Home

ISSUE IN BRIEF: Real Property Tax Tribunal

Staff Contact:

The Business Council is supporting legislation to transfer the jurisdictional venue for the review and determination of challenges made to real property tax assessments for commercial real property with a value at or greater than one million dollars from the supreme court in an Article 78 proceeding to an administrative proceeding conducted by an administrative law judge within the tax appeals tribunal.

Summary of Provisions - Sections 1 through 5 of S.1767 amend the real property tax law to transfer responsibility for the commercial real property tax assessment challenges. Sections 6 through 9 and sections 11 and 12 of the bill amend the tax law to transfer of the responsibility for such real property tax assessment challenges to the division of tax appeals. Section 10 of the bill adds a new section 2013 to the tax law to provide for the new proceeding to review challenges to the assessment of commercial real property valued at one million dollars or more, provided such real property is outside a city with a population of one million or more. Such proceedings shall be conducted before an administrative law judge appointed to hear such a challenge by the tax appeals tribunal in the division of tax appeals. If necessary to take proof and offer other assistance, the administrative law judge can appoint a referee to assist him. Such proceeding shall be conducted in an expeditious manner and the decision rendered in a timely fashion. After a final decision of the tax appeals tribunal, which is not subject to any further administrative review, the determination shall be directly appealable to the appropriate appellate division of the supreme court. Costs in the proceeding may be imposed upon either party, depending upon the decision of the judge. When warranted, a special allowance may be assessed against the assessing unit, where the original assessment, appealed and re-determined, is so unjust or discriminatory as to require its imposition. A re-determination of the assessment, after successful challenge by the property owner in the proceeding shall stand for three years, unless limited special circumstances permit a reassessment during such period. Section 13 of the legislation adds a severability clause.

Existing Law - Currently, the review and determination of challenges made to real property assessments are conducted in an article 78 proceeding before the supreme court pursuant to article 7 of the real property tax law.

Justification - The legislation would provide both property owners and assessing units in which such property is situated with a nondiscriminatory, equitable, and expeditious administrative forum in which to challenge and defend an assessment made by a taxing jurisdiction. Empowering the tax tribunal within the state division of tax appeals, the professional administrative hearing officials independently operated of the state department of taxation and finance, to determine the validity of a locally imposed valuation for real property tax purposes, rather than relying upon the current article 78 certiorari proceeding, will alleviate uncertainties on behalf of local governments and taxpayers; will bring an end to the current tradition of annual or similarly regular reassessment of non-residential real property, followed by its challenge in court, and in most cases, final determination as to the validity thereof years later, well after the initial year of imposition; will provide for a dependable and consistent real property tax assessment review procedure for non-residential real property taxpayers; will relieve supreme court calendars of the time-consuming and laborious article 7 real property tax assessment review cases and their inherent tomes of numerical evidentiary data; and build a concentrated core of expertise in the conduct of complicated and technical real property tax assessment review cases.

Fiscal Implications - The division of tax appeals will incur additional expenses as a result of the administrative hearings it must conduct as a result of the enactment of this act; such costs would be offset by the savings to the judiciary, which would no longer be responsible for conducting the article 78 proceedings currently utilized for the same purpose.

Effective Date - This legislation shall take effect immediately, provided that an assessment review proceeding to challenge an assessment pursuant to section 2013 of the tax law, as added by section 10 of this act, may be commenced initially with respect to assessments on tax rolls completed after December 31, 2004. The division of tax appeals is directed to promulgate regulations necessary to ensure the timely implementation of the amendments made to the real property tax law and the tax law by this act.