Provides that multiple dwellings owned and operated by a mutual redevelopment company established pursuant to article five of the private housing finance law which contains a total of 2,800 or more dwelling units shall be eligible for tax exemption and abatement for improvements to eliminate fire and health hazards.
Ayes (6): Stewart-Cousins, Oppenheimer, Valesky, Thompson, Little, Bonacic
Ayes W/R (1): Johnson C
Excused (1): Morahan
BILL NUMBER: S5956A
TITLE OF BILL : An act to amend the real property tax law, in relation to exemption from taxation of alterations and improvements to certain multiple dwellings to eliminate fire and health hazards
PURPOSE OR GENERAL IDEA OF BILL : To let New York City expand J-51 tax abatement for the Penn South Houses mutual redevelopment company for replacing heating, ventilation, and air-cooling systems.
SUMMARY OF SPECIFIC PROVISIONS : Add, a new subdivision 4-d to Real Property Tax Law § 489. Paragraph (a) limits the provisions of this bill to multiple dwellings owned and operated by a mutual redevelopment company established pursuant to article five of the private finance housing law with at least 2,800 units.
Paragraph (b) provide, a J-51 tax exemption for any increase in assessed value that results from the alterations and improvements.
Paragraph (c) provides for a tax abatement that shall not exceed the greater of 150 percent of certified reasonable cost or 35 percent of actual cost of alterations or improvements. The abatement is to be applied as a credit against real estate taxes at a rate up to 8 1/3 percent a year. If the designated amount cannot be credited each year for any reason, (e.g. it exceeds amount of tax payable) it can be used in any of the following 8 years.
Paragraph (d) would exempt the work from current provision, making J-51 benefit, available only if the property has no violation of local codes concerning its physical condition. This provision would permit benefits to start before violations are fully cleared. Violations must be cleared upon completion of alterations or improvements.
Paragraph (e) would waive limits on the amount of abatement or exemption granted to any apartment unit pursuant to subdivision 11, paragraphs (b) and (e) of this section, which restricts the amount of abatement or exemption granted to any apartment unit, since the new language in paragraph (d) imposes a limit on benefits.
Paragraph (f) limits benefits to work completed by 2015.
JUSTIFICATION : Penn South Houses is a non-profit cooperative development in Manhattan. It is nearly 50 years old and requires extensive work on its heating and ventilation systems.
Without this legislation, the necessary work would require substantial rent increases. A large portion of Penn South's residents are limited income seniors with Senior Citizen Rent Increase Exemption benefits, so these rent increases would result in considerably increased SCRIE tax abatements. Also, the amount of rent surcharge paid by higher-income residents would be reduced, because more of their monthly payment would be going to regular rent. Penn South pays a portion of its rent surcharge income to the City. Thus, if this bill is not enacted, that would cost the City an amount comparable to the J-51 benefits contemplated by this bill. So while this legislation provides substantial protection to the development's residents, it would not significantly affect the City financially.
As the only remaining Article V limited equity coop, Penn South, a 2,802-unit development located in Manhattan, is the only development subject to this legislation. Since its residents are concerned with the continued maintenance and affordability of their buildings and not the resale of their units (from which they are not permitted to profit), this legislation will enable necessary repairs to be undertaken with J-5I benefits thus preserving this unique and affordable housing resource.
New York City's allowances for J-51 benefits would only cover a small portion of Penn South's planned HVAC replacement. This legislation would give the City authority to expand the J-51 abatement for this project.
PRIOR LEGISLATIVE HISTORY : New bill.
FISCAL IMPLICATIONS : None.
EFFECTIVE DATE : This bill shall take effect immediately.
STATE OF NEW YORK ________________________________________________________________________ 5956--A 2009-2010 Regular Sessions IN SENATE June 19, 2009 ___________Introduced by Sen. KRUGER -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- recommitted to the Committee on Local Government in accordance with Senate Rule 6, sec. 8 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee AN ACT to amend the real property tax law, in relation to exemption from taxation of alterations and improvements to certain multiple dwellings to eliminate fire and health hazards THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. Section 489 of the real property tax law is amended by adding a new subdivision 4-d to read as follows: 4-D. (A) ANY SUCH LOCAL LAW MAY ALSO PROVIDE THAT A GROUP OF MULTIPLE DWELLINGS WHICH IS OWNED AND OPERATED BY A MUTUAL REDEVELOPMENT COMPANY ESTABLISHED PURSUANT TO ARTICLE FIVE OF THE PRIVATE HOUSING FINANCE LAW WHICH CONTAINS A TOTAL OF TWENTY-EIGHT HUNDRED OR MORE DWELLING UNITS SHALL BE ELIGIBLE FOR TAX EXEMPTION AND ABATEMENT FOR THE REPLACEMENT AND IMPROVEMENT OF THE EXISTING HEATING, VENTILATION AND AIR COOLING SYSTEM AND ASSOCIATED ASBESTOS ABATEMENT OR REMOVAL AS PROVIDED IN THIS SUBDIVISION. (B) ANY INCREASE IN ASSESSED VALUATION RESULTING FROM THE REPLACEMENT AND IMPROVEMENT OF THE EXISTING HEATING, VENTILATION AND AIR COOLING SYSTEM AND ASSOCIATED ASBESTOS ABATEMENT OR REMOVAL TO ONE OR MORE MULTIPLE DWELLINGS WHICH ARE OWNED AND OPERATED BY A MUTUAL REDEVELOP- MENT COMPANY AS DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION SHALL BE EXEMPT FROM TAXATION FOR LOCAL PURPOSES. SUCH EXEMPTION SHALL BE EQUAL TO THE INCREASE IN THE VALUATION WHICH IS SUBJECT TO EXEMPTION UNDER THIS PARAGRAPH FOR THIRTY YEARS. AFTER SUCH PERIOD OF TIME, THE AMOUNT OF SUCH EXEMPTED ASSESSED VALUE SHALL BE REDUCED BY TWENTY PERCENT IN EACH SUCCEEDING YEAR UNTIL THE ASSESSED VALUE OF THE ALTERATIONS OR IMPROVEMENTS IS FULLY TAXABLE. SUCH EXEMPTION MAY COMMENCE AT THE BEGIN-EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD14258-03-0 S. 5956--A 2
NING OF ANY TAX QUARTER SUBSEQUENT TO THE START OF SUCH ALTERATIONS OR IMPROVEMENTS. IN NO EVENT SHALL SUCH ALTERATIONS OR IMPROVEMENTS DIRECT- LY OR INDIRECTLY RESULT IN AN EQUALIZATION INCREASE IN THE ASSESSED VALUATION OF ANY MULTIPLE DWELLING FORMING PART OF THE MUTUAL REDEVELOP- MENT COMPANY WHERE SUCH ALTERATIONS OR IMPROVEMENTS ARE PERFORMED. (C) THE ABATEMENT OF TAXES IN A MUTUAL REDEVELOPMENT COMPANY DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION, INCLUDING THE LAND, SHALL NOT EXCEED THE GREATER OF (I) ONE HUNDRED FIFTY PER CENTUM OF THE CERTIFIED REASONABLE COST OF THE REPLACEMENT AND IMPROVEMENT OF THE EXISTING HEAT- ING, VENTILATION AND AIR COOLING SYSTEM AND ASSOCIATED ASBESTOS ABATE- MENT OR REMOVAL, AS DETERMINED UNDER THE REGULATIONS OF THE LOCAL HOUS- ING AGENCY ADMINISTERING THE LOCAL LAW, OR (II) THIRTY-FIVE PER CENTUM OF THE ACTUAL CONTRACTED CONSTRUCTION COST OF ALL ALTERATIONS OR IMPROVEMENTS MADE TO AND IN CONJUNCTION WITH THE REPLACEMENT OF THE EXISTING HEATING, VENTILATION AND AIR COOLING SYSTEM AND ASBESTOS ABATE- MENT OR REMOVAL, WHETHER OR NOT SUCH ITEMS ARE CURRENTLY IDENTIFIED IN THE REGULATIONS OF THE LOCAL HOUSING AGENCY. SUCH ABATEMENT SHALL NOT BE EFFECTIVE FOR MORE THAN TWENTY YEARS AND THE ANNUAL ABATEMENT OF TAXES IN ANY CONSECUTIVE TWELVE-MONTH PERIOD SHALL NOT BE GREATER THAN EIGHT AND ONE-THIRD PER CENTUM OF THE TOTAL ABATEMENT GRANTED AND SHALL NOT EXCEED THE AMOUNT OF TAXES PAYABLE IN SUCH CONSECUTIVE TWELVE-MONTH PERIOD. SUCH ABATEMENT SHALL BEGIN NO SOONER THAN THE FIRST QUARTERLY TAX BILL IMMEDIATELY FOLLOWING THE COMPLETION OF SUCH ALTERATIONS OR IMPROVEMENTS. THE LIMITATIONS SET FORTH IN SUBDIVISION FOUR OF THIS SECTION FOR MULTIPLE DWELLINGS, BUILDINGS AND STRUCTURES OWNED AS COOP- ERATIVES SHALL BE INAPPLICABLE TO BENEFITS GRANTED PURSUANT TO THIS SUBDIVISION. (D) IN THE EVENT THAT MULTIPLE ALTERATIONS OR IMPROVEMENTS ARE UNDER- TAKEN IN A MUTUAL REDEVELOPMENT COMPANY DESCRIBED IN PARAGRAPH (A) OF THIS SUBDIVISION, AND SEPARATE APPLICATIONS FOR BENEFITS THEREFOR ARE MADE, ALL REQUIREMENTS CONCERNING PHYSICAL CONDITION OF AND COMPLIANCE WITH LAW BY THE MULTIPLE DWELLINGS IN SUCH REDEVELOPMENT COMPANY SHALL APPLY ONLY UPON COMPLETION OF ALL SUCH ALTERATIONS OR IMPROVEMENTS, PROVIDED THAT ALL SUCH ALTERATIONS OR IMPROVEMENTS ARE COMPLETED WITHIN SIX YEARS. (E) EXCEPT AS PROVIDED IN THIS SUBDIVISION, ALL OF THE REQUIREMENTS IMPOSED BY THIS SECTION ON PROJECTS DESCRIBED IN PARAGRAPH (A) OF SUBDI- VISION ONE OF THIS SECTION SHALL BE APPLICABLE TO ALTERATIONS OR IMPROVEMENTS GRANTED BENEFITS PURSUANT TO THIS SUBDIVISION BUT NONE OF THE LIMITATIONS OF PARAGRAPHS (B) AND (C) OF SUBDIVISION ELEVEN OF THIS SECTION SHALL BE APPLICABLE. (F) THIS SUBDIVISION SHALL BE APPLICABLE ONLY TO ALTERATIONS OR IMPROVEMENTS COMPLETED PRIOR TO DECEMBER THIRTY-FIRST, TWO THOUSAND FIFTEEN. S 2. This act shall take effect immediately.