BILL NUMBER: S335
SPONSOR: JACKSON
 
TITLE OF BILL:
An act to amend the real property tax law, in relation to exemptions
from local real property taxation of certain low income housing accommo-
dations in a city with a population of one million or more
 
PURPOSE:
This bill amends the New York State Real Property Tax Law Section 420-c
to (1) allow tax exemptions for only those entities where the non-profit
has 51% control, instead of 50% control as is written in current law;
and (2) limit the entities eligible for real property tax exemption to
exclude those that are established by a for-profit entity or are a
subsidiary of a for-profit corporation, partnerships or limited liabil-
ity company.
 
SUMMARY OF PROVISIONS:
Section 1 amends Section 420-C of the Real Property Tax Law to limit the
entities eligible for real property tax exemption to exclude those that
are established by a for-profit entity or are a subsidiary of a for-pro-
fit corporation, partnerships or limited liability company.
Section 2 amends Section 420-C of the Real Property Tax Law by defining
a charitable entity as one not established or controlled by a for-profit
entity, and by allowing tax exemptions for only those entities where the
non-profit has at least 51% controlling interest in the corporation,
partnership, or limited liability company.
Section 3 is the effective date.
 
JUSTIFICATION:
The current real property tax law specifies four criteria for tax the
real property tax exemption: (1) the entity must be organized to provide
housing to low-income people, and hold a 501c(3) or 501c(4) exemption;
(2) the project must receive Low-Income Housing Tax-Credits; (3) the
project must have a regulatory agreement with a government entity, and
the agreement must indicate that at least 70% of the units are
restricted to 60% AMI or lower, and (4) the project must have taken out
a loan from a government entity.
Under the current statute, for-profit developers are able to set up
non-profits that are owned and controlled by the for-profit for the
purpose of qualifying for the 420-c benefit. Further, under existing
law, a non-profit must only have 50% of control of an entity in order to
qualify for the abatement, often leaving the non-profit with no over-
sight control of the Joint Venture Agreements.
The property tax abatement, when limited only to non-profit development
corporations, allows for Community Development Corporations (CDCs) to
submit more competitive bids and lower operating costs, providing great-
er benefits to the community. When limited only to non-profit develop-
ers, CDCs are better able to compete, greatly improving the overall
quality of low-income housing in New York City.
 
LEGISLATIVE HISTORY:
2021-2022: S.1911 - Reported and Committed to Housing, Construction and
Community Development/A.5559 - Referred to Real Property Taxation
2019-2020: S.5630 - Referred to Cities/A.2965 - Referred to Real Proper-
ty Taxation
2017-2018: S.1420 - Referred to Cities/A.3789 - Referred to Real Proper-
ty Taxation
2015-2016: S.7856 - Referred to Cities/A.4314 - Referred to Real Proper-
ty Taxation
2013-2014: A.6256 - Referred to Real Property Taxation
2011-2012: A.10660 - Referred to Real Property Taxation
 
STATE AND LOCAL FISCAL IMPLICATIONS:
To be determined.
 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to all projects
approved on or after the date on which this act shall have become a law.

Statutes affected:
S335: 420-c real property tax law, 420-c(1) real property tax law