Authorizes the city of Middletown to enter into a contract to use delinquent tax liens as collateral for a loan.
Ayes (62): Adams, Addabbo, Avella, Bonacic, Boyle, Breslin, Carlucci, DeFrancisco, Diaz, Dilan, Espaillat, Farley, Felder, Flanagan, Fuschillo, Gallivan, Gianaris, Gipson, Golden, Griffo, Grisanti, Hannon, Hassell-Thomps, Hoylman, Kennedy, Klein, Krueger, Lanza, Larkin, Latimer, LaValle, Libous, Little, Marcellino, Marchione, Martins, Maziarz, Montgomery, Nozzolio, O'Brien, O'Mara, Parker, Peralta, Perkins, Ranzenhofer, Ritchie, Rivera, Robach, Sampson, Sanders, Savino, Serrano, Seward, Skelos, Smith, Squadron, Stavisky, Stewart-Cousin, Tkaczyk, Valesky, Young, Zeldin
Nays (1): Ball
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.
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).
This legislation was introduced at the request of the City of Middletown. 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).
None to the State.
This act shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5022 2013-2014 Regular Sessions IN SENATE 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 theEXPLANATION--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.