Amd Art 9 Title 4 Title Head, §§960, 962, 964, 966 & 970, add §§965 & 967, rpld §962 sub 2, §968, RPT L
Modifies provisions for the payment of delinquent taxes by permitting any person or entity to lend the money to the property owner therefor, with the lender to pay the taxing jurisdiction and receive a conditional tax receipt; requires recording of tax liens; provides for foreclosure of a conditional tax receipt like a mortgage.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A7497
SPONSOR: Pretlow TITLE OF BILL:
An act to amend the real property tax law, in relation to the payment of
delinquent taxes; and to repeal subdivision 2 of section 962 of the real
property tax law relating to the qualifications of certain corporations
or banking institutions to lend money pursuant to the provisions of
title 4 of article 9 of the real property tax law and section 968 of the
real property tax law relating to tax sale provisions under such title
PURPOSE:
To update Section 960 et seq. of the Real Property Tax Law to make it
consistent with the existing law and to allow property owners another
option in paying their real property taxes over time and to assist local
governments in the collection of current and delinquent real property
taxes.
SUMMARY OF PROVISIONS:
Section 3. Adds the following language "and penalties, interest, court
costs or other fees" on page 2 line 18 and "and penalties, interest,
court costs or other fees" in page 3, line 3, 6, and 9.
Section 4. Amends section by changing "may" to "shall" in line 23 and
adds the following language on page 4, line 7, "and penalties, interest,
court costs or other fees".
Section 5. Amends section by adding "or entity" on line 18 on page 4 and
adds the following language in line 19 "charge reasonable and customary
loan fees and may".
Section 6. Amends section by adding the following language on line 9,
page 5, "Advances made to pay subsequent years delinquent taxes shall
earn interest at the rate specified in the original contract between the
entity or person making the loan and the property owner".
Section 8. Amends this section by adding the following language to line
22, page 6, "subrogated to and is entitled to exercise any right or
remedy possessed by the transferring taxing jurisdiction and is".
EXISTING LAW:
Under existing law, there is some uncertainty of whether a loan corpo-
ration can make loans. Section 960, et seq. makes several references to
sections of the Real Property Tax Law that were repealed with the enact-
ment of the new Article 11 in 1995. This Bill updates the existing law
to be consistent with the new Article 11 and allows for loan corpo-
rations to make such loans.
JUSTIFICATION:
Many municipalities are owed millions of dollars annually in unpaid
taxes and that these municipalities should be given the opportunity to
utilize as many procedural methods as possible to collect the monies
owed from the unpaid taxes. Such uncollected taxes adversely impact the
municipalities' ability to meet their operating expenditures and provide
for the delivery of necessary and essential local government services,
amplifying the risk of future real property tax increases and negatively
impacting those taxpayers who timely remit payment. There exists limited
means for municipalities to expedite the collection of such delinquent
taxes and that it is in the public interest to increase the number of
methods available to municipalities to expedite such collections. Many
delinquencies often remain unpaid thereby creating a lien against the
affected real property.
Additionally, taxpayers are overburdened and this will allow them to
make payments on their taxes over a longer period of time than a munici-
pal corporation will allow and still allow the taxpayer to keep their
property.
LEGISLATIVE HISTORY:
01/03/24 A4483 referred to real property taxation
02/16/23 A4483 referred to real property taxation
2021-2022 A1407 referred to real property taxation
2019-2020 A3095 referred to real property taxation
2017-2018 A2907 referred to real property taxation
2015-2016 A1966 referred to real property taxation
2013: A3965 referred to real property tax
2012: A2858 held for consideration in real property tax
2010: A2516 held for consideration in real property tax Amends existing
law
FISCAL IMPLICATIONS:
None
LOCAL FISCAL IMPLICATIONS:
Should the changes be implemented local governments should see a
decrease in borrowing, reduced borrowing costs, reduced outflows, and
increased past due and current revenues.
EFFECTIVE DATE:
This act shall take effect on the one hundred eightieth day after it
shall have become a law; provided that any and all rules and regulations
and any other measures necessary to implement any provision of this act
on its effective date may be promulgated and taken, respectively, on or
before the effective date of such provisions.
STATE OF NEW YORK
________________________________________________________________________
7497
2025-2026 Regular Sessions
IN ASSEMBLY
March 28, 2025
___________
Introduced by M. of A. PRETLOW -- read once and referred to the Commit-
tee on Real Property Taxation
AN ACT to amend the real property tax law, in relation to the payment of
delinquent taxes; and to repeal subdivision 2 of section 962 of the
real property tax law relating to the qualifications of certain corpo-
rations or banking institutions to lend money pursuant to the
provisions of title 4 of article 9 of the real property tax law and
section 968 of the real property tax law relating to tax sale
provisions under such title
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Legislative findings. The legislature hereby finds and
2 declares that many taxing jurisdictions are owed millions of dollars
3 annually in unpaid property taxes and that these taxing jurisdictions
4 should be given the opportunity to utilize as many collection methods as
5 possible in an effort to collect as much in unpaid taxes as possible.
6 Such uncollected taxes adversely impact the taxing jurisdictions' abili-
7 ty to meet their operating expenditures and provide for the delivery of
8 necessary and essential local governmental services, amplifying the risk
9 of future real property tax increases and negatively impacting those
10 taxpayers who timely remit payment. It is hereby further declared that
11 limited means exist for taxing jurisdictions to expedite the collection
12 of such delinquent taxes and that it is in the public interest to
13 increase the number of methods available to taxing jurisdictions to
14 expedite such collections and to provide their constituents as many
15 payment methods as possible. It is further declared that many delinquen-
16 cies often remain unpaid, thereby creating a lien against the affected
17 real property, and that the taxpayers should have alternative methods of
18 making payments to taxing jurisdictions for the payment of their taxes
19 which will in turn enable taxing jurisdictions to expedite the receipt
20 of anticipated revenues and provide a funding source, which will enable
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10539-01-5
A. 7497 2
1 taxing jurisdictions more effectively to carry out their public
2 purposes, especially at this time when many taxing jurisdictions have
3 significant budgetary problems.
4 § 2. The title heading of title 4 of article 9 of the real property
5 tax law is amended to read as follows:
6 ACCEPTANCE OF TAXES FROM CERTAIN [LOAN CORPORATIONS]
7 ENTITIES
8 § 3. Section 960 of the real property tax law is amended to read as
9 follows:
10 § 960. Payment of taxes by loan corporations. 1. Any [municipal
11 corporation may] taxing jurisdiction or its assignee shall, as provided
12 in this title, accept payment of taxes, including special ad valorem
13 levies and special assessments, on real property from any [corporation
14 organized under the laws of the state of New York for the purpose of
15 extending loans to taxpayers for the payment of taxes] entity, upon
16 receipt of an affidavit from a property owner authorizing the entity
17 making the loan to pay the taxes or delinquent taxes and penalties,
18 interest, court costs or other fees on such property owner's behalf and
19 containing a legal description of the property and the street address
20 thereof, if applicable. For the purposes of this title, "entity" shall
21 mean any corporation, limited liability company or partnership regis-
22 tered to do business in this state.
23 2. Upon such a payment, a conditional tax receipt shall be issued and
24 the amount thereof conditionally credited by the [municipal corporation]
25 taxing jurisdiction against the taxes due on the property for which
26 payment is made, but such payment shall not extinguish the tax lien
27 existing against such property until the conditional tax receipt is
28 surrendered for cancellation to the [municipal corporation] taxing
29 jurisdiction by the entity lending the money to the taxpayer. In addi-
30 tion, the authorized representative of the taxing jurisdiction shall
31 certify by affidavit that payment of the taxes and penalties, interest,
32 court costs or other fees on the described property has been made by the
33 lending entity and not the property owner responsible for the payment of
34 such taxes and that the taxing jurisdiction's tax lien is transferred to
35 the lending entity that paid the taxes and penalties, interest, court
36 costs or other fees. The taxing jurisdiction shall attach to the docu-
37 ment the collector's seal of office, if there is such a seal, and deliv-
38 er the document to the lending entity that paid the taxes and penalties,
39 interest, court costs or other fees within thirty days of receipt of
40 payment. The taxing jurisdiction shall keep a record of all tax liens
41 transferred as provided by this section. A property owner authorizing a
42 lending entity to pay the taxes imposed by a taxing jurisdiction on such
43 property owner's real property must file with the taxing jurisdiction an
44 affidavit containing such authorization, the name of the entity author-
45 ized to pay the taxes and penalties, interest, court costs or other
46 fees, a legal description of the property and the street address there-
47 of, if applicable.
48 3. Payments made pursuant to this section by the lending entity may be
49 used by the [municipal corporation] taxing jurisdiction in the same
50 manner as if payment were made directly by the taxpayer.
51 § 4. Subdivision 1 of section 962 of the real property tax law is
52 amended to read as follows:
53 1. [Municipal corporations may] Taxing jurisdictions or their assig-
54 nees shall accept [such] payments from [a corporation] an entity extend-
A. 7497 3
1 ing loans for [such] the purpose[, if the loan corporation has a paid-up
2 capital of at least one million dollars and charges not more than four
3 per centum interest on unpaid balances on moneys loaned, nor more than
4 two per centum of the amount of the loan as a service charge in
5 connection therewith; provided, however, that in the event of a default
6 in the payment of such a loan, the loan corporation may charge six per
7 centum interest per annum on all sums in default. The loan corporation
8 shall, within three days after receiving the same, deposit the condi-
9 tional tax receipt with a banking institution, trust company, state
10 bank, national bank, or federal reserve bank of the district in which
11 the municipal corporation is located] of paying taxes and delinquent
12 taxes and penalties, interest, court costs or other fees. An entity
13 making a loan shall have the right to charge reasonable and customary
14 loan fees and interest, and such interest shall not exceed the rate of
15 one and one-quarter percent per month or fraction thereof. The loan
16 document shall provide for the notification of payment due dates and an
17 acknowledgment by the borrower of the interest rate to be paid, and such
18 acknowledgment shall be sworn to. The interest rate, irrespective of
19 any state law, shall not exceed the rate of one and one-quarter percent
20 per month or fraction thereof. In calculating the effective rate of
21 interest, only those fees in excess of ten percent of the face amount of
22 the loan shall be included for such calculation.
23 § 5. Subdivision 2 of section 962 of the real property tax law is
24 REPEALED and two new subdivisions 2 and 3 are added to read as follows:
25 2. To be enforceable, a tax lien transferred as provided by section
26 nine hundred sixty of this title must be recorded in the office of the
27 clerk or register of each county in which the property encumbered by the
28 lien is located.
29 3. An entity holding a tax lien transferred as provided by section
30 nine hundred sixty of this title may charge reasonable and customary
31 loan fees and recover the costs of closing the loan and recording
32 expenses paid to acquire and record the lien by adding these costs to
33 the amount of the lien.
34 § 6. Section 964 of the real property tax law, subdivision 2 as
35 amended by chapter 733 of the laws of 1959, is amended to read as
36 follows:
37 § 964. Deposit and delivery of conditional tax receipts. 1. [Imme-
38 diately upon] Within thirty days of the execution of the loan contract
39 between the [taxpayer] property owner and the [loan corporation, the
40 loan corporation] entity making the loan, such entity shall pay to the
41 [municipal corporation] taxing jurisdiction, or its assignee, the moneys
42 provided for therein. The [taxpayer] property owner shall make payments
43 on the loan to the [banking institution with which the conditional tax
44 receipt has been deposited for the account of the loan corporation]
45 entity making the loan or its successor in interest directly or in such
46 manner as directed by the entity. The entity making the loan shall have
47 the right to pay subsequent years' delinquent taxes and add these taxes
48 to the original conditional tax receipt. Advances made to pay subsequent
49 years' delinquent taxes shall earn interest at the rate specified in the
50 original contract between the entity making the loan and the property
51 owner.
52 2. [When made, such payments shall be entered and acknowledged by the
53 banking institution upon the conditional tax receipt, which receipt
54 shall remain in the possession of the banking institution until either
55 the loan is fully discharged or a default occurs thereon.] In the event
56 the loan is fully discharged, the conditional tax receipt shall be
A. 7497 4
1 endorsed "paid" and two copies of the conditional receipt endorsed
2 "paid" shall be delivered, one to the [taxpayer or person making the
3 payment. In the event of default, the conditional tax receipt shall be
4 returned to the loan corporation at its option] property owner and one
5 to the taxing jurisdiction that issued the conditional tax receipt.
6 § 7. Subdivision 1 of section 966 of the real property tax law is
7 amended to read as follows:
8 1. Upon the surrender of the conditional tax receipt evidencing the
9 discharge of the obligation created by the loan contract in connection
10 with which it was issued, the [municipal corporation] taxing jurisdic-
11 tion shall replace it with a receipted tax bill. Such receipted tax bill
12 shall bear the date of the conditional tax receipt and no interest or
13 penalty shall be charged to the [taxpayer] property owner by the taxing
14 jurisdiction for the period between the date of the issuance of the
15 conditional tax receipt and the date of its surrender. All [penalties
16 and interest imposed by the municipal corporation for tax default shall
17 be added to the tax lien until the discharge of the obligation created
18 by the loan contract in connection with which the conditional tax
19 receipt was issued, and such penalties and interest shall be cancelled
20 and be deemed satisfied upon the discharge of such obligation provided
21 such obligation is discharged prior to the disposition of the tax lien
22 as provided in section nine hundred sixty-eight of this chapter] liens
23 created and transferred shall stay in effect until the loan obligation
24 is fully satisfied and discharged.
25 § 8. The real property tax law is amended by adding two new sections
26 965 and 967 to read as follows:
27 § 965. Definitions; applicability. For the purposes of this title, the
28 term "taxing jurisdiction" includes a municipal corporation, a special
29 district and, where applicable, a county tax collection agency as
30 provided for in title four-A of this article. The provisions of section
31 nine hundred ninety-six of this article shall not be applicable for the
32 purposes of this title.
33 § 967. Foreclosure of a conditional tax receipt. 1. Except as other-
34 wise provided by this section, the transferee of a tax lien pursuant to
35 subdivision two of section nine hundred sixty of this title, and any
36 successor in interest, is subrogated to and is entitled to exercise any
37 right or remedy possessed by the transferring taxing jurisdiction and is
38 entitled to foreclose the lien in the event of a default, as default is
39 defined in the contract between the parties, in the manner provided for
40 in article thirteen of the real property actions and proceedings law for
41 the foreclosure of a mortgage.
42 2. Prior to the institution of a suit to foreclose a tax lien trans-
43 ferred pursuant to subdivision two of section nine hundred sixty of this
44 title, a lending entity shall provide notice, via certified mail, to the
45 property owner that such lending entity intends to commence a foreclo-
46 sure action. Such notice shall provide the property owner sixty days
47 from receipt of such notice to cure any default, as default is defined
48 in the loan agreement with the lending entity.
49 3. If a suit to foreclose a tax lien so transferred results in the
50 foreclosure of such lien, the entity filing suit is entitled to recover
51 all costs, disbursements, expenses and fees as provided for in article
52 thirteen of the real property actions and proceedings law for the fore-
53 closure of a mortgage, the same as provided for in the civil practice
54 law and rules insofar as not covered by the real property actions and
55 proceedings law, and any additional allowances authorized by sections
56 eighty-three hundred two and eighty-three hundred three of the civil
A. 7497 5
1 practice law and rules. Any surplus monies remaining shall be payable to
2 the property owner.
3 4. Subsequent to the sale of the property as provided in this section,
4 the property owner is entitled to redeem the property on or before the
5 (a) first anniversary of the date of the foreclosure sale by paying the
6 purchaser of the foreclosed property the purchase price, plus costs and
7 interest at the rate of eighteen percent per annum, to the date of
8 redemption, or one hundred twenty-five percent of the purchase price,
9 whichever is less; or (b) second anniversary of the date of the foreclo-
10 sure sale by paying the purchaser the purchase price, plus costs and
11 interest at the rate of eighteen percent per annum, to the date of
12 redemption, or one hundred fifty percent of the purchase price, whichev-
13 er is less.
14 § 9. Section 968 of the real property tax law is REPEALED.
15 § 10. Section 970 of the real property tax law is amended to read as
16 follows:
17 § 970. Examination of books of [loan corporations] lending entities.
18 1. Any [municipal corporation] taxing jurisdiction issuing conditional
19 tax receipts shall keep a complete record thereof. Any [municipal corpo-
20 ration] taxing jurisdiction shall have the right to examine from time to
21 time the [books] documents relating to any of the loans of any [loan
22 corporation] entity to which it has issued conditional tax receipts
23 [and]. Any county in which conditional tax receipts are recorded may
24 [make], in its discretion, promulgate regulations not inconsistent with
25 the provisions of this title for the better accomplishment of the
26 purpose thereof and for the protection of the borrowing [taxpayer] prop-
27 erty owner.
28 2. Upon [proof to the municipal corporation of] a determination of,
29 after notice and an opportunity to be heard, any willful and persistent
30 violation of this title, or of the regulations [made] promulgated pursu-
31 ant thereto, by any [loan corporation] lending entity to which [it] a
32 taxing jurisdiction has issued conditional tax receipts, it shall cease
33 the issuance of conditional tax receipts to such [loan corporation]
34 lending entity.
35 § 11. This act shall take effect on the one hundred eightieth day
36 after it shall have become a law. Effective immediately, the addition,
37 amendment and/or repeal of any rule or regulation necessary for the
38 implementation of this act on its effective date are authorized to be
39 made and completed on or before such effective date.
