Assembly Bill A9970

                                BILL NUMBER:A9970

TITLE OF BILL:  An act to amend the real property tax law, in relation
to procedures to review small claims

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

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

(i) twenty-five percent of the threshold assessed value, plus

(ii) five percent of the amount by which the challenged assessment 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 limi-
tation of twenty five percent of the assessed valuation for properties
worth over $450,000.

High-end properties, while still residential, alien are mare complex to
assess 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 some cases the maximum reduction allowed, twenty-five percent 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 bill would provide an additional limitation on the maximum
reductions allowed in SCAR proceedings for properties worth over one
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 arbi-
trated 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 new legislation

FISCAL IMPLICATIONS: None to the Stale

EFFECTIVE DATE: Immediately