S T A T E O F N E W Y O R K
________________________________________________________________________
9096
I N S E N A T E
April 22, 2024
___________
Introduced by Sen. KRUEGER -- read twice and ordered printed, and when
printed to be committed to the Committee on Investigations and Govern-
ment Operations
AN ACT to amend the tax law, in relation to impose an excise tax on the
failure of certain hedge funds owning excess single-family residences
to dispose of such residences; and to amend the state finance law, in
relation to establishing the housing down payment trust fund and
directing the commissioner of the state division of housing and commu-
nity renewal to establish a grant program
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Short title. This act shall be known and may be cited as
the "End Hedge Fund Control of New York Homes Act".
§ 2. The tax law is amended by adding a new article 20-E to read as
follows:
ARTICLE 20-E
EXCISE TAX ON CERTAIN TAXPAYERS FAILING
TO SELL EXCESS SINGLE-FAMILY RESIDENCES
SECTION 500. DEFINITIONS.
500-A. IMPOSITION OF TAX.
500-B. MAXIMUM PERMISSIBLE UNITS.
500-C. CONSTRUCTION.
500-D. REPORTING.
500-E. TAX FORM.
500-F. CERTIFICATION.
500-G. USE OF TAX REVENUES.
§ 500. DEFINITIONS. FOR PURPOSES OF THIS ARTICLE, THE FOLLOWING DEFI-
NITIONS SHALL APPLY:
1. "APPLICABLE DATE" MEANS:
(A) THE LAST DAY OF THE FIRST FULL TAXABLE YEAR ENDING ON OR AFTER THE
EFFECTIVE DATE OF THIS ARTICLE; OR
(B) IN THE CASE OF ANY TAXPAYER THAT CHANGES ITS STATUS DURING A TAXA-
BLE YEAR, THE LAST DAY OF THE TAXABLE YEAR IMMEDIATELY PRECEDING THE
TAXABLE YEAR IN WHICH THE TAXPAYER CHANGED ITS STATUS.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13893-01-3
S. 9096 2
2."APPLICABLE SINGLE-FAMILY RESIDENCE" MEANS ANY SINGLE-FAMILY RESI-
DENCE WHICH WAS ACQUIRED ON OR BEFORE THE APPLICABLE DATE.
3. (A) "APPLICABLE TAXPAYER" MEANS A TAXPAYER, INCLUDING A PARTNER-
SHIP, CORPORATION, TRUST OR OTHER LEGAL ENTITY, THAT:
(I) MANAGES FUNDS POOLED FROM INVESTORS AND IS A FIDUCIARY WITH
RESPECT TO SUCH INVESTORS; AND
(II) IS AN ASSET MANAGER IN ANY OF THE FOLLOWING ASSET CLASSES:
(A) PUBLIC EQUITY OR FIXED INCOME SECURITIES;
(B) A HEDGE FUND;
(C) A FUND OF HEDGE FUNDS;
(D) PRIVATE EQUITY (INCLUDING VENTURE CAPITAL);
(E) A FUND OF PRIVATE EQUITY FUNDS;
(F) A REAL ESTATE INVESTMENT FUND;
(G) A FUND OF REAL ESTATE FUNDS; OR
(H) ANY OTHER ASSET CLASS FOR WHICH AN APPLICABLE FIDUCIARY-CONTROLLED
ENTITY ENGAGES EXTERNAL ASSET MANAGERS; AND
(III) THAT HAS FIFTY MILLION DOLLARS OR MORE IN NET VALUE OR ASSETS
UNDER MANAGEMENT ON ANY DAY DURING THE TAXABLE YEAR.
(B) "APPLICABLE TAXPAYER" SHALL NOT INCLUDE:
(I) AN ORGANIZATION WHICH IS DESCRIBED IN SECTION 501(C)(3) AND EXEMPT
FROM TAX UNDER SECTION 501(A) OF THE INTERNAL REVENUE CODE; OR
(II) AN ORGANIZATION PRIMARILY ENGAGED IN THE CONSTRUCTION OR REHABIL-
ITATION OF SINGLE-FAMILY RESIDENCES.
4. "DISQUALIFIED SALE" MEANS ANY SALE OR TRANSFER OF A SINGLE-FAMILY
RESIDENCE TO:
(A) A CORPORATION OR OTHER ENTITY ENGAGED IN A TRADE OR BUSINESS; OR
(B) AN INDIVIDUAL WHO OWNS ANY OTHER SINGLE-FAMILY RESIDENCE AT THE
TIME OF SUCH SALE OR TRANSFER.
5. "NEWLY ACQUIRED SINGLE-FAMILY RESIDENCE" MEANS ANY SINGLE-FAMILY
RESIDENCE WHICH WAS ACQUIRED BY THE TAXPAYER IN ANY TAXABLE YEAR WHICH
BEGINS AFTER THE EFFECTIVE DATE OF THIS ARTICLE.
6. "SINGLE-FAMILY RESIDENCE" MEANS A RESIDENTIAL PROPERTY CONSISTING
OF ONE TO FOUR DWELLING UNITS; PROVIDED THAT SUCH TERM SHALL NOT
INCLUDE:
(A) ANY UNOCCUPIED SINGLE-FAMILY RESIDENCE ACQUIRED THROUGH FORECLO-
SURE;
(B) ANY SINGLE-FAMILY RESIDENCE THAT IS:
(I) NOT RENTED OR LEASED, AND
(II) USED AS THE PRINCIPAL RESIDENCE OF ANY PERSON WHO HAS AN OWNER-
SHIP INTEREST IN THE APPLICABLE TAXPAYER; OR
(C) ANY SINGLE-FAMILY RESIDENCE CONSTRUCTED, ACQUIRED, OR OPERATED
WITH FEDERAL APPROPRIATED FUNDING SOURCES.
7. "TRADE OR BUSINESS" SHALL INCLUDE ANY ACTIVITY TREATED AS A TRADE
OR BUSINESS UNDER PARAGRAPH (5) OR (6) OF SECTION 469(C) OF THE INTERNAL
REVENUE CODE (DETERMINED WITHOUT REGARD TO THE PHRASE 'TO THE EXTENT
PROVIDED IN REGULATIONS' IN SUCH PARAGRAPH (6)).
§ 500-A. IMPOSITION OF TAX. 1. IN THE CASE OF AN APPLICABLE TAXPAYER,
THERE IS HEREBY IMPOSED A TAX ON THE ACQUISITION OF ANY NEWLY ACQUIRED
SINGLE-FAMILY RESIDENCE EQUAL TO FIFTY PERCENT OF THE FAIR MARKET VALUE
OF SUCH RESIDENCE.
2. (A) IN THE CASE OF AN APPLICABLE TAXPAYER WHO FAILS TO MEET THE
REQUIREMENTS OF SUBDIVISION (B) OF THIS SECTION THERE IS HEREBY IMPOSED
A TAX EQUAL TO THE PRODUCT OF:
(I) FIFTY THOUSAND DOLLARS, AND
(II) THE EXCESS OF:
S. 9096 3
(A) THE NUMBER OF APPLICABLE SINGLE-FAMILY RESIDENCES OWNED BY THE
TAXPAYER AS OF THE LAST DAY OF THE TAXABLE YEAR, OVER
(B) THE MAXIMUM PERMISSIBLE UNITS FOR THE TAXABLE YEAR.
(B) AN APPLICABLE TAXPAYER MEETS THE REQUIREMENT OF THIS SUBDIVISION
FOR ANY TAXABLE YEAR IF THE NUMBER OF APPLICABLE SINGLE-FAMILY RESI-
DENCES OWNED BY THE TAXPAYER AS OF THE LAST DAY OF THE TAXABLE YEAR IS
EQUAL TO OR LESS THAN THE MAXIMUM PERMISSIBLE UNITS DETERMINED WITH
RESPECT TO SUCH TAXPAYER FOR SUCH TAXABLE YEAR. FOR PURPOSES OF THIS
PARAGRAPH, A SINGLE-FAMILY RESIDENCE WHICH IS SOLD OR TRANSFERRED IN A
DISQUALIFIED SALE DURING THE TAXABLE YEAR SHALL BE TREATED AS A SINGLE-
FAMILY RESIDENCE WHICH IS OWNED BY THE APPLICABLE TAXPAYER AS OF THE
LAST DAY OF SUCH TAXABLE YEAR.
§ 500-B. MAXIMUM PERMISSIBLE UNITS. THE MAXIMUM PERMISSIBLE UNITS WITH
RESPECT TO ANY APPLICABLE TAXPAYER FOR ANY TAXABLE YEAR SHALL BE DETER-
MINED AS FOLLOWS:
IN THE CASE OF: THE MAXIMUM PERMISSIBLE UNITS
FOR AN APPLICABLE TAXPAYER IS:
THE FIRST FULL TAXABLE NINETY PERCENT OF THE NUMBER OF APPLICABLE
YEAR BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE SECOND TAXABLE YEAR EIGHTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE THIRD TAXABLE YEAR SEVENTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE FOURTH TAXABLE YEAR SIXTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE FIFTH TAXABLE YEAR FIFTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE SIXTH TAXABLE YEAR FORTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE SEVENTH TAXABLE YEAR THIRTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE EIGHTH TAXABLE YEAR TWENTY PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
THE NINTH TAXABLE YEAR TEN PERCENT OF THE NUMBER OF APPLICABLE
BEGINNING AFTER THE SINGLE-FAMILY RESIDENCES OWNED BY
APPLICABLE DATE THE TAXPAYER ON THE APPLICABLE DATE
S. 9096 4
ANY TAXABLE YEAR BEGINNING 0
MORE THAN NINE YEARS AFTER
THE APPLICABLE DATE
§ 500-C. CONSTRUCTION. 1. FOR PURPOSES OF THIS ARTICLE, AN APPLICABLE
TAXPAYER SHALL BE TREATED:
(A) AS ACQUIRING A SINGLE-FAMILY RESIDENCE IF THE APPLICABLE TAXPAYER
ACQUIRES A MAJORITY OWNERSHIP INTEREST IN THE SINGLE-FAMILY RESIDENCE,
REGARDLESS OF THE PERCENTAGE OF THAT OWNERSHIP INTEREST; AND
(B) AS OWNING A SINGLE-FAMILY RESIDENCE IF THE APPLICABLE TAXPAYER
OWNS A MAJORITY OWNERSHIP INTEREST IN THE SINGLE-FAMILY RESIDENCE,
REGARDLESS OF THE PERCENTAGE OF THAT OWNERSHIP INTEREST.
2. FOR PURPOSES OF THIS ARTICLE, ALL PERSONS OR ENTITIES THAT ARE
TREATED AS A SINGLE EMPLOYER UNDER SUBSECTIONS (A) AND (B) OF SECTION 52
OF THE INTERNAL REVENUE CODE SHALL BE TREATED AS A SINGLE PERSON OR
ENTITY.
§ 500-D. REPORTING. 1. THE COMMISSIONER SHALL REQUIRE SUCH REPORTING
AS THE COMMISSIONER DETERMINES NECESSARY OR APPROPRIATE TO CARRY OUT THE
PURPOSES OF THIS SECTION, INCLUDING REPORTING WITH RESPECT TO:
(A) THE DATES ON WHICH SINGLE-FAMILY RESIDENCES OWNED BY AN APPLICABLE
TAXPAYER WERE ACQUIRED BY SUCH TAXPAYER; AND
(B) WHETHER ANY PERSON ACQUIRING A SINGLE-FAMILY RESIDENCE FROM AN
APPLICABLE TAXPAYER OWNS ANY OTHER SINGLE-FAMILY RESIDENCES AT THE TIME
OF THE ACQUISITION.
2. ANY PERSON WHO FAILS TO REPORT INFORMATION REQUIRED UNDER SUBDIVI-
SION ONE OF THIS SECTION OR WHO FAILS TO INCLUDE CORRECT INFORMATION IN
SUCH REPORT SHALL PAY A PENALTY OF TWENTY THOUSAND DOLLARS; PROVIDED,
HOWEVER, THAT NO SUCH PENALTY SHALL BE IMPOSED WITH RESPECT TO ANY FAIL-
URE IF IT IS SHOWN THAT SUCH FAILURE IS DUE TO REASONABLE CAUSE AND NOT
TO WILLFUL NEGLECT. THE PENALTY UNDER THIS SUBDIVISION SHALL BE PAID
UPON NOTICE AND DEMAND BY THE COMMISSIONER.
§ 500-E. TAX FORM. NOT LATER THAN ONE HUNDRED EIGHTY DAYS AFTER THE
EFFECTIVE DATE OF THIS ARTICLE, THE COMMISSIONER, OR THE COMMISSIONER'S
DELEGATE, SHALL PUBLISH A FORM TO BE USED FOR CALCULATING THE AMOUNT OF
TAX OWED UNDER THIS ARTICLE.
§ 500-F. CERTIFICATION. 1. THE REPORTING REQUIRED UNDER SUBPARAGRAPH
(B) OF SUBDIVISION ONE OF SECTION FIVE HUNDRED-D OF THIS ARTICLE, SHALL
INCLUDE A CERTIFICATION FROM EACH INDIVIDUAL TO WHOM A SINGLE-FAMILY
RESIDENCE IS SOLD OR TRANSFERRED FROM AN APPLICABLE TAXPAYER.
2. THE CERTIFICATION REQUIRED UNDER THIS SECTION SHALL BE SIGNED BY
THE PURCHASER OR TRANSFEREE AND STATE THE FOLLOWING:
(A) THE NAME AND ADDRESS OF THE PURCHASER OR TRANSFEREE;
(B) THAT THE SALE IS NOT A DISQUALIFIED SALE; AND
(C) THAT THE PURCHASER OR TRANSFEREE WILL BE SUBJECT TO THE PENALTY
IMPOSED UNDER SUBDIVISION TWO OF SECTION FIVE HUNDRED-D OF THIS ARTICLE
FOR ANY FALSE CERTIFICATION.
§ 500-G. USE OF TAX REVENUES. ALL REVENUES FROM TAXES COLLECTED UNDER
THIS ARTICLE SHALL BE DEPOSITED INTO THE HOUSING DOWN PAYMENT TRUST FUND
ESTABLISHED BY SECTION EIGHTY-B OF THE STATE FINANCE LAW AND SHALL BE
USED ONLY FOR THE PURPOSES SPECIFIED IN SUCH SECTION.
§ 3. The state finance law is amended by adding a new section 80-b to
read as follows:
§ 80-B. HOUSING DOWN PAYMENT TRUST FUND. 1. THERE IS ESTABLISHED IN
CUSTODY OF THE STATE COMPTROLLER A SPECIAL FUND TO BE KNOWN AS "THE
HOUSING DOWN PAYMENT TRUST FUND" (HEREINAFTER IN THIS SECTION REFERRED
TO AS THE 'TRUST FUND').
S. 9096 5
2. THE TRUST FUND SHALL CONSIST OF MONEYS APPROPRIATED THERETO, MONEYS
TRANSFERRED FROM ANY OTHER FUND OR SOURCES, AND ALL EXCISE TAX, PENAL-
TIES AND FORFEITURES COLLECTED PURSUANT TO ARTICLE TWENTY-E OF THE TAX
LAW. NOTHING CONTAINED IN THIS SECTION SHALL PREVENT THE STATE FROM
RECEIVING GRANTS, GIFTS OR BEQUESTS FOR THE PURPOSES OF THE TRUST FUND
AS DEFINED IN THIS SECTION AND DEPOSITING THEM INTO THE TRUST FUND
ACCORDING TO LAW.
3. THE MONEYS IN THE TRUST FUND SHALL BE KEPT SEPARATE FROM AND SHALL
NOT BE COMMINGLED WITH ANY OTHER MONEYS IN THE CUSTODY OF THE STATE
COMPTROLLER. SUCH MONEYS SHALL BE MADE AVAILABLE TO THE COMMISSIONER OF
THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL FOR THE GRANTS
PROGRAM FOR DOWN PAYMENT ASSISTANCE PROGRAMS AS PROVIDED IN SUBDIVISION
FOUR OF THIS SECTION.
4. THE COMMISSIONER OF THE STATE DIVISION OF HOUSING AND COMMUNITY
RENEWAL SHALL ESTABLISH A PROGRAM UNDER WHICH SAID COMMISSIONER MAKES
GRANTS TO STATE HOUSING FINANCE AGENCIES TO ESTABLISH NEW OR SUPPLEMENT
EXISTING PROGRAMS THAT PROVIDE DOWN PAYMENT ASSISTANCE TO FAMILIES
PURCHASING HOMES WITHIN THE STATE. A STATE HOUSING FINANCE AGENCY THAT
RECEIVES A GRANT UNDER THIS SECTION SHALL GIVE PRIORITY TO FAMILIES
SEEKING ASSISTANCE TO PURCHASE ANY SINGLE-FAMILY RESIDENCE THAT IS SOLD
OR TRANSFERRED BY AN APPLICABLE TAXPAYER AS DEFINED IN ARTICLE TWENTY-E
OF THE TAX LAW. THE COMMISSIONER OF THE STATE DIVISION OF HOUSING AND
COMMUNITY RENEWAL SHALL ESTABLISH THE APPLICATION CRITERIA AND QUALI-
FICATIONS FOR THE STATE HOUSING FINANCE AGENCIES FOR THE PURPOSES OF THE
TRUST FUND AS DEFINED IN THIS SECTION. THE COMMISSIONER OF THE STATE
DIVISION OF HOUSING AND COMMUNITY RENEWAL MAY ENTER INTO CONTRACTS WITH
SUCH QUALIFIED STATE HOUSING FINANCE AGENCIES WHICH MAY THEREAFTER BE
RENEWED, EXTENDED OR SUCCEEDED BY NEW CONTRACTS FROM YEAR TO YEAR IN THE
DISCRETION OF THE COMMISSIONER OF THE STATE DIVISION OF HOUSING AND
COMMUNITY RENEWAL.
5. THE MONIES SHALL BE PAYABLE FROM THE TRUST FUND ON THE AUDIT AND
WARRANT OF THE COMPTROLLER ON VOUCHERS APPROVED AND CERTIFIED BY THE
COMMISSIONER OF THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL.
6. NO LATER THAN THE FIFTEENTH DAY OF JANUARY OF EACH YEAR THE COMMIS-
SIONER OF THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL SHALL
REPORT TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE
SPEAKER OF THE ASSEMBLY ON ACTIVITIES UNDERTAKEN BY THE COMMISSIONER OF
THE STATE DIVISION OF HOUSING AND COMMUNITY RENEWAL AND ANY GRANTEE
PURSUANT TO THIS SECTION IN THE PRECEDING YEAR. THE REPORT SHALL
INCLUDE, BUT NOT BE LIMITED TO, THE CURRENT AMOUNT OF FUNDS AVAILABLE AS
WELL AS THE AMOUNT OF MONEY GRANTED TO ANY STATE HOUSING FINANCE AGEN-
CIES FOR THE PURPOSES IDENTIFIED IN THIS SECTION.
§ 4. This act shall take effect immediately and shall apply to taxable
years beginning on and after the effective date of this act.
