Relates to veteran real property tax exemptions and state funding to localities that grant such exemptions

* The assessed value of any exemption granted pursuant to this section be entered on the assessment roll of the taxable property in a separate column.

* The application of this section not be considered when determining state aid to schools, debt limits, the amount of taxes to be levied, or when calculating tax rates for a school district, or apportioning taxes under the applicable laws.

Section 2 amends the Real Property Tax Law by adding a new Section 1306-b to provide that:

* The amount of taxes to be levied for any school year shall be determined without regard to the fact that state aid will be payable pursuant to this section and the tax rate for any school year shall be determined as if no parcels were exempt from taxation pursuant to Section 458-a of this chapter.

* The tax rate determined shall be applied to the taxable assessed value of each parcel after accounting for all applicable exemptions, including the exemption authorized by Section 458-a of this chapter.

* The tax savings for each parcel receiving the exemption shall be computed by subtracting the amount actually levied against the parcel from the amount that would have been levied if not for the exemption.

* The total tax savings provided by each school district pursuant to this section shall be a state charge payable to a school district as state aid by submitting an application to the commissioner with such information as the commissioner shall require.

* The commissioner may audit an application for state aid pursuant to this section and if the commissioner determines there has been and overpayment or underpayment the next payment of state aid to the school district shall be adjusted accordingly.

* When an exemption approved pursuant to section 458-a of this chapter is revoked, the aid payable to the school district shall be reduced by the amount of the taxes attributable to the revoked exemption.

Section 3 amends Real Property Tax Law Section 458-a (c) to amend the definition of qualified owner to include only those eligible veterans earning an annual income less than five hundred thousand dollars.

Section 4 is the effective date

Justification

In December 2013, Real Property Tax Law Section 458-a, known as the alternative veterans tax exemption, was amended to authorize school districts to grant eligible veterans a partial exemption from their school taxes. Prior to the amendment, the partial exemption was only available for real property taxes of a municipality.

Granting school tax exemptions for eligible veterans would result in the shifting of these taxes to the rest of the school district taxpayers. This placed school districts in the unenviable position of appearing not to value the service of veterans if they did not grant the exemption, or shifting taxes to the rest of the taxpayers regardless of the impact.

As a matter of public policy it is not in the State's interest to shift taxes from one group to another. Rather, the State should seek to reduce the tax burden for all taxpayers. This bill would provide for additional state aid to school districts that authorize the partial tax exemption for eligible veterans. The state aid would be equal to the amount of the total tax savings that would result from the authorization of the alternative veterans tax exemption.

Accordingly, this bill will allow school districts to provide the partial tax exemption to their veterans without shifting taxes to the other school district taxpayers by having the state pay the cost through state aid. In addition the partial tax exemption would be limited to eligible veterans whose income is under five hundred thousand dollars.

Legislative history

2014: A.9867 - Veteran's Affairs Committee

Fiscal implications

To be determined.

Effective date

This act shall take effect immediately and shall apply to taxable years beginning on and after January 1, 2016.