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A03772 Summary:

A03772 Actions:

A03772 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
 submitted in accordance with Assembly Rule III, Sec 1(f)



 
BILL NUMBER: A3772
 
SPONSOR: Quart

 
TITLE OF BILL:  An act to amend the real property tax law, in relation
to transition assessments for class three parcels in the city of New
York
 
 
PURPOSE OR GENERAL IDEA OF BILL:
 
To provide for a phase-in for any changes in assessment for parcels
classified as utility property in New York City.
 
 
SUMMARY OF SPECIFIC PROVISIONS:
 
Amends Section 1805 of the Real Property Tax Law to provide for a five-
year phase-in of any assessment increases resulting from changes in
market value for parcels classified in class three.
 
 
JUSTIFICATION:
 
The New York City real property tax structure is comprised of two main
mechanisms to moderate changes in assessed value from year-to-year.  For
most properties in New York City, changes in market value, and ultimate-
ly assessments and the resulting tax bills, are phased in over a five-
year period of time. For small residential properties (Class 1), there
are caps on assessment growth to minimize annual assessment changes.
Approximately 94% of New York City's taxable assessed value derives from
properties that benefit from one of these two stabilizing mechanisms.
 
Unlike the other classes, utility property in class three is not
provided with such a stabilizing mechanism and is subject to annual
spikes in market value and subsequent spikes in tax liability. It is the
only class that realizes the full change in market value in the year it
occurs. Energy customers subsequently absorb these sudden increases in
their utility bills.

This proposed legislation would provide Class 3 properties with the
stabilization protections provided to properties in the other classes by
enabling a five-year phase-in of assessment changes. Doing so would
protect energy customers from sudden spikes in energy costs resulting
from rapid changes in a public utility's property tax liability.
 
 
PRIOR LEGISLATIVE HISTORY:
 
2015-2016: A4692 referred to Real Property Taxation
2013-2014: A7651 referred to Real Property Taxation
 
 
EFFECTIVE DATE:
Immediately and applicable to assessment rolls with a taxable status
date following its effective date.

A03772 Text:

 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          3772
 
                               2017-2018 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 30, 2017
                                       ___________
 
        Introduced  by M. of A. QUART -- read once and referred to the Committee
          on Real Property Taxation
 
        AN ACT to amend the real property tax law,  in  relation  to  transition
          assessments for class three parcels in the city of New York
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 3 of section 1805 of the real property tax law,
     2  as amended by chapter 143 of the laws of 1989 and as further amended  by
     3  subdivision  (b)  of  section  1  of part W of chapter 56 of the laws of
     4  2010, is amended to read as follows:
     5    3. If the assessment appearing on an assessment roll completed  on  or
     6  after  January  first,  nineteen  hundred  eighty-two for any parcel not
     7  subject to the provisions of subdivision one or two  of  this  section[,
     8  other  than  a  parcel  classified  in class three,] is greater than the
     9  assessment appearing on the previous year's assessment roll the assessor
    10  shall determine a transition assessment for such parcel  for  the  first
    11  assessment roll on which such greater assessment appears and for each of
    12  the succeeding four assessment rolls by computing the difference between
    13  such  greater  assessment  and the assessment appearing on such previous
    14  year's assessment roll and adding  the  following  percentages  of  such
    15  difference  to  the assessment appearing on such previous year's assess-
    16  ment roll: in the first year, twenty percent; in the second year,  forty
    17  percent;  in  the  third year, sixty percent; in the fourth year, eighty
    18  percent; and in the fifth year, one hundred percent. If  the  assessment
    19  of  a  parcel  is increased during a period for which transition assess-
    20  ments have been established because of any prior  assessment  increases,
    21  such  new  increase  shall  be  phased-in over a five-year period as set
    22  forth in this subdivision, and such phased-in increases shall  be  added
    23  to  the  transitional  assessments  previously established for the prior
    24  increase; provided, however, that if in any  year  any  such  transition
    25  assessment exceeds the actual assessment for such year, taxes imposed on
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08922-01-7
        A. 3772                             2
 
     1  such  parcel  for such year shall be based on such lesser actual assess-
     2  ment. Notwithstanding the foregoing, during the period of any such tran-
     3  sition, the assessment roll shall contain an entry of the full amount of
     4  such  greater  assessment which shall be used by the commissioner in its
     5  determination of class ratios pursuant to paragraph (b)  of  subdivision
     6  one of section twelve hundred two of this chapter. In establishing state
     7  equalization rates, class equalization rates, special state equalization
     8  rates  and special state equalization ratios under article twelve, arti-
     9  cle twelve-A and article twelve-B  of  this  chapter,  the  commissioner
    10  shall use the transition assessments as provided for in this subdivision
    11  in  its  determinations,  or  where the actual assessment is the lesser,
    12  such actual assessment shall be so used.
    13    § 2. This act shall take effect immediately.