S2376-2011 Actions

• Jan 4, 2012: REFERRED TO LOCAL GOVERNMENT
• Jan 19, 2011: REFERRED TO LOCAL GOVERNMENT

S2376-2011 Memo

BILL NUMBER:S2376

TITLE OF BILL:
An act
to amend the real property tax law, in relation to extending the
benefits of the STAR program to small businesses

PURPOSE:
To make real property owned by a small business eligible for
the STAR program.

SUMMARY OF PROVISIONS:
Section 1 would amend subdivision 3 of section
425 of the real property
tax law by adding real property owned by a small business to the list
of categories eligible for the STAR
program, and defines "small business" as one which employs twenty
persons or less.

Section 2 provides for an immediate effective date, applicable to
taxable years beginning on
and after January 1, 2011.

JUSTIFICATION:
The STAR program provides for a partial exemption from
school property taxes for
owner-occupied, primary residences. Senior citizens were the first to
benefit based on income eligibility,
and the program has since been extended to include all New Yorkers who
own their own home. STAR
works by exempting a portion of the property's assessed valuation from
the school tax rate.
This bill would expand the STAR program to real property owned by
small businesses (twenty
or less employees). The same economic pressures that have been brought
to bear on senior citizens
and residential home owners have affected small businesses' ability to
compete in the market place
and to expand and create more jobs.
School property tax relief
is a key ingredient in easing the
heavy hand of government on an essential component of New York's
economic engine: small business.

LEGISLATIVE HISTORY:
S.3055 of 2009-10; S.2734/A.3412 of 2007-08.

FISCAL IMPLICATIONS:
To be determined.

EFFECTIVE DATE:
Immediately, applicable to taxable years beginning on
and after January 1, 2011.

S2376-2011 Text

                      S T A T E   O F   N E W   Y O R K
  ________________________________________________________________________

                                    2376

                         2011-2012 Regular Sessions

                              I N  SENATE

                              January 19, 2011
                                 ___________

  Introduced  by  Sens. SEWARD, BONACIC, DeFRANCISCO, FUSCHILLO, GRISANTI,
    LARKIN, MAZIARZ, O'MARA, RANZENHOFER -- read twice and ordered  print-
    ed, and when printed to be committed to the Committee on Local Govern-
    ment

  AN  ACT to amend the real property tax law, in relation to extending the
    benefits of the STAR program to small businesses

    THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
  BLY, DO ENACT AS FOLLOWS:


    Section  1. Subdivision 3 of section 425 of the real property tax law,
  as added by section 1 of part B of chapter 389  of  the  laws  of  1997,
  paragraph  (a)  as amended by chapter 264 of the laws of 2000, paragraph
  (b-1) as added by section 1 of part FF of chapter  57  of  the  laws  of
  2010,  paragraph  (d)  as  added  by chapter 443 of the laws of 2003 and
  paragraph (e) as added by section 2 of part W of chapter 57 of the  laws
  of 2008, is amended to read as follows:

    3.   Eligibility  requirements.  (a)  Property  use.  To  qualify  for
  exemption pursuant to this section, the property must be a one,  two  or
  three family residence, a farm dwelling, A SMALL BUSINESS or residential
  property  held  in  condominium or cooperative form of ownership. If the
  property is not an eligible type of property, but a portion of the prop-
  erty is partially used by the owner as a primary residence, that portion
  which is so used shall be entitled to the  exemption  provided  by  this
  section;  provided  that  in  no  event  shall  the exemption exceed the
  assessed value attributable to that portion.
    (b) Primary residence. The property must serve as  the  primary  resi-
  dence  of  one  or  more  of the owners thereof, UNLESS SUCH PROPERTY IS
  OWNED BY A SMALL BUSINESS AS DEFINED IN PARAGRAPH (F) OF  THIS  SUBDIVI-
  SION.
    (b-1)  Income.  For  final assessment rolls to be used for the levy of
  taxes for the two thousand eleven-two thousand twelve  school  year  and
  thereafter,  the  parcel's affiliated income may be no greater than five

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD05745-01-1

 S. 2376                             2

  hundred thousand dollars, as determined by the commissioner of  taxation
  and  finance  pursuant  to  section one hundred seventy-one-u of the tax
  law, in order to be eligible for the basic exemption authorized by  this
  section.  As  used  herein,  the term "affiliated income" shall mean the
  combined income of all of the owners of the parcel who resided primarily
  thereon on the applicable taxable status date, and of any owners' spous-
  es residing primarily thereon. For exemptions on final assessment  rolls
  to  be  used for the levy of taxes for the two thousand eleven-two thou-
  sand twelve school year, affiliated income  shall  be  determined  based
  upon the parties' incomes for the income tax year ending in two thousand
  nine.  In  each  subsequent  school year, the applicable income tax year
  shall be advanced by one year. The term "income" as  used  herein  shall
  have the same meaning as in subdivision four of this section.
    (c)  Trusts.  If  legal  title  to the property is held by one or more
  trustees, the beneficial owner or owners shall  be  deemed  to  own  the
  property for purposes of this subdivision.
    (d)  Farm  dwellings  not owned by the resident. (i) If legal title to
  the farm dwelling is held by an S-corporation or by a C-corporation, the
  exemption shall be granted if the property serves as the  primary  resi-
  dence of a shareholder of such corporation.
    (ii) If the legal title to the farm dwelling is held by a partnership,
  the  exemption  shall  be  granted if the property serves as the primary
  residence of one or more of the partners.
    (iii) Any information deemed necessary  to  establish  shareholder  or
  partner status for eligibility purposes shall be considered confidential
  and exempt from the freedom of information law.
    (e)  Dwellings  owned by limited partnerships. (i) If legal title to a
  dwelling is held by a limited partnership, the exemption shall be grant-
  ed if the property serves as the primary residence of one or more of the
  partners, provided that the limited partnership which holds title to the
  property does not engage in any commercial activity,  that  the  limited
  partnership  was  lawfully created to hold title solely for estate plan-
  ning and asset protection purposes, and that the partner or partners who
  primarily reside thereon personally pay all of the real  property  taxes
  and other costs associated with the property's ownership.
    (ii)  Any information deemed necessary to establish partner status for
  eligibility purposes shall be considered confidential  and  exempt  from
  the freedom of information law.
    (F)  FOR  THE  PURPOSES  OF THIS SUBDIVISION THE TERM "SMALL BUSINESS"
  SHALL MEAN A BUSINESS WHICH EMPLOYS TWENTY PERSONS OR LESS.
    S 2. This act shall take effect immediately and  shall  apply  to  all
  taxable years beginning on and after January 1, 2011.