property assessment with the local assessor for entry on the assessment roll except for Nassau County and New York City where the Board provides a full value that is equalized locally before entry on the assessment roll.  After a public hearing on the assessment or full value, it then becomes a part of the roll with the same force and effect as if the local assessor had originally made it.  All taxes and special ad valorem levies for county, city, town, village, school, and special districts are then based on this assessment.

Non-special franchise would generally consist of all other mass property not located on, under, or over publicly-owned land (streets) and waterways.  The locality's assessor is responsible for the valuation and assessment of this property.

Appraisal

In accordance with the Advisory appraisal program your municipality has chosen, ORPTS will:

  • Review the six year plans and try to accommodate the structural re-inspection schedules requested.
  • Provide updated values on structural and mass properties, inclusive of inventory and market changes appraisal and field inspection in the first year followed by a re-inspection at least once every six years. 
    • If significant new construction or demolition occurs, a site re-inspection will be done prior to establishing the value. 
    • Appraisals will be in the style of computer-assisted mass appraisals, not detailed narrative appraisals.

Advisory appraisals will include:

  • Form RP-7021, Utility Advisory Appraisal Request
  • values to match Roll Section 6 (Section, Block, Lot) if locality has standardized (UCARS)
  • all mass property (poles, cables, wire, transmission and distribution property)
  • complex utility structures, such as; Municipal water properties
  • generating plants
  • compressor stations
  • electric substations
  • water treatment plants

Advisory Appraisals will not include:

  • cell towers
  • CATV head end structures 
  • utility owned office buildings
  • telephone central office buildings
  • utility service, maintenance and conference centers
  • utility warehouses and garages
  • non-utility scale solar farms (< 1 MW)

The valuation of these structures will be the responsibility of the local assessor.  If requested, ORPTS will provide the latest inventory on file unless that inventory is subject to protection as a trade secret or is otherwise protected under Public Officers Law § 87(2)(d).

Advisory appraisals are also used for measurement of full value and equalization.  If municipalities change utility property values or decide not to use the advisory appraisals, staff will need data to understand the local values for value verification.  Data such as appraisals, inventory, methodology, unit pricing, depreciation schedules, and any other supporting documentation will be helpful in our understanding and verification of locally determined utility values.  This data should be made available at least in the first year of the six-year plan.  (See attached decision grid for utility properties.)

Defense of utility advisory appraisals

Under RPTL § 1544(4), advisory appraisals are to be considered by the assessor in making assessments "but shall not be binding upon him." It is ultimately the assessors responsibility to value real property (other than special franchise property) within his or her jurisdiction, even when an advisory appraisal is requested. The Office of Real Property Tax Services cannot become involved in RPTL Article 7 proceedings or other litigation commenced against a municipality. Furthermore, an RPTL Article 7 proceedings is a de novo review which means that the advisory appraisal should not be directly relevant in such a proceeding—with few exceptions, the inquiry in an Article 7 proceeding is whether the assessed value is correct, not whether the method used to arrive at that value was correct.

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