A New York law that grants tax breaks to banks opening branches in depressed neighborhoods is under attack by the state's thrifts.

The law, enacted last fall, offers a 50% property tax cut to banks that locate in communities deemed "underserved" by state banking officials. It also allows these banks to pay lower interest rates on municipal deposits.

But the 100 or so savings banks in the state are not covered by it.

While the law took effect Jan. 1, the state banking department is still drafting the guidelines under which it will be implemented. The comment period ends today.

At a hearing on the guidelines last week, thrift executives said their institutions also should be eligible for the tax break.

"If there is one thing that separates thrifts ... it is our deep sense of commitment and involvement in our local communities," said Daniel J. Hogarty, president of Troy Savings Bank.

Thrifts were excluded because a separate New York law prohibits them from accepting deposits from local governments.

If thrifts had been included, banks feared they would lose their exclusive right to municipal deposits, said Ivan Lafayette, a Democratic New York State assemblyman from Queens and the author of the legislation. "As you might guess, banks jealously guard this privilege," he said. "If thrifts were in this bill, it never would have passed."

Thrift officials have long objected to municipal deposit laws. "You can imagine how bad I feel when I think that after all the support we give to the community, we are prevented by law to participate in the support of the communities we pay taxes to," he said. Mr. Hogarty said his bank has paid nearly $7.7 million in state and local taxes since 1985.

Thrift leaders said they should receive the same tax breaks as their commercial bank counterparts if they put branches in struggling neighborhoods.

"The focus ought to be on economic development of these areas, not on some archaic laws," said Mariel O. Donath, president of the Community Bankers Association of New York State.

She also questioned why the tax breaks do not extend to those thrifts- and even banks-that are currently the only institutions in their communities.

Mr. Lafayette said he understands the thrifts' concerns but said it was crucial to get the law on the books quickly. "These are areas where we should go out of our way to encourage business development, and the first thing they would need is a bank," he said.

Besides, he said, thrifts may eventually be included, especially if banks shun certain neighborhoods.

"The important thing is that the concept is in place," Mr. Lafayette said. "The companies in these communities don't always care whether they're being served by a bank or a thrift."

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