Relates to the acquisition and disposition of property by land banks

1 Co-sponsor

• Timothy M. Kennedy

BILL NUMBER:S5777

Title of bill

An act to amend the not-for-profit corporation law, in relation to the acquisition and disposition of property by land banks

Purpose

This bill exempts New York State Land Banks from recording fees and 2897 of the Public Authorities Law.

Summary of provisions

Section 1: Amends § 1608(a) of the Not-For-Profit Corporation Law to exempt Land Banks from recording fees.

Section 2: Adds new paragraph (a-1) to § 1609 of the Not-For-Profit Corporation Law, exempting land banks from the property disposition requirements of § 2897 of the Public Authorities Law.

Section 3: Establishes the effective date.

Justification

Land Banks were authorized in 2011 by the State Legislature as a new tool to help municipalities contend with tax delinquent, abandoned and blighted properties. As part of their work, Land Banks incur substantial fees recording documents with County Clerks. This can amount to hundreds of thousands of dollars a year, and forces them to divert funds from their primary purpose.

This legislation will exempt. Land Banks from these fees and allow them to devote more funds to their primary mission. Many of these properties would remain tax delinquent and abandoned if not for land bank intervention. Any fees lost to counties and the State will be made up for when these properties are redeveloped and returned to the tax rolls. Additionally, communities will benefit when these properties are returned to a useful purpose.

Additionally, § 1609 of the Land Bank Act, entitled "Disposition of Property", sets forth detailed requirements concerning the disposition of property by land banks. As local public authorities, land banks are simultaneously required to comply with § 2897 of the Public Authorities Law, similarly entitled "Disposal of Public Authority Property". The public authority disposition provisions overlap, contradict and impair the disposition provisions in the Land Bank Act as the public authority provisions are designed to address the sale of property by a public authority which is not regularly engaged in the disposition of real property.

Inherent in the primary mission and purpose of land banks is the regular disposition of property in the ordinary course of its day to day operations. § 1609 of the Land Bank Act correctly anticipated such activity and vested a land bank, its board of directors and its foreclosing governmental units with, among other powers, the authority to establish the terms and conditions of the consideration received by

a land bank for the transfer of its property, to establish hierarchical rankings of priorities for the use of property conveyed by a land bank and to impose specified voting and approval requirements of its board of directors. The requirement that land banks comply with both disposition statutes impedes the efficient and effective return of vacant, abandoned, and tax-delinquent properties to productive use, and was likely not the intent of the drafters of the Land Bank Act. An amendment to the Land Bank Act is proposed stating that § 1609 is intended to supersede § 2897 of the Public Authorities Law.

Legislative history

New Bill.

Fiscal implications

To be determined.

Effective date

Immediately.