Relates to a mixed use exemption program in certain villages

Title of bill

An act to amend the real property tax law, in relation to a mixed use exemption program in certain villages

Purpose

The measure is intended to authorize the Village of Wappingers Falls in New York State to grant a property investment exemption for the purpose of promoting redevelopment of vacant and blighted properties for mixed-use.

Summary of provisions

Section 1 adds a new section 485-s to the real property tax law to create mixed-use exemptions for villages with a population greater than 5,500 less than 5,600. This section provides definitions of "applicant" and "mixed-use property" and clarifies that newly constructed mixed-use property shall be exempt as well.

The exemption includes an opt-in provision where, upon adoption, the county and towns and school districts in which the village is located may exempt these mixed-use properties from taxation in the same manner and to the same extent as such village has done.

Such real property would initially be exempt to the extent of 90% of the increase in assessed value attributable to such construction and for a period of 20 years where the percentage of the exemption would decrease by no less than 5% each year during the additional period of 20 years. Exemption shall be computed with respect to the "exemption base," which is the increase in assessed value as determined by the previous year's assessed value.

The 485-s application shall be prescribed by the commissioner, completed by the applicant, and submitted to the assessor. It will apply to construction that takes place after the village's local law takes effect. The exemption, however, shall not be granted concurrently or subsequent to any other real property tax exemption granted for the same improvements unless payments in lieu of taxes were made to the local government equal to or greater than the amount which would have been owed for the assessed value of the improvements.

Section 2 sets an immediate effective date

Justification

It is vital that New York empowers municipalities to take positive steps to create jobs, grow their economies and improve their tax base, however high property taxes can be a hindrance to such progress. New York has recognized that appropriate tax exemptions offer municipalities the flexibility to allow local property owners the opportunity to improve the quality of their property and community without having the anxiety of being punished with higher property taxes in the short-term.

This new section, 485-s, adds to over a dozen other Real Property Tax Exemptions that allow other municipalities to offer these types of incentives in a way that works best for their community. Although modeled after section 485-a, section 485-s is unique in that it assists the Village of Wappingers Falls in creating effective public-private partnerships to build anew after demolishing extremely unsafe buildings that are contaminated from industrial use. The new structures will be mixed-use, holding new businesses and housing while also improving the streetscape. New York's Real Property Tax Exemptions are aimed to create more economic opportunities for

residents in numerous municipalities. This legislation is in line with that principle.

Legislative history

S.6689-A (2014): Advanced to third reading

Fiscal implications

Allows local municipalities to offer tax exemptions which would exempt only the increased value in assessment related to improvements. This bill has no impact on current revenues, but would likely raise other forms of local and state revenue related to increased economic activity.

Effective date

This act shall take effect immediately.