What's happening
This bill requires municipalities granting real property tax exemptions to monitor and document compliance with exemption requirements.
Why it matters
Increases accountability for tax-exempt properties. By requiring municipalities to monitor and keep records of compliance, the bill aims to ensure that recipients of property tax exemptions (such as developers) actually fulfill all legal requirements tied to those exemptions.
Helps prevent abuse or misuse of tax incentives. Regular documentation and oversight can deter fraud or negligence, making it harder for property owners to receive exemptions they’re not qualified for or to violate terms, such as affordable housing or construction standards.
Could impact future tax exemption approvals. Municipalities may become more cautious or selective when granting tax exemptions, knowing they must actively monitor and document compliance, potentially leading to more responsible use of public resources.
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Who cares
- Watching
Municipal governments
Municipalities granting Section 421-a project exemptions established by local law would have to monitor compliance with that section and retain records documenting compliance.
- Watching
Developers and property owners with Section 421-a exemptions
Their exempt projects would be subject to municipal monitoring of compliance with Section 421-a requirements.
- Watching
Municipal tax and housing officials
Officials administering these exemptions would need to account for the bill’s compliance-monitoring and record-retention duties.
Headline styles
Track Tax Exemption Compliance
Plain English, a few words. Used as the page title.
Sponsors
No co-sponsors yet.
History
- Referred to housing, construction and community development
- Referred to housing, construction and community development
Full text
1 pageUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
2090
2017-2018 Regular Sessions
IN SENATE
January 12, 2017
Introduced by Sen. AVELLA -- 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 real property tax law, in relation to municipal monitoring of compliance with requirements of local laws granting certain tax exemptions
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Section 421-a of the real property tax law is amended by adding a new subdivision 18 to read as follows:
18. A municipality which has granted tax exemption status to a project under this section shall monitor compliance with the requirements of this section if any local law establishes such exemption. Municipalities shall retain records documenting such compliance.
§ 2. This act shall take effect immediately.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD01217-01-7
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the real property tax law, in relation to municipal monitoring of compliance with requirements of local laws granting certain tax exemptions
Purpose or general idea of bill
This bill mandates that municipalities monitor compliance with Section 421-tax exemptions provided to property owners.
Summary of specific provisions
Section 1 of the bill amends section 421-a of the real property tax law by adding a new subdivision 18 that states that a municipality that has granted tax exemption status to a project under this section shall monitor compliance with the requirements of this section if any local law establishes such exemption. The bill also requires municipalities to retain records documenting such compliance.
Section 2 of the bill sets forth an immediate effective date.
Justification
Real property tax exemptions under Section 421-a are an important incentive to encourage property owners to engage in responsible development such as including affordable housing units within their proposed multifamily residential development plans.
Such incentives are a powerful tool municipalities can use to address housing issues within their communities; however, they are also an incredible windfall to property owners who often stand to save millions of dollars in property taxes for extended periods of time. This is especially the case when certain unscrupulous developers fail to comply with the terms of the agreements under which they were granted such tax exemptions.
In a recent case in the city of New York, a property owner received 421-a tax exemption status based on proposed plans to develop a condominium or rental project but instead was operating an extended stay hotel which violates the terms of the 421-a program. New York State Attorney General Eric Schneiderman uncovered this fraud and reached a settlement with the property owner who will now be forced to pay back more than $4 million in property taxes and convert the building into a rent-stabilized apartment building.
It is likely that there are many more property owners who are failing to comply with the 421-program requirements, yet municipalities have done little to follow through and ensure that these property owners are indeed complying and not simply stealing public money.
Section 421-a does not currently have any mandated provision regarding program compliance and this bill will create that mandate which provide much needed assurance that the public will not be defrauded.
Prior legislative history
New bill.
Fiscal implications
None to the state.
Effective date
This act shall take effect immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.