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New York State 1995/1996 Bill A10588

Reprinted from the New York State Assembly Web site.


All available information for bill A10588, except its text, is supplied in this document. You may jump to a particular item by selecting from the menu below, or you may simply scroll down through this document. To view the bill text, select the last item from the menu below.

 

  • Summary of bill A10588
  • Actions on bill A10588
  • Votes on bill A10588
  • Memo on bill A10588
  •  

    
    
    
    
    
    BILL NO   A10588A                                                              
    
                                                                                   
    
    SPONSOR   RULES COM Grannis                                                    
    
                                                                                   
    
    COSPNSR   Lafayette, Gottfried, Dinowitz, Stringer, Boyland, Brennan, Cook,    
    
              Crowley, Diaz F, Espada,                                             
    
                                                                                   
    
    MLTSPNSR                                                                       
    
                                                                                   
    
    Amd S339-y, RP L; add S467-a, RPT L                                            
    
    Provides partial tax abatement for residential real property held in the       
    
    cooperative or condominium form of ownership in a city of one million or more; 
    
    allows board of managers to act as sole agent of all unit owners on decision   
    
    whether or not to waive prospectively certain tax abatements; directs such city
    
    to report to the legislature on how to address disparity in real property      
    
    taxation between residential real property in class one and in class two held  
    
    in cooperative or condominium form of ownership.                              


    Actions on Bill A10588

    
    
    
    
    
    BILL NO   A10588A                                                              
    
                                                                                   
    
    05/06/96  referred to real property taxation                                   
    
    06/06/96  amend and recommit to real property taxation                         
    
    06/06/96  print number 10588a                                                  
    
    06/12/96  reported referred to ways and means                                  
    
    06/13/96  reported referred to rules                                           
    
    06/13/96  rules report cal.776                                                 
    
    06/13/96  ordered to third reading rules cal.776                               
    
    06/13/96  passed assembly                                                      
    
    06/13/96  delivered to senate                                                  
    
    06/13/96  REFERRED TO RULES                                                    
    
    06/14/96  SUBSTITUTED FOR S6628A                                               
    
    06/14/96  3RD READING CAL.1632                                                 
    
    06/14/96  PASSED SENATE                                                        
    
    06/14/96  RETURNED TO ASSEMBLY                                                 
    
    06/20/96  delivered to governor                                               


    Votes on Bill A10588

    
    
    
    
    
    BILL: A10588A  DATE: 06/13/96  MOTION:                       YEA/NAY: 142/000  
    
                                                                                   
    
    Abbate  Y  Canestr Y  Farrell Y  Hochber Y  McEneny Y  Prentis Y  Thiele  Y    
    
    Acampor Y  Casale  Y  Faso    Y  Hoyt    Y  McGee   Y  Prescot Y  Tocci   Y    
    
    Alfano  Y  Christe Y  Feldman Y  Jacobs  Y  McLaugh Y  Pretlow Y  Tokasz  Y    
    
    Anderso Y  Clark   Y  Ferrara Y  John    Y  Meeks   Y  Ramirez ER Tonko   Y    
    
    Arroyo  Y  Colman  Y  Fessend Y  Johnson Y  Miller  Y  Ravitz  Y  Towns   Y    
    
    Aubry   Y  Connell Y  Flanaga ER Katz    Y  Morelle Y  Reynold Y  Townsen Y    
    
    Bacalle Y  Conte   Y  Galef   Y  Kaufman Y  Murtaug ER Rivera  Y  Vann    Y    
    
    Balboni Y  Cook    Y  Gantt   Y  Keane   Y  Nesbitt ER Robach  Y  Vitalia Y    
    
    Barbaro Y  Crouch  Y  Genoves Y  Kirwan  Y  Nolan   Y  Sanders Y  Warner  Y    
    
    Barraga Y  Crowley Y  Glick   Y  Klein   Y  Norman  Y  Scarbor Y  Weinste ER   
    
    Bea     Y  D`Andre Y  Gottfri Y  Koon    Y  Nortz   Y  Schimmi Y  Weisenb ER   
    
    Becker  Y  Davis   Y  Grannis Y  Lafayet Y  O`Neil  Y  Seaman  Y  Weprin  Y    
    
    Bonacic Y  Destito Y  Green   Y  Lentol  Y  O`Shea  Y  Seminer Y  Wertz   Y    
    
    Boyland Y  Diaz    Y  Greene  Y  Little  Y  Oaks    Y  Sidikma Y  Winner  Y    
    
    Boyle   Y  Dinga   Y  Griffit Y  Lopez   Y  Ortiz   Y  Spano   Y  Wirth   Y    
    
    Bragman Y  Dinowit Y  Gromack Y  Luster  Y  Ortloff Y  Stephen NV Wright  Y    
    
    Brennan Y  DiNapol Y  Guerin  Y  Magee   Y  Parment Y  Stranie Y  Mr. Spe Y    
    
    Brodsky Y  Doran   Y  Gunther Y  Mahoney Y  Perry   Y  Stringe Y               
    
    Brown   Y  Dugan   Y  Harenbe Y  Manning Y  Pheffer Y  Sull EC Y               
    
    Butl DJ Y  Englebr Y  Herbst  Y  Matusow Y  Pillitt Y  Sull F  Y               
    
    Butl MW Y  Espada  Y  Hikind  Y  Mayerso Y  Polonet Y  Sweeney Y               
    
    Calhoun Y  Eve     Y  Hill    Y  Mazzare Y  Pordum  Y  Tedisco Y              


    Memo on Bill A10588

    
    
    
    
    
    BILL NUMBER: A10588                                                            
    
                                                                                   
    
    PURPOSE OR GENERAL IDEA OF BILL:                                               
    
    The  purpose  of  this  bill is to partially relieve the substantial tax       
    
    inequity between owner-occupied cooperatives and condominiums  in  class       
    
    two and one-, two- and three- family homes in class one.                       
    
    SUMMARY OF SPECIFIC PROVISIONS:                                                
    
    This  bill  grants a partial abatement of real property taxes to certain       
    
    homeowners  of  cooperative  or  condominium   units   in   multi-family       
    
    residential  properties  classified  as  class  two pursuant to the Real       
    
    Property Tax Law. The abatement is  intended  to  partially  reduce  the       
    
    disparate   tax   treatment   in   New  York  City  between  cooperative       
    
    and.condominium homeowners in class two and homeowners in class one.           
    
    Under the bill residential condominium.owners and tenant-shareholders in       
    
    cooperative apartment buildings would be eligible for  an  abatement  of       
    
    property  taxes  levied  for FY 1997, FY 1998 and FY 1999.  The New York       
    
    City Financial Plan provides up to $8.5 million, $70 million and $120  million,       
    
    respectively, for this purpose in each year.                                   
    
    To  determine  the  amount  of the abatement, the bill provides specific       
    
    abatement percentages to be applied in each year of the  program.    The       
    
    percentage  will  be  applied to the tax liability for the proportion of       
    
    the building that is eligible for the abatement.                               
    
    The abatement percentages fall into two categories  depending  upon  the       
    
    average  tax  assessment  per  residential  unit.    For cooperative and       
    
    condominium units in which the average tax assessment per unit  is  less       
    
    than  or  equal  to $15,000, the abatement rates will be 4% for FY 1997;       
    
    16% from FY 1998 and 25% for FY 1999.  All other class  two  cooperative       
    
    and  condominium  units  will be granted reductions of 2.75%, 10.75%~and       
    
    17.5%, respectively, for the same fiscal years.                                
    
    The property tax abatement  will  be  reflected  on  the  tax  bills  of       
    
    eligible  condominium units.   For cooperatives the legislation requires       
    
    that the abatement be passed through from the  building`s  tax  bill  to       
    
    eligible  dwelling units.   The bill also imposes a penalty if the board       
    
    of.  directors of a cooperative willfully fails to fully credit any  tax       
    
    abatement granted pursuant to this program.                                    
    
    The  bill contains specific provisions for cooperatives and condominiums       
    
    in other tax benefit programs.  Those under the J-51  abatement  (but not exemption) program       
    
    are  qualified  to  participate in this program.   The abatement is also       
    
    available to owners receiving benefits under the veterans` exemptions or       
    
    the senior citizen homeowner exemption programs.                               
    
    To qualify for abatement under this  program,  an  application  must  be       
    
    filed  with the Commissioner of Finance by September 15, 1996 to receive       
    
    the FY 1997 and FY  1998  abatements.    The  deadline  for  filing  for       
    
    abatements for FY 1998 is April 1, 1997.                                       
    
    The information required in the application includes, but is not limited       
    
    to  physical  information,  such as the number of stories; the number of       
    
    dwelling and non-dwelling units; the common interest or number of shares       
    
    allocated to each unit; and the total number of  shares  in  a  property       
    
    held  in  cooperative  form of ownership.  The application also requires       
    
    the names, social security or tax identification numbers of  all  owners       
    
    of units and the names and addresses of those designated by the board of       
    
    directors  or board of managers for receipt of notices issued under this       
    
    program.                                                                       
    
    The proposed bill requires the City of New York to prepare and present a       
    
    plan to the State legislature containing recommendations by December~31,       
    
    1996 to address problems of disparate tax treatment  between  class  one       
    
    residential   properties  and  class  two  cooperative  and  condominium       
    
    properties.   The bill provides  that  the  program  shall  take  effect       
    
    immediately.                                                                   
    
    JUSTIFICATION:                                                                 
    
                                                                                   
    
    A  1993  study  by the New York City Real Property Tax Reform Commission       
    
    found that the average effective tax rate - as measured by the ratio  of       
    
    tax  liability  to  market  value  - of cooperatives and condominiums in       
    
    class two was more than three times greater than the effective tax  rate       
    
    of class one homeowners.                                                       
    
    The disparity in effective tax rates can be attributed to differences in       
    
    valuation  methods and the effect of statutory limitations on assessment       
    
    increases.                                                                     
    
    One-, two-, and three- family homes are valued  using  sales  prices  of       
    
    comparable  properties  and  the  assessed  value is equivalent to eight       
    
    percent of the estimated market value.  The Real Property Tax Law limits       
    
    the amount the assessed value can  increase  due  to  growth  in  market       
    
    values to six percent annually and 20 percent over any five-year period.       
    
    In  comparison, cooperatives and condominiums in class two are valued as       
    
    income-producing rental properties and are assessed at 45 percent of the       
    
    estimated market value.   Unlike  class  one`s  limitations,  state  law       
    
    provides  for  a  five-year  phase in of assessment changes that are the       
    
    result of market value increases.                                              
    
    The differences in the methods of determining  assessed  value  combined       
    
    with  extraordinary  growth  in  market values which occurred during the       
    
    1980`s have created a situation in which the effective tax rate of co-op       
    
    and condo homeowners in class two are, on average,  three  times  higher       
    
    than  of homeowners in class one.  The proposed abatement represents the       
    
    first step on addressing this long-standing problem.   In its  Financial       
    
    Plan,  the  City has allocated up to $8.5 million, $70 million and $120 million       
    
    in fiscal years 1997, 1998  and  1999  for  tax  reductions  under  this       
    
    program.    Based  upon  the  Department of Finance estimates, more than       
    
    200,000 owners of cooperative and  condominium  apartments  residing  in       
    
    over 6,800 buildings or developments will be eligible for an abatement.        
    
    The  average  annual  abatement per apartment will vary depending on the       
    
    current tax liability of the building  excluding  non-residential  units       
    
    and  spaces. For a typical unit, the yearly abatement per apartment will       
    
    start at less than $100 in the  first  year  of  the  program  and  will       
    
    increase  to  several hundred dollars in the third year.  For example, a       
    
    cooperative apartment with a current annual tax liability of $2,000 will       
    
    receive an estimate abatement of $50 for FY 1997, $200 for FY  1998  and       
    
    $350  for  FY 1999.  The bill provides a higher abatement percentage for       
    
    units with an average assessed value of $15,000  or  less  because  this       
    
    group  was  found  to  have  higher effective rates than the units above       
    
    $15,000.                                                                       
    
    The eligibility provisions of the bill are intended to benefit owners of       
    
    cooperatives and condominiums.  However, the abatement is not  available       
    
    to  the  sponsors of the building and block investors who hold more than       
    
    three units.                                                                   
    
    The bill`s provisions to exclude buildings receiving J-51 or  421-A  tax       
    
    exemptions or other property tax incentives or subsidies recognizes that       
    
    the  effective  tax  rates in these buildings are comparable to, or less       
    
    than, those of small homes.  These limitations do not apply to buildings       
    
    which receive only J-51 abatements or units eligible for  the  Veteran`s       
    
    and/or Senior Citizens Homeowner Exemptions.                                   
    
    The  legislation  also  includes  a  provision  for  the City to prepare       
    
    recommendations that will provide equivalent tax treatment of homeowners       
    
    whether the "home" is a one-family house, for example, or a  cooperative       
    
    studio apartment.                                                              
    
    PRIOR LEGISLATIVE HISTORY: None.  New bill.                                    
    
    FISCAL IMPLICATIONS: None to the State.                                        
    
    EFFECTIVE DATE:immediately.                                                    
    
                                                                               
     
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