What's happening
This bill amends the residential-commercial urban exemption program by tightening eligibility, defining terms, and adding annual certification and penalties for misstatements.
Why it matters
Narrows eligibility and clarifies requirements. By specifying that only mixed-use buildings with at least 50% of above-grade space for residential and at least 15% for commercial use qualify, the bill limits who can access the tax exemption and prevents purely commercial or mostly non-residential projects from benefiting.
Prevents new construction on vacant land from qualifying. Only conversions of existing non-residential buildings are eligible, closing a loophole that could have allowed developers to seek exemptions for new builds on previously vacant lots.
Mandates ongoing compliance and transparency. Annual certifications are required to confirm continued eligibility, including verification of actual commercial and residential use, which increases accountability and discourages misuse of the program.
Establishes strict penalties for fraud or noncompliance. The bill introduces mandatory revocation of benefits, repayment of prior exemptions, and a $1,000 penalty if applicants provide false information, creating a strong deterrent against misrepresentation and abuse of the tax break.
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Who cares
Headline styles
Expand Mixed-Use Tax Breaks
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Substituted by A8091A
- Ordered to third reading cal.884
- Reported and committed to rules
- Print number 5254b
- Amend and recommit to local government
- Referred to local government
- Recommitted to rules
- Vote reconsidered - restored to third reading
- Substitution reconsidered
- Substituted by A8091
- Ordered to third reading cal.1776
- Committee discharged and committed to rules
Show 3 earlier actions
- Print number 5254a
- Amend (t) and recommit to local government
- Referred to local government
Companion bill
The same bill in the other chamber. A bill becomes law when one version passes both houses and the governor signs it, so either number can carry it.
Expand Mixed-Use Tax Breaks
Signed by Governor · Sponsor William Magnarelli
Full text
4 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
5254--B
2019-2020 Regular Sessions
IN SENATE
April 18, 2019
Introduced by Sens. BRESLIN, MAY -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government -committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- recommitted to the Committee on Local Government in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee
AN ACT to amend the real property tax law, in relation to the residential-commercial urban exemption program
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 485-a of the real property tax law, as amended by chapter 632 of the laws of 2004, subdivision 5 as further amended by subdivision (b) of section 1 of part W of chapter 56 of the laws of 2010, is amended to read as follows:
§ 485-a. Residential-commercial urban exemption program. 1. Definitions. As used in this section, the following terms shall have the following meanings:
(a) "Municipality" means any town, city or village except for a city having more than one million inhabitants.
(b) "Applicant" means any person obligated to pay real property taxes on the property for which an exemption from real property taxes under this section is sought.
(c) "Commercial construction work" means the modernization, rehabilitation, expansion or other improvement of the portion of mixed-use property to be used for commercial purposes.
(d) "Commercial purpose or use" means the buying, selling or otherwise providing of goods or services directly to the public, including hotel services, [or other lawful business or commercial activities permitted in mixed-use property] retail stores, office space, restaurants, bars, gyms, theaters, and cafes.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD06087-03-0
S. 5254--B 2
(e) "Mixed-use property" means property on which will exist, after completion of residential construction work or a combination of residential construction work and commercial construction work, a building or structure used for both residential and commercial purposes of which, at least fifty percent of the building or structure's square footage is devoted to residential purposes or use and at least fifteen percent of the building or structure's square footage is devoted to commercial purposes or use. Only square footage existing in a story above grade shall be used in the determination of the building's percentage of residential purposes or use and commercial purposes or use.
(f) "Person" means an individual, corporation, limited liability company, partnership, association, agency, trust, estate, foreign or domestic government or subdivision thereof, or other entity.
(g) "Residential construction work" means the creation, modernization, rehabilitation, expansion or other improvement of dwelling units, other than dwelling units in a hotel, in the portion of mixed-use property to be used for residential purposes.
(h) "Floor area" means the horizontal areas of the several floors or any portion thereof of a mixed-use property measured from the exterior faces of exterior walls or from the center line of party walls, exclusive of any area existing below-grade.
(i) "Story above grade" means any story having its finished floor surface entirely above grade.
(j) "Grade" shall mean the finished ground level adjoining the building at all exterior walls.
2. Any municipality may, by local law, provide for the exemption of real property from taxation as provided in this section. Upon the adoption of such a local law, the county in which such municipality is located may, by local law, and any school district, all or part of which is located in such municipality, may, by resolution, exempt such property from its taxation in the same manner and to the same extent as such municipality has done.
3. Upon the adoption of such a local law, non-residential real property, upon conversion to mixed-use property, shall be exempt from taxation and special ad valorem levies as provided for in subdivision four of this section. Land which was vacant prior to the residential or commercial construction work for which a tax exemption is sought, shall not be eligible to receive benefits pursuant to this section.
4. (a) (i) For a period of twelve years from the approval of an application, the increase in assessed value of such property attributable to such conversion shall be exempt as provided in subparagraph (ii) of this paragraph. Such exemption shall be computed with respect to the "exemption base". The exemption base shall be determined for each year in which there is an increase in assessed value so attributable from that of the previous year's assessed value.
(ii) The following table shall illustrate the computation of the tax exemption:
Year of exemption Percentage of exemption
1 through 8 100% of exemption base
9 80% of exemption base
10 60% of exemption base
11 40% of exemption base
12 20% of exemption base
S. 5254--B 3
(b) No such exemption shall be granted unless
(i) such conversion was commenced subsequent to the date on which the municipality's local law took effect; [and]
(ii) the cost of such conversion exceeds the sum of ten thousand dollars or such greater amount as may be specified by local law[.];
(iii) at least seventy-five percent of the floor area of the mixed-use property consists of the pre-existing building or structure;
(iv) the portion of the building used for commercial purposes is currently, as demonstrated by documentation submitted by the applicant, used as such or is in good faith contemplated.
(c) For purposes of this section the term conversion shall not include ordinary maintenance and repairs.
(d) No such exemption shall be granted concurrent with or subsequent to any other real property tax exemption granted to the same improvements to real property, except, where during the period of such previous exemption, payments in lieu of taxes or other payments were made to the local government in an amount that would have been equal to or greater than the amount of real property taxes that would have been paid on such improvements had such property been granted an exemption pursuant to this section. In such case, an exemption shall be granted for a number of years equal to the twelve year exemption granted pursuant to this section less the number of years the property would have been previously exempt from real property taxes.
5. Such exemption shall be granted only upon application by the owner of such real property on a form prescribed by the commissioner. Such application shall be filed with the assessor of the municipality or county having the power to assess property for taxation on or before the appropriate taxable status date of such municipality or county.
6. If the assessor is satisfied that the applicant is entitled to an exemption pursuant to this section, he or she shall approve the application and such real property shall [thereafter] be exempt from taxation and special ad valorem levies as in this section provided [commencing with the assessment roll prepared after the taxable status date referred to in subdivision five of this section]. The assessed value of any exemption granted pursuant to this section shall be entered by the assessor on the assessment roll with the taxable property, with the amount of the exemption shown in a separate column.
7. (a) During the period of exemption pursuant to this section, the owner shall submit an annual certification to the assessor attesting that the property complies with the provisions or requirements of this section and any additional provisions or requirements as may be provided by local law. Failure to submit such certification shall result in revocation of benefits. Such certification shall include at a minimum the following:
(i) the types of residential use and the total above-grade square footage of such use;
(ii) the types of commercial use and the total above-grade square footage of such use;
(iii) attestation that the portion of the building used for commercial purposes is currently, as demonstrated by documentation submitted by the applicant, used as such or is in good faith contemplated; and
(iv) all such other information required by the municipality.
(b) If the assessor is satisfied that the applicant continues to be entitled to the exemption pursuant to this section, the assessor shall approve the certification and the real property shall remain exempt from
S. 5254--B 4
taxation and special ad valorem levies for another year as provided in this section.
8. (a) The benefits of this section shall be revoked upon a finding by the assessor that:
(i) the application for benefits hereunder or the annual certification required hereunder contains a false statement or false information as to a material matter or omits a material matter; or
(ii) the eligible real property fails to comply with one or more of the provisions or requirements of this section or any provisions or requirements provided by local law.
(b) Such revocation shall require the repayment of any benefits previously granted pursuant to this section.
9. If the assessor determines that there was a material misstatement in an application filed by or on behalf of the owners for an exemption pursuant to this section and that such misstatement provided the basis for the granting of such exemption, the municipality shall proceed to impose a penalty on the applicant of one thousand dollars in addition to recovering the amount of any prior exemption granted.
§ 2. This act shall take effect January 1, 2021 and shall apply to properties for which the initial application for exemption are received on and after such date.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to the residen- tial-commercial urban exemption program
Purpose
To amend the § 485-a property tax exemption for mixed-use development to better align the program to its original intent, which was to provide a property tax incentive for the rehabilitation of under- utilized buildings.
Summary of specific provisions
Section one of the bill would make the following updates to the § 485-a property tax exemption program for mixed-use development: *limit the types of commercial purposes and uses that can qualify for the exemption and require them to be publicly accessible;
*require at least 50% of a building be used for residential purposes and at least 15% of the building be used for commercial purposes exclusive of below-grade floor areas; *disallow the exemption on land that was vacant prior to construction; *require at least seventy-five percent of the floor area to consist of pre-existing building or structure; *require the portion of the building used for commercial purposes to be currently used as such or in good faith contemplated; *require an annual certification to the assessor attesting that the property complies with the eligibility requirements; *require a revocation of benefits if the property is non-compliant; and *impose penalties if a material misstatement is made on an application.
Section 2 provides an effective date.
Justification
The "485-A" program provides tax exemptions for twelve years following the conversion of nonresidential real property into mixed-use (i.e., commercial and residential) property. The program incentivizes the rede- velopment of older building stock and, when applied correctly, reener- gizes flagging areas through an injection of both new residents and new business activity. However, across upstate New York, both the letter and the spirit of the law have been circumvented by unqualified applicants receiving this benefit-- at great cost to localities who forego signif- icant tax revenues. The statute must be amended in order to ensure that the original intent and scope of the program are heeded.
This bill reaffirms the original intent and scope of the 485-A program by mandating minimum portions of commercial and residential uses and purposes, clarifying that only above-grade areas of the converted struc- tures and buildings count toward calculation of those minimum, and disallowing exemptions for land that was vacant prior to the construction work. The bill also adds a new annual certification requirement to ensure that the converted properties continue to apply for the exemption, and specifies conditions under which an exemption can be revoked and requires the imposition of penalties in instances where a material misstatement is made.
Legislative history
New Bill.
Fiscal implications
None to the State.
Effective date
January 1, 2021 and shall apply to properties for which the initial application for exemption are received on and after such date.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.