Relates to establishing an abatement and exemption from real property taxes for capital improvements to reduce carbon emissions; establishes an energy efficiency improvement board to approve the abatements and exemptions.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5050
Relates to establishing an abatement and exemption from real property
taxes for capital improvements to reduce carbon emissions
SUMMARY OF PROVISIONS::
Section 1. Establishes the legislative intent.
Section 2. Creates a new section 488-b of the Real Property Tax Law.
1. Provides definitions for eligible real property, eligible improve-
ments, the Energy Efficiency Board, and permanent resident.
2. Establishes that the bill provides an abatement and exemption from
all taxes including ad valorem levies after the effective date of this
3. Establishes an Energy Efficiency Board to administer the program,
which shall be located within the Office of Real Property Services. The
Board shall consist of four members appointed by the Governor, and two
non-voting members appointed by the Mayor. The Board shall establish
rules and regulations to administer the program.
4. Creates a tax exemption equal to any assessed value increase for the
eligible improvement for a period of twenty years provided that such
improvements are commenced on or after December 31, 2021 and completed
within 60 months of issuance of a permit. The act requires that all
taxes are current on property eligible, and that no tenant be evicted in
order to complete eligible improvements.
5. Creates a tax abatement equal to a share of the cost of the eligible
improvement, with the value of the benefit increasing for projects that
realize larger greenhouse gas emissions. Such abatement shall generally
be in effect for 10 years with a value as follows:
5 percent for a greenhouse gas emission reduction of between 2-5%
6.5 percent for a greenhouse gas emission reduction of between 5-10%
7 percent for a greenhouse gas emission reduction of between 10-12%
7.5 percent for a greenhouse gas emission reduction of between 12-15%
8 percent for a greenhouse gas emission reduction of between 15-17%
8.5 percent for a greenhouse gas emission reduction of between 17-20%
9 percent for a greenhouse gas emission reduction of between 20-25%
9.5 percent for a greenhouse gas emission reduction of between 25-30%
and 10 percent for a greenhouse gas emission reduction of in excess of
30% with these projects being eligible for a 20 year abatement. While
the abatement cannot exceed the amount of taxes owed for any year these
projects could carry forward additional benefits through the 20 year
6. Requires an annual certification by the recipient of an abatement.
7. Requires that for continued receipt of the abatement all provisions
of housing maintenance code, building code, and the multiple dwelling
law shall be complied with.
8. Permits revocation or reduction of benefits where a misstatement of
any material matter, or false statements in the application is deter-
mined by the Board.
9. Allows for local agencies to enact rules and regulations to adminis-
ter aspects of the program.
Section 3. Provides an immediate effective date.
New York State has an urgent need to reduce emissions from the building
stock through energy efficiency measures and efficient electrification
in order to meets the greenhouse gas emission goals established by the
CLCPA. The Climate Action Council (CAC) has noted that electrification
without the widespread adoption of efficiency measures will not realize
the goals as it will overburden the electricity system and fail to
achieve emissions reduction at the speed required by the CLCPA.
There are proposed building code changes coming from the CAC that will
create some reductions, which will be primarily related only to new
construction or those properties which are substantially renovated.
Those proposed changes will not have the rapid measurable impact on
building emissions. At the same time, New York City has adopted local
legislation, Local Law 97 of 2019, that also seeks to reduce greenhouse
gas emissions from buildings. As with the CLCPA, realizing these goals
will require buildings to both reduce their total energy use and move to
lower carbon energy sources. This legislation is intended to realize the
goals of the CLCPA and Local Law 97 by creating an incentive for a prop-
erty owner to create real meaningful reductions in the emissions profile
of the building. To do so, the legislation creates a tax benefit to help
offset the cost associated with work that reduces building emissions.
This type of tool is needed to ensure that buildings make the kinds of
investments that will be needed to combine energy efficiency with elec-
trification as those investments may not make financial sense in the
absence of an incentive.
The legislation proposes a two-fold approach. First, it provides an
exemption for any increased assessment for a period of twenty years, to
the extent that the improvement would otherwise increase the value of
the building. Many of these improvements would improve the property
value, but some do not. For that reason, the legislation includes a
second approach by also providing an abatement that provides a reduction
in taxes owed. This relates not to the cost of the work, e.g. a smart
thermostat, which is not costly, but can have a beneficial impact which
greatly reduces emissions. The abatement corresponds to the reduction in
greenhouse gas amount of the emissions. Based on the social costs of
carbon avoided by virtue of financial bene- fits to the state and the
City of New York, the need for this bill cannot be overstated.
2021-2022: S9603 - REFERRED TO RULES
None to the State.
Immediately, provided that any tax benefits shall be delayed until July
1 next succeeding enactment.