Bill Text: NY A07496 | 2023-2024 | General Assembly | Amended


Bill Title: Authorizes cities and towns, except a city with a population of one million or more, to establish community housing funds; authorizes such cities and towns to impose a real estate transfer tax with revenues to be deposited in such funds; makes related provisions.

Spectrum: Partisan Bill (Democrat 8-0)

Status: (Introduced) 2024-06-05 - reported referred to rules [A07496 Detail]

Download: New_York-2023-A07496-Amended.html



                STATE OF NEW YORK
        ________________________________________________________________________

                                         7496--A

                               2023-2024 Regular Sessions

                   IN ASSEMBLY

                                      May 25, 2023
                                       ___________

        Introduced  by  M.  of A. BARRETT, THIELE, DICKENS, LEVENBERG, LUNSFORD,
          LUCAS -- read once and referred to the Committee on Local  Governments
          -- recommitted to the Committee on Local Government in accordance with
          Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered
          reprinted as amended and recommitted to said committee

        AN  ACT  to  amend the general municipal law, in relation to authorizing
          cities and towns, except a city with a population of  one  million  or
          more,  to  establish community housing funds; to amend the tax law, in
          relation to authorizing cities and towns, except a city with  a  popu-
          lation  of  one  million or more, to impose a real estate transfer tax
          with revenues therefrom to be deposited in such funds;  and  providing
          for the repeal of certain provisions of law relating thereto

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:

     1    Section 1. The general municipal  law  is  amended  by  adding  a  new
     2  section 6-w to read as follows:
     3    §  6-w.  Community  housing  fund.  1.  Definitions.  As  used in this
     4  section, the following words and terms shall have  the  following  mean-
     5  ings:
     6    (a)  "City  or  town" means a city, except a city with a population of
     7  one million or more, or a town.
     8    (b) "Community housing" means a primary residential  property  for  an
     9  eligible  individual.  The governing body shall establish, by local law,
    10  purchase price limit for community housing, provided  that  limit  shall
    11  not exceed one hundred fifty percent of the purchase price limits estab-
    12  lished  by  the state of New York mortgage agency low interest rate loan
    13  program in non-target  categories  for  the  county  in  effect  on  the
    14  contract  date  for  the  sale of such property. Community housing shall
    15  include apartments that are accessory to a legally established  residen-
    16  tial or commercial use.

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD11023-02-4

        A. 7496--A                          2

     1    (c)  "Board"  means the advisory board created pursuant to subdivision
     2  six of this section.
     3    (d)  "Fund"  means  the  community housing fund authorized pursuant to
     4  subdivision two of this section.
     5    (e) "First-time homebuyer" means an eligible individual  who  has  not
     6  owned  a primary residential property and is not married to a person who
     7  has owned a residential property during the three-year period  prior  to
     8  such person's purchase of the primary residential property, and who does
     9  not own a vacation or investment home.
    10    (f)  "Primary residential property" means any one or two family house,
    11  townhouse, or condominium, including accessory apartments.
    12    (g) "Eligible individual" shall be defined by the governing  body,  by
    13  local  law,  provided  that  the  definition of household income in such
    14  local law shall not exceed one hundred percent of the income  limits  as
    15  established  by  the state of New York mortgage agency low interest rate
    16  loan program in non-target categories for the county in  effect  on  the
    17  contract date for the sale of such property.
    18    (h) "Governing body" means a city council or town board.
    19    2.  Fund  authorized. Cities and towns are authorized to establish, by
    20  local law, a community housing fund, pursuant to the provisions of  this
    21  section.    Deposits  into  the  fund  may include revenues of the local
    22  government from whatever source, including but not limited to:  (a)  all
    23  revenues  from  the  supplemental real estate transfer tax authorized by
    24  section fifteen hundred seventy-six of the tax  law;  (b)  all  proceeds
    25  from  any  indebtedness  or  obligations  issued  pursuant  to the local
    26  finance law for community housing opportunity purposes as authorized  in
    27  subdivision three of this section; (c) general fund balances or surplus-
    28  es;  (d)  any proceeds received by the local government from the sale or
    29  rental of community housing produced from revenues of the fund; (e)  the
    30  repayment  of  any loans issued from proceeds of the fund; (f) any gifts
    31  of interests in land or funds; and  (g)  any  state  or  federal  grants
    32  received by the city or town for providing affordable homes.
    33    3. Purposes of the fund. The proceeds of the fund established pursuant
    34  to  subdivision  two of this section shall be utilized for the following
    35  purposes:
    36    (a) the provision of financial assistance to first-time homebuyers who
    37  are residents of the city or town for the purchase of a first home. Such
    38  financial assistance may be in the form of a grant or a  loan  and  such
    39  program shall meet the following criteria:
    40    (1)  A  city or town may provide financial assistance for the purchase
    41  of a first home to a first-time homebuyer who is a resident of the  city
    42  or  town  or who is employed in the city or town. A resident of the city
    43  or town shall include a person who is currently a resident of  the  city
    44  or  town  or a non-resident who has been a resident within the past five
    45  years.
    46    (2) Such financial assistance shall not exceed fifty  percent  of  the
    47  purchase price of the home.
    48    (3)  If  such financial assistance is in the form of a loan, such loan
    49  shall be repayable to the city or town pursuant to the terms  agreed  to
    50  between the recipient and the city or town, provided that any loan shall
    51  be fully repaid by the recipient upon the resale of the home.
    52    (4)  For  the  purposes  of calculating city or town real property tax
    53  liability for such property, only, the dollar amount  of  any  financial
    54  assistance  for  the  purchase  of a first home made by the city or town
    55  pursuant to this section shall be subtracted  from  the  full  equalized
    56  assessed value of such property.

        A. 7496--A                          3

     1    (5)  All revenues received by the city or town from the repayment of a
     2  loan shall be deposited in the fund.
     3    (6)  A  city  or  town  may provide financial assistance for community
     4  housing in conjunction with a public/private  partnership  for  employer
     5  assisted housing.
     6    (b)  the  actual  production of community housing for sale to eligible
     7  individuals by the city or town;
     8    (c) the actual production of community housing for  sale  to  eligible
     9  individuals  in conjunction with a public/private partnership, where the
    10  private partner agrees to comply with the profit guidelines of  the  New
    11  York  state  affordable  housing  corporation and the provisions of this
    12  section;
    13    (d) the  actual  production  and  maintenance  of  community  housing,
    14  including accessory apartments for rental to eligible individuals either
    15  by  the  city or town or its housing authority; or in conjunction with a
    16  public/private partnership, where the private partner agrees  to  comply
    17  with  the  profit  guidelines  of  the New York state affordable housing
    18  corporation and the provisions of this section;
    19    (e) the rehabilitation of existing buildings  and  structures  in  the
    20  city or town for the purpose of conversion to community housing for sale
    21  or rental to eligible individuals;
    22    (f)  the acquisition of interests in real property in existing housing
    23  stock, which will result in the production of community housing for sale
    24  or rental to eligible individuals; and
    25    (g) the provision of housing  counseling  services  by  not-for-profit
    26  corporations who are authorized by the United States department of hous-
    27  ing and urban development to provide such services.
    28    4. Fund management. Interest accrued by monies deposited into the fund
    29  shall  be  credited to the fund. In no event shall monies deposited into
    30  the fund be transferred to any other account. Nothing contained in  this
    31  section shall be construed to prevent the financing in whole or in part,
    32  pursuant to the local finance law, of any purpose authorized pursuant to
    33  this section. Monies from the fund may be utilized to repay indebtedness
    34  or  obligations  incurred  pursuant  to the local finance law consistent
    35  with effectuating the purposes of this section.
    36    5. Eligible expenses. For  the  purposes  of  this  section,  eligible
    37  expenses  relating  to the production of community housing and the reha-
    38  bilitation of existing buildings and structures  under  the  fund  shall
    39  include  but  not be limited to land acquisition, planning, engineering,
    40  construction costs, and other hard and soft costs  directly  related  to
    41  the construction, rehabilitation, purchase or rental of housing pursuant
    42  to this section. All revenues received by the city or town from the sale
    43  or  rental  of  community  housing,  or  the repayment of loans shall be
    44  deposited in the fund.
    45    6. Advisory board established. The governing body of any city or  town
    46  which  has established a community housing fund pursuant to this section
    47  shall create an  advisory  board  to  review  and  make  recommendations
    48  regarding the city or town's community housing plan required by subdivi-
    49  sion  seven  of  this section. Such board shall consist of not less than
    50  seven nor more than fifteen legal  residents  of  the  municipality  who
    51  shall  serve  without  compensation.  No member of the local legislative
    52  body shall serve on the board. The board shall include a  representative
    53  of: (a) the construction industry; (b) the real estate industry; (c) the
    54  banking industry; and three representatives of local housing advocacy or
    55  human services organizations. Where a village or villages, located with-
    56  in  a town, elect to participate in the fund, as provided in subdivision

        A. 7496--A                          4

     1  eight of this section, the board shall include at least one resident  of
     2  a  participating village or villages.  Where an Indian nation is located
     3  within the boundaries of a city or town,  the  board  shall  include  at
     4  least  one  member  from such nation. The board shall act in an advisory
     5  capacity to the governing body.
     6    7. Adoption of housing plan. (a) Before a city or town may expend  any
     7  funds  pursuant  to this section, the governing body shall first adopt a
     8  housing plan which establishes an implementation plan for the  provision
     9  of  community  housing  opportunities  by the fund.   Said plan shall be
    10  adopted by local law. Such plan shall adhere to  the  following  princi-
    11  ples:
    12    (1)  Public  investment. To account for and minimize social, economic,
    13  and environmental costs of  new  development,  including  infrastructure
    14  costs  such  as transportation, sewers, and wastewater treatment, water,
    15  schools, recreation, and loss of open space and agricultural land;
    16    (2) Development. To encourage development in areas  where  transporta-
    17  tion, water, and sewage infrastructure are available or practical;
    18    (3)  Conservation.  To  protect,  preserve,  and  enhance  the state's
    19  resources, including agricultural land, forests, surface waters, ground-
    20  water, recreation and open space, scenic areas, and significant historic
    21  and archeological sites;
    22    (4) Coordination. To promote coordination of state and  local  govern-
    23  ment decisions and cooperation among communities to work toward the most
    24  efficient,  planned  and  cost-effective delivery of government services
    25  by, among other means, facilitating cooperative agreements  among  adja-
    26  cent  communities, and to coordinate planning to ensure compatibility of
    27  one's community development with development of neighboring communities;
    28    (5) Community design. To strengthen  communities  through  development
    29  and  redevelopment strategies that include integration of all income and
    30  age groups, mixed land uses, and compact development, traditional neigh-
    31  borhood development, planned unit  development,  open  space  districts,
    32  downtown  revitalization,  brownfield  redevelopment, enhanced beauty in
    33  public spaces, and diverse and community housing in close  proximity  to
    34  places of employment, recreation, and commercial development;
    35    (6)  Transportation.  To  provide  transportation  choices,  including
    36  increasing public transit and alternative modes  of  transportation,  in
    37  order  to  reduce automobile dependency, traffic congestion, and automo-
    38  bile pollution;
    39    (7) Consistency. To ensure predictability in  building  and  land  use
    40  codes; and
    41    (8)  Community  collaboration.  To  provide  for  and  encourage local
    42  governments to develop, through a collaborative community-based  effort,
    43  plans  that  include  long  term  land use and permit predictability and
    44  coordination, efficient decision making and planning implementation.
    45    (b) Such plan may include the establishment of  a  map  or  maps  that
    46  delineate  the  housing  implementation  recommendations proposed by the
    47  city or town.
    48    (c) Such plan shall be updated at least once every five years.
    49    (d) The housing plan shall be an element of the city or  town  compre-
    50  hensive plan.
    51    (e)  Such plan shall ensure that all community housing, created pursu-
    52  ant to this section, remains affordable. Subsequent purchasers  of  such
    53  community  housing,  at the time of purchase, shall be eligible individ-
    54  uals as defined herein.
    55    (f) Such plan shall provide for the equitable distribution of communi-
    56  ty housing opportunities among all the communities of the city or  town.

        A. 7496--A                          5

     1  The  plan  shall  ensure that no community has an undue concentration of
     2  community housing opportunities that would substantially alter the char-
     3  acter of the community. In determining equitable distribution of  commu-
     4  nity  housing opportunities, existing community housing opportunities in
     5  a community shall be considered.
     6    8. Village participation. (a) The participation of any village,  where
     7  there  is  a town community housing fund, in the production of community
     8  housing authorized by this section,  shall  be  at  the  option  of  the
     9  village.  In  order  to  participate,  a village shall pass a resolution
    10  opting into the program and shall submit said  resolution  to  the  town
    11  board.
    12    (b)  Where a village opts to participate pursuant to this subdivision,
    13  an intergovernmental agreement shall be  executed  pursuant  to  article
    14  five-G of the general municipal law or other applicable legal authority,
    15  in order to establish the rights and responsibilities of each government
    16  regarding community housing opportunities.
    17    (c)  Regardless  of  whether  a  village  participates  in the program
    18  authorized by this section, properties in the village shall  be  subject
    19  to the supplemental real estate transfer tax authorized by section four-
    20  teen hundred forty-nine-bb of the tax law.
    21    §  2.  The  tax law is amended by adding a new article 33-C to read as
    22  follows:
    23                                 ARTICLE 33-C
    24               TAX ON REAL ESTATE TRANSFERS IN CITIES OR TOWNS
    25  Section 1575. Definitions.
    26          1576. Imposition of tax.
    27          1577. Payment of tax.
    28          1578. Liability for tax.
    29          1579. Exemptions.
    30          1580. Credit.
    31          1581. Cooperative housing corporation transfers.
    32          1582. Designation of agents.
    33          1583. Liability of recording officer.
    34          1584. Deposit and disposition of revenue.
    35          1585. Judicial review.
    36          1586. Apportionment.
    37          1587. Miscellaneous.
    38          1588. Returns to be secret.
    39          1589. Foreclosure proceedings.
    40    § 1575. Definitions. When  used  in  this  article,  unless  otherwise
    41  expressly stated, the following words and terms shall have the following
    42  meanings:
    43    1. "Person" means an individual, partnership, limited liability compa-
    44  ny,  society,  association,  joint  stock  company, corporation, estate,
    45  receiver, trustee, assignee, referee or any other  person  acting  in  a
    46  fiduciary  or  representative  capacity, whether appointed by a court or
    47  otherwise, any combination of individuals, and any other form  of  unin-
    48  corporated enterprise owned or conducted by two or more persons.
    49    2.  "Controlling  interest"  means  (a)  in the case of a corporation,
    50  either fifty percent or more of the total combined voting power  of  all
    51  classes  of  stock  of such corporation, or fifty percent or more of the
    52  capital, profits or beneficial interest in such  voting  stock  of  such
    53  corporation, and (b) in the case of a partnership, association, trust or
    54  other  entity,  fifty percent or more of the capital, profits or benefi-
    55  cial interest in such partnership, association, trust or other entity.

        A. 7496--A                          6

     1    3. "Real property" means every estate or right,  legal  or  equitable,
     2  present  or future, vested or contingent, in lands, tenements or heredi-
     3  taments, including buildings, structures and other improvements thereon,
     4  which are located in whole or in part within any city or town. It  shall
     5  not include rights to sepulture.
     6    4.  "Consideration"  means  the  price actually paid or required to be
     7  paid for the real property or interest therein, including payment for an
     8  option or contract to purchase real property, whether or  not  expressed
     9  in  the deed and whether paid or required to be paid by money, property,
    10  or any other thing of  value.  It  shall  include  the  cancellation  or
    11  discharge  of  an  indebtedness or obligation. It shall also include the
    12  amount of any mortgage, purchase money mortgage, lien  or  other  encum-
    13  brance,  whether  or not the underlying indebtedness is assumed or taken
    14  subject to.
    15    (a) In the case of a creation of a leasehold interest or the  granting
    16  of  an  option  with  use  and occupancy of real property, consideration
    17  shall include, but not be limited to, the value of the rental and  other
    18  payments  attributable  to the use and occupancy of the real property or
    19  interest therein, the value of any amount paid for an option to purchase
    20  or renew and the value of rental or other payments attributable  to  the
    21  exercise of any option to renew.
    22    (b)  In  the  case of a creation of a subleasehold interest, consider-
    23  ation shall include, but not be limited to, the value  of  the  sublease
    24  rental  payments attributable to the use and occupancy of the real prop-
    25  erty, the value of any amount paid for an option to renew and the  value
    26  of  rental  or other payments attributable to the exercise of any option
    27  to renew less the value of the remaining  prime  lease  rental  payments
    28  required to be made.
    29    (c) In the case of a controlling interest in any entity that owns real
    30  property,  consideration  shall  mean  the fair market value of the real
    31  property or interest therein, apportioned based on the percentage of the
    32  ownership interest transferred or acquired in the entity.
    33    (d) In the case of an assignment or surrender of a leasehold  interest
    34  or the assignment or surrender of an option or contract to purchase real
    35  property,  consideration  shall  not  include the value of the remaining
    36  rental payments required to be made pursuant to the terms of such  lease
    37  or  the amount to be paid for the real property pursuant to the terms of
    38  the option or contract being assigned or surrendered.
    39    (e) In the case of (1) the original conveyance of shares of stock in a
    40  cooperative housing corporation in connection with the grant or transfer
    41  of a proprietary leasehold by the cooperative corporation or cooperative
    42  plan sponsor, and (2) the subsequent conveyance by the owner thereof  of
    43  such  stock  in a cooperative housing corporation in connection with the
    44  grant or transfer of a proprietary  leasehold  for  a  cooperative  unit
    45  other than an individual residential unit, consideration shall include a
    46  proportionate  share of the unpaid principal of any mortgage on the real
    47  property of the cooperative housing corporation comprising  the  cooper-
    48  ative dwelling or dwellings. Such share shall be determined by multiply-
    49  ing the total unpaid principal of the mortgage by a fraction, the numer-
    50  ator  of  which shall be the number of shares of stock being conveyed in
    51  the cooperative housing corporation in  connection  with  the  grant  or
    52  transfer  of  a proprietary leasehold and the denominator of which shall
    53  be the total number of shares of stock in the cooperative housing corpo-
    54  ration.
    55    5. "Conveyance" means the transfer or transfers  of  any  interest  in
    56  real  property  by  any  method,  including  but  not  limited to, sale,

        A. 7496--A                          7

     1  exchange, assignment, surrender, mortgage foreclosure, transfer in  lieu
     2  of  foreclosure,  option,  trust  indenture,  taking  by eminent domain,
     3  conveyance upon liquidation or by a receiver, or transfer or acquisition
     4  of a controlling interest in any entity with an interest in real proper-
     5  ty.  Transfer of an interest in real property shall include the creation
     6  of  a  leasehold  or  sublease only where (a) the sum of the term of the
     7  lease or sublease and any options for renewal exceeds forty-nine  years,
     8  (b)  substantial  capital  improvements are or may be made by or for the
     9  benefit of the lessee or sublessee, and (c) the lease or sublease is for
    10  substantially all  of  the  premises  constituting  the  real  property.
    11  Notwithstanding  the  foregoing,  conveyance  of real property shall not
    12  include a conveyance made pursuant to devise,  bequest  or  inheritance;
    13  the  creation,  modification,  extension,  spreading, severance, consol-
    14  idation, assignment, transfer, release or satisfaction of a mortgage;  a
    15  mortgage  subordination  agreement,  a  mortgage severance agreement, an
    16  instrument given to perfect or correct a recorded mortgage; or a release
    17  of lien of tax pursuant to this chapter or the internal revenue code.
    18    6. "Interest in the real property" includes title in fee, a  leasehold
    19  interest, a beneficial interest, an encumbrance, development rights, air
    20  space  and  air  rights,  or any other interest with the right to use or
    21  occupancy of real property or the right to  receive  rents,  profits  or
    22  other income derived from real property. It shall also include an option
    23  or  contract  to purchase real property. It shall not include a right of
    24  first refusal to purchase real property.
    25    7. "Grantor" means the person making the conveyance of  real  property
    26  or  interest  therein. Where the conveyance consists of a transfer or an
    27  acquisition of a controlling interest in an entity with an  interest  in
    28  real property, "grantor" means the entity with an interest in real prop-
    29  erty  or  a  shareholder  or  partner  transferring stock or partnership
    30  interest, respectively.
    31    8. "Grantee" means the person who obtains real  property  or  interest
    32  therein as a result of a conveyance.
    33    9. "Community housing fund" means a community fund created pursuant to
    34  section six-w of the general municipal law.
    35    10. "Recording officer" means the county clerk.
    36    11.  "City or town" means a city or town, except a city of one million
    37  or more.
    38    12. "Treasurer" means the county treasurer.
    39    § 1576. Imposition of tax. Notwithstanding any other provisions of law
    40  to the contrary, any city or town, acting through its governing body, is
    41  hereby authorized and empowered to adopt a local law  imposing  in  such
    42  city  or  town a supplemental tax on each conveyance of real property or
    43  interest therein where the consideration exceeds five  hundred  dollars,
    44  at  the  rate  of up to one half of one percent of the consideration for
    45  such conveyance. Provided, however, any such local law imposing, repeal-
    46  ing or re-imposing such supplemental tax shall be subject to a mandatory
    47  referendum pursuant to section twenty-three of the municipal  home  rule
    48  law.    Notwithstanding  the  foregoing, prior to adoption of such local
    49  law, the city or town must establish a community housing  fund  pursuant
    50  to  section  six-w  of  the  general municipal law.   Revenues from such
    51  supplemental tax shall be deposited in such community housing  fund  and
    52  may be used solely for the purposes of such community housing fund. Such
    53  local  law shall apply to any conveyance occurring on or after the first
    54  day of a month to be designated by the governing  board,  which  is  not
    55  less  than  sixty  days after the enactment of such local law, but shall
    56  not apply to conveyances made on or after such date pursuant to  binding

        A. 7496--A                          8

     1  written  contracts  entered  into  prior to such date, provided that the
     2  date of execution of such contract is confirmed by independent  evidence
     3  such  as  the  recording  of the contract, payment of a deposit or other
     4  facts and circumstances as determined by the treasurer.
     5    § 1577. Payment of tax. 1. The real estate transfer tax imposed pursu-
     6  ant  to  this  article  shall  be paid to the treasurer or the recording
     7  officer acting as the agent of the treasurer upon  designation  as  such
     8  agent  by  the treasurer. Such tax shall be paid at the same time as the
     9  real estate transfer tax imposed by article thirty-one of  this  chapter
    10  is  required  to  be  paid.    Such treasurer or recording officer shall
    11  endorse upon each deed or instrument effecting a  conveyance  a  receipt
    12  for the amount of the tax so paid.
    13    2.  A  return  shall  be  required  to be filed with such treasurer or
    14  recording officer for purposes of the real estate transfer  tax  imposed
    15  pursuant  to this article at the same time as a return is required to be
    16  filed for purposes of the real estate transfer tax  imposed  by  article
    17  thirty-one  of  this  chapter. The treasurer shall prescribe the form of
    18  return, the information which it shall contain,  and  the  documentation
    19  that  shall  accompany the return.   Said form shall be identical to the
    20  real estate transfer tax return required to be filed pursuant to section
    21  fourteen hundred nine of this chapter, except that the  treasurer  shall
    22  adapt  said  form  to  reflect  the  provisions in this chapter that are
    23  inconsistent, different, or in addition to  the  provisions  of  article
    24  thirty-one  of  this  chapter.    The  real  estate transfer tax returns
    25  required to be filed pursuant to this section  shall  be  preserved  for
    26  three  years  and  thereafter  until such treasurer or recording officer
    27  orders them to be destroyed.
    28    3. The recording officer shall not record an  instrument  effecting  a
    29  conveyance unless the return required by this section has been filed and
    30  the  tax  imposed  pursuant  to  this  article  shall  have been paid as
    31  required in this section.
    32    § 1578. Liability for tax. 1. The real estate transfer  tax  shall  be
    33  paid  by  the  grantee. If the grantee has failed to pay the tax imposed
    34  pursuant to this article or if the grantee is exempt from such tax,  the
    35  grantor  shall  have  the duty to pay the tax. Where the grantor has the
    36  duty to pay the tax because the grantee has failed to pay the tax,  such
    37  tax  shall  be  the  joint  and several liability of the grantee and the
    38  grantor.
    39    2. For the purpose of the proper administration of this article and to
    40  prevent evasion of the tax hereby imposed, it shall be presumed that all
    41  conveyances are taxable. Where the consideration includes property other
    42  than money, it shall be presumed that  the  consideration  is  the  fair
    43  market  value  of  the real property or interest therein. These presump-
    44  tions shall prevail until the contrary is  proven,  and  the  burden  of
    45  proving  the  contrary  shall be on the person liable for payment of the
    46  tax.
    47    § 1579. Exemptions. 1. The following shall be exempt from the  payment
    48  of  the  real  estate transfer tax: (a) the state of New York, or any of
    49  its  agencies,  instrumentalities,  political  subdivisions,  or  public
    50  corporations,  including  a  public  corporation  created pursuant to an
    51  agreement or compact with another state or Canada; and
    52    (b) the United Nations, the United States of America  or  any  of  its
    53  agencies or instrumentalities.
    54    2.  The  tax shall not apply to any of the following conveyances:  (a)
    55  conveyances to the United Nations, the United  States  of  America,  the
    56  state  of New York, or any of their instrumentalities, agencies or poli-

        A. 7496--A                          9

     1  tical subdivisions, or any public corporation, including a public corpo-
     2  ration created pursuant to agreement or compact with  another  state  or
     3  the Dominion of Canada; (b) conveyances which are or were used to secure
     4  a  debt  or  other obligation; (c) conveyances which, without additional
     5  consideration, confirm, correct, modify or supplement a deed  previously
     6  recorded;  (d)  conveyances  of  real property without consideration and
     7  otherwise than in connection with  a  sale,  including  deeds  conveying
     8  realty  as  bona  fide gifts; (e) conveyances given in connection with a
     9  tax sale; (f) conveyances to effectuate a mere  change  of  identity  or
    10  form of ownership or organization where there is no change in beneficial
    11  ownership,  other  than conveyances to a cooperative housing corporation
    12  of the real property comprising the cooperative dwelling  or  dwellings;
    13  (g)  conveyances  which  consist of a deed of partition; (h) conveyances
    14  given pursuant to the federal bankruptcy act; (i)  conveyances  of  real
    15  property which consist of the execution of a contract to sell real prop-
    16  erty without the use or occupancy of such property or the granting of an
    17  option  to  purchase  real property without the use or occupancy of such
    18  property; (j) conveyances of real property, where the entire  parcel  of
    19  real  property  to  be  conveyed  is  the  subject of one or more of the
    20  following  development  restrictions:  (1)  agricultural,  conservation,
    21  scenic, or an open space easement, (2) covenants or restrictions prohib-
    22  iting development, (3) a purchase of development rights agreement, (4) a
    23  transfer  of  development  rights  agreement,  where  the property being
    24  conveyed has had its development rights removed, (5) said real  property
    25  is subject to the development restriction of an agricultural district or
    26  individual  commitment,  pursuant to article twenty-five-AA of the agri-
    27  culture and markets law,  (6)  real  property  subject  to  any  locally
    28  adopted land preservation agreement, provided said exemption is included
    29  in  the  local  law  imposing  the  tax  authorized by this article; (k)
    30  conveyances of real property, where the property is viable  agricultural
    31  land as defined in subdivision seven of section three hundred one of the
    32  agriculture and markets law and the entire property to be conveyed is to
    33  be  made  subject to one of the development restrictions provided for in
    34  subparagraph two of paragraph (j) of this subdivision provided that said
    35  development restriction precludes the conversion of the  property  to  a
    36  non-agricultural use for at least three years from the date of transfer,
    37  and said development restriction is evidenced by an easement, agreement,
    38  or other suitable instrument which is to be conveyed to the city or town
    39  simultaneously  with the conveyance of the real property; or (l) convey-
    40  ances of real property for open  space,  parks,  community  housing,  or
    41  historic  preservation  purposes to any not-for-profit tax exempt corpo-
    42  ration operated for conservation, environmental,  community  housing  or
    43  historic preservation purposes.
    44    3.  The governing body of a city or town, by local law may establish a
    45  community housing exemption from the payment of the real estate transfer
    46  tax. Such exemption may not exceed an amount equal  to  the  residential
    47  median sale price of the county in which the city or town is located, as
    48  determined by the office of real property services within the department
    49  of  taxation and finance. Such exemption shall be allowed on the consid-
    50  eration of the conveyance of improved real property or an interest ther-
    51  ein. The exemption granted pursuant to the provisions of  this  subdivi-
    52  sion  shall only apply to conveyances for residential property where the
    53  consideration is two million dollars or less.
    54    § 1580. Credit. A grantee shall be allowed a credit  against  the  tax
    55  due  on a conveyance of real property to the extent tax was paid by such
    56  grantee on a prior creation of a leasehold of all or a  portion  of  the

        A. 7496--A                         10

     1  same  real  property  or  on  the  granting  of an option or contract to
     2  purchase all or a portion of the same real  property  by  such  grantee.
     3  Such  credit  shall  be  computed  by  multiplying  the  tax paid on the
     4  creation  of  the leasehold or on the granting of the option or contract
     5  by a fraction, the numerator of which is the value of the  consideration
     6  used  to  compute  such tax paid which is not yet due to such grantor on
     7  the date of the subsequent conveyance (and which such grantor  will  not
     8  be entitled to receive after such date), and the denominator of which is
     9  the total value of the consideration used to compute such tax paid.
    10    §  1581. Cooperative housing corporation transfers. 1. Notwithstanding
    11  the definition of "controlling interest" contained in subdivision two of
    12  section fifteen hundred seventy-five of this article or anything to  the
    13  contrary contained in subdivision five of section fifteen hundred seven-
    14  ty-five  of this article, the tax imposed pursuant to this article shall
    15  apply to (a) the original conveyance of shares of stock in a cooperative
    16  housing corporation in connection  with  the  grant  or  transfer  of  a
    17  proprietary leasehold by the cooperative corporation or cooperative plan
    18  sponsor,  and  (b)  the subsequent conveyance of such stock in a cooper-
    19  ative housing corporation in connection with the grant or transfer of  a
    20  proprietary  leasehold  by  the  owner thereof. With respect to any such
    21  subsequent conveyance where the property is  an  individual  residential
    22  unit,  the  consideration  for  the  interest conveyed shall exclude the
    23  value of any liens on certificates of stock or  other  evidences  of  an
    24  ownership  interest  in  and  a  proprietary lease from a corporation or
    25  partnership formed for the purpose of cooperative ownership of  residen-
    26  tial  interest  in  real estate remaining thereon at the time of convey-
    27  ance. In determining the tax on a conveyance described in paragraph  (a)
    28  of  this subdivision, a credit shall be allowed for a proportionate part
    29  of the amount of any tax paid upon the  conveyance  to  the  cooperative
    30  housing  corporation  of  the  real  property comprising the cooperative
    31  dwelling or dwellings to the extent that such conveyance  effectuated  a
    32  mere  change of identity or form of ownership of such property and not a
    33  change in the beneficial ownership of such property. The amount  of  the
    34  credit  shall  be  determined by multiplying the amount of tax paid upon
    35  the conveyance to the cooperative housing corporation  by  a  percentage
    36  representing  the  extent  to  which  such conveyance effectuated a mere
    37  change of identity or form of ownership and not a change in the  benefi-
    38  cial  ownership  of  such  property,  and then multiplying the resulting
    39  product by a fraction, the numerator of which shall  be  the  number  of
    40  shares  of stock conveyed in a transaction described in paragraph (a) of
    41  this subdivision, and the denominator of which shall be the total number
    42  of shares of stock of the cooperative housing corporation, including any
    43  stock held by the corporation. In no event, however, shall  such  credit
    44  reduce  the  tax,  on  a  conveyance  described in paragraph (a) of this
    45  subdivision, below zero, nor shall any such credit be allowed for a  tax
    46  paid  more than twenty-four months prior to the date on which occurs the
    47  first in a series of conveyances of shares of stock in  an  offering  of
    48  cooperative  housing  corporation  shares  described in paragraph (a) of
    49  this subdivision.
    50    2. Every cooperative housing corporation shall be required to file  an
    51  information  return  with  the  treasurer by July fifteenth of each year
    52  covering the preceding period of January first  through  June  thirtieth
    53  and  by  January fifteenth of each year covering the preceding period of
    54  July first through December thirty-first. The return shall contain  such
    55  information  regarding  the conveyance of shares of stock in the cooper-
    56  ative housing corporation as the treasurer may deem  necessary,  includ-

        A. 7496--A                         11

     1  ing,  but  not limited to, the names, addresses and employee identifica-
     2  tion numbers or social security numbers of the grantor and the  grantee,
     3  the  number  of  shares  conveyed,  the  date  of the conveyance and the
     4  consideration paid for such conveyance.
     5    §  1582.  Designation of agents. The treasurer is authorized to desig-
     6  nate the recording officer to act as the treasurer's agent for  purposes
     7  of  collecting  the  tax authorized by this article. The treasurer shall
     8  provide for the manner in which such person may  be  designated  as  the
     9  treasurer's  agent subject to such terms and conditions as the treasurer
    10  shall prescribe. The real estate transfer tax  shall  be  paid  to  such
    11  agent as provided in section fifteen hundred seventy-seven of this arti-
    12  cle.
    13    §  1583. Liability of recording officer. A recording officer shall not
    14  be liable for any inaccuracy in the amount of tax  imposed  pursuant  to
    15  this  article  that  such  officer shall collect so long as such officer
    16  shall compute and collect such tax on the amount of consideration or the
    17  value of the interest conveyed as such  amounts  are  provided  to  such
    18  officer by the person paying the tax.
    19    §  1584.  Deposit  and disposition of revenue. 1. All taxes, penalties
    20  and interest imposed by the city or town under the authority of  section
    21  fifteen  hundred seventy-six of this article, which are collected by the
    22  treasurer or such treasurer's agents, shall be  deposited  in  a  single
    23  trust  fund for the city or town and shall be kept in trust and separate
    24  and apart from all other monies in possession of the treasurer.   Moneys
    25  in  such  fund  shall be deposited and secured in the manner provided by
    26  section ten of the general municipal law. Pending expenditure from  such
    27  fund,  moneys  therein may be invested in the manner provided in section
    28  eleven of the general municipal law. Any interest earned or capital gain
    29  realized on the moneys so deposited or  invested  shall  accrue  to  and
    30  become part of such fund.
    31    2.  The treasurer shall retain such amount as they may determine to be
    32  necessary for refunds with respect to the tax imposed  by  the  city  or
    33  town, under the authority of section fifteen hundred seventy-six of this
    34  article,  out of which the treasurer shall pay any refunds of such taxes
    35  to those taxpayers entitled to a refund pursuant to  the  provisions  of
    36  this article.
    37    3. The treasurer, after reserving such refunds, shall on or before the
    38  twelfth day of each month pay to the city comptroller or the town super-
    39  visor  the  taxes,  penalties  and  interest imposed by the city or town
    40  under the authority of section fifteen hundred seventy-six of this arti-
    41  cle, collected by the treasurer, pursuant to  this  article  during  the
    42  next  preceding calendar month. The amount so payable shall be certified
    43  to the city comptroller or the town supervisor  by  the  treasurer,  who
    44  shall  not  be  held  liable  for  any inaccuracy in such certification.
    45  Provided, however, any such certification may be based on such  informa-
    46  tion as may be available to the treasurer at the time such certification
    47  must  be  made  under this section. Where the amount so paid over to the
    48  city or town in any such distribution is more or less  than  the  amount
    49  due  to  the city or town, the amount of the overpayment or underpayment
    50  shall be certified to the city comptroller or the town supervisor by the
    51  treasurer, who shall not be held  liable  for  any  inaccuracy  in  such
    52  certification. The amount of the overpayment or underpayment shall be so
    53  certified  to  the city comptroller or the town supervisor as soon after
    54  the discovery of the overpayment or underpayment as reasonably  possible
    55  and  subsequent payments and distributions by the treasurer to such city
    56  or town shall be adjusted by subtracting the amount of any such overpay-

        A. 7496--A                         12

     1  ment from or by adding the amount  of  any  such  underpayment  to  such
     2  number  of  subsequent  payments  and distributions as the treasurer and
     3  city comptroller or town supervisor shall consider reasonable in view of
     4  the overpayment or underpayment and all other facts and circumstances.
     5    4.  All  monies  received from the treasurer shall be deposited in the
     6  appropriate fund of the city or town, pursuant to section six-w  of  the
     7  general municipal law.
     8    §  1585.  Judicial review. 1. Any final determination of the amount of
     9  any tax payable under section  fifteen  hundred  seventy-eight  of  this
    10  article shall be reviewable for error, illegality or unconstitutionality
    11  or  any  other  reason whatsoever by a proceeding under article seventy-
    12  eight of the civil practice law and rules  if  application  therefor  is
    13  made  to  the  supreme  court within four months after the giving of the
    14  notice of such final determination, provided,  however,  that  any  such
    15  proceeding  under  article  seventy-eight  of the civil practice law and
    16  rules shall not be instituted unless (a) the amount of any tax sought to
    17  be reviewed, with such interest and penalties thereon as may be provided
    18  for by local law shall be first deposited and there is filed  an  under-
    19  taking,  issued  by  a surety company authorized to transact business in
    20  this state and approved by the state superintendent of insurance  as  to
    21  solvency  and responsibility, in such amount as a justice of the supreme
    22  court shall approve to the effect that if such proceeding  be  dismissed
    23  or the tax confirmed the petitioner will pay all costs and charges which
    24  may accrue in the prosecution of such proceeding or (b) at the option of
    25  the petitioner, such undertaking may be in a sum sufficient to cover the
    26  taxes,  interest  and  penalties  stated in such determination, plus the
    27  costs and charges which may accrue against it in the prosecution of  the
    28  proceeding,  in  which event the petitioner shall not be required to pay
    29  such taxes, interest or penalties as a condition precedent to the appli-
    30  cation.
    31    2. Where any tax imposed hereunder shall have been erroneously,  ille-
    32  gally  or  unconstitutionally  assessed or collected and application for
    33  the refund or revision thereof duly made to the proper fiscal officer or
    34  officers, and such officer or officers shall have made  a  determination
    35  denying  such refund or revision, such determination shall be reviewable
    36  by a proceeding under article seventy-eight of the  civil  practice  law
    37  and  rules;  provided,  however,  that (a) such proceeding is instituted
    38  within four months after the giving of the notice of such denial, (b)  a
    39  final  determination  of  tax  due  was  not previously made, and (c) an
    40  undertaking is filed with the proper fiscal officer or officers in  such
    41  amount  and  with  such sureties as a justice of the supreme court shall
    42  approve to the effect that if such proceeding be dismissed  or  the  tax
    43  confirmed,  the  petitioner  will  pay  all  costs and charges which may
    44  accrue in the prosecution of such proceeding.
    45    § 1586. Apportionment. A local law adopted by any city or town, pursu-
    46  ant to this article, shall provide for a  method  of  apportionment  for
    47  determining the amount of tax due whenever the real property or interest
    48  therein is situated within and without the city or town.
    49    § 1587. Miscellaneous. A local law adopted by any city or town, pursu-
    50  ant  to  this  article, may contain such other provisions as the city or
    51  town deems necessary for the proper administration of  the  tax  imposed
    52  pursuant  to  this article, including provisions concerning the determi-
    53  nation of tax, the imposition of interest on underpayments and  overpay-
    54  ments  and  the  imposition of civil penalties. Such provisions shall be
    55  identical to the corresponding provisions of the  real  estate  transfer
    56  tax  imposed  by  article  thirty-one  of  this  chapter, so far as such

        A. 7496--A                         13

     1  provisions can be made applicable to the tax imposed  pursuant  to  this
     2  article.
     3    §  1588.  Returns  to  be  secret. 1. Except in accordance with proper
     4  judicial order or as otherwise provided by law, it shall be unlawful for
     5  the treasurer or any officer or employee of the county,  city  or  town,
     6  including  any  person  engaged  or  retained on an independent contract
     7  basis, to divulge or make known in any manner the particulars set  forth
     8  or  disclosed  in any return required under a local law enacted pursuant
     9  to this article.  Provided, however, that nothing in this section  shall
    10  prohibit  the  recording officer from making a notation on an instrument
    11  affecting a conveyance indicating the amount of tax  paid.  No  recorded
    12  instrument  affecting  a  conveyance  shall  be  considered a return for
    13  purposes of this section.
    14    2. The officers charged with the custody of such returns shall not  be
    15  required  to  produce  any  of them or evidence of anything contained in
    16  them in any action or proceeding in any court, except on behalf  of  the
    17  county,  city,  or  town  in  any  action  or  proceeding  involving the
    18  collection of a tax due under a local law enacted pursuant to this arti-
    19  cle to which such county, city, or town is a party, or a claimant, or on
    20  behalf of any party to any action or proceeding under the provisions  of
    21  a  local  law enacted pursuant to this article when the returns or facts
    22  shown thereby are directly involved in such action or proceeding, in any
    23  of which events the court may require the production of, and  may  admit
    24  in  evidence,  so much of said returns or of the facts shown thereby, as
    25  are pertinent to the action or proceeding and no more.
    26    3. Nothing in this section shall be construed to prohibit the delivery
    27  to a grantor or grantee of an instrument effecting a conveyance  or  the
    28  duly  authorized  representative  of a grantor or grantee of a certified
    29  copy of any return filed  in  connection  with  such  instrument  or  to
    30  prohibit  the  publication of statistics so classified as to prevent the
    31  identification of particular returns  and  the  items  thereof,  or  the
    32  inspection by the legal representatives of such county, city, or town of
    33  the return of any taxpayer who shall bring action to set aside or review
    34  the tax based thereon.
    35    4. Any officer or employee of such county, city, or town who willfully
    36  violates  the  provisions of this section shall be dismissed from office
    37  and be incapable of holding any public office in this state for a period
    38  of five years thereafter.
    39    § 1589. Foreclosure proceedings. Where the conveyance  consists  of  a
    40  transfer  of  property  made  as  a result of an order of the court in a
    41  foreclosure proceeding ordering the sale of such property,  the  referee
    42  or sheriff effectuating such transfer shall not be liable for any inter-
    43  est or penalties that are authorized pursuant to this article or article
    44  thirty-seven of this chapter.
    45    §  3.  Severability.  If  any provision of this act or the application
    46  thereof shall for any reason be  adjudged  by  any  court  of  competent
    47  jurisdiction  to  be invalid, such judgment shall not affect, impair, or
    48  invalidate the remainder of this act, but shall be confined in its oper-
    49  ation to the provision thereof directly involved in the  controversy  in
    50  which such judgment shall have been rendered.
    51    §  4.  This act shall take effect immediately; provided, however, that
    52  section two of this act shall take effect on the ninetieth day after  it
    53  shall  have  become  a  law and shall expire December 31, 2044 when upon
    54  such date the provisions of such section shall be deemed repealed.
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