BILL NUMBER:S1077

TITLE OF BILL:

An act to amend the real property tax law, in relation to
telecommunications equipment

SUMMARY OF 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 (i), which relates to owners other than a telephone 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
immediately.

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 assessable. The
current definitions of assessable real property in these provisions
each includes "all lines, wires, poles, supports and inclosures" used
in connection with conducting electricity, but these provisions do not
currently specifically mention equipment for conducting 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
telecommunications 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 telecommunication 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 considered 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 electromagnetic 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
Department 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 communications 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 telecommunications 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
telecommunications 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 technology going forward.

LEGISLATIVE HISTORY:

2013-4: S.5349 - Referred to Local Government both years

FISCAL IMPLICATIONS:

None

EFFECTIVE DATE:

This act shall take effect immediately.