LEGISLATIVE REVIEW COMMITTEE

MEMBER UPDATE

December, 2003

 J. David Eldridge, Esq. & Matthew E. Pachman, Esq, Co-Chairs

Among the several functions of the Bar’s Legislative Review Committee is to keep our members informed of proposed, pending, and adopted legislation likely to have an impact upon the practice of law and the citizens of Suffolk County.

 

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Legislative Review Committee’s

PICK OF THE MONTH:

            (S04404) (A8827)

            Sponsor: Defrancisco

            Status: signed by the Governor, 10/28/03

An Act recently passed which amends the CPLR, by eliminating demands for the amount of damages sought in all actions for personal injuries or wrongful death, and which allows an attorney to make reference, during opening statement and/or closing statement, to a specific dollar amount that the attorney believes to be appropriate compensation.

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                                                                 This Week:

REAL PROPERTY UPDATE

 

(1)                   An act to amend the education law, the real property tax law and the tax law, in relation to abolishing certain school taxes, providing for alternative taxes and state distribution to school districts, and repealing certain provisions of the real property tax law and the tax law relating to school taxes

 

(A01805) Sponsor: Thiele

            Status: held for consideration in Education

            PURPOSE:

            The purpose of this plan is to permit the financing of public schools in New York State

within the context of the following objectives: (1) the elimination of the inequitable and regressive real estate tax as the support of public schools, (2) the retention of present levels of local control by school districts, (3) the guarantee of quality and equality of educational opportunity for all children of the state.

            SUMMARY:

            The plan consists of the following basic principles: (1) the state shall assume all of the costs of Basic Quality Education, including all general and special educational services which the commissioner, under guidelines established by the Legislature, shall define as necessary.

            JUSTIFICATION:

            This plan will end, once and for all, the dependency of public schools on the regressive and unfair real estate tax; a tax which bears little relationship to ability to pay; a tax which penalizes the person who chooses to invest in his own home.

            All property owners will benefit, be they rich or poor, by reduced property taxes averaging 60% in New York State. Homes will be more marketable and will increase in value. Retired persons will not be forced to sell their homes. Young couples will be able to purchase homes. The concept of "homestead" will be restored.

            This plan will insure equitable education for all children of the state regardless of wealth within a school district because the BASIC budget will supply all general services necessary for quality education, and all special services required by needy districts. Approved LEO budgets in poorer districts will be supplemented by state funds.

            A "windfall" to New York tenants, of reduced federal income taxes, will result from the trade-off of reduced rents (not deductible) and increased state income taxes (deductible). Estimates run from $200 million to $400 million annually from this windfall.

 

            Most businesses will benefit from the transfer of property taxes (fixed costs) to corporate franchise income taxes (variable costs). This is especially true for high capital invested manufacturing companies that employ large numbers of people. Although high income earning executives will likely be paying a net increase in total taxes, this will be reduced 50% by the increased deduction against the federal income tax.

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(2)An act to amend the real property law, in relation to verification by real estate brokers regarding zoning law compliance

            (A02649) Sponsor: McLaughlin

            Status: referred to Judiciary

            PURPOSE:

            To impose an affirmative duty upon real estate brokers to verify that the properties they list are in compliance with zoning laws.

 

            SUMMARY:

            This legislation adds a new section 442-1 to the real property law. This new section requires that real estate brokers verify that the properties they list are in compliance with all local zoning laws and ordinances. It also prohibits real estate brokers from listing properties not in compliance with such local zoning laws and ordinances.

            JUSTIFICATION:

            At present, real estate brokers have no duty to verify that the properties they list are in compliance with zoning laws. The proliferation of residential properties occupied in contravention of zoning restrictions has become a serious problem, particularly in the five boroughs of the City of New York. All too often, real estate brokers list properties for uses that violate local zoning laws. Brokers should be required to verify that the properties they list are in compliance with such zoning laws, and prohibited from listing properties they know to be not in compliance.

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(3)                   An act to amend the real property tax law, in relation to treating unpaid building code enforcement fines as real property taxes

 

            (A02459) Sponsor: McLaughlin

            Status: referred to Real property Taxation

            PURPOSE:

            This bill authorizes municipalities to include unpaid building code enforcement fines in the following year tax levy and subjects the property to foreclosure proceedings as authorized by the law for unpaid real property taxes. This legislation will enable municipalities, at local option, to treat unpaid building code enforcement fines as liens on the affected property. The liens could then be foreclosed pursuant to annual tax foreclosure proceedings should the fines remain unpaid. Faced with prospect of having their property sold at a tax sale, it is anticipated that violators would choose to settle outstanding fines to municipality.

            SUMMARY OF SPECIFIC PROVISIONS:

            Adds a new Section 901 to the Real Property Tax law.

            JUSTIFICATION:

            It is costly for municipalities to collect unpaid building code violation fines because the fine may only be collected pending a civil judgement. Consequently, smaller fines remain unpaid but, in the aggregate, may amount to thousands of dollars.

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(4)                   An act to amend the real property tax law, in relation to permitting a one-time real property tax credit for first-time home buyers within cities of certain size populations

            (A01694) Sponsor: Spano

            Status: Real property Taxation

            PURPOSE:

            The bill would authorize cities of certain size populations to adopt and amend local laws or ordinances providing for a one-time credit against taxation for local purposes.

            

            SUMMARY:

            Would authorize any city having a population of less than three hundred fifty thousand and more than fifty thousand people, or any city having a population in excess of one million people to adopt and amend local laws or ordinances to provide for a one-time credit against local real property taxation to purchasers who have never before owned residential property as a primary residence. Credit authorized shall be one half of one percent of the price previously paid by the purchaser for the purchase of such residential property.

            JUSTIFICATION:

            This legislation would allow certain cities of New York State to provide a tax credit to first time home buyers to entice people to stay in these cities.

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(5)                   An act to amend the real property tax law, in relation to reduced assessments due to contamination

            (A0157) Sponsor: Thiele

            Status: referred to Real property Taxation

            PURPOSE:

            Provides for a reduction in the assessed value of real property that is contaminated and in need of remediation by the owner of such property.

            SUMMARY:

            Section 1. The real property tax law is amended by adding a new section, 561.

            JUSTIFICATION:

            Landowners are entitled to a tax cut if their properties are polluted. Assessors must take into account any factor that affects the "marketability" of a property. Properties are being purchased without the owner`s knowledge about possible contamination. The property shall be eligible for a reduction in the assessed valuation of property based on the projected total cost necessary to remediate such contamination.

 

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Matthew E. Pachman and J. David Eldridge are partners in the firm of Pachman, Pachman & Eldridge, of Commack, NY. Together they co-chair the Bar’s Legislative Review Committee.