A 9116: Relates to the collection of monies owed for unpaid real property tax liens and water and sewer charges; establishes the homeowner protection fund; prohibits municipalities from conveying tax liens on real property to any private entity, trust, or third-party servicer; repeals certain provisions relating to foreclosure of real property tax liens.

  
  STATE OF NEW YORK ________________________________________________________________________ 9116 2025-2026 Regular Sessions  IN ASSEMBLY September 26, 2025 ___________ Introduced by M. of A. BICHOTTE HERMELYN -- read once and referred to the Committee on Real Property Taxation AN ACT to amend the real property tax law, in relation to the collection of monies owed for unpaid real property tax liens and water and sewer charges; to amend the state finance law, in relation to establishing the homeowner protection fund; to prohibit municipalities from convey- ing tax liens on real property to any private entity, trust, or third- party servicer; and to repeal certain provisions of the real property tax law and the administrative code of the city of New York, relating to foreclosure of real property tax liens The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. Short title. This act shall be known and may be cited as 2 the "community wealth and homeownership protection act". 3 § 2. Legislative intent. The legislature finds that the sale of prop- 4 erty tax liens to private entities has disproportionately harmed low-in- 5 come, elderly, and Black and brown homeowners, leading to displacement, 6 foreclosure, and the erosion of generational wealth. This act affirms 7 the state's commitment to equitable taxation, community stability, and 8 the protection of homeownership. 9 § 3. Prohibition of property tax lien sales. (a) Notwithstanding any 10 other provision of law, no municipality, including the city of New York, 11 shall sell, assign, transfer, or otherwise convey any tax lien on real 12 property to any private entity, trust, or third-party servicer. 13 (b) Any existing municipal authority to conduct tax lien sales is 14 hereby revoked. 15 (c) No future legislation, local law, or administrative rule shall 16 authorize the sale of property tax liens unless expressly approved by 17 the state legislature through a two-thirds majority vote. 18 § 4. Titles 3, 5 and 6 of article 11 of the real property tax law are 19 REPEALED. EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13780-01-5 
 A. 9116 2 1 § 5. Sections 11-319, 11-320, 11-321, 11-321.1, 11-322, 11-322.1, 2 11-323, 11-324, 11-327, 11-328, 11-330, 11-331, 11-332, 11-333, 11-334, 3 11-335, 11-336, 11-337, 11-338, 11-339, 11-340, 11-341, 11-342 and 4 11-347 and chapter 4 of title 11 of the administrative code of the city 5 of New York are REPEALED. 6 § 6. Subdivision 1 of section 202 of the real property tax law is 7 amended by adding a new paragraph (q) to read as follows: 8 (q) Develop a model program to collect unpaid real property taxes, 9 school taxes and water and sewer charges and a grant program as provided 10 in title three of article eleven of this chapter. 11 § 7. Article 11 of the real property tax law is amended by adding a 12 new title 3 to read as follows: 13 TITLE 3 14 COLLECTION MEASURES 15 Section 1120. Collection. 16 1121. Grants. 17 § 1120. Collection. The commissioner of taxation and finance, in 18 consultation with the state comptroller, shall develop a model program 19 to collect unpaid real property and school taxes, and water and sewer 20 charges, without tax lien sales. Each municipality collecting real prop- 21 erty or school taxes shall adopt and implement the program in its real 22 property tax jurisdiction. 23 § 1121. Grants. 1. The commissioner of taxation and finance, in 24 consultation with the state comptroller, shall develop and implement a 25 grant program to assist counties and, in the case of a county wholly 26 contained within a city, such city, in implementing real property tax 27 collection programs as an alternative to selling liens on real property 28 due to unpaid real property taxes, school taxes or water and sewer 29 charges assessed to the property, including legal assistance, estate 30 planning, and outreach to tax-distressed homeowners. 31 2. The attorney general shall establish the application criteria and 32 qualifications for grant recipients. 33 3. The program shall prioritize grants to municipalities with high 34 rates of tax lien sales prior to the effective date of this title. 35 4. Funds received by a county or city through the program shall be 36 used to supplement and not supplant any local funds which such county or 37 city would otherwise have had to expend for the provision of real prop- 38 erty tax collection programs. 39 § 8. The state finance law is amended by adding a new section 97-vvvv 40 to read as follows: 41 § 97-vvvv. Homeowner protection fund. 1. There is hereby established 42 in the joint custody of the comptroller and the commissioner of taxation 43 and finance a special fund to be known as the homeowner protection fund. 44 2. Such fund shall consist of all moneys appropriated for the purpose 45 of such fund, all other moneys required to be paid into or credited to 46 such fund, and all moneys received by the fund or donated to it. 47 3. Monies in the fund shall be used to implement the grant program 48 described in section eleven hundred twenty-one of the real property tax 49 law. 50 4. Monies in the fund shall be kept separate from and not commingled 51 with other funds held in the custody of the comptroller. 52 5. Monies in the fund shall be payable from the fund on the audit and 53 warrant of the comptroller on vouchers approved and certified by the 54 commissioner of taxation and finance. 55 § 9. Severability. If any clause, sentence, paragraph, subdivision, 56 section or part of this act shall be adjudged by any court of competent 
 A. 9116 3 1 jurisdiction to be invalid, such judgment shall not affect, impair, or 2 invalidate the remainder thereof, but shall be confined in its operation 3 to the clause, sentence, paragraph, subdivision, section or part thereof 4 directly involved in the controversy in which such judgment shall have 5 been rendered. It is hereby declared to be the intent of the legislature 6 that this act would have been enacted even if such invalid provisions 7 had not been included herein. 8 § 10. This act shall take effect one year after it shall have become a 9 law and shall apply to tax and water and sewer assessments made on and 10 after such effective date. Effective immediately, the addition, amend- 11 ment and/or repeal of any rule or regulation necessary for the implemen- 12 tation of this act on its effective date are authorized to be made and 13 completed on or before such effective date.