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.