NY State Senate Bill 2019-S8436

Senate Bill S8436

2019-2020 Legislative Session

Relates to authorizing an exemption for class one capital improvements to residential buildings and certain new construction in a special assessing unit that is not a city

download bill text pdf

Archive: Last Bill Status - In Senate Committee Housing, Construction And Community Development Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 29, 2020	referred to housing, construction and community development

2019-S8436 (ACTIVE) - Details

See Assembly Version of this Bill:: A10649
Current Committee:: Senate Housing, Construction And Community Development
Law Section:: Real Property Tax Law
Laws Affected:: Amd §421-f, RPT L
Versions Introduced in 2021-2022 Legislative Session:: S4265, A2566

2019-S8436 (ACTIVE) - Summary

Authorizes an exemption for class one capital improvements to residential buildings and certain new construction in a special assessing unit that is not a city.

2019-S8436 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S8436

SPONSOR: THOMAS
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to authorizing an
exemption for class one capital improvements to residential buildings
and certain new construction in a special assessing unit that is not a
city

 
PURPOSE:

This bill would amend the Real Property Tax Law ("RPTL") to provide
Nassau County class one homeowners an expanded exemption to transition
the increased value of capital improvements to residential buildings and
new construction up to $750,000 for assessment purposes.

 
SUMMARY OF PROVISIONS:

Section one of the bill amends the heading of 421-f of the Real Property
Tax Law to "Exemption of capital improvements to residential buildings

and certain new construction."

Section two of the bill adds a new paragraph to 421-f of the Real Prop-
erty Tax Law expanding the exemption to new construction in Nassau for
class one properties. No application would be required to receive the
exemption.

Section three of the bill amends 421-f to include a new construction
exemption for Nassau class one homeowners. The exemption follows the
existing law's eight-year schedule, which provided for a 100% exemption
of the qualifying increased value in year one, followed by decreases of
12.5% per year cumulatively for seven years until all of the new value
is captured on the assessment roll. The amendment would also raise the
exemption limit in Nassau County for class one capital improvements and
physical improvements from $80,000 to $750,000 in increased market
value.  Increases in market value for capital improvements and physical
improvements over $750,000 would not receive the benefit of the
exemption.

Section four of the bill amends other provisions of 421-f to conform to
the new exemption changes.

Section five of the bill provides that the changes would be effective
for Nassau County's 2020-2021 assessment roll and two subsequent rolls
and then sunsets, at which point the current law's provisions as applied
to Nassau county would be restored, including the $80,000 market value
cap on the exemption and without application to new construction.

Section six is a severability clause.

Section seven is the effective date.

 
JUSTIFICATION:

Nassau County's nearly decade-long frozen roll that the prior County
administration instituted beginning in 2011 has greatly lessened the
affordability of new construction and capital improvements in the Coun-

ty. The cost of construction per square foot in Nassau is greater than
most, if not all, other suburban areas of the state.

Because the roll was frozen, the prior administration drastically cut
positions in the County Department of Assessment, which left the depart-
ment unable to add new construction timely to the roll. This left a
backlog that the current administration has been required to add to the
roll in the last year as part of its assessment reform program. These
delayed updates disproportionately impact many homeowners in the County
because of the effect on new construction of the five-year transitional
assessments that the County is applying to the 2020-2021 roll in
connection with its recent reassessment.

Transitioning the increase in a property's market value due to new
construction and physical improvements for the purposes of assessment
would address these inequities and strengthen the housing market in
Nassau.  This would provide residents with protection from the immediate
impact of assessment increases similar to those provided under other
laws.  Increasing and expanding the current exemption as provided in the
bill will make it more appropriate and meaningful in Nassau due to its
higher costs of construction.

The County has made great progress in promoting economic development to
ensure that businesses remain in, or relocate to, the County, while at
the same time preserving the County's suburban identity. This legis-
lation will build on that success by preserving and generating jobs in
the construction industry during the recovery from the severe economic
impact of the coronavirus crisis.

 
LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

None.

 
EFFECTIVE DATE:
This act shall take effective immediately.

2019-S8436 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8436
 
                             I N  S E N A T E
 
                               May 29, 2020
                                ___________
 
 Introduced  by  Sen.  THOMAS -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN ACT to amend the real property tax law, in relation to authorizing an
   exemption  for class one capital improvements to residential buildings
   and certain new construction in a special assessing unit that is not a
   city

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  The section heading of section 421-f of the real property
 tax law, as amended by chapter 590 of the laws of 1994,  is  amended  to
 read as follows:
   Exemption of capital improvements to residential buildings AND CERTAIN
 NEW CONSTRUCTION.
   § 2. Section 421-f of the real property tax law is amended by adding a
 new subdivision 1-a to read as follows:
   1-A.  BUILDINGS  CLASSIFIED  AS CLASS ONE PROPERTY IN SECTION EIGHTEEN
 HUNDRED TWO OF THIS CHAPTER RECONSTRUCTED, ALTERED, IMPROVED,  OR  NEWLY
 CONSTRUCTED  IN  A  SPECIAL  ASSESSING  UNIT THAT IS NOT A CITY SHALL BE
 EXEMPT FROM TAXATION AND SPECIAL AD VALOREM LEVIES IN  THE  SAME  MANNER
 AND  TO  THE  SAME  EXTENT  AS COUNTY, TOWN, SPECIAL DISTRICT AND SCHOOL
 DISTRICT TAXES LEVIED ON THE ASSESSMENT ROLL PREPARED  BY  SUCH  SPECIAL
 ASSESSING  UNIT.  AN  APPLICATION  SHALL  NOT BE REQUIRED TO RECEIVE THE
 EXEMPTION.
   § 3. Subdivisions 2 and 3 of section 421-f of the  real  property  tax
 law, as amended by chapter 590 of the laws of 1994, subparagraph (ii) of
 paragraph  (a)  of subdivision 2 and subdivision 3 as further amended by
 subdivision (b) of section 1 of part W of chapter  56  of  the  laws  of
 2010, are amended to read as follows:
   2.  (a) Such buildings shall be exempt for a period of one year to the
 extent of one hundred per centum of the increase in assessed value ther-
 eof attributable to such reconstruction, alteration or improvement,  AND
 NEW  CONSTRUCTION PURSUANT TO SUBDIVISION ONE-A OF THIS SECTION, and for
 an additional period of seven years subject to the following:
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                       [ ] is old law to be omitted.
                                                            LBD16543-02-0

 S. 8436                             2
 
   (i) The extent of such exemption shall  be  decreased  by  twelve  and
 one-half  per centum of the "exemption base" each year during such addi-
 tional period. The "exemption base" shall be the  increase  in  assessed
 value  as  determined  in the initial year of the term of the exemption,
 except as provided in subparagraph (ii) of this paragraph.
   (ii)  In  any year in which a change in level of assessment of fifteen
 percent or more is certified for a final assessment roll pursuant to the
 rules of the commissioner, the exemption base shall be multiplied  by  a
 fraction,  the  numerator  of which shall be the total assessed value of
 the parcel on such final assessment roll (after accounting for any phys-
 ical or quantity changes to the parcel since the  immediately  preceding
 assessment  roll),  and  the  denominator  of  which  shall be the total
 assessed value of the parcel on the immediately preceding final  assess-
 ment  roll.  The  result  shall be the new exemption base. The exemption
 shall thereupon be recomputed to take into  account  the  new  exemption
 base,  notwithstanding the fact that the assessor receives certification
 of the change in level of assessment after the completion,  verification
 and  filing of the final assessment roll. In the event the assessor does
 not have custody of the roll when such certification  is  received,  the
 assessor  shall  certify  the recomputed exemption to the local officers
 having custody and control of the roll,  and  such  local  officers  are
 hereby  directed and authorized to enter the recomputed exemption certi-
 fied by the assessor on the roll. The assessor shall give written notice
 of such recomputed exemption to the property owner, who may,  if  he  or
 she  believes that the exemption was recomputed incorrectly, apply for a
 correction in the manner provided by title three of article five of this
 chapter for the correction of clerical errors.
   (iii) [Such] EXCEPT IN A SPECIAL ASSESSING UNIT THAT IS  NOT  A  CITY,
 SUCH  exemption shall be limited to eighty thousand dollars in increased
 market value, or such other sum less than eighty thousand  dollars,  but
 not  less than five thousand dollars as may be provided by the local law
 or resolution, of the  property  attributable  to  such  reconstruction,
 alteration  or improvement and any increase in market value greater than
 such amount shall not be eligible for the  exemption  pursuant  to  this
 section.  IN  A SPECIAL ASSESSING UNIT THAT IS NOT A CITY, THE EXEMPTION
 SHALL BE LIMITED TO SEVEN HUNDRED FIFTY THOUSAND  DOLLARS  IN  INCREASED
 MARKET  VALUE. For the purposes of this section, the market value of the
 reconstruction,  alteration  or  improvement,  OR  NEW  CONSTRUCTION  AS
 AUTHORIZED  BY  SUBDIVISION ONE-A OF THIS SECTION, shall be equal to the
 increased assessed value attributable to such reconstruction, alteration
 [or], improvement OR NEW CONSTRUCTION divided by the class [I] ONE ratio
 in a special assessing unit  or  the  most  recently  established  state
 equalization  rate  or special equalization rate in the remainder of the
 state, except where the state equalization rate or special  equalization
 rate  equals  or exceeds ninety-five percent, in which case the increase
 in assessed value attributable to  such  reconstruction,  alteration  or
 improvement  shall  be  deemed  to equal the market value of such recon-
 struction, alteration or improvement.
   (b) [No] EXCEPT IN A SPECIAL ASSESSING UNIT THAT IS  NOT  A  CITY,  NO
 such  exemption  shall  be  granted  for  reconstruction, alterations or
 improvements unless:
   (i) such  reconstruction,  alteration  or  improvement  was  commenced
 subsequent  to the effective date of the local law or resolution adopted
 pursuant to subdivision one of this section; and
   (ii) the value  of  such  reconstruction,  alteration  or  improvement
 exceeds three thousand dollars; and

 S. 8436                             3
 
   (iii)  the greater portion, as so determined by square footage, of the
 building reconstructed, altered or improved is at least five years old.
   (c)  For purposes of this section the terms reconstruction, alteration
 and improvement shall not include ordinary maintenance and repairs.
   3. [Such] EXCEPT IN A SPECIAL ASSESSING UNIT THAT IS NOT A CITY,  SUCH
 exemption  shall  be  granted only upon application by the owner of such
 building on a form prescribed by the commissioner. The application shall
 be filed with the assessor of the city, town, village or  county  having
 the  power  to assess property for taxation on or before the appropriate
 taxable status date of such city, town, village or county.  IN A SPECIAL
 ASSESSING UNIT THAT IS NOT A CITY, THE EXEMPTION SHALL BE APPLIED  BASED
 UPON  THAT COMPLETION OF RECONSTRUCTION, ALTERATION, IMPROVEMENT, OR NEW
 CONSTRUCTION ON OR BEFORE THE TAXABLE STATUS DATE OF THE SPECIAL ASSESS-
 ING UNIT.
   § 4. Subdivisions 5, 6 and 7 of section 421-f of the real property tax
 law, as amended by chapter 590 of the laws of 1994, are amended to  read
 as follows:
   5.  For  the  purposes  of this section, EXCEPT IN A SPECIAL ASSESSING
 UNIT THAT IS NOT A CITY, a residential building shall mean any  building
 or  structure designed and occupied exclusively for residential purposes
 by not more than two families.
   6. In the event that a building granted an exemption pursuant to  this
 section  ceases  to  be used primarily for residential purposes or IS NO
 LONGER CLASSIFIED AS CLASS ONE PROPERTY IN A SPECIAL ASSESSING UNIT THAT
 IS NOT A CITY, title thereto is transferred to other than the  heirs  or
 distributees  of  the  owner,  the  exemption  granted  pursuant to this
 section shall cease.
   7. (a) [A] EXCEPT FOR A SPECIAL ASSESSING UNIT THAT IS NOT A  CITY,  A
 county, city, town or village may, by its local law, or school district,
 by its resolution:
   (i)  reduce  the per centum of exemption otherwise allowed pursuant to
 this section;
   (ii) limit eligibility for the exemption  to  those  forms  of  recon-
 struction,  alterations  or improvements as are prescribed in such local
 law or resolution;
   (iii) provide that the exemption shall be  applicable  only  to  those
 improvements which would otherwise result in an increase in the assessed
 valuation  of the real property but which consist of an addition, remod-
 eling or modernization to an existing residential structure  to  prevent
 physical  deterioration  of  the  structure or to comply with applicable
 building, sanitary, health and/or fire codes.
   (b) No such  local  law  or  resolution  shall  reduce  or  repeal  an
 exemption  granted  pursuant to this section until the expiration of the
 period for which such exemption was granted.
   § 5. Applicability. This act shall be applicable  beginning  with  the
 two  thousand  twenty -- two thousand twenty-one assessment roll through
 and including the two thousand twenty-two -- two  thousand  twenty-three
 assessment roll.
   § 6. Severability. If any clause, sentence, paragraph, section or part
 of  this act shall be adjudged by any court of competent jurisdiction to
 be invalid and after exhaustion of  all  further  judicial  review,  the
 judgment  shall  not affect, impair or invalidate the remainder thereof,
 but shall be confined in its operation to the  clause,  sentence,  para-
 graph,  section or part of this act directly involved in the controversy
 in which the judgment shall have been rendered.
   § 7. This act shall take effect immediately.

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