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A06328 Summary:

BILL NOA06328A
 
SAME ASSAME AS S02774-A
 
SPONSORThiele
 
COSPNSR
 
MLTSPNSR
 
Amd 102 & 402, RPT L
 
Subjects to taxation the possessory interest of a private individual or corporation which uses real property owned by the United States or the state, except for real property owned by public authorities, for business purposes; excludes private property where the use is for a concession available to the general public located on property, such as parks, available for the use of the general public.
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A06328 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6328A
 
SPONSOR: Thiele
  TITLE OF BILL: An act to amend the real property tax law, in relation to assessment and taxation of lessees and users of certain tax exempt property   PURPOSE: Relates to assessment and taxation of possessory interest of a private individual who operate on real property owned by the United States or the State of New York for business purposes.   SUMMARY OF PROVISIONS: Section 1: Subdivision 12 of section 102 of the real property tax law 2 is amended by adding a new paragraph (j) to add possessory interest of a private lessee subject to real property taxation, expect where the use is by way of a concession which is available for the use of general public and is located in or adjacent to a public airport, park, market, fairground, road, pier, marina, railroad, bus line, subway or similar property which is available for the use of the general public. Section 2: Subdivision 1 of section 402 of the real property tax law is amended to allow the possessory interest to be assessed to be entered into the locality's assessment roll. Section 3: Subdivision 2 of section 402 of the real property tax law is amended to allow the taxes to be collected to the municipal corporation or special district for which the taxes were levied. Section 4: Section 402 of the real property tax law is amended by adding a new subdivision 4 that possessory interest shall only be taxable if the governing body of the municipal corporation or special district adopts a local law, which shall- allow partial exemption from taxation for the next succeeding four year in accordance with this section. Notwithstanding any other provision of law in this chapter, possessory interests on parcels which have been designated as military land shall be fully exempt from school property tax if the school district whereup- on such military land parcels are situated receives Impact Aid funds from the federal government pursuant to 30 CFR Part 222. This section shall not apply to businesses with less than twenty five employees. Section 5: Effective Date.   JUSTIFICATION: Currently, property owned by the Federal or State Government remains completely tax exempt when used by a lessee or contractor for private business. This bill will allow municipalities to levy property taxes on possessory interests of private individuals and corporations who operate on tax-exempt real property for business purposes. Many states have enacted legislation which requires these lessees who operate on tax-ex- empt property to be subject to local property taxation like any other business. This legislation seeks to correct this unjust tax loophole.   LEGISLATIVE HISTORY: Senate 2017- Veto 1993 2020 - S1679, Referred to Local Government. 2021-2022- 51813, Referred to Investigations and Government Operations Assembly 2017 - A2135, Veto 1993 2018 - Referred to Real Property Taxation 2020 - A10373, Referred to Real Property Taxation Senate: 2021-2022- A3691, Referred to Ways and Means   FISCAL IMPLICATIONS: Estimated upwards of $20 million in revenue to local governments   EFFECTIVE DATE: This act shall take effect on the first of January next succeeding the date on which it shall have become a law.
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A06328 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         6328--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      April 5, 2023
                                       ___________
 
        Introduced by M. of A. THIELE -- read once and referred to the Committee
          on  Real  Property  Taxation  --  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 assessment and
          taxation of lessees and users of certain tax exempt property

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1. Subdivision 12 of section 102 of the real property tax law
     2  is amended by adding a new paragraph (k) to read as follows:
     3    (k) The possessory interest of a private lessee  or  contractor  which
     4  uses  real property owned by the United States or the state of New York,
     5  except real property owned by public  authorities,  where  the  property
     6  would  be  subject  to real property taxation if owned by such lessee or
     7  contractor, except where the use is by way  of  a  concession  which  is
     8  available  for  the use of the general public and is located in or adja-
     9  cent to a public airport, park, market, fairground, road, pier,  marina,
    10  railroad, busline, subway or similar property which is available for the
    11  use of the general public.
    12    §  2. The section heading and subdivision 1 of section 402 of the real
    13  property tax law are amended to read as follows:
    14    United States or state property  held  under  lease  or  contract  [of
    15  sale].   1.   Whenever the legal title of real property is in the United
    16  States, or in the  state  of  New  York,  but  the  use,  occupation  or
    17  possession  thereof  is  in a person, partnership, association or corpo-
    18  ration, or his or her or its  successor  in  interest,  under  a  lease,
    19  contract  [of  sale],  option  or  other  agreement  [whereby a right to
    20  acquire the premises through an option, a first  privilege  or  a  first
    21  refusal is granted, or whereby upon one or more payments the legal title
    22  thereto is to be or may be acquired by such person, partnership, associ-
    23  ation  or  corporation], such that the interest is a possessory interest
    24  described in paragraph (k) of subdivision twelve of section one  hundred
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD05779-05-3

        A. 6328--A                          2
 
     1  two  of  this  chapter, his or her or its interest in such real property
     2  shall be assessed and taxed [as] for the same amount  and  to  the  same
     3  extent  as  though the lessee, contractor or user were the owner of such
     4  real  property  and  shall be entered in the assessment roll in the same
     5  manner as if such person, partnership, association or  corporation  held
     6  the  legal  title  to  such  property,  except  for  the addition to the
     7  description of the property of the name of the owner and  of  the  words
     8  "interest  under  lease",  "interest  under  contract",  "interest under
     9  option", or other appropriate words descriptive of the interest  in  the
    10  property  so  assessed.   [Such assessment shall be at the full value of
    11  such interest.]
    12    § 3. Subdivision 2 of section 402 of the  real  property  tax  law  is
    13  amended to read as follows:
    14    2.  [The  assessors  shall  add  to  the  assessment roll opposite the
    15  description of any such interest a notation stating that the real  prop-
    16  erty itself so owned by the United States, or by the state, is not to be
    17  taxed.    Every  notice of sale or other process and every conveyance or
    18  other instrument affecting the title to any  such  property,  consequent
    19  upon  the  non-payment  of  any such tax, shall contain a statement that
    20  such legal title is not sold or to be sold or affected] Taxes  shall  be
    21  assessed  to the lessees, contractors or users of such real property and
    22  collected in the same manner as taxes assessed to owners of real proper-
    23  ty, except that such taxes shall not become  a  lien  against  the  real
    24  property  of  the  United  States or of the state of New York. When due,
    25  such taxes shall constitute a  debt  due  and  owing  from  the  lessee,
    26  contractor  or user to the municipal corporation or special district for
    27  which the taxes were levied  and  shall  be  recoverable  by  action  in
    28  supreme court.
    29    § 4. Section 402 of the real property tax law is amended by adding two
    30  new subdivisions 4 and 5 to read as follows:
    31    4.  Possessory interests, as described in paragraph (k) of subdivision
    32  twelve of section one hundred two of this chapter, shall only be taxable
    33  as provided in this section if  the  governing  body  of  the  municipal
    34  corporation  in which the possessory interests are located, after public
    35  hearing, adopts a local  law,  ordinance  or  resolution  so  providing,
    36  provided,  however, the provisions of this section shall not be applica-
    37  ble where a possessory interest is making  payments  in  lieu  of  taxes
    38  which  payment is equal to the taxes that would be paid had the property
    39  been taxable. Any such local law, ordinance or  resolution  shall  apply
    40  alike to all possessory interests which are located within the municipal
    41  corporation.  Possessory interests in existence on the effective date of
    42  the local law, ordinance or resolution shall be  partially  exempt  from
    43  taxation  for  the  next  succeeding  four years in accordance with this
    44  section; provided, however, that (a) if the lease, contract,  option  or
    45  other  agreement  is  renegotiated  or renewed and such renegotiation or
    46  renewal becomes effective during those four years, the partial exemption
    47  shall not be available subsequent to  the  effective  date  of  the  new
    48  agreement,  and  (b)  if  the lease, contract, option or other agreement
    49  contains any provision assigning liability between the  parties  in  the
    50  event  that real property taxes are imposed, the partial exemption shall
    51  not be available to possessory interests created thereunder.  Except  in
    52  the  instances  set  forth  in  this  subdivision, for the first taxable
    53  status date occurring subsequent to the effective date of the local law,
    54  ordinance or resolution, taxable possessory interests  shall  be  exempt
    55  from  taxation  by  any  municipal  corporation  in which located to the
    56  extent of eighty percent of the assessed value; for the  second  taxable

        A. 6328--A                          3
 
     1  status  date,  to  the  extent  of  sixty percent; for the third taxable
     2  status date, to the extent of forty percent; and for the fourth  taxable
     3  status  date, to the extent of twenty percent. Notwithstanding any other
     4  provision  of law in this chapter, possessory interests on parcels which
     5  have been designated as military land shall be fully exempt from  school
     6  property tax if the school district whereupon such military land parcels
     7  are  situated  receives  Impact  Aid  funds  from the federal government
     8  pursuant to 30 CFR Part 222.
     9    5. This section shall not apply to businesses with less  than  twenty-
    10  five employees.
    11    §  5. This act shall take effect on the first of January next succeed-
    12  ing the date on which it shall have become a law.
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