S3050-2013 Actions

• Jan 29, 2013: REFERRED TO LOCAL GOVERNMENT

S3050-2013 Memo

BILL NUMBER:S3050

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, 2013.

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.2376 of 2011-12; 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, 2013.

S3050-2013 Text

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

                                    3050

                         2013-2014 Regular Sessions

                              I N  SENATE

                              January 29, 2013
                                 ___________

  Introduced  by  Sen.  SEWARD -- read twice and ordered printed, and when
    printed to be committed to the Committee on Local Government

  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,  para-
  graph  (e)  as added by section 2 of part W of chapter 57 of the laws of
  2008, and paragraph (f) as added by section 1 of part B of chapter 59 of
  the laws of 2012, 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 (G) 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
  hundred  thousand dollars, as determined by the commissioner of taxation

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD06744-01-3

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  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) Compliance with state tax obligations. The property's  eligibility
  for  the  STAR  exemption  must not be suspended pursuant to section one
  hundred seventy-one-y of the tax law  due  to  the  past-due  state  tax
  liabilities  of one or more of its owners. Notwithstanding any provision
  of law to the contrary,  where  a  property's  eligibility  for  a  STAR
  exemption  has  been  suspended  pursuant to such section, the following
  provisions shall be applicable:

    (i) The property shall be ineligible for  a  basic  or  enhanced  STAR
  exemption effective with the next school year commencing after the issu-
  ance  of  notice  by the department of the suspension of its eligibility
  for the STAR exemption, even if the notice was issued after the applica-
  ble taxable status date. If a STAR exemption has been granted to such  a
  property  on a tentative or final assessment roll, the assessor or other
  person having custody of that roll is hereby authorized and directed  to
  immediately remove that STAR exemption from the roll.
    (ii) Any challenge to the factual or legal basis behind the suspension
  of a property's eligibility for a STAR exemption pursuant to section one
  hundred seventy-one-y of the tax law must be presented to the department
  in  the  manner  prescribed  by  such section. Neither an assessor nor a

 S. 3050                             3

  board of assessment review has the authority to consider  such  a  chal-
  lenge.
    (iii)  The  property  shall  remain  ineligible for the STAR exemption
  until the department notifies the assessor that the  suspension  of  its
  eligibility has been lifted. Once the assessor has been so notified, the
  exemption  may be resumed on a prospective basis only, provided that the
  eligibility requirements of this section are otherwise satisfied.
    (iv) In the case of a cooperative apartment or mobile home receiving a
  STAR exemption pursuant to paragraph (k) or (l) of  subdivision  two  of
  this section, a suspension of a STAR exemption due to a taxpayer's past-
  due  state tax liabilities shall only apply to the STAR exemption on the
  cooperative apartment or mobile home owned, or deemed to  be  owned,  by
  that taxpayer.
    (G)  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, 2013.