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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.
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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