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A05570 Summary:

BILL NOA05570
 
SAME ASNo Same As
 
SPONSORBrabenec
 
COSPNSRMorinello, Salka
 
MLTSPNSR
 
Amd 102 & 490, add 403, 420 & 497, RPT L
 
Relates to authorizing the imposition of service charges upon certain real property.
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A05570 Actions:

BILL NOA05570
 
02/13/2019referred to real property taxation
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A05570 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5570
 
SPONSOR: Brabenec
  TITLE OF BILL: An act to amend the real property tax law, in relation to authorizing the imposition of service charges upon certain real property   PURPOSE OR GENERAL IDEA OF BILL: To permit municipalities, at local option, to impose charges on tax exempt properties to defray the cost of certain services local govern- ments provide.   SUMMARY OF PROVISIONS: Section one - amends subdivision 20 of section 102 of the real property tax law and adds a new subdivision 13-a to define service charge as a charge, other than a special ad valorem levy or special assessment, imposed upon real property by or on behalf of a county, city, town or village, to defray the cost of services and improvements necessary or convenient in providing such services for the following purposes: police protection; fire protection; street and high-way construction, mainte- nance and lighting; sanitation; and water supply. Section two - adds a new section 403 to the real property tax law in relation to limitation on exemptions granted. All real property for which exemption is allowed, exclusive of property used exclusively for charitable, hospital, educational or cemetery purposes, shall be subject to service charges and to such special ad valorem, levies and special assessments, except that real property owned by a municipality within such municipality shall be exempt; or real property owned by a munici- pality outside its borders which is otherwise wholly or partially exempt from taxation shall also be exempt. Section three - adds a new section 42C to title 2 of article 4 of the real property tax law providing for limitation on exemptions granted. Notwithstanding sections 421-a, 424-428, 432, 434, 438-444, 450, 452, 464, 472, 474, 486, and 488 of the real property tax law, real property for which exemption is allowed by any such sections, exclusive of prop- erty owned by a corporation or association organized or conducted exclu- sively for religious, charitable, hospital, educational or cemetery purposes, shall be subject to service charges, special ad valorem levies and special assessments. Section four - amends section 490 of the real property tax law, as amended by chapter 87 of the laws of 2001 to add service charges. Section five - adds a new section 497 to the real property tax law relating to service charges and defines chargeable services and improve- ments as services, and improvements necessary or convenient in providing such services, for the following purposes: police protection; fire protection; street and highway construction, maintenance and lighting; sanitation; and water supply. The amount of the service charge shall be based on the assessed value of the tax exempt property and the amount which the county, city or town or village expended, in the year preced- ing the year in which such charge is assessed, for chargeable services and improvements. Any federal or state aid received for such aforemen- tioned purposes shall not be considered. The expenditures for services not provided for certain real property shall not be considered when a service is currently funded by another special ad valorem levy or special assessment. The service charge rate shall be determined by dividing the expenditures determined pursuant to paragraph (a) of this subdivision by the assessed value of all real property located within the county, city, town or village imposing the service charge, including nontaxable property. Under no circumstances shall the amount of such service charge exceed ten percent of the property tax liability if the property were subject to taxation. The provisions of this section shall not authorize the imposition of any charge by any municipality on real property otherwise exempt by law from taxation unless such municipality shall hold a public hearing and adopt a local law, ordinance or resol- ution. Section six - contains the effective date.   JUSTIFICATION: Local governments in New York State continue to face a myriad of fiscal challenges, particularly with respect to the financing and delivery of essential municipal services. Since the property tax is the single most important revenue source for local governments, the erosion of the local tax base and the accompanying burden it places on local taxpayers is of paramount concern to both state local officials. While much of the erosion is attributable to population declines and decreases in property values, particularly in the state's urban centers, the tax base is also compromised by the imposition of real property tax exemptions.According to 2006 data, approximately 62 percent of the 5.6 billion parcels in New York State are wholly or partially exempt from taxes. This reflects $738 billion in exempt full value -- 32 percent of the value of all property in the State. While real property tax exemptions do play an important role in New York State's property tax system, it is important to note that exempting property from taxes doesn't diminish the need for reven- ues; it simply shifts the burden of generating those revenues to the remaining taxpayers in the community. It is also important to consider that many of the state's tax exempt properties require the same, or in some cases, more municipal services than other taxable properties in the community yet they are not required to help fund the costs associated with these services due to their tax exempt status. This bill would provide local governments with a mechanism to recoup a portion of those costs, at local option. at a fraction of the amount these properties would pay if they were subject to taxation.   PRIOR LEGISLATIVE HISTORY: 2008: A.11172; held for consideration in real property taxation. 2009: A.738; held for consideration in real property taxation. 2015: A.6211; referred to real property taxation 2016: A.6211; referred to real property taxation 2016: A.6211; held for consideration in real property taxation 2017: A.5645; referred to real property taxation 2018: A.5645; referred to real property taxation   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: This would assist local governments in providing services.   EFFECTIVE DATE: This act shall take effect on the first of April of the calendar year next succeeding the date on which it shall have become a law, and shall apply to all assessments made with reference to a taxable status date which falls on or after such effective date.
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A05570 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5570
 
                               2019-2020 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 13, 2019
                                       ___________
 
        Introduced by M. of A. BRABENEC -- read once and referred to the Commit-
          tee on Real Property Taxation
 
        AN  ACT  to  amend the real property tax law, in relation to authorizing
          the imposition of service charges upon certain real property
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Subdivision 20 of section 102 of the real property tax law
     2  is amended and a new subdivision 13-a is added to read as follows:
     3    13-a. "Service charge" means a charge, other than a special ad valorem
     4  levy or special assessment, imposed upon real property by or  on  behalf
     5  of  a  county, city, town or village, to defray the cost of services and
     6  improvements necessary or convenient in providing such services for  the
     7  following purposes: police protection; fire protection; street and high-
     8  way  construction,  maintenance  and  lighting;  sanitation;  and  water
     9  supply. All improvements specified in paragraph (a) of  subdivision  one
    10  of  section  four  hundred  ninety  of this chapter shall be deemed such
    11  improvements.
    12    20. "Tax" or "taxation" means a charge imposed upon real  property  by
    13  or  on  behalf  of  a county, city, town, village or school district for
    14  municipal or school district purposes, including a service  charge,  but
    15  does  not include a special ad valorem levy or a special assessment. The
    16  term "tax" or "taxes" as used in articles five, nine[, ten]  and  eleven
    17  of  this  chapter shall for levy and collection purposes include special
    18  ad valorem levies.
    19    § 2. The real property tax law is amended by adding a new section  403
    20  to read as follows:
    21    §  403.  Limitation  on exemptions granted by this title. 1.  Notwith-
    22  standing the provisions of sections four hundred four and  four  hundred
    23  six  of  this title, all real property for which exemption is allowed by
    24  any of such sections, exclusive of property used exclusively for  chari-
    25  table,  hospital,  educational or cemetery purposes, shall be subject to
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD08138-01-9

        A. 5570                             2
 
     1  service charges computed as provided in section four hundred ninety-sev-
     2  en of this article and to such special ad  valorem  levies  and  special
     3  assessments  as are specified in subdivision two of section four hundred
     4  ninety of this article, except that:
     5    (a)  real  property owned by a municipal corporation within its corpo-
     6  rate limits which is otherwise exempt from taxation shall be exempt from
     7  any such service charge, special ad valorem levy or  special  assessment
     8  imposed by or on behalf of such municipal corporation; or
     9    (b)  real  property  owned  by  a municipal corporation not within its
    10  corporate limits which is otherwise exempt from taxation, either  wholly
    11  or  partially,  shall be exempt from any such service charge, special ad
    12  valorem levy or special assessment imposed by or on behalf of any munic-
    13  ipal corporation in which such property is located, provided the govern-
    14  ing board thereof shall so agree in writing.
    15    2. To the extent that the provisions of this section are  inconsistent
    16  with any other provision of law, the provisions of this section shall be
    17  controlling.
    18    §  3.  Title 2 of article 4 of the real property tax law is amended by
    19  adding a new section 420 to read as follows:
    20    § 420. Limitation on exemptions granted by this title.  1.    Notwith-
    21  standing  the  provisions  of  sections  four hundred twenty-one-a, four
    22  hundred twenty-four through  four  hundred  twenty-eight,  four  hundred
    23  thirty-two,  four hundred thirty-four, four hundred thirty-eight through
    24  four hundred forty-four, four hundred  fifty,  four  hundred  fifty-two,
    25  four  hundred  sixty-four, four hundred seventy-two, four hundred seven-
    26  ty-four, four hundred eighty-six and four hundred eighty-eight  of  this
    27  title;  real  property  for  which  exemption  is  allowed  by  any such
    28  sections, exclusive of property owned by a  corporation  or  association
    29  organized  or conducted exclusively for religious, charitable, hospital,
    30  educational or cemetery purposes, shall be subject  to  service  charges
    31  computed  as provided in section four hundred ninety-seven of this arti-
    32  cle and to such ad valorem levies and special assessments as are  speci-
    33  fied in subdivision two of section four hundred ninety of this chapter.
    34    2.  To the extent that the provisions of this section are inconsistent
    35  with any other provision of law, the provisions of this section shall be
    36  controlling.
    37    § 4. Section 490 of the real property tax law, as amended  by  chapter
    38  87 of the laws of 2001, is amended to read as follows:
    39    §  490.  Exemption  from special ad valorem levies and special assess-
    40  ments.  [Real] 1.  Except as otherwise provided in  subdivision  two  of
    41  this section, real property exempt from taxation pursuant to subdivision
    42  two  of  section  four  hundred, subdivision one of section four hundred
    43  four, subdivision one of section four hundred six, sections four hundred
    44  eight, four hundred ten, four hundred ten-a, four  hundred  ten-b,  four
    45  hundred  eighteen,  four  hundred  twenty-a, four hundred twenty-b, four
    46  hundred twenty-two, four hundred twenty-six, four hundred  twenty-seven,
    47  four hundred twenty-eight, four hundred thirty, four hundred thirty-two,
    48  four  hundred thirty-four, four hundred thirty-six, four hundred thirty-
    49  eight, four hundred fifty, four hundred fifty-two, four  hundred  fifty-
    50  four,  four  hundred  fifty-six,  four  hundred sixty-four, four hundred
    51  seventy-two, four hundred seventy-four and four hundred  eighty-five  of
    52  this  [chapter]  article  shall  also  be exempt from special ad valorem
    53  levies and special assessments against  real  property  located  outside
    54  cities  and  villages  for a special improvement or service or a special
    55  district improvement or  service  and  special  ad  valorem  levies  and
    56  special assessments imposed by a county improvement district or district

        A. 5570                             3
 
     1  corporation  except [(1)] (a) those levied to pay for the costs, includ-
     2  ing interest and incidental and preliminary costs, of  the  acquisition,
     3  installation,  construction,  reconstruction and enlargement of or addi-
     4  tions  to  the  following  improvements,  including  original equipment,
     5  furnishings, machinery or apparatus, and the replacements thereof: water
     6  supply and distribution  systems;  sewer  systems  (either  sanitary  or
     7  surface  drainage or both, including purification, treatment or disposal
     8  plants or buildings); waterways and drainage improvements; street, high-
     9  way, road and parkway improvements (including sidewalks, curbs, gutters,
    10  drainage, landscaping, grading or improving the right of way) and  [(2)]
    11  (b)  special  assessments  payable  in  installments  on an indebtedness
    12  including interest contracted prior  to  July  first,  nineteen  hundred
    13  fifty-three,  pursuant  to section two hundred forty-two of the town law
    14  or pursuant to any other comparable provision of law.
    15    2.  Notwithstanding the provisions of subdivision one of this section,
    16  real property subject to service charges as  provided  in  section  four
    17  hundred  three  or  four  hundred  twenty  of this article shall also be
    18  subject to special ad valorem levies and special assessments imposed  to
    19  defray  the  cost,  including  operation  and  maintenance,  of  special
    20  district improvements or services or of special improvements or services
    21  for the following purposes: police protection; fire  protection;  street
    22  and  highway  construction,  maintenance  and  lighting; sanitation; and
    23  water supply. All improvements specified in paragraph (a) of subdivision
    24  one of this section shall be deemed such improvements.
    25    § 5.  The real property tax law is amended by adding a new section 497
    26  to read as follows:
    27    § 497. Service charges. 1. Any service charge to which any real  prop-
    28  erty may be subject as provided in section four hundred three or section
    29  four  hundred twenty of this article shall be imposed at a rate computed
    30  as provided in subdivision three of this section.
    31    2. For the purposes of this section, "chargeable services and improve-
    32  ments" means services,  and  improvements  necessary  or  convenient  in
    33  providing  such services, for the following purposes: police protection;
    34  fire protection; street and highway construction, maintenance and light-
    35  ing; sanitation; and water supply. All improvements specified  in  para-
    36  graph  (a)  of  subdivision  one  of section four hundred ninety of this
    37  title shall be deemed chargeable improvements.
    38    3. The amount of the service charge shall be determined as follows:
    39    (a) The service charge shall be based on the assessed value of the tax
    40  exempt real property and the amount which the county, city  or  town  or
    41  village expended, in the year preceding the year in which such charge is
    42  assessed,  for chargeable services and improvements. Any amount received
    43  from federal or state aid specifically  designated  for  the  above-men-
    44  tioned  purposes  shall  not  be  considered  in determining the cost of
    45  providing such services for the  real  property.  The  expenditures  for
    46  services  not provided for certain real property shall not be considered
    47  in the calculation of the service charge for  such  real  property,  nor
    48  shall such expenditures be considered when a service is currently funded
    49  by another special ad valorem levy or special assessment.
    50    (b)  The  service  charge  rate  for  the tax-exempt property shall be
    51  determined by dividing the expenditures determined pursuant to paragraph
    52  (a) of this subdivision by the  assessed  value  of  all  real  property
    53  located  within  the  county, city, town or village imposing the service
    54  charge, including nontaxable property.

        A. 5570                             4
 
     1    (c) The resulting rate shall then be applied to the assessed valuation
     2  of the tax exempt property subject to service charges to  determine  the
     3  amount of such charges.
     4    (d)  Under  no  circumstances  shall the amount of such service charge
     5  exceed ten percent of the property tax liability if  the  property  were
     6  subject to taxation.
     7    4.  The  provisions of this section shall not authorize the imposition
     8  of any service charge, special ad valorem levy or special assessment  by
     9  any  municipal corporation on real property otherwise exempt by law from
    10  taxation unless the governing board of such municipal corporation  shall
    11  previously, after public hearing, have adopted a local law, ordinance or
    12  resolution  electing  to make the provisions of this section applicable.
    13  For the purposes of this section, governing board, with respect  to  the
    14  city  of  New  York, shall mean the board of estimate of the city of New
    15  York.
    16    § 6. This act shall take effect on the first of April of the  calendar
    17  year  next  succeeding the date on which it shall have become a law, and
    18  shall apply to all assessments made with reference to a  taxable  status
    19  date which falls on or after such effective date.
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