Relates to procedures to review small claims

1 Co-sponsor

• Nelson Castro

3 Multi-sponsors

• Nancy Calhoun
• William Magee
• Marcus Molinaro

BILL NUMBER:A9970

Title of bill

An act to amend the real property tax law, in relation to procedures to review small claims

Purpose or general idea of bill

The purpose of this bill is to allow municipal corporations to limit the maximum allowable assessment reduction in Small Claims Assessment Review (SCAR) proceedings for prop- erties that are worth over one million dollars.

Summary of specific provisions

Section 1 amends paragraph (c) of subdivision 1 of section 730 of the Real Property Tax Law to allow municipal corporations to pass a local law that would limit the amount by which an assessment could be reduced in SCAR proceedings for proper- ties worth over one million dollars. The limitations prescribed would be:

(i) twenty-five percent of the threshold assessed value, plus

(ii) five percent of the amount by which the challenged assessment value exceeds the threshold assessed value. For the purposes of this section, "threshold assessed value" means the assessed value that equates to an equalized value of one million dollars,

Justification

The initial intent of Small Claims Assessment Review (SCAR) was to provide to homeowners seeking small refunds an informal and inexpensive venue for tax grievances. SCAR provides an alternative to Supreme Court, mitigating the need for legal representation and adherence to higher standards of disclosure and evidence. Due to the informal nature of SCAR, and its intent to provide modest refunds, it originally had a maximum tax refund limit of $750. This tax dollar refund limitation was later eliminated and replaced by the current limi- tation of twenty five percent of the assessed valuation for properties worth over $450,000.

High-end properties, while still residential, alien are mare complex to assess than a typical one, two or three family residence. The complexity of their valuation and the minimum supporting evidence required in a SCAR proceeding, make it difficult to properly adjudicate such claims. In some cases the maximum reduction allowed, twenty-five percent of the assessed value, is sought and granted without sufficient justification - some with corresponding tax reductions as high as $50,000. Because SCAR does not provide the opportunity for a municipality to appeal a ruling, municipalities are at a disadvantage when it comes to defending their assessed values, even when high refunds are at stake.

This bill would provide an additional limitation on the maximum reductions allowed in SCAR proceedings for properties worth over one million dollars. In doing so, Small Claims Assessment Review would, as originally intended, provide homeowners seeking modest refunds an easy and expeditious grievance venue. Large sum reductions would be arbi- trated in tax certiorari proceedings. Homeowners of high-end properties

could still utilize SCAR; they simply would be limited in the amount of a reduction they could receive.

Prior legislative history

This is new legislation

Fiscal implications

None to the Stale

Effective date

Immediately