Assessor Manuals, Exemption Administration: RPTL Section 404(1)

Exemption Administration Manual—Part 1: New York State Government

Section 4.02 - RPTL Section 404(1): State of New York (generally)

Exemption ode(s):

12100

Year originally enacted:

Before 1896

Related statutes:

• RPTL §§402, 490, 532, 534, 536, 542, 545
• ECL §§15-2115, 15-2317 Pub Lands L §§19-a, 19-b

Summary:

Real property owned by the State of New York or any of its departments or agencies is wholly exempt from taxation except when (1) the property is taxable under RPTL §402, (2) it is located in one of the areas described in RPTL §532 or §536 and is one of the types of property described there, (3) it is used for reforestation as described in RPTL §534, or (4) it is used for river regulating district purposes as described in ECL §15-2115 (see the Exemption Profiles for these statutes).

Such property is also exempt, for certain purposes, from special assessments. In addition, while RPTL §404(1) and §490 imply that state-owned property is entitled to a limited exemption from special ad valorem levies, it has been the opinion of the New York State Attorney General (Op.Atty.Gen., 1953, p.133) that state-owned lands and improvements are wholly exempt from such levies except as otherwise provided in RPTL §532 and §534.

There are several state agencies that are not subject to the provisions of RPTL §404(1), but instead are eligible for exemption under other statutes. For the provisions of these statutes, see the Exemption Profiles for the following:

Eligibility requirements

Ownership requirements:

Property must be owned by the State of New York or one of its departments or agencies.

Property location requirements:

None.

Property use requirements:

None.

Certification by state or local government:

None required.

Required construction start date or other time requirement:

None.

Local option

No.

Limitation on exemption

* Per opinion of Attorney General.

Payments in lieu of taxes

Yes. New York State is required to make the following types of payments:

1. It must make payments equivalent to local property taxes for a limited period of time when either (a) it acquires property that becomes exempt as a result of the acquisition and such property constitutes 2% or more of the total taxable assessed value of the latest preceding assessment roll or (b) there is a reduction in assessments on taxable state-owned lands. When either of these events occurs, the Office of Real Property Tax Services establishes a "transition assessment" that effectively prevents any loss of taxable assessed value on the assessment roll for the first year affected by the event. For each succeeding year, the state board establishes a transition assessment that in effect limits to 2% of the total taxable assessed value on the latest preceding assessment roll the loss in taxable assessed value on such roll as a result of the event. The transition assessment determined annually is the basis for the tax-equivalent payments made by the state. Reductions in the transition assessment for each property continue until the transition assessment is phased out.

   In making transition assessments for property acquired by a state public authority or by the state for the purposes of a state public authority, such transition assessments must be reduced by any payments in lieu of taxes made by the authority. For state lands in which interests have been granted by the state to others and these interests and improvements made to lands in which those interests have been granted are taxable, the transition assessments must be reduced by the taxable assessed value of those interests and improvements.

2. The state is required to make payments in lieu of taxes for lands it owns in the Adirondack Park that are taxable as described in RPTL §532. Payments are determined as follows. The annual minimum assessed value of all taxable parcels in a taxing district is equal to the 1960 assessed value adjusted for accumulated changes in level of assessment since that time. If the annual assessments are less than the minimum, an additional assessment is included in the taxing district to bring the total up to the minimum.
    
3. The state must make payments in lieu of taxes to any city having a population of 75,000 or more in which the taxable assessed value in the city is decreased because of acquisition by the state of lands and improvements for its use or for the construction of facilities, for any purpose other than highway purposes, and the sum of this decrease plus the assessed value of other tax-exempt property owned by the state in the city, excluding property owned or used by a state public authority, is equal to or exceeds 25% of the city's total taxable assessed value. If title to the lands and improvements is held by the New York State and Local Employees' Retirement System, the New York State Teachers' Retirement System, or the New York State and Local Police and Fire Retirement System, payments are to be made directly by these agencies and not by the State Comptroller.

   Subsequent to acquisition of the property by the state and prior to the completion of construction of the facilities, annual payments are to be equivalent to the amount of taxes levied on the property prior to acquisition by the state. After the facilities are constructed, annual payments are to be made for the period of probable usefulness of the facilities or the lands on which the facilities are built, whichever is longer, but in no event for more than 30 years. These payments are to be equal to 1% of the sum of the acquisition cost of the land and improvements plus the cost of construction of the facilities. The law governing this program allows the city to agree to payments in lesser amounts than those described here or to agree not to apply for any payments at all.

4. The state is required to make payments in lieu of taxes to a city located in a county where a state office building project has been constructed in accordance with the "South Mall contract", i.e. the City of Albany. These payments are to be equal to 1% of the sum of the actual acquisition cost of the land and the improvements thereon and the actual cost of the construction of the facilities, but may not exceed the following amounts:
   
   

    Limit amounts

   State Fiscal Year	Amount
   2000-2001	$4,500,000
   2001-2002	$4,500,000
   2002-2003	$4,500,000
   2003-2004	$9,850,000
   2004-2005	$16,850,000
   2005-2006	$22,850,000
   2006-2007	$22,850,000
   2007-2008	$22,850,000
   2008-2009	$22,850,000
   2009-2010	$22,850,000
   2010-2011	$22,850,000
   2011-2012	$15,000,000
   2012-2013	$22,850,000
   2013-2014	$22,850,000
   2014-2015	$15,000,000
   2015-2016	$15,000,000
   2016-2017	$15,000,000
   2017-2018	$15,000,000
   2018-2019	$15,000,000
   2019-2020	$15,000,000
   2020-2021	$15,000,000
   2021-2022	$15,000,000
   2022-2023	$15,000,000
   2023-2024	$15,000,000
   2024-2025	$15,000,000
   2025-2026	$15,000,000
   2026-2027	$15,000,000
   2027-2028	$15,000,000
   2028-2029	$15,000,000
   2029-2030	$15,000,000
   2030-2031	$15,000,000
   2031-2032	$7,150,000
   2032-2033	$7,150,000

   Property eligible for these payments is not entitled to any other form of state aid for such state-owned or state-leased property.

5. The state is required to make payments in lieu of taxes to the county, town, school district, and special district(s) for land and improvements acquired by the state at West Valley in the town of Ashford, Cattaraugus County, and used by Nuclear Fuel Services, Inc., beginning in any year in which the acquisition of such property causes a decrease in the taxable assessed value of the taxing jurisdiction. The amount of payment is to be equal to the taxes and special district charges that were levied or would have been levied on the property on the basis of its value on the last assessment roll completed in 1980. Each taxing jurisdiction must apply to the state Comptroller for payments under this program.

Since they are not collected by the tax collector, payments in lieu of taxes should not be entered on the tax roll. Such payments are collected in the same manner as are other payments due the municipality under contract.

Calculation of exemption

General municipal and school district taxes:

100% of assessed value.

Special ad valorem levies and special assessments:

Special ad valorem levies:

100% of assessed value.

Special assessments:

100% of basis of assessment.

The exemption applies to all assessments imposed by counties, county special districts, towns, and town special districts except (1) charges levied to pay for the capital costs of sewer systems, water supply systems, waterways and drainage improvements, and streets and highways, and (2) special assessments for indebtedness contracted before 7/1/53. The exemption does not apply to special assessments imposed by cities or villages.

Coding of exemption on assessment roll

Assessment roll section(s):

Exempt (RPS Section 8).

Note: This code should not be used to identify property that is taxable under RPTL §402, RPTL §532, or ECL §15-2115, or is exempt for certain purposes under RPTL §534, RPTL §536, or ECL §15-2309, or is exempt under any of the statutes listed under Similar Exemptions below. For coding of such property, see the Exemption Profile for the statute that applies.

Filing requirements (owner or occupant of property):

None.

Reporting requirements (assessor)

None.

Similar exemptions

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