senate Bill S5022

Signed by Governor

Authorizes the city of Middletown to enter into a contract to use delinquent tax liens as collateral for a loan

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Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed by Governor
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actions

  • 06 / May / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 30 / May / 2013
    • 1ST REPORT CAL.841
  • 03 / Jun / 2013
    • 2ND REPORT CAL.
  • 04 / Jun / 2013
    • ADVANCED TO THIRD READING
  • 05 / Jun / 2013
    • HOME RULE REQUEST
  • 05 / Jun / 2013
    • PASSED SENATE
  • 05 / Jun / 2013
    • DELIVERED TO ASSEMBLY
  • 05 / Jun / 2013
    • REFERRED TO WAYS AND MEANS
  • 18 / Jun / 2013
    • SUBSTITUTED FOR A6731
  • 18 / Jun / 2013
    • ORDERED TO THIRD READING RULES CAL.336
  • 18 / Jun / 2013
    • HOME RULE REQUEST
  • 18 / Jun / 2013
    • PASSED ASSEMBLY
  • 18 / Jun / 2013
    • RETURNED TO SENATE
  • 01 / Nov / 2013
    • DELIVERED TO GOVERNOR
  • 13 / Nov / 2013
    • SIGNED CHAP.510

Summary

Authorizes the city of Middletown to enter into a contract to use delinquent tax liens as collateral for a loan.

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Bill Details

See Assembly Version of this Bill:
A6731
Versions:
S5022
Legislative Cycle:
2013-2014
Law Section:
Taxation
Versions Introduced in 2013-2014 Legislative Cycle:
A6731

Sponsor Memo

BILL NUMBER:S5022 REVISED MEMO 06/03/2013

TITLE OF BILL: An act to authorize the city of Middletown to enter into
a contract to sell or pledge as collateral for a loan some or all of the
delinquent liens held by such city to a private party or engage a
private party to collect some or all of the delinquent tax liens held by
it

PURPOSE OR GENERAL IDEA OF BILL:

To expand the options available to the City of Middletown to efficiently
and effectively manage the collection of delinquent property taxes and
to increase revenues to the city.

SUMMARY OF SPECIFIC PROVISIONS:

Sections 1 & 2.

Permits the city of Middletown, under enumerated circumstances, to enter
into a contract to sell some or all of their delinquent tax liens to a
private party and for the City of Middletown to enter into a contract to
collect some or all of the delinquent tax liens held by such city to a
private party. Provides "consumer protections" for affected property
owners, including a requirement for thirty days notification, assurance
that the existing redemption periods and interest rates remain
unchanged, and imposition of the procedural requirements relating to
foreclosure of a mortgage or tax lien sale by the Municipal Bond Bank
Agency.

Section 3. Effective date.

EXISTING LAW:

Municipalities must request enacting legislation to enable the sale of
delinquent tax liens to private parties and the city was granted special
legislation in 2009 (Chapter 104 of 2009).

JUSTIFICATION:

This legislation was introduced at the request of the City of Middle-
town. Similar legislation had been signed into law in 2009 (Chapter 104
of the Laws of 2009) but has since expired. Since that time, the City of
Middletown has accumulated numerous liens and has decided that it is in
their best interest to again sell their tax liens to a private party.

PRIOR LEGISLATIVE HISTORY:

This is a new bill, however, similar legislation was signed into law in
2009 (Chapter 104 of the Laws of 2009).

FISCAL IMPLICATIONS:

None to the State.

EFFECTIVE DATE:

This act shall take effect immediately.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5022

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                               May 6, 2013
                               ___________

Introduced  by  Sen. BONACIC -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to authorize the city of Middletown to enter into a  contract  to
  sell  or pledge as collateral for a loan some or all of the delinquent
  liens held by such city to a private party or engage a  private  party
  to collect some or all of the delinquent tax liens held by it

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Notwithstanding any provision of any  general,  special  or
local  law  to  the  contrary,  the  city of Middletown may enter into a
contract to sell some or all of the delinquent tax liens held by it to a
private party, subject to the following conditions:
  (a) The consideration to be paid for a  sale  of  the  delinquent  tax
liens  held  by  it  may be more or less than the face amount of the tax
liens sold.
  (b) Property owners shall be given at least 30 days advance notice  of
sale  in  the  same  form  and manner as is provided by subdivision 2 of
section 1190 of the real property  tax  law.  Failure  to  provide  such
notice  or the failure of the addressee to receive the same shall not in
any way affect the validity of any sale of a tax lien or  tax  liens  or
the  validity  of  the  taxes or interest prescribed by law with respect
thereto.
  (c) The city of Middletown shall set the terms and conditions  of  the
contract of sale or loan.
  (d)  The  tax lien purchaser must 30 days prior to the commencement of
any foreclosure action provide to the city of Middletown a list of liens
to be foreclosed. The city of Middletown may, at  its  sole  option  and
discretion,  repurchase a lien or liens on the foreclosure list from the
tax lien purchaser. The repurchase price shall be the amount of the lien
or liens plus any accrued interest and collection fees incurred  by  the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10323-01-3

S. 5022                             2

tax lien purchaser through the date of repurchase. The tax lien purchas-
er  shall  provide the foreclosure list to the city of Middletown, along
with the applicable repurchase price of each lien,  by  certified  mail,
and the city of Middletown shall have 30 days from receipt to notify the
tax  lien  purchaser of its option to purchase one or more of the liens.
If the city of Middletown opts to purchase the lien,  it  shall  provide
payment  within  30 days of receipt of the repurchase price of said lien
or liens. If the city of Middletown shall fail to repurchase the lien or
liens the tax lien purchaser shall have the right to commence a foreclo-
sure action immediately upon notice from the city of Middletown  of  its
refusal  or  at  the  expiration  of  the 30 day review period whichever
occurs first.
  (e) The sale of a tax lien pursuant to this act shall not  operate  to
shorten  the otherwise applicable redemption period or change the other-
wise applicable interest rate.
  (f) Upon the expiration of the redemption period  prescribed  by  law,
the  purchaser  of  a delinquent tax lien, or its successors or assigns,
may foreclose the lien as in  an  action  to  foreclose  a  mortgage  as
provided  in section 1194 of the real property tax law. The procedure in
such action shall be the procedure prescribed by article 13 of the  real
property  actions  and proceedings law for the foreclosure of mortgages.
At any time following the commencement of an action to foreclose a lien,
the amount required to redeem the lien, or the amount received upon sale
of a property, shall include reasonable and necessary collection  costs,
attorneys' fees, legal costs, allowances, and disbursements.
  (g)  The  provisions of title 5 of article 11 of the real property tax
law shall apply so far as is practicable to a contract for the  sale  of
tax liens pursuant to this act.
  S  2.  Notwithstanding  any provision of any general, special or local
law to the contrary, the city of Middletown may enter into a contract to
pledge as collateral for a loan some or all of the delinquent tax  liens
held  by  it to a third party or engage a third party to collect some or
all of the delinquent tax liens held by  it  subject  to  the  following
conditions:
  (a)  Any  loan provided under this section shall bear an interest rate
to be determined by the city of Middletown.
  (b) Any contract for the collection of delinquent tax  liens  the  fee
paid  by  the city of Middletown shall not exceed 10% of the outstanding
balance of the tax lien being collected and said fee shall be  borne  by
the delinquent taxpayer.
  S 3. This act shall take effect immediately.

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