NY State Senate Bill 2021-S2140

Archive: Last Bill Status - In Senate Committee Judiciary Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
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Delivered to Governor
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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 05, 2022	referred to judiciary
Jan 20, 2021	referred to judiciary

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2021-S2140 (ACTIVE) - Details

See Assembly Version of this Bill:: A2380
Current Committee:: Senate Judiciary
Law Section:: Real Property Tax Law
Laws Affected:: Add Art 4 Title 6 §§499-aaaaa & 499-bbbbb, RPT L
Versions Introduced in 2019-2020 Legislative Session:: S8904, A10936

2021-S2140 (ACTIVE) - Summary

Establishes the COVID-19 small business recovery lease act of 2021; authorizes real property tax abatements for certain properties entering into COVID-19 recovery leases in a city having a population of one million or more.

2021-S2140 (ACTIVE) - Sponsor Memo

                                
 
BILL NUMBER: S2140

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to establishing
the COVID-19 small business recovery lease act of 2021; and providing
for the repeal of such provisions upon expiration thereof

 
PURPOSE:

This bill would authorize the City of New York to enact local legis-
lation to offer property owners an abatement on their real property
taxes if they enter into recovery leases with their commercial small
business tenants.

 
SUMMARY OF PROVISIONS:

Section one of the bill creates a new Title 6 in Article 4 of the real
property tax law authorizing tax abatements to property owners entering
into COVID-19 recovery leases which limit rent increases for certain

commercial tenants.

Section 499-aaaaa of the new Title 6 sets forth definitions for what
constitutes an eligible commercial tenant, a COVID-19 recovery lease,
and the covered period. This section requires recovery leases to be
entered into within two years of the enactment of the law. These leases
must last at least ten years, and the abatement benefit period must be
no longer than ten years.

Section 499-bbbbb of the new Title 6 authorizes the City of New York to
adopt or amend any local law or ordinance to offer property tax abate-
ments when building owners enter into a recovery lease with an eligible
commercial tenant. The local law shall provide for:  standards to deter-
mine whether commercial tenants and building owners have suffered finan-
cial hardship, the maximum annual rent increases permitted in recovery
leases, duration of the tax abatement, and the way the abatement shall
be calculated.

Section two of the bill sets forth the effective date.

 
JUSTIFICATION:

New York's small businesses have been devastated by the COVID-19 pandem-
ic. Commercial rent remains, for many, the biggest single fixed cost,
other than their workforce. Even before the COVID-19 crisis, untenable
commercial rents were causing many storefronts across the city to close.
Meanwhile, spaces sat vacant for years, as some property owners sought
higher rents and higher-credit tenants. If left unaddressed, the COVID-
19 crisis is likely to result in the shuttering of many beloved small
businesses in neighborhoods throughout the city - businesses that have
served as the backbone of our communities into which owners have poured
their hearts, souls, and savings. An increase in commercial vacancies is
sure to follow, undermining retail strips and the neighbor- hoods they
anchor. While this may lead to a drop in commercial rents over time,
there is no guarantee that this would help existing tenants, already
locked into their leases, especially as more commercial land- lords
choose to leave their storefronts empty, waiting to see if a recovery
allows them to strike a higher price down the road.  Giving New York
City the authority to encourage property owners to restructure existing
leases and rent commercial spaces at affordable rates will be a lifeline
not only to the small businesses struggling to survive now, but to the
communities across New York who have seen their Main Streets vacant for
too long.

 
LEGISLATIVE HISTORY:

2020: S8904 (Kavanagh) / A10936 (Niou) -RULES/real property taxation

 
FISCAL IMPLICATIONS:

None to the state.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall expire and be deemed
repealed after a period of two years.

2021-S2140 (ACTIVE) - Bill Text download pdf

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   2140
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 20, 2021
                                ___________
 
 Introduced  by Sens. KAVANAGH, BIAGGI, GOUNARDES, HOYLMAN, KRUEGER, MAY,
   MYRIE, RIVERA, SEPULVEDA -- read twice and ordered printed,  and  when
   printed to be committed to the Committee on Judiciary
 
 AN  ACT  to amend the real property tax law, in relation to establishing
   the COVID-19 small business recovery lease act of 2021; and  providing
   for the repeal of such provisions upon expiration thereof
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "COVID-19 small business recovery lease act of 2021".
   § 2. Article 4 of the real property tax law is amended by adding a new
 title 6 to read as follows:
                                  TITLE 6
         AUTHORIZATION OF REAL PROPERTY TAX ABATEMENT FOR CERTAIN
             PROPERTIES ENTERING INTO COVID-19 RECOVERY LEASES
 SECTION 499-AAAAA. DEFINITIONS.
         499-BBBBB. REAL PROPERTY TAX ABATEMENT.
   § 499-AAAAA. DEFINITIONS. FOR THE PURPOSE OF THIS TITLE:
   1.  "ELIGIBLE  COMMERCIAL  TENANT"  SHALL  MEAN  A  SMALL BUSINESS, AS
 DEFINED BY SECTION ONE HUNDRED THIRTY-ONE OF  THE  ECONOMIC  DEVELOPMENT
 LAW,  THAT  ENTERS INTO OR SEEKS TO ENTER INTO A COVID-19 RECOVERY LEASE
 FOR PROPERTY SUCH TENANT CURRENTLY OCCUPIES, OR  FOR  PROPERTY  THAT  IS
 VACANT FOR REASONS OTHER THAN EVICTION.
   2.  "COVID-19  RECOVERY LEASE" SHALL MEAN A COMMERCIAL LEASE AGREEMENT
 THAT: (A) IS ENTERED INTO WITHIN TWO YEARS OF THE EFFECTIVE DATE OF THIS
 TITLE BETWEEN AN ELIGIBLE COMMERCIAL TENANT AND A PROPERTY OWNER,  WHERE
 EITHER THE ELIGIBLE COMMERCIAL TENANT OR THE PROPERTY OWNER HAS SUFFERED
 A  FINANCIAL  HARDSHIP  DURING THE COVID-19 COVERED PERIOD, OR BOTH HAVE
 SUFFERED SUCH A HARDSHIP; (B) HAS A TERM OF NOT LESS THAN TEN YEARS; (C)
 PROVIDES FOR ANNUAL RENT INCREASES DURING A TERM OF  NOT  LESS  THAN  AT
 LEAST  TEN  YEARS THAT DO NOT EXCEED THE AMOUNTS PERMITTED PURSUANT TO A
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD04955-01-1

 S. 2140                             2
 
 LOCAL LAW ENACTED FOR THE PURPOSE OF SETTING SUCH MAXIMUM INCREASES; (D)
 SETTLES ANY ARREARS OWED BY THE TENANT PURSUANT TO  ANY  PREVIOUS  LEASE
 AGREEMENT  FOR  THE  LEASED  PROPERTY;  AND  (E) INCLUDES ANY ADDITIONAL
 PROVISIONS THAT MAY BE REQUIRED PURSUANT TO LOCAL LAW.
   3. "BENEFIT PERIOD" SHALL MEAN THE AMOUNT OF TIME ESTABLISHED BY LOCAL
 LAW DURING WHICH AN ELIGIBLE PROPERTY SHALL RECEIVE AN ABATEMENT OF REAL
 PROPERTY  TAXES  PURSUANT  TO  SECTION FOUR HUNDRED NINETY-NINE-BBBBB OF
 THIS TITLE, PROVIDED THAT IN NO EVENT SHALL THE BENEFIT PERIOD BE LONGER
 THAN TEN YEARS.
   4. "COVID-19 COVERED PERIOD" SHALL MEAN  THE  PERIOD  BEGINNING  MARCH
 SEVENTH, TWO THOUSAND TWENTY, UNTIL THE END OF THE COVID-19 STATE DISAS-
 TER EMERGENCY DECLARED BY EXECUTIVE ORDER NUMBER TWO HUNDRED TWO AND ANY
 FURTHER  AMENDMENTS  OR  MODIFICATIONS  THERETO,  AND  AS MAY BE FURTHER
 EXTENDED PURSUANT TO SECTION TWENTY-EIGHT OF THE EXECUTIVE  LAW,  ISSUED
 IN  RESPONSE  TO  THE  COVID-19  PANDEMIC,  CONTINUES TO APPLY IN A CITY
 HAVING A POPULATION OF ONE MILLION OR MORE.
   § 499-BBBBB. REAL PROPERTY TAX ABATEMENT. 1. NOTWITHSTANDING ANY OTHER
 PROVISION OF LAW TO THE CONTRARY, A CITY  HAVING  A  POPULATION  OF  ONE
 MILLION  OR  MORE MAY, BY ADOPTING OR AMENDING A LOCAL LAW, OFFER ABATE-
 MENTS OF REAL PROPERTY TAXES DURING A PRESCRIBED BENEFIT PERIOD TO PROP-
 ERTIES IN WHICH THE PROPERTY OWNER ENTERS INTO A RECOVERY LEASE WITH  AN
 ELIGIBLE  COMMERCIAL  TENANT.  SUCH LOCAL LAW SHALL PROVIDE FOR: (A) THE
 MANNER IN WHICH IT SHALL BE DETERMINED WHETHER  AN  ELIGIBLE  COMMERCIAL
 TENANT  OR A PROPERTY OWNER HAS SUFFERED A FINANCIAL HARDSHIP DURING THE
 COVID-19 COVERED PERIOD; (B) THE MAXIMUM ANNUAL RENT INCREASES PERMITTED
 DURING THE TERM OF A RECOVERY LEASE; (C) THE  DURATION  OF  THE  BENEFIT
 PERIOD;  (D)  THE  MANNER  IN WHICH THE AMOUNT OF THE ABATEMENT SHALL BE
 CALCULATED; AND (E) ANY OTHER TERMS AND CONDITIONS THE CITY DEEMS NECES-
 SARY TO EFFECTUATE THE PURPOSES OF THIS TITLE. SUCH LOCAL LAW  MAY  ALSO
 PROVIDE  FOR A MAXIMUM AGGREGATE VALUE OF ALL TAX ABATEMENTS THAT MAY BE
 GRANTED UNDER THIS TITLE.
   2. IN NO EVENT SHALL AN  ABATEMENT  GRANTED  PURSUANT  TO  THIS  TITLE
 EXCEED  THE  TAX  LIABILITY  OF  THE PROPERTY FOR WHICH THE ABATEMENT IS
 GRANTED.
   § 3. This act shall take effect immediately and shall  expire  and  be
 deemed repealed 12 years after it shall have become a law.

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Senate Bill S2140

Sponsored By

Archive: Last Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

2021-S2140 (ACTIVE) - Details

2021-S2140 (ACTIVE) - Summary

2021-S2140 (ACTIVE) - Sponsor Memo

2021-S2140 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S2140

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Sponsored By

Archive: Last Bill Status - In Senate Committee Judiciary Committee

co-Sponsors

2021-S2140 (ACTIVE) - Details

2021-S2140 (ACTIVE) - Summary

2021-S2140 (ACTIVE) - Sponsor Memo

2021-S2140 (ACTIVE) - Bill Text download pdf

Comments