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HomeMy WebLinkAboutDanby Tax Group Document The Tax Working Committee of Danby’s Planning Group has agreed that the taxation of large parcels of land puts an ever-increasing burden on the taxpayers who own those parcels. The pressure encourages the owners to subdivide into smaller parcels and to develop, threatening the preservation of open space in our Town. Conservation Easements to protect the space are available but large parcel owners have little incentive to enter into one: the Easements are not accompanied by significant relief from property taxes (Federal: none, State: limited). All the residents of Danby appreciate and benefit from the natural beauty and rural character provided by open space, yet the cost of providing this benefit falls disproportionately on the owners of those properties. Around 2012, the Tompkins County Assessment Department adopted the New York State policy of assessing land at full market value. For some owners, land assessment went from $1,000 per acre to $2,000. Then, in 2018, it went up again, to $2,500 an acre. That’s an increase of 250 percent in six years—and the burden of the resulting tax changes fell primarily on a small number of property owners, those whose property value is more heavily based on land rather than residences. In other words, it fell on the owners of larger properties. With some parcels currently selling at $5-6,000 per acre, the Tax Working Committee fears that tax liability of larger parcels to their owners is only going to increase further, increasing the pressure to subdivide those parcels for development. To preserve open space, the Town needs to address this inequity. It needs to provide an incentive that will encourage owners of larger parcels not to turn to development to make their properties tax-affordable. If the Town desires open space but fails to provide tax relief, it risks seeing the acreage sold, either to ongoing development or to the wealthy few who can afford the tax burden. The result would be a great change to the character of our Town. Our investigation of NY State Tax Law found other NY Towns with similar concerns. These Towns turned to the NY State Legislature, which approved tax relief for land preservation by incorporating special exceptions into NY’s Real Property Tax Law. The Section 491 exceptions provide for the creation of tax exemptions—50 to 90 percent—to accompany medium-term to permanent Conservation Easements. Many landowners are not willing to restrict the value of their land without compensation. Even landowners who want to preserve the open space provided by their land may be uncomfortable with a permanent conservation easement. Urging the State Legislature, along with Danby’s Town Board, to provide Section 491 relief would permit the Tompkins County Assessment Department to rebalance the tax burden on larger parcels (with conservation easements) and encourage open space preservation. Based on data from the end of 2019, provided by the Assessment Department, the value of the land in the 100 largest parcels in Danby is only 5 percent of the Town’s Total Assessed Value. Even if all 100 were totally exempt from property tax (a very unlikely scenario), the burden shared among Danby’s 2000 land parcels would amount to a relatively small increase; the average property, valued at about $175,000, would owe Danby about $50 extra. More realistically, the increase would be much smaller. This is a small cost compared to the value of preserving the open space that provides Danby’s residents with highly-valued rural character. Proposed Text of Law to be enacted by State Legislature and Town Board § 491. Conservation easement agreement exemption; certain towns. 1. Applicability. (a) In a town having a population of [insert population figures to identify the Town of Danby in Tompkins County], based upon the latest decennial federal census, is hereby authorized to adopt a local law to provide that, real property whose interests or rights have been acquired for the purpose of the preservation of an open space or an open area, as authorized in section two hundred forty-seven of the general municipal law, may be partially exempt from local real property taxation, provided that the owner or owners of such real property enter into a conservation easement agreement with the municipality in accordance with the procedures specified in subdivision three of this section. A county having a population of [insert population figures to identify Tompkins County] based upon the latest decennial federal census may, by local law, and any fire district or water district, all or part of which is located in a town having a population of [insert population figures to identify the Town of Danby in Tompkins County], and any school district, all or part of which is located in a town having a population of [insert population figures to identify the Town of Danby in Tompkins County], may, by resolution, exempt such property from its taxation in the same manner and to the same extent as such town has done. (b) A town having a population of [insert population figures to identify the Town of Danby in Tompkins County], based upon the latest decennial federal census may, by a vote of the town board, opt out of this exemption at any time. 2. Definitions. For the purpose of this section, the following terms shall have the following meanings: “open space” or “open area” means any space or area characterized by natural scenic beauty or whose existing openness, natural condition or present state of use, if retained, would enhance the present or potential value of abutting or surrounding urban development or would maintain or enhance the conservation of natural or scenic resources. For the purposes of this definition, “natural resources” shall include, but not be limited to, agricultural lands defined as open lands actually used in bona fide agricultural production. “conservation board” means a Conservation Advisory Council or any other board appointed by the town board for the purpose of advising on the acquisition of conservation easements. 3. Procedures for obtaining a conservation easement agreement. (a) Any owner or owners of land may submit a proposal to the town board of a town having a population of [insert population figures to identify the Town of Danby in Tompkins County], based upon the latest decennial federal census, for the granting of interest or rights in real property for the preservation of open space or areas. Such proposal shall be submitted in such a manner and form as may be prescribed by the conservation board of such town. (b) Upon receipt of such proposal, the town board shall convey the proposal to the conservation board of such town. Such conservation board shall investigate the area to determine if the proposal would be of benefit to the people of the town and may negotiate the terms and conditions of the offer. If the conservation board determines that it is in the public interest to accept such proposal, it shall recommend to the town board that it hold a public hearing for the purpose of determining whether or not the town should accept such proposal. (c) The town board shall, within thirty days of receipt of such advisory opinion, hold a public hearing concerning such proposal at a place within the town. At least ten days notice of the time and place of such hearing shall be published in a paper of general circulation in such town, and a written notice of such proposal shall be given to all adjacent property owners and to any municipality whose boundaries are within five hundred feet of the boundaries of said proposed area, and to the school district in which it is located. (d) The town board, after receiving the reports of the conservation board of a town having a population of [insert population figures to identify the Town of Danby in Tompkins County], based upon the latest decennial federal census, and after such public hearing, may adopt the proposal or any modification thereof it deems appropriate or may reject it in its entirety. (e) If such proposal is adopted by the town board, it shall be executed by the owner or owners in written form and in a form suitable for recording in the county clerk's office. (f) Such agreement may not be canceled by either party. However, the owner or owners thereof may petition the town board for cancellation upon good cause shown, and such cancellation may be granted only upon payment of the penalties provided in this section. 4. Computation. (a) An exemption granted pursuant to this section shall commence as of the effective date of the conservation easement agreement, and shall terminate upon the expiration or termination of such conservation easement agreement. (b) The following tables shall illustrate the computation of the exemptions: Commitment Percentage of Exemption Not less than 5 years but less than 15 years 30% Not less than 15 years but less than 30 years 50% Not less than 30 years but less than 50 years 75% Not less than 50 years but less than 75 years 85% Perpetual 90% Special Condition Additional Percentage of Exemption Property described by easement contains features that are available to the public for recreational purposes, including, but not limited to, sports facilities, playgrounds, hiking trails, and water bodies 9% Such exemption shall be granted only upon application by the owner or owners of such real property on a form prescribed by the commissioner. Such application shall be filed with the assessor of the town on or before the taxable status date of such town. (c) If satisfied that the applicant is entitled to an exemption pursuant to this section, the assessor shall approve the application and such real property shall thereafter be exempt from taxation and special ad valorem levies as provided in this section commencing with the assessment roll prepared on the basis of the taxable status date. The assessed value of any exemption granted pursuant to this section shall be entered by the assessor on the assessment roll with the taxable property, with the amount of the exemption shown in a separate column. (d) Whenever a conservation easement encumbers only a portion of a parcel, the assessor shall henceforth enter that portion of the parcel encumbered by such easement as a separate parcel on all subsequent assessment rolls. 5. Penalties for offenses. If there is a violation of the terms and conditions of the conservation easement agreement or if such conservation easement agreement is canceled by the town board upon petition, then the owner or owners of such property must pay to the town the following amounts: (a) All taxes abated pursuant to the conservation easement agreement, as limited by the remainder of this section, including, if applicable, those taxes imposed by the county, town, fire districts, water districts, school districts and all special improvement districts and other taxing units to which the property is subject. Repayment of the aforementioned abated taxes shall be equal to five times the taxes saved in the last year in which the land benefited from a conservation easement agreement exemption, plus interest of six percent per year compounded annually for each year in which an exemption was granted, not exceeding five years. (b) Payments shall be added by or on behalf of each taxing jurisdiction to the taxes levied on the assessment roll prepared on the basis of the first taxable status date after there is a violation of the terms and conditions of the conservation easement or such conservation easement agreement is canceled.