S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5988
 
                        2019-2020 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 26, 2019
                                ___________
 
 Introduced by M. of A. LAWRENCE -- read once and referred to the Commit-
   tee on Real Property Taxation
 
 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, A 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.
   (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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09595-01-9

 A. 5988                             2
 
 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
 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.

 A. 5988                             3
 
   (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) SMALL BUSINESSES.  FOR THE PURPOSES OF THIS SUBDIVISION:
   (I) THE TERM  "SMALL BUSINESS" SHALL MEAN A BUSINESS WHICH EMPLOYS ONE
 HUNDRED PERSONS OR LESS AND IS LOCATED  ON  A  NON-RESIDENTIAL  PROPERTY
 USED  PRIMARILY  FOR  COMMERCIAL  PURPOSES.  SUCH  BUSINESS WILL ONLY BE
 ELIGIBLE FOR THE EXEMPTION IF IT DOES NOT RECEIVE EMPIRE ZONE REAL PROP-
 ERTY TAX BENEFITS PURSUANT TO SECTION FIFTEEN OF THE TAX LAW OR DOES NOT
 MAKE PAYMENTS IN LIEU OF TAXES TO THE PUBLIC SCHOOL  DISTRICT  IN  WHICH
 SUCH  SMALL  BUSINESS  IS LOCATED AT A RATE BELOW THE RATE APPLICABLE TO
 ALL OTHER PROPERTIES; AND
   (II) THE TERM "COMMERCIAL" SHALL HAVE THE SAME MEANING AS SET FORTH IN
 SECTION FOUR HUNDRED EIGHTY-NINE-AAA OF THIS ARTICLE.
   § 2. This act shall take effect immediately and  shall  apply  to  all
 taxable years beginning on and after January 1, 2019.