S T A T E   O F   N E W   Y O R K
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                                   5397
 
                        2023-2024 Regular Sessions
 
                           I N  A S S E M B L Y
 
                              March 10, 2023
                                ___________
 
 Introduced by M. of A. BRABENEC -- read once and referred to the Commit-
   tee on Real Property Taxation
 
 AN  ACT  to  amend the real property tax law, in relation to authorizing
   the imposition of service charges upon certain real property
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 20 of section 102 of the real property tax law
 is amended and a new subdivision 13-a is added to read as follows:
   13-A. "SERVICE CHARGE" MEANS A CHARGE, OTHER THAN A SPECIAL AD VALOREM
 LEVY OR SPECIAL ASSESSMENT, IMPOSED UPON REAL PROPERTY BY OR  ON  BEHALF
 OF  A  COUNTY, CITY, TOWN OR VILLAGE, TO DEFRAY THE COST OF SERVICES AND
 IMPROVEMENTS NECESSARY OR CONVENIENT IN PROVIDING SUCH SERVICES FOR  THE
 FOLLOWING PURPOSES: POLICE PROTECTION; FIRE PROTECTION; STREET AND HIGH-
 WAY  CONSTRUCTION,  MAINTENANCE  AND  LIGHTING;  SANITATION;  AND  WATER
 SUPPLY. ALL IMPROVEMENTS SPECIFIED IN PARAGRAPH (A) OF  SUBDIVISION  ONE
 OF  SECTION  FOUR  HUNDRED  NINETY  OF THIS CHAPTER SHALL BE DEEMED SUCH
 IMPROVEMENTS.
   20. "Tax" or "taxation" means a charge imposed upon real  property  by
 or  on  behalf  of  a county, city, town, village or school district for
 municipal or school district purposes, INCLUDING A SERVICE  CHARGE,  but
 does  not include a special ad valorem levy or a special assessment. The
 term "tax" or "taxes" as used in articles five, nine[, ten]  and  eleven
 of  this  chapter shall for levy and collection purposes include special
 ad valorem levies.
   § 2. The real property tax law is amended by adding a new section  403
 to read as follows:
   §  403.  LIMITATION  ON EXEMPTIONS GRANTED BY THIS TITLE. 1.  NOTWITH-
 STANDING THE PROVISIONS OF SECTIONS FOUR HUNDRED FOUR AND  FOUR  HUNDRED
 SIX  OF  THIS TITLE, ALL REAL PROPERTY FOR WHICH EXEMPTION IS ALLOWED BY
 ANY OF SUCH SECTIONS, EXCLUSIVE OF PROPERTY USED EXCLUSIVELY FOR  CHARI-
 TABLE,  HOSPITAL,  EDUCATIONAL OR CEMETERY PURPOSES, SHALL BE SUBJECT TO
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD08906-01-3
              

 A. 5397                             2
 
 SERVICE CHARGES COMPUTED AS PROVIDED IN SECTION FOUR HUNDRED NINETY-SEV-
 EN OF THIS ARTICLE AND TO SUCH SPECIAL AD  VALOREM  LEVIES  AND  SPECIAL
 ASSESSMENTS  AS ARE SPECIFIED IN SUBDIVISION TWO OF SECTION FOUR HUNDRED
 NINETY OF THIS ARTICLE, EXCEPT THAT:
   (A)  REAL  PROPERTY OWNED BY A MUNICIPAL CORPORATION WITHIN ITS CORPO-
 RATE LIMITS WHICH IS OTHERWISE EXEMPT FROM TAXATION SHALL BE EXEMPT FROM
 ANY SUCH SERVICE CHARGE, SPECIAL AD VALOREM LEVY OR  SPECIAL  ASSESSMENT
 IMPOSED BY OR ON BEHALF OF SUCH MUNICIPAL CORPORATION; OR
   (B)  REAL  PROPERTY  OWNED  BY  A MUNICIPAL CORPORATION NOT WITHIN ITS
 CORPORATE LIMITS WHICH IS OTHERWISE EXEMPT FROM TAXATION, EITHER  WHOLLY
 OR  PARTIALLY,  SHALL BE EXEMPT FROM ANY SUCH SERVICE CHARGE, SPECIAL AD
 VALOREM LEVY OR SPECIAL ASSESSMENT IMPOSED BY OR ON BEHALF OF ANY MUNIC-
 IPAL CORPORATION IN WHICH SUCH PROPERTY IS LOCATED, PROVIDED THE GOVERN-
 ING BOARD THEREOF SHALL SO AGREE IN WRITING.
   2. TO THE EXTENT THAT THE PROVISIONS OF THIS SECTION ARE  INCONSISTENT
 WITH ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS SECTION SHALL BE
 CONTROLLING.
   §  3.  Title 2 of article 4 of the real property tax law is amended by
 adding a new section 420 to read as follows:
   § 420. LIMITATION ON EXEMPTIONS GRANTED BY THIS TITLE.  1.    NOTWITH-
 STANDING  THE  PROVISIONS  OF  SECTIONS  FOUR HUNDRED TWENTY-ONE-A, FOUR
 HUNDRED TWENTY-FOUR THROUGH  FOUR  HUNDRED  TWENTY-EIGHT,  FOUR  HUNDRED
 THIRTY-TWO,  FOUR HUNDRED THIRTY-FOUR, FOUR HUNDRED THIRTY-EIGHT THROUGH
 FOUR HUNDRED FORTY-FOUR, FOUR HUNDRED  FIFTY,  FOUR  HUNDRED  FIFTY-TWO,
 FOUR  HUNDRED  SIXTY-FOUR, FOUR HUNDRED SEVENTY-TWO, FOUR HUNDRED SEVEN-
 TY-FOUR, FOUR HUNDRED EIGHTY-SIX AND FOUR HUNDRED EIGHTY-EIGHT  OF  THIS
 TITLE;  REAL  PROPERTY  FOR  WHICH  EXEMPTION  IS  ALLOWED  BY  ANY SUCH
 SECTIONS, EXCLUSIVE OF PROPERTY OWNED BY A  CORPORATION  OR  ASSOCIATION
 ORGANIZED  OR CONDUCTED EXCLUSIVELY FOR RELIGIOUS, CHARITABLE, HOSPITAL,
 EDUCATIONAL OR CEMETERY PURPOSES, SHALL BE SUBJECT  TO  SERVICE  CHARGES
 COMPUTED  AS PROVIDED IN SECTION FOUR HUNDRED NINETY-EIGHT OF THIS ARTI-
 CLE AND TO SUCH AD VALOREM LEVIES AND SPECIAL ASSESSMENTS AS ARE  SPECI-
 FIED IN SUBDIVISION TWO OF SECTION FOUR HUNDRED NINETY OF THIS CHAPTER.
   2.  TO THE EXTENT THAT THE PROVISIONS OF THIS SECTION ARE INCONSISTENT
 WITH ANY OTHER PROVISION OF LAW, THE PROVISIONS OF THIS SECTION SHALL BE
 CONTROLLING.
   § 4. Section 490 of the real property tax law, as amended by section 2
 of part AA of chapter 59 of the laws of 2019,  is  amended  to  read  as
 follows:
   §  490.  Exemption  from special ad valorem levies and special assess-
 ments.  [Real] 1. EXCEPT AS OTHERWISE PROVIDED  IN  SUBDIVISION  TWO  OF
 THIS SECTION, REAL property exempt from taxation pursuant to subdivision
 two  of  section  four  hundred, subdivision one of section four hundred
 four, subdivision one of section four hundred six, sections four hundred
 eight, four hundred ten, four hundred ten-a, four  hundred  ten-b,  four
 hundred  eighteen,  four  hundred  twenty-a, four hundred twenty-b, four
 hundred twenty-two, four hundred twenty-six, four hundred  twenty-seven,
 four hundred twenty-eight, four hundred thirty, four hundred thirty-two,
 four  hundred thirty-four, four hundred thirty-six, four hundred thirty-
 eight, four hundred fifty, four hundred fifty-two, four  hundred  fifty-
 four,  four  hundred  fifty-six,  four  hundred sixty-four, four hundred
 seventy-two, four hundred seventy-four,  four  hundred  eighty-five  and
 subdivision  ten  of section four hundred eighty-seven of this [chapter]
 ARTICLE shall also be exempt from special ad valorem levies and  special
 assessments  against  real  property located outside cities and villages
 for a special improvement or service or a special  district  improvement
 A. 5397                             3
 
 or service and special ad valorem levies and special assessments imposed
 by  a  county  improvement district or district corporation except [(1)]
 (A) those levied to pay for the costs, including interest and incidental
 and  preliminary  costs, of the acquisition, installation, construction,
 reconstruction and enlargement of or additions to the following improve-
 ments, including original equipment, furnishings, machinery  or  appara-
 tus,  and  the  replacements  thereof:  water  supply  and  distribution
 systems; sewer systems (either sanitary or  surface  drainage  or  both,
 including  purification,  treatment  or  disposal  plants or buildings);
 waterways and drainage improvements; street, highway, road  and  parkway
 improvements  (including  sidewalks, curbs, gutters, drainage, landscap-
 ing, grading or improving the  right  of  way)  and  [(2)]  (B)  special
 assessments  payable in installments on an indebtedness including inter-
 est contracted prior to July first, nineteen hundred fifty-three, pursu-
 ant to section two hundred forty-two of the town law or pursuant to  any
 other comparable provision of law.
   2.  NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
 REAL  PROPERTY  SUBJECT  TO  SERVICE CHARGES AS PROVIDED IN SECTION FOUR
 HUNDRED THREE OR FOUR HUNDRED TWENTY  OF  THIS  ARTICLE  SHALL  ALSO  BE
 SUBJECT  TO SPECIAL AD VALOREM LEVIES AND SPECIAL ASSESSMENTS IMPOSED TO
 DEFRAY  THE  COST,  INCLUDING  OPERATION  AND  MAINTENANCE,  OF  SPECIAL
 DISTRICT IMPROVEMENTS OR SERVICES OR OF SPECIAL IMPROVEMENTS OR SERVICES
 FOR  THE  FOLLOWING PURPOSES: POLICE PROTECTION; FIRE PROTECTION; STREET
 AND HIGHWAY CONSTRUCTION,  MAINTENANCE  AND  LIGHTING;  SANITATION;  AND
 WATER SUPPLY. ALL IMPROVEMENTS SPECIFIED IN PARAGRAPH (A) OF SUBDIVISION
 ONE OF THIS SECTION SHALL BE DEEMED SUCH IMPROVEMENTS.
   § 5.  The real property tax law is amended by adding a new section 498
 to read as follows:
   §  498. SERVICE CHARGES. 1. ANY SERVICE CHARGE TO WHICH ANY REAL PROP-
 ERTY MAY BE SUBJECT AS PROVIDED IN SECTION FOUR HUNDRED THREE OR SECTION
 FOUR HUNDRED TWENTY OF THIS ARTICLE SHALL BE IMPOSED AT A RATE  COMPUTED
 AS PROVIDED IN SUBDIVISION THREE OF THIS SECTION.
   2. FOR THE PURPOSES OF THIS SECTION, "CHARGEABLE SERVICES AND IMPROVE-
 MENTS"  MEANS  SERVICES,  AND  IMPROVEMENTS  NECESSARY  OR CONVENIENT IN
 PROVIDING SUCH SERVICES, FOR THE FOLLOWING PURPOSES: POLICE  PROTECTION;
 FIRE PROTECTION; STREET AND HIGHWAY CONSTRUCTION, MAINTENANCE AND LIGHT-
 ING;  SANITATION;  AND WATER SUPPLY. ALL IMPROVEMENTS SPECIFIED IN PARA-
 GRAPH (A) OF SUBDIVISION ONE OF SECTION  FOUR  HUNDRED  NINETY  OF  THIS
 TITLE SHALL BE DEEMED CHARGEABLE IMPROVEMENTS.
   3. THE AMOUNT OF THE SERVICE CHARGE SHALL BE DETERMINED AS FOLLOWS:
   (A) THE SERVICE CHARGE SHALL BE BASED ON THE ASSESSED VALUE OF THE TAX
 EXEMPT  REAL  PROPERTY  AND THE AMOUNT WHICH THE COUNTY, CITY OR TOWN OR
 VILLAGE EXPENDED, IN THE YEAR PRECEDING THE YEAR IN WHICH SUCH CHARGE IS
 ASSESSED, FOR CHARGEABLE SERVICES AND IMPROVEMENTS. ANY AMOUNT  RECEIVED
 FROM  FEDERAL  OR  STATE  AID SPECIFICALLY DESIGNATED FOR THE ABOVE-MEN-
 TIONED PURPOSES SHALL NOT BE  CONSIDERED  IN  DETERMINING  THE  COST  OF
 PROVIDING  SUCH  SERVICES  FOR  THE  REAL PROPERTY. THE EXPENDITURES FOR
 SERVICES NOT PROVIDED FOR CERTAIN REAL PROPERTY SHALL NOT BE  CONSIDERED
 IN  THE  CALCULATION  OF  THE SERVICE CHARGE FOR SUCH REAL PROPERTY, NOR
 SHALL SUCH EXPENDITURES BE CONSIDERED WHEN A SERVICE IS CURRENTLY FUNDED
 BY ANOTHER SPECIAL AD VALOREM LEVY OR SPECIAL ASSESSMENT.
   (B) THE SERVICE CHARGE RATE  FOR  THE  TAX-EXEMPT  PROPERTY  SHALL  BE
 DETERMINED BY DIVIDING THE EXPENDITURES DETERMINED PURSUANT TO PARAGRAPH
 (A)  OF  THIS  SUBDIVISION  BY  THE  ASSESSED VALUE OF ALL REAL PROPERTY
 LOCATED WITHIN THE COUNTY, CITY, TOWN OR VILLAGE  IMPOSING  THE  SERVICE
 CHARGE, INCLUDING NONTAXABLE PROPERTY.
 A. 5397                             4
 
   (C) THE RESULTING RATE SHALL THEN BE APPLIED TO THE ASSESSED VALUATION
 OF  THE  TAX EXEMPT PROPERTY SUBJECT TO SERVICE CHARGES TO DETERMINE THE
 AMOUNT OF SUCH CHARGES.
   (D)  UNDER  NO  CIRCUMSTANCES  SHALL THE AMOUNT OF SUCH SERVICE CHARGE
 EXCEED TEN PERCENT OF THE PROPERTY TAX LIABILITY IF  THE  PROPERTY  WERE
 SUBJECT TO TAXATION.
   4.  THE  PROVISIONS OF THIS SECTION SHALL NOT AUTHORIZE THE IMPOSITION
 OF ANY SERVICE CHARGE, SPECIAL AD VALOREM LEVY OR SPECIAL ASSESSMENT  BY
 ANY  MUNICIPAL CORPORATION ON REAL PROPERTY OTHERWISE EXEMPT BY LAW FROM
 TAXATION UNLESS THE GOVERNING BOARD OF SUCH MUNICIPAL CORPORATION  SHALL
 PREVIOUSLY, AFTER PUBLIC HEARING, HAVE ADOPTED A LOCAL LAW, ORDINANCE OR
 RESOLUTION  ELECTING  TO MAKE THE PROVISIONS OF THIS SECTION APPLICABLE.
 FOR THE PURPOSES OF THIS SECTION, GOVERNING BOARD, WITH RESPECT  TO  THE
 CITY  OF  NEW  YORK, SHALL MEAN THE BOARD OF ESTIMATE OF THE CITY OF NEW
 YORK.
   § 6. This act shall take effect on the first of April of the  calendar
 year  next  succeeding the date on which it shall have become a law, and
 shall apply to all assessments made with reference to a  taxable  status
 date which falls on or after such effective date.