S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  9541--A
 
                           I N  A S S E M B L Y
 
                             January 19, 2018
                                ___________
 
 Introduced by M. of A. THIELE -- read once and referred to the Committee
   on  Local  Governments  -- committee discharged, bill amended, ordered
   reprinted as amended and recommitted to said committee
 
 AN ACT to amend the town law and the tax law, in relation to authorizing
   towns in the Peconic Bay  region  to  establish  a  community  housing
   revolving  fund,  to  be funded by a supplemental real estate transfer
   tax
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. This act may be known and cited as the "Peconic Bay Region
 Community Housing Revolving Fund Act".
   § 2. Legislative findings. The legislature hereby finds that  critical
 to  the  future  of  the  Peconic Bay region is the need for an adequate
 supply of housing opportunities for all  segments  of  the  Peconic  Bay
 community.
   The adverse impact resulting from the lack of housing opportunities is
 severe.  Local  employers  are  having  difficulty  hiring and retaining
 employees because of housing costs  and  availability.  Local  volunteer
 emergency  services  agencies are experiencing difficulty in recruitment
 and retention. Long-time residents are forced to leave the area. Traffic
 congestion is intensified by the importation of labor  from  areas  with
 lower  housing  costs.  Finally,  the  lack  of housing opportunities is
 resulting in residents being forced  to  live  in  substandard,  illegal
 conditions.
   The  unique demographics and economics in the Peconic Bay region and a
 lack of affordable dwelling units are contributing to this housing shor-
 tage. The combination of the Peconic Bay region's attractiveness,  prox-
 imity  to  the dense population of the New York metropolitan region, and
 proximity to that region's extraordinary wealth, makes the  Peconic  Bay
 region a prime location for seasonal and luxury homes. While this combi-
 nation  of  extraordinary  attractiveness,  population  and  wealth  has
 created a strong local economy  for  the  Peconic  Bay  region,  it  has
 resulted  in  housing  problems  for  local families. In the Peconic Bay
 region, more than 40% of all housing units are seasonal.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD13851-05-8

 A. 9541--A                          2
 
   In summary, the demand of land  for  luxury  and  seasonal  homes  and
 seasonal  rentals  has  left a short supply of housing opportunities for
 moderate income and working class local residents. The implementation of
 the new federal tax bill will only exacerbate this problem by making  it
 more  difficult for homebuyers with the $10,000 cap on the deductibility
 of state and local taxes and the reduced mortgage interest deduction  on
 new  mortgages.  The  Peconic Bay region needs a balanced housing policy
 where there exists a variety of housing types and  opportunities  across
 the region's economic spectrum.
   It is the purpose of this legislation, to give the towns of the Pecon-
 ic  Bay  region  the authority and resources needed to establish housing
 opportunities. This legislation would permit each town  to  establish  a
 dedicated  community housing revolving fund to increase housing opportu-
 nities in the region. Specifically, towns would be permitted to  provide
 loans  to  those residents and families below the median income level of
 the town who are first time home buyers. Said loans would be up  to  50%
 of  the  cost  of the house. Such a loan would permit more residents and
 families to access the existing  housing  market.  Said  loan  would  be
 repaid upon any future sale of  the dwelling. The repayment amount would
 be  equal to an amount in proportion to the resale price as the original
 proportion of the loan to the original sale price.
   This program would provide funding to increase housing  opportunities.
 It  would also permit families under the program to enjoy a proportional
 benefit in the equity of their  new  home.  Finally,  upon  resale,  the
 town's  proportional  interest  would be returned to the fund to finance
 future housing opportunities.
   Said fund would be financed by a combination of state and local funds,
 including a 0.5% real estate transfer tax, which would be in addition to
 the existing 2% real estate transfer tax  for  the  Peconic  Bay  region
 community preservation fund.
   §  3.  The town law is amended by adding a new section 64-k to read as
 follows:
   § 64-K. PECONIC BAY REGION COMMUNITY HOUSING REVOLVING FUND ACT.    1.
 DEFINITIONS.  AS  USED  IN  THIS  SECTION, THE FOLLOWING WORDS AND TERMS
 SHALL HAVE THE FOLLOWING MEANINGS:
   A. "PECONIC BAY REGION" MEANS THE TOWNS OF  EAST  HAMPTON,  RIVERHEAD,
 SHELTER ISLAND, SOUTHAMPTON, AND SOUTHOLD.
   B. "HOUSING" MEANS A PRIMARY RESIDENTIAL PROPERTY FOR A HOUSEHOLD WITH
 AN  INCOME THAT DOES NOT EXCEED ONE HUNDRED PERCENT OF THE INCOME LIMITS
 WHERE THE PURCHASE PRICE OF THE PRIMARY RESIDENTIAL  PROPERTY  DOES  NOT
 EXCEED  ONE  HUNDRED  FIFTY  PERCENT  OF  THE PURCHASE PRICE LIMITS. THE
 INCOME LIMITS AND PURCHASE PRICE LIMITS SHALL BE AS ESTABLISHED  BY  THE
 STATE  OF  NEW  YORK  MORTGAGE  AGENCY LOW INTEREST RATE LOAN PROGRAM IN
 NON-TARGET CATEGORIES FOR SUFFOLK COUNTY IN EFFECT ON THE CONTRACT  DATE
 FOR THE SALE OF SUCH PROPERTY.
   C. "FUND" MEANS THE COMMUNITY HOUSING REVOLVING FUND AUTHORIZED PURSU-
 ANT TO THIS SECTION.
   D. "FIRST HOME" MEANS A PERSON WHO HAS NOT OWNED A PRIMARY RESIDENTIAL
 PROPERTY  AND  IS  NOT  MARRIED  TO A PERSON WHO HAS OWNED A RESIDENTIAL
 PROPERTY DURING THE THREE-YEAR PERIOD PRIOR TO HIS OR  HER  PURCHASE  OF
 THE  PRIMARY  RESIDENTIAL  PROPERTY,  AND WHO DOES NOT OWN A VACATION OR
 INVESTMENT HOME.
   E. "PRIMARY RESIDENTIAL PROPERTY" MEANS ANY ONE OR TWO  FAMILY  HOUSE,
 TOWNHOUSE, OR CONDOMINIUM.
   2.  FUND  AUTHORIZED.  THE  TOWN  BOARD OF ANY TOWN IN THE PECONIC BAY
 REGION IS AUTHORIZED TO ESTABLISH  BY  LOCAL  LAW  A  COMMUNITY  HOUSING

 A. 9541--A                          3
 
 REVOLVING  FUND,  PURSUANT  TO  THE PROVISIONS OF THIS SECTION. DEPOSITS
 INTO THE FUND MAY INCLUDE REVENUES OF THE LOCAL GOVERNMENT FROM WHATEVER
 SOURCE, INCLUDING BUT NOT LIMITED TO:
   A. ALL REVENUES FROM THE SUPPLEMENTAL REAL ESTATE TRANSFER TAX AUTHOR-
 IZED BY SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED FORTY-NINE-BB OF THE
 TAX LAW;
   B.  GENERAL  FUND  APPROPRIATIONS,  INCLUDING GENERAL FUND BALANCES OR
 SURPLUSES;
   C. THE REPAYMENT OF ANY LOANS ISSUED FROM PROCEEDS OF THE FUND;
   D. ANY GIFTS OF INTERESTS IN LAND OR FUNDS; AND
   E. ANY STATE OR FEDERAL GRANTS RECEIVED  BY  THE  TOWN  FOR  PROVIDING
 AFFORDABLE HOMES.
   3. FUND MANAGEMENT. INTEREST ACCRUED BY MONIES DEPOSITED INTO THE FUND
 SHALL  BE  CREDITED TO THE FUND. IN NO EVENT SHALL MONIES DEPOSITED INTO
 THE FUND BE TRANSFERRED TO ANY OTHER ACCOUNT. NOTHING CONTAINED IN  THIS
 SECTION SHALL BE CONSTRUED TO PREVENT THE FINANCING IN WHOLE OR IN PART,
 PURSUANT TO THE LOCAL FINANCE LAW, OF ANY PURPOSE AUTHORIZED PURSUANT TO
 THIS SECTION. MONIES FROM THE FUND MAY BE UTILIZED TO REPAY INDEBTEDNESS
 OR  OBLIGATIONS  INCURRED  PURSUANT  TO THE LOCAL FINANCE LAW CONSISTENT
 WITH EFFECTUATING THE PURPOSES OF THIS SECTION.
   4. PURPOSES OF THE FUND. THE PROCEEDS OF THE FUND ESTABLISHED PURSUANT
 TO THIS SECTION SHALL BE UTILIZED:
   A. FOR THE PROVISION OF LOANS TO ELIGIBLE RESIDENTS OF  THE  TOWN  FOR
 THE PURCHASE OF A FIRST HOME PURSUANT TO THE PROVISIONS OF THIS SECTION,
 AND
   B.  THE  PROVISION  OF  HOUSING  COUNSELING SERVICES BY NOT-FOR-PROFIT
 CORPORATIONS WHO ARE AUTHORIZED BY THE U.S. DEPARTMENT  OF  HOUSING  AND
 URBAN DEVELOPMENT TO PROVIDE SUCH SERVICES.
   5.  A  TOWN  MAY  MAKE  A  LOAN  TO A RESIDENT OF THE TOWN OR A PERSON
 EMPLOYED IN THE TOWN FOR THE PURCHASE OF A FIRST HOME. SAID  LOAN  SHALL
 NOT  EXCEED  FIFTY  PERCENT OF THE PURCHASE PRICE OF THE HOME. SAID LOAN
 SHALL BE REPAYABLE TO THE TOWN UPON THE RE-SALE OF THE HOME. THE  REPAY-
 MENT  TO  THE  TOWN  SHALL  BE  AN AMOUNT EQUAL TO THE PROPORTION OF THE
 ORIGINAL LOAN FROM THE TOWN TO THE ORIGINAL PURCHASE PRICE TO THE RESALE
 PRICE MULTIPLIED BY THE RE-SALE PURCHASE PRICE.
   6. FOR THE PURPOSES OF CALCULATING TOWN TAX LIABILITY FOR SUCH PROPER-
 TY, ONLY, THE DOLLAR AMOUNT OF ANY LOAN FOR THE PURCHASE OF A FIRST HOME
 MADE BY THE TOWN PURSUANT TO THIS SECTION SHALL BE SUBTRACTED  FROM  THE
 FULL EQUALIZED ASSESSED VALUE OF SUCH PROPERTY.
   7. ALL REVENUES RECEIVED BY THE TOWN FROM THE REPAYMENT OF LOANS SHALL
 BE DEPOSITED IN THE FUND.
   8.  THE  TOWN MAY GIVE A PRIORITY TO PERSONS WHO (A) SERVE AS A VOLUN-
 TEER IN AN EMERGENCY SERVICES AGENCY, (B) SERVE  AS  A  VOLUNTEER  IN  A
 NOT-FOR-PROFIT  HEALTH  OR  HUMAN SERVICES AGENCY, OR ARE (C) TOWN RESI-
 DENTS, VETERANS, ACTIVE DUTY MILITARY OR EMPLOYED BY THE TOWN.
   9. THE TOWN SHALL HAVE THE AUTHORITY TO ENACT RULES AND REGULATIONS TO
 FACILITATE THE PROVISIONS AND PURPOSES OF THIS SECTION.
   § 4. Section 1449-bb of the tax law, as added by chapter  114  of  the
 laws of 1998, is amended to read as follows:
   §  1449-bb. Imposition of tax. 1. Notwithstanding any other provisions
 of law to the contrary, any town  in  the  Peconic  Bay  region,  acting
 through  its  town  board, is hereby authorized and empowered to adopt a
 local law imposing in such town a tax on each conveyance of real proper-
 ty or interest therein where  the  consideration  exceeds  five  hundred
 dollars,  at  the  rate  of  two  percent  of the consideration for such
 conveyance.  Provided, however, any such local law  imposing,  repealing

 A. 9541--A                          4
 
 or reimposing such tax shall be subject to a mandatory referendum pursu-
 ant  to  section  twenty-three  of the municipal home rule law. Notwith-
 standing the foregoing, prior to adoption of such local  law,  the  town
 must  establish a community preservation fund pursuant to section sixty-
 four-e of the town law. Revenues from such tax  shall  be  deposited  in
 such  fund  and  may  be used solely for the purposes of such fund. Such
 local law shall apply to any conveyance occurring on or after the  first
 day  of  a  month to be designated by such town board, which is not less
 than sixty days after the enactment of such local  law,  but  shall  not
 apply  to  conveyances  made  on  or after such date pursuant to binding
 written contracts entered into prior to such  date,  provided  that  the
 date  of execution of such contract is confirmed by independent evidence
 such as the recording of the contract, payment of  a  deposit  or  other
 facts and circumstances as determined by the treasurer.
   2.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS OF LAW TO THE CONTRARY, IN
 ADDITION TO THE TAX AUTHORIZED BY SUBDIVISION ONE OF THIS  SECTION,  ANY
 TOWN IN THE PECONIC BAY REGION, ACTING THROUGH ITS TOWN BOARD, IS HEREBY
 AUTHORIZED  AND  EMPOWERED  TO ADOPT A LOCAL LAW IMPOSING IN SUCH TOWN A
 SUPPLEMENTAL TAX ON EACH CONVEYANCE OF REAL PROPERTY OR INTEREST THEREIN
 WHERE THE CONSIDERATION EXCEEDS FIVE HUNDRED DOLLARS, AT THE RATE OF ONE
 HALF OF ONE PERCENT OF THE CONSIDERATION FOR SUCH CONVEYANCE.  PROVIDED,
 HOWEVER,  ANY  SUCH  LOCAL  LAW  IMPOSING,  REPEALING OR REIMPOSING SUCH
 SUPPLEMENTAL TAX SHALL BE SUBJECT TO A MANDATORY REFERENDUM PURSUANT  TO
 SECTION TWENTY-THREE OF THE MUNICIPAL HOME RULE LAW. NOTWITHSTANDING THE
 FOREGOING,  PRIOR TO ADOPTION OF SUCH LOCAL LAW, THE TOWN MUST ESTABLISH
 A COMMUNITY HOUSING REVOLVING FUND PURSUANT TO SECTION  SIXTY-FOUR-K  OF
 THE  TOWN LAW. REVENUES FROM SUCH SUPPLEMENTAL TAX SHALL BE DEPOSITED IN
 SUCH FUND AND MAY BE USED SOLELY FOR THE PURPOSES OF SUCH  FUND.    SUCH
 LOCAL  LAW SHALL APPLY TO ANY CONVEYANCE OCCURRING ON OR AFTER THE FIRST
 DAY OF A MONTH TO BE DESIGNATED BY SUCH TOWN BOARD, WHICH  IS  NOT  LESS
 THAN  SIXTY  DAYS  AFTER  THE ENACTMENT OF SUCH LOCAL LAW, BUT SHALL NOT
 APPLY TO CONVEYANCES MADE ON OR AFTER  SUCH  DATE  PURSUANT  TO  BINDING
 WRITTEN  CONTRACTS  ENTERED  INTO  PRIOR TO SUCH DATE, PROVIDED THAT THE
 DATE OF EXECUTION OF SUCH CONTRACT IS CONFIRMED BY INDEPENDENT  EVIDENCE
 SUCH  AS  THE  RECORDING  OF THE CONTRACT, PAYMENT OF A DEPOSIT OR OTHER
 FACTS AND CIRCUMSTANCES AS DETERMINED BY THE TREASURER.
   § 5. Subdivision 3 of section 1449-ee of the  tax  law,  as  added  by
 chapter 114 of the laws of 1998, is amended to read as follows:
   3.  (a)  In the towns of East Hampton, Shelter Island and Southampton,
 an exemption of two hundred fifty thousand dollars shall be  allowed  on
 the  consideration  of  the  conveyance  of improved real property or an
 interest therein and an exemption of one hundred thousand dollars  shall
 be  allowed  on  the  consideration of the conveyance of unimproved real
 property.   THIS EXEMPTION SHALL  NOT  APPLY  TO  ANY  SUPPLEMENTAL  TAX
 IMPOSED  PURSUANT  TO SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED FORTY-
 NINE-BB OF THIS ARTICLE.
   (b) In the towns of  Riverhead  and  Southold,  an  exemption  of  one
 hundred  fifty thousand dollars shall be allowed on the consideration of
 the conveyance of improved real property or an interest therein  and  an
 exemption  of  seventy-five  thousand  dollars  shall  be allowed on the
 consideration of the conveyance  of  unimproved  real  property.    THIS
 EXEMPTION  SHALL  NOT  APPLY TO ANY SUPPLEMENTAL TAX IMPOSED PURSUANT TO
 SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED FORTY-NINE-BB OF THIS  ARTI-
 CLE.
   (C)  IN  THE TOWNS OF EAST HAMPTON, SHELTER ISLAND AND SOUTHAMPTON, AN
 EXEMPTION FROM THE TAX IMPOSED PURSUANT TO SUBDIVISION  TWO  OF  SECTION

 A. 9541--A                          5
 
 FOURTEEN  HUNDRED  FORTY-NINE-BB  OF  THIS  ARTICLE IN THE AMOUNT OF ONE
 MILLION DOLLARS SHALL BE ALLOWED ON THE CONSIDERATION OF THE  CONVEYANCE
 OF  IMPROVED  REAL  PROPERTY  OR AN INTEREST THEREIN AND AN EXEMPTION OF
 FIVE  HUNDRED  THOUSAND DOLLARS SHALL BE ALLOWED ON THE CONSIDERATION OF
 THE CONVEYANCE OF UNIMPROVED REAL PROPERTY.
   (D) IN THE TOWNS OF RIVERHEAD AND SOUTHOLD, AN EXEMPTION FROM THE  TAX
 IMPOSED  PURSUANT  TO SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED FORTY-
 NINE-BB OF THIS ARTICLE IN THE AMOUNT OF SEVEN HUNDRED THOUSAND  DOLLARS
 SHALL BE ALLOWED ON THE CONSIDERATION OF THE CONVEYANCE OF IMPROVED REAL
 PROPERTY  OR AN INTEREST THEREIN AND AN EXEMPTION OF THREE HUNDRED FIFTY
 THOUSAND DOLLARS SHALL BE ALLOWED ON THE CONSIDERATION OF THE CONVEYANCE
 OF UNIMPROVED REAL PROPERTY.
   § 6. Severability clause. If any provision of this act or  application
 thereof  shall  for  any  reason  be  adjudged by any court of competent
 jurisdiction to be invalid, such judgment shall not affect,  impair,  or
 invalidate the remainder of the act, but shall be confined in its opera-
 tion  to  the  provision thereof directly involved in the controversy in
 which the judgment shall have been rendered.
   § 7. This act shall take effect immediately; provided,  however,  that
 the  amendments  to  section 1449-bb of the tax law and subdivision 3 of
 section 1449-ee of the tax law, made by sections four and five  of  this
 act,  respectively,  shall  not affect the repeal of article 31-D of the
 tax law and shall be deemed to be repealed therewith.