NY State Senate Bill 2023-S606

Archive: Last Bill Status - In Senate Committee Local Government Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to local government
Jan 05, 2023	referred to local government

co-Sponsors

2023-S606 (ACTIVE) - Details

Current Committee:: Senate Local Government
Law Section:: Real Property Tax Law
Laws Affected:: Amd §§924-a, 936 & 1112, RPT L
Versions Introduced in Other Legislative Sessions:: 2019-2020: S4676
2021-2022: S2845
2025-2026: S69

2023-S606 (ACTIVE) - Summary

Relates to authorizing counties to set interest rates imposed on late payment of property taxes and delinquencies and redemption of property subject to more than one tax lien.

2023-S606 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S606

SPONSOR: KAVANAGH
 
TITLE OF BILL:

An act to amend the real property tax law, in relation to certain inter-
est rates imposed on late payment of taxes and delinquencies and redemp-
tion of certain property subject to more than one tax lien

 
PURPOSE OF THE BILL:

The bill provides relief for owners of owner-occupied one-, two- and
three-family residential properties who fall behind on their taxes by
waiving a 5% penalty that currently applies, providing for lower inter-
est rates, and enabling them to more easily delay and ultimately prevent
foreclosure and sale of their properties by making partial payments of
their outstanding liabilities as their finances permit.  The bill will
also give counties the flexibility to set lower rates of interest on
unpaid taxes on other types of properties to enable them to respond to
the economic circumstances of their communities.

 
SUMMARY OF PROVISIONS:

Section 1 amends subdivision 1 of section 924-a of the real property tax
law to establish that the amount of interest added onto late property
tax payments received after the interest-free period and all delinquent
taxes can be different than the amount determined pursuant to subdivi-
sion two and two-a of section 924-a of the real property tax law as
provided by a local law adopted by a county; this provision extends to
counties an authority that is already available to cities.

Section 2 amends section 936 of the real property tax law to remove
subsection two and establish that a five percent charge that is other-
wise added to unpaid taxes shall not be applied to owner-occupied one-,
two-, or three-family residential property as defined by Real Property
Law.

Section 3 amends subdivision 1 and paragraph a of subdivision 2 of
section 1112 of the real property law to establish that liens shall be
redeemed in chronological order so that the earliest lien is redeemed
first and that the enforcement process shall otherwise continue as long
as at least one lien remains unredeemed for three or more years.

Section 4 amends subdivision 2 of section 924-a to establish that the
12% minimum interest rate otherwise applicable to late property tax
payments shall not apply to owner-occupied one-, two-, and three-family
residential property; instead, a lower minimum rate of 7.5% shall apply
as prescribed.

Section 5 establishes the effective date.

 
JUSTIFICATION:

Under current law, property owners who fall behind on their property
taxes must pay a high rate of interest, plus a 5% penalty. The interest
rate is set by the Commissioner of Tax and Finance but may not be less
than 12%. This amount may have seemed more reasonable in the 1970s when
the prime rate was above 10%, but today, with the prime rate hovering in
the low single digits, a minimum of 12% is a very high rate. While
cities are permitted to adopt a local law to set a different interest
rate, counties cannot. Moreover, when tax liens are issued for delin-
quent taxes, any payments property owners make are required to be
applied to the most recent tax lien, but the age of the oldest pending
lien determines whether they will lose their property for non-payment of
taxes. These provisions apply equally to large commercial or residential
properties and small owner-occupied residential dwellings.

This bill gives counties the option of setting interest rates for all
late or delinquent taxes at a level different from the statewide rate,
including a rate lower than the 12% minimum. This will increase the
ability of county governments to respond to the economic circumstances
of their communities.

In addition, the bill provides relief for owners of owner-occupied one,
two and three-family residential properties who fall behind in their
taxes. For such small residential properties, the bill waives the 5%
penalty mentioned above, provides for a lower interest rate (with a 7.5%
minimum rather than 12%), and requires that any payments made for delin-
quent taxes will be applied to the oldest pending lien rather than the
most recent. This last provision would mean that owners of small owner-
occupied residential properties would not need to pay all back taxes in
order to save their home from being foreclosed upon and sold. Those who
are able to recover from financial hardships enough to pay their current
year's taxes and one additional year will gain additional time to satis-
fy any remaining liens and increase the likelihood that they can remain
in their home.

 
LEGISLATIVE HISTORY:

2022: S2846 (Kavanagh) - LOCAL GOVERNMENT:

2020: S4676B (Kavanagh) -ADVANCED TO THIRD READING, RULES

2019: S4676A (Kavanagh) - LOCAL GOVERNMENT:

 
FISCAL IMPLICATIONS TO THE STATE:

None.

 
EFFECTIVE DATE:
This act shall take effect on the ninetieth day after it shall have
become a law.

2023-S606 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    606
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                              January 5, 2023
                                ___________
 
 Introduced  by Sens. KAVANAGH, HARCKHAM -- read twice and ordered print-
   ed, and when printed to be committed to the Committee on Local Govern-
   ment
 
 AN ACT to amend the real property tax law, in relation to certain inter-
   est rates imposed on late  payment  of  taxes  and  delinquencies  and
   redemption of certain property subject to more than one tax lien
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Subdivision 1 of section 924-a of  the  real  property  tax
 law, as amended by chapter 26 of the laws of 2003, is amended to read as
 follows:
   1.  The amount of interest to be added on all taxes received after the
 interest free period and all delinquent taxes shall be  one-twelfth  the
 rate  of  interest as determined pursuant to subdivision two or two-a of
 this section rounded to the nearest one-hundredth of a percentage point,
 except as otherwise provided by a general or special law, or a local law
 adopted by a city pursuant to the municipal home rule law or any special
 law OR BY A LOCAL LAW ADOPTED BY A COUNTY.  Such interest shall be added
 for each month or fraction thereof until such taxes are paid.
   § 2. Section 936 of the real property tax law, as amended  by  chapter
 237  of the laws of 1995, subdivision 1 as amended by chapter 355 of the
 laws of 1997, is amended to read as follows:
   § 936. Return of unpaid delinquent taxes.  1. Upon the  expiration  of
 his warrant, each collecting officer shall make and deliver to the coun-
 ty  treasurer  an  account, subscribed and affirmed by him as true under
 the penalties of perjury, of all taxes listed  on  the  tax  roll  which
 remain  unpaid, except that such collecting officer shall not include in
 such account the amount of the installments  of  taxes  returned  unpaid
 pursuant  to [section nine hundred twenty-eight-b or] subdivision one of
 section nine hundred seventy-six of this chapter. The  county  treasurer
 shall,  if  satisfied  that such account is correct, credit him with the
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD02409-01-3

 S. 606                              2
 
 amount of such unpaid delinquent taxes. Such return  shall  be  endorsed
 upon or attached to the tax roll.
   2.  In making the return of unpaid taxes, the collecting officer shall
 add five per centum to the amount of each tax as levied.  In  the  event
 that  the  collecting officer fails to do so, the county treasurer shall
 make such addition. In a county in which there is a local law in  effect
 pursuant  to  [section  nine  hundred  twenty-eight-b  or]  section nine
 hundred seventy-two of this chapter  providing  for  the  collection  of
 taxes  in installments, the five per centum provided by this subdivision
 shall not be added to the taxes which a real property owner has  elected
 to  pay in installments pursuant to [section nine hundred twenty-eight-b
 or] section nine hundred seventy-five of this  chapter.  Such  five  per
 centum  shall  be  added  by  the county treasurer to the amount of such
 taxes as shall have remained unpaid after the date upon which  the  last
 installment  was due as provided in such local law. SUCH FIVE PER CENTUM
 SHALL NOT BE ADDED WHERE THE  TAXABLE  REAL  PROPERTY  UPON  WHICH  SUCH
 UNPAID  TAX  WAS  LEVIED  IS  AN  OWNER OCCUPIED RESIDENTIAL PROPERTY AS
 DEFINED BY SECTION ELEVEN HUNDRED ELEVEN OF THIS CHAPTER. The amount  of
 such  added  per centum shall thereafter be deemed part of the amount of
 the unpaid tax.
   § 3. Subdivision 1 and paragraph (a) of subdivision 2 of section  1112
 of  the  real property tax law, as amended by chapter 532 of the laws of
 1994, are amended to read as follows:
   1. (A) When a tax district holds more than  one  tax  lien  against  a
 parcel,  the  liens  need  not  be redeemed simultaneously. However, the
 liens must be redeemed in reverse chronological order, so that the  lien
 with  the most recent lien date is redeemed first, and the lien with the
 earliest lien date is redeemed last. Notwithstanding the  redemption  of
 one  or  more  of  the  liens  against  a parcel as provided herein, the
 enforcement process shall proceed according to the  provisions  of  this
 article as long as the earliest lien remains unredeemed.
   (B)  NOTWITHSTANDING  THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI-
 SION, WHEN A TAX DISTRICT HOLDS MORE THAN ONE TAX LIEN AGAINST A  PARCEL
 AND  SUCH PARCEL IS AN OWNER OCCUPIED RESIDENTIAL PROPERTY AS DEFINED BY
 SECTION ELEVEN HUNDRED ELEVEN OF THIS  TITLE,  THE  LIENS  NEED  NOT  BE
 REDEEMED SIMULTANEOUSLY.  HOWEVER, THE LIENS SHALL BE REDEEMED IN CHRON-
 OLOGICAL ORDER, SO THAT THE LIEN WITH THE EARLIEST LIEN DATE IS REDEEMED
 FIRST,  AND  THE  LIEN  WITH THE MOST RECENT LIEN DATE IS REDEEMED LAST.
 NOTWITHSTANDING THE REDEMPTION OF ONE OR MORE OF  THE  LIENS  AGAINST  A
 PARCEL AS PROVIDED HEREIN, THE ENFORCEMENT PROCESS SHALL PROCEED ACCORD-
 ING  TO THE PROVISIONS OF THIS ARTICLE AS LONG AS ANY LIEN REMAINS UNRE-
 DEEMED FOR A PERIOD OF THREE YEARS OR MORE FROM THE DATE OF  DELINQUENCY
 OF SUCH LIEN.
   (a)  (I)  When  one  or  more  liens  against a parcel are redeemed as
 provided herein, but the earliest lien remains unredeemed,  the  receipt
 issued to the person redeeming shall include a statement in substantial-
 ly  the  following  form:    "This parcel remains subject to one or more
 delinquent tax liens. The payment you have made will  not  postpone  the
 enforcement  of  the outstanding lien or liens. Continued failure to pay
 the entire amount owed will result in the loss of the property."
   (II) NOTWITHSTANDING THE PROVISIONS OF SUBPARAGRAPH (I) OF THIS  PARA-
 GRAPH,  WHEN ONE OR MORE LIENS AGAINST A PARCEL ARE REDEEMED AS PROVIDED
 HEREIN AND SUCH PARCEL IS AN  OWNER  OCCUPIED  RESIDENTIAL  PROPERTY  AS
 DEFINED  BY  SECTION  ELEVEN  HUNDRED ELEVEN OF THIS TITLE, BUT ANY LIEN
 REMAINS UNREDEEMED FOR A PERIOD OF THREE YEARS OR MORE FROM THE DATE  OF
 DELINQUENCY  OF  SUCH  LIEN,  THE RECEIPT ISSUED TO THE PERSON REDEEMING
 S. 606                              3
 
 SHALL INCLUDE A STATEMENT IN SUBSTANTIALLY  THE  FOLLOWING  FORM:  "THIS
 PARCEL  REMAINS SUBJECT TO ONE OR MORE DELINQUENT TAX LIENS. THE PAYMENT
 YOU HAVE MADE WILL NOT POSTPONE THE ENFORCEMENT OF THE OUTSTANDING  LIEN
 OR  LIENS.   CONTINUED FAILURE TO PAY THE ENTIRE AMOUNT OWED WILL RESULT
 IN THE LOSS OF THE PROPERTY."
   § 4. Subdivision 2 of section 924-a of the real property tax  law,  as
 amended  by  chapter  355  of the laws of 2003 and as further amended by
 subdivision (b) of section 1 of part W of chapter  56  of  the  laws  of
 2010, is amended to read as follows:
   2.  The  rate  of interest applicable to the third calendar quarter of
 each year, as set by the commissioner of taxation and  finance  pursuant
 to  subparagraph  (A)  of paragraph two of subsection (j) of section six
 hundred ninety-seven of the tax law,  shall  be  the  rate  of  interest
 applicable  to  unpaid real property taxes for purposes of this section.
 Such commissioner shall set such rate on or before the fifteenth day  of
 July  in each year. Such rate shall be effective for all warrants issued
 for a collection period commencing on or after the first day of  Septem-
 ber  next  succeeding  the  date the rate of interest is set.  Provided,
 however, the rate of interest prescribed by this subdivision shall in no
 event be less than twelve per centum per annum UNLESS THE  TAXABLE  REAL
 PROPERTY UPON WHICH SUCH TAX WAS LEVIED IS AN OWNER OCCUPIED RESIDENTIAL
 PROPERTY  AS  DEFINED  IN SECTION ELEVEN HUNDRED ELEVEN OF THIS CHAPTER.
 The commissioner shall inform each affected municipality of  any  change
 in the rate established pursuant to this subdivision.
   §  5.  This  act shall take effect on the ninetieth day after it shall
 have become a law.

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Senate Bill S606

Sponsored By

Archive: Last Bill Status - In Senate Committee Local Government Committee

co-Sponsors

2023-S606 (ACTIVE) - Details

2023-S606 (ACTIVE) - Summary

2023-S606 (ACTIVE) - Sponsor Memo

2023-S606 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S606

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Sponsored By

Brian Kavanagh

Archive: Last Bill Status - In Senate Committee Local Government Committee

co-Sponsors

Pete Harckham

2023-S606 (ACTIVE) - Details

2023-S606 (ACTIVE) - Summary

2023-S606 (ACTIVE) - Sponsor Memo

2023-S606 (ACTIVE) - Bill Text download pdf

Comments