NY State Senate Bill 2019-S5630

Senate Bill S5630

2019-2020 Legislative Session

Exempts certain low income housing accommodations from local real property taxation in N.Y. city

download bill text pdf

Archive: Last Bill Status - In Senate Committee Cities Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 08, 2020	referred to cities
May 09, 2019	referred to cities

co-Sponsors

2019-S5630 (ACTIVE) - Details

See Assembly Version of this Bill:: A2965
Current Committee:: Senate Cities
Law Section:: Real Property Tax Law
Laws Affected:: Amd §420-c, RPT L
Versions Introduced in Other Legislative Sessions:: 2011-2012: A10660
2013-2014: A6256
2015-2016: S7856, A4314
2017-2018: S1420, A3789
2021-2022: S1911, A5559
2023-2024: S335

2019-S5630 (ACTIVE) - Summary

Exempts certain low income housing accommodations from local real property taxation in a city with a population of one million or more.

2019-S5630 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S5630

SPONSOR: JACKSON
 
TITLE OF BILL:  An act to amend the real property tax law, in relation
to exemptions from local real property taxation of certain low income
housing accommodations in a city with a population of one million or
more

 
PURPOSE:

This bill amends the New York State Real Property Tax Law Section 420-c
to (1) allow tax exemptions for only those entities where the non-profit
has 51% control, instead of 50% control as is written in current law and
(2) limit the entities eligible for real property tax exemption to
exclude those that are established by a for-profit entity or are a
subsidiary of a for-profit corporation, partnerships or limited liabil-
ity company.

 
SUMMARY OF PROVISIONS:

Section 1 amends Section 420-c of the New York State Real Property Tax

Law to limit the entities eligible for real property tax exemption to
exclude those that are established by a for-profit entity or are a
subsidiary of a for-profit corporation, partnerships or limited liabil-
ity company.

Section 2 amends Section 420-c of the New York State Real Property Tax
Law by defining a charitable entity as one not established or controlled
by a for-profit entity, and by allowing tax exemptions for only those
entities where the non-profit has at least 51% controlling interest in
the corporation, partnership, or limited liability company.

Section 3 is the effective date.

 
JUSTIFICATION:

The current real property tax law specifies four criteria for tax the
real property tax exemption: (1) the entity must be organized to provide
housing to low-income people, and hold a 501c(3) or 501c(4) exemption;
(2) the project must receive Low-Income Housing Tax-Credits; (3) the
project must have a regulatory agreement with a government entity, and
the agreement must indicate that at least 70% of the units are
restricted to 60% AMI or lower, and (4) the project must have taken out
a loan from a government entity.

Under the current statute, for-profit developers are able to set up
non-profits that are owned and controlled by the for-profit for the
purpose of qualifying for the 420-c benefit. Further, under existing
law, a non-profit must only have 50% of control of an entity in order to
qualify for the abatement, often leaving the non-profit with no over-
sight control of the Joint Venture Agreements.

The property tax abatement, when limited only to non-profit development
corporations, allows for Community Development Corporations (CDCs) to
submit more competitive bids and lower operating costs, providing great-
er benefits to the community. When limited only to non-profit develop-
ers, CDCs are better able to compete, greatly improving the overall
quality of low-income housing in the city.

 
LEGISLATIVE HISTORY:

2017-2018: S.1420 - Referred to Cities/A.3789 - Referred to Real Proper-
ty Taxation
2015-2016: S.7856 - Referred to Cities/A.4314 - Referred to Real Proper-
ty Taxation
2013-2014: A.6256 - Referred to Real Property Taxation
2011-2012: A.10660 - Referred to Real Property Taxation

STATE AND LOCAL FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all projects
approved on or after the date on which this act shall have become a law.

2019-S5630 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5630
 
                        2019-2020 Regular Sessions
 
                             I N  S E N A T E
 
                                May 9, 2019
                                ___________
 
 Introduced  by  Sen. JACKSON -- read twice and ordered printed, and when
   printed to be committed to the Committee on Cities
 
 AN ACT to amend the real property tax law,  in  relation  to  exemptions
   from local real property taxation of certain low income housing accom-
   modations in a city with a population of one million or more

   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 1 of section 420-c of  the  real  property  tax
 law,  as  amended by chapter 104 of the laws of 1999, is amended to read
 as follows:
   1. In a city having a population of one million or more, real property
 owned by a corporation, partnership or limited liability company  formed
 for  the  purpose  of  providing  housing accommodations for persons and
 families of low income as defined in section two of the private  housing
 finance  law  and used for such purpose, shall be exempt from local real
 property taxation, provided that such corporation, partnership or limit-
 ed liability company: (a) is organized as a non-profit housing  develop-
 ment  fund  company  pursuant  to  article eleven of the private housing
 finance law AND IS NOT ESTABLISHED OR CONTROLLED BY A FOR-PROFIT ENTITY,
 or is a non-profit housing corporation as defined in article  eleven  of
 the  private  housing finance law which is not incorporated as a housing
 development fund company as defined in article  eleven  of  the  private
 housing finance law AND IS NOT ESTABLISHED OR CONTROLLED BY A FOR-PROFIT
 ENTITY,  or is a wholly-owned subsidiary of such a company or is a part-
 nership or limited liability company the controlling interest  of  which
 is held by such a company or corporation or by a wholly owned subsidiary
 of  such  a  company  or  by a corporation sponsored or formed by such a
 company or corporation; and (b) has received a loan from a municipality,
 the state or the housing trust fund corporation established pursuant  to
 section forty-five-a of the private housing finance law or any successor
 corporation; and (c) enters into a regulatory agreement with the munici-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD00426-01-9

 S. 5630                             2
 
 pality,  the  state  or  the  housing trust fund corporation established
 pursuant to section forty-five-a of the private housing finance  law  or
 any successor corporation guaranteeing the provision of housing accommo-
 dations for persons and families of low income; and (d) is a participant
 in  the federal low income housing tax credit program established pursu-
 ant to section forty-two  of  the  internal  revenue  code  of  nineteen
 hundred  eighty-six,  as amended. Any exemption pursuant to this section
 shall expire upon the expiration or termination of the regulatory agree-
 ment.
   § 2. Subparagraphs 4 and 5  of  paragraph  (a)  of  subdivision  4  of
 section  420-c  of the real property tax law, subparagraph 4 as added by
 chapter 522 of the laws of 2004 and subparagraph 5 as amended by chapter
 526 of the laws of 2004, are amended to read as follows:
   (4) The term "charitable organization" shall mean (i) an  entity,  NOT
 ESTABLISHED  OR  CONTROLLED  BY A FOR-PROFIT ENTITY, formed for purposes
 that include providing housing accommodations for persons  and  families
 of  low  income  and  that has received written recognition of exemption
 pursuant to section 501(c)(3)  or  section  501(c)(4)  of  the  internal
 revenue  code of nineteen hundred eighty-six, as amended, or any succes-
 sor statute, from the United States Internal  Revenue  Service,  or  any
 successor  agency, or (ii) a corporation, partnership or limited liabil-
 ity company wholly owned and wholly controlled by an entity, NOT  ESTAB-
 LISHED  OR  CONTROLLED  BY A FOR-PROFIT ENTITY, formed for purposes that
 include providing housing accommodations for persons and families of low
 income and that has received written recognition of  exemption  pursuant
 to  section  501(c)(3) or section 501(c)(4) of the internal revenue code
 of nineteen hundred eighty-six, as amended, or  any  successor  statute,
 from  the United States Internal Revenue Service, or any successor agen-
 cy.
   (5) The term "eligible entity" shall mean a  corporation,  partnership
 or  limited  liability company at least [fifty] FIFTY-ONE percent of the
 controlling interest of which is held by a charitable organization.
   § 3. This act shall take effect immediately and  shall  apply  to  all
 projects  approved  on  or  after  the date on which this act shall have
 become a law.

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Senate Bill S5630

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Sponsored By

Robert Jackson