BILL NUMBER: S6595
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to providing a
tax abatement for facility-integrated carbon-to-value equipment
 
PURPOSE:
The bill would establish a property tax abatement in cities with popu-
lations of one million or more persons to incentivize investment in
building-integrated technologies that remove, capture and/or utilize
carbon or carbon dioxide in processes that result in a net reduction of
emissions produced at buildings.
 
SUMMARY OF PROVISIONS:
Section 1 amends Article 4 of the Real Property Tax Law by adding a new
Title 3-A. The bill includes definitions of terms in the bill and their
meanings. The definitions include information related to policy and
rules formulation including: (1) the technical categories that consti-
tute different forms of "Carbon-to-value" technologies that will be
eligible for the property tax abatement; (2) the property tax abatement
compliance period of four to eight years, and the maximum percentage of
eligible expenditures (20%) and/or tax dollar values that can be claimed
by project applicants in a given tax year ($100,000) and during the
entire compliance period ($800,000); and (3). the extensive authorities
and powers granted to the City of New York and designated agencies to
formulate and implement rules related to property tax abatement eligi-
bility, application procedures, and monitoring, oversight and enforce-
ment.
The bill stipulates that (1) the property tax abatement will be eligible
for technologies placed in service between January 1, 2023, and December
31, 2028; and (2) that the annual property tax abatement amount will be
equal to the lesser of 5% of the total eligible expenditures, the amount
of property taxes payable in such tax year, or $100,000. The bill
provides the guidelines and rules of the property tax abatement applica-
tion process, including: (1) the application deadline; (2) required
project information that must be included in complete form in the appli-
cation; and (3) certification of the project's compliance with local
building, electrical, fire and other relevant codes and standards.
The bill states that eligibility to claim the property tax abatement is
conditioned on the project's continuous compliance with local codes and
standards during the property tax abatement compliance period. Further,
the bill provides conditions and guidelines for property tax abatement
revocation by the Department of Taxation and Finance in the event of
project non-compliance.
The bill provides the powers and authority of the Department of Taxation
and Finance to formulate, implement and modify all rules and processes
related to the property tax abatement application, rules, revocation
conditions, and any other necessary functions. Additionally, the bill
states that any prior taxes required to be paid by a property tax abate-
ment applicant shall constitute a tax lien as of the date it is deter-
mined such taxes and interest are owed.
Section 2 is the effective date.
 
JUSTIFICATION:
In recent years, New York State and New York City have made bold statu-
tory commitments to eliminate greenhouse gas emissions over the next
three decades. Direct emissions reductions in key economic sector
through efficiency, and transitioning to zero and low carbon energy
sources and technologies will account for the majority of progress made
towards these ambitious, legally mandated targets. In the dense urban
context of New York City, buildings account for 751 of greenhouse gas
emissions. As a consequence, local climate protection laws focus signif-
icantly on strategies to reduce emissions at the building scale.
In addition to energy efficiency, electrification, renewable energy
substitution and climate effective design and planning, the rapidly
emerging carbontech (or carbonto-value) sector represents a promising
new means of ensuring that New York State and New York City emission
goals are successfully met. Carbontech refers to a spectrum of technolo-
gies that remove CO2 from the air, capture it at point sources, and/or
sequester it in goods or in the geosphere.
This evolving industry is now delivering a growing number of solutions
that can reduce emissions at the building scale within cities like New
York. For those industrial and commercial segments of the local building
stock that will prove most difficult to fully reduce the emissions of in
compliance with mandated targets, carbontech solutions are creating
additional compliance options for building owners, and supplemental
pathways for overall emissions reduction success. Avoiding punitive
fines for noncompliance is now more acute than ever in COVID-19 era New
York, where large property owners now face extreme economic uncertainty
and pressure as remote work and industrial realignments represent exis-
tential threats. Carbontech can offer another pathway for compliance for
such buildings.
The property tax abatement proposed with this legislation will stimulate
demand for building-integrated carbontech applications, increasing the
financial performance of such investments and adoption by building
owners. This legislation builds on the success precedents established by
earlier legislation that introduced property tax abatements in New York
City for solar electric technology, battery storage systems, and green
roofs.
This legislation will advance New York's strategic efforts to attract
carbontech businesses to New York State and New York City. Recent
investments by the State in carbontech research and development and
commercialization, combined with the State's world class advanced tech-
nology industries and infrastructure, and the market drivers created by
both the Climate Leadership and Community Protection Act and the New
York City Climate Mobilization Act, New York City is well positioned to
become a global economic hub for this future one trillion dollar indus-
try. Establishing a demand-side incentive in the form of a property tax
abatement will make New York City the strongest market for building-
integrated carbontech solutions in the world, and consequently will
attract new businesses and jobs to the City.
 
LEGISLATIVE HISTORY:
2023-2024: 5.5450 - Reported and Committed to Finance/A.777 Referred to
Real Property Taxation
2021-2022: 5.8252 - Reported and Committed to Finance/A.8887 Referred to
Real Property Taxation
 
STATE AND LOCAL FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately.