Bill Text: NY S05201 | 2019-2020 | General Assembly | Introduced

Bill Title: Prohibits the Long Island power authority from bringing a tax certiorari challenge against a municipality.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-04-16 - REFERRED TO ENERGY AND TELECOMMUNICATIONS [S05201 Detail]

Download: New_York-2019-S05201-Introduced.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                     April 16, 2019
        Introduced  by Sen. FLANAGAN -- read twice and ordered printed, and when
          printed to be committed to the Committee on  Energy  and  Telecommuni-
        AN  ACT  to amend the public authorities law, in relation to prohibiting
          the Long Island power authority from bringing a tax  certiorari  chal-
          lenge  against a municipality; and providing for the repeal of certain
          provisions upon expiration thereof
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. Legislative intent. The legislature finds and declares that
     2  the  Long  Island  power  authority  ("LIPA")  took over the Long Island
     3  lighting company ("LILCO") in 1998. As part of that takeover,  represen-
     4  tatives  from  both  LILCO and LIPA made repeated public representations
     5  that LIPA would drop all outstanding tax certiorari challenges previous-
     6  ly initiated by LILCO, and would not challenge the  assessments  on  its
     7  four  "legacy"  power plants ("plants") in the future. For over a decade
     8  LIPA adhered to its commitment.   In 2010, however,  LIPA  brought  suit
     9  against  the  county  of Nassau, the towns of Brookhaven and Huntington,
    10  and the village of  Port  Jefferson  ("the  assessing  municipalities"),
    11  alleging  that  the assessing municipalities have over valued the plants
    12  thereby seeking a reduction in their assessed value and a  repayment  of
    13  the over-taxes they paid.
    14    The  legislature  further  finds  that according to LIPA, if these tax
    15  certiorari challenges  are  successful  against  the  assessing  munici-
    16  palities,  in  addition to a significant reduction in the assessed value
    17  of each plant going forward, the  "back-taxes"  owed  to  it  would  be:
    18  $500,000,000  from  Huntington;  $200,000,000  from  Nassau  County; and
    19  $300,000,000 from Brookhaven/Port Jefferson. That refund would be  borne
    20  by  all  taxpayers  across the respective municipality, and would be due
    21  immediately. If the assessing municipalities lose at trial, in order  to
    22  refund  that exorbitant amount of money would require a massive increase
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 5201                             2
     1  in property taxes for residents in the respective municipality. In addi-
     2  tion, the drastic reduction in the value of each plant would immediately
     3  wipe out a significant amount of school taxes generated by such plant to
     4  the  school  district  in  which the respective plant is located. In the
     5  Northport-East Northport school district, if the  Northport  plant  were
     6  found  to  be  valued  at  what LIPA alleges its value to be, the school
     7  district would immediately lose one-third of its tax base.
     8    Therefore, the legislature finds LIPA made a number of promises to the
     9  Long Island community,  federal,  state  and  local  elected  officials,
    10  school  districts, and taxpayers in the assessing municipalities that it
    11  would not challenge its taxes. That  promise  was  relied  upon  by  the
    12  community  and  upheld  by  LIPA  for years. LIPA broke that promise and
    13  therefore the legislature finds it necessary to codify  in  statute  the
    14  promises  LIPA  agreed  to  before significant financial harm is brought
    15  upon the assessing municipalities.
    16    § 2. Section 1020-f of the public authorities law is amended by adding
    17  a new subdivision (a-1) to read as follows:
    18    (a-1) 1. Notwithstanding subdivision (a) of this section, the authori-
    19  ty shall not and is prohibited from bringing a tax certiorari  challenge
    20  against any municipality in which one or more of its electric generating
    21  facilities  are located, unless the municipality abusively increases the
    22  assessment on the authority's property in which such electric generating
    23  facility is located.
    24    2. Any tax certiorari challenges the authority, or its predecessor  in
    25  interest,  initiated  prior  to or after the enactment of the chapter of
    26  the laws of two thousand nineteen that added  this  subdivision  against
    27  any  municipality  that  was  not  the  result  of an abusive assessment
    28  increase are deemed void and non-justiciable.
    29    § 3. This act shall take effect immediately; provided, that  this  act
    30  shall be deemed to have been in full force and effect on and after Janu-
    31  ary  1,  2009; provided further, that any memorandum of understanding or
    32  settlement agreement previously entered into between a municipality  and
    33  the  authority  as  a  result of a tax certiorari challenge reducing the
    34  assessed value of one of the authority's electric generating  facilities
    35  shall be deemed void; and provided further, that paragraph 2 of subdivi-
    36  sion  (a-1)  of  section  1020-f  of the public authorities law added by
    37  section two of this act shall expire and be  deemed  repealed  one  year
    38  after the effective date of this act.