S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9734
 
                           I N  A S S E M B L Y
 
                             February 2, 2018
                                ___________
 
 Introduced by M. of A. THIELE -- read once and referred to the Committee
   on Real Property Taxation
 
 AN  ACT to amend the real property tax law, in relation to extending the
   benefits of the STAR program to small businesses
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section  1. Subdivision 3 of section 425 of the real property tax law,
 as added by section 1 of part B of chapter 389  of  the  laws  of  1997,
 paragraph  (a)  as amended by chapter 264 of the laws of 2000, paragraph
 (b-1) as added by section 1 of part FF of chapter  57  of  the  laws  of
 2010, paragraph (d) as amended by chapter 564 of the laws of 2015, para-
 graph  (e)  as added by section 2 of part W of chapter 57 of the laws of
 2008, and paragraph (f) as added by section 1 of part B of chapter 59 of
 the laws of 2012, is amended to read as follows:
   3.  Eligibility  requirements.  (a)  Property  use.  To  qualify   for
 exemption  pursuant  to this section, the property must be a one, two or
 three family residence, a farm dwelling, SMALL BUSINESS  or  residential
 property  held  in  condominium or cooperative form of ownership. If the
 property is not an eligible type of property, but a portion of the prop-
 erty is partially used by the owner as a primary residence, that portion
 which is so used shall be entitled to the  exemption  provided  by  this
 section;  provided  that  in  no  event  shall  the exemption exceed the
 assessed value attributable to that portion.
   (b) Primary residence. The property must serve as  the  primary  resi-
 dence  of  one  or  more  of the owners thereof, UNLESS SUCH PROPERTY IS
 OWNED BY A SMALL BUSINESS AS DEFINED IN PARAGRAPH (G) OF  THIS  SUBDIVI-
 SION.
   (b-1)  Income.  For  final assessment rolls to be used for the levy of
 taxes for the two thousand eleven-two thousand twelve  school  year  and
 thereafter,  the  parcel's affiliated income may be no greater than five
 hundred thousand dollars, as determined by the commissioner of  taxation
 and  finance  pursuant  to  section one hundred seventy-one-u of the tax
 law, in order to be eligible for the basic exemption authorized by  this
 section.  As  used  herein,  the term "affiliated income" shall mean the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD04175-03-8

 A. 9734                             2
 
 combined income of all of the owners of the parcel who resided primarily
 thereon on the applicable taxable status date, and of any owners' spous-
 es residing primarily thereon. For exemptions on final assessment  rolls
 to  be  used for the levy of taxes for the two thousand eleven-two thou-
 sand twelve school year, affiliated income  shall  be  determined  based
 upon the parties' incomes for the income tax year ending in two thousand
 nine.  In  each  subsequent  school year, the applicable income tax year
 shall be advanced by one year. The term "income" as  used  herein  shall
 have the same meaning as in subdivision four of this section.
   (c)  Trusts.  If  legal  title  to the property is held by one or more
 trustees, the beneficial owner or owners shall  be  deemed  to  own  the
 property for purposes of this subdivision.
   (d)  Farm  dwellings  not owned by the resident. (i) If legal title to
 the farm dwelling is held by an S-corporation or by a C-corporation, the
 exemption shall be granted if the property serves as the  primary  resi-
 dence of a shareholder of such corporation.
   (ii) If the legal title to the farm dwelling is held by a partnership,
 the  exemption  shall  be  granted if the property serves as the primary
 residence of one or more of the partners.
   (iii) If the legal title to the farm dwelling is  held  by  a  limited
 liability company, the exemption shall be granted if the property serves
 as the primary residence of one or more of the owners.
   (iv)  Any information deemed necessary to establish shareholder, part-
 ner or owner status for eligibility purposes shall be considered  confi-
 dential and exempt from the freedom of information law.
   (e)  Dwellings  owned by limited partnerships. (i) If legal title to a
 dwelling is held by a limited partnership, the exemption shall be grant-
 ed if the property serves as the primary residence of one or more of the
 partners, provided that the limited partnership which holds title to the
 property does not engage in any commercial activity,  that  the  limited
 partnership  was  lawfully created to hold title solely for estate plan-
 ning and asset protection purposes, and that the partner or partners who
 primarily reside thereon personally pay all of the real  property  taxes
 and other costs associated with the property's ownership.
   (ii)  Any information deemed necessary to establish partner status for
 eligibility purposes shall be considered confidential  and  exempt  from
 the freedom of information law.
   (f)  Compliance with state tax obligations. The property's eligibility
 for the STAR exemption must not be suspended  pursuant  to  section  one
 hundred  seventy-one-y  of  the  tax  law  due to the past-due state tax
 liabilities of one or more of its owners. Notwithstanding any  provision
 of  law  to  the  contrary,  where  a  property's eligibility for a STAR
 exemption has been suspended pursuant to  such  section,  the  following
 provisions shall be applicable:
   (i)  The  property  shall  be  ineligible for a basic or enhanced STAR
 exemption effective with the next school year commencing after the issu-
 ance of notice by the department of the suspension  of  its  eligibility
 for the STAR exemption, even if the notice was issued after the applica-
 ble  taxable status date. If a STAR exemption has been granted to such a
 property on a tentative or final assessment roll, the assessor or  other
 person  having custody of that roll is hereby authorized and directed to
 immediately remove that STAR exemption from the roll.
   (ii) Any challenge to the factual or legal basis behind the suspension
 of a property's eligibility for a STAR exemption pursuant to section one
 hundred seventy-one-y of the tax law must be presented to the department
 in the manner prescribed by such section.  Neither  an  assessor  nor  a

 A. 9734                             3
 
 board  of  assessment  review has the authority to consider such a chal-
 lenge.
   (iii)  The  property  shall  remain  ineligible for the STAR exemption
 until the department notifies the assessor that the  suspension  of  its
 eligibility has been lifted. Once the assessor has been so notified, the
 exemption  may be resumed on a prospective basis only, provided that the
 eligibility requirements of this section are otherwise satisfied.
   (iv) In the case of a cooperative apartment or mobile home receiving a
 STAR exemption pursuant to paragraph (k) or (l) of  subdivision  two  of
 this section, a suspension of a STAR exemption due to a taxpayer's past-
 due  state tax liabilities shall only apply to the STAR exemption on the
 cooperative apartment or mobile home owned, or deemed to  be  owned,  by
 that taxpayer.
   (G)  FOR  THE  PURPOSES OF THIS SUBDIVISION, THE TERM "SMALL BUSINESS"
 SHALL MEAN A BUSINESS WHICH EMPLOYS ONE HUNDRED PERSONS OR LESS.
   § 2. This act shall take effect immediately and  shall  apply  to  all
 taxable years beginning on and after January 1, 2018.