N.Y. General Municipal Law § 3-c: Limit upon real property tax levies by local governments

§ 3-c. Limit upon real property tax levies by local governments. 1.

Unless otherwise provided by law, the amount of real property taxes that

may be levied by or on behalf of any local government, other than the

city of New York and the counties contained therein, shall not exceed

the tax levy limit established pursuant to this section.

2. When used in this section:

(a) "Allowable levy growth factor" shall be the lesser of: (i) one and

two one-hundredths; or (ii) the sum of one plus the inflation factor;

provided, however, that in no case shall the levy growth factor be less

than one.

(b) "Available carryover" means the amount by which the tax levy for

the prior fiscal year was below the tax levy limit for such fiscal year,

if any, but no more than an amount that equals one and one-half percent

of the tax levy limit for such fiscal year.

(c) "Coming fiscal year" means the fiscal year of the local government

for which a tax levy limit shall be determined pursuant to this section.

(d) "Inflation factor" means the quotient of: (i) the average of the

national consumer price indexes determined by the United States

department of labor for the twelve-month period ending six months prior

to the start of the coming fiscal year minus the average of the national

consumer price indexes determined by the United States department of

labor for the twelve-month period ending six months prior to the start

of the prior fiscal year, divided by: (ii) the average of the national

consumer price indexes determined by the United States department of

labor for the twelve-month period ending six months prior to the start

of the prior fiscal year, with the result expressed as a decimal to four

places.

(e) "Local government" means a county, city, town, village, fire

district, or special district including but not limited to a district

created pursuant to article twelve or twelve-A, or governed by article

thirteen of the town law, or created pursuant to article five-A, five-B

or five-D of the county law, chapter five hundred sixteen of the laws of

nineteen hundred twenty-eight, or chapter two hundred seventy-three of

the laws of nineteen hundred thirty-nine, and shall include town

improvements provided pursuant to articles three-A and twelve-C of the

town law but shall not include the city of New York or the counties

contained therein.

(f) "Prior fiscal year" means the fiscal year of the local government

immediately preceding the coming fiscal year.

(g) "Tax levy limit" means the amount of taxes authorized to be levied

by or on behalf of a local government pursuant to this section,

provided, however, that the tax levy limit shall not include the

following:

(i) a tax levy necessary for expenditures resulting from court orders

or judgments against the local government arising out of tort actions

for any amount that exceeds five percent of the total tax levied in the

prior fiscal year;

(ii) in years in which the system average actuarial contribution rate

of the New York state and local employees' retirement system, as defined

by paragraph ten of subdivision a of section nineteen-a of the

retirement and social security law, increases by more than two

percentage points from the previous year, a tax levy necessary for

expenditures for the coming fiscal year for local government employer

contributions to the New York state and local employees' retirement

system caused by growth in the system average actuarial contribution

rate minus two percentage points;

(iii) in years in which the system average actuarial contribution rate

of the New York state and local police and fire retirement system, as

defined by paragraph eleven of subdivision a of section three hundred

nineteen-a of the retirement and social security law, increases by more

than two percentage points from the previous year, a tax levy necessary

for expenditures for the coming fiscal year for local government

employer contributions to the New York state and local police and fire

retirement system caused by growth in the system average actuarial

contribution rate minus two percentage points;

(iv) in years in which the normal contribution rate of the New York

state teachers' retirement system, as defined by paragraph a of

subdivision two of section five hundred seventeen of the education law,

increases by more than two percentage points from the previous year, a

tax levy necessary for expenditures for the coming fiscal year for local

government employer contributions to the New York state teachers'

retirement system caused by growth in the normal contribution rate minus

two percentage points.

(h) "Tax" or "taxes" shall include (i) a charge imposed upon real

property by or on behalf of a county, city, town, village or school

district for municipal or school district purposes, and (ii) special ad

valorem levies and special assessments as defined in subdivisions

fourteen and fifteen of section one hundred two of the real property tax

law.

3. (a) Subject to the provisions of subdivision five of this section,

beginning with the fiscal year that begins in two thousand twelve, no

local government shall adopt a budget that requires a tax levy that is

greater than the tax levy limit for the coming fiscal year. Provided

however the tax levy limit shall not prohibit a levy necessary to

support the expenditures pursuant to subparagraphs (i) through (iv) of

paragraph (g) of subdivision two of this section.

(b) (i) The commissioner of taxation and finance shall calculate a

quantity change factor for each local government for the coming fiscal

year based upon the physical or quantity change, as defined by section

twelve hundred twenty of the real property tax law, reported to the

commissioner of taxation and finance by the assessor or assessors

pursuant to section five hundred seventy-five of the real property tax

law. The quantity change factor shall show the percentage by which the

full value of the taxable real property in the local government has

changed due to physical or quantity change between the second final

assessment roll or rolls preceding the final assessment roll or rolls

upon which taxes are to be levied, and the final assessment roll or

rolls immediately preceding the final assessment roll or rolls upon

which taxes are to be levied. The commissioner of taxation and finance

shall, as appropriate, promulgate rules and regulations regarding the

calculation of the quantity change factor which may adjust the

calculation based on the development on tax exempt land.

(ii) After determining the quantity change factor for the local

government, the commissioner of taxation and finance shall proceed as

follows:

(A) If the quantity change factor is negative, the commissioner of

taxation and finance shall not determine a tax base growth factor for

the local government.

(B) If the quantity change factor is positive, the commissioner of

taxation and finance shall determine a tax base growth factor for the

local government which is equal to one plus the quantity change factor.

(iii) The commissioner of taxation and finance shall notify the state

comptroller and each local government of the applicable tax base growth

factors, if any, as soon thereafter as such factors are determined.

(c) Each local government shall calculate the tax levy limit

applicable to the coming fiscal year which shall be determined as

follows:

(i) Ascertain the total amount of taxes levied for the prior fiscal

year.

(ii) Multiply the result by the tax base growth factor, calculated

pursuant to paragraph (b) of this subdivision, if any.

(iii) Add any payments in lieu of taxes that were receivable in the

prior fiscal year.

(iv) Subtract the tax levy necessary to support expenditures pursuant

to subparagraph (i) of paragraph (g) of subdivision two of this section

for the prior fiscal year, if any.

(v) Multiply the result by the allowable levy growth factor.

(vi) Subtract any payments in lieu of taxes receivable in the coming

fiscal year.

(vii) Add the available carryover, if any.

(d) Whenever the responsibility and associated cost of a local

government function is transferred to another local government, the

state comptroller shall determine the costs and savings on the affected

local governments attributable to such transfer for the first fiscal

year following the transfer, and notify such local governments of such

determination and that they shall adjust their tax levy limits

accordingly.

4. (a) When two or more local governments consolidate, the state

comptroller shall determine the tax levy limit for the consolidated

local government for the first fiscal year following the consolidation

based on the respective tax levy limits of the component local

governments that formed such consolidated local government from the last

fiscal year prior to the consolidation.

(b) When a local government dissolves, the state comptroller shall

determine the tax levy limit for the local government that assumes the

debts, liabilities, and obligations of such dissolved local government

for the first fiscal year following the dissolution based on the

respective tax levy limits of such dissolved local government and such

local government that assumes the debts, liabilities, and obligations of

such dissolved local government from the last fiscal year prior to the

dissolution.

(c) The tax levy limit established by this section shall not apply to

the first fiscal year after a local government is newly established or

constituted through a process other than consolidation or dissolution.

5. A local government may adopt a budget that requires a tax levy that

is greater than the tax levy limit for the coming fiscal year, not

including any levy necessary to support the expenditures pursuant to

subparagraphs (i) through (iv) of paragraph g of subdivision two of this

section, only if the governing body of such local government first

enacts, by a vote of sixty percent of the total voting power of such

body, a local law to override such limit for such coming fiscal year

only, or in the case of a district or fire district, a resolution,

approved by a vote of sixty percent of the total voting power of such

body, to override such limit for such coming fiscal year only.

6. In the event a local government's actual tax levy for a given

fiscal year exceeds the tax levy limit as established pursuant to this

section due to clerical or technical errors, the local government shall

place the excess amount of the levy in reserve in accordance with such

requirements as the state comptroller may prescribe, and shall use such

funds and any interest earned thereon to offset the tax levy for the

ensuing fiscal year. If, upon examination pursuant to sections

thirty-three and thirty-four of this chapter, the state comptroller

finds that a local government levied taxes in excess of the applicable

tax levy limit, the local government, as soon as practicable, shall

place an amount equal to the excess amount of the levy in such reserve

in accordance with this subdivision.

7. All local governments subject to the provisions of this section

shall, prior to adopting a budget for the coming fiscal year, submit to

the state comptroller, in a form and manner as he or she may prescribe,

any information necessary for calculating the tax levy limit for the

coming fiscal year.