Provides that when owned by a telephone company real property shall include conduits for conducting or transmitting electricity, power, light or other substance upon, above or underground.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7595
SPONSOR: Farrell TITLE OF BILL: An act to amend the real property tax law, in relation
to telecommunications equipment
SUMMARY OF SPECIFIC PROVISIONS: Presently, paragraphs (d) and (i) of
subdivision 12 of section 102 of the Real Property Tax Law include in
the definition of "real property," "property" or "land" all lines,
wires, poles, supports and inclosures for electrical conductors. This
bill would amend paragraph (d), which relates to telephone companies, to
include lines, wires, poles, supports, inclosures and conduits for
"conducting or transmitting any type of energy or substance." This bill
would amend paragraph (1), which relates to owners other than a tele-
phone company, to include "lines, wires, poles, supports, inclosures and
conduits for conducting or transmitting any type of energy or substance"
that is used in connection with the transmission of electromagnetic
voice, video and data signals.
Section two of this bill provides that this act shall take effect imme-
diately.
JUSTIFICATION: Paragraphs (d) and (i) of subdivision 12 of section
102 of the Real Property Tax Law describe the types of telecommunication
equipment that are considered "real property" and are therefore assessa-
ble. The current definitions of assessable real property in these
provisions each includes "all lines, wires, poles, supports and inclo-
sures" used in connection with conducting electricity, but these
provisions do not currently specifically mention equipment for conduct-
ing light, i.e., fiber optic technology.
Prior to 1985, real property taxation of telecommunications equipment
was limited to telephone and telegraph property, such as lines, wires
and poles. With the deregulation of AT&T and the emergence of new tele-
communications equipment in the in mid-1980s, the Legislature amended
the Real Property Tax Law to cover a wider variety of telecommunications
equipment, such that telecommunications providers would be taxed on a
more equitable basis. The legislative history from the 1985 amendments
indicates that the changes were specifically intended to expand the
definition of real property to include various emerging types of tele-
communication equipment then exempted, including fiber optic equipment.
See Bill Jacket for Chapter 71 of the Laws of 1985, Sponsor's Memorandum
(intent of legislation to impose the real property tax "in an equitable
fashion on various types of telecommunications property now exempted or
not now taxed"); New York State Board of Equalization and Assessment,
Report to Governor Mario M. Cuomo on the Taxation of Telecommunications
Property (January, 1985) at 10, 13 (discussing fiber optic technology as
one of the emerging types of telecommunications equipment to be consid-
ered in defining telecommunications equipment). Moreover, in 1985, the
Legislature amended subparagraph (i) of subdivision 12 of section 102 of
the Real Property Tax Law to specifically refer to the transmission of
"electromagnetic voice, video and data signals," which would necessarily
include fiber optic transmission, given that light is part of the elec-
tromagnetic spectrum. Finally, the definition of "special franchise" in
subdivision 17 of section 102 of the Real Property Tax Law includes the
right to construct, maintain or operate "mains, pipes, tanks, conduits,
wires or transformers, with their appurtenances, for conducting water,
steam, light, power, electricity, gas or other substance" (emphasis
added).
Nevertheless, in a 2012 opinion of the Appellate Division, First Depart-
ment in Matter of RCN N.Y. Communications, LLC v. Tax Commn. of the
City of N.Y., the court held that the current language of paragraph (i)
of subdivision 12 of section 102 of the Real Property Tax Law does not
specifically include equipment used for providing fiber optics communi-
cations services. This ruling has resulted in loss of revenue for New
York City and other taxing authorities and does not comport with the
Legislature's intent that both emerging and traditional telecommuni-
cations equipment be taxed.
By amending the definition of real property to include equipment used
for conducting or transmitting any other type of energy or substance,
this bill would clarify the intent of the Legislature to tax all tele-
communications equipment (including fiber optic conductors), conform the
definition of subdivision 12 of section 102 of the Real. Property Tax
Law with the definition of "special franchise" in subdivision 17 of
section 102 of the Real Property Tax Law, and bring the definition up to
date with modem telecommunications technology. The proposed bill would
also make clear that the definition is intended to be expansive as it
applies to types of conductors or transmitters, covering all relevant
types of conductors or transmitters, including any new type of technolo-
gy going forward.
PRIOR LEGISLATIVE HISTORY: New Bill
FISCAL IMPLICATIONS: None
EFFECTIVE DATE: Immediately.
