STATE OF NEW YORK
________________________________________________________________________
7514
2023-2024 Regular Sessions
IN SENATE
June 2, 2023
___________
Introduced by Sen. RYAN -- read twice and ordered printed, and when
printed to be committed to the Committee on Rules
AN ACT to amend the real property tax law, in relation to distribution
of surplus in tax enforcement proceedings
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The real property tax law is amended by adding a new
2 section 989 to read as follows:
3 § 989. Distribution of surplus in tax enforcement proceedings. 1.
4 Notwithstanding the provisions of any general, special or local law to
5 the contrary, when a property owner is divested of title due to the
6 foreclosure of a delinquent real property tax lien on the property, and
7 the property is sold to a third party, the proceeds of such sale shall
8 be distributed as follows:
9 (a) If the proceeds of the sale are less than or equal to the total
10 taxes due on the property plus interest, penalties and other charges
11 duly imposed upon the property, including the administrative costs asso-
12 ciated with the foreclosure process, the entire proceeds shall be paid
13 to the local government.
14 (b) If the proceeds of the sale exceed the total taxes due on the
15 property plus interest, penalties and other charges duly imposed upon
16 the property, including the administrative costs associated with the
17 foreclosure process, the excess shall be distributed as follows:
18 (i) If the property is not subject to other liens, the excess proceeds
19 shall be paid to the prior owner or owners of the property.
20 (ii) If the property is subject to other liens, the lienholders shall
21 be paid from the excess proceeds in the same order and to the same
22 extent as they would be in an action to foreclose a mortgage pursuant to
23 article thirteen of the real property actions and proceedings law. Any
24 proceeds remaining after the other lienholders have been so paid shall
25 be paid to the prior owner or owners of the property.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD10302-01-3
S. 7514 2
1 2. The provisions of this section shall apply whether property is sold
2 through a public auction or otherwise.
3 3. When a foreclosure concludes with the tax district taking title to
4 property, the provisions of this section shall not apply unless and
5 until the tax district sells the property to a third party; provided
6 that in such a case, if there are excess proceeds to be paid to the
7 prior owner or owners of the property, such proceeds shall be paid to
8 the owner or owners of the property prior to its acquisition by the tax
9 district.
10 4. The provisions of this section shall not apply to the enforcement
11 of tax liens on abandoned real property. For purposes of this section,
12 real property shall be deemed abandoned if it:
13 (a) has been included on a local municipal roll, registry or list of
14 vacant and abandoned residential property pursuant to section eleven
15 hundred eleven-a of this chapter, or
16 (b) has been certified as abandoned commercial or industrial real
17 property pursuant to article nineteen-A of the real property actions and
18 proceedings law, or
19 (c) has been included on the statewide registry of vacant and aban-
20 doned property pursuant to section thirteen hundred ten of the real
21 property actions and proceedings law.
22 5. A municipality shall notify a property owner when the owner's prop-
23 erty netted a surplus at a tax foreclosure auction that was held on or
24 after the effective date of this section. The notification shall be made
25 as directed by the court and shall state the possible existence of a
26 surplus, how to obtain the surplus and the steps the property owner must
27 take to obtain the surplus.
28 6. This section shall be construed to supersede all general, special
29 and local laws relating to tax enforcement to the extent that such laws
30 would otherwise allow the proceeds of a sale to be distributed in a
31 manner other than as set forth in this section. This section is not
32 intended to supersede such laws in other respects.
33 § 2. Subdivision 2 of section 1104 of the real property tax law, as
34 amended by chapter 532 of the laws of 1994, paragraph (iii) as further
35 amended by subdivision (b) of section 1 of part W of chapter 56 of the
36 laws of 2010, is amended to read as follows:
37 2. The provisions of this article shall not be applicable to a county,
38 city or town which: (i) on January first, nineteen hundred ninety-three,
39 was authorized to enforce the collection of delinquent taxes pursuant to
40 a county charter, city charter, administrative code or special law; (ii)
41 adopted a local law, no later than July first, nineteen hundred ninety-
42 four, providing that the collection of taxes in such county, city or
43 town shall continue to be enforced pursuant to such charter, code or
44 special law, as such charter, code or special law may from time to time
45 be amended; and (iii) filed a copy of such local law with the commis-
46 sioner no later than August first, nineteen hundred ninety-four.
47 Provided, however, that nothing contained herein shall be construed to
48 exempt any such county, city or town from the provisions of section nine
49 hundred eighty-nine of this chapter.
50 § 3. Subdivision 1 of section 1166 of the real property tax law, as
51 amended by chapter 500 of the laws of 2015, is amended to read as
52 follows:
53 1. Whenever any tax district shall become vested with the title to
54 real property by virtue of a foreclosure proceeding brought pursuant to
55 the provisions of this article, such tax district is hereby authorized
56 to sell and convey the real property so acquired, which shall include
S. 7514 3
1 any and all gas, oil or mineral rights associated with such real proper-
2 ty, either with or without advertising for bids, notwithstanding the
3 provisions of any general, special or local law. The proceeds obtained
4 from any such sale shall be distributed in the manner provided by
5 section nine hundred eighty-nine of this chapter.
6 § 4. This act shall take effect October 1, 2023, and shall apply to
7 all tax foreclosure proceedings commenced on and after such date.
