Bill S6225-2009

Authorizing cities and villages to collect delinquent real property taxes



  • Apr 12, 2010: referred to real property taxation
  • Apr 12, 2010: PASSED SENATE
  • Mar 24, 2010: 2ND REPORT CAL.
  • Mar 23, 2010: 1ST REPORT CAL.291
  • Jan 6, 2010: REFERRED TO CITIES
  • Oct 14, 2009: REFERRED TO RULES


VOTE: COMMITTEE VOTE: - Cities - Mar 23, 2010
Ayes (5): Huntley, Oppenheimer, Perkins, Padavan, Lanza



TITLE OF BILL : An act to amend the general city law and chapter 602 of the laws of 1993 amending the real property tax law relating to the enforcement of the collection of delinquent real property taxes and to the collection of taxes by banks, in relation to the collection of delinquent real property taxes and providing for the repeal of such provisions upon expiration thereof

PURPOSE : The purpose of this bill is to expand the number of options available to municipalities to efficiently and effectively manage the collection of delinquent real property taxes and to provide protections to those property owners that are subject to real property tax collections by such municipalities or third parties.

SUMMARY OF PROVISIONS : Section 1: Adds a new General Cities Law section 21-a to expand the sale of tax liens by municipalities in bulk to private parties. permits municipalities, under certain conditions, to enter into a contact to sell some or all of their delinquent tax liens to a private party. The authority to enter into such contracts sunsets on December 31, 2013.

The bill provides for extensive consumer protections for affected property owners that are subject to such municipal tax collection efforts. Among the protections includes: a) a public hearing must be held by the city and a local law adopted before such a procedure can be initiated, b) prior to any sale, the city must hold a public hearing announcing its intention to conduct a sale of its tax liens to a third party. c) property owners must be given a 30 day notice before such a tax lien sale, provided that if such notice is not provided, that the sale is null and void. d) before commencing any foreclosure proceeding by a third party, the city must be given notice of such proceeding and may, at its own volition, re-purchase such tax liens to stop the foreclosure proceeding. e) before commencing a third party foreclosure proceeding, the real property owner must be given the opportunity to establish a payment plan for a period not to exceed 48 months to repay the real property taxes due. The third party lien holder may not charge any other fees for executing such a payment plan. f) once a third party tax lien foreclosure proceeding has been started, it must be done the same way procedurally as any other tax foreclosure proceeding initiated by a municipality.

Within 60 days after the annual anniversary of such bulk tax lien sales auction, the city must prepare a report to ascertain the cost effectiveness of such sale of tax liens, whether real property owners experienced any difficulties with the foreclosure process, the number of foreclosures, if any, the number of properties taken back by the city to avoid a foreclosure action from proceeding, and any complaints from the public about the conduct of any third party purchaser of a city real property tax lien. Such report shall be forwarded to the state comptroller for his or her review.

Section 2: Adds a new provision to Chapter 602 of the Laws of 1993 to allow villages to conduct the same type of private sale of real property tax liens as can be conducted by this State's cities provided for in section 1 of this bill.

Section 3: After receiving individual reports from cities and villages on the conduct of their sale of real property tax liens to private parties, the State Comptroller shall prepare its own consolidated report. This annual report shall look at the cost effectiveness of this program to enhance municipal real property tax collections, the amount of new revenue generated by this program minus the cost of its operation, the number and severity of complaints about the foreclosure process by the municipality or the third party lien holder, and any items or suggestions that the State comptroller may have to increase consumer protections to assist real property owners who have delinquent tax liens pending to retain their real property.

EXISTING LAW : Under current state law and the municipal home rule laws governing certain cities, the cities of Amsterdam, Gloversville, Schenectady and Utica can conduct such tax lien sales to private parties, but without many of the consumer protections incorporated in this law. Further, the cites of Rochester and Syracuse can conduct such sales by their own home rule authority. Further, the City of Buffalo is able to conduct a similar program via an In Rem tax sale. This bill expands the number of cities and villages that can conduct such sales, but with the added consumer protections provided in this bill.

JUSTIFICATION : Our State's cities and villages are under financial pressure to keep expenses low and to raise additional revenue to overcome the economic downturn that they are facing. This bill allows cities and villages to, with the assistance of third parties, to conduct the sales of tax liens so that such municipalities can in a more timely manner collect overdue real property taxes that are due to them. This bill should help cities and villages to raise additional tax revenue and place delinquent properties back on the tax rolls. It is the sponsor's hope that placing such properties back on the tax rolls will encourage better utilization of such properties and upgrade any buildings located on such property to maximize their use.



LOCAL FISCAL IMPLICATIONS : This bill will improve the fiscal condition of any municipality that exercises this new option to obtain cash from the sale Of delinquent tax liens.

EFFECTIVE DATE : Expires January 31, 2014.



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