S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1116--A
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                              January 6, 2017
                                ___________
 
 Introduced  by  Sen.  AKSHAR -- read twice and ordered printed, and when
   printed to be committed to the Committee on Local Government -- recom-
   mitted to the Committee on Local Government in accordance with  Senate
   Rule  6,  sec.  8  --  committee  discharged,  bill  amended,  ordered
   reprinted as amended and recommitted to said committee

 AN ACT to amend the real property tax law, in relation to extending  the
   benefits of the STAR program to small businesses
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 3 of section 425 of the real property tax  law,
 as  added  by  section  1  of part B of chapter 389 of the laws of 1997,
 paragraph (a) as amended by chapter 264 of the laws of  2000,  paragraph
 (b-1)  as  added  by  section  1 of part FF of chapter 57 of the laws of
 2010, paragraph (d) as amended by chapter 564 of the laws of 2015, para-
 graph (e) as added by section 2 of part W of chapter 57 of the  laws  of
 2008, and paragraph (f) as added by section 1 of part B of chapter 59 of
 the laws of 2012, is amended to read as follows:
   3.   Eligibility  requirements.  (a)  Property  use.  To  qualify  for
 exemption pursuant to this section, the property must be a one,  two  or
 three  family  residence, a farm dwelling, SMALL BUSINESS or residential
 property held in condominium or cooperative form of  ownership.  If  the
 property is not an eligible type of property, but a portion of the prop-
 erty is partially used by the owner as a primary residence, that portion
 which  is  so  used  shall be entitled to the exemption provided by this
 section; provided that in  no  event  shall  the  exemption  exceed  the
 assessed value attributable to that portion.
   (b)  Primary  residence.  The property must serve as the primary resi-
 dence of one or more of the owners  thereof,  UNLESS  SUCH  PROPERTY  IS
 OWNED  BY  A SMALL BUSINESS AS DEFINED IN PARAGRAPH (G) OF THIS SUBDIVI-
 SION.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD04175-02-8
              

 S. 1116--A                          2
 
   (b-1) Income. For final assessment rolls to be used for  the  levy  of
 taxes  for  the  two thousand eleven-two thousand twelve school year and
 thereafter, the parcel's affiliated income may be no greater  than  five
 hundred  thousand dollars, as determined by the commissioner of taxation
 and  finance  pursuant  to  section one hundred seventy-one-u of the tax
 law, in order to be eligible for the basic exemption authorized by  this
 section.  As  used  herein,  the term "affiliated income" shall mean the
 combined income of all of the owners of the parcel who resided primarily
 thereon on the applicable taxable status date, and of any owners' spous-
 es residing primarily thereon. For exemptions on final assessment  rolls
 to  be  used for the levy of taxes for the two thousand eleven-two thou-
 sand twelve school year, affiliated income  shall  be  determined  based
 upon the parties' incomes for the income tax year ending in two thousand
 nine.  In  each  subsequent  school year, the applicable income tax year
 shall be advanced by one year. The term "income" as  used  herein  shall
 have the same meaning as in subdivision four of this section.
   (c)  Trusts.  If  legal  title  to the property is held by one or more
 trustees, the beneficial owner or owners shall  be  deemed  to  own  the
 property for purposes of this subdivision.
   (d)  Farm  dwellings  not owned by the resident. (i) If legal title to
 the farm dwelling is held by an S-corporation or by a C-corporation, the
 exemption shall be granted if the property serves as the  primary  resi-
 dence of a shareholder of such corporation.
   (ii) If the legal title to the farm dwelling is held by a partnership,
 the  exemption  shall  be  granted if the property serves as the primary
 residence of one or more of the partners.
   (iii) If the legal title to the farm dwelling is  held  by  a  limited
 liability company, the exemption shall be granted if the property serves
 as the primary residence of one or more of the owners.
   (iv)  Any information deemed necessary to establish shareholder, part-
 ner or owner status for eligibility purposes shall be considered  confi-
 dential and exempt from the freedom of information law.
   (e)  Dwellings  owned by limited partnerships. (i) If legal title to a
 dwelling is held by a limited partnership, the exemption shall be grant-
 ed if the property serves as the primary residence of one or more of the
 partners, provided that the limited partnership which holds title to the
 property does not engage in any commercial activity,  that  the  limited
 partnership  was  lawfully created to hold title solely for estate plan-
 ning and asset protection purposes, and that the partner or partners who
 primarily reside thereon personally pay all of the real  property  taxes
 and other costs associated with the property's ownership.
   (ii)  Any information deemed necessary to establish partner status for
 eligibility purposes shall be considered confidential  and  exempt  from
 the freedom of information law.
   (f)  Compliance with state tax obligations. The property's eligibility
 for the STAR exemption must not be suspended  pursuant  to  section  one
 hundred  seventy-one-y  of  the  tax  law  due to the past-due state tax
 liabilities of one or more of its owners. Notwithstanding any  provision
 of  law  to  the  contrary,  where  a  property's eligibility for a STAR
 exemption has been suspended pursuant to  such  section,  the  following
 provisions shall be applicable:
   (i)  The  property  shall  be  ineligible for a basic or enhanced STAR
 exemption effective with the next school year commencing after the issu-
 ance of notice by the department of the suspension  of  its  eligibility
 for the STAR exemption, even if the notice was issued after the applica-
 ble  taxable status date. If a STAR exemption has been granted to such a

 S. 1116--A                          3
 
 property on a tentative or final assessment roll, the assessor or  other
 person  having custody of that roll is hereby authorized and directed to
 immediately remove that STAR exemption from the roll.
   (ii) Any challenge to the factual or legal basis behind the suspension
 of a property's eligibility for a STAR exemption pursuant to section one
 hundred seventy-one-y of the tax law must be presented to the department
 in  the  manner  prescribed  by  such section. Neither an assessor nor a
 board of assessment review has the authority to consider  such  a  chal-
 lenge.
   (iii)  The  property  shall  remain  ineligible for the STAR exemption
 until the department notifies the assessor that the  suspension  of  its
 eligibility has been lifted. Once the assessor has been so notified, the
 exemption  may be resumed on a prospective basis only, provided that the
 eligibility requirements of this section are otherwise satisfied.
   (iv) In the case of a cooperative apartment or mobile home receiving a
 STAR exemption pursuant to paragraph (k) or (l) of  subdivision  two  of
 this section, a suspension of a STAR exemption due to a taxpayer's past-
 due  state tax liabilities shall only apply to the STAR exemption on the
 cooperative apartment or mobile home owned, or deemed to  be  owned,  by
 that taxpayer.
   (G)  FOR  THE  PURPOSES OF THIS SUBDIVISION, THE TERM "SMALL BUSINESS"
 SHALL MEAN A BUSINESS WHICH EMPLOYS ONE HUNDRED PERSONS OR LESS.
   § 2. This act shall take effect immediately and  shall  apply  to  all
 taxable years beginning on and after January 1, 2018.