In a move sure to draw ire from developers, the state Legislature is nearing a deal to pass a notable change to a development tax break that would add new requirements for affordable housing, people involved in the discussions said.

The legislation would alter the tax break, known as Section 421-a, expanding upon a bill passed by the City Council in December. It is expected to further enlarge the area of the city in which developers are required to devote 20% of their apartments to low-income families in order to qualify for the incentive. The affordable housing requirements in the bill extend to parts of all five boroughs and include all of Manhattan.

Likely to go into effect in July 2008, the bill would be the biggest revision in years to the 1971 tax break initiative, which critics claim has subsidized luxury housing.

The accord in the Legislature comes after weeks of back and forth between members of the Assembly and the Senate, as well as lengthy discussions with the real estate industry and the city, legislators say.

In a concession to the real estate industry, which claims some of the affordable housing requirements will curtail development, the start date for the new tax break was moved, pushing it back six months from the date originally planned.