2015 Legislative Session Ends
More than a week past the original June 17 deadline, the Senate and Assembly finished the 2015 session in the late hours of Thursday June 25th, acting primarily on S.6012 / A.8323. This bill included major program extensions and reforms on NYC rent regulations, 421-a tax abatement program, the Property Tax Cap, a new property tax relief credit/rebate program, and education reforms.
Items not part of the package include raising the age of criminal responsibility, ethics reform or pension forfeiture, mixed martial arts or a provision to raise minimum wage. Separately, the Assembly took up the final county sales tax extensions bills and other home rule revenue items. See below for a section-by-section breakdown of each of the final negotiated items in the comprehensive end-of-session bill. The Final week of the legislative session culminated Thursday night.
Agreement on Rent Control
The agreement extends the emergency housing rent control law until June 15, 2019. This includes the State Rent Stabilization Law, City Rent Stabilization Law, City Rent Control Law, and the Emergency Tenant Protection Act (ETPA). The bill language ensures all these provisions are retroactive to June 15, 2015, the date when rent regulation temporarily expired.
Vacancy provisions of the rent control law are amended to ensure that apartments with regulated rents of $2700 or more per month that become vacant after January 1, 2016 have an increase to their maximum legal regulated rent that is the same percentage as the most recent one-year renewal adjustment. The amendments also pertain to the exclusion of high rent accommodations. Beginning January 1, 2016, these thresholds will also increase by the same percentage as the one-year renewal adjustment. In both cases, these adjustments are to be set by the City’s rent guideline’s board.
The changes to rent regulations also decrease the vacancy bonus for preferential rent to 5%, 10%, 15%, or 20%, based on the length of tenancy in the unit rented at a preferential rate. The bill increases the threshold for civil penalties that may be imposed on landlords due to harassment by the Division of Housing and Community Renewal.
Lastly these changes address rent increases for rent-controlled units within buildings that undergo a major capital improvement required for the operation, preservation or maintenance of the structure. The changed law will ensure increased costs are amortized over an eight-year period for buildings with less than 35 units instead of the seven-year period used for buildings with more than 35 units.
Temporary Renewal of 421-a Program
The final package extends section 421-a of the real property tax law for seven months and provides that the program will be extended until June 15, 2019, if representatives of labor and real estate interest groups enter into a fully executed memorandum of understanding regarding wage protections for construction workers performing construction work on projects receiving 421-a benefits.
The bill language also amends section 421-a in order to:
- increase the number of affordable units being built under the program by providing for multiple affordable development options;
- mandate the same entry be available for use by all tenants;
- allow for the New York City Council to pass legislation modifying the Geographic Exclusion Area that defines where affordable units are mandated under this program;
- mandate wage protections for building service workers at buildings participating in the 421-a program; and
- increase the commitment to affordability and the length of the tax abatement to 35 years
The J-51 program, which is a property tax exemption and abatement for renovating certain multiple unit residential buildings, is also extended until June 15, 2019. The bill language also opens the window for applications under the 2010 Loft Law expansion for an additional two years and establishes compliance language for loft units that would be included.
Home Rule Extenders and Some Increases Pass
All of the local sales/compensating revenue bills were passed (including increases sought), as were the extensions and increases related to local Hotel/Motel taxes. All of the local mortgage recording tax extenders were passed, but no increases were passed. Extensions to real estate transfer tax rates were also passed. None of the Local Omnibus Sales tax bills passed, nor wireless surcharge increases. One county was also granted authority to impose a local motor vehicle fee of $15 and $30 depending on weight, including a $30 commercial vehicle fee as well.
Property Tax Cap Extension and Adjustments
The current property tax cap is not set to expire until June of 2016, but the tax cap law sunsets if rent control laws for New York City and surrounding communities are not renewed. Since the final package did renew the rent laws it also extended the property tax cap until June of 2020. The rent laws and property tax cap will continue to be linked together with a one year lag in expiration dates.
The bill does allow for two minor adjustments to the property tax cap calculation that are to be implemented administratively by the Commissioner of Taxation and Finance. The Commissioner is directed to develop changes to the tax cap calculation as follows:
- For BOCES, the tax cap calculation may be adjusted for capital local expenditures “…to reflect a school district’s share of additional budgeted capital expenditures made by a board of cooperative educational services.”
- To modify the calculation of the “…quantity change factor which may adjust the calculation based on the development on tax exempt land.” This quantity change factor modification would apply to all municipalities.
View NYSAC’s Property Tax research and reports.
STAR Rebate Check Program
The final package also included a 4-year program that generally resurrects the STAR rebate program that was discontinued during the Great Recession, but with a twist related to homeowner eligibility. The new program will provide state sponsored rebate checks to STAR eligible homeowners under the following parameters:
- The program is in place for 2016, 2017, 2018 and 2019 – excludes New York City.
- Checks will be distributed on or around October 15th of each year.
- The rebates will be provided on a sliding scale based on income with a cap of $275K of adjusted gross income (income will be determined by state income tax returns for the taxable year two years prior to the actual rebate payment – i.e., 2016 rebate check based on 2014 income tax return.
- To receive a rebate check the school district and dependent school districts must be tax cap compliant. There is no requirement that other municipalities maintain their tax caps for the rebates to be paid.
The State estimates that about 2.5 million homeowners will benefit from this program at a full annual cost of $1.3 billion by 2019. They estimate the average credit will be $532 by 2019.
In 2016, the credit will be payable in a set amount of $130 for eligible homeowners in the Metropolitan Commuter Transportation District (excluding NYC) and $185 in the rest of the state. The value of the credit will be phased in beginning in 2017 (based on income).
The chart below summarizes the phase in of the credit and how it might look under varying dollar value assumptions.
|¹ These represent NYSAC estimates of average STAR benefits statewide. They will vary by jurisdiction primarily due to property values and tax rates.
|² Provides examples of rebate check sizes in jurisdictions with lower or higher than average STAR benefits.
|* Metropolitan commuter transportation district (MCTD) – For purposes of rebates this includes Nassau, Suffolk, Westchester, Rockland, Orange, Putnam and Dutchess — NYC is excluded.
Additional Charters Schools in NYC
This legislation increases the number of charter schools available to be issued in New York City, ensuring that this category of schools can continue to increase access and choice in communities across New York City. This legislation would also enhance flexibility in educator hiring at charters schools, and encourages community building by allowing an optional enrollment preference for children of charter school employees.
Private School Investment/Reimbursements
Non-public schools serve over 400,000 students across the state nearly 15% of the total public school population. The State Education Department (SED) currently reimburses non-public schools for the cost of performing certain State mandated functions. This legislation appropriates $250 million for this purpose of reimbursing private schools for their costs providing State mandated services.
$8.4 million to the State Education Department
This legislation provides $8.4 million in new funding to the State Education Department. In addition, this bill clarifies required components of the state growth model for teacher evaluations; establishes a committee to review the content of all standardized tests; prohibits teacher confidentiality agreements in certain circumstances; and directs the SED Commissioner to undertake a comprehensive review of education standards by June 30, 2016.
One-Year Extension of Mayoral Control
Mayoral control of New York City was first enacted in 2002, and would have expired on June 30, 2015. In 2002 the legislature complied and granted the NYC Mayor control of the New York City Board of Education now the New York City Department of Education. The NYC Education central board consists of 13, but the majority (8) is appointed by the mayor and serve at his pleasure. Local school boards were replaced by community education councils. This legislation renews all provisions of mayoral control for an additional year, to June 30, 2015.
Targeted School District Aid Due to Loss of PILOT Revenues
The bill also includes $19 million to aid school districts negatively impacted by the closure of fossil fuel power plants that severely reduces their local tax revenues as a result.
City of Yonkers School Aid
The bill also provides a one-time $25 million appropriation to the City of Yonkers to help alleviate a significant deficit faced by the city’s school district. In separate legislation, the City is being granted the authority to increase its local sales tax by one-half cent for three years with the contingency that these funds be dedicated to the city’s schools.
Governors’ Authority to Officiate Marriage Ceremonies
Under current law, a mayor of a village, a county executive of a county, or a mayor, city magistrate, police justice or police magistrate of a city, a former mayor or the city clerk are allowed to officiate marriage ceremonies in the State of New York. This legislation amended the domestic relations law to include sitting governors and former governors the authority as well.
City of Rochester Aid
The bill includes $6 million in aid “…for services and expenses of the city of Rochester which may include support for the Rochester/Monroe anti-poverty initiative.”