Assessor's Manual, Volume 4, Exemption Administration

Exemption Administration Manual - Part 1
Municipal Governments

Section 4.03 - ED L Section 468

NYC Educational Construction Fund (NYC)

Exemption code(s): 13920  Year originally enacted: 1966

Related statutes: Pub Hsng L §3(15)(16)

Summary: Real property that (1) is owned by the NYC Educational Construction Fund or under its jurisdiction, control, or supervision, (2) is located in New York City, and (3) is used for the construction and/or improvement of elementary and secondary school buildings in combination with other compatible non-school purposes is wholly exempt from taxation, but liable for special assessments. Payments in lieu of taxes are required to be provided for in leases and subleases of nonschool portions of any combined occupancy structures as described in Payments in Lieu of Taxes below.

1. Eligibility requirements:
   1. Ownership requirements: Property must be owned by the fund or under its jurisdiction, control, or supervision. 
   2. Property location requirements: Property must be located in New York City.
   3. Property use requirements: Land and improvements must be used for the construction, rehabilitation, or improvement of elementary and secondary school buildings in combination with other compatible nonschool uses to correct for the typical under-utilization of land by such school buildings.
   4. Certification by state or local government: None required.
   5. Required construction start date or other time requirement: None.
2. Local option: No. 
3. Limitation on exemption:

    Limitation on exemption

   	General Municipal Taxes	School District Taxes	Special Ad Valorem Tax	Special Assessments
   1. Amount	No limit	No limit	NA	No exemption allowed
   2. Duration	No limit	No limit	NA	No exemption allowed
   3. Taxing Jurisdiction
   a. City	Ex	NA	NA	Tax
   b. School District	NA	Ex	NA	Tax
   	Ex-Exempt      Tax-Taxable      NA-Not Applicable

4. Payments in lieu of taxes: Leases and subleases of exempted nonschool portions, and any corresponding property rights, of combined occupancy structures must include provision for payments in lieu of taxes. Such payments must be equal to the amount which would normally be paid as taxes, unless NYC approves a lesser or greater amount, (1) for such leased or subleased property, (2) for any subsequent nonschool improvements constructed thereon, and (3) for any such property rights.

   Should such lease or sublease be held by the NYC Housing Authority, the amount of the payments in lieu of taxes must be agreed upon (1) by the NYC Educational Construction Fund, (2) by NYC, and (3) by the NYC Housing Authority and must be approved (1) by the commissioner of the NYS Division of Housing and Community Renewal -- if such project meets the Public Housing Law definition (3(16)) of a state project or (2) by the federal government -- if such project meets the Public Housing Law definition (3(15)) of a federal project.

   Additionally, and with NYC approval, leases and subleases of such nonschool portions may further provide:

   1. for the payment of a fixed sum or sums as a tax equivalency payment whether or not such property rights are exempt from real property taxes,
   2. that, if an ad valorem tax is levied and paid by such lessee or sublessee, such payment will be credited against any taxes thereafter payable to NYC, and
   3. that, if a tax is levied that replaces all or part of the real property taxes on such property rights and is paid by such lessee or sublessee, such payment will be credited against any taxes thereafter payable to NYC.

   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.

5. Calculation of exemption:
   1. General municipal and school district taxes: 100% of assessed value.
   2. Special Ad Valorem Levies and special assessments: No exemption allowed. 
6. Coding of exemption on assessment roll:

    Coding of exemption on assessment roll

   Code	Description of Alternative Codes Possible
   13920

   Assessment roll section(s): This code should not be used to identify (1) property owned by NYC and exempt under RPTL §406(1), (2) property that is owned by a school district or a Board of Cooperative Educational Services and is exempt under RPTL §408, or (3) property that 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.

7. Filing requirements (owner or occupant of property): None.
8. Reporting requirements (assessor): None. 
9. Similar exemptions:

    Similar exemptions

   Subject	Statute
   Municipal corporations	RPTL §406(1)
   Public authorities	RPTL §412 & Pub Auth L

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