Source: https://www.nysenate.gov/legislation/bills/2019/s4040/amendment/a
Timestamp: 2020-01-17 19:26:16
Document Index: 89777811

Matched Legal Cases: ['§64', '§1449', '§  2', '§ 3', '§ 64', '§  4', '§ 1449', '§  5', '§ 7', '§ 4', '§  1449', '§ 6', '§ 7']

NY State Senate Bill S4040A
senate Bill S4040A
Authorizes towns in the Peconic Bay region to establish community housing funds to be funded by a supplemental real estate transfer tax
Current Bill Status Via A4941 - Vetoed by Governor
Get Status Alerts for S4040A
vetoed memo.247
3rd reading cal.1766
substituted for s4040a
Jun 19, 2019 substituted by a4941b
Jun 04, 2019 print number 4040a
Jun 04, 2019 amend and recommit to local government
Feb 26, 2019 referred to local government
A4941B
S4040 - Details
Add §64-k, Town L; amd §§1449-bb & 1449-ee, Tax L
S4040 - Summary
Authorizes towns in the Peconic Bay region to establish community housing funds to be funded by a supplemental real estate transfer tax; defines terms; outlines eligible expenses; establishes an advisory board in any town which has established a community housing fund to review and make recommendations regarding the town's community housing plan… (view more) makes related provisions.
S4040 - Sponsor Memo
BILL NUMBER: S4040
An act to amend the town law and the tax law, in relation to authorizing
towns in the Peconic Bay region to establish community housing funds to
be funded by a supplemental real estate transfer tax
Authorizing towns in the Peconic Bay region to establish a community
housing funds to be funded by a supplemental real estate transfer tax.
Section 2. Cites the Peconic Bay Region Community Housing Act.
Section 3. Amends the Town Law by adding a new section 64-k relating to
the Peconic Bay Region Community Housing Act for the towns of East Hamp-
ton, Riverhead, Shelter Island, Southampton and Southold.
Section 4. Section 1449-bb of the tax law is amended to authorize each
town within the Peconic Bay region, acting through its own board, to
adopt a local law imposing a supplemental real estate transfer tax for
the sole purpose of finding an established community housing fund.
Section 5. Subdivision 3 of section 1449-ee of the tax law is amended to
provide for certain exemptions from the supplemental real estate trans-
fer tax.
Section 7. Provides for an immediate effective date and shall remain in
full force and effect until December 31, 2050, when upon such date the
provisions of sections four and five of this act shall expire and be
The adverse impact resulting from the lack of housing opportunities is
severe. Local employers are having difficulty hiring and retaining
employees because of housing costs and availability. Local volunteer
emergency services agencies are experiencing difficulty in recruitment
and retention. Long-time residents are forced to leave the area. Traffic
congestion is intensified by the importation of labor from areas with
lower housing costs. Finally, the lack of housing opportunities is
resulting in residents being forced to live in substandard, illegal
The unique demographics and economics in the Peconic Bay region and a
lack of affordable dwelling units are contributing to this housing shor-
tage. The combination of the Peconic Bay region's attractiveness, prox-
imity to the dense population of the New York metropolitan region and to
that region's extraordinary wealth, makes the Peconic Bay region a prime
location for seasonal and luxury homes. While this combination of
extraordinary attractiveness, population density and wealth has created
a strong local economy for the Peconic Bay region, it has resulted in a
housing crisis for local families. In the Peconic Bay region, more than
40% of all housing units are seasonal.
In summary, the demand of land for luxury and seasonal homes and
seasonal rentals has left a short supply of housing opportunities for
moderate income and working class local residents. The implementation of
the new Federal tax bill will only exacerbate this problem by making it
more difficult for first time homebuyers by imposing a $10,000 cap on
the deductibility of state and local taxes and by reducing the mortgage
interest deduction on new mortgages. The Peconic Bay region requires a
balanced housing policy where there exists a variety of housing types
and opportunities across the region's economic spectrum.
It is the public purpose of this legislation to give the towns of the
Peconic Bay region the authority and resources needed to establish a
dedicated fund to provide needed housing opportunities. Specifically,
this legislation would permit each town to establish a community housing
fund to increase housing opportunities in the region.  Further, a town
approved and implemented to ensure that these new housing opportunities
are enacted I the context of a comprehensive plan. The funds shall be
Said fund would be financed by a combination of state and local funds,
including a .5% supplemental real estate transfer tax, which would be an
addition to the existing 2% real estate transfer tax for the Peconic Bay
Region Community Preservation Fund.
amendments to section 1449-bb of the tax law and subdivision 3 of
section 1449-ee of the tax law, made by sections 4 and 5 of this act,
respectively, shall not affect the repeal of such sections and shall be
deemed to be repealed therewith.
S4040 - Bill Text download pdf
towns in the Peconic Bay region to establish community  housing  funds
to be funded by a supplemental real estate transfer tax
critical  to  the  future  of  the Peconic Bay region is the need for an
adequate supply of housing opportunities for all segments of the Peconic
severe. Local employers  are  having  difficulty  hiring  and  retaining
employees  because  of  housing  costs and availability. Local volunteer
emergency services agencies are experiencing difficulty  in  recruitment
and  retention.  Long-time residents are forced to leave the area. Traf-
fic congestion is intensified by the importation  of  labor  from  areas
with lower housing costs.  Finally, the lack of housing opportunities is
resulting  in  residents  being  forced  to live in substandard, illegal
The unique demographics and economics in the Peconic Bay region and  a
tage.  The combination of the Peconic Bay region's attractiveness, prox-
location  for  seasonal  and  luxury  homes.  While  this combination of
extraordinary attractiveness, population density, and wealth has created
a strong local economy for the Peconic Bay region, it has resulted in  a
housing  crisis for local families. In the Peconic Bay region, more than
LBD03159-04-9
S. 4040                             2
the new federal tax bill will only exacerbate this problem by making  it
more  difficult  for  first time homebuyers by imposing a $10,000 cap on
the deductibility of state and local taxes and by reducing the  mortgage
interest  deduction  on new mortgages. The Peconic Bay region requires a
balanced housing policy where there exists a variety  of  housing  types
It  is the public purpose of this legislation to give the towns of the
Peconic Bay region the authority and resources  needed  to  establish  a
dedicated  fund  to  provide needed housing opportunities. Specifically,
fund to increase housing opportunities in the region.  Further,  a  town
including  a  0.5% supplemental real estate transfer tax, which would be
in addition to the existing 2% real estate transfer tax for the  Peconic
Bay region community preservation fund.
§  2.  This  act  shall  be known and may be cited as the "Peconic Bay
region community housing act".
§ 3. The town law is amended by adding a new section 64-k to  read  as
§ 64-K. PECONIC BAY REGION COMMUNITY HOUSING FUND.  1. DEFINITIONS. AS
(A) "PECONIC BAY REGION" MEANS THE TOWNS OF EAST  HAMPTON,  RIVERHEAD,
(B)  "COMMUNITY  HOUSING"  MEANS  A PRIMARY RESIDENTIAL PROPERTY FOR A
HOUSEHOLD WITH AN INCOME THAT DOES NOT EXCEED ONE HUNDRED PERCENT OF THE
INCOME LIMITS AND ONE  HUNDRED  FIFTY  PERCENT  OF  THE  PURCHASE  PRICE
LIMITS.  THE  INCOME LIMITS AND PURCHASE PRICE LIMITS SHALL BE AS ESTAB-
LISHED BY THE STATE OF NEW YORK MORTGAGE AGENCY LOW INTEREST  RATE  LOAN
PROGRAM  IN  NON-TARGET  CATEGORIES  FOR SUFFOLK COUNTY IN EFFECT ON THE
CONTRACT DATE FOR THE SALE OF SUCH PROPERTY.
(D) "FUND" MEANS THE COMMUNITY HOUSING  FUND  AUTHORIZED  PURSUANT  TO
(E)  "FIRST  HOME" MEANS A PERSON WHO HAS NOT OWNED A PRIMARY RESIDEN-
TIAL PROPERTY AND IS NOT MARRIED TO A PERSON WHO HAS OWNED A RESIDENTIAL
PROPERTY DURING THE THREE-YEAR PERIOD PRIOR TO HIS OR  HER  PURCHASE  OF
THE  PRIMARY  RESIDENTIAL  PROPERTY,  AND WHO DOES NOT OWN A VACATION OR
(F) "PRIMARY RESIDENTIAL PROPERTY" MEANS ANY ONE OR TWO FAMILY  HOUSE,
TOWNHOUSE, OR CONDOMINIUM.
(G)  "EDUCATION  IMPACT PAYMENT" MEANS AN ANNUAL PAYMENT MADE FROM THE
FUND TO SCHOOL DISTRICTS NOT TO EXCEED AN AMOUNT EQUAL TO THE ADDITIONAL
ANNUAL REAL PROPERTY TAX IMPACT OF EDUCATING THE NUMBER OF STUDENTS THAT
WILL BE ADDED TO A SCHOOL DISTRICT AS A  RESULT  OF  THE  PRODUCTION  OF
COMMUNITY  HOUSING, PURSUANT TO THE FUND. SUCH ANNUAL PAYMENTS SHALL NOT
REGION IS AUTHORIZED TO ESTABLISH BY LOCAL LAW A COMMUNITY HOUSING FUND,
S. 4040                             3
PURSUANT  TO  THE PROVISIONS OF THIS SECTION. DEPOSITS INTO THE FUND MAY
INCLUDE REVENUES OF THE LOCAL GOVERNMENT FROM WHATEVER SOURCE, INCLUDING
BUT NOT LIMITED TO: (A) ALL REVENUES FROM THE SUPPLEMENTAL  REAL  ESTATE
TRANSFER  TAX  AUTHORIZED BY SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED
FORTY-NINE-BB OF THE TAX LAW; (B) ALL PROCEEDS FROM ANY INDEBTEDNESS  OR
OBLIGATIONS ISSUED PURSUANT TO THE LOCAL FINANCE LAW FOR COMMUNITY HOUS-
ING  OPPORTUNITY  PURPOSES  AS  AUTHORIZED  IN SUBDIVISION THREE OF THIS
SECTION; (C) GENERAL  FUND  BALANCES  OR  SURPLUSES;  (D)  ANY  PROCEEDS
RECEIVED  BY  THE LOCAL GOVERNMENT FROM THE SALE OR RENTAL OF AFFORDABLE
HOUSING PRODUCED FROM REVENUES OF THE FUND; (E)  THE  REPAYMENT  OF  ANY
LOANS  ISSUED  FROM  PROCEEDS OF THE FUND; (F) ANY GIFTS OF INTERESTS IN
LAND OR FUNDS; (G) ANY STATE OR FEDERAL GRANTS RECEIVED BY THE TOWN  FOR
PROVIDING AFFORDABLE HOMES.
(A) THE PROVISION OF NO-INTEREST LOANS TO ELIGIBLE  RESIDENTS  OF  THE
TOWN FOR THE PURCHASE OF A FIRST HOME.
(1)  A  TOWN  MAY  MAKE  A  LOAN TO A RESIDENT OF THE TOWN OR A PERSON
EMPLOYED IN THE TOWN FOR THE PURCHASE OF A FIRST HOME. A RESIDENT OF THE
TOWN SHALL INCLUDE A PERSON WHO IS CURRENTLY A PRIMARY RESIDENT  OF  THE
TOWN  OR  A NON-RESIDENT WHO HAS BEEN A PRIMARY RESIDENT WITHIN THE PAST
(2) SAID LOAN SHALL NOT EXCEED FIFTY PERCENT OF THE PURCHASE PRICE  OF
(3)  SAID  LOAN SHALL BE REPAYABLE TO THE TOWN UPON THE RE-SALE OF THE
(4) THE REPAYMENT TO THE TOWN SHALL BE AN AMOUNT EQUAL TO THE  PROPOR-
TION  OF  THE ORIGINAL LOAN FROM THE TOWN TO THE ORIGINAL PURCHASE PRICE
TO THE RESALE PRICE MULTIPLIED BY THE RE-SALE PURCHASE PRICE.
(5) FOR THE PURPOSES OF CALCULATING TOWN TAX LIABILITY FOR SUCH  PROP-
ERTY,  ONLY,  THE  DOLLAR AMOUNT OF ANY LOAN FOR THE PURCHASE OF A FIRST
HOME MADE BY THE TOWN PURSUANT TO THIS SECTION SHALL BE SUBTRACTED  FROM
THE FULL EQUALIZED ASSESSED VALUE OF SUCH PROPERTY.
(6)  ALL  REVENUES  RECEIVED  BY  THE TOWN FROM THE REPAYMENT OF LOANS
(B) THE ACTUAL PRODUCTION OF COMMUNITY HOUSING FOR  SALE  TO  ELIGIBLE
(C)  THE  ACTUAL  PRODUCTION OF COMMUNITY HOUSING FOR SALE TO ELIGIBLE
INDIVIDUALS IN CONJUNCTION WITH A PUBLIC/PRIVATE PARTNERSHIP, WHERE  THE
PRIVATE  PARTNER  AGREES TO COMPLY WITH THE PROFIT GUIDELINES OF THE NEW
YORK STATE AFFORDABLE HOUSING CORPORATION AND  THE  PROVISIONS  OF  THIS
STATE AFFORDABLE HOUSING CORPORATION AND THE PROVISIONS OF THIS SECTION;
DEFINED IN PARAGRAPH (G) OF SUBDIVISION ONE OF THIS SECTION.
S. 4040                             4
(H)  THE  TOWN SHALL HAVE THE AUTHORITY TO ENACT RULES AND REGULATIONS
TO FACILITATE THE PROVISIONS AND PURPOSES OF THIS SECTION.
4. FUND MANAGEMENT. INTEREST ACCRUED BY MONIES DEPOSITED INTO THE FUND
SHALL  BE  CREDITED TO THE FUND. IN NO EVENT SHALL MONIES DEPOSITED INTO
THE FUND BE TRANSFERRED TO ANY OTHER ACCOUNT. NOTHING CONTAINED IN  THIS
SECTION SHALL BE CONSTRUED TO PREVENT THE FINANCING IN WHOLE OR IN PART,
PURSUANT TO THE LOCAL FINANCE LAW, OF ANY PURPOSE AUTHORIZED PURSUANT TO
THIS SECTION. MONIES FROM THE FUND MAY BE UTILIZED TO REPAY INDEBTEDNESS
OR  OBLIGATIONS  INCURRED  PURSUANT  TO THE LOCAL FINANCE LAW CONSISTENT
WITH EFFECTUATING THE PURPOSES OF THIS SECTION.
5. ELIGIBLE EXPENSES. FOR  THE  PURPOSES  OF  THIS  SECTION,  ELIGIBLE
EXPENSES  RELATING  TO THE PRODUCTION OF COMMUNITY HOUSING AND THE REHA-
BILITATION OF EXISTING BUILDINGS AND STRUCTURES  UNDER  THE  FUND  SHALL
INCLUDE  BUT  NOT BE LIMITED TO LAND ACQUISITION, PLANNING, ENGINEERING,
CONSTRUCTION COSTS, AND OTHER HARD AND SOFT COSTS  DIRECTLY  RELATED  TO
THE CONSTRUCTION, REHABILITATION, PURCHASE OR RENTAL OF HOUSING PURSUANT
TO  THIS  SECTION.  ALL  REVENUES  RECEIVED BY THE TOWN FROM THE SALE OR
RENTAL OF COMMUNITY HOMES, OR THE REPAYMENT OF LOANS SHALL BE  DEPOSITED
6.  ADVISORY  BOARD  ESTABLISHED.  THE  TOWN  BOARD OF ANY TOWN IN THE
PECONIC BAY REGION WHICH HAS ESTABLISHED A COMMUNITY HOUSING FUND PURSU-
ANT TO THIS SECTION SHALL CREATE AN ADVISORY BOARD TO  REVIEW  AND  MAKE
RECOMMENDATIONS  REGARDING THE TOWN'S COMMUNITY HOUSING PLAN REQUIRED BY
SUBDIVISION SEVEN OF THIS SECTION. SUCH BOARD SHALL CONSIST OF NOT  LESS
THAN SEVEN NOR MORE THAN FIFTEEN LEGAL RESIDENTS OF THE MUNICIPALITY WHO
SHALL  SERVE  WITHOUT  COMPENSATION.  NO MEMBER OF THE LOCAL LEGISLATIVE
BODY SHALL SERVE ON THE BOARD. THE BOARD SHALL INCLUDE A  REPRESENTATIVE
OF: (A) THE CONSTRUCTION INDUSTRY; (B) THE REAL ESTATE INDUSTRY; (C) THE
BANKING INDUSTRY; AND THREE REPRESENTATIVES OF LOCAL HOUSING ADVOCACY OR
HUMAN SERVICES ORGANIZATIONS. WHERE A VILLAGE OR VILLAGES, LOCATED WITH-
IN  THE  TOWN,  HAVE  ELECTED TO PARTICIPATE IN THE FUND, AS PROVIDED IN
SUBDIVISION SEVEN OF THIS SECTION, THE BOARD SHALL INCLUDE AT LEAST  ONE
RESIDENT  OF A PARTICIPATING VILLAGE OR VILLAGES. WHERE AN INDIAN NATION
IS LOCATED WITHIN THE BOUNDARIES OF A TOWN, THE BOARD SHALL  INCLUDE  AT
LEAST  ONE  MEMBER  FROM SUCH NATION. THE BOARD SHALL ACT IN AN ADVISORY
CAPACITY TO THE TOWN BOARD.
7. ADOPTION OF HOUSING PLAN.   (A) BEFORE A  TOWN  MAY  ESTABLISH  THE
FUND,  THE TOWN BOARD SHALL FIRST ADOPT A TOWN HOUSING PLAN WHICH ESTAB-
LISHES AN IMPLEMENTATION PLAN FOR THE  PROVISION  OF  COMMUNITY  HOUSING
OPPORTUNITIES BY THE FUND. SAID PLAN SHALL BE ADOPTED BY LOCAL LAW. SUCH
PLAN SHALL ADHERE TO THE FOLLOWING SMART GROWTH PRINCIPLES:
S. 4040                             5
(5)  COMMUNITY  DESIGN.  TO STRENGTHEN COMMUNITIES THROUGH DEVELOPMENT
AND REDEVELOPMENT STRATEGIES THAT INCLUDE INTEGRATION OF ALL INCOME  AND
BORHOOD  DEVELOPMENT,  PLANNED  UNIT  DEVELOPMENT, OPEN SPACE DISTRICTS,
DOWNTOWN REVITALIZATION, BROWNFIELD REDEVELOPMENT,  ENHANCED  BEAUTY  IN
(C) SUCH PLAN SHALL BE UPDATED AT LEAST ONCE EVERY  FIVE  YEARS.  SUCH
PLAN  AND  LOCAL  LAW  SHALL  BE  ADOPTED AT LEAST SIXTY DAYS BEFORE THE
MANDATORY REFERENDUM REQUIRED BY SUBDIVISION TEN OF THIS SECTION.
(E) SUCH PLAN SHALL PROVIDE FOR  THE  LEGAL  MECHANISM  THAT  WILL  BE
AT COMMUNITY HOUSING ELIGIBILITY LEVELS. THE RE-SALE OF COMMUNITY  HOUS-
ING  CREATED  PURSUANT  TO  THIS  SECTION  TO OTHER THAN INCOME ELIGIBLE
(F) SUCH HOUSING PLAN SHALL PROVIDE FOR THE EQUITABLE DISTRIBUTION  OF
COMMUNITY HOUSING OPPORTUNITIES AMONG ALL THE HAMLETS AND COMMUNITIES OF
THE TOWN. THE PLAN SHALL INSURE THAT NO HAMLET OR COMMUNITY IS SITED FOR
AN  UNDUE  CONCENTRATION  OF  COMMUNITY HOUSING OPPORTUNITIES THAT WOULD
SUBSTANTIALLY ALTER THE CHARACTER OF THE HAMLET OR COMMUNITY. IN  DETER-
MINING EQUITABLE DISTRIBUTION OF COMMUNITY HOUSING OPPORTUNITIES, EXIST-
ING  COMMUNITY  HOUSING  OPPORTUNITIES IN A HAMLET OR COMMUNITY SHALL BE
(G) SUCH HOUSING PLAN SHALL INCLUDE A  REGIONAL  HOUSING  STRATEGY  IN
CONJUNCTION  WITH ALL OTHER PECONIC BAY TOWNS FOR THE PURPOSE OF MEETING
THE REGIONAL HOUSING NEEDS IN THE PECONIC BAY REGION.
8. VILLAGE AND INDIAN NATION PARTICIPATION.  (A) THE PARTICIPATION  OF
ANY VILLAGE OR INDIAN NATION IN THE COMMUNITY HOUSING PROGRAM AUTHORIZED
BY  THIS SECTION SHALL BE AT THE OPTION OF THE VILLAGE OR INDIAN NATION.
IN ORDER TO PARTICIPATE, A VILLAGE OR INDIAN NATION SHALL PASS A  RESOL-
UTION  OPTING  INTO  THE PROGRAM AND SHALL SUBMIT SAID RESOLUTION TO THE
S. 4040                             6
9. REGIONAL HOUSING STRATEGY. WITHIN ONE YEAR OF THE EFFECTIVE DATE OF
THIS  SECTION,  THE  TOWNS SHALL ENTER INTO AN INTER-MUNICIPAL AGREEMENT
PURSUANT TO ARTICLE FIVE-G OF  THE  GENERAL  MUNICIPAL  LAW  TO  JOINTLY
IMPLEMENT  A REGIONAL HOUSING STRATEGY, AS PROVIDED FOR BY PARAGRAPH (G)
OF  SUBDIVISION  SEVEN  OF  THIS  SECTION,  CONSISTENT WITH THE PURPOSES
ENUMERATED IN SUBDIVISION THREE OF THIS SECTION. AT LEAST TWENTY PERCENT
OF THE ANNUAL REVENUES OF EACH TOWN FUND SHALL BE DEVOTED TO THE  IMPLE-
MENTATION OF THIS REGIONAL HOUSING STRATEGY.
10.  MANDATORY  REFERENDUM. THE LOCAL LAW OR LAWS ADOPTING THE HOUSING
PLAN AND ESTABLISHING THE COMMUNITY HOUSING FUND SHALL BE SUBJECT  TO  A
MANDATORY REFERENDUM. SUCH LOCAL LAW OR LAWS SHALL ONLY BECOME EFFECTIVE
UPON THE ADOPTION OF SAID REFERENDUM BY THE ELECTORS OF THE TOWN.
§  4.  Section  1449-bb of the tax law, as added by chapter 114 of the
§ 1449-bb. Imposition of tax. 1. Notwithstanding any other  provisions
of  law  to  the  contrary,  any  town in the Peconic Bay region, acting
through its town board, is hereby authorized and empowered  to  adopt  a
local law imposing in such town a tax on each conveyance of real proper-
ty  or  interest  therein  where  the consideration exceeds five hundred
dollars, at the rate of  two  percent  of  the  consideration  for  such
conveyance.    Provided, however, any such local law imposing, repealing
or reimposing such tax shall be subject to a mandatory referendum pursu-
ant to section twenty-three of the municipal  home  rule  law.  Notwith-
standing  the  foregoing,  prior to adoption of such local law, the town
must establish a community preservation fund pursuant to section  sixty-
four-e  of  the  town  law. Revenues from such tax shall be deposited in
such fund and may be used solely for the purposes  of  such  fund.  Such
local  law shall apply to any conveyance occurring on or after the first
day of a month to be designated by such town board, which  is  not  less
than  sixty  days  after  the enactment of such local law, but shall not
apply to conveyances made on or after  such  date  pursuant  to  binding
written  contracts  entered  into  prior to such date, provided that the
date of execution of such contract is confirmed by independent  evidence
such  as  the  recording  of the contract, payment of a deposit or other
facts and circumstances as determined by the treasurer.
2. NOTWITHSTANDING ANY OTHER PROVISIONS OF LAW  TO  THE  CONTRARY,  IN
ADDITION  TO  THE TAX AUTHORIZED BY SUBDIVISION ONE OF THIS SECTION, ANY
TOWN IN THE PECONIC BAY REGION, ACTING THROUGH ITS TOWN BOARD, IS HEREBY
AUTHORIZED AND EMPOWERED TO ADOPT A LOCAL LAW IMPOSING IN  SUCH  TOWN  A
SUPPLEMENTAL TAX ON EACH CONVEYANCE OF REAL PROPERTY OR INTEREST THEREIN
WHERE THE CONSIDERATION EXCEEDS FIVE HUNDRED DOLLARS, AT THE RATE OF ONE
HALF  OF ONE PERCENT OF THE CONSIDERATION FOR SUCH CONVEYANCE. PROVIDED,
HOWEVER, ANY SUCH LOCAL LAW  IMPOSING,  REPEALING  OR  RE-IMPOSING  SUCH
SUPPLEMENTAL  TAX SHALL BE SUBJECT TO A MANDATORY REFERENDUM PURSUANT TO
SECTION TWENTY-THREE OF THE MUNICIPAL HOME RULE LAW. NOTWITHSTANDING THE
FOREGOING, PRIOR TO ADOPTION OF SUCH LOCAL LAW, THE TOWN MUST  ESTABLISH
A  COMMUNITY  HOUSING  FUND PURSUANT TO SECTION SIXTY-FOUR-K OF THE TOWN
LAW.  REVENUES FROM SUCH SUPPLEMENTAL TAX SHALL  BE  DEPOSITED  IN  SUCH
FUND  AND  MAY  BE USED SOLELY FOR THE PURPOSES OF SUCH FUND. SUCH LOCAL
LAW SHALL APPLY TO ANY CONVEYANCE OCCURRING ON OR AFTER THE FIRST DAY OF
A MONTH TO BE DESIGNATED BY SUCH TOWN BOARD,  WHICH  IS  NOT  LESS  THAN
SIXTY DAYS AFTER THE ENACTMENT OF SUCH LOCAL LAW, BUT SHALL NOT APPLY TO
CONVEYANCES  MADE  ON  OR  AFTER  SUCH  DATE PURSUANT TO BINDING WRITTEN
CONTRACTS ENTERED INTO PRIOR TO SUCH DATE, PROVIDED  THAT  THE  DATE  OF
EXECUTION  OF SUCH CONTRACT IS CONFIRMED BY INDEPENDENT EVIDENCE SUCH AS
S. 4040                             7
THE RECORDING OF THE CONTRACT, PAYMENT OF A DEPOSIT OR OTHER  FACTS  AND
CIRCUMSTANCES AS DETERMINED BY THE TREASURER.
§  5.  Subdivision  3  of  section 1449-ee of the tax law, as added by
chapter 114 of the laws of 1998, is amended to read as follows:
3. (a) In the towns of East Hampton, Shelter Island  and  Southampton,
an  exemption  of  [two]  FOUR hundred [fifty] thousand dollars shall be
allowed on the consideration of the conveyance of improved real property
or an interest therein and an exemption of one hundred thousand  dollars
shall  be  allowed  on the consideration of the conveyance of unimproved
real property. THIS EXEMPTION SHALL ALSO APPLY TO ANY  SUPPLEMENTAL  TAX
IMPOSED  PURSUANT  TO SUBDIVISION TWO OF SECTION FOURTEEN HUNDRED FORTY-
NINE-BB OF THIS ARTICLE.
(b) In the towns of Riverhead and Southold, an exemption of [one]  TWO
hundred  [fifty] EIGHTY thousand dollars shall be allowed on the consid-
eration of the conveyance of improved real property or an interest ther-
ein and an exemption of seventy-five thousand dollars shall  be  allowed
on  the  consideration  of  the  conveyance of unimproved real property.
THIS EXEMPTION SHALL ALSO APPLY TO ANY SUPPLEMENTAL TAX IMPOSED PURSUANT
TO SUBDIVISION TWO OF SECTION FOURTEEN  HUNDRED  FORTY-NINE-BB  OF  THIS
(C) THE PROVISIONS OF THIS SUBDIVISION SHALL ONLY APPLY TO CONVEYANCES
FOR  RESIDENTIAL PROPERTY WHERE THE CONSIDERATION IS TWO MILLION DOLLARS
§ 7. This act shall take effect immediately; provided,  however,  that
the  amendments  to  section 1449-bb of the tax law and subdivision 3 of
section 1449-ee of the tax law, made by sections four and five  of  this
act,  respectively,  shall  not affect the repeal of article 31-D of the
tax law and shall be deemed to be repealed therewith.
S4040A (ACTIVE) - Details
S4040A (ACTIVE) - Summary
S4040A (ACTIVE) - Sponsor Memo
BILL NUMBER: S4040A
TITLE OF BILL:  An act to amend the town law and the tax law, in
relation to authorizing towns in the Peconic Bay region to establish
community housing funds to be funded by a supplemental real estate
housing funds to be funded by a supplemental real estate transfer tax
Section 2. Cites the Peconic Bay Region Community Housing Act
the sole purpose of funding an established community housing fund
fer tax
Section 6. Amends subparagraph 1 of paragraph (a) of subdivision 4 of
Section 1449-ee to increase the purchase price limit for the exemption
for first-time homebuyers in the towns of East Hampton, Southampton and
Shelter Island from 120% to 150% of the purchase price limit defined by
the State of New York Mortgage Agency (SONYMA).
Section 8. Provides for an immediate effective date and shall remain in
and retention. Long-time residents are forced to leave the area.
Traffic congestion is intensified by the importation of labor from areas
with lower housing costs. Finally, the lack of housing opportunities is
The unique demographics. and economics in the Peconic Bay region and a
imity to the dense population of the New York metropolitan region, and
to that region's extraordinary wealth, makes the Peconic Bay region a
prime location for seasonal and luxury homes.  While this combination of
more difficult for first-time homebuyers by imposing a $10,000 cap on
It is the public purpose of this legislation, to give the towns of the
dedicated fund to provide needed housing opportunities.  Specifically,
are enacted in the context of a comprehensive plan. The funds shall
including a 0.5% supplemental real estate transfer tax, which would be
an addition to the existing 2% real estate transfer tax for the Peconic
S4040A (ACTIVE) - Bill Text download pdf
4040--A
LBD03159-14-9
S. 4040--A                          2
In  summary,  the  demand  of  land  for luxury and seasonal homes and
seasonal rentals has left a short supply of  housing  opportunities  for
the  new federal tax bill will only exacerbate this problem by making it
more difficult for first time homebuyers by imposing a  $10,000  cap  on
the  deductibility of state and local taxes and by reducing the mortgage
interest deduction on new mortgages. The Peconic Bay region  requires  a
balanced  housing  policy  where there exists a variety of housing types
It is the public purpose of this legislation to give the towns of  the
Peconic  Bay  region  the  authority and resources needed to establish a
dedicated fund to provide needed  housing  opportunities.  Specifically,
fund  to  increase  housing opportunities in the region. Further, a town
approved and implemented to insure that these new housing  opportunities
are  enacted  in  the context of a comprehensive plan. The fund shall be
including a 0.5% supplemental real estate transfer tax, which  would  be
in  addition to the existing 2% real estate transfer tax for the Peconic
In addition, the exemption amounts from the total real estate transfer
tax would be increased to $400,000 in the  towns  of  Southampton,  East
Hampton and Shelter Island and to $280,000 in the towns of Riverhead and
Southold.  This will insure that in the towns of East Hampton, Southamp-
ton, and Shelter Island, the real estate transfer tax  will  be  reduced
from  current  law  for  property  transfers  with a consideration under
$1,000,000.  The real estate transfer tax would be reduced from  current
law in the towns of Southold and Riverhead for property transfers with a
consideration  under $800,000. Finally, the purchase price limit for the
exemption for first time homebuyers in the towns of East Hampton, South-
ampton and Shelter Island would be increased from 120% to  150%  of  the
purchase  price  limit defined by the state of New York mortgage agency.
These amendments to the exemptions will reduce any adverse  impact  from
the transfer tax on the provision of community housing.
(B)  "COMMUNITY  HOUSING"  MEANS A PRIMARY RESIDENTIAL PROPERTY FOR AN
ELIGIBLE INDIVIDUAL THAT DOES NOT EXCEED ONE HUNDRED  FIFTY  PERCENT  OF
THE  PURCHASE PRICE LIMITS ESTABLISHED BY THE STATE OF NEW YORK MORTGAGE
AGENCY LOW INTEREST RATE  LOAN  PROGRAM  IN  NON-TARGET  CATEGORIES  FOR
SUFFOLK COUNTY IN EFFECT ON THE CONTRACT DATE FOR THE SALE OF SUCH PROP-
(C)  "BOARD"  MEANS THE ADVISORY BOARD CREATED PURSUANT TO SUBDIVISION
S. 4040--A                          3
(E)  "FIRST-TIME  HOMEBUYER"  MEANS AN ELIGIBLE INDIVIDUAL WHO HAS NOT
OWNED A PRIMARY RESIDENTIAL PROPERTY AND IS NOT MARRIED TO A PERSON  WHO
HAS  OWNED  A RESIDENTIAL PROPERTY DURING THE THREE-YEAR PERIOD PRIOR TO
HIS OR HER PURCHASE OF THE PRIMARY RESIDENTIAL PROPERTY,  AND  WHO  DOES
NOT OWN A VACATION OR INVESTMENT HOME.
(F)  "PRIMARY RESIDENTIAL PROPERTY" MEANS ANY ONE OR TWO FAMILY HOUSE,
(G) "ELIGIBLE INDIVIDUAL" MEANS A HOUSEHOLD WITH AN INCOME  THAT  DOES
NOT  EXCEED  ONE  HUNDRED PERCENT OF THE INCOME LIMITS AS ESTABLISHED BY
THE STATE OF NEW YORK MORTGAGE AGENCY LOW INTEREST RATE LOAN PROGRAM  IN
NON-TARGET  CATEGORIES FOR SUFFOLK COUNTY IN EFFECT ON THE CONTRACT DATE
FOR THE SALE OF SUCH PROPERTY.
RECEIVED  BY  THE  LOCAL GOVERNMENT FROM THE SALE OR RENTAL OF COMMUNITY
(A) THE PROVISION OF FINANCIAL ASSISTANCE TO FIRST-TIME HOMEBUYERS WHO
ARE RESIDENTS OF THE TOWN FOR THE PURCHASE OF A FIRST HOME.  SAID FINAN-
CIAL ASSISTANCE MAY BE IN THE FORM OF GRANTS OR LOANS.
(1) A TOWN MAY PROVIDE FINANCIAL ASSISTANCE TO A FIRST-TIME  HOMEBUYER
WHO  IS  A  RESIDENT  OF THE TOWN OR WHO IS EMPLOYED IN THE TOWN FOR THE
PURCHASE OF A FIRST HOME. A RESIDENT OF THE TOWN SHALL INCLUDE A  PERSON
WHO IS CURRENTLY A RESIDENT OF THE TOWN OR A NON-RESIDENT WHO HAS BEEN A
RESIDENT WITHIN THE PAST FIVE YEARS.
(2)  SAID  FINANCIAL  ASSISTANCE SHALL NOT EXCEED FIFTY PERCENT OF THE
(3) IF SAID FINANCIAL ASSISTANCE IS IN THE FORM OF A LOAN,  SAID  LOAN
SHALL  BE  REPAYABLE TO THE TOWN PURSUANT TO THE TERMS AGREED TO BETWEEN
THE RECIPIENT AND THE TOWN, PROVIDED THAT, AT A MINIMUM, ANY LOAN  SHALL
BE FULLY REPAID BY THE RECIPIENT UPON THE RESALE OF THE HOME.
(4)  FOR THE PURPOSES OF CALCULATING TOWN TAX LIABILITY FOR SUCH PROP-
ERTY, ONLY, THE DOLLAR  AMOUNT  OF  ANY  FINANCIAL  ASSISTANCE  FOR  THE
PURCHASE OF A FIRST HOME MADE BY THE TOWN PURSUANT TO THIS SECTION SHALL
BE SUBTRACTED FROM THE FULL EQUALIZED ASSESSED VALUE OF SUCH PROPERTY.
(5)  ALL  REVENUES  RECEIVED  BY THE TOWN FROM THE REPAYMENT OF A LOAN
(6) A TOWN MAY PROVIDE FINANCIAL ASSISTANCE FOR COMMUNITY  HOUSING  IN
CONJUNCTION  WITH  A  PUBLIC/PRIVATE  PARTNERSHIP  FOR EMPLOYER ASSISTED
S. 4040--A                          4
(D)  THE  ACTUAL  PRODUCTION  AND MAINTENANCE OF COMMUNITY HOUSING FOR
RENTAL TO ELIGIBLE INDIVIDUALS EITHER BY THE TOWN OR  THE  TOWN  HOUSING
AUTHORITY;  OR  IN  CONJUNCTION WITH A PUBLIC/PRIVATE PARTNERSHIP, WHERE
THE PRIVATE PARTNER AGREES TO COMPLY WITH THE PROFIT GUIDELINES  OF  THE
NEW YORK STATE AFFORDABLE HOUSING CORPORATION AND THE PROVISIONS OF THIS
RENTAL TO ELIGIBLE INDIVIDUALS; AND
ING AND URBAN DEVELOPMENT TO PROVIDE SUCH SERVICES.
SHALL BE CREDITED TO THE FUND. IN NO EVENT SHALL MONIES  DEPOSITED  INTO
THE  FUND BE TRANSFERRED TO ANY OTHER ACCOUNT. NOTHING CONTAINED IN THIS
OR OBLIGATIONS INCURRED PURSUANT TO THE  LOCAL  FINANCE  LAW  CONSISTENT
5.  ELIGIBLE  EXPENSES.  FOR  THE  PURPOSES  OF THIS SECTION, ELIGIBLE
EXPENSES RELATING TO THE PRODUCTION OF COMMUNITY HOUSING AND  THE  REHA-
BILITATION  OF  EXISTING  BUILDINGS  AND STRUCTURES UNDER THE FUND SHALL
INCLUDE BUT NOT BE LIMITED TO LAND ACQUISITION,  PLANNING,  ENGINEERING,
CONSTRUCTION  COSTS,  AND  OTHER HARD AND SOFT COSTS DIRECTLY RELATED TO
TO THIS SECTION. ALL REVENUES RECEIVED BY THE  TOWN  FROM  THE  SALE  OR
RENTAL  OF COMMUNITY HOMES, OR THE REPAYMENT OF LOANS SHALL BE DEPOSITED
6. ADVISORY BOARD ESTABLISHED. THE TOWN  BOARD  OF  ANY  TOWN  IN  THE
ANT  TO  THIS  SECTION SHALL CREATE AN ADVISORY BOARD TO REVIEW AND MAKE
RECOMMENDATIONS REGARDING THE TOWN'S COMMUNITY HOUSING PLAN REQUIRED  BY
SUBDIVISION  SEVEN OF THIS SECTION. SUCH BOARD SHALL CONSIST OF NOT LESS
SHALL SERVE WITHOUT COMPENSATION. NO MEMBER  OF  THE  LOCAL  LEGISLATIVE
BODY  SHALL SERVE ON THE BOARD. THE BOARD SHALL INCLUDE A REPRESENTATIVE
IN THE TOWN, HAVE ELECTED TO PARTICIPATE IN THE  FUND,  AS  PROVIDED  IN
SUBDIVISION  SEVEN OF THIS SECTION, THE BOARD SHALL INCLUDE AT LEAST ONE
RESIDENT OF A PARTICIPATING VILLAGE OR VILLAGES. WHERE AN INDIAN  NATION
IS  LOCATED  WITHIN THE BOUNDARIES OF A TOWN, THE BOARD SHALL INCLUDE AT
LEAST ONE MEMBER FROM SUCH NATION. THE BOARD SHALL ACT  IN  AN  ADVISORY
7.  ADOPTION  OF  HOUSING PLAN.   (A) BEFORE A TOWN IN THE PECONIC BAY
REGION MAY ESTABLISH THE FUND, THE TOWN BOARD SHALL FIRST ADOPT  A  TOWN
HOUSING  PLAN WHICH ESTABLISHES AN IMPLEMENTATION PLAN FOR THE PROVISION
S. 4040--A                          5
OF COMMUNITY HOUSING OPPORTUNITIES BY  THE  FUND.  SAID  PLAN  SHALL  BE
ADOPTED  BY  LOCAL  LAW.  SUCH  PLAN SHALL ADHERE TO THE FOLLOWING SMART
PUBLIC SPACES, AND DIVERSE AND COMMUNITY HOUSING IN CLOSE  PROXIMITY  TO
INCREASING PUBLIC TRANSIT AND ALTERNATIVE MODES  OF  TRANSPORTATION,  IN
ORDER  TO  REDUCE AUTOMOBILE DEPENDENCY, TRAFFIC CONGESTION, AND AUTOMO-
(7) CONSISTENCY. TO ENSURE PREDICTABILITY IN  BUILDING  AND  LAND  USE
(8)  COMMUNITY  COLLABORATION.  TO  PROVIDE  FOR  AND  ENCOURAGE LOCAL
GOVERNMENTS TO DEVELOP, THROUGH A COLLABORATIVE COMMUNITY-BASED  EFFORT,
SMART  GROWTH  PLANS THAT INCLUDE LONG TERM LAND USE AND PERMIT PREDICT-
ABILITY AND COORDINATION, EFFICIENT DECISION MAKING AND PLANNING  IMPLE-
(B)  SUCH  PLAN  MAY  INCLUDE  THE ESTABLISHMENT OF A MAP OR MAPS THAT
DELINEATE THE HOUSING IMPLEMENTATION  RECOMMENDATIONS  PROPOSED  BY  THE
(C)  SUCH  PLAN  SHALL BE UPDATED AT LEAST ONCE EVERY FIVE YEARS. SUCH
PLAN AND LOCAL LAW SHALL BE ADOPTED  AT  LEAST  SIXTY  DAYS  BEFORE  THE
(E) SUCH PLAN SHALL ENSURE THAT ALL COMMUNITY HOUSING CREATED PURSUANT
TO  THIS  SECTION  REMAINS  AFFORDABLE.    SUBSEQUENT PURCHASERS OF SUCH
COMMUNITY HOUSING SHALL HAVE AT THE TIME OF PURCHASE,  PURSUANT  TO  THE
DEFINITION  "ELIGIBLE  INDIVIDUAL",  AN  INCOME THAT DOES NOT EXCEED ONE
HUNDRED PERCENT OF THE INCOME LIMITS AS ESTABLISHED BY THE STATE OF  NEW
YORK  MORTGAGE AGENCY LOW INTEREST RATE LOAN PROGRAM IN NON-TARGET CATE-
GORIES FOR SUFFOLK COUNTY.
(F) SUCH PLAN SHALL PROVIDE FOR THE EQUITABLE DISTRIBUTION OF COMMUNI-
TY HOUSING OPPORTUNITIES AMONG ALL THE COMMUNITIES OF THE TOWN. THE PLAN
SHALL ENSURE THAT NO COMMUNITY IS SITED FOR AN  UNDUE  CONCENTRATION  OF
COMMUNITY HOUSING OPPORTUNITIES THAT WOULD SUBSTANTIALLY ALTER THE CHAR-
S. 4040--A                          6
ACTER  OF THE COMMUNITY. IN DETERMINING EQUITABLE DISTRIBUTION OF COMMU-
NITY HOUSING OPPORTUNITIES, EXISTING COMMUNITY HOUSING OPPORTUNITIES  IN
A COMMUNITY SHALL BE CONSIDERED.
8. VILLAGE PARTICIPATION.  (A) THE PARTICIPATION OF ANY VILLAGE IN THE
COMMUNITY  HOUSING  PROGRAM  AUTHORIZED  BY THIS SECTION SHALL BE AT THE
OPTION OF THE VILLAGE. IN ORDER TO PARTICIPATE, A VILLAGE SHALL  PASS  A
RESOLUTION  OPTING  INTO THE PROGRAM AND SHALL SUBMIT SAID RESOLUTION TO
(B) WHERE A VILLAGE OPTS TO PARTICIPATE PURSUANT TO THIS  SUBDIVISION,
AN  INTERGOVERNMENTAL  AGREEMENT  SHALL  BE EXECUTED PURSUANT TO ARTICLE
FIVE-G OF THE GENERAL MUNICIPAL LAW OR OTHER APPLICABLE LEGAL AUTHORITY,
IN ORDER TO ESTABLISH THE RIGHTS AND RESPONSIBILITIES OF EACH GOVERNMENT
REGARDING COMMUNITY HOUSING OPPORTUNITIES.
9. INTERMUNICIPAL AGREEMENTS. NOTWITHSTANDING ANY PROVISION OF LAW  TO
THE CONTRARY, TOWNS IN THE PECONIC BAY REGION MAY ENTER INTO INTERMUNIC-
IPAL  AGREEMENTS PURSUANT TO ARTICLE FIVE-G OF THE GENERAL MUNICIPAL LAW
10. MANDATORY REFERENDUM. THE LOCAL LAW OR LAWS ADOPTING  THE  HOUSING
PLAN  AND  ESTABLISHING THE COMMUNITY HOUSING FUND SHALL BE SUBJECT TO A
§ 4. Section 1449-bb of the tax law, as added by chapter  114  of  the
§  1449-bb. Imposition of tax. 1. Notwithstanding any other provisions
of law to the contrary, any town  in  the  Peconic  Bay  region,  acting
through  its  town  board, is hereby authorized and empowered to adopt a
ty or interest therein where  the  consideration  exceeds  five  hundred
dollars,  at  the  rate  of  two  percent  of the consideration for such
conveyance.  Provided, however, any such local law  imposing,  repealing
ant  to  section  twenty-three  of the municipal home rule law. Notwith-
standing the foregoing, prior to adoption of such local  law,  the  town
must  establish a community preservation fund pursuant to section sixty-
four-e of the town law. Revenues from such tax  shall  be  deposited  in
such  fund  and  may  be used solely for the purposes of such fund. Such
local law shall apply to any conveyance occurring on or after the  first
day  of  a  month to be designated by such town board, which is not less
than sixty days after the enactment of such local  law,  but  shall  not
apply  to  conveyances  made  on  or after such date pursuant to binding
written contracts entered into prior to such  date,  provided  that  the
date  of execution of such contract is confirmed by independent evidence
such as the recording of the contract, payment of  a  deposit  or  other
2.  NOTWITHSTANDING  ANY  OTHER  PROVISIONS OF LAW TO THE CONTRARY, IN
ADDITION TO THE TAX AUTHORIZED BY SUBDIVISION ONE OF THIS  SECTION,  ANY
AUTHORIZED  AND  EMPOWERED  TO ADOPT A LOCAL LAW IMPOSING IN SUCH TOWN A
HALF OF ONE PERCENT OF THE CONSIDERATION FOR SUCH CONVEYANCE.  PROVIDED,
HOWEVER,  ANY  SUCH  LOCAL  LAW  IMPOSING, REPEALING OR RE-IMPOSING SUCH
SUPPLEMENTAL TAX SHALL BE SUBJECT TO A MANDATORY REFERENDUM PURSUANT  TO
FOREGOING,  PRIOR TO ADOPTION OF SUCH LOCAL LAW, THE TOWN MUST ESTABLISH
A COMMUNITY HOUSING FUND PURSUANT TO SECTION SIXTY-FOUR-K  OF  THE  TOWN
S. 4040--A                          7
LAW.    REVENUES  FROM  SUCH SUPPLEMENTAL TAX SHALL BE DEPOSITED IN SUCH
FUND AND MAY BE USED SOLELY FOR THE PURPOSES OF SUCH  FUND.  SUCH  LOCAL
A  MONTH  TO  BE  DESIGNATED  BY SUCH TOWN BOARD, WHICH IS NOT LESS THAN
CONVEYANCES MADE ON OR AFTER  SUCH  DATE  PURSUANT  TO  BINDING  WRITTEN
CONTRACTS  ENTERED  INTO  PRIOR  TO SUCH DATE, PROVIDED THAT THE DATE OF
EXECUTION OF SUCH CONTRACT IS CONFIRMED BY INDEPENDENT EVIDENCE SUCH  AS
THE  RECORDING  OF THE CONTRACT, PAYMENT OF A DEPOSIT OR OTHER FACTS AND
CIRCUMSTANCES AS DETERMINED BY THE TREASURER. ANY TAX  IMPOSED  PURSUANT
TO THIS SUBDIVISION SHALL BE ADMINISTERED AND COLLECTED IN A LIKE MANNER
AS THE TAX IMPOSED BY SUBDIVISION ONE OF THIS SECTION.
on the consideration of the conveyance of unimproved real property.
§ 6. Subparagraph 1 of paragraph  (a)  of  subdivision  4  of  section
1449-ee  of  the tax law, as amended by chapter 389 of the laws of 2014,
(1) in the towns of Southampton, East Hampton and Shelter Island,  the
primary  residential  property  is  within  one  hundred  [twenty] FIFTY
percent of the purchase price limits defined by the state  of  New  York
mortgage agency low interest rate mortgage program in the non-target one
family  categories for Suffolk county in effect on the contract date for
the sale of such property;
§ 7. Severability clause. If any provision of this act or  application
the  amendments  to sections 1449-bb and 1449-ee of the tax law, made by
sections four, five, and six of this act shall not affect the repeal  of
article  31-D  of  the tax law and shall be deemed to be repealed there-