BILL NUMBER:A8896

TITLE OF BILL:  An act to amend the real property tax law, in relation
to assessment reduction

PURPOSE  OR GENERAL IDEA OF BILL: The purpose of this bill is to allow
Westchester County to limit the maximum allowable assessment reduction
in Small Claims Assessment Review (SCAR)  proceedings  for  properties
that are worth over one million dollars.

SUMMARY  OF  SPECIFIC  PROVISIONS: Section one amends paragraph (c) of
subdivision 1 of section 730 of the Real Property  Tax  Law  to  allow
assessing  units  in Westchester County to pass a local law that would
limit the amount by which an  assessment  could  be  reduced  in  SCAR
proceedings  for  properties  worth  over  one  million  dollars.  The
limitations prescribed would be:

a. 25% of the threshold assessed value, plus

b. Five percent of the amount by which the challenged  assessed  value
exceeds the threshold assessed value.

For  the purposes of this section "threshold assessed value" means the
assessed value that equates to  an  equalized  value  of  one  million
dollars.

              

JUSTIFICATION:  The  initial  intent of Small Claims Assessment Review
(SCAR) was to provide to homeowners seeking small refunds an  informal
and inexpensive venue for tax grievances. SCAR provides an alternative
to  Supreme  Court,  mitigating  the need for legal representation and
adherence to higher standards of disclosure and evidence. Due  to  the
informal  nature  of SCAR and its intent to provide modest refunds, it
originally had a maximum tax refund limit of  $750.  This  tax  dollar
refund  limitation  was  later  eliminated and replaced by the current
limitation of 25% of the assessed valuation for properties worth  over
$450,000.

Over  the past several years, Westchester County has seen a tremendous
increase in  the  number  of  SCAR  filings.  Many  of  these  filings
represent   high-end   homes.   High-end   properties,   while   still
residential, often are more complex to valuate than a typical one, two
or three-family residence. The complexity of their valuation  and  the
minimum  supporting  evidence  required  in a SCAR proceeding, make it
difficult to properly  adjudicate  such  claims.  In  many  cases  the
maximum  reduction  allowed,  25% of the assessed value, is sought and
granted without sufficient justification - some with corresponding tax
reductions as high as $50,000.  Because  SCAR  does  not  provide  the
opportunity  for a municipality to appeal a ruling, municipalities are
at a disadvantage when it comes to defending  their  assessed  values,
even when high refunds are at stake.

This  has not gone unnoticed by property tax representatives, who have
benefited from the SCAR process. In the year 2008-09 it  is  estimated
that 95% of SCAR cases in the Towns of North Castle, Scarsdale and the
Cities  of While Plains and Rye were filed by tax representatives.  As
a result of the increase in  the  total  number  of  SCAR  reductions,
especially  for  high-end  properties, many Westchester municipalities


find their tax base decreasing and their ability to  provide  adequate
services in jeopardy.

This  bill  would  provide  an  additional  limitation  on the maximum
reductions allowed in SCAR proceedings for  properties  worth  over  a
million dollars. In doing so, Small Claims Assessment Review would, as
originally intended, provide homeowners seeking modest refunds an easy
and  expeditious  grievance  venue.  Large  sum  reductions  would  be
arbitrated in  tax  certiorari  proceedings.  Homeowners  of  high-end
properties  could  still utilize SCAR; they simply would be limited in
the amount of a reduction they could receive.

PRIOR LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS:  None to State

EFFECTIVE DATE: Immediately