N.Y. Real Property Tax Law § 487: Exemption from taxation for certain energy systems

§ 487. Exemption from taxation for certain energy systems. 1. As used

in this section:

(a) "Solar or wind energy equipment" means collectors, controls,

energy storage devices, heat pumps and pumps, heat exchangers,

windmills, and other materials, hardware or equipment necessary to the

process by which solar radiation or wind is (i) collected, (ii)

converted into another form of energy such as thermal, electrical,

mechanical or chemical, (iii) stored, (iv) protected from unnecessary

dissipation and (v) distributed. It does not include pipes, controls,

insulation or other equipment which are part of the normal heating,

cooling, or insulation system of a building. It does include insulated

glazing or insulation to the extent that such materials exceed the

energy efficiency standards required by law.

(b) "Solar or wind energy system" means an arrangement or combination

of solar or wind energy equipment designed to provide heating, cooling,

hot water, or mechanical, chemical, or electrical energy by the

collection of solar or wind energy and its conversion, storage,

protection and distribution.

(c) "Authority" means the New York state energy research and

development authority.

(d) "Incremental cost" means the increased cost of a solar or wind

energy system or farm waste energy system or component thereof which

also serves as part of the building structure, above that for similar

conventional construction, which enables its use as a solar or wind

energy or farm waste energy system or component.

(e) "Farm waste electric generating equipment" means equipment that

generates electric energy from biogas produced by the anaerobic

digestion of agricultural waste, such as livestock manure, farming waste

and food processing wastes with a rated capacity of not more than one

thousand kilowatts that is (i) manufactured, installed and operated in

accordance with applicable government and industry standards, (ii)

connected to the electric system and operated in conjunction with an

electric corporation's transmission and distribution facilities, (iii)

operated in compliance with the provisions of section sixty-six-j of the

public service law, (iv) fueled at a minimum of ninety percent on an

annual basis by biogas produced from the anaerobic digestion of

agricultural waste such as livestock manure materials, crop residues and

food processing wastes, and (v) fueled by biogas generated by anaerobic

digestion with at least fifty percent by weight of its feedstock being

livestock manure materials on an annual basis.

(f) "Farm waste energy system" means an arrangement or combination of

farm waste electric generating equipment or other materials, hardware or

equipment necessary to the process by which agricultural waste biogas is

produced, collected, stored, cleaned, and converted into forms of energy

such as thermal, electrical, mechanical or chemical and by which the

biogas and converted energy are distributed on-site. It does not include

pipes, controls, insulation or other equipment which are part of the

normal heating, cooling or insulation system of a building.

(g) "Micro-hydroelectric energy equipment" means any energy storage

device, penstock, turbine, generator and other materials, hardware and

equipment necessary to the process by which the flow of stream or river

water or water from other water bodies is (i) converted into electrical

energy; (ii) protected from unnecessary dissipation; and (iii)

distributed. It does not include pipes, controls, insulation or other

equipment which are part of the normal heating, cooling, or insulation

system of a building. It does not include insulated glazing or

insulation to the extent that such materials exceed the energy

efficiency standards established by law.

(h) "Micro-hydroelectric energy system" means an arrangement or

combination of micro-hydroelectric energy equipment designed to provide

electrical energy by the use of flowing water. It does not include

pipes, controls, insulation or other equipment which are part of the

normal heating, cooling, or insulation system of a building. It does not

include insulated glazing or insulation to the extent that such

materials exceed the energy efficiency standards established by law.

(i) "Fuel cell electric generating equipment" means a solid oxide,

molten carbonate, proton exchange membrane or phosphoric acid fuel cell

with a combined rated capacity of not more than two thousand kilowatts.

It does not include insulated glazing or insulation to the extent that

such materials exceed the energy efficiency standards established by

law.

(j) "Fuel cell electric generating system" means an arrangement or

combination of equipment designed to produce electrical energy through

reaction of chemicals, including but not limited to hydrogen, oxygen,

methane and natural gas.

(k) "Micro-combined heat and power generating equipment" means an

integrated, cogenerating building heating and electrical power

generation system, owned, leased or operated by a residential customer,

located at such customer's premises, operating on any fuel and of any

applicable engine, fuel cell, fuel-flexible linear generator or other

technology with a rated capacity of at least one kilowatt and not more

than ten kilowatts electric and any thermal output that has a design

total fuel use efficiency in the production of heat and electricity of

not less than eighty percent, and annually produces at least two

thousand kilowatt hours of useful energy in the form of electricity that

may work in combination with supplemental or parallel conventional

heating systems, that is manufactured, installed and operated in

accordance with applicable government and industry standards, that is

connected to the electric system and operated in conjunction with an

electric corporation's transmission and distribution facilities. It does

not include pipes, controls, insulation or other equipment which are

part of the normal heating, cooling, or insulation system of a building.

It does not include insulated glazing or insulation to the extent that

such materials exceed the energy efficiency standards established by

law.

(l) "Micro-combined heat and power generating equipment system" means

an arrangement or combination of equipment designed to produce

electrical energy and heat for a residential customer on such customer's

premises.

(m) "Electric energy storage equipment" means a set of technologies

capable of storing electric energy and releasing that energy as electric

power at a later time. Electric energy storage technologies may store

energy as potential, kinetic, chemical or thermal energy, that can be

released as electric power and include, but are not limited to, various

types of batteries, flywheels, electrochemical capacitors, compressed

air storage and thermal storage devices.

(n) "Electric energy storage system" means an arrangement or

combination of equipment designed to store electrical energy in electric

energy storage equipment and release electric power at a later time.

(o) "Fuel-flexible linear generator electric generating equipment" or

"fuel-flexible linear generator" means an integrated system consisting

of oscillators, cylinders, electricity conversion equipment and

associated balance of plant components that directly convert the linear

motion of the oscillators into electricity and which has a combined

rated capacity of not more than two thousand kilowatts.

(p) "Fuel-flexible linear generator electric generating system" means

an arrangement or combination of fuel-flexible linear generator electric

generating equipment designed to produce electrical energy from linear

motion created by the reaction of gaseous or liquid fuels, including but

not limited to biogas and natural gas.

2. Real property which includes a solar or wind energy system, farm

waste energy system, micro-hydroelectric energy system, fuel cell

electric generating system, micro-combined heat and power generating

equipment system, electric energy storage equipment and electric energy

storage system, or fuel-flexible linear generator electric generating

system approved in accordance with the provisions of this section shall

be exempt from taxation to the extent of any increase in the value

thereof by reason of the inclusion of such solar or wind energy system,

farm waste energy system, micro-hydroelectric energy system, fuel cell

electric generating system, micro-combined heat and power generating

equipment system, electric energy storage equipment and electric energy

storage system, or fuel-flexible linear generator electronic generating

system for a period of fifteen years. When a solar or wind energy system

or components thereof, farm waste energy system, micro-hydroelectric

energy system, fuel cell electric generating system, micro-combined heat

and power generating equipment system, electric energy storage equipment

and electric energy storage system, or fuel-flexible linear generator

electronic generating system also serve as part of the building

structure, the increase in value which shall be exempt from taxation

shall be equal to the assessed value attributable to such system or

components multiplied by the ratio of the incremental cost of such

system or components to the total cost of such system or components. The

exemption provided by this section is inapplicable to any structure that

satisfies the requirements for exemption under section four hundred

eighty-three-e of this title.

3. The president of the authority shall provide definitions and

guidelines for the eligibility for exemption of the solar and wind

energy equipment and systems, farm waste energy equipment and systems,

micro-hydroelectric equipment and systems, fuel cell electric generating

equipment and systems, micro-combined heat and power generating

equipment and systems, electric energy storage equipment and electric

energy storage system, and fuel-flexible linear generator electric

generating equipment and systems described in paragraphs (a), (b), (e),

(f), (g), (h), (i), (j), (k), (l), (m), (n), (o) and (p) of subdivision

one of this section.

4. No solar or wind energy system, farm waste energy system,

micro-hydroelectric energy system, fuel cell electric generating system,

micro-combined heat and power generating equipment system, electric

energy storage equipment and electric energy storage system, or

fuel-flexible linear generator electric generating system shall be

entitled to any exemption from taxation under this section unless such

system meets the guidelines set by the president of the authority and

all other applicable provisions of law.

5. The exemption granted pursuant to this section shall only be

applicable to (a) solar or wind energy systems or farm waste energy

systems which are (i) existing or constructed prior to July first,

nineteen hundred eighty-eight or (ii) constructed subsequent to January

first, nineteen hundred ninety-one and prior to January first, two

thousand thirty, and (b) micro-hydroelectric energy systems, fuel cell

electric generating systems, micro-combined heat and power generating

equipment systems, electric energy storage equipment or electric energy

storage system, or fuel-flexible linear generator electric generating

system which are constructed subsequent to January first, two thousand

eighteen and prior to January first, two thousand thirty.

6. Such exemption shall be granted only upon application by the owner

of the real property on a form prescribed and made available by the

commissioner in cooperation with the authority. The applicant shall

furnish such information as the commissioner shall require. The

application shall be filed with the assessor of the appropriate county,

city, town or village on or before the taxable status date of such

county, city, town or village. A copy of such application shall be filed

with the authority.

7. If the assessor is satisfied that the applicant is entitled to an

exemption pursuant to this section, he or she shall approve the

application and enter the taxable assessed value of the parcel for which

an exemption has been granted pursuant to this section on the assessment

roll with the taxable property, with the amount of the exemption set

forth in a separate column as computed pursuant to subdivision two of

this section in a separate column. In the event that real property

granted an exemption pursuant to this section ceases to be used

primarily for eligible purposes, the exemption granted pursuant to this

section shall cease.

8. (a) Notwithstanding the provisions of subdivision two of this

section, a county, city, town or village may by local law or a school

district, other than a school district to which article fifty-two of the

education law applies, may by resolution provide either (i) that no

exemption under this section shall be applicable within its jurisdiction

with respect to any solar or wind energy system or farm waste energy

system which began construction subsequent to January first, nineteen

hundred ninety-one or the effective date of such local law, ordinance or

resolution, whichever is later, and/or (ii) that no exemption under this

section shall be applicable within its jurisdiction with respect to any

micro-hydroelectric energy system, fuel cell electric generating system,

micro-combined heat and power generating equipment system, electric

energy storage equipment or electric energy storage system, or

fuel-flexible linear generator electric generating system constructed

subsequent to January first, two thousand eighteen or the effective date

of such local law, ordinance or resolution, whichever is later. A copy

of any such local law or resolution shall be filed with the commissioner

and with the president of the authority.

(b) Construction of a solar or wind energy system or a farm waste

energy system shall be deemed to have begun upon the full execution of a

contract or interconnection agreement with a utility; provided however,

that if such contract or interconnection agreement requires a deposit to

be made, then construction shall be deemed to have begun when the

contract or interconnection agreement is fully executed and the deposit

is made. The owner or developer of such a system shall provide written

notification to the appropriate local jurisdiction or jurisdictions upon

execution of the contract or the interconnection agreement.

9. (a) A county, city, town, village or school district, except a

school district under article fifty-two of the education law, that has

not acted to remove the exemption under this section may require the

owner of a property which includes a solar or wind energy system which

meets the requirements of subdivision four of this section, to enter

into a contract for payments in lieu of taxes. Such contract may require

annual payments in an amount not to exceed the amounts which would

otherwise be payable but for the exemption under this section. If the

owner or developer of such a system provides written notification to a

taxing jurisdiction of its intent to construct such a system, then in

order to require the owner or developer of such system to enter into a

contract for payments in lieu of taxes, such taxing jurisdiction must

notify such owner or developer in writing of its intent to require a

contract for payments in lieu of taxes within sixty days of receiving

the written notification. Written notification to a taxing jurisdiction

for this purpose shall include a hard copy letter sent to the

highest-ranking official of the taxing jurisdiction. Such letter shall

explicitly reference subdivision nine of section four hundred

eighty-seven of the real property tax law, and clearly state that,

unless the taxing jurisdiction responds within sixty days in writing

with its intent to require a contract for payments in lieu of taxes,

such project shall not be obligated to make such payments.

(b) Notwithstanding paragraph (a) of this subdivision, should a taxing

jurisdiction adopt a law or resolution at any time within or prior to

the sixty day window, indicating the taxing jurisdiction's ongoing

intent to require a contract for payments in lieu of taxes for such

systems, such law or resolution shall be considered notification to

owners or developers and no further action is required on the part of

the taxing jurisdiction, provided that such law or resolution remains in

effect through the end of the sixty day notification period.

(c) Any payment in lieu of a tax agreement shall not operate for a

period of more than fifteen years, commencing in each instance from the

date on which the benefits of such exemption first become available and

effective.

10. Notwithstanding the foregoing provisions of this section, on or

after April first, two thousand nineteen, a county, city, town or

village may by local law or a school district, other than a school

district to which article fifty-two of the education law applies, may by

resolution provide that real property that comprises or includes a solar

or wind energy system, farm waste energy system, microhydroelectric

energy system, fuel cell electric generating system, microcombined heat

and power generating equipment system, electric energy storage system,

or fuel-flexible linear generator as such terms are defined in

paragraphs (b), (f), (h), (j), (l), (n), and (o) of subdivision one of

this section (hereinafter, individually or collectively, "energy

system"), shall be permanently exempt from any taxation, special ad

valorem levies, and special assessments to the extent provided in

section four hundred ninety of this article, and the owner of such

property shall not be subject to any requirement to enter into a

contract for payments in lieu of taxes in accordance with subdivision

nine of this section, if: (a) the energy system is installed on real

property that is owned or controlled by the state of New York, a

department or agency thereof, or a state authority as that term is

defined by subdivision one of section two of the public authorities law;

and (b) the state of New York, a department or agency thereof, or a

state authority as that term is defined by subdivision one of section

two of the public authorities law has agreed to purchase the energy

produced by such energy system or the environmental credits or

attributes created by virtue of the energy system's operation, in

accordance with a written agreement with the owner or operator of such

energy system. Such exemption shall be granted only upon application by

the owner of the real property on a form prescribed by the commissioner,

which application shall be filed with the assessor of the appropriate

county, city, town or village on or before the taxable status date of

such county, city, town or village.