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Assessor's Manual, Volume 4, Exemption Administration Manual - Part 1

 U.S., Foreign Governments, and Interstate Agencies

Section 4.04 - RPTL Section 400(2)

U.S. Government (Property Occupied under
purchase contract authorized by
Public Buildings Purchase Contract Act)
Exemption Code(s): 18600

Year Originally Enacted: 1957
Related Statutes: RPTL §490
40 USC 356 (Public Buildings Purchase Contract Act of 1954)

SUMMARY: Real property occupied by the U.S. Government under a purchase contract arrangement authorized by the Public Buildings Purchase Contract Act of 1954 (PBPCA) is wholly exempt from taxation and is exempt for certain purposes from special ad valorem levies and special assessments during the term of such contract provided that the U.S. Government (Administrator of General Services) agrees to make annual payments in lieu of taxes to each municipal corporation in which the property is located. Purchase contracts under the PBPCA are for a term of between 10 and 25 years, and these contracts specify limitations on the amount of payments in lieu of taxes required.
 
Once title to the property passes to the U.S. Government, as prescribed in the purchase contract, the property becomes exempt under RPTL §400(1).

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be under contract of sale to the U.S. Government and must be occupied by the U.S. Government.
    2. Property Location Requirements: None.
    3. Property Use Requirements: Pursuant to 40 USC 356(6), the property must be used as specified by the terms of the applicable purchase contract.
    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:  
        General
    Municipal
    Taxes
    School
    District
    Taxes
    Special
    Ad Valorem
    Tax
    Special
    Assessments
    1. Amount No
    limit
    No
    limit
    No
    limit
    No
    limit
    2. Duration Yes* Yes* Yes* Yes*
    3. Taxing Jurisdiction a. County or County
    Special Districts
    Ex NA L L
    b. City Ex NA NA Tax
    c. Town or Town
    Special District
    Ex NA L L
    d. Village Ex NA NA Tax
    e. School District NA Ex NA NA
       Ex-Exempt Tax-Taxable NA-Not Applicable
       L - Liable only for (1) county and town charges for capital costs of sewer systems, water supply systems, waterways and drainage improvements, and streets and highways, plus (2) special assessments for indebtedness contracted before 7/1/53.

    * Until title passes to U.S. Government (10 to 25 years). Once title passes to the U.S. Government, property becomes exempt under RPTL §400(1). 

  4. PAYMENTS IN LIEU OF TAXES: Yes -- The U.S. Government must enter into an agreement with each municipal corporation in which the property is located, whereby payment of a fair and reasonable" sum in lieu of taxes must be made annually to each corporation. The specific amount of such payments is subject to negotiation; however, the annual combined amount paid may not exceed 15% of the fair market value of the property as of the date of the purchase contract, or, in the case of property where construction is not complete on the contract date, 15% of the fair market value as of the date construction is completed.

    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 of that portion of the property occupied by the U.S. Government.
       
    2. Special Ad Valorem Levies and Special Assessments: 100% of assessed value or other basis of assessment.

      The exemption applies to all levies and 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.

  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
     
    Code Description of Alternative Codes Possible
    18600  

    Assessment Roll Section(s): Exempt (ARLM Section 8).

    NOTE: This code should be used only during the term of the purchase contract; once title passes to the U.S. Government, the property becomes exempt under RPTL §400(1).

    This code should not be used to identify 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:
Subject Statute
U.S. Government (generally) RPTL §400(1)

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