S T A T E O F N E W Y O R K
________________________________________________________________________
120
2023-2024 Regular Sessions
I N A S S E M B L Y
(PREFILED)
January 4, 2023
___________
Introduced by M. of A. MAGNARELLI -- read once and referred to the
Committee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to the certif-
ication of certain property complying with the residential-commercial
urban exemption program and the revocation of benefits of such program
in certain circumstances
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 485-a of the real property tax law, as amended by
chapter 132 of the laws of 2021, is amended to read as follows:
§ 485-a. Residential-commercial urban exemption program. 1. Defi-
nitions. As used in this section, the following terms shall have the
following meanings:
(a) "Municipality" means any town, city or village except for a city
having more than one million inhabitants.
(b) "Applicant" means any person obligated to pay real property taxes
on the property for which an exemption from real property taxes under
this section is sought.
(c) "Commercial construction work" means the modernization, rehabili-
tation, expansion or other improvement of the portion of mixed-use prop-
erty to be used for commercial purposes.
(d) "Commercial purpose or use" means [(i)] the buying, selling or
otherwise providing of goods or services directly to the public[; or
(ii) a non-residential lawful use including, but not limited to, an
office, hotel, retail store, brewery, distillery, restaurant, cafe, bar
or tavern, gymnasium, theater, or entertainment venue which employs or
is anticipated to employ a minimum of five employees primarily at the
mixed-use property for which an exemption under this section is sought],
INCLUDING HOTEL SERVICES, RETAIL STORES, OFFICE SPACE, RESTAURANTS,
BARS, GYMS, THEATERS, AND CAFES.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD00333-01-3
A. 120 2
(e) "Mixed-use property" means property on which will exist, after
completion of residential construction work or a combination of residen-
tial construction work and commercial construction work, a building or
structure used for both residential and commercial purposes of which, at
least [forty] FIFTY percent of the building or structure's square
footage is devoted to residential purposes or use and at least fifteen
percent of the building or structure's square footage is devoted to
commercial purposes or use. ONLY SQUARE FOOTAGE EXISTING IN A STORY
ABOVE GRADE SHALL BE USED IN THE DETERMINATION OF THE BUILDING'S
PERCENTAGE OF RESIDENTIAL PURPOSES OR USE AND COMMERCIAL PURPOSES OR
USE.
(f) "Person" means an individual, corporation, limited liability
company, partnership, association, agency, trust, estate, foreign or
domestic government or subdivision thereof, or other entity.
(g) "Residential construction work" means the creation, modernization,
rehabilitation, expansion or other improvement of dwelling units, other
than dwelling units in a hotel, in the portion of mixed-use property to
be used for residential purposes.
(h) "Story above grade" means any story having its finished floor
surface entirely above grade.
(i) "Grade" shall mean the finished ground level adjoining the build-
ing at all exterior walls.
(J) "FLOOR AREA" MEANS THE HORIZONTAL AREAS OF THE SEVERAL FLOORS OR
ANY PORTION THEREOF OF A MIXED-USE PROPERTY MEASURED FROM THE EXTERIOR
FACES OF EXTERIOR WALLS OR FROM THE CENTER LINE OF PARTY WALLS, EXCLU-
SIVE OF ANY AREA EXISTING BELOW-GRADE.
2. Any municipality may, by local law, provide for the exemption of
real property from taxation as provided in this section. Upon the
adoption of such a local law, the county in which such municipality is
located may, by local law, and any school district, all or part of which
is located in such municipality, may, by resolution, exempt such proper-
ty from its taxation in the same manner and to the same extent as such
municipality has done.
3. Upon the adoption of such a local law, non-residential real proper-
ty, upon conversion to mixed-use property, shall be exempt from taxation
and special ad valorem levies as provided for in subdivision four of
this section. LAND WHICH WAS VACANT PRIOR TO THE RESIDENTIAL OR COMMER-
CIAL CONSTRUCTION WORK FOR WHICH A TAX EXEMPTION IS SOUGHT, SHALL NOT BE
ELIGIBLE TO RECEIVE BENEFITS PURSUANT TO THIS SECTION.
4. (a) (i) For a period of twelve years from the approval of an appli-
cation, the increase in assessed value of such property attributable to
such conversion shall be exempt as provided in subparagraph (ii) of this
paragraph. Such exemption shall be computed with respect to the
"exemption base". The exemption base shall be determined for each year
in which there is an increase in assessed value so attributable from
that of the previous year's assessed value.
(ii) The following table shall illustrate the computation of the tax
exemption:
Year of exemption Percentage of exemption
1 through 8 100% of exemption base
9 80% of exemption base
10 60% of exemption base
11 40% of exemption base
12 20% of exemption base
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(b) No such exemption shall be granted unless:
(i) such conversion was commenced subsequent to the date on which the
municipality's local law took effect; [and]
(ii) the cost of such conversion exceeds the sum of ten thousand
dollars or such greater amount as may be specified by local law[.];
(III) AT LEAST SEVENTY-FIVE PERCENT OF THE FLOOR AREA OF THE MIXED-USE
PROPERTY CONSISTS OF THE PRE-EXISTING BUILDING OR STRUCTURE; AND
(IV) THE PORTION OF THE BUILDING USED FOR COMMERCIAL PURPOSES IS
CURRENTLY, AS DEMONSTRATED BY DOCUMENTATION SUBMITTED BY THE APPLICANT,
USED AS SUCH OR IS IN GOOD FAITH CONTEMPLATED.
(c) For purposes of this section the term conversion shall not include
ordinary maintenance and repairs.
(d) No such exemption shall be granted concurrent with or subsequent
to any other real property tax exemption granted to the same improve-
ments to real property, except, where during the period of such previous
exemption, payments in lieu of taxes or other payments were made to the
local government in an amount that would have been equal to or greater
than the amount of real property taxes that would have been paid on such
improvements had such property been granted an exemption pursuant to
this section. In such case, an exemption shall be granted for a number
of years equal to the twelve year exemption granted pursuant to this
section less the number of years the property would have been previously
exempt from real property taxes.
5. Such exemption shall be granted only upon application by the owner
of such real property on a form prescribed by the commissioner. Such
application shall be filed with the assessor of the municipality or
county having the power to assess property for taxation on or before the
appropriate taxable status date of such municipality or county.
6. If the assessor is satisfied that the applicant is entitled to an
exemption pursuant to this section, he or she shall approve the applica-
tion and such real property shall be exempt from taxation and special ad
valorem levies as in this section provided. The assessed value of any
exemption granted pursuant to this section shall be entered by the
assessor on the assessment roll with the taxable property, with the
amount of the exemption shown in a separate column.
7. (a) During the period of exemption pursuant to this section, the
owner shall submit an annual certification to the assessor attesting
that the property complies with the provisions or requirements of this
section and any additional provisions or requirements as may be provided
by local law. Failure to submit such certification shall result in revo-
cation of benefits. Such certification shall include at a minimum the
following:
(i) the types of residential use and the total above-grade square
footage [and below-grade square footage] of such use;
(ii) the types of commercial use and the total above-grade square
footage [and below-grade square footage] of such use;
(iii) attestation that the portion of the building used for commercial
purposes is currently, as demonstrated by documentation submitted by the
applicant, used as such or is in good faith contemplated [to be used as
such]; AND
(iv) [the specific address of the entrance through which the public
enters the portion of the building used for commercial purposes;
(v) if the portion of the building intended to be used for commercial
purposes is not currently in active use for such purposes and open to
the public, the reasons why it is not currently being used for commer-
cial purposes and open to the public; and
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(vi)] all such other information required by the municipality.
(b) If the assessor is satisfied that the applicant continues to be
entitled to the exemption pursuant to this section, the assessor shall
approve the certification and the real property shall remain exempt from
taxation and special ad valorem levies for another year as provided in
this section.
8. (a) The benefits of this section shall be revoked upon a finding by
the assessor that:
(i) the application for benefits hereunder or the annual certification
required hereunder contains a false statement or false information as to
a material matter or omits a material matter; OR
(ii) the eligible real property fails to comply with one or more of
the provisions or requirements of this section or any provisions or
requirements provided by local law[; or
(iii) the portion of the property devoted to commercial purposes has
not been in active use for commercial purposes and open to the public
for three consecutive years].
(b) Such revocation shall require the repayment of any benefits previ-
ously granted pursuant to this section [for any year during which the
property was non-compliant or the application or annual certification
contained a false statement or false information as to a material matter
or omitted a material matter.
(c) No benefits may be revoked unless the applicant has been given
thirty days' notice of such revocation and has been given reasonable
notice to cure any failure to comply with the provisions of requirements
of this section].
9. If the assessor determines that there was a material misstatement
in an application filed by or on behalf of the owners for an exemption
pursuant to this section and that such misstatement provided the basis
for the granting of such exemption, the municipality shall proceed to
impose a penalty on the applicant of one thousand dollars in addition to
recovering the amount of any prior exemption granted.
§ 2. This act shall take effect January 1, 2024 and shall apply to
properties for which the initial application for exemption are received
on and after such date.