Burling, Crouch, Errigo, Giglio, Kolb, Miller J, Raia, Townsend
MLTSPNSR
Bacalles, Conte, Spano
Add SS307-b, 1443 - 1450, RPT L; amd S606, Tax L; amd S2022, Ed L
Limits real property assessment increases; caps municipal tax increases in this state; establishes a personal income tax credit for a cap on real property tax based off of a household's income; creates senior tax deferral; defines terms; provides for annual notification to senior taxpayers and permits prepayment of deferred taxes for certain seniors who meet the requirements of the enhanced STAR exemption.
STATE OF NEW YORK
________________________________________________________________________
4031
2009-2010 Regular Sessions
IN ASSEMBLY
January 29, 2009
___________
Introduced by M. of A. THIELE, BURLING, CROUCH, ERRIGO, GIGLIO, KOLB,
MILLER, WALKER, RAIA, TOWNSEND -- Multi-Sponsored by -- M. of A.
BACALLES, CONTE, SPANO -- read once and referred to the Committee on
Real Property Taxation
AN ACT to amend the real property tax law, in relation to limiting real
property assessment increases on primary residences only and to
provide for senior tax deferral; to amend the tax law, in relation to
establishing a personal income tax credit for a cap on real property
tax based off of a household's gross income; and to amend the educa-
tion law, in relation to authorizing a school district to impose a cap
on taxes
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The real property tax law is amended by adding a new
2 section 307-b to read as follows:
3 § 307-b. Limitation on increases of assessed value of primary resi-
4 dences only real property subject to taxation. 1. Notwithstanding any
5 provision of any general, special or local law to the contrary, the
6 assessor for a municipal corporation shall not increase the assessment
7 of any primary residences only taxable real property as defined pursuant
8 to section three hundred of this title, as measured from the full valu-
9 ation assessment of such real property on December thirty-first, two
10 thousand nine, unless the property is sold, transferred or renovated, or
11 to correct an error. Three years from the effective date of this section
12 and once every three years thereafter, a municipal corporation shall be
13 allowed to increase the assessment of taxable real property by the
14 percentage increase in the consumer price index or five percent whichev-
15 er is less, but not more than the actual increase in value.
16 2. When a person sells or transfers his or her primary residence with-
17 in this state and within one year establishes in the same assessing unit
18 another property as his or her new primary residence, the newly estab-
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD05122-01-9
A. 4031 2
1 lished primary residence shall be initially assessed at less than fair
2 market value. The difference between the new primary residence's fair
3 market value and its assessed value in the first year the homestead is
4 established shall be the difference between the previous primary resi-
5 dence's fair market value and its assessed value in the year of sale. In
6 addition, to be assessed as provided in this subdivision, the assessed
7 value of the new primary residence shall be equal to or exceed the
8 assessed value of the previous primary residence. Thereafter, the
9 primary residence shall be assessed as provided in this section.
10 § 2. Section 606 of the tax law is amended by adding a new subsection
11 (qq) to read as follows:
12 (qq) Cap on real property tax. (1) A taxpayer shall be allowed a cred-
13 it, to be computed as provided in this subsection, against the tax
14 imposed by this article. A cap on real property tax shall be established
15 based on a household's gross income and indexed to the consumer price
16 index.
17 (2) The net real property tax for any taxable year on a parcel of
18 owner-occupied residential real property shall not exceed an amount
19 equal to the following percentage of the household gross income:
20 Household Gross IncomeCap on Real Property Tax
21 $200,000 or less5% of household gross income
22 (3) A taxpayer shall file income tax returns in the manner prescribed
23 by this article. Any amount paid over the real property tax cap shall be
24 returned to the taxpayer in the form of a refundable personal income tax
25 credit. Section four hundred twenty-five of the real property tax law
26 shall not be affected by any provision of this subsection.
27 (4) The personal income tax credit pursuant to this section shall only
28 be available to New York state residents for a primary residence. Such
29 credit shall be claimed on the New York state resident income tax
30 return, form IT-201.
31 (5) For the purposes of this section, the following terms shall have
32 the following meanings:
33 (A) a "homeowner" shall mean any person:
34 (i) who occupied the same New York residence for six months or more;
35 (ii) who paid real property taxes on such person's residence;
36 (iii) who was a New York state resident for all of the tax year;
37 (iv) who could not be claimed as a dependent on another taxpayer's
38 federal income tax return;
39 (v) whose residence was not completely exempted from real property
40 taxes; and
41 (vi) whose primary residence is in New York state.
42 (B) "Members of a household" include all who share a residence and its
43 furnishings, facilities, and accommodations whether such persons are
44 related or not.
45 However, tenants, subtenants, roomers, or boarders are not members of
46 a household unless such persons are related in one of the following
47 ways:
48 (i) a son, daughter, or a descendent of either; (ii) a stepson or
49 stepdaughter; (iii) a brother, sister, stepbrother, or stepsister; (iv)
50 a father, mother, or an ancestor of either; (v) a stepfather or step-
51 mother; (vi) a niece or nephew; (vii) an aunt or uncle; or (viii) a
52 son-in-law, daughter-in-law, father-in-law, mother-in-law, brother-in-
53 law, or sister-in-law.
54 Provided, further, that no one can be a member of more than one house-
55 hold at one time.
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1 (C) "Household gross income" means the annual total of the following
2 income items that a homeowner and all members of his or her household
3 received during the tax year;
4 (i) Federal adjusted gross income (even if such person does not have
5 to file a federal return);
6 (ii) New York state additions to federal adjusted gross income. For a
7 list of these additions, see Publication 22, General Information on New
8 York State's Real Property Tax Credit for Homeowners and Renters, or the
9 instructions for Form IT-201. For Form IT-200 filers, the New York State
10 additions to federal adjusted gross income are shown on Form IT-200,
11 line 9, Public employee 414(h) retirement contributions and line 10, IRC
12 125 amounts from the New York City flexible benefits program. For Form
13 IT-201 filers, the New York State additions to federal adjusted gross
14 income are shown on Form IT-201, lines 19 through 22;
15 (iii) Support money, including foster care support payments;
16 (iv) Income earned abroad exempted by section 911 of the Internal
17 Revenue Code;
18 (v) Supplemental Security Income (SSI) payments;
19 (vi) Nontaxable Interest received from New York state, its agencies,
20 instrumentalities, public corporations, or political subdivisions;
21 (vii) Workers' compensation;
22 (viii) The gross amount of loss-of-time Insurance. (For example, an
23 accident or health insurance policy and disability benefits received
24 under a no-fault automobile policy, etc.);
25 (ix) Cash public assistance and relief, other than medical assistance
26 for the needy (for example, cash grants to clients, emergency aid to
27 adults, value of food vouchers received by clients, etc.), except
28 amounts received from the Home Energy Assistance Program (HEAP);
29 (x) Nontaxable strike benefits;
30 (xi) The gross amount of pensions and annuities, including railroad
31 retirement benefits;
32 (xii) All payments received under the Social Security Act and veterans
33 disability pensions reduced by any Medicare premiums deducted from your
34 benefit reported on Federal Form SSA-1099, Social Security Benefit
35 Statement.
36 Household gross income shall not include food stamps, medicare, medi-
37 caid, scholarships, grants, surplus food, or other relief in kind. It
38 also shall not include payments made to veterans under the Federal
39 Veterans' Dioxin and Radiation Exposure Compensation Standards Act
40 because of exposure to herbicides containing dioxin (agent orange), or
41 pursuant to certain agent orange product liability litigation.
42 Also, household gross income shall not include payments made to indi-
43 viduals because of their status as victims of Nazi persecution as
44 defined in federal Public Law 103-286.
45 (D) A "residence" means a dwelling that a person owns that is located
46 in New York state. For purposes of this subparagraph, each residence
47 within a multiple dwelling unit may qualify. A condominium or a cooper-
48 ative within a single dwelling is also a residence.
49 A trailer or mobile home that is used only for residential purposes is
50 also a residence if the trailer or mobile home is assessed for real
51 property tax purposes.
52 (E) "Real property taxes paid" are:
53 (i) All current, prior, and prepaid real property taxes, special ad
54 valorem levies and assessments levied and paid upon a residence owned or
55 previously owned by a qualified taxpayer (or spouse, if the spouse occu-
56 pied the residence for at least six months) during the tax year. Such
A. 4031 4
1 person may elect to include real property taxes that are exempted from
2 tax under section four hundred sixty-seven (for persons sixty-five and
3 older) of the real property tax law (veterans' tax exemption does not
4 qualify).
5 (ii) Real property taxes paid also include any real estate taxes
6 allowed (or which would be allowable if the taxpayer had filed a return
7 on a cash basis) as a deduction for tenant-stockholders in a cooperative
8 housing corporation under section 216 of the internal revenue code.
9 (iii) If any part of a residence was owned by someone who was not a
10 member of a household, include only the real property taxes paid that
11 apply to the part such person and other qualified members of a household
12 own.
13 If a residence was part of a larger unit, include only the amount of
14 real property taxes paid that can be reasonably applied to such person's
15 residence.
16 If a homeowner owned and occupied more than one residence during the
17 tax year, add together the prorated part of real property taxes paid for
18 the period you occupied each residence.
19 § 3. Section 2022 of the education law is amended by adding a new
20 subdivision 7 to read as follows:
21 7. a. Notwithstanding any other provision of law, rule or regulation
22 to the contrary, in a common, union free, central, central high school
23 district or city school district to which this article applies, upon the
24 filing with the trustees or board of education of a petition pursuant to
25 paragraph b of this subdivision requesting such officers to submit a
26 proposition for the purpose of imposing a limitation on the tax rate to
27 the qualified voters at the annual district meeting signed by twenty-
28 five percent of the number of qualified voters who voted in the previous
29 annual district meeting, said number to be determined by the number of
30 persons recorded on the poll list as having voted at such district meet-
31 ing, the trustees or board of education shall submit such proposition to
32 the qualified voters.
33 b. Such petition relating to imposition of a limitation on the tax
34 rate shall be submitted at least thirty days prior to the annual
35 district meeting and shall specify the proposed maximum percentage
36 change in the estimated tax rate, as defined by the commissioner from
37 the actual tax rate that resulted from the levying of school taxes in
38 the prior school year that the trustees or board of education must apply
39 in developing or adopting a budget for the school year commencing with
40 the budget to be submitted at the next annual district meeting following
41 voter approval of such proposition. The proposition presented to the
42 qualified voters for approval must specify the limit on the percentage
43 change in the estimated tax rate that the petition proposes to impose.
44 c. Notwithstanding the provisions of section two thousand twenty-three
45 of this part or any other provision of law, rule or regulation to the
46 contrary, upon approval by the voters of a proposition imposing a limi-
47 tation on tax rate changes pursuant to this subdivision, for the school
48 years in which the limitation is in effect the trustees or board of
49 education shall not develop and submit a proposed budget to the voters
50 at the annual district meeting or a budget revote that in combination
51 with any separate propositions involving the expenditure of money
52 proposed by the trustees or board of education at such annual district
53 meeting or budget revote, would result in an estimated tax rate, deter-
54 mined at the time the property tax report card is prepared, that is in
55 excess of the maximum percentage change in such estimated tax rate that
56 has been approved by the voters, and the trustees or board of education
A. 4031 5
1 shall not adopt a contingency budget for such school years, in combina-
2 tion with any such separate propositions proposed by the trustees or
3 board of education that have been approved by the voters, would result
4 in an estimated tax rate in excess of such limitation.
5 § 4. 1. Notwithstanding any other provision of law, rule or regulation
6 to the contrary, in a village, town, city, or county upon the filing of
7 a petition pursuant to subdivision 2 of this section with the county
8 board of elections in which the political subdivision which is the
9 subject of the petition is located, a proposition for the purpose of
10 imposing a limitation on the tax rate to the qualified voters at the
11 next general election or village general election, if the proposition
12 relates to a village tax rate, signed by twenty-five percent of the
13 number of qualified voters who voted in the previous general election or
14 village general election if the proposition relates to a village tax
15 rate, said number to be determined by respective board of elections such
16 proposition shall be submitted to the qualified voters.
17 2. Such petition relating to the imposition of a limitation on the tax
18 rate shall be submitted at least thirty days prior to the general
19 election or village general election if the proposition relates to a
20 village tax rate and shall specify the proposed maximum percentage
21 change in the estimated tax rate from the actual tax rate that resulted
22 from the levying of property taxes in the prior year, for the year
23 commencing with the budget in the year following voter approval of such
24 proposition. The proposition presented to the qualified voters for
25 approval must specify the limit on the percentage change in the esti-
26 mated tax rate that the petition proposes to impose.
27 § 5. The real property tax law is amended by adding eight new sections
28 1443, 1444, 1445, 1446, 1447, 1448, 1449 and 1450 to read as follows:
29 § 1443. Senior tax deferral. 1. For the purposes of this section the
30 following terms shall have the following meanings:
31 (a) "Household" means a person or group of persons living together in
32 a room or group of rooms as a housing unit, but the term does not
33 include persons boarding in or renting a portion of the dwelling.
34 (b) "Income" means the "adjusted gross income," as defined in section
35 62 of the United States Internal Revenue Code, of all members of a
36 household.
37 2. Any person who is entitled to claim enhanced STAR exemption pursu-
38 ant to section four hundred twenty-five of this chapter may elect to
39 defer payment of a portion of the combined total of the ad valorem taxes
40 and any non-ad valorem assessments not to exceed twenty-five hundred
41 dollars per year by filing an annual application for senior tax deferral
42 with the assessor on or before September first before the year in which
43 the taxes and non-ad valorem assessments are assessed. It shall be the
44 burden of each applicant to affirmatively demonstrate compliance with
45 the requirements of this section.
46 3. Approval of an application for senior tax deferral shall defer that
47 portion of the combined total of ad valorem taxes and any non-ad valorem
48 assessments not to exceed twenty-five hundred dollars.
49 4. No senior tax deferral shall be granted:
50 (a) If the total amount of senior deferred taxes, non-ad valorem
51 assessments, and interest plus the total amount of all other unsatisfied
52 liens on the homestead exceeds eighty-five percent of the assessed value
53 of the homestead, or
54 (b) If the primary mortgage financing on the homestead is for an
55 amount which exceeds seventy percent of the assessed value of the home-
56 stead.
A. 4031 6
1 5. The amount of taxes, non-ad valorem assessments, and interest
2 deferred under this article shall accrue interest at a rate equal to the
3 semiannually compounded rate of one-half of one percent plus the average
4 yield to maturity of the long-term fixed-income portion of the New York
5 state and local employees' retirement system investments as of the end
6 of the quarter preceding the date of the sale of the deferred payment
7 tax certificates; however, the interest rate may not exceed seven
8 percent.
9 6. The taxes, non-ad valorem assessments, and interest deferred pursu-
10 ant to this article shall constitute a prior lien and shall attach as of
11 the date and in the same manner and be collected as other liens for
12 taxes, as provided for under this chapter, but such senior deferred
13 taxes, non-ad valorem assessments, and interest shall only be due, paya-
14 ble, and delinquent as provided in this article.
15 § 1444. Senior tax deferral; application. 1. The application for
16 senior tax deferral shall be made upon a form prescribed by the board
17 and furnished by the assessor. The application form shall be signed upon
18 oath by the applicant before an officer authorized by the state to
19 administer oaths. The assessor may, in his or her discretion, require
20 the applicant to submit such other evidence and documentation as deemed
21 necessary by the assessor in considering the application. The applica-
22 tion form shall advise the applicant of the manner in which interest is
23 computed. Each application form shall contain an explanation of the
24 conditions to be met for approval and the conditions under which
25 deferred taxes and interest become due, payable, and delinquent. Each
26 application shall clearly state that all senior tax deferrals pursuant
27 to this article shall constitute a lien on the applicant's homestead.
28 2. (a) The assessor shall consider each annual application for senior
29 tax deferral within thirty days of the day the application is filed or
30 as soon as practicable thereafter. An assessor who finds that the appli-
31 cant is entitled to the senior tax deferral shall approve the applica-
32 tion and file the application in the permanent records. An assessor who
33 finds the applicant is not entitled to the deferral shall send a notice
34 of disapproval within thirty days of the filing of the application,
35 giving reasons therefor to the applicant, either by personal delivery or
36 by registered mail to the mailing address given by the applicant and
37 shall make return in the manner in which such notice was served upon the
38 applicant upon the original notice thereof and file among the permanent
39 records of the assessor's office. The original notice of disapproval
40 sent to the applicant shall advise the applicant of the right to appeal
41 the decision of the assessor to the board of assessment review and shall
42 inform the applicant of the procedure for filing such an appeal.
43 (b) Appeals of the decision of the assessor to the board of assessment
44 review shall be in writing on a form prescribed by the board and
45 furnished by the assessor. Such appeal shall be filed with the board of
46 assessment review within twenty days after the applicant's receipt of
47 the notice of disapproval. The board of assessment review shall review
48 the application and the evidence presented to the board of assessment
49 review upon which the applicant based his or her claim for senior tax
50 deferral and, at the election of the applicant, shall hear the applicant
51 in person, or by agent on the applicant's behalf on his or her right to
52 senior tax deferral. The board of assessment review shall reverse the
53 decision of the assessor and grant senior tax deferral to the applicant,
54 if in its judgment the applicant is entitled thereto, or affirm the
55 decision of the assessor. Such action of the board of assessment review
56 shall be final unless the applicant or assessor or other lienholder,
A. 4031 7
1 within fifteen days from the date of disapproval of the application by
2 the board, files in the supreme court of the county in which the proper-
3 ty is located, an article seventy-eight proceeding pursuant to the civil
4 practice law and rules.
5 3. Each application shall contain a list of, and the current value of,
6 all outstanding liens on the applicant's homestead.
7 4. For approved applications, the date of receipt by the assessor of
8 the application for senior tax deferral shall be used in calculating
9 taxes due and payable net of discounts for early payment.
10 5. If such proof has not been furnished with a prior application, each
11 applicant shall furnish proof of fire and extended coverage insurance in
12 an amount which is in excess of the sum of all outstanding liens and
13 deferred taxes and interest with a loss payable clause to the assessor.
14 6. The assessor shall notify the collecting officer.
15 7. The assessor shall promptly notify the collecting officer of
16 denials of application and changes in ownership of properties that have
17 been granted a senior tax deferral.
18 § 1445. Annual notification to taxpayer. 1. The assessor shall notify
19 the taxpayer of each parcel appearing on the real property assessment
20 roll of the right to defer payment of taxes and non-ad valorem assess-
21 ments pursuant to this article. Such notice shall be printed on the back
22 of envelopes used for mailing the notice of taxes. Such notice of the
23 right to defer payment of taxes and non-ad valorem assessments shall
24 read:
25 NOTICE TO TAXPAYERS ENTITLED
26 TO SENIOR TAX DEFERRAL
27 "If your income is low enough to meet certain conditions, you may
28 qualify for a deferred tax payment plan on primary residential property.
29 An application to determine eligibility is available in the assessor's
30 office."
31 2. On or before April first of each year, the assessor shall notify
32 each taxpayer to whom a senior tax deferral has been previously granted
33 of the accumulated sum of deferred taxes, non-ad valorem assessments,
34 and interest outstanding.
35 § 1446. Deferred payment tax certificates for persons who qualify for
36 the enhanced STAR provisions. The assessor shall notify the local
37 governing body of the amount of taxes and non-ad valorem assessments
38 deferred which would otherwise have been collected for such governing
39 body.
40 § 1447. Change in ownership or use of property owned by persons
41 sixty-five years or older. 1. In the event that there is a change in
42 use of senior tax-deferred property such that the owner is no longer
43 entitled to claim senior tax deferral for such property, or such person
44 fails to maintain the required fire and extended insurance coverage, the
45 total amount of such deferred taxes and interest for all previous years
46 shall be due and payable December first of the year in which the change
47 in use occurs or on the date failure to maintain insurance occurs and
48 shall be delinquent on January thirty-first of the year following the
49 year in which the change in use or failure to maintain insurance occurs.
50 2. In the event that there is a change in ownership of senior tax-de-
51 ferred property, the total amount of such deferred taxes and interest
52 for all previous years shall be due and payable on the date the change
53 in ownership takes place and shall be delinquent on January thirty-first
54 following such date. When, however, the change in ownership is to a
A. 4031 8
1 surviving spouse and such spouse is eligible to claim senior tax defer-
2 ral on such property, such surviving spouse may continue the deferment
3 of previously deferred taxes and interest pursuant to the provision of
4 this article.
5 3. Whenever the assessor discovers that there has been a change in the
6 ownership or use of property which has been granted a senior tax defer-
7 ral, the assessor shall notify the collecting officer in writing of the
8 date such change occurs, and the collecting officer shall collect any
9 taxes and interest due or delinquent.
10 4. During any year in which the total amount of senior deferred taxes,
11 interest, and all other unsatisfied liens on the primary residence
12 exceeds eighty-five percent of the assessed value of the primary resi-
13 dence, the assessor shall immediately notify the owner of the property
14 on which taxes and interest have been deferred that the portion of taxes
15 and interest which exceeds eighty-five percent of the assessed value of
16 the primary residence shall be due and payable within thirty days of
17 receipt of the notice. Failure to pay the amount due shall cause the
18 total amount of senior deferred taxes and interest to become delinquent.
19 5. Each year, upon notification, each owner of property on which
20 senior taxes and interest have been deferred shall submit to the asses-
21 sor a list of, and the current value of, all outstanding liens on the
22 owner's primary residence. Failure to respond to this notification
23 within thirty days shall cause the total amount of senior deferred taxes
24 and interest to become payable within thirty days.
25 § 1448. Prepayment and distribution of senior deferred taxes. 1. All
26 or part of the senior deferred taxes and accrued interest may at any
27 time be paid to the collecting officer by:
28 (a) The owner of the property or the spouse of the owner.
29 (b) The next of kin of the owner, heir of the owner, child of the
30 owner, or any person having or claiming a legal or equitable interest in
31 the property, provided no objection is made by the owner within thirty
32 days after the collecting officer notifies the owner of the fact that
33 such payment has been tendered.
34 2. Any partial payment made pursuant to this section shall be applied
35 first to accrued interest.
36 3. When any senior deferred taxes or interest is collected, the
37 collecting officer shall maintain a record of the payment, setting forth
38 a description of the property and the amount of senior taxes or interest
39 collected for such property. The collecting officer shall distribute
40 payments received in accordance with the procedures for distribution of
41 ad valorem taxes or redemption moneys as prescribed in this article.
42 § 1449. Construction. Nothing in this article shall be construed to
43 prevent the collection of personal property taxes which become a lien
44 against senior tax-deferred property, defer payment of special assess-
45 ments to benefited property other than those specifically allowed to be
46 deferred, or affect any provision of any mortgage or other instrument
47 relating to property requiring a person to pay ad valorem taxes or non-
48 ad valorem assessments.
49 § 1450. Penalties. 1. The following penalties shall be imposed on any
50 person who willfully files information for a senior tax deferral pursu-
51 ant to section fourteen hundred forty-three of this article required by
52 this article which is incorrect:
53 (a) Such person shall pay the total amount of senior taxes and inter-
54 est deferred, which amount shall immediately become due;
55 (b) Such person shall be disqualified from filing a senior tax defer-
56 ral application for the next three years; and
A. 4031 9
1 (c) Such person shall pay a penalty of twenty-five percent of the
2 total amount of senior taxes and interest deferred.
3 2. Any person against whom the penalties prescribed in this section
4 have been imposed may appeal the penalties imposed to the board of
5 assessment review within thirty days after such penalties are imposed.
6 § 6. This act shall take effect on the one hundred eightieth day after
7 it shall have become a law. Effective immediately, the addition, amend-
8 ment and/or repeal of any rule or regulation necessary for the implemen-
9 tation of this act on its effective date are authorized and directed to
10 be made and completed on or before such effective date.
