RPS-16-08-00006-P Annual Charges to Railroad Companies

4/16/08 N.Y. St. Reg. RPS-16-08-00006-P

NEW YORK STATE REGISTER

VOLUME XXX, ISSUE 16

April 16, 2008

RULE MAKING ACTIVITIES

OFFICE OF REAL PROPERTY SERVICES

PROPOSED RULE MAKING

HEARING(S) SCHEDULED

 

I.D No. RPS-16-08-00006-P

Annual Charges to Railroad Companies

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed action:

Repeal of section 200-6.7 and addition of section 200-7.1 to Title 9 NYCRR.

Statutory authority:

Real Property Tax Law, sections 202(1)(l), 489-q and 489-nn; and State Finance Law, section 97-jj

Subject:

Annual charges to railroad companies.

Purpose:

To restore the process of establishing annual charges that was unintentionally deleted in a prior rule making.

Public hearing(s) will be held at:

10:00 a.m., May 14, 2008 at 16 Sheridan Ave., Albany, NY 12210

Accessibility:

All public hearings have been scheduled at places reasonably accessible to persons with a mobility impairment.

Interpreter Service:

Interpreter services will be made available to deaf persons, at no charge, upon written request submitted within reasonable time prior to the scheduled public hearing. The written request must be addressed to the agency representative designated in the paragraph below.

Text of proposed rule:

The State Board of Real Property Services hereby amends Part 200 of Title 9 of the Official Compilation of Codes, Rules and Regulations of the State of New York as follows:

Section one: Section 200-6.7 is repealed.

Section 2. Part 200 is amended by adding a new section 200-7.1 to read as follows:

200-7.1 Annual charge to railroad companies.

§ 200-7.1 Annual charge to railroad companies. (a) Each year a charge shall be computed for each railroad company receiving a tentative railroad ceiling.

(b) The charge shall be computed as follows:

(1) The executive director or his designee shall establish a dollar amount for the direct and indirect costs and expenses for computing and establishing railroad ceilings. In establishing this amount, the executive director shall include the costs of obtaining valuation information, processing that information, calculating values, establishing ceilings and complying with all statutory and regulatory notice and hearing requirements for establishing those ceilings. He shall not include the cost of any contractual expenses incurred in defense of any railroad ceilings.

(2) The value of railroad real property used for transportation purposes used to establish the final railroad ceilings for the previous year for all railroad companies shall be divided into the dollar amount determined in paragraph (1) of this subdivision. This shall be the charge rate.

(3) The charge rate shall be multiplied by the value of real property used for transportation purposes which was used to compute the final railroad ceiling for a railroad company for the previous year. In the first year a railroad company receives a railroad ceiling, the charge rate shall be multiplied by the value of real property used for transportation purposes which was used to compute the tentative railroad ceiling for that company.

(4) Where a charge of less than $25 is computed, no charge shall be imposed. Annual charges unpaid more than 60 days after the billing date shall be considered past due.

(c) Charges shall be computed and billed annually on or about July 1st, or within 45 days of the adoption of the State Operations Budget, whichever is later. If the total amount computed and billed is more than the amount previously estimated and sent to a railroad company in the preceding calendar year after submission of the budget request pursuant to section 200-7.5(f) of this section, the bill should be accompanied by a detailed explanation of the difference.

(d) All revenue collected pursuant to this Subpart shall be deposited in the industrial and utility service account of the miscellaneous special revenue fund.

(e) In no event may the amount computed and billed for the railroad ceiling program exceed the funds appropriated for this program in the State Operations Budget. The amount computed shall be reduced prior to billing by the amount of any funds remaining unexpended in the industrial and utility service account of the special revenue fund that are identifiable to the railroad ceiling program.

(f) No later than 30 days prior to the submission of the next fiscal year's budget request, the Office of Real Property Services shall notify railroad companies of prospective program changes, if any, and the preliminary estimated cost for administration of the railroad ceiling program for the next fiscal year. Railroad companies may submit comments regarding these changes and costs up to 15 days after issuance of the notice. These comments shall be considered by office staff in finalizing the budget request. After submission of the budget request, ORPS shall notify railroad companies of the final estimated cost for administration of the program for the next fiscal year.

(g) Within 10 days of receipt of the notice of any prospective program changes and the preliminary estimated cost of administration of the program for the next fiscal year, any railroad company may request that a meeting be scheduled for railroad companies to discuss these proposed program changes and preliminary estimated costs with ORPS staff. Upon receipt of any such request, ORPS shall schedule such a meeting and shall provide all railroad companies with notice of the time and place that such meeting will be held.

(h) At the same time that the Office of Real Property Services notifies railroad companies of prospective program changes for the next fiscal year, an accounting of the costs of administering the railroad ceiling program for the preceding fiscal year shall be available upon request.

(i) (1) Costs and expenses incurred in the establishment of railroad ceilings which shall be paid from the collection of the annual charge shall include direct personal services, nonpersonal services, and indirect costs.

(2) Direct personal services shall be calculated in the following manner. The executive director shall identify those job titles that directly perform tasks required by the railroad ceiling program and shall enumerate the percent of time each particular job title is expected to spend on the program.

(3) Nonpersonal services include travel, supplies, equipment, contractual obligations, and mandated fringe benefit charges as published annually by the Office of the State Comptroller and expressed as a percentage of estimated personal service costs.

(4) Indirect costs, or overhead, include space rental, heat, utilities, security, computing and data processing costs, training and staff development costs, and the cost of executive direction and administration.

(5) In computing indirect costs, the amount of time individual employees spend in the establishment of railroad ceilings, as enumerated pursuant to paragraph (2) of this subdivision, shall be expressed as full-time employee equivalents. This number shall be divided by the number of full-time employee equivalents of ORPS whose official station is the Albany office of ORPS on the first day of the fiscal year for which the annual charge is determined. This percentage shall be computed to the third decimal place. The resulting percentage shall be applied to total costs for Albany space rental, heat, utilities, security, computing and data processing, and training and staff development to determine indirect costs other than the cost of executive direction and administration.

(6) The cost of executive direction and administration required for the establishment of railroad ceilings, which includes the costs of legal services, fiscal and administrative services, human resource management and development, and the office of the executive director, shall be determined by dividing the total personal services appropriation of ORPS) for the fiscal year for which the annual charge is being computed into the salary equivalents of the sum of those individuals responsible for providing these services. The resulting percentage, computed to the third decimal place, shall be applied to the amount determined for the cost of direct personal services pursuant to paragraph (2) of this subdivision to determine the indirect cost of executive direction and administration.

(i)* In computing the annual charge rate or the annual charge for any railroad company pursuant to this section, the value of railroad real property shall be determined without any adjustment for any economic factor established pursuant to title 2-A of article 4 of the Real Property Tax Law.

Section 3. This amendment shall take effect immediately and apply to all annual fees imposed for fiscal years ending on or after April 30, 2008.

Text of proposed rule and any required statements and analyses may be obtained from:

Hung Kay Lo, Office of Real Property Services, 16 Sheridan Ave., Albany, NY 12210-2714, [phone], e-mail: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory Authority: Section 202(1)(l) of the Real Property Tax Law (RPTL) authorizes the State Board of Real Property Services (State Board) to adopt such rules “as may be necessary for the exercise of its powers and the performance of its duties.”

Sections 489-q (for intrastate railroads) and 489-nn (for interstate railroads) of the RPTL authorizes the State Board to impose an annual charge on railroad companies to defray the cost of the railroad ceilings program.

Section 97-jj of the State Finance Law creates an Industrial and Utility Service Account for those annual charges.

2. Legislative Objectives: Funding of the railroad ceiling program through the imposition of annual charges on railroad companies.

3. Needs and Benefits: Titles 2-A and 2-B of Article 4 of the RPTL provide a de facto exemption for railroads operating in New York. Each year the State Board establishes ceilings for transportation property of approximately 20 railroads in each of approximately 385 assessing unit. Taxes are subsequently extended against the lower of the ceiling or the assessment placed on the property by the local assessor.

This estimate includes certain adjustments that make the estimate lower than that which would be established under normal circumstances. This cost estimate is then reduced further by application of a factor that reflects the profitability of the individual railroad — the less profitable the railroad, the lower the value. The resulting values are equalized to provide a ceiling, so that the railroad company pays on the lower of the ceiling or the local assessment of the property.

In 2006 the staff of the State Office of Real Property Services (ORPS) reviewed the provisions of Part 200 of Title 9 concerning the railroad ceiling program and, at a March 21, 2006, meeting of the State Board, recommended certain changes to those rules, which contain the process the Board has established for the ceiling program. Some information is no longer needed and the requirements for forms RPRR-A, RPRR-D and RPRR-5 are deleted. Chapter 733 of the Laws of 2004 changed the valuation date for railroad ceilings from the prior (or second prior) December 31 to the prior July 1 (489-c[3], 489-cc[3]). This in turn requires changes in the dates for some of the annual reports. The Railroad Infrastructure Investment Act of 2002 (Chapter 698), which provides additional reductions in the cost calculation and adjustments to the profitability curves, also requires minor changes to the rules. In addition, some valuation information has been deleted due to internal agency operations being more appropriate in procedure rather than rule.

In 2007 amendments were made to Part 200 to recognize changes in State and Federal law (RPS-40-06-00007, April 11, 2007). Those amendments inadvertently retained section 200-6.7, which is duplicative of statute (Real Property Tax Law 1224), and repealed section 200-7.1, which provides the process for establishing annual charges for railroad companies. This proposal corrects that error.

4. Costs: (a) To State Government: None.

(b) To local governments: None.

(c) To private regulated parties: None. The annual charge is imposed by statute.

(d) Basis of cost estimates: The nature of the amendment.

5. Local Government Mandates: None.

6. Paperwork: None.

7. Duplication: There are no comparable State or Federal requirements.

8. Alternatives: Establishment of annual charges without the process being contained in rule. A set of the proposed amendments were sent to each of the affected railroad companies on December 4, 2007, requesting comments. By the deadline date of December 21, 2007, no comment has been received.

9. Federal Standards: There are no Federal regulations concerning this subject.

10. Compliance Schedule: The annual charges would continue in place without change. There would be no compliance imposed on railroad companies.

Regulatory Flexibility Analysis

The amendments proposed would not impose any adverse economic conditions or any reporting, recordkeeping or other compliance requirements on small businesses. The proposal restores the process for establishing the annual fee imposed by statute on railroad companies of whatever size.

The rule imposes no additional recordkeeping or reporting requirements on local governments.

Rural Area Flexibility Analysis

A rural area flexibility analysis is not required for this rule making because the amendments would not impose any adverse economic conditions, any reporting, recordkeeping or compliance requirements on public or private entities in rural areas. The proposal restores the process for the imposition of statutory annual fees.

Job Impact Statement

These amendments concern the establishment of the annual fee for railroad companies under the existing railroad ceiling program. The proposal should have no effect, positive or negative, on job opportunities.