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Bill No.: Summary Actions Committee&nbspVotes Floor&nbspVotes Memo Text LFIN Chamber&nbspVideo/Transcript S05662 Summary: BILL NO S05662B &nbsp SAME AS SAME AS A06654-B

&nbsp SPONSOR KAVANAGH &nbsp COSPNSR FERNANDEZ &nbsp MLTSPNSR &nbsp Amd §§33, 125 & 93, Priv Hous Fin L &nbsp Relates to authorizing a reduction of taxes pursuant to shelter rent; provides that upon consent of the local legislative body in a city with a population of one million or more such taxes may be reduced to five per centum or less, including a full reduction of the annual shelter rent or carrying charges of a project.

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STATE OF NEW YORK ________________________________________________________________________

5662--B

2025-2026 Regular Sessions

IN SENATE

February 26, 2025 ___________

Introduced by Sens. KAVANAGH, FERNANDEZ -- read twice and ordered print- ed, and when printed to be committed to the Committee on Housing, Construction and Community Development -- recommitted to the Committee on Housing, Construction and Community Development in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee -- reported favorably from said committee and committed to the Committee on Finance -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee

AN ACT to amend the private housing finance law, in relation to author- izing a reduction of taxes pursuant to shelter rent

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

1 Section 1. Paragraph (a) of subdivision 1 of section 33 of the private 2 housing finance law, as amended by section 1 of part L of chapter 56 of 3 the laws of 2025, is amended to read as follows: 4 (a) Upon the consent of the local legislative body of any municipality 5 in which a project is or is to be located, the real property in a 6 project shall be exempt from local and municipal taxes, other than 7 assessments for local improvements, to the extent of all or part of the 8 value of the property included in such project which represents an 9 increase over the assessed valuation of the real property, both land and 10 improvements, acquired for the project at the time of its acquisition by 11 the limited-profit housing company, provided, however, that the real 12 property in a project acquired for purposes of rehabilitation shall be 13 exempt to the extent of all or part of the value of the property 14 included in such project, and further provided that the amount of such 15 taxes to be paid for projects located or to be located in a municipality 16 with a population of less than one million shall not be less than ten 17 per centum of the annual shelter rent or carrying charges of such 18 project except that for projects located or to be located in a city of a

EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD10198-07-6

S. 5662--B 2

1 population of one million or more, the amount of such taxes shall be no 2 more than five per centum of the annual shelter rent or carrying charges 3 of the project or, upon consent of the local legislative body, the 4 amount of such taxes may be further reduced to five per centum or less, 5 including a full reduction, of the annual shelter rent or carrying 6 charges of the project . Upon the consent of the local legislative body 7 of a municipality, other than a city with a population of one million or 8 more, in which the project is located, the amount of such taxes may be 9 further reduced to five per centum or less , including a full reduction, 10 of the annual shelter rent or carrying charges of the project. Any such 11 granted consent to reduce the amount of such taxes shall expire every 12 ten years. If such authorization is not renewed, the rate of taxation 13 shall revert to the level established before the consent was granted. 14 Shelter rent shall mean the total rents received from the occupants of a 15 project less the cost of providing to the occupants electricity, gas, 16 heat and other utilities. Total rents shall include rent supplements and 17 subsidies received from the federal government, the state or a munici- 18 pality on behalf of such occupants but shall not include interest 19 reduction payments pursuant to subdivision (a) of section two hundred 20 one of the Federal Housing and Urban Development Act of nineteen hundred 21 sixty-eight. The tax exemption shall operate and continue so long as the 22 mortgage loans of the company, including any additional mortgage loan 23 the proceeds of which are used primarily for the residential portion of 24 the project, which additional loan is approved by the commissioner or 25 the supervising agency, are outstanding. 26 § 2. Paragraph (c) of subdivision 1 of section 33 of the private hous- 27 ing finance law, as amended by section 2 of part L of chapter 56 of the 28 laws of 2025, is amended to read as follows: 29 (c) Notwithstanding the provisions of paragraphs (a) and (b) of this 30 subdivision, the real property of a state urban development corporation 31 project acquired, owned, constructed, managed or operated by a company 32 incorporated pursuant to the not-for-profit corporation law and this 33 article shall be entitled to all the benefits provided by section four 34 hundred twenty-two of the real property tax law. The real property of a 35 state urban development corporation project, other than a state urban 36 development corporation project acquired, owned, constructed, managed or 37 operated by a company incorporated pursuant to the not-for-profit corpo- 38 ration law and this article, shall be exempt from all local and munici- 39 pal taxes, other than assessments for local improvements, to the extent 40 of the value of the property included in such project as represents an 41 increase over the assessed valuation of the real property, both land and 42 improvements, acquired for the project on the date of its acquisition by 43 the limited-profit housing company, provided that the amount of such 44 taxes to be paid for projects located or to be located in a municipality 45 with a population of less than one million shall not be less than ten 46 per centum of the annual shelter rent or carrying charges of such 47 project, as defined in paragraph (a) hereof, except that in a city with 48 a population of one million or more, the amount of such taxes shall be 49 no more than five per centum of the annual shelter rent or carrying 50 charges of the project or, upon consent of the local legislative body, 51 the amount of such taxes may be further reduced to five per centum or 52 less, including a full reduction, of the annual shelter rent or carrying 53 charges of the project . Upon the consent of the local legislative body 54 of the municipality, other than a city with a population of one million 55 or more, in which the project is located, the amount of such taxes may 56 be further reduced to five per centum or less , including a full

S. 5662--B 3

1 reduction, of the annual shelter rent or carrying charges of the 2 project. Any such granted consent to reduce the amount of such taxes 3 shall expire every ten years. If such authorization is not renewed, the 4 rate of taxation shall revert to the level established before the 5 consent was granted. The tax exemption shall operate and continue so 6 long as the mortgage loans of such limited profit housing company, 7 including any additional mortgage loan the proceeds of which are used 8 primarily for the residential portion of the project, which additional 9 loan is approved by the commissioner or the supervising agency, are 10 outstanding and the project is continued to be operated as a limited- 11 profit housing project. If a state urban development corporation project 12 qualifying for tax exemption pursuant to this paragraph is sold, with 13 the approval of the commissioner, to another limited-profit housing 14 company, such successor company shall be entitled to all the benefits of 15 this paragraph. In the event that such sale is to a company incorporated 16 pursuant to the not-for-profit corporation law and this article, such 17 successor company shall be entitled to all the benefits provided by 18 section four hundred twenty-two of the real property tax law. 19 § 3. Paragraph (d) of subdivision 1 of section 33 of the private hous- 20 ing finance law, as amended by section 3 of part L of chapter 56 of the 21 laws of 2025, is amended to read as follows: 22 (d) Notwithstanding the provisions of paragraphs (a) and (b) of this 23 subdivision, when a project is financed with a mortgage loan pursuant to 24 this article or article three of this chapter and (i) there is a partic- 25 ipation, new loan or investment pursuant to section twenty-three-b of 26 this article or (ii) such mortgage loan is assigned, modified or satis- 27 fied pursuant to section twenty-three-a or forty-four-b or subdivision 28 twenty-two-a of section six hundred fifty-four of this chapter, the real 29 property of the project shall be exempt from all local and municipal 30 taxes, other than assessments for local improvements, to the extent of 31 the value of the real property included in such project which represents 32 an increase over the assessed valuation of the real property, both land 33 and improvements, acquired for the project on the date of its original 34 acquisition for the project by the original mortgagor under a mortgage 35 loan pursuant to this article or article three of this chapter, provided 36 that the amount of taxes to be paid on the project for projects located 37 or to be located in a municipality with a population of less than one 38 million shall not be less than ten per centum of the annual shelter rent 39 or carrying charges of such project, as defined in paragraph (a) of this 40 subdivision, except that in a city with a population of one million or 41 more, the amount of such taxes shall be no more than five per centum of 42 the annual shelter rent or carrying charges of the project or, upon 43 consent of the local legislative body, the amount of such taxes may be 44 further reduced to five per centum or less, including a full reduction, 45 of the annual shelter rent or carrying charges of the project . Upon the 46 consent of the local legislative body of the municipality, other than a 47 city with a population of one million or more, in which the project is 48 located, the amount of such taxes may be further reduced to five per 49 centum or less , including a full reduction, of the annual shelter rent 50 or carrying charges of the project. Any such granted consent to reduce 51 the amount of such taxes shall expire every ten years. If such authori- 52 zation is not renewed, the rate of taxation shall revert to the level 53 established before the consent was granted. Such tax exemption shall 54 commence in each instance from the date when the project becomes subject 55 to a mortgage insured by the federal government and shall operate and 56 continue so long as a mortgage on such project is insured or held by the

S. 5662--B 4

1 federal government or so long as the project is thereafter owned by the 2 federal government or so long as any residual indebtedness is outstand- 3 ing, whichever is longer. When there is a participation, new loan or 4 investment pursuant to section twenty-three-b of this article, such 5 participation, new loan or investment shall be deemed to be the equiv- 6 alent of a federally insured mortgage for purposes of this paragraph. 7 Nothing contained in this paragraph shall be construed to limit or 8 otherwise impair the benefits available to any company eligible for 9 exemption from taxation pursuant to section thirty-one or section thir- 10 ty-six-a of this article, section four hundred twenty-two or section 11 four hundred sixty-seven-c of the real property tax law, or section 12 fifty-eight of the public housing law. The foregoing shall not be deemed 13 to authorize any company to receive the benefits of any exemption from 14 taxation in contravention of the provisions of section two of article 15 eighteen of the constitution. 16 § 4. Subdivision 4 of section 33 of the private housing finance law, 17 as amended by section 4 of part L of chapter 56 of the laws of 2025, 18 is amended to read as follows: 19 4. Notwithstanding the provisions of subdivision one [ hereof ] of this 20 section , when a mutual company is organized under this article to facil- 21 itate the acquisition of a building by residents thereof, the amount of 22 local and municipal taxes, other than assessments for local improve- 23 ments, to be paid on the real property included in such project, both 24 land and improvements, shall not exceed twenty per centum of the annual 25 shelter rent or carrying charges of such project, as defined in para- 26 graph (a) of subdivision one [ hereof ] of this section ; provided, howev- 27 er, that where such acquisition of a building by residents thereof 28 involves the financing of rehabilitation or other improvement as well as 29 acquisition, upon the consent of the local legislative body of the muni- 30 cipality in which the project is located the amount of such taxes for 31 projects located or to be located in a municipality with a population of 32 less than one million may be further reduced provided that such amount 33 shall not be less than ten per centum of the annual shelter rent or 34 carrying charges of the project, as defined in paragraph (a) of subdivi- 35 sion one [ hereof ] of this section, or such other amount less than ten 36 per centum approved by the local legislative body of such municipality ; 37 or the company may in lieu of requesting such consent apply for the 38 benefits of the local law, if any, enacted pursuant to section four 39 hundred eighty-nine of the real property tax law. Notwithstanding any 40 other provision of this subdivision, in a city with a population of one 41 million or more, the amount of such taxes shall be no more than five per 42 centum of the annual shelter rent or carrying charges of the project or, 43 upon consent of the local legislative body, the amount of such taxes may 44 be further reduced to five per centum or less, including a full 45 reduction, of the annual shelter rent or carrying charges of the 46 project . Upon the consent of the local legislative body of the munici- 47 pality, other than a city with a population of one million or more, in 48 which the project is located, the amount of such taxes may be further 49 reduced to five per centum or less , including a full reduction, of the 50 annual shelter rent or carrying charges of the project. Any such granted 51 consent to reduce the amount of such taxes shall expire every ten years. 52 If such authorization is not renewed, the rate of taxation shall revert 53 to the level established before the consent was granted. Such tax 54 exemption, if any, granted pursuant to this article shall operate and 55 continue so long as a loan made under this article or any subsequent 56 loan approved by the commissioner or the supervising agency to enhance

S. 5662--B 5

1 the residential portion of the project and the project is continued to 2 be operated for the purposes set forth in this article is outstanding. 3 § 5. Paragraph (a-4) of subdivision 1 of section 125 of the private 4 housing finance law, as amended by chapter 430 of the laws of 2025, is 5 amended to read as follows: 6 (a-4) Any inconsistent provision of law notwithstanding, in a city 7 having a population of one million or more, where a local legislative 8 body has acted to extend the tax exemption of a mutual redevelopment 9 company for the maximum period provided for in paragraph (a-2) of this 10 subdivision, the local legislative body may grant an additional tax 11 exemption for a period of up to fifty years, provided that the amount of 12 taxes to be paid during any such period of tax exemption shall be not 13 less than an amount equal to the lesser of (i) five per centum of the 14 annual rent or carrying charges of the project minus utilities for the 15 residential portion of the project, (ii) upon the authorization of the 16 local legislative body, less than five per centum of the annual rent or 17 carrying charges of the project minus utilities for the residential 18 portion of the project, up to a full tax exemption, or [ (ii) ] (iii) the 19 taxes payable by such company for the residential portion of the project 20 during the tax year commencing July first, two thousand and ending on 21 June thirtieth, two thousand one. Such grant of an additional tax 22 exemption [ period ] shall take effect upon the expiration of the maximum 23 period provided for in paragraph (a-2) of this subdivision. 24 § 6. Subdivision 8 of section 93 of the private housing finance law, 25 as added by section 5 of part L of chapter 56 of the laws of 2025, is 26 amended to read as follows: 27 8. Notwithstanding any other provision of this section, the maximum 28 combined local and municipal taxes, other than assessments for local 29 improvements, that a project operated by a housing company established 30 pursuant to this article, and which is eligible for a tax exemption 31 pursuant to any other subdivision of this section, shall be required to 32 pay in a city with a population of one million or more shall be no more 33 than the equivalent of five per centum of the annual shelter rent or 34 carrying charges of such project or, upon consent of the local legisla- 35 tive body, the amount of such taxes may be further reduced to five per 36 centum or less, including a full reduction, of the annual shelter rent 37 or carrying charges of the project . Upon the consent of the local legis- 38 lative body of the municipality, other than a city with a population of 39 one million or more, in which the project is located, the amount of such 40 taxes may be further reduced to five per centum or less , including a 41 full reduction, of the annual shelter rent or carrying charges of the 42 project. Any such granted consent to reduce the amount of such taxes 43 shall expire every ten years. If such authorization is not renewed, the 44 rate of taxation shall revert to the level established before the 45 consent was granted. For the purposes of this subdivision, "shelter 46 rent" shall have the same meaning as such term is defined to have in 47 paragraph a of subdivision one of section thirty-three of this chapter. 48 § 7. This act shall take effect immediately.

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