S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5662
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                             February 26, 2025
                                ___________
 
 Introduced  by Sen. KAVANAGH -- read twice and ordered printed, and when
   printed to be committed to the Committee on Housing, Construction  and
   Community Development
 
 AN  ACT to amend the private housing finance law, in relation to author-
   izing a reduction of taxes pursuant to shelter rent

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Paragraph (a) of subdivision 1 of section 33 of the private
 housing  finance  law, as amended by chapter 229 of the laws of 1989, is
 amended to read as follows:
   (a) Upon the consent of the local legislative body of any municipality
 in which a project is or is to  be  located,  the  real  property  in  a
 project  shall  be  exempt  from  local  and municipal taxes, other than
 assessments for local improvements, to the extent of all or part of  the
 value  of  the  property  included  in  such project which represents an
 increase over the assessed valuation of the real property, both land and
 improvements, acquired for the project at the time of its acquisition by
 the limited-profit housing company, provided,  however,  that  the  real
 property  in  a project acquired for purposes of rehabilitation shall be
 exempt to the extent of all  or  part  of  the  value  of  the  property
 included  in  such project, and further provided that the amount of such
 taxes to be paid FOR PROJECTS LOCATED OR TO BE LOCATED IN A MUNICIPALITY
 WITH A POPULATION OF LESS THAN ONE MILLION shall not be  less  than  ten
 per  centum  of  the  annual  shelter  rent  or carrying charges of such
 project [except], OR SUCH OTHER AMOUNT LESS THAN TEN PER CENTUM APPROVED
 BY THE LOCAL LEGISLATIVE BODY OF SUCH MUNICIPALITY, AND FURTHER PROVIDED
 that [for] projects located or to be located in a city of  a  population
 of  one million or more[, upon the consent of the local legislative body
 of the municipality, the amount of such taxes to be paid may be  set  at
 not less than (i) the taxes payable with respect to the real property in
 such  project  with  respect to the year nineteen hundred seventy-three,

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10198-02-5
              

 S. 5662                             2

 or, (ii) if such project was not occupied in such year,  not  less  than
 ten  per  centum  of  the  annual shelter rent or carrying charges first
 established pursuant to subdivision one of section  thirty-one  of  this
 article] SHALL NOT BE ASSESSED.  Shelter rent shall mean the total rents
 received  from  the occupants of a project less the cost of providing to
 the occupants electricity, gas, heat and other  utilities.  Total  rents
 shall  include  rent supplements and subsidies received from the federal
 government, the state or a municipality on behalf of  such  occupants[,]
 but  shall  not include interest reduction payments pursuant to subdivi-
 sion (a) of section two hundred one of the  Federal  Housing  and  Urban
 Development Act of nineteen hundred sixty-eight. The tax exemption shall
 operate  and  continue  so  long  as  the mortgage loans of the company,
 including any additional mortgage loan the proceeds of  which  are  used
 primarily  for  the residential portion of the project, which additional
 loan is approved by the commissioner  or  the  supervising  agency,  are
 outstanding.
   § 2. Paragraph (c) of subdivision 1 of section 33 of the private hous-
 ing  finance  law,  as  amended  by  chapter 229 of the laws of 1989, is
 amended to read as follows:
   (c) Notwithstanding the provisions of paragraphs (a) and (b)  of  this
 subdivision,  the real property of a state urban development corporation
 project acquired, owned, constructed, managed or operated by  a  company
 incorporated  pursuant  to  the  not-for-profit corporation law and this
 article shall be entitled to all the benefits provided by  section  four
 hundred  twenty-two of the real property tax law. The real property of a
 state urban development corporation project, other than  a  state  urban
 development corporation project acquired, owned, constructed, managed or
 operated by a company incorporated pursuant to the not-for-profit corpo-
 ration  law and this article, shall be exempt from all local and munici-
 pal taxes, other than assessments for local improvements, to the  extent
 of  the  value of the property included in such project as represents an
 increase over the assessed valuation of the real property, both land and
 improvements, acquired for the project on the date of its acquisition by
 the limited-profit housing company, provided that  the  amount  of  such
 taxes to be paid FOR PROJECTS LOCATED OR TO BE LOCATED IN A MUNICIPALITY
 WITH  A  POPULATION  OF LESS THAN ONE MILLION shall not be less than ten
 per centum of the annual  shelter  rent  or  carrying  charges  of  such
 project,  as  defined in paragraph (a) hereof, OR SUCH OTHER AMOUNT LESS
 THAN TEN PER CENTUM APPROVED BY THE LOCAL LEGISLATIVE BODY OF SUCH MUNI-
 CIPALITY, AND FURTHER PROVIDED THAT PROJECTS LOCATED OR TO BE LOCATED IN
 A CITY WITH A POPULATION OF ONE MILLION OR MORE SHALL NOT  BE  ASSESSED.
 The  tax  exemption  shall  operate and continue so long as the mortgage
 loans of such limited profit housing company, including  any  additional
 mortgage  loan the proceeds of which are used primarily for the residen-
 tial portion of the project, which additional loan is  approved  by  the
 commissioner  or the supervising agency, are outstanding and the project
 is continued to be operated as a limited-profit housing  project.  If  a
 state urban development corporation project qualifying for tax exemption
 pursuant to this paragraph is sold, with the approval of the commission-
 er,  to  another  limited-profit housing company, such successor company
 shall be entitled to all the benefits of this paragraph.  In  the  event
 that such sale is to a company incorporated pursuant to the not-for-pro-
 fit  corporation  law  and this article, such successor company shall be
 entitled to all the benefits provided by section four hundred twenty-two
 of the real property tax law.
 S. 5662                             3
 
   § 3. Paragraph (d) of subdivision 1 of section 33 of the private hous-
 ing finance law, as amended by chapter 744  of  the  laws  of  1977,  is
 amended to read as follows:
   (d)  Notwithstanding  the provisions of paragraphs (a) and (b) of this
 subdivision, when a project is financed with a mortgage loan pursuant to
 this article or article three of this chapter and (i) there is a partic-
 ipation, new loan or investment pursuant to  section  twenty-three-b  of
 this  article or (ii) such mortgage loan is assigned, modified or satis-
 fied pursuant to section twenty-three-a or forty-four-b  or  subdivision
 twenty-two-a of section six hundred fifty-four of this chapter, the real
 property  of  the  project  shall be exempt from all local and municipal
 taxes, other than assessments for local improvements, to the  extent  of
 the value of the real property included in such project which represents
 an  increase over the assessed valuation of the real property, both land
 and improvements, acquired for the project on the date of  its  original
 acquisition  for  the project by the original mortgagor under a mortgage
 loan pursuant to this article or article three of this chapter, provided
 that the amount of taxes to be paid on the project FOR PROJECTS  LOCATED
 OR  TO  BE  LOCATED IN A MUNICIPALITY WITH A POPULATION OF LESS THAN ONE
 MILLION shall not be less than ten per centum of the annual shelter rent
 or carrying charges of such project, as defined in paragraph (a) of this
 subdivision, OR SUCH OTHER AMOUNT LESS THAN TEN PER CENTUM  APPROVED  BY
 THE  LOCAL  LEGISLATIVE  BODY OF SUCH MUNICIPALITY, AND FURTHER PROVIDED
 THAT PROJECTS LOCATED OR TO BE LOCATED IN A CITY WITH  A  POPULATION  OF
 ONE  MILLION  OR  MORE  SHALL  NOT BE ASSESSED. Such tax exemption shall
 commence in each instance from the date when the project becomes subject
 to a mortgage insured by the federal government and  shall  operate  and
 continue so long as a mortgage on such project is insured or held by the
 federal  government or so long as the project is thereafter owned by the
 federal government or so long as any residual indebtedness is  outstand-
 ing,  whichever  is  longer.  When there is a participation, new loan or
 investment pursuant to section  twenty-three-b  of  this  article,  such
 participation,  new  loan or investment shall be deemed to be the equiv-
 alent of a federally insured mortgage for purposes  of  this  paragraph.
 Nothing  contained  in  this  paragraph  shall  be construed to limit or
 otherwise impair the benefits available  to  any  company  eligible  for
 exemption  from taxation pursuant to section thirty-one or section thir-
 ty-six-a of this article, section four  hundred  twenty-two  or  section
 four  hundred  sixty-seven-c  of  the  real property tax law, or section
 fifty-eight of the public housing law. The foregoing shall not be deemed
 to authorize any company to receive the benefits of any  exemption  from
 taxation  in  contravention  of the provisions of section two of article
 eighteen of the constitution.
   § 4. Subdivision 4 of section 33 of the private housing  finance  law,
 as  amended  by  chapter  229 of the laws of 1989, is amended to read as
 follows:
   4. Notwithstanding the provisions of subdivision one  hereof,  when  a
 mutual  company is organized under this article to facilitate the acqui-
 sition of a building by residents  thereof,  the  amount  of  local  and
 municipal  taxes,  other  than assessments for local improvements, to be
 paid on the real property  included  in  such  project,  both  land  and
 improvements,  shall  not exceed twenty per centum of the annual shelter
 rent or carrying charges of such project, as defined in paragraph (a) of
 subdivision one [hereof] OF THIS SECTION; provided, however, that  where
 such acquisition of a building by residents thereof involves the financ-
 ing  of rehabilitation or other improvement as well as acquisition, upon
 S. 5662                             4
 
 the consent of the local legislative body of the municipality  in  which
 the project is located, the amount of such taxes FOR PROJECTS LOCATED OR
 TO  BE  LOCATED  IN  A  MUNICIPALITY  WITH A POPULATION OF LESS THAN ONE
 MILLION  may  be  further reduced provided that such amount shall not be
 less than ten per centum of the annual shelter rent or carrying  charges
 of  the project, as defined in paragraph (a) of subdivision one [hereof]
 OF THIS SECTION, OR SUCH OTHER AMOUNT LESS THAN TEN PER CENTUM  APPROVED
 BY  THE  LOCAL LEGISLATIVE BODY OF SUCH MUNICIPALITY; or the company may
 in lieu of requesting such consent apply for the benefits of  the  local
 law, if any, enacted pursuant to section four hundred eighty-nine of the
 real  property  tax  law.  NOTWITHSTANDING  ANY  OTHER PROVISION OF THIS
 SUBDIVISION, PROJECTS LOCATED OR TO BE LOCATED IN A CITY  WITH  A  POPU-
 LATION OF ONE MILLION OR MORE SHALL NOT BE ASSESSED. Such tax exemption,
 if  any,  granted pursuant to this article shall operate and continue so
 long as a loan made under this article or any subsequent  loan  approved
 by the commissioner or the supervising agency to enhance the residential
 portion  of  the project and the project is continued to be operated for
 the purposes set forth in this article is outstanding.
   § 5. This act shall take effect immediately.