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Assessor's Manual, Volume 4, ExemptionAdministration

Exemption Administration Manual - Part 2
Industrial, Commercial, and Public Service

Section 4.06 - McK U Con L Section 6272 (Industrial)

New York State Urban Development Corporation
(Industrial project or property of undetermined use)

Exemption Code(s): 18180 Year Originally Enacted:1968

Related Statutes: None.

SUMMARY: Industrial projects, industrial effectiveness projects, and small and medium- sized business assistance projects owned or under the control of the NYS Urban Development Corporation (UDC) that are located and used as required (see Property Location and Property Use Requirements below) are wholly exempt from taxation and special ad valorem levies, but are liable for special assessments. Also eligible for this exemption is property owned or under the control of the UDC whose use has not yet been determined, i.e., no project finding has yet been made determining whether the property is to be used for a civic, housing, industrial, or urban renewal project. Payments in lieu of taxes are required for such projects and for industrial projects.

This exemption also applies to UDC subsidiaries, except those eligible for exemption under the following statutes: RPTL §422 (not-for-profit housing companies), PHFL §33(1)(c) (limited-profit (Mitchell-Lama) housing companies), PHFL §93(6) (limited-dividend housing companies), and PHFL §577(3) (housing development fund companies). For a description of the exemption allowed for each of these subsidiaries, see the Exemption Profile for the statute that applies.

  1. ELIGIBILITY REQUIREMENTS:
    1. Ownership Requirements: Property must be owned by the UDC or one of its subsidiaries or under its control, possession, or supervision.
       
    2. Property Location Requirements: An industrial project, industrial effectiveness project, or small and medium-sized business assistance project must be located in an area that is substandard or insanitary, or in danger of becoming such an area, and in which there exists substantial and persistent unemployment or underemployment.
       
    3. Property Use Requirements: An industrial project must provide for the elimination, reduction, or prevention of unemployment or underemployment in the area and must include buildings suitable for manufacturing, warehousing, research, or other industrial, business, or commercial purposes.

      An industrial effectiveness project must be designed to improve the productivity and competitiveness of an industrial firm or group of industrial firms through redesign of production facilities or other means. An industrial firm is defined as a manufacturing firm involved with extracting, smelting, or recovering, developing, preparing, compounding, converting, assembling, or producing raw materials. Along with facilities used for these purposes, eligible facilities include those used for storage, warehousing, or distribution, research and development, or refinement of known substances, processes, and products.

      A small and medium-sized business assistance project must be either of the following:
      (1) the rehabilitation or renovation of an industrial plant that is economically inefficient because of the need for changes in design, construction, technology, or production processes or
      (2) the rehabilitation or renovation of existing facilities for reuse as an industrial facility. A small or medium-sized business is defined as one that employs 500 or fewer employees within the state on a full-time basis.

    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
    exemption
    allowed
    2. Duration No
    limit
    No
    limit
    No
    limit
    No
    exemption
    allowed
    3. Taxing Jurisdiction
    a. County or County
    Special Districts
    Ex NA Ex Tax
    b. City Ex NA NA Tax
    c. Town or Town
    Special District
    Ex NA Ex Tax
    d. Village Ex NA NA Tax
    e. School District NA Ex NA NA
      Ex-Exempt   Tax-Taxable   NA-Not Applicable

     
  4. PAYMENTS IN LIEU OF TAXES: Yes -- The UDC, subject to any agreement it has with any of its noteholders or bondholders, may enter into agreements with a municipality in which a project is located to make annual payments in lieu of taxes with respect to property that is owned by the UDC or one of its subsidiaries.

    Payments in lieu of taxes are required on the real property constituting the project site for industrial projects as follows: 100% of the average annual real property taxes paid or due for the three-year period prior to UDC acquisition or, in the case of real property acquired from an urban renewal agency or from a municipality which acquired such property for urban renewal purposes, for the three-year period prior to its acquisition by such agency or municipality.

    The chairman of the corporation must annually, on or before December 1, make and deliver to the Governor and to the Director of the Budget his certificate stating the sum(s), if any, required to be paid for industrial projects which have been granted exemption pursuant to this statute; such payments are paid by the state.

    Real property of the UDC for which no project finding has been made in accordance with the provisions of McK U Con L §6260 are subject to such required payments described above so long as the chairman of the UDC certifies such sum(s) as being required.

    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:

      Special Ad Valorem Levies: 100% of assessed value.

      Special Assessments: No exemption allowed.

  6. CODING OF EXEMPTION ON ASSESSMENT ROLL:
    Code Description of Alternative Codes Possible
    18180  

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

    NOTE: 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
    Branch banks in banking development districts RPTL §485-f
    Business investment property RPTL §485-b
    Commercial properties in designated areas
    of Manhattan (New York City)
    RPTL §499-b
    Commercial properties in New York City
    except designated areas of Manhattan
    RPTL §499-bb
    Housing development fund companies
    (UDC subsidiary)
    PHFL §577(3)
    Industrial and commercial properties in New York City
    (project certified by NYC Department of Finance)
    RPTL §489-bbbb
    Industrial and commercial properties in New York City
    (project certified by NYC Department of Finance
    after June 30, 2008)
    RPTL §489-bbbbbb
    Industrial development agencies, municipal RPTL §412-a
    & Gen Muny L §874
    Limited-dividend housing companies
    (UDC subsidiary)
    PHFL §93(6)
    Limited-profit housing companies
    (UDC subsidiary)
    PHFL §33(1)(c)
    Mixed-use properties in certain municipalities RPTL §485-a
    Mixed-use properties in New York City RPTL §489-bbbbb
    Nonprofit corporation providing industrial
    facilities and related research or
    guaranteeing loans to finance small
    business facilities and activities
    CLS U Con L Ch. 270
    Not-for-profit housing companies RPTL §422
    Public authorities RPTL §412 & Pub Auth L
    Property improvements in empire zones RPTL §485-e
    State of New York (generally) RPTL §404(1)

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