Authorizes cities and towns to establish community preservation funds, and to impose a tax on real property transfers to provide revenue to such funds

A town or city ("Designated Community") that establishes a Fund must adopt by local law a community preservation project plan, which must include any project the community plans to undertake and every property necessary to be acquired with monies from the Fund, and must include an evaluation of land use alternatives to protect community character. The plan must be filed with the Designated Community's clerk at least 60 days before the mandatory referendum required to adopt a real estate transfer tax (discussed below), and be updated at least every five years. A public hearing must be held prior to acquiring any interest or right in real property.

A Designated Community that establishes a Fund must also establish an advisory board to review and make recommendations on proposed acquisitions using the Fund. The Designated Community may designate an appropriate existing board, or create a separate board, to serve as its advisory board.

Any property acquired using the Fund must be administered and managed to protect community character, allow public use and enjoyment, preserve biodiversity, limit improvements to those which promote access, and preserve historical culture.

Absent legislative authority, rights or interests in real property acquired with monies from the Fund may not be sold, leased or otherwise disposed of to anyone other than the State, a municipality, or a not-for-profit organization where such property will continue to be used for a qualifying purpose under the plan.

Section 2 of this bill adds a new subdivision 10 to Environmental Conservation Law § 90101 to define "community forest."

Section 3 of this bill adds a new Article 30-C to the Tax Law to authorize a Designated Community to adopt a local law imposing a real estate transfer tax of up to 2 percent of the consideration for each conveyance of real property or interest, where the consideration exceeds $500. The local law would be subject to a mandatory referendum pursuant to Municipal Home Rule Law § 23. Revenues from the tax must be deposited in the Fund created pursuant to GML § 6-1.

Section 3 further provides that certain conveyances would be exempt from the tax, including, for example, conveyances that: (1) involve certain government entities; (2) are used to secure a debt or other obligation; (3) make bona fide gifts; (4) involve a tax sale; (5) transfer property for open space, parks, or historic preservation purposes to certain not-for-profit corporations; and (6) transfer certain agricultural land. The bill also provides an exemption from the tax on that portion of the consideration which is equal to the median sales price of residential real property within the applicable town or city. The tax would be payable by the buyer on any conveyance of real property in the Designated Community to the county treasurer at the same time as the state real estate transfer tax and be held in trust on behalf of the Designated . Community. Once a month, the treasurer would pay the tax revenue to the Designated Community for deposit in its Fund.

Section 4 of this bill provides for an immediate effective date.

Existing law

Currently, an individual municipality must seek approval of the State Legislature to establish a real estate transfer tax and use the revenues for a community preservation fund. Legislation has been enacted to allow the establishment of community preservation funds in the Peconic Bay region (Chapter 114 of the Laws of 1998); the towns of Brookhaven (Chapter 282 of the Laws of 2003), Warwick (Chapter 262 of the Laws of 2005), Chatham (Chapter 543 of the Laws of 2007), Northeast (Chapter 333 of the Laws of 2008), Fishkill (Chapter 544 of the Laws of 2007) and Red Hook (Chapter 443 of the Laws of 2006); and any city or town in the counties of Westchester or Putnam (Chapter 596 of 2007).

Legislative history

Similar legislation has been considered by the Legislature since 2004. A.7333 passed the Assembly in 2007, and was reported to the calendar in 2008, but did not pass. A.5767 was reported to the Ways and Means Committee on March 11, 2009.

Statement in support

This legislation would give all towns and cities in the State the opportunity to preserve their natural resources and selected undeveloped lands using monies funded by a local real estate transfer tax, without the need to obtain specific approval from the State Legislature.

Across New York State, communities struggle with sprawling development that destroys productive agricultural lands, forest lands, critical wildlife habitat and important open space areas within their boundaries. Often these communities have limited funds available for comprehensive planning and other tools to effectively manage development and preserve open space. Municipalities are increasingly requesting legislative authority to establish a Fund because they recognize it can be an effective tool to complement their land use regulatory authority in protecting community character and preserving important natural resources. By imposing a modest tax on real estate transfers after a local referendum, a community would have access to financial resources to acquire rights or interests in real property and implement a management and stewardship program necessary to protect important open spaces and preserve community character.

In addition, enactment of this legislation would give municipalities a new, optional tool to pursue smart growth and discourage sprawl, by encouraging and facilitating preservation of open space in all communities across the State that struggle with unimpeded development. A municipality that implements a community-wide planning process that promotes preservation of open space and quality of life encourages sustainable development and enhances the community's long-term viability. Communities that have received authority to establish Funds are already using Fund monies to implement plans which take future growth into consideration. The availability of a Fund would enable more communities to take advantage of State programs by providing a source of local matching funds. For example, the Farmland Protection Program is under utilized because it is difficult for many local governments to meet the local match requirement.

Similar legislation has been enacted for communities on Long Island, Chatham in Columbia County, Fishkill, Northeast and Red Hook in Dutchess County, Warwick in Orange County and municipalities in Putnam and Westchester Counties. This legislation would provide all towns and cities across the State with the authority to develop a dedicated, locally-derived funding source to enable them to protect significant lands at the local level.

Budget implications

This bill would have no fiscal impacts on the State.

Effective date

This bill would take effect immediately.